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Commission, c. 1945; The Attorney General's Committee to Study the Antitrust Laws (Report, March 31, 1955); and The Report of the President's Commission on the Patent System (1966). The patent system has been reconfirmed as beneficial to the public and a just reward for inventive contributions to the useful arts. As most recently reported by the Presidential Commission of 1966:

“The members of the Commission unanimously agreed that a patent system today is capable of continuing to provide an incentive to research, development and innovation. They have discovered no practical substitute for the unique service it renders."

This remarkable stability of the patent system is not due to industry's, private inventors' or the patent bars' resistance to change. Rather it results from the foresight of our Founding Fathers in recognizing and applying the simple logic that persons invent and disclose their inventions, and entrepreneurs commit the necessary capital to bring these inventions to the public, only where there is an adequate incentive to do so. Quoting further from the Presi. dential Commission:

“First, a patent system provides an incentive to invent by offering the possi. bility of reward to the inventor and to those who support him. This prospect encourages the expenditure of time and private risk capital in research and development efforts.

Second, and complementary to the first, a patent system stimulates the investment of additional capital needed for the further development and mar keting of the invention. In return, the patent owner is given the right, for a limited period, to exclude others from making, using, or selling the invented product or process.

Third, by affording protection, a patent system encourages early public dis. closure of technological information, some of which might otherwise be kept secret. Early disclosure reduces the likelihood of duplication of effort by others and provides a basis for further advances in the technology involved.

Fourth, a patent system promotes the beneficial exchange of products, seryices, and technological information across national boundaries by providing protection for industrial property of foreign nationals."

We are seriously concerned that the proposed Hart Bill would work against these purposes of the patent system. The total effect of the bill would be so burdensome on inventors and developed of inventive technology as to destroy their incentive to invent and/or force them to elect secrecy rather than public disclosure under the patent system. It would discourage them from investing the capital necessary for developing and bringing new products to the public. In short, the progress of the useful arts would be inhibited rather than promoted.

This report will now address itself to the specific subjects listed in the Chiet Counsel's letter of August 7, 1973. 1. Vodification of Patent Examination Proceedings to Provide Public Adver.

sary Hearings The provisions of the Hart Bill establishing adversary proceedings are Sec tion 122. which requires the Commissioner to make all applications available for public inspection and copying within six months of filing, and Section 135 which permits any party between such publication and allowance to intervene with any information which might have a bearing on the patentability of the application. The term “party” includes the Public Counsel (discussed below), any agency, state, political subdivision, or instrumentality thereof, and any person adversely affected by any action of the Patent Office under Section 100(h). The intervening party may identify himself and participate in further proceedings, or remain unidentified under Section 135(d).

What is contemplated is an open ended, unlimited, pre-issuance patent opposition proceeding in which the opponent (or opponents) need not even be identifed.

Past proposals for pre-issuance opposition proceedings have consistently been disapproved. This disapproval usually centered on the increased operating costs in the Patent Office from two separate publications for each application, and increased cost and interminable delay to the applicant. Pre-issuance opposition would also deprive the inventor of his right to know the scope of his patent before being obliged to surrender his right to keep his invention sperrt.

The consequence of such opposition proceedings is not only a decrease in inventor's rights, but also the probable disuse of the patent system to the detriment of the public and the progress of the useful arts.

The Hart Bill is subject to all of these objections to earlier opposition proposals and adds some shortcomings of its own. The twelve-year patent term from the date of filing provided by Section 153 (b) without a saving clause in case of opposition proceedings, together with the provision of Section 271(a) limiting infringements to activity occurring only after issuance, subjects an inventor to a shortened and, in the event of a protracted opposition, possibly no effective patent life at all.

In addition, since the proposed Section 102(a) follows a universal prior art approach and no longer limits prior art to publicly available printed documentary evidence (or public uses), an opposition could be based upon prior knowledge or use anywhere in the world, even if the use was secret. Thus, an inventor could be denied his rights notwithstanding the fact that he is the first to provide in this country what is now recognized as the quid pro quo entitling him to a patent, namely, the disclosure of the invention to the public.

