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non-citation of prior art by monetary awards against the defendant even if he wins.
If there is no prior art revealed by the competitors, as required by legislation, the Courts can then feel justified in exercising their perogatives with estoppels and other procedural limitations of proofs. An infringement suit certainly can be expedited. In fact, if the competition cannot find pertinent art, there either is none, or, it is a lost or abandoned art such as something suppressed, a concealed reduction to practice, or report, etc.
Additionally, an early publishing of the tentatively allowable claims and disclosure is worthwhile so that the public is also informed of developments at the earliest opportunity. An earlier opportunity is provided others to design a new non-infringing product. This also promotes progress.
Such estoppels encourage possessors of prior art to disclose it to the Patent Office while it can be used at the examination level. Reviewing the aims
The Courts and plantiffs desire that patents issue with all the available prior art before the patent Office, particularly that which would be most likely to be cited if an action is instituted on the issued patent,
The patentee wants a valid patent for what he had to pay, and, he wants relief from infringement with the least amount of expense and greatest det recovery, including some additional advantage for choosing the assured validity. recheck publication procedure.
All the prior art of interest should pass before the patent Office before the patent issues, thereby relieving the Courts of that burdensome task. Implementing the procedure
The procedure merely requires one optional additional step in the present prosecution of the patent application, namely:
All patent applications are prosecuted to allowability in presently routine manner. Thereupon, the Inventor-Applicant or Assignee has an option to take at his future risk the patent “as is” for a limited term, say 10, 12, or 17 years from date of publication, or, by option and paying an additional fee, elect to have it published with the allowable claims for pubiic surveillance to enable competition to cite prior art in that particular field. Thereupon, the Patent Office reopens prosecution for one action, if need be, and the application goes to final rejection or allowance for a term of say 20 years from an appropriate date. The patentee is thus rewarded by a sounder patent and an extra length term for the extra expense he incurred. This has also made it possible for the Court to consider with greater confidence a patent prepared for litigation hazards with a full portfolio of prior art in event of trial. Thereafter, any infrin. ger failing to cite pertinent prior art of which it was aware during the publi. cation period is personally estopped from using that art defensively in that action. In brief, the Court takes the patent as is for the purposes of essentially determining infringement in that particular action.
Many advantages occur :
1. The inventor or the Patent Office can select an important patent applica. tion that should have outside prior art exposure before issuance.
2. The inventor or assignee is induced to publish for citation of new art by the reward of a stronger patent and an increased life in trying to be sure to have a valid one for a Court to consider if ever there is an infringement.
3. Risk of infringement and loss of defensive strength induces competitors to bring forth prior art rather than withhold it and then not be able to use it later. The Patent Office and the public are better appraised of a technological situation instead of not knowing of otherwise withheld prior art that might free other competition also, as part of the knowledge that actually should be in public domain.
4. The Patent Office is further financed by a fee for publicly rechecking validity before issuance.
5. The Courts can rule for or against evidence improperly withheld when the possessor should have revealed and did not.
6. The necessitated study of patent applications published for opposition stimulates earlier competitive search, research and investigation of develop ments overlooked and may be suggestive of further developments for the ultimate further progress of Science and the Useful Arts.
7. Potential litigants are brought into less strained contacts leading to deter mination of relative rights and future activity without courtroom antagonism. 8. Technical questions that would plague the deliberations of the Courts are not present, or, have already been decided with the expertise of the Patent Office.
Finally, many excellent articles, treatises and editorials have been written over a period of years by outstanding minds in the Judiciary and Patent Law profession regarding validity and invalidity involving U.S.C.A. § 103, often referred to as the “obviousness" section, and, a defendant having a better chance of invalidating broad claims of a patent in Court with the prior art kept secret until infringement suit is started. (J.P.O.S. vol. 52, page 433 (1970).
