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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 Association 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 construced 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, public 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 assur ance 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 document 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(e)] 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

the foreign application and which was carried forward in the corresponding U.S. application. We seriously doubt the wisdom of this change in the law preferring the contra rationale of the CCPA and the Court of Appeals for the District of Columbia in In re Hilmer et al., 149 USPQ 480 CCPA, 1966 and EliLilly and Company v. Brenner, Com. Pats., 153 USPQ 95, DC Cir. 1967.

Section 103. "Conditions for patentability; non-obvious subject mattter". The word "identically" appearing in line 2 of the present law has been omitted in the Hart Bill. The reason for the omission is not clear, although it may be an attempt to codify cases decided since the enactment of the 1952 Act, e.g. in In re Foster, 145 USPQ 166.

More significant, however, is the omission of the last sentence of Section 103 of the present law "Patentability shall not be negatived by the manner in which the invention was made." This sentence was included in the present law to overrule the holding of Cuno Engineering Corporation v. The Automatic Devices Corporation, 51 USPQ 272, U.S. Supreme Court, 1941 which held that one of the criteria for invention was a "flash of genius". Since deletion of the quoted sentence could adversely change the criteria for patentability, the proposed change is opposed. This section of the present law entitled, "Inventions made abroad" has been deleted in the Hart Bill. This section prevents the use of knowledge or use in foreign countries, in establishing the date of invention. Section 104 of the present law should be retained. Otherwise it would place the same intolerable burdens on United States applicants as those discussed above in Sections 102 (a) and (b), namely, undue hardship in proving or disproving the activities of others in foreign countries without the assurance of the right of service of process or cross-examination.

Present section 104.

Section 104(a). Date of invention; priority.-This section precludes an applicant from reliance upon a date of invention more than one year prior to his filing date or, in the event of a continuing application, to a date more than one year prior to the filing date of the immediately preceding parent application. This also has been debated (and defeated) before. Patents should not be issued on the basis of who won the race to the Patent Office. With respect to the one year period, it is felt that it is too short since more time is frequently needed to conduct the research necessary to ascertain the proper metes and bounds of the discovery involved and to enable the application to be prepared and filed. Furthermore the limitation of the right to rely only upon the immediately preceding parent application unduly restricts present continuation practice, discouraging the application from updating the original disclosures to disclose the best mode for commercial utilization. To the extent that continuation practice has in the past been a source of abuse in extending the period of protection for an invention, the revision in the patent term to measure the term from filing date rather than from issue date is the better alternative.

Section 104 (b) purports to deal with the determination of priority of inventorship, and leaves the basis for such determination to rules and regulations to be prescribed by the Commissioner. This is in marked contrast to present law [see 35 USC 102(g)] and is undesirable a promoting uncertainty. The meaning of the language "make dispositive the respective dates of filing . . . and reduction to practice" is unknown and certaintly fails to provide the necessary guidance to the Commissioner and to the public.

Section 104(d) would appear to bar an applicant from obtaining a patent upon a material that has been disclosed in the prior art even though it failed to teach how to prepare the composition and failed to disclose how to use it. In consequence, this provision would appear to countenance, indeed encourage, speculative or erroneous disclosures to bar later workers from securing protection for their discoveries. By encouraging specious disclosures such a provision would seem to be counterproductive in promoting the progress of useful arts and its enactment should be resisted. It also appears to reverse current law to the extent that it would allow reliance on inoperative disclosures as prior art. Section 104 (e) denies patentability "in the perception of a problem the solution of which is obvious". Discovery of the nature of a problem may well constitute invention. The fact that the solution may be obvious, once the problem is understood, has frequently been held to be the hallmark of truly meritorious inventions. This area of inventive activity should not be singled out and denied protection.

Section 111. Application for patent.-This section permits application for patents to be filed by an assignee, not necessarily the inventor. This change is

desirable; however, certain improvements should be made. For example, provisions should be included for correcting errors in the naming of the inventors during pendency of the application. Another is that there should be steps for inventor ratification of the agent's authority within a prescribed period of time after filing.

Section 112. Specification.-Paragraph (a) requires a great deal more in the disclosure of the specification than does the present law, particularly with regard to novel or unexpected properties and results, dates of each invention claimed, dates of reduction to practice of each claim, specific designation of best modes and of know-how known to the inventor and applicant necessary for commercial utilization. Besides the work and expense involved, these new requirements would place the applicant at a serious disadvantage with regard to possible future interferences with other parties, to have disclosed his dates of invention. Furthermore, it is not certain whether the date of invention includes the date of conception or diligence. With regard to disclosing the best mode, the inventor at the time of filing of the application may not know what the best mode is, because he has not had sufficient time to test all of variations of his invention. The requirement to disclose know-how is also burdensome. Literal compliance would require including in the application detailed engineering drawings, techniques and technologies in the published prior art but which may be important for success for commercial development.

Section 112(b), first sentence would require the applicant to state not only what is previously known but also what is obvious therefrom. This in effect requires the applicant to predict a conclusion of law which a Court might make in interpreting the patent years hence. The fourth sentence requires the applicant to give "the range of equivalents to which any element of any claim shall be accorded". Here again the law would be requiring the inventor to prophecize what the Courts and would-be infringer might do years hence with the benefit of after-acquired knowledge. This is an intolerable burden on the applicant.

