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Mr. BRENNAN. One final question. Did you become Commissioner of Patents because of your political influence and active role in politics?
Mr. BRENNER. I am glad you asked me that question. Unfortunately, I would say the Commissioner of Patents has always changed as the administration has changed. I personally think that that is not in the best interest of the operation of the system, but being Presidential appointees, perhaps that is inherent.
I would say this, that I was a registered Republican, and I was appointed by a Democratic President, Lyndon Johnson. And like Commissioner Schuyler said, if that is a political operation or political plum, it escapes me.
Mr. BRENNAN. Thank you.
Senator IIART. I was tempted to undertake a definition of political plum when the question was raised earlier, and I think there is not any universally agreed upon definition. Some would define it as a job that changes with administrations.
Mr. Nasu. Let me ask one question, Commissioner. This relates to the quantity and quality of patents that are issued. It has been expressed to me by a number of examiners, and indeed in the literature-and we will have some examiners in, and we will explore itit has been expressed to me that over the past 5 years or so a quota system has been reimposed on the Patent Office. Examiners are required upon pain of lack of promotion or other problems created for them, to issue a certain number of actions within each period.
And it would just seem to a nonpatent expert that any kind of a requirement for a quantity production would of necessity have to reduce the quality; and I would like your observation on the logic of that statement, as well as any information that you have on the facts of whether a quota system does exist.
Mr. BRENNER. I think the patent system has to operate, at least with respect to the operation of the Patent Office, based upon two major points. One is the patent laws, the type that we are talking about here today, as to how the patent system is to operate; and secondly, you have to operate within the budget provided by the Congress.
As I say, Congress says this is the kind of operation we want to run here, the amount of money we are giving you to operate it. The Patent Office and any Commissioner or anybody else in the Patent Ofice has to operate within that framework.
So maybe you could look at it one way, that OK, if this is a job we have to do, somebody imposed some limits on the amount of resources that we can apply to this. If you want to call that a quota system, okay. That is the way you look at it. I do not really look at
This is one of the reasons why I said that I thought that there should be greater study in depth of what is involved in this quality. I think probably if you double the budget of the Patent Office from $70 million to $140 million, increase the staff from 2,500 to 5,000, you would probably have a better quality product coming out. But the question is is that extra $70 million worth whatever you gain! Herein I think is where the problem is—how much is quality worth?
it that way.
So anyway, that is the way I would answer that question. And I doubt if the Patent Office ever will get in the position where it has enough time and manpower to do the perfect job. I just do not think that would help, and it is a matter of balance.
Mr. Nash. As I understand you, you are saying that yes, a minimum output requirement exists.
Mr. BRENNER. I think the Congress tells me, when I was Commissioner, that it gives me a budget. I give you so much money to do this job, to process so many applications. If that is called a quota or whatever it is, I think that is the way the system has to operate. It is not only true in the Patent Office; it is true any place. You can look at any agency. They have got to operate within their budget. And if you wish to call the work outputs quotas, so be it.
Mr. Nash. Thank you.
Senator Hart. Because of our policy committee luncheon at 12:30, I would suggest that we recess now until 2.
[Whereupon, the hearing in the above-entitled matter recessed for lunch at 12:25 p.m., to be reconvened the same day at 2 p.m.]
Mr. BRENNAN. The first witness for the afternoon session is Charles M. Hogan.
Mr. Hogan, we have a prepared statement which I trust you wish to have printed in full at this point in the record.
Mr. Hogax. If you please, Mr. Brennan. And with the Senators' permission, I would like to streamline it with a few remarks.
[The prepared statement of Charles M. Hogan follows:]
STATEMENT OF CHARLES M. HOGAN, ATTORNEY AT LAW
September 11, 1973. Re S. 1321, The Senator Hart bill.
Honorable Chairman and members of the committee, my name is Charles M. Hogan. I present this statement and appear to testify in favor of certain features of the Hart Bill. The views herein expressed are offered solely on my own responsibility and are not represented to be those of any other entity.
I have been employed in patent work on behalf of Avco Corporation for twenty-six years, during the last seven as General Patent Counsel. Prior to employment by Aveo, and beginning in 1940, I successively worked in the general practice of law at Wellston, Ohio, as a junior examiner in the United States Patent Office, and as a patent lawyer with the Hazeltine Electronics ('orporation in New York City. During my service years I was assigned to the Bureau of Naval Ordnance. Between the end of World War II and association with Arco I engaged in the private practice of patent law in Chicago.
I served one term as President of the Cincinnati Patent Law Association, participated actively in bar association committee work and published several law review articles on subjects related to patents.
While I speak from a corporation-oriented point of view, it has been my privilege to work closely with inventors, some humble, some renowned, such as Ronald J. Rockwell, chief engineer for the “Voice of America," the late Herrick L. Johnston, head of the Cryogenics Laboratory at Ohio State University, and Professor Richard H. Engelmann, head of the College of Electrical Engi. neering, University of Cincinnati. I have individually prosecuted several hundreds of patents and have been attorney of record in the issue files of sereral hundred more.
