manufacturers who want to compete in marketing a shrimp-making machine, do not have to go abroad to their market to set up manufacturing facilities. They can set them up here in the United States, use American labor, American materials, American capital. Here we have a situation where the patent policy, or the patent people, may feel that it is inappropriate to allow American firms to manufacture a patented device in parts and such is, in fact, making the device, infringing a patent while American business interests may seem to indicate that this was very good, because it helps the American company, the balance of trade, and the rest.

These types of conflicts of interest would exist in making decisions on marketing patents. I think these kinds of influences are proper, but they should not be the orientation of a man who oversees operations as the Secretary of Commerce. He does have oversight power. There may be possible conflicts.

Again, I would like to make perfectly clear I am not suggesting this type of discussion has ever gone on in the halls of Commerce. This is the type of example I could dream up.

Senator HART. You have made it clear that you are not suggesting that either proper or improper influences have been exercised. But you do suggest there is a propensity, or inherent possibility?

Mr. DUNNE. Yes, sir, I do.

Senator HART. Do you, as an individual, have any opinion as to whether the frequent changes in the person of the Commissioner of Patents, a tradition that goes over a long history, affects adversely the morale of the personnel in the Patent Office?

Mr. DUNNE. That would depend about the feelings about the Commissioner in office at the time. I have been through three Commissioners. I believe it is harmful, sir. I most definitely do. I think it has an adverse affect on morale. Continuity of programs, that are the basic programs in the operation of the Office have been maintained. I have been in the Office under Commissioner Schuyler and Commissioner Godtschalk and now Commissioner Tegtmeyer.

There has been a continuity of programs. There have been innovative programs come in under the different administrations which I think is good. But I think three Commissioners within 3 years is a bit out of hand. Of course, if we go back 5 years, they number more. Effective management cannot be done by a 1-year Commissioner, particularly in the Patent Office.

In the Patent Office, we have a group of professionals that are fairly unique in Federal service. They are fairly unique anywhere. They are trained as engineers, scientists, highly well educated technical people. Most have a law degree or are attending law school. We have an unusual profession, not one that can be managed by fiat, one that can be managed only by having faith in the programs, particularly when you get to the upper management levels.

For a Commissioner to effectively manage or administer-as opposed to policy-to effectively administer the Office requires great confidence from his Directors and his supervisory primary examiners and the examiners themselves. We are an independent group of employees.

I think it is very harmful, the changeover. We do not have trust, faith, or confidence in the everchanging leader type of concept, which is definitely harmful.

Senator HART. Mr. Brennan?
Mr. BRENNAN. No questions.
Senator HART. Mr. Nash?
Mr. NASH. No questions.

Senator HART. Mr. Dunne, thank you very much.

Mr. DUNNE. Thank you, Senator.

Mr. BRENNAN. Mr. Francis Browne.

Senator HART. Mr. Browne, I think you joined us to discuss the aspect I was last talking about with Mr. Dunne.

Mr. BROWNE. Yes, Senator.

STATEMENT OF FRANCIS C. BROWNE, ESQ.

Mr. BROWNE. My name is Francis C. Browne. I am the senior partner in the law firm of Browne, Beveridge, DeGrandi & Kline, and a member of the bar of the District of Columbia and Maryland.

My own personal background is-I started in patent work in 1938. I am admitted to practice before the United States and Canadian patent offices. Some of my early patent practice was in industry and government. Since 1945, I have been continuously engaged in the private practice of patent, copyright, and trademark and unfair competition law here in Washington.

I have held office in and served on the board of managers of the American Patent Law Association. I have been chairman of various committees of the American Bar Association Section of Patent, Trademark, and Copyright Law. I am a past chairman of the patent section of the Bar Association of the District of Columbia.

I have served as a consultant to the House of Representatives Committee on Science and Astronautics on the subject of Government patent policy and also as an adviser to the Organization of American States on patent and trademark matters.

