ther. It is a system that has served us less than perfectly, but it is nevertheless a system that has served us well. Consequently, it behooves us to ask, not whether it should be thrown out and not whether it should be taken as the be-all and end-all of ultimate wisdom, but whether it can be revised and shored up to the end that it may better perform its function in the light of modern conditions. It is with these concerns in mind that I approach S. 1321. One hears frequently the comment from both the proponents and the opponents of the patent system that the conditions and methods of invention have changed greatly since the patent system was created; that the emphasis on the individual inventor has given way to the cooperative research of the industrial and governmental laboratory; that the complete self-containing invention of the "snapshot" type, springing full armed from the head of Jove, so to speak, has given way to the continuing process of development in which each individual step is comparable to a single frame in a movie film strip; and that primary reliance upon the stimulus of private competitive gain-to which the patent system is inextricably keyed-has given way to Government support and subsidy. This Subcommittee expressed it well in 1956 when it said (Sen. Rept. No. 1464, 84th Cong., p. 15):

. . . the industrial and technological economy of today bears little resemblance to that of yesterday. The relatively simple, easily understood and inexpensive inventions have given way to highly complex inventions that require extensive scientific training to understand and substantial experimentation and capital to develop and perfect. The garret, garage, or basement inventor to a marked extent has given way to the laboratory technician who is both scientifically trained and versed in the latest techniques of experimentation and invention. The independent 'lone wolf inventor has given way to the coordinated group activity of the research laboratory."

Granted the truth of these observations, it does not follow that the patent system is outmoded. As the saying goes, "The more things change, the more they remain the same." Changing circumstances do, however, suggest the need for close reexamination to see whether corresponding changes in the system are needed to make it work better. And that, as I understand it, is what S. 1321 is all about.

Let me turn without further ado to the problems that currently beset the patent system and the provisions of S. 1321 that are proposed as a means of coping with these problems-or, more specifically, to those particular changes to which the present hearings are addressed-and then ask whether these proposals offer tenable and viable solutions.

S. 1321, as I read it, has both good and bad points. On the plus side, speaking generally, it attempts in a number of respects to come to grips with some of the more serious problems that beset the patent system, and provides solutions for some of these problems or at least a good starting point for arriving at solutions. In doing so, it avoids some of the inadequacies and shortcomings of the predecessor revision bills that followed the Report of the Presidential Commission. On the negative side, its shortcomings, as I see it, are three-fold: One, in certain respects it seems to impose unwarranted and unnecessary burdens on patent applicants and patentees. Two, certain proposals, although they may ultimately prove meritorious, seem sufficiently uncertain in their effects as to call for more thorough investigation and research into their impact before pushing ahead with legislation. Three, even with all the new features contained in the bill, it lacks certain additions that could contribute considerably to the workings of the system.

In the remainder of my testimony, I will attempt to spell out the basis for these observations.

The first step, obviously, is to ask what are the problems of the patent system. By-passing the problems that stem from the basic changes previously mentioned, five main problems exist, as I see it, even taking the system in its traditional operation. One is the failure of the system to provide the patent holder with firm assurance that the patent issued to him will ultimately stand up. The second is the delay in processing one's claim to patent rights, both at the application stage and in later litigation. The third is the cost that attends these proceedings, again, at both the application and prosecution stages-espe

cially the latter. A fourth problem is the arbitrariness and inflexibility of an "invention" or "non-obviousness" test which draws a sharp line between "reward" and "no reward" instead of recognizing that gradations exist in the creative process, and that there is need for a form of reward that is better keyed to the level of ingenuity-what the patent author, Emerson Stringham, used to refer to as "inventiv-level." This is closely tied to the first problem of uncertain validity and will be discussed as part of that issue. The fifth problem is the need for international harmonization, a need that becomes more insistent as international transactions expand and the movement toward international procedural cooperation gains strength. This problem, I pass over inasmuch as S. 1321, in contrast to the original Commission Report and initial legislative proposals, gives it no serious attention.

