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SECTION 286

Suit for infringement cannot recover for more than two years prior to filing of complaint or counter-claim and in case of government the limit is four years. The present code in both instances gives six years. The shortened period of time may make it impractical for many smaller patentees even to recover the cost of the suit! The "incentive” of the United States patent incentive system is here considerably weakened !

Again, the foregoing is on a once-through reading-simply to get the gist of the bill.

HARBAUGH AND THOMAS,

PATENT LAWYERS,

Evanston, Ill., September 25, 1973. THE CHAIRMAN AND MEMBERS OF THE ANTI-TRUST AND MONOPOLY SUBCOMMITTEE,

U.S. Senate, Washington, D.C. GENTLEMEN : It would appear to be mandatory that if reform of the Patent Law is desirable then Congress will do that which well measures up to the principle and standard of Promoting the Progress of Science and the Useful Arts, and, more important, shall do nothing that does not promote the Progress of Science and the Useful Arts. If there is doubt on this principle about any item of reform, the answer should be No.

It is this writers opinion that there should be some reform. Enough experience is accumulating with patent systems of other countries who are endeavoring to catch up with the effects of the U.S. system that it may be time for the C.S. to improve to stay ahead.

Something could also be done to correct the U.S. word game approach to claiming an invention to an approach better portraying the inventive concept that is being protected as an assist to Courts and public considering infringement. Have Examiner indicate concept supporting allowance.

Regarding reform of the U.S. Patent System, it is my conclusion that the Federal Courts have shown the way to further promote progress. Extend their estoppel potential.

REASONS AND COMMENTS No endeavor is made to be profound in these down-to-earth comments intended only to be suggestively helpful for a legislative body. but, the crux of the recurrent interest in the reform of the present U.S. Patent System appears essentially to be the suspected frequency of adjudicated patent invalidity over the last decade or so. This has occurred primarily because the Patent Office staff did not locate or cite the prior art upon which invaldity was ultimately determined in Court, plus the tendancy of patentees in a “word game" to interpret claims narrowly for issuance and then broadly for infringement. For years the Patent Office has had very little exposure to the "new" prior art outside the Patent Office from which anticipations are drawn to the Judge's attention by defendants who possess the art. Incidentally, there are very few patents litigated as compared with the total number of patents issued, substantially less than one percent, and, this is also significant.

The Patent Office is doing quite well with its facilities, particularly where there is full cooperation of the applicants and attorneys on prior art known to them. But no patent office alone can cope with the vast burgeoning accumulation of new prior art occurring day by day let alone do "outside art" searching in the shortened examination procedure necessitated by the budget afforded the Patent Office. Invalidity based on new prior art could increase if something is not done about the prior art outside the Patent Office.

The critical reaction of Courts is expected. They are concerned in having to pass on extensive prior art that is cited defensively against a patent which should have been considered with the expertise of the Patent Office before the patent issues. They seldom cosider patents where validity is admitted and licenses are taken or infringement avoidance is accomplished without litigation.

The questions for everyone is not "will” but “what" can be done about it. This would not be the first nor the last time Congress reformed the potent statutes.

It would appear that the proposed Hart Bill is a conglomerate of all suggestions that have been made over the last decade to see where they rank at the present time with respect to "promoting the Progress of Science and the Useful Arts.” Some suggestions therein would be steps forward and others would be steps backward; some are not likely to promote progress while others do hold promise by way of worthwhile reform to promote even greater progress. Care must be taken, and, apparently reactions of patent lawyers in the field of practice are welcome even though a full scale research has not been conducted by the legislators upon which a scientific approach to the problem could be made. For instance, the writer is unaware of any determined comparison of how many invalidity decisions are based upon "new" prior art that was, or, was not available to the Patent Office. The causes could be quite different.

Accordingly, it should be noted first that over-characterization of allegedly critical conditions are not convincing and radical treatment of a patient without complete diagnosis results in a long recovery, or invalidism. Maybe the illness has not been carefully diagnosed for legislative remedy and prognostication.

Before discussing several points, however, reform objectively appears to be desirable specifically along the following broad lines because of validity results occurring in foreign countries: (Modus of operandi will be discussed later.)

1. Increasing the prior art available to the Examiner to include what is outside that which is now available in the Patent Office files.