I am submitting this statement on my own personal behalf and not on behalf of any organization or client. So far as I know, no organized bar association has considered the proposal I am about to make. However, in discussing the substance of my proposal with some former Commissioners of Patents and other highly regarded members of the patent bar, they have indicated that the idea has some merit and have expressed surprise that it has not been suggested before now.

I am interested, particularly, in the administrative process by which the patent system operates in implementing the statutes enacted by Congress under article I, section 8, of the Constitution. The key to efficient administration of the patent statutes and effective operation of the U.S. patent system, in my opinion, lies in bringing the organization and function of the U.S. Patent Office more directly under the control of Congress.

By way of historical background, it can be recalled that Congress, in exercising its powers under the Constitution to promote the progress of science and useful arts enacted the first patent law in 1790.

The authority to grant patents for discoveries of inventors was placed in the hands of a three-member board-the Secretary of State, the Secretary of War, and the Attorney General.

There were no independent agencies in the executive branch at that time, so Congress placed the administrative responsibility for implementation of the statute in the State Department, that being the seniormost Cabinet department at the time.

Three years later, however, the three-member board was abolished and the examination system which existed during that time was abolished. They then went to a system of registering the patents, so to speak, and granting patents merely on the filing of an application. So it was really a clerical function, which was assigned to the Secretary of State. And in 1802, when James Madison, was Secretary of State-he established a separate division in the department for issuing patents and appointed a Dr. William Thornton to fill that position. And he later adopted the title of Superintendent.

In 1816 Madison became President, and in a special message to Congress, he urged that the Patent Office be given the status of a separate bureau. However, it was not until 1836, when the examination system was reinstituted and the patent laws were revised extensively, that the Patent Office became a distinct and separate bureau, the Commissioner of Patents being appointed by the President with later that jurisdiction was transferred to the Department of Commerce. I will come to that point later.

When the Patent Office was established in 1836, copyright matters were retained in the Department of State. But in 1859, the responsibility for those matters was also transferred to the Department of Interior, whereupon the Secretary of Interior gave the Commissioner of Patents the responsibility for copyrights and a Librarian of Copyrights was appointed in the Patent Office.

When the next major revision of the patent laws went into effect in 1870, the copyright function was turned over to the Librarian of Congress, an arm of Congress itself, and the Patent Office was given, instead, the responsibility for administering the newly enacted trademark statutes. That is the first time that the Patent Office had anything to do with trademarks. Four year later, as an adjunct to the trademark operation, the responsibility for registration of copyrights for prints and labels used with manufactured goods was taken from the Copyright Office and given back to the Patent Office. In 1939, this function was finally returned to the Copyright Office in the Library of Congress.

By Executive order issued in 1926, jurisdiction over the Patent Office was transferred from the Department of Interior to the Department of Commerce. I make special note of the fact that that was by Executive order, not an act of Congrss. This was the first step towards diminishing congressional control over the Patent Office and dilution of the authority of the Commissioner of Patents. In 1933, 1 year after the Patent Office was moved into the Commere Building at 14th and SE Streets, the Secretary of Commerce

injected himself into the management of the Patent Office nting a Patent Office Advisory Committee to assist him in

matters of general policy. For that committee, he drew upon personnel from industry, general law, and patent law.

Now, in 1950, under Reorganization Plan No. 5, the Secretary of Commerce vested in himself-again by Executive order-all of the functions of the Patent Office and then redelegated them to the existing Commissioner of Patents. When the patent laws were revised and codified 2 years later, in 1952, Reorganization Plan No. 5 was codified in the patent statutes, and the authority was given the Secretary of Commerce to vest in himself all the powers and functions of the Commissioner of Patents.

Although such powers have been redelegated to the Commissioner, as was the case under Reorganization Plan No. 5, there has been an increasing tendency on the part of most recent Secretaries of Commerce and Assistant Secretaries of Science and Technology to exercise greater policy and operational control and domination over the Patent Office and the Commissioners of Patents.

Thus, we have an anomalous situation where one Presidential appointee has the power and authority to completely strip another Presidential appointee of all his duties and functions with or with

out cause or reason.

