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of records, publications, or services furnished by the Patent 2 Office, not specified above.

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"(d) The fees prescribed by or under this section shall

4 apply to any other Government department or agency, or

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officer thereof, except that the Commissioner may waive the

payment of any fee for services or materials in cases of

7 occasional or incidental requests by a Government depart

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ment or agency, or officer thereof.

"(e) The Patent Office shall recover by fees not less 10 than 65 per centum of the costs of operation of the Patent 11 Office. When such recovery consistently falls below this per12 centage, the Commissioner shall transmit to the Congress 13 his recommendations for an adjustment of the fee schedule." SEC. 3. Section 173 of title 35, United States Code, is

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15 amended to read as follows:

16 ❝8 173. Term of design patent

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"Patents for designs shall be granted for a term of four

18 teen years from the date of issue."

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SEC. 4. The items numbered 1 and 3, respectively, in 20 subsection (a) of section 31 of the Act approved July 5, 21 1946 (ch. 540, 60 Stat. 427; 15 U.S.C. 1113), as amended, 22 are amended to read as follows:

23 "1. On filing each original application for registration 24 of a mark in each class, $50."

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1 "3. On filing an affidavit under section 8 (a) or section 2 8(b) for each class, $25."

3 SEC. 5. (a) This Act shall take effect three months 4 after its enactment.

5 (b) Items 1, 3, and 4 of section 41 (a) of title 35, 6 United States Code, as amended by section 1 of this Act, 7 and section 173 of title 35 as amended by section 3 of this 8 Act, do not apply in further proceedings in applications 9 filed prior to the effective date of this Act.

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(c) Item 2 of section 41 (a) of title 35, United States 11 Code, as amended by section 1 of this Act, does not apply

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in cases in which the notice of allowance of the application

was sent, or in which a patent was issued, prior to the

effective date; and, in such cases, the fee due is the fee

specified in this title prior to the effective date of this Act.

(d) Item 3 of section 31 of the Trademark Act, as amended by section 4 of this Act, applies only in the case of registrations issued and registrations published under the

provisions of section 12 (c) of the Trademark Act on or

after the effective date of this Act.

Mr. BRENNAN. Mr. Chairman, the morning session of the subcommittee will be devoted to a panel session describing the need for the amendments introduced by the minority leader. Mr. Raymond E. Johnson will introduce the panel.

Senator MCCLELLAN. All right. Let the panel be introduced by Mr. Johnson.

STATEMENT OF RAYMOND E. JOHNSON, GENERAL COUNSEL, ELECTRONIC INDUSTRIES ASSOCIATION

Mr. JOHNSON. Senator, we very much appreciate this opportunity to appear before the subcommittee. The introduction of the subject matter is of course

Senator MCCLELLAN. Would you identify yourself, please.

Mr. JOHNSON. I am Raymond E. Johnson, general counsel of the Electronic Industries Association. I will define the pertinent licensing terms and the state of the law. Following me will be John McKinney, vice president of Johns-Manville, speaking on behalf of the National Association of Manufacturers who will discuss what the Scott amendments are intended to do; S. W. Herwald, vice president of engineering and development of Westinghouse, who speaks for Westinghouse about the importance of patents and licensing.

Next will be Marvin R. Jones, Manager of Research and Development for Cameron Iron Works, Houston, Tex. Mr. Jones will also be concerned with the placement of licensing.

The fifth speaker will be Robert W. Beart, first vice president of Illinois Tool Works, speaking for the Illinois Manufacturers Association. He will speak to examples of licensing profits.

The last speaker will speak for the U.S. Chamber of Commerce. He is Jackson Browning, vice president, Union Carbide.

Mr. Chairman, members of the committee, my name is Raymond E. Johnson. I am the General Counsel of the Electronic Industries Association and appear today on its behalf. With me are two members of EIA's Patents Panel, Mr. Harold Levine of Texas Instruments, chairman of the Panel, and Mr. William L. Keefauver of Bell Telephone Laboratories, a former Chairman of the Panel.

The Electronics Industries Association is made up of representatives of over 300 companies, both large and small, engaged in the development and manufacture of electronic equipment. Our member companies invest a total of over $4 billion each year in research and development. The protection and effective commercialization of the results of this investment are of serious concern to our members. The prepared statement provided today to the subcommittee sets forth EIA's strong support from the business viewpoint for the principles preserved in the Scott amendments 23 and 24 and reflected in section 6 of S. 643. We would like to very briefly highlight the EIA position. Very briefly again, our support for the principles of Scott amendment 24 on the transferable and licensable nature of patent rights is influenced by two major propositions:

1. A strong patent system, so necessary to provide adequate inducement and protection for the investment of risk capital in research and development, requires a reasonable opportunity both to acquire rights in the patents of others and to grant various rights

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1 tions for patent and patents may be conveyed for the whole

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or any part of the United States.

"(2) An applicant, patentee, or his legal representative

may also, at his election, waive or grant, by license or other5 wise, the whole or any part of his rights under a patent or 6 patent application and for the whole or any part of the 7 United States, by exclusive or nonexclusive arrangement with a party or parties of his selection.".

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On page 38, between lines 15 and 16, insert the following

10 new subsections:

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"(e) No assignor of a patent shall contest, directly or 12 indirectly, the validity of the patent, when asserted against 13 him by his assignee or any owner of the patent deriving title 14 through the assignee, unless (1) the consideration involved 15 has been restored to, or for the benefit of, the first assignee, 16 and (2) such assignor asserts a ground for invalidity not 17 reasonably available to him when the assignment was made. "(f) No party to a license, immunity, or other express 19 waiver under a patent shall, unless consented to by all other 20 parties thereto, contest the validity of the patent, provided 21 that any party who gives written notice that he uncondi22 tionally renounces all future benefit from the license, im23 munity, or other waiver may then and thereafter contest 24 the validity regardless of any contract to the contrary, but

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1 such renunciation shall not operate to relieve the renouncing 2 party from any performance due prior to the renunciation.".

3 On page 39, between lines 19 and 20, insert the follow4 ing new subsections:

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"(f) No patent owner shall be guilty of misuse or il6 legal extension of patent rights because he has entered into,

7 or will enter only into

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"(1) an arrangement granting some rights under the patent but excluding specified conduct, if the conduct excluded would be actionable under this title, or

"(2) an arrangement granting rights under the patent that excludes or restricts conduct in a manner that is reasonable under the circumstances to secure to

the patent owner the full benefit of his invention and

patent grant.

"(g) No patent applicant or patent owner shall be 17 guilty of misuse or illegal extension of patent rights because 18 he has entered into, or will enter only into, an arrangement 19 of assignment, license, or waiver of some or all of his rights 20 under this title for a consideration which includes

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"(1) a nonexclusive license or waiver of patent

rights; or

"(2) a royalty, fee, or purchase price:

"(A) in any amount, however paid or meas