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COMMENTS ON S. 1535 SUBMITTED BY PETER B. MAGGS, PROFESSOR OF LAW,

UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN

Page 1, lines 5-8 (Process Patent Infringement)

By restricting importation of goods made with patented processes, this bill would encourage developers to reveal processes through the patent system rather than to keep them as trade secrets, and would bring U.S. law into line with that of many other countries.

The formulation of the rule is simpler and clearer in H.R. 3577 and H.R. 3878, than in S. 1535. The presumption found in H.R. 3577 and H.R. 3878 is missing from S. 1535. It is my belief that this presumption is essential to the effectiveness of the legislation, since without it, procedural difficulties (e.g., the unavailability of discovery) may make it impossible to enforce a rule against foreign infringement of process

patents.

Page 1, lines 9-10; page 2, lines 1-6 (Reversal of Deepsouth)

A closer look should be taken at the atempt to reverse the Deepsouth decision. It seems quite possible that if this legislation is enacted, copiers will merely shift production operations overseas, beyond the reach of the U.S. patent system. This would mean a loss of jobs in the United States, with no real gain for holders of United States patents. Indeed, along these economic lines an argument could be made for legislation providing that manufacture of goods for export in general does not

constitute an infringement of a U.S. patent.

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Page 2, lines 7-24; page 3, lines 1-13 (simplifying license for foreign filing requirements).

I think that stifling of American competitiveness through government

red tape is a far greater danger to national security than loss of information through foreign patent filings. Absent strong and thoroughly justified objections by the Defense Department, I would hope that your committee would look favorably on any reform that allowed U.S. industry to compete more easily in the international marketplace.

Page 3, lines 14-25; p. 4, lines 1-4

These sections take proper account of the team nature of most inventive activity in the United States today. They overcome what has amounted to forfeiture on the basis of a technicality, where the rewards were for having clever lawyers rather than brilliant scientists and

engineers on corporate staffs.

Page 4, lines 3-6 (affidavit)

It is not clear to me that this section will have the desired result of reducing costs; rather it could lead to even greater expenses in turning more interferences into Federal court cases. If enacted, there should be a sunset provision requiring the Commissioner of Patents and

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Trademarks to report back on its effects on the cost of patent litigation,

and it should be made part of permanent legislation only if it was successful.

Page 4, lines 7-14 (interference settlement filling)

This seems to be an appropriate change that will relieve from forfeiture without significant danger of increasing antitrust violations.

Page 4, lines 15-23 (arbitration)

If settlement is to be allowed, arbitration also should be allowed. THere is a problem, however, with the way the bill is phrased. Suppose the arbitrator finds that A conceived and reduced to practice in March 1982 and that B conceived and reduced to practice in January 1983, so that A wins the interference. It still should be open to the PTO to contend

This would require

that A really did not invent until June 1983 and so was barred by a May 1982 publication that was not before the arbitrator. rejection of the arbitrator's finding that A invented in March 1982 and

even rejection of the finding that A had priority over B. It is not clear

from the language given in the bill that the Patent Office could make such a rejection.

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Page 4, lines 24-25; page 5, lines 1-19 (licensee estoppel)

This section seems to give a fairer balance between the interests of licensor and licensee than given by the present confusing mix of court decisions.

Page 4, lines 17-19 (retroactivity)

Is the law meant to apply to existing licensing contracts so as to change the rules of licensee estoppel with respect to them? If so, this would seem to be an unfair change of rules in the middle of the game. not, the statute should clearly state not.

If

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The Honorable Robert W. Kastenmeier

Chairman, Subcommittee on Courts,

Civil Liberties and the Administration of Justice
U. S. House of Representatives
Committee on the Judiciary
Washington, D. C. 20515

Re:

Proposed Legislation H.R. 3286 and H.R. 3878

Dear Congressman Kastenmeier:

Thank you for your letter of September 29, 1983 enclosing copies of the above House bills and inviting my comments. I am happy to respond.

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This bill appears to me to codify the case law relating to employee inventions, made on the employee's time and not relating to the business of the employer, in a manner consistent with wellestablished precedent, c.f., U. S. Dubilier Condenser Corp., 289 U.S. 178 (1933). In addition, it provides for a shopright consistent with applicable law principles; Cambridge Wire & Cloth Co. v. Applegarth, 141 U.S.P.Q. 44 (Md. Cir. Ct. 1964). The bill resembles the provisions of the California Labor Code, Sections 2870-71 enacted in 1979.

In view of its correspondence with well-established case law, I assume that this should be a noncontroversial bill. My only thought is that, because the case law is not in doubt in this area, is there any need to take up the time of Congress by codifying it into legislation. That, however, is a question which is uniquely. within your province.

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I believe the intended objective, to encourage joint R & D ventures under circumstances where the participants would presently be inhibited for fear of running afoul of the antitrust laws, will

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