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I will give one glaring example which has not been discussed at the hearings.
S. 1321 would not permit a patent for an "obvious" solution for a discovered problem, the "discovery” of which, today, is considered patentable under the law and cases. Such a provision in S. 1321 is evidence of a need to further study the essence of patentable invention as therein defined. There are other less readily noticeable but equally important departures in S. 1321 on which no hearings were held, e.g., making public abandoned applications.
Other unacceptable provisions exist in S. 1321. I ask whether you think that a prior public use, known only behind the Iron Curtain, should defeat a patent when it becomes available in this country only after deep, expensive, time-consuming search conducted with a view to defeating a U.S. patent. Has the constitutional ". . . progress of the useful arts . . .” been promoted by the use unknown in this country prior to the publication of the patent?
The broad picture requires that public consideration be given to such provi. sions.
3. In 1966 the Administration Bill S. 1042 introduced by you by request was surprise to almost all of industry, including the patent bar. There ensued a year of great tension between the Administration and the bar representing the industrial, inventive community. I am glad to say that I initiated and had an active part in the "reconciliation" of September 18, 1967, following a hard summer just prior to which was held in April the emergency meeting of the American Bar Association, Patent, Trademark and Copyright Law Section in Washington, D.C., attended by over 400 members. Your ably conducted hearings of May 1967 then followed.
The Administration Bill submission is understood to involve about 280 pages, which must needs be reviewed by those who are truly concerned. Time must be available to study, to comment and to be heard.
Clearly, any rush to legislate should be moderated by the United States of America way of affording the interested citizens opportunity to publicly present their views.
4. I believe that patent system reform should be accomplished to include licensing of patents which should now be clarified and stabilized by statute, so the public and the courts will know better what can or cannot be done with rights which are secured by patents. Let's go the whole way and have better Patent Office functioning and a better, more fruitful progress of the useful arts with licensing in a clarified, stabilized climate. The Congress has the plenary power and duty to proceed on this basic sine qua non! I am among those who believe that there is time, if the Administration so chooses, to bring in an amelioration of the present licensing situation which adversely affects the rate of growth of our economy, especially now so badly needed when virtually ever-present inflation is all but rampant! I incorporate by reference the points of my letter to you, printed page 647 of the record of the May 13, 1971 hearings. For the economic posture of our country both here and in a world of nations, there should be statutory guidelines now! If it truly appears that the bill to be reported out cannot be achieved with licensing provisions I bow to the inevitable but must urge inclusion of such amendments when the Administration is indicating that the Department of Justice and Department of Commerce soon may come to agreement on them.
I believe that the system needs to be revised, not just the operation of the Patent Office. The laws and rules now on the books have well served the operation of the Patent Office. The testimony and statements before you show that reduction, of the only 25 percent of litigated patents being held invalid, can be obtained if the prior art is available to the examiner. All parties agree that the law should provide the means for getting the art before the Patent Office. This can be done simply 1. without full scale adversary oppositions as are now largely anathema abroad ; 2. without a public counsel in the Patent Office who as a “big brother" to the Commissioner of Patents, reducing his status, would have to examine each application for patent to avoid two standards of validity or discrimination (a second Patent Office examining staff!); 3. without the administrative burdens attendant the manifold new steps provided, and 4. without the many other burdens which, as related by the witnesses, are built into S. 1321.
In passing, a point of extreme importance in considering validity of patents is the time it takes to develop the secondary tests of patentability set out by
the Supreme Court. Another point: even if sanctions are imposed for not opposing the issuance of a patent, assuming a party-litigant has the art and the interest at the time set for protesting the issuance of the application, it is clear that the courts in the public interest will permit him to bring in his prior art.
5. It is time that the record of validity of the patents issued and litigated be emphasized in contradiction to those few who talk without statistical facts or who are repeating alleged statistics. As can be gleaned from the statements of some of the witnesses and from at least one written statement furnished to the subcommittee the patents held invalid over art already available to the Patent Office are only 25 percent of those litigated. As seen in the U.S. Patents Quarterly Reports, in the period 1968 through 1972 the courts considered S80 patents. The number of patents issued during that period is of the order of 75-80,000 per year. (75,000 X 5 = 375,000 patents—Surely 880 is a very small percentage.) To scale up from these few obviously selected patents is not war. ranted. Obviously, only a patent which already is of doubtful validity is taken to court. The reasons for doubt are 1. there is a disagreement between patent lawyers on opposing sides as to the teachings of the art available to the Patent Office, 2. there is new art which the defendant's lawyer believes will invalidate the patent, 3. in a small number of cases, there is some other issue on which both sides think they can win, and 4. the judgments of reasonable men can and do differ.
