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The key object, it will be noted, is to promote utilization of potentially raluable national assets.

This utilization theory has even wider application than I could have image ined when I first wrote about it and in the intervening years when I have promoted the concept through speeches, articles and other means. 16 It clearls should not be limited to patented inventions arising out of government-sponsored research and development; it should be applied to all patented inrentions. After all, a patented invention is just as much a potential asset to the nation whether it was conceived with federal aid or in the perforinance of a complete non-governmental projection without federal subsidy. What, then, should be done about the terrible wastes of patented inventions that result when patents are invalidated by the courts? Since the Supreme Court re-defined the legislative standards of patentability in the case of Graham v. John Deer six years ago, over 72% of all patents litigated in the Courts of Appeals across the nation have been held invalid.17 This figure should becompared with the 57.4% of patents invalidated by the courts in the period 1953–63.18 Another interesting statistic is the fact only two patents have been held valid by the Supreme Court in the last 25 years. 19

In a rather thought-provoking paper, Robert J. Fay, a Cleveland patent attorney, inquires: "A patent-A Civil Right: Is It Being Discriminated Against ?" 20 Fay points out that a patent is a right granted by the Constitution, but, it is a right which is being abridged by judicial fiat. Patentees, he notes, are a minority in our society and their patents are rights which are as sacred to them as are the rights for which other minority groups have sought and obtained protection under our civil rights laws. Further, he suggests, the rights of inventors to the fruits of their creations "are just as sacred as the


15 Following is a list of publications and record of testimony by H. I. Forman before various Congressional committees, all on the subject of Government Patent Policy. In which the "utilization theory" was proposed and has since been developed in some depth : Publications a. "Government Ownership of Patents and the Administration Thereof" (27 Temp.

L. Q. 31 (1954)). b. “Patents--Their Ownership and Administration by the U.S. Government (Central Book

Co., New York 1957). c. "Federal Employee Invention Rights-What Kind of Legislation?" (40 J. Pat. Ofr.

Society 468 July 1938)). d. “Wanted: A Definitive Government Patent Policy," (3 PTC J. Res. & Ed. 399 (Winter.

1959), reprinted in Forman, ed., Patents, Research and Management, 509 (Central

Book Co., New York, 1961) ). e. “Forgive My Enemies for They Know Not What They Do," (44 J. Pat. Of. Society

274 (1962)). f. "Impact of Government Patent Policies on the Economy and the American Patent

Systein," (Patent Procurement and Exploitation 181 (Bureau of National Affairs,

Washington, D. C., 1963)). g. “Government Ownership and Administration of Patents," (Calvert, ed., "The Encyclo.

paedia of Patent Practice and Management, 360 (Reinhold Publishing Corp., New

York, 1964)). h. “President's Statement of Government Patent Policy: A Springboard for Legislative

Action," (25 Fed. B.J. 4 (Winter, 1965)). 1. “Retrospections and Introspections Concerning Patents and Gorernment Patent Pol.

icy," (49 J. Pat, Off. Socity 675 (1967)). j. “Government Patent Policy-Yesterday, Today and Tomorrow," (50 J. Pat or

Society 32 (1968)). k. "How the Chemical-Pharmaceutical Industry Views the Government's Patent Policy."

(25 Food, Drug, Cosmetic Law Journal 204 (1970)). Testimony 1. Hearings before House Subcommittee No. 3 of Committee on the Judiciary on IIJ.

