Mr. LATMAN. Yes. I would think that it would make a lot of sense for the committee, if it so chose, to designate right in the bill either the Patent Office or Copyright Office. Now, in that connection, the fees which were suggested some years back of $15 were felt even at that time to be significantly inadequate to be self-sufficient, and so it may well be that current data on that would be required and that fees be more realistic because I think this would be the kind of operation that appropriately should be self-sufficient.

Mr. KASTENMEIER. My last question is one that relates to the time of commencement of protection. In European countries, in patents, protection commences with date of filing. In this country on a first to invent basis rather than first to file. I am asking you, Mr. Latman, what is the principle here? Presumably it is publication, first publication, rather than first registration, that will determine the protection. Mr. LATMAN. Well, if you are talking

Mr. KASTENMEIER. For the person entitled to protection.

Mr. LATMAN. No. I don't think that the commencement of protection provisions does relate to the question of who gets the protection. I don't think it does relate to that. Just as I think in the patent situation, protection begins against the world generally in this country upon the issuance of the patent. But, as the Chairman indicated, who is the true inventor would require analysis of who invented first.

This bill comes from a different philosophy. In this respect again it harkens back to copyright. You could theoretically have two people having rights if they created the work independently of each other, but their protection would be correspondingly limited. Their protection is only against somebody who copies from them.

This has resulted in what we in the copyright situation call a rough and ready justice and that is that they are not subject to esthetic considerations hey, this is good; it should be protected-but indeed if it is a very commonplace thing under copyright nobody will need, you may say, to copy from that one of many versions.

The same would be true here. So it would be I think set up that way which would not relate to when protection begins.

Now, when protection begins, as you indicate correctly in section 204 (a), is upon publication. They use a separate word because we try to get away from the gloss on publication. And it is this protection that Commissioner Tegtmeyer suggests be modified to allow protection on registration, and my suggestion this morning was that this should be an option similar to the way there is an option under copyright or, indeed, in certain cases or, indeed, would be under title I or under your recently introduced bill, Mr. Chairman, across the board, and that is a person could secure registration of unpublished works. So I suggest, in effect, giving the same kind of option here.

Mr. KASTENMEIER. Do you contemplate that there might be contests between individuals as to who is the first designer of a piece of commercially useful ornamental design?

Mr. LATMAN. Well, there might be in the same sense as there would be today in that sometimes in copyright infringement suits, both the plaintiff and defendant have certificates of registration from the Copyright Office. This is a disconcerting concept, I guess, when one first hears it and certainly when a judge, unfamiliar with copyright, first hears it, and really what is battled out in that contest is who originated it and who copied from whom.

Now, potentially, theoretically it is possible that neither copied from the other, but usually it doesn't work that way. So, I think in a realistic sense, the answer is yes, that in such a situation there would be a contest. Here again, in order to be more moderate, to give the public, the users, more remedies than they have under copyright today, there is a formal proceeding right within the office where you can petition to cancel a registration, and one of the grounds for cancellation would be that it was not an original, not created by the person who got the registration.

Mr. WIGGINS. Mr. Chairman

Mr. KASTEN MELER. The gentleman from California, Mr. Wiggins. Mr. WIGGINS Thank you, Mr. Chairman.

Mr. Latman, I know so little about this subject that it frightens me that I am sitting here and you are sitting out there, but I am going to try, and if I ask questions which would indicate that I would fail your class in this field, please bear with me at least for a while.

It appears to me that when an article subject to protection is made public which is a momentous event in this law, that certain rights attach at that time, and they endure for a prescribed period of time.

I am wondering if that event, making public a protected design, is a sufficiently certain and notorious event that there is really certainty to it. I am concerned about that because alternatively we may attach protection at some other more definite moment in time, such as registration.

If you would like to comment on that, I would appreciate it.

Mr. LATMAN. Well, certainly in both respects, certainty and notoriety, you are correct, Congressman, that registration would be a more certain moment and could, by the publication of an official gazette in effect be more notorious. I think those considerations might lead you to prefer protection from that moment. The compromise that was effected was this, was the actual article language. There was fear at the other end of the spectrum that someone should not be able to make public a little sketch, let's say, of a lighting fixture or automobile or egg beater and if you required him to have an actual article that that was going somewhat toward having something that was more notorious.

Certain people said it should be an actual article, not even a mockup, that that was insufficient. It should be something in the real marketable world, similar I suppose just by analogy to a trademark use. You have got to have an actual article and you have got to ship one article so long as it is bonafide in interstate commerce. So I guess this is I think the fear of waiting for registration is that there will be a delay, that there will be no protection during the interim. The person cannot market during the interim. I would not consider it-especially in view of the Commissioner's comments, I would not consider it unreasonable if the committee felt they wanted to move to that other route and start protection from registration. I can see the point" that you are making and I think that that would probably be acceptable.

The only fear was that we would somehow slip into a situation similar to the situation in the Patent Office, but it would be such an inordinate delay that protection would be illusory by the time it came. Mr. WIGGINS. All right. I think I understand the considerations on both sides.