Let me turn now to the five specific features of S. 1321 that, I understand, are the central subjects of the present hearing, and discuss them in the light of the major problems of uncertainty, delay and expense that I have mentioned. These five features involve (1) opposition proceedings and related meaus of bringing to Patent Office attention evidence relating to validity and especially evidence concerning prior art; (2) the establishment of a Public Counsel in the Patent Office; (3) a deferred examination procedure; (4) maintenance fees; and (5) creation of the Patent Office as an independent agency.

1. OPPOSITION PROCEEDINGS

Section 135 of S. 1321 provides for an opposition proceeding whereunder any person may submit to the Patent Office evidence bearing upon the patentability of a claimed invention. Thereupon, the examiner shall reexamine the application and the question of patentability in the light of the evidence thus submitted. As written, section 135 permits the opposer to remain unidentified or to become a party at his election, and permits him to submit any information bearing upon patentability without limiting him to specific categories of evidence such as printed publications or issued patents. Opposition must be instituted after publication of the application pursuant to section 122, but prior to notice of allowance of the patent. Section 138 provides that an opposer shall not he estopped, as a result of his action, in subsequent court proceedings.

An opposition proceeding of some sort is long overdue in our law. Other countries have had it for decades and presumably find it desirable, on balance, since there appears to be no disposition to do away with it, as far as I am aware. Experience has demonstrated that the ex parte examination procedure to which we have been dedicated simply does not work. The large number and proportion of issued patents that are subsequently invalidated through court proceedings is ample testimony to this fact. Procedures that permit the issuance of patent after patent that never should have issued are unfair to the public, unfair to would-be users of the technology in question, and unfair to the patentee himself. It is inefficient, expensive and discrediting to the patent system as an institution. Nor, as a realistic matter, does there appear much chance of the situation improving as long as we persist in a purely ex parte procedure. The Patent Office examiner cannot do the job alone. He must have some help in reviewing the application and the relevant prior art. This help can come from the patentee himself, in the form of the patentability brief and other obligations of disclosure, as provided in sections 112, 115 and 131. It can come from specially-appointed officials who are charged with responsibility for critically reviewing applications in the light of relevant prior art, such as the Public Counsel provided for by section 3(d) and which I will discuss later. Both of these innovations should prove helpful. The most effective help, however, is likely to come from interested third parties as contemplated by the section I am now discussing. Through this proceeding, the Patent Office examiner may be made aware of information that was available but which he overlooked, relevant prior art that he had no means of locating through his own efforts, and analysis and evaluation that may be helpful to him even with respect to evidence that he did possess. In short, effectively administered opposition proceedings could be of considerable help even to the most competent and conscientious examiner.

The procedure may have two additional effects, both salutary in terms of a satisfactorily operating patent system. First, the mere existence of an opposition proceeding should put the examiner (and the applicant in the preparation of his patentability brief, as well) on his mettle since he knows that, in con

trast to present proceedings, there is a strong likelihood that any shortcomings or slip-ups of which he may be guilty will promptly come to the attention of Patent Office officials. Second, as a result of improved examination procedures and, for that matter, as a result of the sheer fact that the opportunity to oppose exists, the presumption of validity in later court proceedings should be substantially strengthened.

Certain specific provisions call for comment. If the provision for publication of the application prior to allowance is deleted—and in my opinion it should be-section 135 (a) will require revision. The question then would be whether to publish the application for opposition after tentative allowance but before issuance, or whether to issue and then permit an opposition. Since experience in other countries indicates that opposition proceedings are sometimes misused as a device for tieing up and delaying enforcement proceedings by a patentee. the latter would appear to be preferable, especially if the present law is amended to make patents run from date of application instead of date of issu

ance.

With such change, the question would also arise whether a time limit should be set for instituting an opposition proceeding. A statute of limitations of some sort has often been suggested but, on balance, it would seem preferable not to set time limits. Situations arise in which a potential opposer does not have sufficient information, resources, or interest in contesting, as to warrant his filing an opposition within a given period.

In the interests of expedition, however, the Subcommittee may wish to consider possible means of encouraging prompt opposition, short of an absolute requirement that it be brought within a given period.1

Finally, there is the question whether an opposer should be permitted to become a party to the proceeding. Section 135 (d) permits this. So do the opposition laws of other countries. It may be that experience will demonstrate that opposition proceedings cannot be meaningful without such participation, but initially it would seem desirable to try a more limited approach in the interests of minimizing expense, delay and procedural complexity, namely, of permitting an opposer to submit his evidence for consideration, making that evidence a part of the file (without identifying the opposer unless he consents), but not permit him to become an actual party.