4.34 re “Rights of Government and the Employees in Inventions Made by Surh

Employees," pp. 2, 3 (March 3, 1958). m. Hearings before Senate Subcommittee on Patents, Trademarks and Copyrights on

S. Res. 5.5 re “Government Patent Policy," pp. 452 and 580 (May 31. 19611. n. Hearings before Senate Subcommittee on Patents, Trademarks and Copyrights on

S. Res. 48 re “Government Patent Policy." p. 470 (July 6. 1965)-republished with foreword by Francis Boyer, Chairman of Board, Smith, Kline and French Laborato.

ries) 145 J. Pat. Off. Society 787, 789 (1965)). 0. Hearings before Commission on Government Procurement Study Group No. 6. Wash

D. C., July 29, 1971. 16 383 U. s. i (1966). 17 Gausewitz, R. L., "Brief in Support of Proposed Amendment to Sec. 103. Title 35 right to equal protection of the law and the right to freedom from discrimination are to the ordinary citizen. The taking of an invention from one by an Proding judicial process, i.e., by discriminating against his invention, is just as much a removal of his constitutional rights and he is discriminated against just as much."

latents U. S. Code,'' Patent Law Association of Los Angeles, p. 8. 18 Calvert, R.: "The Encyclopedia of Patent Practice and Invention Management," p 23, Reinhold Publishing Co. (New York, 1964).

19 The Jones patent in Graver Tank and Mg. Co., Inc. v. Linde Air Products Co., 339 V. S. 605 (1960), and the Adams patent in United States v. Adams, 353 l. 8 9 (1965). The last patent previously found valid by the Court was in a 1945 decistou. 20 Unpublished as of the time the present paper was prepared.

Whether or not one agrees with Fay's premise, the fact remains that each patent a court holds invalid represents one more invention which may not be brought to commercial application or to its fullest possible utilization because its originator, assignee or licensee generally will refrain from investing sizeable sums to develop something that anyone can freely imitate after the development has been completed. As President Nixson said, “an asset unused is an asset wasted." Who is to answer and be held accountable for all these potential assets which the federal courts send down the drain marked "patent invalidity?" The Patent Office has for decades been admonished by the courts, by the Congress, by the Executive Branch, by industry, by inventors, by patent attorneys, by just about everyone, to issue patents which will not be held inralid when subjected to judicial scrutiny. The record of patents in the courts clearly indicates the Patent Office is not succeeding in meeting that goal. That poor record, incidentally, appears destined to become worse each year as the Justice Department's Antitrust Division steps up its efforts to attack patents, pren those not accused of being misused in violation of our antitrust laws, but are alleged to be invalid on other grounds.

What are some possible remedies to this unhappy situation? Several have fitn suggested by Fay and others.21 One solution which I have been vocal in supporting from the time it was first proposed is the "Ex Parte Opposition" provision which constitutes Recommendation XI of the Report of the President's Commission Ou The Patent System, 29 and has been incorporated in Senator Mcclellan's current Patent Revision Bill.23 This provision calls for a citation period of six months after the Patent Office publishes an application for patent otherwise found to be allowable, before the grant is made final. In that period anyone openly or anonymously, can call to the attention of the Patent Office any reference or fact which could cause claims previously found allowable to be rejected. Once this provision is enacted into law the courts should find it possible to place greater faith in the results of the Patent Office's examining procedures. Thereafter, issued patents will be considered not only to have cleared past the searching scrutiny of trained Patent Office examiners, but also the watchful eyes of the members of the public who are likely to be adversely affected by issuance of patents to others in their fields of interest. Even attorneys in the patent unit of the Justice Department's Antitrust Division may find this an excellent aid in their campaign to prevent invalid patents from being granted and thereby become capable of being used to limit competition.

As a supplement to “Ex Parte Opposition" I have another proposal to make, one which I believe deserves very serious consideration by all concerned with maximizing the utilization of patented inventions and diminishing the waste of potentially important national assets represented in patents which are commercially unexploited because they have been judicially invalidated. This proposal, taking a page out of the Lanham Trade Mark Act,24 is to make patents incontestable under certain conditions after a prescribed number of years.25 My thought is that the grantee of a patent having the 17-year term of our present patent statutes would have the opportunity to make an election at the end of, say the 5th year following issuance of the patent. By simply making applica


a cf. Vojacek. J., "A Survey of the Principal National Pttent Systems,” Prentice-Hall (Very York 1936); and Fortas, "The Patent System in Distress," 147 IDEA 571 (1971).