The proposed opposition proceedings would be conducted by a Primary Examiner. The Examiner's decision would be appealable to the Board of Appeals under Section 134 (a), and appeal could be initiated by any party (as that term is defined above) under Section 137. Furthermore, under Section 134(c) the appeal could be conducted as a de novo proceeding with any party introducing new evidence not previously in the record. The potential burdens on the applicant, as well as on the Patent Office, are staggering. Also, it is questioned whether a Primary Examiner should be called upon to receive, supervise and analyze testimony in adversary proceedings (as would be necessary on public use proceedings) and to make decisions based thereon. De novo proceedings on appeal could lead to abuse in that an opposer could withhold art from the Examiner on the basis that he could always introduce it on appeal.

In preference to the pre-issuance adversary proceedings proposed in the Hart Bill, we would recommend a post-issuance revocation procedure. This type of proceeding would not destroy the present trade secrecy rights of an inventor. He could maintain his invention secret during pendency of his application. The costs on the Patent Office and the patentee would be far less. In addition, this proceeding would not shorten the effective life of the patent, as would the adversary proceedings under the Hart Bill.

Accordingly, we feel that the adversary proceedings provided in the Hart Bill would seriously discourage inventors from using our patent system. Assuming the purpose of thse provisions to be the improvement of the quality and reliability of issued patents, we believe that post-issuance revocation proceedings are a far better means for accomplishing this purpose.

2. Creation of Office of Public Counsel The Hart Bill (Section 3(d)) establishes the position of Public Counsel who shall be appointed by the President with public approval; and he shall be “independent of the Commissioner in carrying out his responsibilities." In addition to the duties now assumed by the Solicitor, the Public Counsel is delegated the responsibility of assuring the issuance of “high quality patents" by reriewing wall proceedings in the Patent Office.” He "may intervene and participate at any time in any Patent Office proceeding" where he believes developing law or technology or the public interest warrants such intervention. In order to carry out the purpose of the proposed statute, the Public Counsel, at his discretion, may take any action, participate in any other proceeding, or conduct any inventigations or inquiries he deems appropriate.

He would have power under Section 24 to subpoena "any applicant, patentee, or any other person within the jurisdiction of the United States . . . to appear . . ., to testify, produce documentary evidence, or produce other information or material ...

... or file reports or answers in writing to specific questions." Under Section 132 he could be called upon by the Primary Examiner to "intervene and participate in any proceeding". He would brief and argue appeals to the Board of Appeals under Section 134,a nd to the Court of Customs and Patent Appeals under Section 143, and to the District Court for the District of Columbia under Section 145.

In our view, this section should be opposed because of the anticipated high costs of implementation which would inevitably result in escalation of patent fees and the broadness of the powers granted the Public Counsel. We have difficulty in reconciling the anamolous and inconsistent situation of having the Public Counsel represent the Patent Office in the defense of appeals from final actions, while in the same breath being virtually independent of the Commissioner or Patent Office policy. It is feared that his autonomy and uncontrolled power could be potentially more harmful than beneficial to the patent system. 3. Establishment of a System for Deferred Eramination of Patent Applications

The 1966 President's Commission on the Patent System adopted as one of its recommendations the proposal that enabling legislation be enacted to permit the Commissioner of Patents to establish a deferred examination program if he deemed it desirable. This was coupled with a recommendation for the publication of each application within an 18 to 24-month period after its effective filing date. (Cf. the Hart Bill proposal of 6 months.)

In 1966 the average pendency period between filing an application and issuing a patent thereon was two and one half years and rising. Likewise, the patent application backlog was rising. The Commission's purpose in recommending the publication of applications was to provide the public with knowl. edge of the advancements in technology more rapidly than the Patent Office was then doing it. The deferral of examinations was believed to be a possible solution to relieving the Patent Office of some of its work since some applications would be abandoned and would never require examination.

Since that time the average pendency time has been reduced to 24 months. As former Commissioner Gottschalk reported in May of this year, “Pendency time is now at the lowest level in over 50 years.” (APLA April-May '73 Bul. letin, p. 262) He also reported that the application backlog is going down, and that the Office's rate of disposals is exceeding the new filings by 12,000 appli. cations per year.