Former Commissioner of Patents Edward J. Brenner testifying, aptly remarked to the Chairman conducting the recent hearings that even the Supreme Court decisions, oftentimes, are 54 or otherwise split. Yet the matter of human judgment is ever present, even in patent matters. Of the 25 percent of the litigated patents held invalid, in cases in which the art avail. able to the court was also before the Patent Office, there are the patents on which judgments of the court and those of the Patent Office examiner or the Board of Patent Appeals in the Patent Office or of the court which may have in effect granted the patent, are simply different. This can be quickly agreed when the split decision of the courts on obviousness of invention are considered.
No system will be devised which can avoid imprecision or lack of sameness in the exercise of human judgment so that of the “25 percent" patents litigated there are unavoidably some invalid patents.
So let's look to the positive results of the United States patent incentive system and tread lightly before we make drastic changes in it.
6. It can be said with assurance that the provisions of S. 1321 designed to avoid fraud or unclean hands are far too burdensome on the Patent Office and on the applicants and, therefore, on the country relative to the good such provisions may accomplish. It is thought the Administration bill may, in part, be evidence of over-reaction to insufficiently warranted criticisms.
There are laws on the books to deal with fraud or unclean hands. Witness the patents which are held invalid for the very small number of humans who intentionally seek to obtain a patent improperly. In the 880 patents above men. tioned, only 66 had allegations of fraud or unclean hands. The courts held fraud or unclean hands in only 17 cases ! I.e., only 1.94 percent of the 880 patents considered. Though provisions of S. 1321 may appear well founded, the use to which adversary proceedings, or public counsel, as defined, can be put, practically, cannot be expected to have a substantial effect on validity. Why burden the Patent Office, the applicants and our country with the great cost of lesser invention and lesser disclosure at a time when our country needs innovation so badly?
7. The allegation was voiced that examiners are allowing cases due to pressure of the disposal system. This allegedly results in invalid patents. It is implied that the examiners of the Patent Office are so lacking in good faith, intellectual honesty and professionalism that they would allow a case just to make disposals. It was stated in effect, that the rate of disposal had increasd because of the allowance of more invalid patents. No mention was made that during the period in question the staff of the Patent Office, which has had at much earlier times a turnover of about 20 percent* each year, had been stabj. lized by better working quarters, better status, better pay and increased
* Now of the order of about 6-10 percent.
responsibilities! The examiners as a group are now more skilled not only in the patent law and practice thereunder but in the art which they can and do search more rapidly. So knowledge and experience do count; the small increase in the rate of "disposals” surely can be traced to such better staff in the Patent Office!
Abandoned cases and counted as “disposals." An Examiner's Answer on Appeal also is counted as a “disposal” (but not for the reduction in office inventories). Thus, about one third of the “average" examiner's disposals are not allowances.
That the "young examiner studying law" can be importuned to allow an unpatentable case should be documented with actual case histories. In my long and wide experience in a great many sections of the Patent Office, the young examiner has been most difficult to convince and has ordinarily held to an unnecessary, higher standard of invention than the more experienced ones who have become more sure that they are correctly deciding the issue. The relatirely inexperienced examiner is, ordinarily, less impressed by the invention when he sees it after viewing the art. He applies more "hindsight” at this time of his career than he will later!
I have worked in patent prosecution since I was twelve years old. Today I am almost 59. I have been intimately associated with or have directly presented, prosecuted, supervised and trouble-shot hundreds of cases. I do not recall a single application-and I dare to say readily none can be found-in which the Examiner allowed the case without a real basis other than "a quota system.” It is just as easy to send the applicant a final action or to appeal as not to do so. And the affirmances or reversals on appeal tell the story about quality. In my view, many cases which have patentable merit are abandoned simply because lack of funds and manpower available to the inventor precludes appealing all cases. I agree with the Patent Office Society spokesman that the U.S. Patent examiner will not allow simply because of a disposal system quota.