I share the concern of this country and this honorable Committee that the United States is confronted with an energy crisis, an ecology crisis, and inflation, all at a time when Japan, the Soviet Union, and others are giving us very hot competition for technical leadership The patent system has always been one of the spark plugs of our economy and growth in technology. However, it suffers from a certain lack of confidence both in the courts and in the public eye just at the time incentives are most needed.
THE PROBLEM AND THE BROAD PRINCIPLES REQUIRED FOR SOLUTION Various factors—including caution on the part of patent attorneys, difficulty in predicting the future course of inventions, catering to the vanity of clients and senior engineers, the reluctance of patent attorneys and agents to pass judgment and reject patent application opportunities, and the statistical fact that a fraction of the inventions zealously protected achieve success-cause the work load of the United States Patent Office to consist, not only of thousands of applications pertaining to true inventions, but also a large number—in my opinion a greater onerepresenting no more than the ordinary skill of the art. The efforts of the patent attorneys, in prosecuting the aggregate work load, tend to depress the Patent Office standard of invention below the level of the constitutional intent. Examination is superficial. While the veteran examines and the directors of the examining groups and the members of the appellate tribunals of the Patent Office are generally men of substantial experience and scientific knowledge, they are frequently academic types not close to industry. The front line examiner is often a junior, a recent engineering or science graduate, armed with a superficial grasp of the art. The inevitable result is that the examination is often incomplete. Even when conducted by a senior examiner, it does not extend adequately into the literature or the foreign prior art. The presentation by the applicant is unilateral, and the Patent Office has no machinery to determine effectively whether statutory bars exist.
Thousands of applications are filed which should not have been filed. Thousands of patents issue which should not have issued. The efforts of the Patent Office are so diluted in the examination of meritorious inventions that when the patent on these properly issue the absence of a complete citation of prior art often constitutes an undesirable cloud on them.
While the courts pay lip service to the presumption of the validity of patents, they declare invalid or not infringed the majority of fully litigated patents.
The usual invalid patent represents an attempt to monopolize something in the public domain. Instead of advancing the progress of science and the useful arts, it handicaps them in that it is a powerful weapon in the hands of the occasional not-too-scrupulous management. Even an invalid patent can be used as a basis for extensive, complicated and costly discovery proceedings and trials so that defendants, unable to finance $100,000-and-up defenses, are compelled to surrender rather than risk the cost, loss of time and worry of litigation, which boils down to ordeals by expert when the technical issues become abtruse. The issuance of an invalid patent is accordingly a disservice to the public. Consider now the mine field of invalid patents into which a manufacturing industry must carefully tread when it is planning a new product or an improvement to an existing product. I do not say that most patents are invalid. I do say that the many invalid patents constitute a marsh and a briar patch and an affirmative obstacle to the progress of science and the useful arts.
The objective here is to establish reforms that will greatly strengthen patents on meritorious inventions and will weed out attempts to monopolize what should not be monopolized and patent applications that do not represent an affirmative contribution to science and technology. While there is much to be said for getting all inventive concepts and disclosures out on the table, none
w tbe patent law profession must sift judiciously and the examination in
reason to assume that even an extensive completely
in the Patent Office is going radically to increase
the general order of competence of the examiners. A way must be found in which to enlist the affirmative and enthusiastic aid of industry and inventors and patent attorneys in furnishing input data for the examining process.
The experienced attorney generally overpowers the relatively inexperienced examiner in the over-all lowering of the standard of invention in the U.S. Patent Office. This is a major reason for the issuance of invalid patents. A very secondary reason is misrepresentation and fraud on the part of patent attorneys and applicants. Patent attorneys as a class are as ethical and dedicated a group of professional men as can be found. They are generally candid in their dealings with each other and with the U.S. Patent Office, but there are a marginal few who are standard forms for reissue oaths, who withhold knowledge of the most relevant prior art from the U.S. Patent Office, who present false oaths for signature by applicants, and resort to like sharp practices. In recent years, the courts have become more and more inclined to look into these and to hold patents unenforceable for fraud and unclean hands. There is need for machinery in the U.S. Patent Office that would discourage these practices and subject them to rigorous scruntiny. There is need for an agency whose very presence would constitute a detriment to fraud.
We must find a way to bring to bear on the examination process all available input intelligence and maximum competence and attention. At the same time, this optimum examination must be accomplished without unduly burdening the applicant, particularly the independent inventor. Many of the best inventions come from the individual inventors, the men who either do not know the rules of science or know them too well, the cross pollenizers, the men who take an unorthodox view of the status quo in technology, the men who are not satisfied with things as they are, the men who do not have to conform to corporate policy. The machinery must not be so elaborate as unduly to burden them or the already heavily overburdened taxpayer..
Let us now compare these objectives and the various curative proposals that Senator Hart is making.
