general employment contracts, whether entered into before or after the inception of the employment relation.

My second comment relates to the definition of "service invention" in Section 402 (3) (A) and (B). "(G) rown out of the type of work performed by the employee" and "derived from experiences gained on the job" seem unnecessarily broad. In Roberts v. Sears, Roebuck & Co., 573 F.2d 976 (7th Cir.), cert denied, 439 U.S. 860 (1978), one Peter M. Roberts, a lowly sales clerk in Sears' hardware department:, invented a quickrelease socket wrench that allowed the user to change sockets with one hand. The employer then negotiated an assignment of the invention, which Roberts had made at home on his own time. For a maximum payment to Roberts of $10,000, Sears obtained rights to the wrench and sold 19 million copies in ten years, at a profit of one to two dollars each. Did Roberts' invention grow out of the type of work performed? He was a sales clerk. Was it derived from experiences gained on the job? Is this the type of "service invention" that you contemplate in this bill? Does not the definition need some clarification?

My third comment relates to the requirement, under Section 431, that the employee give written notice of any free invention to the employer so that the employer can determine whether or not the invention is a free invention. My problem with this section is that the invention is usually a trade secret for a period of time after its development and during the time the employee is either attempting to license it or is planning on developing it himself. Trade secrets lose their status as such when they become known to more than a select few to whom knowledge has been disclosed for the purpose of licensing or manufacturing. Requiring disclosure by the employee of an invention that is not a service invention unnecessarily impairs the employee's right to trade secret protection that may be vital for a short period of time. Perhaps your bill could provide for notice of the general subject matter of the invention and then submission to the Arbitration Board of Section 435 if the employer claims that it is a service invention.

H.R. 3577. Mr. Moorhead's bill might indeed close a damaging loophole in American patent law by expanding the patent infringement cause of action to include anyone who uses or sells a product produced by a patented process. It is Mr. Moorhead's stated intention to prevent sales of a product in the United States if the product was made by a patented process outside of the United States and the U.S. patentee has not authorized the practice of the process. However, the bill accomplishes much more than that. As written, the bill would create a new class of patent infringers, a class that has never been contemplated in American patent law. The bill would indict the innocent user or seller who is unaware of the fact that the production process is unauthorized. Our patent law has never expanded patent rights

to that extent and, in my opinion, such an extension of the 17-year monopoly is unwarranted. Our courts have carefully circumscribed the rights of the patentee. While ancillary rights are favored when they serve to enhance the ability of the patentee to obtain the reward that is justifiably due (e.g., license royalties and profits from sales), the courts recognize the patent as an extraordinary exclusive right in derogation of the historical distaste for monopolies of any kind. Thus, most cases limit the patent rights to those originally contemplated by the Congress under Article I, Section 8, Clause 8, of the Constitution. In my opinion, Mr. Moorhead's bill would be an untoward expansion of patent rights that cannot be justified.

A more appropriate solution to the problem addressed by H.R. 3577 would be the amendment proposed in S. 1535, in Parts I and II of the Proposal for Patent Legislation prepared by the Ad Hoc Committee to Improve the Patent Laws. Proposed Sections 271 (e) and (f) of that bill would cure the problem without unduly extending the patent grant to products not intended to be subject to infringement actions.

Board of Patent Appeals/Board of Interference Merger. The bill to be introduced that would merge the Board of Patent Appeals with the Board of Interference has apparently emerged from the Patent and Trademark Office itself, as an administrative measure to simplify Patent Office organization and, perhaps, to lower administrative costs. The Board of Appeals is a true appellate board, which renders a final administrative determination before the applicant is allowed to appeal to the judicial system. The Board of Interferences is not an appellate board at all. Once the patent examiner has found that two applicants have the same invention, and they are willing to propose identical claims, the interference is declared and moves on to the Board of Patent Interferences. That Board need make no further determination of patentability, but has only the assignment of determining who is the first inventor. Thus, the objects of the bill would not be achieved. The two determinations: patentability of claims and priority of invention, must still be made separately. If it is an object of the bill to allow the merged Appeals/ Interference Board to determine inventor priority before patentability, then we have not reduced the total workload of the Patent and Trademark Office, but we have imposed an additional burden on patent applicants who have a similar invention but who may ultimately find that the invention is unpatentable, even after priority of intention has been awarded.

H.R. 2610. The most important provision of this bill would institute defensive patents in this country. I am not at all certain that this would constitute progress. The idea of defensive patents is not new, but has not, over the years, gained a substantial foothold in American jurisprudence. While the idea is in some ways quite appealing, it has its disadvantages. The public disclosure of an invention without any attendant petition

for patent protection serves to increase the store of knowledge in a particular technical art, but the total contribution may be illusory. If there is no patentability examination under Sections 131 and 132 of the Patent Code, a disclosure may be published that contains sweeping language designed to include a wide area of technical achievement that the applicant has really not reduced to practice. While the bill does contain a requirement that the description be a sufficient disclosure under the Section 112 tests, the cursory check to be made by the Patent and Trademark Office may easily fail to discover the overbreadth of the claimed invention. Such a defensive patent would foreclose protection for a patentable invention that the author of the knowhow needed to reproduce the best mode of the invention. Omission of this information enables the applicant to claim more broadly than would be allowed if the knowhow were included. A similar practice would prevail in defensive patent practice. Even more alarming is the provision that would allow an unexamined defensive patent to serve as a basis for a priority claim when applying for a foreign patent. I do not see how an unexamined patent could be acceptable to those foreign patent offices that are now willing to issue fully empowered patents based on the examination known to have preceded the issuance of the U.S. patent.

Section 3 of H.R. 2610 would permit an appeal from a second rejection of claims by an examiner who is not a primary examiner. I welcome this as an improvement in the patent prosecution process that would help to shorten it and make it less complicated.

I have no comments to offer with regard to the remianing sections of H.R. 2610. The sections relating to international patent practice should be commented upon by practitioners familiar with that type of practice.

S. 1535. I am in accord with most of the proposals submitted by the Ad Hoc Committee to Improve the Patent Laws. I have already indicated that proposals I and II, relating to the unauthorized importation of a product made by a process patented in the United States, are to be preferred over the solution posed by the H.R. 3577. S. 1535 closes the loophole without unnecessarily expanding the exclusionary privilege of the patentee. The innocent buyer or user of the domestically made product is not exposed to liability under S. 1535 and should not be.

Proposal III should also be acted upon favorably. American inventors are in need of expediency in obtaining foreign patent protection and the proposed additions to Sections 184 and 185 should contribute to that expediency.

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.

Sincerely yours,

a.

Ramon A. Klitzke
Professor of Law

RAK:ns

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 summary 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.