-2 Report Issued on November 17, 1966 responsive to E. 0, 11215 which established the Commission on April 8, 1965.

> S. 643 (92nd Cong., 1st Sess.) $ 191, 1971. A P. L. 489 (79th Cong., 2d Sess.) 1946.

The basis for this proposal was derived from a recommendation made by the Amerfran Society on Inventors, through their spokesmen Dr. E. Burke Wilford and Albert G. Fonda, in testimony at the Hearings on the Scott Amendments. (Cf. Record of Hearings before Subcommittee on Patents, Trademarks and Copyrights, U. S. Senate, on S. 643, S. 121, and S. 1255, Part 2, p. 444 (May 13, 1971). Their recommendation, which they declared was similar to a provision in the Japanese patent law, was to set a limit of 6 years after patent issuance within which patents could be attacked. In private conversations with them later, they suggested to the present writer that after that time the patents could only be attacked on the grounds of fraud having been committed in the prosecution thereof through the Patent Office.

tion to the Patent Office the patent could be recorded as being incontestable thereafter for any reason other than proof of fraud having been committed in the process of obtaining the patent grant. In exchange for this mantle of incontestability the patentee must agree to having the term of his patept foreshortened to a total, say, of 12 years. If the patentee chooses not to avail himself of this opportunity to make this election, the patent will be eligible to run to its full term of 17 years but will continue to be subject to the same attacks and risks which have contributed to the high invalidity record discussed previously.

To those who may instantly react against the notion of incontestable patents as being undesirable for one reason or another, let me remind them that the provision therefor would be coupled with the public opportunity to attark them in Ex Parte Opposition stage. To those who are loathe to accept the concept of patents being incontestable even though “the perfect reference" 10 invalidate them is found too late to cite during the opposition period, I would sympathize with their personal loss but I would take solace in the thought that the public-at-large may derive numerous benefits. I submit that, just as been pointed out in the comparison made between the benefits of pollution abatement vs. their costs, the very high costs to our national economy of having "100% valid” patents may exceed the gains which we have heretofore thought were received by safeguarding the public against all “invalid" patents

Inconstestable patents can materially reduce the workload of an alreuiy over burdened federal judiciary, for one thing. But even more important is the likelihood that the inventor, the patentee, the assignee all will be in a really secure position for the first time in our history to make important derisione such as whether to invest sizeable sums of money in erecting a plant to produce a patented invention. No longer will they have to worry abont the likelihood of their patents being attacked and invalidated. With such assurance development of patented inventions, both technological and commercial, will be able to proceed in an orderly, logical fashion as never before.

Of course, if a patent owner is confident that his patent is invincible or at least is willing to take the risks involved he need not take the shortened term route, and can seek the benefits afforded by the full 17-year patent life time.

Why the option? What's the rationale underlying the shortened term ? The term of a patent grant is arbitrary, to begin with, and varies from country to country. Whatever the full term provided by law, the provision of an election of a shorter term can produce certain socially desireable results. Reduction and savings in court time and expenses to all parties concerned in litigation is one such result. Increasing the likelihood of commercial exploitation of pat. ented inventions—the a voidance of wasted assets in the form of inventions that no one cares to exploit because they are not protected by patents—is another. A third, of course, is that the shortened term will place the patent in the public domain rears earlier than at present, thereby increasing competition but doing so only after the patent owner has had a reasonable lead time to reanup his investment and make a deserved profit.

If our laws are changed to provide for a patent term of, say, 20 years from the date an application is filed 26 (rather than the present 17 years after patent issuance), the proposal for incontestability could be adopted with its tain modifications. As a nucleus for discussion I would suggest that the place tion and application for incontestability could be made by the sth year follow. ing the filing of the patent application, and the patented term then would be foreshortened to 15 years from the application filing date.