2. Assuring appropriate revelation to the Patent Office by potential infringers possessing pertinent outside art by applying a penalty to those who fail or refuse to help.

It could be at the present time that broad claims vs. privately-known invalidating art is more attractive to an infringer than a patent having claims of assured validity.

a. Some precedent exists because the inventor is already being penalized by Court reprisals for concealment of pertinent prior art known to him during patent prosecution.

b. The infringer should be penalized if significant prior art is withheld from the Patent Office when he should have presented it. This is up to both Congress and the Courts.

3. Legislatively, making the disclosure of known prior art to the Patent Office a requirement assists Courts in exacting personal estoppels if withheld prior art is critical. Such prior art could then be open to others also who did not know of existence before an issuance of the patent or a notice of infringement.

4. Publication of patent application claims deemed allowable by the Patent Office and opening the application to surveillance before issuance of the patent also assists potential infringers in their research and development plans.

5. A patent Reissue procedure for Patent Office consideration of prior art anytime patentee considers newly discovered prior art to be pertinent is desire able, but only for the purposes of narrowing the claims or for interferences.

6. Reissue application also published when allowable for the surveillance of members of the public is desirable for citation of further prior art if none was cited at the previous publication.

7. There is little reason not to assure validity for the Courts if the patent is likely to be infringed.

Corrective legislative treatment is simple. It is believed that a minor but critical corrective operation, not needed when prior art was sparse and the patent system was young, is all that is required now to satisfy the Courts, the Patent Office, the inventors, and, more important, the purpose expressed by the Constitution involving the Congressional duty to Promote Progress of Science and the Useful Arts.

If the Courts feel they are doing more and more of what should alreads have been accomplished by trained Patent Office personnel which is technicalls better equipped to pass on validity, they are right. Moreover, if they feel that somehow patent claims that come before them should have been better final. ized before issuance instead of being subjected after issuance to further public prior art knowledge and strained technical interpretations to save validity and still be infringed, they are right. But more and more prior art is being brought to the attention of the Courts than the Patent Office Examiner bas available to him. The questions are to determine where it is coming from and how to get it to the Examiner.

But first, are the Courts correct in blaming the Patent Office? Senator Hart mentions 72% invalidity, whereas it was 80.89% for 1940–1944 (J.P.O.S. vol. 32, page 807). It went down to 76.58% for 1945-1949. For 1968–1972 it was 50% validity.* With no figures known, it looks like something has already been improving. What are the figures? Then, see also J.P.O.S. vol. 52, page 407, where 75% of the invalidations are traced to new art. Is this what Senator Hart meant? So, let us say the new art is most likely the major part of the problem, if there is one.* The critical question, however, is was the "new" art found in the Patent Office collection, or, outside the Patent Office? Is research on this impossible?

In five of the ten Circuit Courts, it appears in the J.P.O.S. vol. 32, page 807 that the percentage of invalidity was over 80% with two Circuits well into the 90's, while four others were below "72%" with one as low as 23.07%, and, these figures include also non-infringement. Maybe the 23% Circuit is approaching a solution to the problem, and, maybe a “standard of invention" is being sought to level this sawtooth curve among the Circuits. Reconnoitering on remedies to further promote progress

It would seem that in a quest for some "standard of invention" or a remedy for the percentage of patent mortality by invalidity, such may already be at hand in the jurisprudential hierarchy of “rules, principles and standards” for judicial consistency throughout the Circuits, and, to shorten as well as reduce patent litigation. Actually, the wise forefathers provided a standard in the Constitution that would endure with impartiality against ravages of change and self-interest influences. The U.S. Constitution provides that:

"The Congress shall have power ... to Promote the Progress of Science and the l'seful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective writings and discoveries."

(Art. I, Sec. 8.) This is a standard. The question for both Courts and Legislature is not "why" but "how" to better Promote the Progress of Science and the Useful Arts. This end would justify any reasonable Court consideration or Congressional means if progress will be advanced. It is a broad and enduring standard that is tried and true. Future legislation and judicial decision should measure up to this standard because they can well be measured by it. First, what does advance progress?

(a) The Constitution also sets forth one way as a started for Congress; namely, by securing the exclusive Right to the Inventor, i.e. the true inventor, so that the inventor personally receives the credit.

