But what is most important is to authorize the establishment of a single court of patent appeals. To establish such a court as recommended by the Commission would insure uniformity and finality in patent decisions, whether in interference or in infringement suits, as well as on ex parte appeals from the Patent Office. It would also eliminate conflicting decisions between the various circuit courts of appeal and would reduce the time and the vast costs of litigation. In short, it would exercise the most stabilizing influence that could be exerted in our patent system.

The United States Court of Customs and Patent Appeals is an integral part of the patent system in the administration of the patent laws. The members of that court are preeminently qualified by reason of long years of experience in deciding literally hundreds of interferences Insofar as I am aware, no patent claim to function as such a court. allowed by that court on appeal has ever been held invalid, and the equity courts generally accept its rulings on questions of priority as conclusive unless new facts are presented that clearly show them to be erroneous (Luftin v. R. C. A. Mfg. Co., Inc., 60 U. Š. P. Q., 285).

I commend these recommendations for the serious consideration of the proponents of H. R. 3264 and for the future consideration of this committee.

Again, gentlemen, I thank you for the time and the courteous attention which you have given me.

Mr. LANHAM. Thank you very much, Mr. Henry.

Gentlemen we have 20 minutes left at our disposal. Mr. Cullen wishes 5 minutes. Mr. Byerly is also here from out of the city and he would like to make a statement.

We will try to the best of our ability to divide up the 20 minutes so that those from out of the city who wish to have something to say may have an opportunity to do so. They may amplify their remarks by submitting a report later.

Off the record.

(Discussion off the record.)

STATEMENT OF JOHN A. DIENNER, CHICAGO, ILL.

Mr. DIENNER. I am opposed to the bill and I shall state my reasons in a statement which I may later submit, if that is in order, within the next 2 weeks or something like that.

Mr. LANHAM. It is quite in order and we will be glad to have it.

STATEMENT OF MR. FENNING, PATENT LAW ASSOCIATION,
CLEVELAND, OHIO

Mr. FENNING. I have a statement, a written statement that I would like to have incorporated in the record.

Mr. LANHAM. It will be incorporated in the record at this point.
(The statement referred to follows')

STATEMENT RELATIVE TO H. R. 3264 FOR THE CLEVELAND PATENT LAW

ASSOCIATION

This statement is made on behalf of the directors and the members of the legislative committee of the Cleveland Patent Law Association of Cleveland, Ohio.

Paragraph (d) on page 3 of the bill, has the defect of serious ambiguity in the statement: "Any party may file in the Patent Office such proofs, not requiring testimony, as he may see fit, as tend to establish who is the prior inventor of the said subject matter of the rejected claims." The words "such proofs not requiring testimony" seem to apply a standard of competency or admissibility for the evidence that may be filed. If that be the intent of the provision and the established rules of evidence as to incompetency or admissibility are to apply, there would seem to be very little in the way of "proofs" that would not require testimony; and this would seem to lead to a practice in which the first to file would be given the administrative award and possibly also the patent. Such a practice would put a premium on undue haste in the preparation and filing of applications, with many attendant troubles, and would also be inconsistent with an important fundamental characteristic of the United States patent system, namely, that the patent shall be granted to the first inventor.

It is quite possible that the draftsman of the bill did not intend the words "proofs, not requiring testimony" to carry the implication above indicated, but rather intended that any party may file in the Patent Office such proofs as he may see fit, other than testimony, which tend to establish who is the prior inventor, etc. In that event it would be possible, for example, to file affidavits supported by documentary evidence of conception, disclosure, and reduction to practice, and the Patent Office would then have a substantial basis for an administrative award and the practice would be in line with the intent that the first to invent shall be rewarded. If this is not the intent of the bill then those for whom this statement is made are opposed to it, for the reasons indicated. In either case the phraseology of the bill should be clarified.

It is suggested that a clause be added to paragraph (1) on page 5 of the bill (or alternatively be inserted following the period in line 14 of page 7 of the bill) providing for suitable supplemental proceedings for the cancelation of the patent granted on the basis of the administrative award, or the invalidation of claims of such patent, as might be appropriate.

Such

Further, it is respectfully urged that paragraph (m) on pages 5 and 6 of the bill be modified to give the District Court of the United States for the District of Columbia exclusive jurisdiction for interference actions under section 4915. provision would have the advantage of building up in one court a consistent body of law and practice which could be reasonably relied upon. By restricting the interference practice to the courts of the District of Columbia tribunals would be assured better qualified to try the highly technical interference issues than would be available if jurisdiction is given to all of the Federal courts.