2. PUBLIC COUNSEL

Section 3(d) provides for a "Public Counsel" whose function is to "assure as an advocate, and through the adversary process, that high quality patents which meet the statutory and constitutional criteria therefor issue from the Patent Office." In this role, he is free to participate in any Patent Office proceedings in which a public interest appears to be involved. In addition, a somewhat obscure provision provides that he "shall prosecute or defend appeals from any final action of the Patent Office." Section 3(d) is implemented by section 24 giving the Public Counsel authority to issue and enforce subpenas, by section 132 (a) under which a primary examiner may request the Public Counsel to intervene in examination proceedings, by section 134 (a) making him "responsible for briefing and arguing" cases (presumably in support of the Patent Office rejection, although the section does not say so expressly) before the Board of Appeals, and by sections 143 and 145 giving him comparable responsibilities on reviews of Patent Office rejections by the Court of Customs and Patent Appeals and the District Court for the District of Columbia.

The creation of a Public Counsel, like the opposition proceeding (and, for that matter, provisions not discussed here relating to patentability briefs and disclosure statements, inventors' and applicants' oaths, statements by counsel for applicants, and putting the burden of proving patentability upon applicant), is designed to reduce to the minimum the possibility of a patent issuing that should not issue. The Public Counsel, in short, plays the role primarily within the Patent Office that a serious opposer would play, working from outside, in an opposition proceeding.2 Thus, to the extent that he performs effec

1 Although not pr sion of the oppositius mit questions of quently developed 2 For that matt an opposition proce member of the p

S1321 the Subcommittee may wish to consider an extenprinciple by authorizing courts handling patent litigation to sub~the Patent Office for consideration in the light of subse

35 he could himself institute

, just as could any other

tively, he helps to provide a needed balance to the one-sided, ex parte nature of present proceedings and to that extent contributes to the integrity of the patent system in the same sense that a well-administered opposition proceeding does.

In supporting this innovation, however, some cautionary comments are in order. The principal task of the Public Counsel is, and should be, to play the role of devil's advocate, to say why a patent should not issue on a given application. Recognizing that applications now run at the level of 100,000 a year, merely reviewing pending applications and taking positions on those calling for action on his part, even though this latter function is carried out on a highly selective basis, could prove a massive undertaking. To impose duties upon the Public Counsel that go beyond this specific role would in all likelihood result in either spreading the work of his staff so thin as to render its performance inadequate or creating within the Patent Office a new department of massive and cumbersome proportions. And even if workable in other respects, serious confusion of roles (confusing to the public, the Patent Office staff and the Public Counsel himself) could result from simultaneously or successively playing such somewhat varied roles as defender of the public interest in quality patents and defender of examiner action on appeal.

Here, in short, it would seem wise to proceed slowly with this novel and experimental arrangement, by holding the Public Counsel's function to the devil's advocate role, and trying it out in this limited area before broadening out into other fields.

It would be inappropriate to leave the two proposals heretofore discussed, both of which are designed to provide greater assurance of validity with respect to an issued patent, without mentioning one other cause of our present difficulties in this respect. Improvement in the procedures for determining and evaluating the prior art will help greatly in preventing the issuance of spurious patents, but it will not completely solve the problem. Those who must pass on the validity of patents, whether the Patent Office or the courts, find themselves impaled on the horns of 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 him a patent gives him too much and denying him a patent gives him too little. In this situation, there is no room for a "right" decision in terms of what the patent system seeks to accomplish, namely, a reward or stimulus that is appropriately keyed to the contribution or effort. As I expressed it twenty-five years ago, our patent grant is comparable to

"a system in which every worker receives, say, ten dollars 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." (Invention and Public Policy, 12 Law & Contemporary Problems, 649, 6GS (1947)).