The swing of the pendulum has been towards freedom-of-competition which has somehow swayed towards invalidity in close patent cases. It has not been unappreciated that it may be less expensive for a competitor to seek to invalidate an infringed patent by an all-out invalidation effort under Section 103 before taking a license rather than promote progress by a new design or redesign to another construction that avoids infringement. A product in the hand in physical from may be worth two research problems on the design board.
However, under it all, there seems to lurk in some decisions a background realization which may well swing from the freedom-of-competition touchstone towards the progress-being-promoted touchstone by the concept being recognized that two competing articles may be greater progress as compared with competitors expensively litigating on one article. A design or redesign to avoid infringement often involves improvements which would also promote progress if an infringer were forced to design and make a different products. The Courts may very well wish to encourage this. A true freedom to compete and progress is encouraged when a new or improved construction comes on the market. The Courts cannot help but see a thread of significance in a copier being forced to redesign because of infringing a validity-rechecked patent and then the infringer complaining when he is copied, thus ultimately there being three competing products for the public instead of lengthy protracted litigation.
Progress of Science and the Useful Arts would be better promoted and that is what is is all about. The Courts have shown the way to further promote progress. Extend their estoppel potential. Respectfully submitted
WATSON D. HARBAUGH. Articles containing arguments of interest Publication of Pending Applications (R.Y. Peters), J.P.O.S. vol. 48, page 553
(1966). Re-examination System? (Martin Abramson), J.P.O.S. vol. 52, pages 407, 415
LICENSING EXECUTIVES SOCIETY, INC.,
New York, N.Y., September 26, 1973. U.S. SENATE, Committee on the Judiciary, Subcommittee on Patents, Trademarks, and Copyrights, Washington, D.C.
GENTLEMEN: We are very grateful to you for your response to our letter of September 11, 1973 informing us that the record would be kept open until September 28th.
As you know, our Society is a non-profit, professional organization having some 1500 members throughout the business world actively engaged in the interchange of technology. We, therefore, have the greatest concern for the U.S. patent system, its integrity and operation, and appreciate the opportunity to express our views on the issues of S. 1321 (Hart) which you have been considering in the recent hearings. We shall keep our comments as brief as possible.
On the question of providing a Public Counsel in the Patent Office, we recognize this as an attempt to improve the essential reliability of the Patent Office. However, the creation of an office of Public Counsel, and the staff associated with it, would require a substantial investment. Further, there probably would be conflicts and overlaps with “regular" Patent Office employees. We suggest that the funds provided to support this office of Public Counsel would be
better spent in increasing the size of the examining corp of the Patent Office. This would provide the Examiners more time to search the art, the result being more reliable patents.
With respect to adversary proceedings, we have no basic objection to this provided the proceedings occur after the allowance of the patent application, It would be a mistake to lay open non-allowed applications because of the substantial printing costs and the resultant administrative involvement which, in many cases, would be useless. We would prefer that such "adversary proceedings" be limited to permitting submission of prior art by third parties.
With respect to maintenance fees, we would oppose these unless the filing and issue fees were substantially reduced. In such case the “maintenance fee" would, in effect, be deferred fees. In any event, however, we strongly oppose such fees at the level suggested in S. 1321, because experience has taught us that many patent rights do not become valuable in the market place until many years after their issuance.
We see no net advantage in the deferred examination system suggested in S. 1321 and feel it creates more trouble than it is worth. We note that European countries which have the most experience in this area has not provided for deferred examination in the new European Patent Convention.
We support the idea of making the Patent Office an independent agency. We also support the idea of making the Commissioner of Patents at least an Assistant Secretary of Commerce if the Patent Office is to remain in that Department. It is obvious that substantial changes are necessary to improve the stability of the Patent Office management staff. Changing the Patent Office to an independent agency would accomplish this and therefore, we approve.
