specialized patent court that would begin to believe that they were dealing only with their own little world. Now I will be glad to answer any questions if there are any. Senator HART. Well, Mr. Clark, your prepared testimony that we did have an opportunity to read supplemented by your oral testimony this morning is so comprehensive that I think we are left with very little to ask. There is no obscurity with respect to your views as to at least the principle elements of the bill. For all of that we are grateful. I know that in the earlier record of this committee on the occasion that you testified, I believe in 1970 or 1971, this item is reflected, but let me for the benefit of this record ask you the name of the company whose chief patent counsel you have served as for these many years? Mr. CLARK. I am, and have been counsel for 14 years, with Firestone Rubber Co. Senator HART. What kind of track record does Firestone have in the Patent Office and in patent litigation in the courts? Mr. CLARK. Firestone has over the years been involved in almost every major piece of litigation involving the tire industry. There is one case that has not yet been finally decided, but in all other cases. Senator, we have resisted the major patents which we thought were invalid and at great cost and expense substantiated that position and won those cases. We have not filed patent applications-no, pardon me, patent suits against the tire industry based upon our own patents. I would say that our competitors would say that the Firestone Tire & Rubber Co. is antipatent. I do not believe it is. We are antiinvalid patents. And strongly so. Senator HART. One of the points you have developed in your prepared testimony, and you referred to it again in your oral testimony, was the desirability of section 115's oath provision. Mr. Kauper, speaking for the administration or at least appearing on behalf of the Department of Justice and commenting on the bill, suggested that the administration bill does not include the attorney's oath. I asked this question just to underscore for the record your position. What is your view with respect to that? Mr. CLARK. I see no problem with the attorney's oath. I am in favor of it. There has been a bugaboo raised that this puts too great a burden upon the attorney but in any oath the affiant need only tesify as to what he knows and if he has no information as to a particular point, he can always state that fact. But I think that as to what an attorney knows which is relevant, he should state that and be willing to state it under oath or at least under conditions that would call for penalties if he deliberately misled the Patent Office. The question has been raised that perhaps every application that is filed must have a search and that the attorney must make an exhaustive search before he can make such an oath. I don't think that is required. I think all he has to state is that we have made no search or we have made a small search, but in any event here is the prior art and the best prior art that we know of. We have been doing this at Firestone for some years, because I feel and my management feels that an invalid patent is a debit and not a credit on the books of a company and it is a great mistake to believe that you have an asset of some value when in fact you have an invalid patent, which could in the end become a very dangerous instrument to be turned against you. I might add that insofar as an adversary proceeding in the Patent Office is concerned, Senator, there has for some years been an informal adversary proceeding. Let's assume that a corporation finds an issued French patent, which indicates XYZ corporation has filed a U.S. application, and they get a copy of that U.S. application from the French Patent Office. This is a normal, routine, proper procedure; and assume they are concerned about XYZ's patent application. They can take up a bundle of relevant prior art and submit it to the division of the Patent Office that is handling that subject matter and show them that issued French patent and say that if there is a U.S. application pending, and we are not asking you to state whether there is or not, but if there is one, then here is what we think is good, relevant, prior art. Now sometimes that works and sometimes it doesn't. There are some patent lawyers that will not submit prior art to the Patent Office saying they would rather reserve it for later use in court. They say let the patent issue and then we will fight it in the courts using this prior art. The reason they do this is because they have more faith in the courts in applying the prior art than they have in the patent examiner to apply it properly. So the formal adversary system that is provided for in this bill will work to the extent the patent bar cooperates with it and to the extent the patent bar has an increasing confidence in the competence of the Patent Office and the willingness of the Patent Office to apply prior art properly. If they do not gain that faith, then they will hold the prior art back and wait for their day in court. That is why it is important in the administration of this bill that the adversary system be administered with great care in the Patent Office and that the Patent Office take steps to see to it that the proir art is properly applied; otherwise people will feel that they have "wasted" their prior art, in the Patent Office. However, I think the adversary system that is provided for by this bill could be very useful and I am in favor of it. Senator HART. You have endorsed the deferred examination system. Now, as I understand the criticism or the opposition to deferred examination, and taking your view as being responsible for Firestone patents, the argument goes that you should be worried about your competitors filing a large number of spurious applications and deferring examination. As I understand it, the argument goes that this would create sort of a cloud over the technology because you wouldn't know which patents