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Senator Hart. Sixth, did you intend to change existing law by adopting a proposal for assignee filing?

Mr. KaUPER. A wide variety of assignee filing provisions was considered. Basically speaking, the administration bill does permit an assignee to file papers, subject to the protections for the individual inventor. It does not, however, change the existing substantive law with respect to joint inventorship or identifying inventive contributions by different individuals.

Senator Hart. There is no need to review with you the up-anddownhill business of the antitrust treatment and the subcommittee and committee's action last year and the year before last.

Let us find out, to the extent that you are free here, your own feeling, the Department's feeling, the administration's feeling, on this matter. Professor Turner and Judge McClaren, your predecessors, opposed the inclusion of antitrust licensing provisions in the patent reform legislation. Then Commissioner of Patents, Commissioner Brenner, opposed the inclusion of such a provisions in 1967 and 1968.

Since then, I believe, the Patent Office has changed its position. I would like to know the present views of the Anti-Trust Division on the need for such antitrust provisions.

Mr. KAUPER. Mr. Chairman, I do not believe it would be appropriate at this time for me to answer that. An administration position is being developed with respect to that issue and will be resolved, I hope, very shortly. At that point, I would be perfectly happy to discuss that decision and its merits or lack of merits. I think it important that we proceed with formulating the administration position.

We have a request, as I recall, from the chairman of this subcommittee for an administration position on this issue. And in an attempt to comply with that, I think we had better keep on the tract that we are presently on.

While I would be more than happy to discuss this with you in any forum you may like once the decision is made, I think I should wait until that time.

Senator Hart. This may, at least, signal the delay that would be involved if there are antitrust provisions. I think we would have to take you up on your offer to come in and talk about it.

Mr. KUAPER. I would assume so, Mr. Chairman.

Senator Hart. I should indicate that a vote has been scheduled in the Senate to begin about noon, but I would anticipate that we will be able to conclude before a recess.

This is not the most important thing in all the testimony given us. but why do you say that the administration bill is going to have the patentability brief requirement expire after 5 years?

Mr. KAUPER. I think there has been a feeling that this is simply a way to re-evaluate its effectiveness and whether there are other means of securing the same information.

There seems to be some confusion in the actual meaning of the statement, as to whether it actually expires within 5 years. The Commissioner is given some options after 5 years. What it is designed to do, without going into details of it, because there might be some disagreement about the precise meaning of that, is to permit a re-evaluation of the requirement at a particular point in time and permit, to a certain degree, some redesignation by regulation-perhaps even as to classes of cases where the brief would be required. The requirement is mandatory at the outset of the bill. But the provision I have been discussing would create some flexibility for the Commissioner, as well.

Senator Hart. I asked this in part because twice the Patent Office tried to require this patentability brief by rulemaking, and it was included in the bill of 1971.

I am not sure that either of us will have a better understanding at the end of these next several questions as to where we should be on how many years, but let me try anyway.

You recommended a 20-year patent term. That is 3 years—
Mr. KAUPER. From the date of filing.

Senator Hart [continuing). From the date of filing, a 3-year increase over the present.

Mr. KaUPER. Well, the extent to which it is an increase, of course, depends on when you begin the term.

Senator Hart. Your bill and ours start the term from the date of filing rather than the date of issuance ?

Mr. KAUPER. That is right. Senator Hart. The Patent Office expects to get to its goal of an 18-month pendency period. Assuming that happens, we would calculate the new patent term at 181/2 years.

Mr. KAUPER. I understand your arithmetic. A 20-year term, of course, is the term that was in the committee print earlier.

Senator Hart. What I am really leading up to, without arguing 18 months, good or bad-does the Department have or know of any economic study that suggests 20 years?

Mr. KAUPER. I think the answer to that is no.

Senator Hart. On the business of the potential anticompetitive effect in this business of deferred examination, it is your judgment that it could or would be anticompetitive because competitors would not know which claims might be allowed and hence would be disadvantaged.

Let's assume that to be correct—could you not argue that that would be better than the issuance of a large number of low quality patents ?