All human endeavor is measured and we all do or should work toward reasonably established goals.
An interesting fact, which I seek to underscore, is that my experience in supervising and training patent lawyers clearly makes evident that the persons producing the higher number of cases and disposals almost always are those who do the higher quality work. I have observed this to be true for over 25 years of record keeping! Of course, all quota systems should be equitable in assigning points of credit for quality as well as for quantity. I believe, from rather close association with the Patent Office and a good number of the members of the staff, as well as intimate knowledge of persons who are high quality producers there, that they are usually the high quantity producers.
Suffice to say, when the Chief Counsel asked a witness for evidence of the increase in the "hordes" of invalid patents being issued, the witness had none to offer! I will not dwell on the clearly unfounded allegations of the witness save to point out that those who have presented statistics have given their evi. dence which can be checked readily. I know that the Subcommittee of our great Judiciary Committee will not act on unfounded “testimony.” It will ascertain the facts.
8. Generally there is a great deal of "shop talk" or "gab" in the profession of patenting. Much of it is repeated on a hearsay basis. People who are other. wise learned and careful use poorly chosen words and phrases, quite loosely, to describe what they think is a fact—without really knowing it. Incomplete presentations must be viewed critically.
Although there is always room for improvement, when a thorough analysis is given it is at once evident that the vast majority of U.S. patents are validly issued and, importantly, that the progress of the useful arts is now well promoted by the system. More especially this is so when the total picture is viewed:
(A) The Patent Office terminates the prosecution of only 70 percent of applications filed by issuing a patent.
(B) Allowing even for differences in judgment or opinion of reasonable persons, the Patent Office Board of Appeals affirms on the order of 75 percent of the examiner's actions rejecting claims. This is a high percentage, encouraging the examiners to reject claims. And the Courts affirm on the order of 70 percent of cases appealed from the Board of Appeals. Again, a high percentage encouraging a good standard of patentability.
It would seem then that the case is made that a few squeaky wheels (cases which are notorious because of some fact or personality) do not signify that the lubricants supplied the millions of wheels in the world are unsatisfactory. Likewise, the entire operation of the system cannot be seen by scaling up from that very small minority that are notorious cases. The possibility for multipli. cation of gross errors is too great! Even on scale-up, however, the positive value of the system which has truly served the country as we know-is still evident!
This letter would be grossly incomplete if it did not urge that the remedy for the “problems" lies primarily in supplying the art to the examiner and in heavily punishing the few who are intentionally dishonest.
S. 1321 proposes a much greater burden be placed upon the public in its dealings with its government than in any other public dealings simply because, admittedly, there will always be dishonest persons amongst us.
9. The great majority of the chemical or chemistry-related inventions now sought to be patented are of non-reverse engineerable nature. This means that such inventions can be guarded as secrets if obtaining a patent is fraught with too much difficulty or if an application can result in public disclosure without obtaining a satisfactory patent. If kept secret, the “hordes" of scientists, chemists and engineers cannot know of them. These people will not be able to apply their talents to improving such inventions or to inventively designing around them. These remarks apply not only to the esoteric "chemical" inventions, but also to such inventions in electronics based upon esoteric treatment of materials, such as transistors, filaments, tubes, alloys, getters, and the like. Even in mechanical contrivances, there are assembly or adjustment "tricks of the trade" which may be held secret.
Accordingly, the publication of abandoned applications for patent should not be permitted except in special situations substantially as now provided in Sec tion 122. This matter is now on appeal in the Fourth Circuit from a decision of the U.S. District Court in Alexandria, Virginia in a civil suit. Several associations, companies and persons presented information and arguments in the trial in support of the Patent Office which sought to prevail under the consti. tutionality of the Section. Section 122 should not be changed without cureful consideration.
Under every circumstance the applicant or his assignee should have the full right to abandon his application prior to publication and maintain confidential his information disclosed in it, even after allowance of claims, if he is not satisfied that the system is securing to him his right to his invention or discovery as provided in the Constitution. See Congressional intent in Freedom of Information Act relating to receipt by government of information in confidence. Guaranteed this right, inventors will continue to come forth to seek patents.