Also, it is believed that with the limited jurisdiction the expense to the litigants would generally be lower. As the bill is drawn, in a two-party interference, a junior party living in the East might have to go to the west coast to institute suit if the senior party were a resident in the latter district. Moreover, if an appeal were taken from the district court decision, it would follow the usual practice of appellate courts, with regard to printing the record and briefs, etc. The cost involved in such proceedings would undoubtedly be greater than the cost involved to an applicant under the present Patent Office proceeding. It would undoubtedly result in a great many inventors, because of financial limitations, being precluded from carrying on an interference proceeding.

Also, many district courts require that a plaintiff shall either give a bond or cash deposit of $250 to cover possible costs; and in appellate proceedings the appellant must file a cost bond of $250.

In the usual proceeding under section 4915, all costs are assessed against the losing party and there is nothing in the present bill which would change that situation. Therefore an inventor in moderate circumstances would have a heavy financial burden in an interference proceeding. On the other hand, corporations, or persons well financed, would have a corresponding advantage.

This, it is thought, is a change in the wrong direction as compared with ourpresent interference practice where each party to an interference has to pay his own costs so that cost bonds are not required and where the Patent Office fees and even the fee of the Court of Customs and Patent Appeals are very moderate.

Accordingly it is suggested that the bill be modified to add to section 4915 a provision that each party to an interference action under that section pay his own costs and his proportionate share of the court costs.

Finally, the paragraph on page 6, lines 9 to 14, inclusive, makes res adjudicata a determination of priority as against persons not parties to that determination, and it seems questionable, to say the least, whether such a departure is justified. Also, lines 13 and 14 of this paragraph seem to be obscure and uncertain in meaning.

Respectfully submitted.

RAY S. GEHR,

President, Cleveland Patent Law Association.

CLEVELAND, OHIO, February 22, 1944.

STATEMENT OF DANIEL C. CULLEN, DETROIT, MICH.

Mr. CULLEN. I am a patent lawyer from Detroit. I was on the committee with Mr. Barnett as chairman and during the year that this committee was in existence we spent a great amount of time studying this bill from every point of view. It was this committee that drafted the bill.

During the correspondence we encountered considerable objection to this type of proposal. The objections came from members of the committee and during the year those members of the committee who who had objections at the start of the year recognized that their objections were the old-fashioned objections made to any new procedure, namely, we just never did it that way and we do not think we ought to do it that way.

During the year all but one of the members of that committee adopted this proposal and approved this bill. During a period when permit was granted to others to file objections to this bill, the sum total of those objections was three and the sum effect of those objections was that we ought to delay this bill for another bill so that we can study it some more, and it is just that spirit of delay we are concerned with here.

When you look at this old procedure and compare it with the new procedure, you ought to be impressed with one startling fact that I do not think has been brought out sharply thus far. The present procedure has two practical effects and they are the major and the only major practical effect of the present procedure, apart from all the little details, but there are two major effects.

The first is that an applicant by the present procedure is enabled to obtain a patent for himself, that is No. 1.

The second is that by the present procedure an applicant is enabled to block somebody else from obtaining a patent. It is just like grabbing hold of the bat when Babe Ruth is going up to bat. I can't hit a home run, but if I hold that bat Babe Ruth cannot either. That is the principal effect of the present procedure. Experience has shown that that is the major practical effect. However, there are these two practical effects:

No. 1 is to obtain a patent and No. 2 is to block the other fellow. Now, the revised procedure, this proposed revision, does not in any way diminish the right of an applicant to obtain a patent for himself. There is no diminution of that at all. There are some minor changes and those minor changes will be discussed at great length by others but there is no diminution of that right. He can still obtain a patent by going through the same kind of thing that he must go through now. He may do it in a different place, he may do it under a slightly different set of rules, but he does the same thing in about the same way.

It is the second practical effect that exists in the present procedure that completely is eliminated by this proposed revision. That second practical effect, as I explained, was the effect of blocking somebody else. Now, that completely is eliminated by the revised provision and if we strip this bill of everything else but one paragraph, we would have accomplished about 95 percent of what is to be accomplished by this procedure and that paragraph you will find in paragraph (k) on page 5, and that is:

The grant of a patent to the applicant in whose favor such administrative award has been made shall not be withheld. suspended, or delayed because of the pendency of any priority proceedings.

That is the whole bill. It reminds me of the old parable. Someone was asked to tell the whole Bible while standing on one foot, and he said, "That is easy; do unto others as you would have them do unto you." All the rest is commentary.

Mr. LANHAM. If you would like to amplify your statement for the record, we will be glad for you to do so.

Mr. HENRY. May I interpose a remark? In connection with what the past speaker has said, I would say, do not enable anybody to do others.

Mr. LANHAM. Mr. Cullen's further statement will be incorporated in the record at this point.