In addition, we strongly urge that any new patent legislation include specific guidelines specifying what the patent owner can properly do in licensing his patent rights. Indeed, we feel Congress would be derelict in its duty if it did not clarify this area of the law. To leave the validity of any particular licens. ing practice to the vagaries and expenses of litigation is a distinct disservice to the innovative sector of our Society.
We thank you for this opportunity to comment on this vitally important, pe ng legislation. Very truly yours,
C. H. CHAPPELL, President.
PATENT LAW ASSOCIATION OF LOS ANGELES,
Los Angeles Calif., September 12, 1975. Hon. John L. MOCLELLAN, Chairman, Subcommittee on Patents, Trademarks, and copyrights, Committee
on the Judiciary, U.S. Senate, Washington, D.C. DEAR SENATOR MCCLELLAN: The Patent Law Association of Los Angeles has been informed by your Chief Counsel, Thomas C. Brennan, Esq., under date of August 7th, that hearings will be held September 11, 13, and 14, 1973, on the Hart bill, S. 1321 (93d Congress, 1st Session). We are informed that it will not be possible to allocate time to representatives of our Association. We have, however, been urged to request our members to furnish to your subcommittee any suggestions regarding the bill's provisions, including those relating to speeified issues discussed hereinafter. The comments which follow are an expres. sion of the consensus of our Legislative Committee and of our Board of Gover. nors, including our officers.
The patent bar has devoted thousands of man-hours since the report of the Presidential Commission in efforts to assist your subcommittee in modernizing the patent laws. We have traveled across the continent repeatedly to special meetings of our national associations which were devoted to no other purpose. Our deliberations and debates produced successive drafts of proposed legisla. tion culminating in a draft, each and every provision of which had been care fully considered and determined to represent legislation in the public interest.
Senator Hart's bill, S. 1321, is not the result of such a deliberate process of open debate participated in by any member of the patent bar wishing to be heard on the subject. This is not to say that it lacks merit. It does, howerer, provide a basis for our opinion that it would be improvident to enact legisla. tion so different from any previously proposed, without subjecting it to the same deliberation and debate.
First, therefore, we urge your subcommittee to refrain from reporting this bill until its very novel provisions have been deliberated upon and debated by those most familiar with the subject matter to which it relates the members of the patent bar.
As to the five subjects designated as being included in the forthcoming hear. ings we have only the following comments at this time:
PUBLIC ADVERSARY HEARINGS
We have previously approved provisions for public assistance to patent examiners after the issuance of patents, and revocation of patents, for cause, within a limited period after their issue.
We oppose publication of all applications because it would "pollute" the fields of search with large numbers of redundant publications and more than double the expenses of publication incurred by the Patent Office.
Further consideration is necessary of the provision for participation by third parties in the prosecution of published applications. It is questionable whether the prospective enhancement of the validity of issued patents so effected would justify the additional costs imposed upon individual applicants by such procedures.
Insofar as the contemplated duties of the proposed Public Counsel are no more than those presently discharged by the Solicitor of the Patent Office or members of the examining corps, their mere transfer is unobjectionable.
The extremely broad subpoena powers of the proposed Public Counsel which would be conferred by Section 24 of the bill are, however, entirely unprecedented, and such provisions should not be approved, if at all, without full deliberation and open debate by the patent bar.
This proposal has been fully considered and rejected by the organized patent bar after full deliberation and open debate.
The experience of foreign countries which have implemented deferred examination practices has since demonstrated that any supposed advantages of deferred examination are more than offset by the “pollution" of the fields of search by redundant publications.
Furthermore, the advances made in recent years by our Patent Office in reducing its backlog have entirely removed the originally envisioned need for deferred examination,
Therefore, we oppose these provisions.