In the first half century of the Constitution, however, Congress found this was a step in the right direction, but not too much "progress" was being made with the patentee having the burden of sustaining validity.

(b) In 1836 Congress enacted a provision that a patent was presumed to be valid. The infringer was shouldered with the burden of proving invalidity.

It worked. Ever since these two basic concepts were brought together, the greatest and most rapid progress has occurred for Americans that is known to our civilization of man, all in the brief period of less than five generations of the 200 generations of recorded civilization, and, the greatest compendium of Science and the Useful Arts is now found in the U.S. Patent Office and in reductions to practice, public uses and publications. More than this, Invention is still stimulated with momentum for even greater progress industrially and for even better standards of living. Progress has been and is being promoted.

Now that golden eggs are resulting, shall we risk killing the goose? Or, shall we further nuture it? If we can, reformation is in order.

Suggestions or possible solutions indicated by the Courts should not be overlooked, but if what promotes the progress and useful arts for the people comes under criticism merely because it might be a burden to the Court, the Court wouid be willing to bear its burden of promoting progress. The Courts are the servants of the people as well as being people themselves.

But with this burgeoning of U.S. technology and the standards of living, a strong reaction by the Courts to hard-fought infringement actions is well

*Patent Office Study of Court Determinations of Validity/Invalidity 1968-1972 (P.T.C.A. for September 13, 1973, page F-1).

founded. Seeing prior art being turned up before them by the alleged infringers through extensive validity searches, costing in the thousands of dollars, which the Patent Office Examiners cannot match, the Courts well may question the validity of patents being issued by the Patent Office within its budget. This is a critical question of interest.

(c) Accordingly, a further ingredient for the promotion of Progress of Science and the Useful Arts would logically be to do all that is possible to strengthen the presumption of validity. There is little else basically for concern.

How is this to be accomplished? The Patent Office cannot provide extensive searches for every patent application passing through it for examination and keep current in its work and promptness of issuance, which factors also promote progress. Nor, can the Patent Office have an inventor's foresight to select significant patents upon which to concentrate examination, and, even if it had, it could not approach litigation validity searches on all patents to cover the less than one percent of the patents which are litigated. The Patent Office simply does not possess all the prior art that can be cited by defendants.

If the Patent Office cannot do the outside searching for many reasons, then how can the holders of pertinent prior art be induced or compelled to reveal it to the Patent Office? Estoppel ? Quite probably, but a Court would have difficulty in helping by “estoppel" if Congress does not lay down requirements that have to be met to avoid an estoppel.

In this direction, the applicants should not be burdened with "new" art validity searches. Their prosecution expenses are already extensive. The presumption of invalidity would be re-invoked that was corrected in 1836. Ans. thing that unnecessarily increases the burden upon the inventor other than properly disclosing and claiming his invention, or, deprives him of exclusivity and the validity presumption, it is obviously a negative approach by previous trial and error with respect to promoting progress. Yet, an improvement of the status of validity of issued patents will promote progress.

Of course, the inventor can be induced to disclose that he knows of the prior art under threat of invalidity, etc., with penalties. (See Brand Plastics Co. v. Dow Chemical Co. 168 U.S.P.Q. 133, C.D. Calif. 1971 and 177 D.S.P.Q. 33 CA.9 1973.) But the inventor doesn't know all the prior art. And the inventor having conscientiously done his best, expects the public benefited by his inren. tion to do its best to assure the presumption of validity with a complete presentation of the pertinent prior art for examination by the Patent Office and the Public to assay the novelty and claims of a patent which might become important.

If this assurance necessarily requires further expense for the inventor, then the inventor should be rewarded some additional return as a patentee for his valid patent. Otherwise, the promotion of progress by disclosures and the granting of a patent begins to break down.

Psychologically, inventions do not just appear upon which patents can be granted. The inventor has had to make extra effort and sacrifices to improve his environment and disclose it to the public by patent or product, and seeks a reward. Unfortunately, this psychology is not comprehended by most people, including legislators, even though many will walk away from a business promotion which has nothing in it for them.

Briefly, practically everyone is an innovator. Congress innovates. An inventor is an innovator working in a field where novel innovations can be protected hy statute. The psychology does exist and must be understood in order to promote progress.