will issue. Firestone would be fearful of entering that area. Additionally, as I understand the argument, you would have to start reviewing all of the patent applications of your competitors in the art and the art would be burdened with a large number of questionable applications to be reviewed. How do you feel about that? Mr. CLARK. I don't agree with that. I would in the first place much rather know what my competition has filed and have an opportunity to examine it and be sure of what is going on. We do find out as I said earlier, we generally find out from an examination of foreign patents what may be in the Patent Office. However if the patent files should be made open to the public under 1321 we will know with certainty what is there. If there is an application, a patent application of interest, we will do one of several things. We will compile our prior art and our defenses to be ready if the patent issues. Or we could use those in an adversary proceeding in the Patent Office and block that patent. Or we would begin work to work around it, which is very often possible, and in fact sometimes works to our advantage. I do not think that a published application in which the examination is deferred would intimidate anybody from doing work in the same field. As a matter of fact it might inspire them to beat their competitor at their own game; and I have seen that happen. So I think that it is all to the good to have the applications published earlier and to have a deferred examination. Senator HART. Mr. Brennan? Senator HART. Thank you. I read two sentences from your prepared testimony that struck my eye and that was "My view of the Patent System is that it is a system in distress, that it is in need of reform and that unless it is reformed it may face total collapse. Hopefully the provisions of 1321 will supply the needed reform." Measured against your own background and experience, that caution I hope will persuade the committee and the Congress to move. Mr. CLARK. I hope so. Senator HART. Thank you. [The statement of Stanley M. Clark in full follows.] STATEMENT OF STANLEY M. CLARK ADVOCATING ENACTMENT OF S. 1321 This statement is generally in support of enactment of S. 1321 and I respectfully request that this statement be filed as part of the record in the Hearings held in connection with the proposed legislation. The statement is an expression of my personal views and does not neces sarily reflect those of my employer; it is based upon my experience and training as summarized below. I am a registered Professional Engineer and have been a member of the Bar of the State of Ohio for 27 years and have been admitted to practice before the United States Patent Office for almost that period of time. My practice has generally been limited to the practice of patent law, including five years with a private law firm in Cleveland, Ohio, and the last 23 years in the Patent Law Department of an industrial company. I have been Chief Patent Counsel of this company for the past 14 years. During the course of these years, I have had extensive experience in the licensing of patents and in patent litigation, both in the United States and in foreign countries. I have a deep interest in the patent system; I believe in the patent system, and I have an earnest hope and desire that our patent system will be improved to accommodate itself to a radically changed and changing world. My view of the patent system is that it is a system in distress, that it is in need of reform and that unless it is reformed it may face total collapse. Hopefully, the provisions of 1321 will supply the needed reform. At least it incorporates many remedial features which are long overdue. For these basic reasons, I favor enactment of S. 1321. I will comment in detail upon a few of the many features which I favor and which I believe under the circumstances should be retained in the bill. However, before I do that, I would like to take exception to three provisions of the bill; namely, Sections 263 and 273, and a portion of Section 112. Section 263. Rights of employee-inventors guaranteed Section 263 is, in my opinion, ill advised, mischievous and almost impossible to administer. It will breed discord and litigation. And I believe there are grave doubts as to its constitutionality. It should be realized that an invention or a development, by the time it reaches commercial practice, is the result of the contributions of a great many individuals, the relative contributions of which are almost impossible to evalu ate. Many individuals make vitally important contributions which lead to the final commercial success of an invention that it will be literally impossible to determine just how much of the profit or savings can be "attributed" to the patent. The section should be deleted. Its effect would, in my opinion, lead to inequitable and unjustified consequences. Section 273. Unauthorized practice of subject matter prior to issuance of patent Section 273 provides for what I call "interim infringement". This is objec tionable because it places the public in a position of uncertainty. There is no reason why the public should face the risk of infringing a patent whose claims are not yet certain and which may never be allowed. The section apparently has been inserted in the bill as a partial remedy for the shortened term of the patent from 17 to 12 years. It would be far better to delete Section 273 in its entirety and in lieu thereof reinstate the term of a patent to the present 17 years. Section 112. Specification Paragraph (a) of this Section requires a specification to include "all knowhow known to the inventor and applicant necessary or commercially requisite to make, use and work the same." This is burdensome, impractical and probably cannot be complied with. I urge that it be deleted. COMMENTS IN SUPPORT OF S. 1321 Having stated my criticisms of the sections of the bill to which I strongly object, I would like to devote my remarks to those sections which I strongly