FEE SCHEDULE AND MAINTENANCE FEES
We oppose any schedule of fees designed to recover 60 to 75 percent of the costs of operation of the Patent Office for the reason that such a fee schedule inevitably would impose prohibitive financial burdens on individual inventors and small businesses, thereby inhibiting innovation. Also, such a fee schedule would make the Patent Office a profit-making federal operation when it should not have such function. The profit-making aspect of the Patent Office operation would come about because the government not only receives fees from patent applicants, but also obtains taxes which are levied on royalties and transfers of patents. The latter revenue would not be received by the federal government at all if it were not for the operations of the Patent Office, and so should be credited against the cost of operation of the Patent Office before the subject of Patent Office fees is considered.
Provisions for maintenance fees have previously been considered and rejected by the patent bar because of the severe penalty such fees would impose upon individual inventors and small businesses. Such fees would tend to stifle invention and encourage secrecy, thereby running counter to the Constitutional goal of promoting the progress of the useful arts. The exculpatory provisions of Sections 41(b) and (c) might lessen such burdens, but would not eliminate them so that the net negative effect would remain. The sections also would substantially increase the work load of the Patent Office. The proposed maintenance fee of at least $1,000 per year potentially would generate enormous amounts of revenue, entirely disproportionate to the cost of operating the Patent Office.
We unqualifiedly approve the proposal to make the Patent Office an independent agency.
Its integration into the Department of Commerce, which resulted from a recommendation of the Hoover Commission, was “an experiment noble in purpose", as Mr. Hoover once characterized the 18th Amendment, but it was no more successful than the latter. It is time to revert the status of the Patent Office to that of an independent agency, and we applaud Senator Hart's proposal to that end. Very truly yours,
RICHARD F. CARR, President.
MACHINERY AND ALLIED PRODUCTS INSTITUTE,
Washington, D.O., October 1, 1973. Senator JOHN L. MCCLELLAN, Chairman, Subcommittee on Patents, Trademarks, and copyrights, Committee
on The Judiciary, U.S. Senate, Washington, D.C. DEAR CHAIRMAN MCCLELLAN: The Machinery and Allied Products Institute appreciates the opportunity to offer its views on S. 1321, “For the general reform and revision of the Patent Laws. ." 1 The membership of the Institute is comprised of capital goods and allied industrial product manufacturers. These are high technology industries and, as such, have a very deep interest in the American patent system and in proposals for changing that system. It is our understanding that, although the public hearings on S. 1321, which were recently concluded, were devoted to the consideration of only five "... impor. tant new issues" raised by this proposal, written statements may consider all aspects of the bill, and accordingly our statement discusses ten of its provi. sions. However, before considering separately these several sections of S. 1321 we should like to put our specific comments in a broader perspective by commenting briefly on the general thrust and the broader possibilities of this bill.
The spirit of S. 1321 emerges in Section 1 thereof, “National Patent Policy," by a subtle but substantial alteration of the constitutional provision from which it derives. Article I, Section 8 of the Constitution asserts that the Copgress shall have the power "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." (Underscoring supplied.) The constitutional word "right" is changed to "privilege" in Section 1 of S. 1321. By implication an applicant for letters patent who seeks to have secured to him the right to which the disclosure of his discovery entitles him now becomes a supplicant who desires of his government not a declaration of his rights but the award of a special privilege. The author of this proposed change may not have intended the significance which we attach to it but, regardless of intent, it seems to us a precursor of other and unquestionably significant changes in our patent laws which, in our judgment, would tend in the long run greatly to reduce the usefulness of a patent system which has served this country well.
We believe that any number of changes, discussed in more specific terms below, would tend to discourage the use of the patent system which is to say that the inventor of new art would decline publicly to disclose such new art but rather would conceal it and attempt to profit from his discovery by maintaining it as a trade secret. Although the Institute would oppose at any time legislation harmful to the patent system—and we think S. 1321 wonld be harmful--this bill is especially untimely during a period when the United States is losing much of the technological lead which it has for so many years enjoyed.
1 As this letter is filed, the White House has announced the submission to Congress of "The Patent Modernization and Reform Act of 1973." No copy of the bill is yet arall. able and, hence, no comment on it is offered here.