Mr. LATMAN. Thank you. Of course, I need not say your preliminary remarks were unnecessary. You would not, of course, fail any exam that I know of.

Mr. WIGGINS. Not in today's age, no.

Mr. KASTENMEIER. If there are no other questions, Mr. Latman, the committee appreciates your appearance here this morning and your contributions in terms of explaining title II and what it is and understands your support of it.

Mr. LATMAN. Thank you very much, Mr. Chairman. Of course, I do request that the statement that I submitted be included in the record. Mr. KASTENMEIER. Without objection it will be received.

Mr. LATMAN. Thank you very much, Mr. Chairman, and members of the subcommittee.

[The prepared statement of Alan Latman and his letter of July 18, 1975, and attachment thereto follow :]

STATEMENT OF ALAN LATMAN ON TITLE II OF H.R. 2223 BEFORE SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES, AND ADMINISTRATION OF JUSTICE OF THE HOUSE JUDICIARY COMMITTEE DELIVERED ON JULY 17, 1975

My name is Alan Latman. I am a member of the law firm of Cowan, Liebowitz & Latman, P.C., 200 East 42d Street, New York, New York and a member of the New York and District of Columbia Bars. I am also an Adjunct Professor of Law at New York University School of Law. I am honored to have been invited by the Subcommittee to testify on the background and provisions of Title II of H.R. 2223, the "Design Protection Act of 1975", or as it has long been known, "the design bill".

I am testifying in my individual capacity on this subject, although I am counsel to two organizations which are also appearing before you on a slightly different subject this morning-International Typographic Composition Association & Advertising Typographers Association.1

One thing is indisputable about Title II-its venerability. It is older than Title I, having first seen the light of legislative day in 1957 when it was introduced by Chairman Willis of this Subcommittee at the request of the Coordinating Committee of the National Council of Patent Law Associations. The chairman of the Coordinating Committee was Giles S. Rich, presently a Judge of the United States Court of Customs & Patent Appeals. Judge Rich presided over a drafting committee composed of acknowledged leaders of the patent bar, assisted by equally distinguished government advisors such as Pat Federico of the Patent Office and George Cary and Barbara Ringer of the Copyright Office.

The Willis Bill of 1957 as drafted by this group was then subjected to a refinement process, spearheaded by an industry clearing house called the National Committee for Effective Design Legislation. This group operated from 1958 for about a decade of drafting, redrafting, and compromising in accordance with the continuing experience of industry and the bar. I served as counsel of this National Committee throughout its years of operation.

The legislative developments surrounding this bill through the late 1950s and 1960s was extensive. The Subcommittee on Patents, Trademarks and Copyrights of the Senate Judiciary Committee held three sets of hearings on the bill and the Senate passed the bill three times. The bill was consistently supported by the Patent Office and the Copyright Office and consistently opposed by the Justice Department in a statement similar to the one submitted to you this Spring.

The most intensive consideration of the bill in the House was in 1963, when a hearing was held before this Subcommittee which then reported the bill out in August of 1964. The 88th Congress adjourned before action was taken by the full committee or the House itself.

In 1969 a historic docking took place (not quite as historic as the events planned for this week). The Hart design bill in the Senate was reported out by the Senate Judiciary Committee as Title III of S. 543, the Copyright Revision Bill. Since then the design bill and copyright laws have been joined and as the

1 I have also served as counsel to the National Committee for Effective Design Legislation which I will refer to later.

Subcommittee knows, were both passed as S. 1361, September 9, 1974 by the Senate. A summary of these legislative developments is appended to my written statement.

The hearings held in the Senate and House documented the economic, social and cultural need for new protection for designs. The industry testimony presaged the evidence on the need for protection against record piracy with which this Subcommittee is familiar. It was noteworthy however that in each industry it was the small businessman who sought design protection for one of the few competitive tools he had-creativity. My purpose today, however, is not to cover these matters. It is simply to explain the provisions of the bill against the background of existing law.

The bill provides for a specialized sui generis type of protection in between copyright and patents. It is closer to copyright but is much more limited. An understanding of the provisions of this bill require an explanation of the inadequacies of present copyright and patent protection.

There are, of course, two types of patents. The type with which this Subcommittee is more often concerned is the mechanical patent, a grant by the Government protecting the functional operation of a machine, manufacture or process. In addition, of course, there are patents protecting appearance. The latter are called design patents and, in protecting the ornamental, rather than the functional, differ from mechanical patents only with respect to length of protection (the term for mechanical patents is seventeen years while design patents last for three and a half, seven or fourteen years, depending on the fee the applicant chooses to pay.)

In order to qualify for a patent, an applicant must introduce something new to a particular field. But he must do more than merely take a step forward— it must be a large step. The contribution must be such that it was not "obvious" to those in the field. These requirements are in the familiar parlance of the patent law, "novelty" and "invention" or "unobviousness".

It is apparent that many creative, attractive and successful designs in such fields as kitchenware, automobiles and furniture still fail to meet these high standards. In practice, results in the Patent Office and the courts have convinced many designers and manufacturers that design patents are too difficult to enforce. The courts in an infringement suit can find a patent invalid and do so often. And even if the requirements were not so high, it is apparent that judgments about appearance must be highly subjective and unpredictable.