To the extent that, in the first instance, success of the United States patent system is the responsibility of Congress, it would seem that Congress should not allow the Patent Office to be submerged several layers deep in a Cabinet Department of the executive branch. The analogy between the granting of a patent and the granting of other limited franchises by regulatory or quasi-judicial independent agencies or commissions leads one to the logical conclusion that the Patent Office should also be an independent agency or commission more directly responsible to Congress.

The proposal which I submit for your consideration at this time, Mr. Chairman, is really in the nature of an extension of the concept set forth in sections 2, 3, 5, 134, and 145 of Senator Hart's bill 1321. This would reestablish the Patent Office as an independent agency in the executive branch of the Federal Government.

Basically, I propose that instead of merely having a Commissioner and a Deputy Commissioner, as proposed in your bill, S. 1321, there be established as an independent agency a five-member U.S. Patent Commission, the administrative structure of which would correspond to that of existing Federal franchise-granting or quasijudicial commissions, such as the Federal Power Commission, Interstate Commerce Commission, Federal Communications Commission, or the Civil Aeronautics Board.

I would suggest that the members of the Patent Commission which I propose be appointed by the President with the advice and consent of the Senate, each of the members, however, to be appointed for overlapping terms of 7 years, as in the case of other commissions. Likewise, not more than three members of the Patent Commission should be from any one political party, and the President should designate one of the members of the Commission to serve as chairman. By the way, this parallels the Federal Trade Commission Act; it is the statutory language. In this way, there would be greater continuity of service of Commissioners with the

consequence of greater consistency in the administration of the patent laws. This is the point that the previous witness from the Patent Office Society made, and I very strongly support his conclusion in that regard.

I also propose that the Commission appoint, under the Civil Service System, as many Administrative Law Judges-or, as they used to be called, Hearing Examiners-as may be necessary to perform the duties presently being performed by the examiners-in-chief who are now serving as members of the Patent Board of Appeals and the Board of Patent Interference Examiners. This proposal differs from section 5(a) of S. 1321 in that it would eliminate the title of examiners-in-chief and substitute the more current, consistent and meaningful title of administrative law judges. They would be on the same pay-scale relationship as provided in S. 1321.

Instead of conducting hearings in panels of three members each as provided in Section 5(d) of the present bill and limiting the record to that made before the patent examiners, as is presently the practice, I would suggest that the administrative law judges individually hear testimony, receive evidence, and obtain proposals for further amendments to the claims, prepare and file findings and conclusions, and be authorized to make final disposition of cases brought before them after final rejection by the primary examiner.

The applicant or in inter partes cases, the dissatisfied partycould request the Commission to review exceptions to the findings and conclusions of the administrative law judges. From the final decision of the Patent Commission on those exceptions, judicial review could be had before the U.S. Court of Customs and Patent Appeals on the record made in the Commission, including the evidence submitted to the patent examiners as well as that submitted to the administrative law judges.

If the foregoing recommendation is adopted, I then recommend that the so-called trial de novo in the U.S. District Courts, as provided under sections 145 and 146, be abolished, since the presentation of evidence before the administrative law judge and the Patent Commission would eliminate the necessity for that type of judicial review.

If I may add a footnote, recent cases which I have noted since this statement has been prepared, I find that the so-called de novo affect of the trial in the District Court is more of a dream than a reality. There are cases that say that the evidence introduced in a trial de novo should be limited to that which was introduced in the Patent Office and relate only to issues presented in that Office.

Finally, I would leave the entire trademark registration function in the Commerce Department, separate from the Patent Office, since it is a purely ministerial or registration function arising under the Commerce clause of Article I, Section 8 of the Constitution, not under the Patents and Copyright clause. Another reason for separating this function from the Patent Commission is that trademark jurisprudence arises primarily out of the common law, whereas patents and copyrights are Congressionally created franchises which are constitutionally based statutory exceptions to the common law.

Here I may be treading in an area I am not as well informed as I should be. I am advised that there is a jurisdictional dichotomy