THE PUBLIC COUNSEL-SECTIONS 3, 24, 132, 134, 142, AND 148 The Publie Counsel principle is eminently sound but there is some confusion in the proposed legislation as to the proper functions of the proposed Public Counsel and the present office of Solicitor in the United States Patent Office. The present office of the Solicitor should be continued. The Solicitor is the legal adviser to the Commissioner of Patents. He handles petititions on special matters and represents the Commissioner in defending appeals by applicants to the Board of Appeals. Most of these appeals involve the question as to whether or not an invention is patentable over the prior art. The Solicitor and the Boards of Appeals are thoroughly competent to perform these functions and their role should be continued. However, there are a number of bars to patentability which the Patent Office does not have adequate machinery to inquire into and the best prior art may not be on the record. The proper role of the Public Counsel is to inquire into these matters and to accomplish compliance with the very rigid requirements of candor and good faith that Sections 115 and 131 of the Hart Bill require. The objective of Sections 115 and 131 is to enlist the aid of the inventor and the applicants and the attorneys in placing on the record the most pertinent prior are known to them and a full disclosure of all facts, pro and con, bearing on compliance with the statutory requisites. The proper role of the Public Counsel is to inquire into these matters on which the highest good faith is required.
The Public Counsel should be empowered but should not be required to review all proceedings in the U.S. Patent Office. His office should be entirely independent from that of the Solicitor, who should continue to bear the princiDal responsibility to oppose appeals of applicants from the various tribunals of the Patent Office. The office of Public Counsel should be completely independent from that of Commissioner except for purely administrative matters. The Public Counsel should be permitted to appoint all of the employees of his office. He should receive complaints from examiners and competitors of applicants and from the public at large. With regard to fraud or unethical practice or noncompliance with statutory requirements or breaches of ethics, he should be empowered to inquire into them and to intervene in any case before the Patent Office tribunals, representing the public interest. Generally he should concern himself with cases involving fraud or unfair practice and his efforts should only supplement those of the Solicitor in the conventional defense of appeals, which generally involve the question as to whether or not the subject matter claimed is patentable over the prior art.
The Public Counsel must exercise a great deal of discretion and judicions restraint and should be sure that at least a prima facie case in favor of the public exists before he intervenes in any proceeding.
Most of the law relating to fraud and unclean hands is made in the Supreme Court or in the Circuit Courts of Appeals. It should be made in the Patent Office. There is presently no effective means for making it. The Public Counsel will supply the means. Clearly he cannot review all proceedings or intervene in all cases. That might require that his office have a staff as large as the examining corps. However, even operating on a spot check basis, his very presence will discourage misrepresentation and fraud, and litigation conducted by him will establish principles that will further discourage misrepresentation and fraud.
Heretofore the appellate procedure before the Patent Office Board of Appeals is invoked by the applicant. An excellent feature of the Hart Bill is the proposal that he may intervene in any Patent Office proceeding or intervene or appeal rulings therein. In other words, the Public Counsel, on behalf of the public, can now appeal if he is dissatisfied with allowance of a patent application by the primary examiner or a Board of Appeals. This will provide the public with machinery to uplift the standard of invention in the Patent Office so that patents issuing therefrom will have a better chance of vindication in court.
PUBLIC ADVERSARY HEARINGS-SECTIONS 122, 134, 135, 137, AND 138
The principle here involved is most commendable. The objective is to enlist the aid of the interested public and the relevant sector of industry in contributing to the examining process the maximum of intelligence and the optimum prior art picture. These sections require revision. It is suggested that not every applicant be subjected to what amounts to a full trial in the U.S. Patent Office. His case should not be published and laid open for opposition until it has been examined and tentatively allowed. At that stage it would be in order to consider, ex parte, any and all comments and reference material submitted by any interested party. Moreover, the Public Counsel could be brought in to ascertain if any public interest appears at that point. The interested party or opposer should not be permitted to intervene or participate in or set up an inter partes proceeding, bearing on the merits of the patent application, unless and until the Public Counsel determines, in a specific case, that such intervention would aid him in the performance of his function. In the majority of cases an ex parte consideration of data submitted by a potential adversary should exhaust the reexamination process.
A serious defect in opposition proceedings is in evidence in certain foreign countries. Many companies filing patent applications in those countries now simply assume that their competitors abroad will file oppositions, whether or not in good faith. The public Counsel should be given authority to ascertain whether or not data supplied by adversaries are furnished in good faith and to tax costs and penalties if they are not.
DEFERRED EXAMINATION--SECTIONS 191-193 The present practice of examining all patent applications is a prime reason why the examination is too often inadequate. This practice overlooks certain realities : that many patent applications are filed in order to establish dates on invention and set up defensive latitude for manufacturers who are not interested in licensing or like patent exploitation, and that some are filed for only potential use and others for bargaining purposes.
Under Senator Hart's proposal a patent application would not be examined on the merits unless and until the applicant visualizes commercial exploitatiou. a licensing opportunity, or some practical impact on the economy that would justify the payment of an examination fee. The applicant would have a fires year period of grace during which to make a request for examination and pas the fee. Upon failure to make it within the time limited, the application would