With this present average period of pendency of two years, the publication of applications for the purpose of early disclosure is no longer necessary. Like wise, in view of the more rapid disposal of cases, the need to lighten the workload of the Patent Office (one of the objects of deferred examination) is not urgent today as it might have been in 1966.

It is also not known whether the number of applications that will he ahandoned during the deferred period, if any, will be significant. The investment an applicant makes in filing is not limited to the Patent Office fees. He must also pay for the services of an attorney or agent and generally, as a result, thie total expenditures for filing become substantial. Having made the decision to file despite the required initial investment, it is not likely that very mans applications will be abandoned without at least receiving a first examination to determine possible patentability.

Section 192(b) of the Hart Bill, providing for the examination of deferred applications, permits any party (as defined above) to request esamination by paying a so-called basic examination fee. The applicant would therr be required to pay all other fees. The amount of this basic fee is not set forth, but it is assumed that it would be nominal. It is also not definite whether an applicant may refuse to pay all other fees subject to his application being declared atandoned, but this “relief" would appear to be available. In any event, it would appear that this provision lends itself to abuse by parties who, by paying a nominal fee, could force an applicant, at best, to pay the remainder of an examination fee when he was not prepared to or, at worst, to abandon his application.

A pre-issuance publication procedure would be necessary to implement a deferred examination system if delayed disclosures are to be avoided. Reasons for opposing such publication are discussed elsewhere in this report. These reasons alone are sufficient basis for opposing the deferred examination proposal.

This Association opposes the deferred examination system proposed by the Hart Bill. The seemingly insignificant benefits that might be derived froin such a system are far outweighted by the disadvantages that would result from both it and the publication of applications.

Thus, it is our view that deferred examination is unnecessary in view of the Patent Office's current predency and backlog status, unfair to the applicant in that it would require pre-issuance publication, and unwise in that the boped for benefits of fewer examinations are illusory.

4. Patent Office Fees The critical provisions of Section 41 that depart from existing law are summarized as follows:

(a) Fees shall be designed to affect an overall recovery in the range of 65–75 per centum of the costs of operation of the Patent Office (Section 41 (b)(1)); and

(b) Maintenance fees are established to maintain a patent in force. Individual inventors and small businessmen may be granted exemptions under certain circumstances. (Section 41(b) (2))

(c) Beginning with the fourth year after a patent issues, the maintenance fees shall be no less than $1000 and shall increase annually by at least 25 per centum each year. Deferred payment of such maintenance fees are sanctioned provided certain prerequisites are met. (Section 41(c))

We oppose this section. The 65–75 percent cost recovery rate is far too high in view of the Office's current and projected operating costs, and also because it ignores both the public interest served by the patent system, as well as the tax revenues derived from that system. We also question the fairness of the proposed fee system in that one of the effects would be that corporations would disproportionately subsidize a major part of the patent system. And, finally, the escalation rate of maintenance fees and the relatively high minimum fee established appear to be designed (1) to punish patent owners who are not working their patents, and (2) place a large percentage of issued patents in the pubic domain before they have realized their commercial potential.

This is contrary, in our view, to the basic spirit of the Constitution (Article 1, Sec. 8)

We favor the continuation of statutory fees subject to periodical Congressional review.

5. Administrative Restructuring of the Patent Office Section 2 of the Hart Bill establishes the Patent Office as an “independent agency".

We favor granting independence of action to the Patent Office and it is our understanding that there are presently separate bills in the Senate which would accomplish this.

In addition to the specific subjects we have discussed above and which were referred to in the Chief Counsel's letter of August 7, 1973, the Association's Subcommittee on Patent Law Revision has also examined other points in the Hart Bill and the Association's position on these other points will be submitted to you in due course.

If I can give you any further information or material relating to the above, please let me know.

Respectfully submitted,


New York, N.Y., September 30, 1973. Re Written statement of the position of the New York Patent Law Associa

tion on additional portions of the Patent Reform Act of 1973 (S. 1321). Hon. John L. MCCLELLAN, Chairman, Subcommittee on Patents, Trademarks and Copyrights, U.S. Senate,

Senate Office Building, Washington, D.C. DEAR SENATOR MCCLELLAN: This supplements our letter to you of September 11, 1973. In our September 11, 1973 letter, we remarked on five specific subjects concerning the so-called Hart Bill and we indicated that we would submit our Association's position on other points of the Hart Bill at a later date. This letter represents our Association's position on the other points set forth in the Hart Bill which we did not comment on in our letter of September 11, 1973.