Mr. KAUPER. Yes; I think that is true, Senator. I think if one assumes that there is going to be a large number of low quality patents issued, then, weighing all various competitive factors, obviously that becomes fairly important.

I think, however, discussing deferred examination, that there are a vareity of choices that are present here. One way is to proceed along the deferred examination route. Another is to say, the best way to improve the quality of issued patents is to get the most effective examination as rapidly as possible from the outset. This provides more certainty. It may assure quality from the outset.

And I think what we are saying is that we believe, in essence, that that is the preferable course, rather than starting down the path of a deferred examination system.

Now, obviously, one's views depend on how successful one thinks the process will be.

Senator Hart. Thank you very much.
Mr. KAUPER. Thank you, sir.

Senator Hart. There being a vote occurring now, I would suggest a recess until 2 o'clock.

[Whereupon, at 12 p.m., the subcommittee was recessed to reconvene at 2 p.m., the same day.]


Senator HART. The subcommittee will be in order.

Mr. BRENNAN. Mr. Chairman, the first witness this afternoon is Mr. Dunne of the Patent Office Society.


COMMITTEE, PATENT OFFICE SOCIETY Mr. Dunxe. Mr. Chairman, members of the committee, my name is Jerry Dunne. I am the chairman of the Legislative Committee of the Patent Office Society.

I wish to state for the record that I am appearing here today on annual leave, and that I am an employee of the Patent Office.

The Patent Office Society is an organization devoted to the fur. therance of the patent and trademark systems and the professional development of its members. The society numbers among its members over 1,100 Examiners and other professions of the Patent Office. This represents over 90 percent of the total number of professional employees in the Patent Office. Although many of its members are employees of the Patent Office, the society conducts its affairs independently of the Patent Office, thus this report does not reflect and should not be construed to be the views of the Patent Office administration.


Section 2 of S. 1321 provides for the establishment of the Patent Office as an independent agency. The Patent Office Society favors in principle such an administrative restructuring.

The Patent Office, in fulfilling its duties in administering the patent system, affects three separate sectors of the national community. The decisions and policies of the Office affect the business community, the scientific community, and the consuming public. Pres. ently, decisions of policy effecting the patent system are influenced by the Secretary of Commerce, who is charged with furthering American business interests, the Assistant Secretary for Science and Technology, charged with furthering the interests of the scientific community, and the Patent Office administrative personnel. The divergent and possibly competing interests of these various sectors provides for at best, a decisionmaking process responsive to the interests of the various sectors and at a minimum, competing policy

interests that frustrate attempts at positive and effective management.

S. 1321 provides an administrative restructuring that would retain the positive aspects while diminishing the negative influences in the present administrative feedback between the Commerce Department and the Patent Office. Section 10 of the proposed bill, providing for the Advisory Council on the Patent System, insures the necessary input to the decisionmaking process from those sectors of the citizenry affected by the policy decisions of the Patent Office. Section 2 of S. 1321, establishing the Patent Office as an independent agency, frees the Office from the possibility of its programs and policy decisions being affected by interests and influences not in the best interests of the general public nor the patent system.

I would like to move on to the creation of the Office of Public Counsel. Section 3(d) of S. 1321, creates the Office of Public Counsel. The Patent Office Society favors in principal the creation of such a position within the Office.

The creation of the Office of Public Counsel will place additional burdens upon some patent applicants of time and expense. Whenever the Public Counsel intervenes in any proceeding, the applicant will incur additional legal expenses and possibly a delay in issuance of his patent. However, by the very nature of the Public Counsel's mission, that is, to intervene in the public interest, the Public Counsel will participate in patent applications they will have a perpensity to be of significant economic influence and thus of great value to the applicant. Under such conditions, the additional expense that may attach to the applicant will not defer him from filing nor unduly prejudice his right to the patent monopoly, which offers him such potential benefits. When the Public Counsel intervenes in the proceedings before the Office on applications of substantial economic interest to the nation, the additional expense to the applicant and the government is justified to insure such patent applications receive the best possible consideration in the Office, to protect not only the interests of the public, but also the rights of the applicant.