10. A witness was asked by the chairman at the hearing why the business community does not sound off about the unsatisfactory nature of the product of the Patent Office. His response, which is not worthy of repetition, is in the record. The question made an erroneous assumption that business generally does not approve of the product of the Patent Office. Those organizations and persons who cite pertinent art to the Office and who prosecute vigorously on all issues, as can be documented from the files of issued patents at the Patent Office, will disagree that they are dissatisfied with the product. Their dissatisfactions are not of the general kind intimated by the chairman at the hearing.
Generally business wants to plan on a sound basis. It cannot go ahead on invalid patents and does not do so intentionally. Again, the broad picture must be viewed.
In closing this letter I am not to be understood to deny that much improre. ment in our Patent Incentive System is possible. However, the record should show the relative unbalance of the testimony with regard to points made in this letter,
S. 643 as distinguished from the "committee print" was a good bill. The Administration and the proposed bar bills have made additional changes which upon careful examinaion may be found to add improvement. S. 643 is more in tune with the reality of the administrative and functional operations of the Patent Incentive System, including the Patent Office, the licensing of patents and the judicial reviews of the patents and licensing arrangements involving patents.
There is attached to this letter an addendum noting a number of points relating to provisions of S. 1321, not noticed for hearing. Several statements,
presented at the hearings, made reference to such provisions of the bill as requiring study and hearings. Some alluded to a few points in this connection. No statement was addressed to the manifold provisions which are a departure from any bills earlier considered and from the present law. These comments and addendum are simply submitted so that the record will show that the bill, in my view, require additional study and hearings and not by way of being comprehensive or the result of final study of each provision of the bill. Indeed, the comments, prepared early in May, are not intended as final, but as notes with a view to initial preparation for hearings on the manifold principal new provisions of the bill. It is hoped that further study and hearings will be permitted before the subcommittee adopts provisions a good number of which are now viewed by me to be most likely disincentive in character.
I ask that this letter and its addendum be printed in full in the record as my personal reaction to the bill, statements and hearings of September 1973.
Thank you kindly.
PAUL L. GOMORY. P.S. The Administration bill, just in hand, in which certain key provisions have been read, will, clearly appears, require considerable comment, upon further study!
WASHINGTON, D.C. P.S. To my letter of September 27, 1973, I am attachig my reasons for having patent licensing provisions as reprinted in the May 1972 ACTION. Please print this as part of my letter.
PAUL L. GOMORY.
JOURNAL OF THE ASSOCIATION FOR THE ADVANCEMENT OF INVENTION AND
PATENT LICENSING PROVISIONS
The time for action is now. I urge that the separate action be supported by all interested parties for at least the following important reasons.
1. Consumerism.—the consumer will benefit because the exchange of technological information taking place under increased licensing, as herein discussed, will permit to be produced by American industry better and lower priced products. This will lead to more competition,
2. Fight Against Inflation.--the production of better and lower priced products will aid in the fight against inflation since these products will compete for the increased flow of dollars.
3. More Jobs.-more jobs will be created because there will be more inventions and/or products to be produced or to operate.
4. More Pay To Labor.--because the new improved technology will reduce other production costs, more will be left with which to pay labor increased wages,
5. Increased Competition Here At Home Among Domestic Organizations.the increased spread of technology, even in field of use licensing, will in each field produce new and better products at lower prices and thus will increase competition in each field of licensing.
6. Competition Here At Home Against Imports From Abroad.--this is siinilar to 5 above.
7. Competition Abroad By U.S. Organizations.—this again is similar to 5 above.
8. Environmental Improvement and Control.-Clearly, items 1-7 will considerably aid the technological leap forward required to improve and protect our environment.
9. Citics Problems.—by no means least, there are the cities problems. There is the decay, crime, drugs and added problems.
We cannot expand the fund of technology quickly enough to deal with the listed problems-for example, to develop antidrug drugs. Yet, there must be incentive to the patent holder to license various fields of use and in each field to those who would most quickly and most effectively develop the invention in the respective fields.
The continued inroads causing attrition of the "incentive" of the U.S. Patent Incentive System by lessening the value of patents, which are being made by those opposing the kind of legislation here favored, are detrimental to the