Section 112(c) deals with claims directed to combinations of means. It is essentially the same as the present statute except that it deletes the final phrase "and equivalents thereof". The deletion of the phrase could be interpreted as a significant detraction from the patentee's scope of protection and therefore is objectionable.

Section 115. Oath of invention.-This provision requires a number of oaths or declarations in addition to the oath required at time of filing. These additional oaths, including those of each inventor, each applicant, if the applicant is not the inventor, and each attorney involved in the preparation or prosecution of the application, are to be submitted prior to issuance of the patent and are to recite an absence of awareness or prior public uses, prior art more pertinent than that considered by the Patent Office, and other material information. Given the present state of the fraud defense in patent litigation, the submission of these affidavits would appear to be pointless but would materially add to the cost of obtaining a patent and would significantly increase the quantity of documents to be processed within the Patent Office without commensurate benefit. The added cost and burden upon an applicant make this provision, as proposed, wholly undesirable.

Section 116 Joint inventors.-This section represents a significant departure from current law. Under this provision claims having different inventive entities may be joined in a single patent application, thereby assisting in the reduction of the number of applications to be filed to protect different aspects of a given inventive concept. This change is deemed highly desirable and its enactment is strongly recommended.

Section 120. Benefit of earlier filing date in the United States.-This section pertinent to continuation and continuation-in-part practice would appear to impose significant restrictions on such practice. For example, subsection (a) (4) (D) and (E) would bar the filing of such an application after the filing of appeal or after one year from the public availability of the subject matter dis closed in the parent application. For reasons discussed earlier (see Section 104 supra) such limitations and restrictions on the filing of continuation applications are deemed to be undesirable and counterproductive. The cutting off of the right to file a continuation application after a notice of appeal has been filed in the parent case is particularly obnoxious since an Examiner frequently fails to clearly state his bases for rejection prior to the submission of an

Examiner's Answer, by which time under this Section a continuation application could not be filed.

Section 122. Public availability, publication, and confidential status of appli cation. Under this provision applications, except those placed under secrecy order, are to be made publicly available within six months of the actual filing date and are to be published as soon after becoming available as possible. The publication of pending applications has long been considered, and has long been opposed, and is still opposed as being unsound. Reasons in support of such opposition can be briefly summarized as follows:

(1) It deprives the inventor of his right to keep his invention secret.

(2) It will encourage the submission of ill-defined and speculative disclosures which are useless as a base for building further advances, but rather which are presented largely to prevent others from obtaining patents.

(3) It will pyramid the cost of operation of the patent system thereby reducing its use by others than the large corporation.

(4) It will encourage filing of large numbers of specious desclosures as a means for clouding the precise area of commercial interest on the part of the applicant.

(5) The cost of publishing all applications would be a burden on the Patent Office budget, and eventually on the applicants, who would have to foot the bill for the major portion of such cost, under Section 41(b) of the Hart Bill.

Section 131 (b) of the Hart Bill requires the applicant to (1) submit prior art which the applicant has considered in connection with his patent application "the disclosure of which is necessary to make the application as a whole not misleading" and (2) provide an explantion as to why the claims of the application are patentable over cited prior art. The quoted language is unclear in scope and effect. Furthermore there should be a saving clause to the effect that neither matters of judgment exercised in citing prior art nor inadvertent failure to comply with the section would result in a holding of invalidity, unenforceability, misue or fraud.

Section 132(e) prohibits amendments which would add claims that mate. rially enlarge the scope of the claims of the application. This limitation apparently is due to the adversary examination feature of the Hart Bill discussed elsewhere in this report. It is in our view an unjustified curtailment of an applicant's rights.

Section 140. Burden of Persuasion.-This section places on the applicant the burden of persuading the Office that a claim is patentable. We believe the better rule is that reasonable doubts should be resolved in favor of patentability. The market place is the best means for resolving doubts. The applicants should be afforded the opportunity to prove commercial success industry acceptance, etc. to tip the balance in favor or patentability. Such factors, however, usually does not appear until long after the examination process is ended. If, as provided in Section 140 of the Hart Bill, the applicant has the burden of persuasion, he would be denied the opportunity of proving commercial success in support of unobviousness because his patent would never issue. Section 147 provides that appeals from the CCPA shall be to the U.S. Court of Appeals for the District of Columbia and further denies Petition for Certiorari for review by the U.S. Supreme Court unless the Petition for Review by the Court of Appeals has been denied. In addition it appears that the current Section 146 interference review action in the district of the adverse party is eliminated. The effect of this section is to displace the CCPA to a level subordinate to the Court of Appeals. In our view this change is not warranted and should be opposed.


Section 201 provides for reissues similar to the present law with the exception that it prohibits enlarging the scope of the claims of the original patent and stays the reissue application if the validity of the patent or the conduct of the patentee in procuring it is in question in any proceeding. We are opposed to the prohibition of broadened reissues for the same reason as discussed above with respect to Section 132(e).

Section 203 provides for disclaimer and is similar to the current law, but adds the feature that the disclaimer must be timely upon learning of the defect, and further that a terminal disclaimer or dedication shall have no effect in the determination if the patentability or validity of a claim in pat

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