An inventor thinks creatively for the ultimate benefit of the public eve though most of the patentees are ranked as employed personnel. His employer then expects recompense.

Trade secrets and guilds would be very inviting comparatively if discourage ment of recompense is increased, and, there is interest in this subject today,

How is the "public" going to better deliver on its part of assuring valid exclusivity? Here again are two general considerations.

It generally is only when a copier wants to capitalize on another's innota. tion without compensation to the innovator-inventor that validity becomes a litigation problem. Thus, the only time validity becomes serious for the Courts is when someone copies the patented subject matter thereby indicating appreciable current importance of the invention to the public, and, the patentee objects by litigation if negotiations for a license break down.

How about a pre-issuance validity assurance treatment for patents in which knowledgeable members of the public participate in helping the Patent Office? There obviously are comparatively only a few patents of all those issued that will ultimately reach the Courts. There is no need to burden all patents with a pre-issuance validity assurance treatment. However, selecting the ones which are important for pre-issuance treatment requires a preselection that only the inventors and competitiors are competent to perform, and, the Patent Office should also have an option to require it, confidentially knowing of developments before it.

The first person to pass on the selection would be the inventor himself who already cites his prior art knowledge to the Patent Office. As mentioned, concealment in this quarter is already being penalized. Then, after preliminary prosecution and a tentative allowance, the inventor could have a choice, either to have the patent issue for a predetermined term, a choice for which he has no one to blame except himself, or, he can elect and pay an additional fee and have it published for public appraisal purposes. Thereby, he would appreciably reduce the expenses of universal or general publication procedure since such an election may be in the minority, yet, provide the advantages of prior art outside the Patent Office being brought, upon election, to the attention of Patent Office before issuance. If these requests increase, then the inventors are accepting a system whose expense was not forced upon them and adjustments can be made in the Patent Office with some assurance of public acceptance and improved validity results. This promotes progress.

Public relations thereon also would indicate that someone else should not inform the inventor that his effort is not a worthy invention. Let the inventor have his choice if he merely wants a patent. He may not want a patent for litigation purposes. Just issue the patent. Many competitors file competive patents for disclosure reasons which they may not even use. This also promoted progress.

On the other hand, after electing to assure validity by public reaction, then with one more action on the merits given by the Patent Office after preissuance publication, the patent can be issued for a longer period of years dating from its filing data as some recompense for extra trouble and expense encountered by the applicant in looking to help a Court, if infringed.

A significant question, of course, is how to induce others to present to the Patent Office prior art known to them. First, who knows the prior art any better than competitors in the product being patented ? If they do not know specifics, a search for additional art can be conducted by the competitors when they have the otherwise allowable claims before them. They are the most knowledgeable in the field involved, particularly if litigation appears to be likely, and they can be required by legislation to indicate to the Patent Office before the patent issues that prior art they would rely upon if they were to be sued on the published allowable claims in event they were issued as the claims of a patent. No opposition proceeding like in Germany is contemplated, just citation the prior art, if any, for benefit of the Examiner. In other words, the modus operandi enable the competitors to bring the knowledgeable prior art in full focus for the Patent Office on patents which, in the opinion of the inventors and competitors, are most likely to be litigated. If an "unpublished" patent becomes infringed, a notice of infringement is followed by citation of art and a Reissue procedure. A single current disclosure by a competitor may well be worth a § 102 rejection instead of a § 103 rejection for obviousness. Accordingly, the knowledgeable experts in the industry. must be legislatively induced to indicate the prior art for the experts in the Patent Office to consider while handling the prosecution of the patent before it reaches a Court.

The Courts would assist this in view of the results that: Potential litigants are making adversary contacts on prior art before a Court action is filed ; the Patent Office acts upon "new" prior art while the patent is still in its formative stages; and, possibly rather than risk a failure, it is likely competitors and would-be competitors will file patents and publish articles on pertinent subject matter so that the prior art is already before the Patent Office, thus also promoting progress.

On the question of estoppels, as already mentioned, a Court may have some hesitation in applying an appropriate estoppel if a statute makes no requirements that are to be met. After that, if further prior art might appear as a defense in a Court action which should have been timely drawn to the attention of the Patent Office, the Court can apply a personal estoppel or discourage

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