favor. On balance, S. 1321 is desirable, long overdue and should be enacted. It will protect the public interest, strengthen the patent system and effect its constitutional purpose of advancing the arts. First of all, the bill has several provisions which require the patentee and his counsel to play fair with the Patent Office and I favor all of these provisions. Section 3 (d) Public Counsel The concept of a Public Counsel having the power to intervene in the public interest, I believe, was suggested in the "Report of the President's Commission on the Patent System." As I understand it, the Public Counsel's role will be in the nature of an ombudsman and, hopefully, the Public Counsel would be able to perform such duties effectively. I should point out that the Public Counsel and his staff should be recruited at least in part from the patent litigation bar and in part from corporate patent counsel as well as from the public generally. Furthermore, there should be free and open communication between the Public Counsel and the patent bar and, of course, the public as well. To the extent the lines of communication are difficult or bogged down in bureaucratic red tape, then the Public Counsel will not only lose the confidence of the bar but will be denied its cooperation, and the Public Counsel will need such free and voluntary cooperation in order to function as effectively as he should. Section 41. Patent Office fees Section 41 (b) (1) has a concept stated as follows: "Fees shall be designed to effect an overall recovery in the range of 65 to 75 percentum of the costs of operation of the Patent Office." If the patent system serves its purpose, which is to inform the public of advances in the arts, then it seems undesirable to have a formal Congressional expression that the Patent Office shall be 65 to 75% self-supporting. Such an expression does not take into account the value of the information supplied to the public by patents. However, I see no objection to moderate maintenance fees because they would serve a useful purpose in weeding out patents which sometimes lurk in the background for years until an industry has been built up and which are then, to the surprise of the industry, asserted in "strike suits". The waiver of fees by the Commissioner is not set out in such clear terms as to protect an individual inventor or a small company to whom maintenance fees would be a burden. I would suggest that any individual person or corporation be allowed to designate each year five patents as to which maintenance fees would automatically be waived. Section 102. Conditions for patentability; novelty and bars to patent First, I endorse heartily the enlarged definition of prior art to include knowledge, public use and sale in a foreign country as being a proper recognition of the fact that the world is so much smaller in practical terms than it was more than 100 years ago when the present limited concept of "prior art" was adopted. It is easier to travel from New York to London today than it was to go from Philadelphia to New York a century ago. It is easier to learn what is going on commercially and technically in London or in Tokyo than it was 100 years ago for an inventor in Erie, Pennsylvania, to know what was occurring in New York City. Furthermore, American corporations have direct commercial contacts in most foreign countries. For example, the annual reports of four of the large tire companies, namely, Firestone, Goodyear, General Tire and B. F. Goodrich, show these companies, collectively, to have some 99 subsidiaries, affiliated companies, or companies having technical service agreements with them in at least 54 different foreign countries as shown in the attached table, which is attached hereto as Exhibit A. How can it be argued that these companies and others like them have no knowledge of what is going on in the rest of the world. Furthermore, the language of 102 which brings foreign public uses and sales into the prior art places an American inventor on more equal footing with his foreign competitors. Over 25% of the patent applications are filed by foreign nationals and these applications are likely to be of significant technological importance. It is grossly unfair for a foreign competitor to have a product successfully tested in the market place in Europe, and (as long as a description is not published) be free to file a patent application in this country and escape having his own prior public use in his homeland being applied against him as prior art. A United States citizen has no such freedom to follow the same course of conduct in the United States. The second change in Section 102 which I approve is in connection with prior art which formerly was to be in "printed" form. In view of some courts giving a limited interpretation to the term "printed" the addition of the words "other tangible form" in defining prior art should enable all courts to hold that prior art includes, for example, typewritten descriptions, handwritten descriptions, blueprints, sketches, mimeograph copies, Xerox copies, photographic copies, including microfilms, computer storage systems, and the like. Section 112. Specification Paragraph (d) of Section 112 provides for a "Jepson" form of claim, a form of claim which I have advocated for many years. However, the preamble "where the nature of the case admits" should be deleted. It gives applicants and the Patent Office too much leeway in avoiding the mandate of this Section. I submit that a claim having the prescribed form can be drafted for any invention regardless of its nature. The prescribed form of claim is most useful and desirable because it will give little opportunity for the nature and extent of the invention to be obfus cated either in the Patent Office or in the courts should the patent become involved in litigation. The form of claim should be mandatory and not left to the discretion of the Patent Office which has had more than 100 years to require such a claim and has failed to do so. |