Proposal IV has two parts. The proposed addition to Section 103 of the Patent Code would exempt certain unpublished information from the prior art. Conceptually, unpublished information not readily available beyond the walls of the corporate laboratory should not be used to defeat a future patent application. There would be a very slight disadvantage to the independent inventor by reason of the elimination of a rule that has been unfavorably imposed upon corporate inventors: the broad joint inventor rule. The second part of the Proposal IV, the amendment of Section 116 of the Patent Code, would also be corrective of the unjust joint inventor requirement that has quite seriously complicated corporate patent practice for many years. Many courts have struggled with the present statutory language, "made by two or more persons jointly," and the cases have not satisfactorily resolved the issue of joint inventorship.

Proposal V would simplify patent interference practice. There is no area of American jurisprudence that is more arcane than patent interference practice. It has been an unnecessary burden on the Patent and Trademark Office, that patent bar, and the feepaying clients far too long. I can support Proposal V without qualification. I would add only that there are a number of antitrust and patent misuse cases that might be in conflict with that part of the proposed bill that would allow arbitration of priority of invention. While settlement agreements and arbitration should be encouraged, it must be remembered that one of the litigating parties will be awarded a legal monopoly. Any deference to the future rights of the other party will be viewed suspiciously under principles of antitrust law.

The

Proposal VI codifies the well-accepted rule of Lear v. Adkins, 395 U.S. 653 (1969), but would provide some relief for the licensor whose patent is being challenged by the licensee. courts have, to some extent, favored the licensee in license litigation and this proposed amendment would strike a more equitable balance.

Conclusion. I am pleased to have the opportunity to comment upon these bills, and I shall be happy to make my thoughts known with regard to any future bills that you may choose to send me. I am particularly grateful to you for sending me copies of these bills because I can discuss them in my patent law classes. I would like to receive copies of future bills relating to patent or antitrust law, if your office could conveniently arrange to send them to me.

We have conducted a survey (Appendix A annexed hereto) to seek the opinions of companies and law firms regarding the Lear v. Adkins decision of the Supreme Court. We have reviewed the history of doctrine of law of licensee estoppel and the results in our courts following that decision (Appendix B). The annexed review is a concise summary only of a careful study of that law by Steven Krantz (one of our students) in consultation with this writer. A sua mary of the results of the survey is found in Appendix C which also includes comments by those who responded, and Appendix D contains copies of the returned questionnaires.

A review of question "D" of Appendix D shows that 26 of the 33 respondents favored legislation rendering a change in the Lear doctrine to make the licensee more responsible; six said no; and one said maybe. We sent 250 questionnaires to law firms and industrial corporations (see the longhand designation "law firm," upper right-hand corner, and "corp.").

A review of the cases is even more telling. The circuits are in disarray, as is indicated in Appendix B. It should be noted that the review contains typical cases only of what is a fairly large number of cases on the subject. The Lear doctrine is an aberration grafted by the Court upon the long standing law of contracts and is a blemish upon that law. It is incredible that our highest court should not have foreseen the mischief of its decision.

Appendix A

THE PTC RESEARCH FOUNDATION

FRANKLIN PIERCE LAW CENTER

October 4, 1983

Dear Respondent:

We are writing on behalf of the PTC Research Foundation, a nonprofit organization presently engaged in researching the impact of Lear, Inc. v. Adkins, 395 U.S. 653.

This session Congress will be addressing, under S.1535, the doctrine of licensee estoppel emanating from Lear by the following proposed amendment to 35 U.S.C.

(a) A licensee shall not be estopped from asserting in
judicial action the invalidity of any patent to which it is
licensed. Any agreement between the parties to a patent
license agreement which purports to bar the licensee from
asserting the invalidity of any licensed patent shall be
unenforceable as to that provision.

(b) In the event of an assertion of invalidity by the
licensee in a judicial action, licensee and licensor shall
each have the right to terminate the license at any time
after such assertion. Until so terminated by either party,
the licensee shall pay and the licensor shall receive the
consideration set in the license agreement.

In order for the PTC to represent and assess the impact of Lear on businesses such as yours, we ask you to fill out the enclosed one-page questionnaire. Please feel free to expand upon the issues. Your individual response will be kept in confidence, but it will be compiled with others to be presented to the Congress.

A.

PTC RESEARCH FOUNDATION QUESTIONNAIRE

Has your company/client challenged the validity of a patent that it had licensed under the Lear doctrine? (If so, was the challenge successful? Court decision or settlement?)

B.

Has your company/client, as a licensor, been challenged by a licensee as
to patent validity under the Lear doctrine?
(If so, was the challenge
successful? Court decision or settlement?)

C. Has Lear had any significant practical impact, in your experience, upon the licensing process? (If so, please explain briefly.)

D.

Do you favor:

a.

Repeal of Lear, Inc. v. Adkins by legislation?

b.

Legislation to require license payments until a decision adverse to the patent?

c.

Any other legislation? (Briefly delineate.)

APPENDIX B

An estoppel is a remedy at equity, that is to say, in looking at a situation as a whole an estoppel brings about a result that is "fair." This concept has a long history which survives, for the most part, today. The exception to the survival of various forms of estoppel is the doctrine of licensee estoppel in patent cases.

Originally the doctrine of licensee estoppel operated under the concept that a person who bargains for a license should be estopped from denying that the licensor had valid title to the object of the license. In developing this concept, one early court analogized the doctrine of licensee estoppel to the doctrine of lessee estoppel, another property concept. In lessee estoppel, a lessee "... is bound to pay rent as long as he continues to enjoy quietly the premises leased to him, though by one who's title may be invalid. lessee cannot dispute the title of his landlord." In 1805 the English case

2

...

So a

of Taylor v. Hare addressed the issue of licensee estoppel based upon the concept of sanctity of contract when it stated, "[t]he Plaintiff has had the enjoyment of what he stipulated for, and in this action the Court ought not to interfere

4

This deep rooted concept of fundamental fairness was plucked up by the Supreme Court in the case of Lear v. Adkins. The Court, without citing any specific authority, struck down the doctrine of licensee estoppel, basing its decision upon the rationale that according to federal law, "... all ideas in

general circulation be dedicated to the common good unless they are protected

by a valid patent." This ruling effectively encouraged patent litigation, as