Section 102. Conditions for patentability; novelty and bars to patent. The introductory phrase is a change from present law in that it states that a person shall not be entitled to a patent if the subject matter sought to be patented encounters any of the obstacles recited in the section, as contrasted to the present law which states that the applicant shall be entitled to a patent unless certain stated conditions are encountered. This change shifts to the applicant the burden of going forward with evidence of absence of anticipation or lack of obviousness. This change should be considered together with the new proposed Section 140 "Burden of Persuasion”, which states that the applicant shall have the burden of persuading the Office that a claim is patentable.

It is far too burdensome, indeed practially impossible, for an applicant to prove the absence of all of the conditions set forth in Section 102. This requires the proof of a negative. Under the Hart Bill the Examiner could nerely say under Section 140 "you have failed to persuade me that the claim is patentable” because you (the applicant) have failed to show that there is no prior publication, public knowledge, public use, etc.

The effect of the proposed change in Section 102 should also be considered together with Section 1 of the Hart Bill. Section 1 purports to state the national policy to be “to promote the progress of science and the useful arts, by granting inventors the privilege, for a limited time ... to exclude others ..." (Emphasis added) But Article 1, Sec. 8 of the Constitution speaks in terms of granting inventors "the exclusive right”, and the Courts have so construceni the patent grant. The distinction is subtle but significant in that privileges can and frequently are set aside in the face of countervailing equities.

Thus, Sections 102 and 140 as proposed would place an intolerable burden on the applicant in obtaining a patent, and Section 1 would then undercut the value of that patent once obtained.

Sections 102(a) and 102(b) would change the present law by permitting the use of universal prior art to defeat a patent, i.e. prior knowledge, publie use or placing on sale in a foreign country. This has been debated (and defeated) before. It would place an undue burden on the applicant because it would require him to explore activities of others in foreign countries without assurance of the assistance of service of process or the right of full and complete cross-examination, which he would have with regard to similar activities in the United States. It would also make virtually impossible a reliable validity search as a basis for investment in the invention, and it would make patent validity adjudication even more expensive than it already is.

Section 102(a) and 102(b) would also change the present law in adding to the subject matter which can defeat a patent application, subject matter which is "described in printed or other tangible form in this or a foreign country". This would abandon the well-founded reliance in our law on patents, publications, which are ascertainable with reasonable certainty, and those matters in the prior art which are accessible to the public, a the principal measures of the information available to the American public. Instead, it would include within prior art all writings, whether handwritten, and whether published or secret. Thus, as literally construed, laboratory notebooks maintained in secrecy in research laboratories, patent applications filed in foreign countries and maintained in secrecy, even those abandoned, would be prior art which could defeat an application for patent. One could never be sure, even at the point of litigation, that somewhere in the world there would be uncovered a secret dors ument never before known by anyone except its author, that would render the litigated patent invalid.

Section 102 (c) states that a patent is to be refused if the subject matter. "was forfeited, suppressed, or concealed". The present law (Section 102(ei) states that the applicant is to be refused the patent if he has abandoned his invention.

The intended effect of the proposed change is unclear. There is no definition of the terms "forfeited", "suppressed" or "concealed". Consider the quite common situation where the inventor spends time bringing an invention to the point of commercialization, during which time close secrecy is maintained. This might be considered “suppressing" or "concealing" the invention so as to defeat the right to a patent under the proposed Section 102(c). Moreover, the section makes no allowance for situations where the applicant resumes activity after a period of inactivity or secrecy. In such situations the applicant should not be denied his right to a patent.

Section 102(e) would change the present law by making the effective date of a United States patent, for prior art purposes, the filing date of a corresponding foreign application under Section 119, rather than the actual filing date in the United States as under present law. The language of the paragraph is somewhat unclear in that it does not state whether the U.S. application shall be entitled to the foreign date only for the subject matter which appeared in

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