rather than giving public counsel a multitude of sweeping responsibilities as S. 1321 does. It might be preferable to limit his responsibilities to playing the role of devil's advocate rather than having him spread himself too thinly or having him get into a situation where there could be real confusion concerning his role, both in his own mind and in the minds of the patent office, the public, and the applicant as well. In suggesting that he not take on the responsibility of handling appeals and that sort of thing for the Patent Office, I do reiterate that someone other than the primary examiner should have the responsibility of defending the position that the primary examiner has taken instead of putting this additional burden on the examiner who, after all, has simply done his job in a conscientious fashion.

All in all, what I am suggesting is that the public counsel feature is a desirable thing to experiment with, but it is something that perhaps one should go slowly with and feel one's way before extending his responsibilities into broader areas than this relatively limited role.

At this point I do want to make a comment about the problem of inflexibility as it exists in the patent system, Senator. My comment relates both to the opposition proceeding and to the public counsel proposal. Both of these proposals will be useful in providing for greater certainty as far as patents are concerned. They are not going to solve the problem alone. Part of the difficulty that we have in our patent system is the fact that both the Patent Office and the courts are faced with a dilemma. With only one single reward available for a given novel contribution, namely, a 17-year exclusive right in the invention, the decision maker often finds himself confronted with a situation in which an inventor has made a substantial but not outstanding contribution, with the result that granting a patent gives him too much and denying hin a patent gives him too little. In this situation there is no room for a right decision. As I expressed it 25 years ago, our patent grant is comparable to "a system in which every worker receives, say, $10 a day, irrespective of whether he is a college graduate or an illiterate, capable of a hard day's work or a weakling, industrious or one who soldiers on the job."

There are various ways in which flexibility might be injected into the patent system: Petty patents; patents of addition; possibly some relaxation, subject to careful safeguards, with respect to double patenting and the introduction of new matter; and finally, some ways of providing more flexible remedies than we have at the present time where the whole thrust of relief is in terms of an absolute injunction. It would seem desirable to explore some of these more fully than S. 1321 has.

DEFERRED EXAMINATION

The third topic before the committee is the matter of the deferred examination. Here, we move from the proposals that are designed to enhance the integrity of a patent to proposals that are procedural and contribute to a reduction in cost and delay.

Deferred examination has been extensively debated, pro and con, for quite some time ever since it was introduced intially in the

Netherlands. It has both virtues and vices and this suggests that it should be explored sympathetically and respectively but also very carefully and critically. Its virtues are that it avoids a long drawn out, complicated, expensive, burdensome proceeding in the Patent Office, fighting over a patent which after it has issued, may never become the subject of any kind of controversy in any way, most frequently because no one else is interested in using the particular invention. It would be nice if all of our inventions were the subject of great economic importance but the simple fact is that they are not. Yet, every patent must be subjected to the examination procedure. This is burdensome both on the Patent Office and on the applicant. Secondly, deferred examination provides for prompt publication and expeditious disclosure and this, after all, is in the public interest. Third, it is often urged-although I think this is an unfortunate emphasis to give it-as a means of taking care of the backlog that plagues the Patent Office not only in this country but in other countries as well.

Having emphasized these good points, it is important to recognize some very real dangers. The greatest danger, of course, is that we end up with a great many inadequately conceived and inadequately formulated patents or potential patents that provide little useful and novel information and create a multitude of actual and potential barriers to freedom of use and impose heavy burdens of examination, review, and possible litigation. Secondly-although I think this danger is less important because patentees are likely to be fairly sophisticated about these matters-it may provide a pitfall for the unsuspecting. Thirdly, if inadequately administered, it could very easily result in a substantial increase in the number of applications and thus defeat the purpose of trying to reduce the Patent Office's backlog.

In light of these concerns, I would suggest, one, that initially it is important to study the experience in the Netherlands, Germany and Japan and see how the system has worked, in order to detect pitfalls that may exist and see how we might avoid these. From a procedural standpoint, the important thing is that the deferred examination be administered in a careful and responsible fashion.