Coming back to statements I made earlier, I again call attention to the tremendous wastes in precious manpower, time, financial and other national resources, first in the patenting process and then in the courts, not to mention the discouraging wastes in time and money spent for research and develop ment leading to products and processes that never become properly commer cialized for lack of sound patent protection.

I call attention again to the need for better utilization of the great national resources potentially represented by inventions that require the sheltes of patent protection in order to promote their development. I again echo Presj. dent Nixon's words that "an asset unused is an asset wasted." I will add titat un-utilized inventions may be among our country's most wasted assets, and

2 S. 643 (92nd Cong.. 1st Sess.) § 154 (b), 1971, calls for just such a provision.

they contribute all to heavily to the economic pollution that inhibits and stagnates our national prosperity. I suggest to the President that he take steps within the Executive Branch to establish a unified, single policy of his Administration which will balance the implementation of our patent laws and our antitrust laws so as not to favor one or the other, or individuals who might personally benefit from one or the other, but rather will maximize the benefirial effects of both to the nation as a whole. And lastly, I suggest to the Congress that it should expeditiously consider adopting such legislative proposals as I have advocated in order to increase the utilization of patented inventions.

If the Patent Office continues to grant patents under the present laws, the Antitrust Division continues to attack them, and the courts continue to invalidate them, all without regard for the net effect on our national prosperity, it is high time to start a patent/antitrust ecology movement. After all, this is the Environmental Decade, isn't it? And when we start, let's learn from the blunders and findings of the environmental ecologists; let's avoid collision courses 27 and let's eliminate seeming remedies for one aspect of our economy's problems which only result in causing other adverse effects upon our economy and onr nation's economic health and welfare.

WASHINGTON, D.C., September 27, 1973. Hon. John L. MCCLELLAN, Chairman, Senate Judiciary Committee, Subcommittee on Patents, Trademarks,

and Copyrights, U.S. Senate, Washington, D.C. DEAR SENATOR MCCLELLAN: I offer comments to be considered by your subcommittee and for the record.

My comments are primarily additive rather than cumulative to those already received by the subcommittee.

I wish to help provide the best possible Patent Incentive System. All points herein considered made have been tested by whether our country will be a better one in which my children and theirs, and others, will live. In my book there is no special interest. The welfare of our country and to promote the progress of the useful arts, arts useful to make ours a better country, and one which will hold its own among nations for as long a time as possible is my goal!

Tested against such a template the answer for every legislative provision must be that it will increase or at least not diminish the incentive to innovate, to disclose in a patent application, especially so in cases in which through shortage of funds, or otherwise there is a tendency and real possibility for secrecy rather than for disclosure. All people do not function identically. It is clear that therefore a broad picture should be taken so that optimum, rather than perfect, legislation is the goal.

I have viewed each patent revision bill, beginning with S.1042. As you know, I have been active in and a chairman of a number of committees in industry and in the patent bar. I have a record of over 20 years patent legislation work; have organized and coordinated many efforts both directly and indirectly involving legislation; and have been on and have chaired patent legislation committees. Presently serving on the Council of the D. C. Bar, PTC Section, I am the liaison for it with our Patent Legislation Committee. I am a

It is encouraging to note that this objective is shared by the Justice Department's Antitrust Division. The Chief of its Patent Unit, Richard H. Stern, Esq., makes this clear in a alk he gave on October 7. 1971 before the Practising Law Institute in New York City entitled “Harmonizing Patent Law and Antitrust Objectives", 47 PTCJ D-2. In the principal area of conflict between patent law usages and antitrust law enforcement, namely patent license límitations, such harmonization can perhaps best be accomplished in ways succinctly expressed by Professor S. Chesterfield Oppenheim in “The Patent-Antitrust Spectrum of Patent and Know-How License Limitations: Acrommodation? Conflict? or Antitrust Supremacy?", 15 IDEA 1 (Spring 1971). Prof. Oppenheim concludes that article as follows:

“... I recapitulate three fundamentals for accommodation of public patent policy and antitrust policy related to license limitations :

"First, I preserve to the patentee the full reward to which the exclusive rights of the patent grant entitle him within the scope of the claims of his patented invention.