(The statement referred to follows:)

STATEMENT OF DANIEL G. CULLEN OF DETROIT, MICH.

I practice patent law in Detroit and also am head of the patent department of Bull Dog Electric Products Co. I was formerly an examiner in the United States Patent Office. I appear before the committee as an individual.

To my way of thinking, the entire subject is crystallized in the one short paragraph of the bill, namely section 4904, paragraph K, on page 5, which specifies that the grant of a patent shall not be withheld, suspended, or delayed because of the pendency of any priority proceedings. This really means that the grant of a patent to one of two applicants shall not be delayed while the other applicant is carrying on priority proceedings, including the taking of testimony and the carrying forward of the various appeals and lawsuits.

In order to understand the importance of this requirement of the proposed bill, we should compare the practical results possible under the present practice with the practical result of the proposed practice.

Under the present practice there are two practical results in an interference:

1. An applicant is enabled to obtain a patent for himself.

2. An applicant is enabled to delay, or hinder, or block another applicant from obtaining a patent.

It is the second practical result of the present practice that has been the subject of criticism for over 35 years. Despite all attempts thus far to revise the practice, it is still possible to delay, and very often it happens that an interference proceeding operates to delay, the obtaining of a patent by one of the applicants, This, of course, means that the other applicant, regardless of his motive, is enabled by carrying on the proceeding, to delay or block the issuance of a patent to his rival. It also means that each applicant knows that he is in a position to block the issuance of a patent to his rival.

There is only one sound way of eliminating delay from our present practice, and that is to eliminate the advantage that one applicant can obtain by delaying the proceedings. Paragraph K eliminates the advantage which one applicant can get by delaying the proceeding, namely, the advantage of blocking or delaying the issuance of a patent to his rival. The proposed practice, therefore, eliminates delay simply by eliminating the advantage of delay, and this is a very direct way of handling the problem.

The first practical result of the present practice, the obtaining of a patent for one's self, is in no way changed by the proposed practice.

Under the present practice an applicant must take testimony in order to establish priority and get a patent, and this is just as true, but no more true, of the revised practice.

Under the present practice that testimony is taken by deposition and, in some cases, in open court as well, under section 4915. The revised practice would also have it taken, either by deposition or in open court.

Under the present practice the testimony is reviewed, not only by the Patent Office but also by a court, if an appeal is taken under sections 4911 or 4915. Under the proposed practice the Patent Office does not review the testimony, and there is only one review, by the court, rather than two reviews, as at present, by the Patent Office and the court.

Under the present practice an applicant carrying on his proceedings can obtain a patent if he establishes priority, and this is just as true of the proposed practice. The proposed practice in no way diminishes the first of the two practical results of the present practice, namely, the obtaining of a patent, but completely wipes out the second practical result of the present practice, namely, delay the grant of a patent to a rival. No one would stand up in favor of the present second practical result. There is no good reason for retaining that second practical result. The proposed bill eliminates that second practical result in the most effective way possible, by eliminating completely an advantage that can be obtained from the second practical result.

Mr. LANHAM. You may proceed with your statement, Mr. Byerly.

STATEMENT OF ROBERT W. BYERLY, NEW YORK, N. Y.

Mr. BYERLY. I appear as an individual but I am chairman of two committees in New York that have given some study to this sort of legislation. I polled the committees informally and I found almost unanimous approval of what we think is an extension of this bill and almost unanimous condemnation of the terms of the bill.

The question of interference; I mean the procedure that has been built up around interference, with all due respect to the assistant, is a cancer in the patent system, particularly because of the delay. Now, a case can be tried, first in the Patent Office, and over again on new testimony before the courts, and that delay, besides being bad for the applicants, has the extremely bad effect for the public in effect by lengthening the terms of the patents, so there is a situation here which I think calls for improvement.

Now, if a case is to be tried twice, you can improve a situation by making it tried only once. That leaves the question of whether that would be; that is, the one trial should be in the court or in the Patent Office. On that I think the court is unquestionably the place because the issue in an interference is a very simple question of fact. The subject matter may be complicated, the setting may be complicated, but the question is, did you invent this first, or did he? That is an issue of fact which the courts are qualified to try by oral trial in court. And so, I think if we are going to have one trial that trial should be in

court.

Now, how to do that? There is about an even division among those I have talked to in New York as to whether or not a case should go directly into court with no action whatever in the Patent Office, which is my feeling, or whether there should be this presumptive award in the Patent Office. Just what that means is hard to tell, but if there is to be such an award, it should be phrased very simply, simply the Patent Office should be told it is to give a presumptive, a prima facie presumptive award and allow it to make its own procedure and not have it all set up in detail as in this bill.