My second suggestion is to urge a careful screening of applications and an outright rejection of any that are inadequate because of inadequate disclosure, clear noninvention, or any other reason, and further, to urge that the Patent Office make at least an initial prior art review and attach this to the patent so that it goes along with the patent and one has the benefit of whatever evaluation has already been made by the Patent Office.

Thirdly, it would seem advisable to permit an applicant to withdraw his application if he decides that he does not want it to issue in the deferred application form. Finally, the fees should be carefully tailored-and this would call for some doing-in order to provide fees that would be low enough to make the deferred application procedure attractive to applicants and at the same time high enough to discourage frivolous, nuisance-type applications.

All in all, if adequately and properly administered, the program could result in the publication of deferred applications of sufficient

quality that the committee might wish to consider the possibility of having the effectiveness of the application or of the patent run from the date when it is published as distinguished from the date when it is ultimately validated, subject, of course, to the patent being subsequently validated before it became enforceable.

Let me make two or three minor comments concerning the deferred application. It is worth noting that this proposal dovetails with some of the other proposals that seem to have merit. It dovetails with the opposition proceeding, with the desirability of a low initial fee, and with the defensive patenting procedure which has been used at times in the past.

Maintenance fees. Now, we come to the fourth recommendation of S. 1321 under consideration here, the matter of maintenance fees. Here again, I think the merits are fairly obvious. Maintenance fees make it possible to keep intial fees low. This is desirable in the interests of stimulating invention. Second, they provide a procedure whereby it is possible to wash out those patents that are no longer economically relevant and which would simply clutter up the record in terms of a person looking to see just what he could do and what he could not do. Third, the bill provides for a considerable amount of flexibility and waiver of fees. This is a desirable feature both in terms of making it possible for the less financially equipped applicants to make applications and also in view of the high fees that are proposed in S.1321.

Two or three of the fee provisions in S. 1321 give me concern. One, I agree with the suggestion that, rather than a yearly fee, there be a periodical fee-perhaps after the third year and then in the successive third years after the patent issues. Second, the fee that is established as a minimum appears unjustifiably high. It would discourage inventors. It would throw cold water on the fire of invention and innovation in that it makes patenting an inordinately expensive proposition. It leaves the impression that the real purpose of the maintenance fee is not to provide a soundly administered operation in which one pays low fees at the time when the patent is the least productive and higher fees later when he can afford to do so, but that the real purpose is to find an excuse for higher fees. This, I think, would be unfortunate. That brings me to the third provision with respect to the fees that gives me concern, namely is the proposal that the Patent Office should recoup from 65 to 75 percent of its expenses in the form of fees. I have always found it difficult to see any real justification for this. If one were to view the patent as a giveaway; as a grant by the government of something that a person was not really entitled to, that would be a different matter. Presumably patents are granted because the inventor has made a contribution. Under those circumstances, I see no reason, since there is a public contribution, why the public should not pay all or at least most of the cost of making the invention available. The patent system either is or is not in the public interest. If it is not, we should get rid of it. If it is, we should give it the support needed to enable it to work effectively. When one considers the total national budget in relationship to the trivial amount, relatively speaking, that goes to the Patent Office, it is hardly convincing to say that we

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can not afford to give adequate support to that Office. An added concern in my mind is the fact that the very inclusion of a provision of this sort may strengthen the tendency to keep the Patent Office budget inadequate. We have heard testimony that what is needed is a really well-operating and well-supported Patent Office. The way to get that is to provide it with the money and then see that it uses that money in a wise fashion.

Finally, here again, there is a long-standing European experience with respect to maintenance fees and it would seem wise to examine carefully the experience in these countries in order to avoid any shortcomings that they may have experienced.