“Second, apply the antitrust laws only when there is proof of plus antitrust elements arising from restrtints beyond the exclusivity bounds of the patent grant.

*Third, reject the fallacy that federal patent policy preempts licensing for royalties of trade secret or secret know-how and continue to protect valid secret proprietary information pursuant to long-established federal and state judicial precedents.''

member of the Antitrust and Trade Regulation Committee of the Chamber of Commerce of the United States.

I speak from a background of childhood in which I saw my father lose his health in seeking to protect his invention; patent applications covering which finally stood between him and the entire loss of it. He won because of the security of his patent position, that is, a position which secured to him his inherent right to his invention. The record is known. I will not here repeat it.

I say with humility that I am probably as qualified to speak on the “incentive" of our great United States patent incentive system as perhaps any other living person. I feel that a person such as myself should not remain silent at this crucial tine in the history of our country. My motivation to speak out is set forth herein.

I view the present patent law revision bill with misgivings because I do not see the kind of provisions which, on the whole, on balalnce, I can accept as being truly for the betterment and welfare of our country.

Accordingly, the comments I offer are set out with the hope that those who view the system as I do will consider and be persuaded to adopt them. If there is not agreement with all points, hopefully, these comments will have served at least for the betterment of the functioning of our Patent Incentive System and therefore our great United States.

In reading these comments I ask you to be ever mindful that the 77 million dollar Patent Office budget is relatively so small compared with "welfare" systems and schemes of our federal government that any increase or decrease in costs accomplished by legislation can be ignored. As you know in your capacity as Chairman of the Appropriations Committee, we are, today, appropriating tremendous amounts for all kinds of government operations which are legislated by Congress for the "welfare" of our country.

You need not be reminded, Sir, that comparing the relative merits of such welfare legislation with the Patent Office functions there is no doubt that the Patent Office is as essential as the best of the welfare programs.

Patents make jobs, which make incomes, which make taxes. The patented inventions ultimately make better living for all through progress of the useful arts. These patented inventions stimulate that progress.

The jobs, the processes, products, and other benefits for better living and national defense motivated into existence by our great United States patent incentive system are legion. This makes the Patent Incentive System the root of real welfare for the citizen and his country. Even at this late date, in the operation of our very old but good system, this needs to be told and repeated. The taxes for providing the non-patent system schemes of our government are generated in large part by the operation by our Patent Incentive System, as you know.

Much revenue in this country, as well as coming into it from abroad, results from patent protection here in the United States. A U.S. inventor must serure his rights here, for usually the real market for it, for him, is here. Unless in such case he has protection here he cannot afford to reveal his invention abroad.

I have read the statements and have heard every word of the testimony presented to the subcommittee September 11, 12 and 14, 1973. I am pleased that some of my work has been reflected to the subcommittee.

1. I believe that no legislation, even resulting from the no doubt well corsidered Administration bill, should be enacted until the public, preferably in public hearings, has had an opportunity to develop its ideas, suggestions and possibly even better principled provisions. I urge you to provide hearings on any new bill introduced whether by the Administration or any other group of citizens.

Such hearings should not be open to review specific provisions on which those concerned have been heard. There should be time to put forth positions and arguments on real departures either from present law, or priorly reasonably considered provisions of early bills.

2. S.1321, undoubtedly introduced with the welfare of our great country in view, contains provisions improving the stature of the Patent Office which I can accept. For the most part it contains provisions, on only some of which the public has been invited or permitted to comment reasonably and at the hearings, which I and great many others, including the Administration, cannot accept. Please note the addendum, later discussed.

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