As long as this situation continues, decision-makers are going to differ as to whether they should give too much or too little, no matter how complete the evidence of prior art and analysis of the inventive contribution may be. The answer, of course, is to inject a flexibility into the patent system that its present "one-price" system lacks. Thert are various ways to do this. Petty patents, patents of addition, some relaxation of the double-patenting rule, tailoring of claims, and selective variations in the scope of relief granted, immediately come to mind. Unfortunately, S. 1321 is silent on this point. Before it is through, the Subcommittee may wish to give some thought to this aspect of the patent problem.

3. DEFERRED EXAMINATION

In the foregoing discussion of opposition proceedings and the Public Counsel, the primary concern was to improve the integrity of the issued patent. The remaining points to be discussed center on tht procedural and structural aspects of the system, especially as they affect the cost and delay in obtaining and enforcing patents.

The first of these to consider is the proposal for deferred examination. Sections 191 and 192 provide that an application shall, unless applicant requests immediate examination at the time he files, be published following an examination "as to formal matters and other such matters as the Commissioner may prescribe." Thereafter, within a period of 5 years, a request for examination

may be filed by applicant. Public Counsel or any other person who is prepared to pay the examination fee. If no request is filed within 5 years, the applica tion lapses. Although the bill is not explicit on this score, no enforceable patent rights apparently arise until such examination occurs and the Patent Office formally "issues" the patent (section 151). Section 153 (b) provides for extension of the patent term (which, under S. 1321, begins to run as of date of application) by the period of deferment, so that the period of enforcceability will not be less than it would have been had there been no deferment-indeed, under section 153(b) as phrased the term might be lengthened to some extent.

The concept of deferred examination has virtues, but it also has vices. Consequently, it should be explored sympathetically and receptively, but also carefully and critically. Its main advantages are that it relieves both the applicant and the Patent Office of the burden, expense and delay of extensive controversy over the details, in terms of both validity and scope, of an applicationcontroversy which may ultimately prove to have been a waste of time because no third party shows sufficient interest in the invention either to challenge it or negotiate rights under it-a fate that apparently befalls a substantial proportion of issued patents at the present time. Deferred examination also means more expeditious disclosure, resulting in benefits to the public generally. A marginal advantage, but unfortunately one that appears to have received undue emphasis in the moves to introduce deferred examination, is that it would help reduce the backlog that typically plagues patent offices, our own included.

The dangers of a deferred examination are that, improperly administered, it can let loose on the patent a spate of 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 upon would-be users. It can also prove to be a pitfall to the unsuspecting applicant who finds his idea publicly disclosed, but is ultimately denied a patent and ends up with nothing as a result. Finally, to the extent that applications are encouraged that otherwise would not be filed, the effort to clear up the backlog may prove self-defeating.

In the light of these considerations, it would seem wise to proceed with the idea, but to do so cautiously. Initially, the experience of those countries, spearheaded by the Netherlands, that have instituted a deferred examination proce dure should be studied and the present proposal reexamined in the light of what that study discloses. In exploring possible modifications of the present proposal, the Subcommittee might give thought to the following possible considerations: (1) providing an initial screening, though short of a full examination, that would deny even a provisional issuance of any application that failed to meet standards of clear, full and adequate disclosure or involved only an idea that would be clearly unpatentable by patent law standards; (2) undertake at least a preliminary review of the prior art and append to the issued application a statement and evaluation thereof so the public (and the applicant) would have some idea of the nature and extent of the contribution and consequently the probabilities as to validity; (3) permit the applicant to withdraw or modify his application at any time prior to issuance so as not to lose such possible trade secret rights as he might possess; and (4) develop a fee structure that would be high enough to discourage frivolous or nuisance applications and at the same time low enough to provide applicants (and, collaterally, the Patent Office) with genuine benefits from the procedure-a delicate and difficult balancing act. I concede, but not an impossible one.

A deferred examination procedure that embodied the foregoing conditions should result in issuances of sufficiently probable validity that it would be appropriate to have legal rights under the patent begin to run from the date of issuance contingent, of course, on the patent being subsequently validated— instead of running only from the date of validation.

Before leaving this subject, let me make briefly four additional observations. (1) The deferred examination procedure fits in with the concept of an opposi tion procedure, and complements that procedure, in that opportunity exists for third parties to provide the Patent Office with evidence and argument as to why a patent should not be valid. (2) The procedure also fits in with the concept, to be discussed next, that the fees charged an applicant should be as