The specific statutory language of section 3(d) of S. 1321 is objected to, as can be noted in appendix A. It is the position of the society that certain safeguards, to insure proper qualifications of the public counsel and adequate staff, be provided. Further the language requiring review of all Office proceedings places an undue burden on the public counsel. To monitor all proceedings would require a staff approaching in size that of the examining corps. It is urged that such a large allocation of manpower would better be used elsewhere within the Office with more dramatic results in improving the patent system. Further it is suggested that the specific delineations of when it is necessary or appropriate for the public counsel to intervene or participate in Office proceedings are too restrictive and should be deleted, enabling the public counsel to take action whenever appropriate and not be limited by specific statutory language defining his authorization. Attention is directed to appendix A, which contains the society recommendations on specific statutory language of section

[The information referred to follows:]



The following are the changes and reasons for same. Material to be deleted has been bracketed ([ ]), material to be added has been underlined. Section 3.Commissioner's and other officers

(a) There shall be a chief administrative officer of the Patent Office, the Commissioner of Patents, referred to in this title as the Commissioner'. The Commissioner shall be appointed by the President, by and with the advice and consent of the Senate, and he shall be compensated at the rate now or hereafter provided for level IV of the Executive Schedule pay rates (5 U.S.C. 5315). The Commissioner shall superintend or perform all duties required by law respecting the granting and issuing of patents and the registration of trademarks, and he shall have charge of property belonging to the Patent Office. The Commissioner is authorized to promulgate rules and regulations governing proceedings before the Patent Office and to prescribe such further rules and regulations which may be necessary for administration of the Patent Office, not inconsistent with law. [; to define any and all terms used in this title in connection therewith ; and otherwise to prescribe such further rules and regulations as may be necessary or proper for purposes of administration of the Patent Office.] (1)

(b) There shall be a Deputy Commissioner of the Patent Office, who shall be appointed by the President, by and with the advice and consent of the Senate, and who shall be compensated at the rate of now or hereafter pro vided for level V of the Executive Schedule pay rates (5 U.S.C. 5316). The Deputy Commissioner shall perform such functions as the Commissioner may assign or delegate and he shall act as Commissioner during the absence or disability of the Commissioner or in the event of a vacancy in the Office of Commissioner.

(c) There shall be no more than three Assistant Commissioners of the Patent Office, who shall be appointed by the Commissioner and who shall be compensated at a per annum rate of basic compensation fixed by him not in excess of the maximum scheduled rate provided for positions in grade 18 of the General Schedule (5 U.S.C. 5104). Such Assistant Commissioners shall perform such functions as the Commissioner may from time to time assign or del. egate. In the event of vacancies in the Offices of Commissioner and Deputy Commissioner, or their absence or disability, the Assistant Commissioner senior in date of appointment shall fill the Office of Commissioner until said vacancies, absences or disabilities terminate.

(d) There shall be in addition an Associate (Assistant) (2) Commissioner of the Patent Office for Appeals, Litigation, and Public Counsel referred to in this title as the 'Public Counsel', who shall be appointed by the President, by and with the advice and consent of the Senate. The Public Counsel shall be a person competent legal knowledge in the intellectual property field and possessed of scientific ability. [The position of Public Counsel shall be in the com. petitive service, and the](3) The per annum rate of basic compensation therefor shall not exceed the maximum scheduled rate provided for positions in grade 18 of the General Schedule (5 U.S.C. 5104). The Public Counsel shall assure as an advocate, and through the adversary process, that high quality patents which meet the statutory and constitutional criteria therefor issue Public Counsel's approval, an adequate and competent staff for the Public from the Patent Office. To that end the Commissioner shall provide, subject to Counsel so that (4) he may (5) [shall] consider and review all application proceedings before (6) (in) the Patent Office, and he or his delegates :

(1) may intervene and participate at any time in the above mentioned (6) [any] Patent Office proceedings, or appeal therefrom, when, in his discretion, it is necessary or appropriate to do so [:] ; and

[(A) in the public interest to assure the integrity, strength, and reliability of a high quality patent system; or

(B) in circumstances which indicate the public need toanalyze or defend an important, new, or developing theory of law; or

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