In view of the requirement that a design be novel, a search of earlier designs, of course, must be conducted by the Patent Office before it can issue a patent. Until the patent is actually granted, the designer or manufacturer markets his design at his peril. Despite the intelligent and devoted work of the Patent Office in this regard, the time lag, which may be many months or years, is often crucial. These facts of life were acknowledged by Assistant Commissioner Tegtmeyer in his supporting statement on behalf of the Commerce Department submitted earlier to this Subcommittee.

Finally, the overall expense of design patents is much greater than the statutory fees mentioned above. Even such fees must be multipled by the relatively large number of designs introduced by many manufacturers each year, most of which designs are unsuccessful. But in addition, a manufacturer who decides to rely on a patent must usually first seek the advice and services of a patent lawyer. Thus the cost of a preliminary search and legal fees also add substantially to the expenses of securing a design patent.

A copyright is not as difficult to obtain as a patent. The author need only originate the work himself, that is, refrain from copying from someone else's work or from the common fund of works known as the "public domain". He can obtain a copyright not only for a book, play or musical composition, but also for a "work of art". Can the design of a useful article be considered a "work of art" as that term is used in the copyright statute? This is a question which troubled the courts and the Copyright Office for some time. The answer is that until the 1950s such designs were sometimes considered "works of art", but more often they were not.

However, significant pronouncements in the field were made by the Supreme Court in 1954 in Mazer v. Stein, 347 U.S. 201 (1954). The Court held that the usefulness of an article did not prevent its being a work of art; but the Court did not define what a work of art is. Involved in this case was a human figurine used as a lamp base. There can be little dispute that this traditional subject of sculpture must be considered a "work of art". But what of the many other designs which do not so clearly fall within this classification?

The Copyright Office has taken the view that this decision does not offer any guide as to whether, for example, the shape of a chair or of an egg-beater is to fit within the category of a work of art. At the same time, the Mazer decision has certainly resulted in the expansion of copyright protection. For example, artistic drawings or paintings cannot now be denied protection because they are used on textiles. But as to these designs, different problems arise. Thus, the very technical provisions requiring a copyright notice are poorly adapted to such things and can result in unintended loss of protection. Moreover, the historic concern of the copyright law with books and music produce other inappropriate results for commercial and industrial designs. For example, innocent sellers of a pirated copy of a copyrighted work are fully liable as infringers. And the term of protection can be as long as 56 years. Thus, from several points of view, copyright does not provide the answer to industry for either effective or equitable protection of designs of useful articles.

Of course, the avenue offered by the common law of unfair competition, which was always of uncertain scope, was sharply curtailed in this field by the 1964 Supreme Court decisions in Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964) and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964). But even in the absence of these decisions a judicial solution to this problem may not include the limitations and safeguards required in this situation.

It was the purpose of the draftsmen of Title II to provide such limitations and safeguards. Turning to the bill itself, we find the following key provisions:

1. Standard for Protection-A design can be protected if it is the original creation of its author. An original design is one which has not been copied from someone else's work or from a design in the public domain. The protected design need not meet any test of novelty, unobviousness, or inventiveness. But the design cannot be staple or commonplace or close to it, nor can it be dictated by the function of the article embodying it.

2. Scope of Protection-The original designer is protected only against the unauthorized copying of the substance of his protected design. If the author of a similar design can prove that he created it independently, rather than through copying, no infringement has taken place.

3. Duration of Protection-Five years, with an optional second five-year term. 4. Commencement of Protection-Protection begins upon the public exhibition, sale or offering of an actual existing article embodying the design. This is called "making public" the design.

5. Registration-A claim to protection must be registered in a Government office within six months after the design is made known. An Administrator is to be designated by the President. (In approving S. 1361 the Senate Judiciary Committee expressed the view that the Office of the Administrator should be located in the Patent Office). There is no requirement of a search or comparison with earlier designs, but a proper party is given the opportunity to petition the Administrator for cancellation of registration of a design not subject to protection.

6. Notice or Marking-Protection is not forever forfeited if the prescribed form of notice is omitted, though omission may sharply limit the design owner's legal remedies against infringers. The requirements as to form and position of notice are very flexible.

7. Infringement―The design owner may generally recover from anyone who without his authority, purposefully makes or imports articles embodying a copy of the protected design and cannot recover from sellers, assemblers, processors or innocent parties generally.

8. Remedies

(a) Injunction;

(b) Damages, which the court in its discretion can increase to $1.00 per copy, or $5,000., whichever is greater;

(c) Possible forfeiture or destruction of all infringing articles, plates, molds, etc.;

(d) Recovery of costs and possibly attorneys fees.

9. Interrelation with Design Patent and Copyright

(a) The new design protection does not affect the availability of design patents to those design inventions which qualify. Protection under the new law would, however, terminate as soon as a design patent is issued.

There is the possibility of suing an infringer even if registration is denied.