Independent agency. We come now to the fifth item before the committee, namely the matter of the Patent Office as an independent agency. One consideration that makes this desirable is that the Patent Office has the job of administering a law and of granting rights or not granting rights according to the law. Typically. in our system, we have not left that job to executive departments. We have left it either to the courts or to administrative agencies of the type that Mr.Browne was talking about yesterday. The other consideration, of course, is whether separation of the Patent Office from the Department of Commerce would result in better and more efficient operations. Would it carry out its job better than it can under the present structure? I have no particular knowledge on this and I simply pass over the question with the observation that anything I might say at this point following Commissioner Gottschalk's testimony would be gilding the lily.

So much for the matters before the committee. I have included in my prepared statement comment on a number of additional items, some of which struck me as good. some of which struck me as not so good. Regarding most of these, I will simply refer you to my prepared statement.

There are two items, however, that I would like to mention briefly. One is the proposal to get on with the business of mechanized searching. This has been a difficult problem and one on which little progress apparently has been made insofar as the Patent Office is concerned. The traditional methods of searching that Commissioner Gottschalk referred to are obviously essential until one can find some substitute. At the same time, however, that we continue to preserve adequate searches through traditional methods, at the same time that we make efforts to improve the classification system, it would seem clear that every effort should be made to explore and move as fast as we can into more highly mechanized procedures. provided this can be done without interfering with carrying on the day-to-day work.

The other provision that I wish to mention is the vision in section. 104(a) which would limit the date of invention that any applicant could show to 1 year prior to his date of application. This has always struck me as a desirable compromise between the proposal to take the date of application as the date of invention and the other extreme, to which we go in this country, in which it is possible to go back for an indefinite and often undeterminable period of time in establishing one's date of invention.

This concludes my testimony. I would simply say in summation that I find myself favorably disposed to S. 1321. It has shortcomings, I know. It has problems and it has bugs in it. But it represents in my own opinion a courageous step and an imaginative effort really to come to grips with the kinds of problems our patent system has been faced with. It represents the kind of an approach that is necessary if we are going to restore the patent system to what it really should be. Consequently I strongly urge careful consideration of the proposals contained in it.

The task now is one of refinements, the selective retention of those features that are meritorious and the rejection of those that are bad, the revision of those features that are sound in principle but need fixing up in details, and the further study and exploration of those that may well have merit and warrant ultimate inclusion but for which an adequate foundation has not yet been laid.

I would end up with one more observation and that is to point out that on the whole the proposals that have been suggested here in the hearings today are things that are worth trying, things that can be tried and then can be scrapped with no serious or lasting damage to the patent system if it turns out they are not going to accomplish what it is hoped they will accomplish.

Senator HART. În your comment on the deferred examination system, you suggested the initial screening, preliminary review kind of approach. Others have indicated the desirability of that approach which tends, of course, to avoid some of the problems that the administration and other witnesses have cautioned of could constitute abuse if you had a deferred system. If the law was modified or if this bill was modified to include that preliminary procedure, do you have any way of estimating how much of a saving would be made from that kind of deferred system? Is there anything in your experience to guide us on that?

Mr. STEDMAN. I have no way of making a guess on that at all. I would think the real experts on that would be the patent examiners. They should be able to give you some idea of how much time is spent in the initial screening that they customarily go through and how much is spent in fighting over refinements and details and so forth and so on.

Senator HART. I was asking the staff what we have been told in connection with that by Mr. Dunn of the Patent Office and apparently we may get an estimate. Any questions?

Mr. BRENNAN. No questions.

Mr. NASH. No questions.

Senator HART. Thank you very much.

[The statement of John C. Stedman in full follows.]

STATEMENT ON S. 1321, BY JOHN C. STEDMAN

My name is John Stedman and I am Professor of Law at the University of Wisconsin Law School. One of my main teaching subjects for over thirty years has been Patent Law and related aspects of the Intellectual Property field. In this connection, I have concerned myself with both the virtues and shortcomings of the patent system and with possible means of improving its operation. We have had a patent system in this country for almost 200 years, virtually from the beginning of our nation, and its roots in Europe go back even fur