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retaining a narrower claim; whereas if it had to be done in the courts it would be too late and surely more expensive.

Recommendation No. 23, which is reflected in section 294, provides that once a patent is found invalid in one action it is then invalid everywhere. There has been some criticism of that. At the present time, of course, you can sue in the first circuit, you can sue another defendant in the second circuit, and you can go through every circuit in the country. Why that should be permitted is rather difficult to explain, except that it gives the inventor 10 chances. The real defendant is always the same fellow; he is the fellow who is manufacturing the accused product; but the patent owner can sue for infringement of his patent every store or user in each of the several circuits. Each time, of course, the manufacturer of the product has to pick up the tab for defending. Under the bill all this is changed. Once a patentee has been licked, he stays licked. It would be nice if we could also declare that once declared valid it is beyond challenge but the Constitution would stand in the way. You cannot deprive a litigant of his day in court.

Now about the international aspects of the bill. I said that one of the questions we considered was, What can we do with the patent system to advance our international goals? On that subject I want to say one preliminary thing. We did, in the report, recommend a number of changes where we thought it would be good practice to harmonize American practice with predominant world practice. I do not think we ever did it in any case where we thought that we would be accepting the poorer method in place of the superior method. Harmonization is good in and of itself but not so great a good as to justify abandoning a superior practice. When there are choices that are even-steven, when there is no advantage in one over the other, for instance, whether traffic shall move to the right or traffic shall move to the left, as it does in some countries, then I think most people would agree that a harmonious system is better than a dis-harmonious one.

Now, what do I think are the international goals of the United States in the patent field? I would state them this way. I think the ultimate international goal of the United States is universal peace and therefore anything that contributes to that, furthers the international goal of the United States. And, therefore, in the patent field, it ought to stimulate inventive capacity around the globe, and to promote the widespread dissemination of technology for the enrichment of human life everywhere, facilitate investment and exploitation of technology throughout the world and thereby to lift the standard of living of people everywhere, and to contribute to world peace by improving cooperative relationships and constructing new ones that will serve not only international economic needs but also mutual understanding among nations.

I spoke about the so-called universal patent. Maybe I am being an idealist in this respect. It seems to me a perfectly appropriate time for us to say that the long-range target of all international action should be the establishment of a universal patent, valid and recognized throughout the world, issued in the light of, and as inventive over the known art of the whole world, and obtained on a single application, quickly and inexpensive in return for a genuine contribution to the useful arts.

My thought on this whole subject, if I may respectfully submit it, is this. The major premises which underlie our social arrangements, that is, the unspoken consensi of our constitutional system are incompatible with private monopolies. The common law which is part of the legal heritage of our country is allergic to private monopoly. A small segment of the patent fraternity, judging from some of the mail I have received, has, from preoccupation with patents, become unconscious of the exceptional character of patents. To survive in a hostile environment, this system of patent monopolies must justify and rejustify itself. Each patent must justify itself as the quid pro quo, as the reward by the community given in return for a contribution to the community; and the system itself must rejustify itself as a source of motivation for a constantly growing effort to expand and enlarge our technology, to explore new fields and to bring in ever growing abundance of God's bounty for the enhancement of the life of all the people of the earth. Thank you.

Chairman KASTEN MEIER. Thank you Judge Rifkind, for a very enlightening, comprehensive discussion of the Commission's work and views and of your own views.

I just have one or two questions, looking at patents as a nonpractitioner. You stated that there were several areas that the Commission did not go into. You did not go into the issue of Government patent policy; you assumed that the patent system up to the present time, has been faithful to the constitutional mandate; you didn't go into a great deal of detail in your report on certain detailed practices of the Patent Office. What are the areas affecting patents that you really did not consider?

Mr. RIFKIND. There were really quite a number. My memory is not as keen on it now as it should be but we had among the papers available to the Commission and I assume available to you, a long list of problems which-from which we withheld any attention. We abandoned them, either at the first glance or because we could not arrive at any sensible solution or contribution in the area. The whole subject of the relationship of the patent system to the antitrust field, we touched on, but we did not really go into depth in this very important area. There are a number of others of that kind, I am sorry my memory is not very vivid on it right now. I dealt with some other problems in the interval but I think that it can be very readily found.

Chairman KASTENMEIER. As far as Government patent policy is concerned, the commission appropriately suggested that the Congress had already undertaken an evaluation of this. Did the commission consider whether it would be easier or more difficult to tie in any new determination of Government patent policy with the revised patent systems such as you were advocating?

Mr. RIFKIND. I see no reason why the two cannot be meshed very comfortably, no matter which solution the Congress finally adopts. After all, the patent policy problem, the Government patent problem concerns itself with who shall own the patent rights. This bill deals with when patents shall or shall not be granted and how they shall be enforced. The two can be zippered together in almost any system. As to your previous question I want to say, for example, we were unhappy that the patent system should deal with design patents but we did not recommend or explore what alternative protection should be afforded

in the design patent field. We were rather disconcerted by the way the Patent Office has been dealing with plant patents. We thought that it was an inappropriate area for the Patent Office to deal with. We realized a substitute, more directly relevant, was in order, but we did not go into what that should be.

Chairman KASTENMEIER. As far as the duration of the patent is concerned, I think the committee understands why 20 years was settled on. This really isn't a determination that the present duration should be changed but rather that it should be made consistent with the new system. My question is this, was there much thought given as to whether the term should be lengthened or shortened.

Mr. RIFKIND. There was a great deal of discussion. There was considerable debate about whether we should go for the European idea of a petty patent which would be a short duration patent for ideas of modest scope. All of that was explored. Either we did not reach a conclusion thereon or the conclusion is the one that is reflected. We took 17 years as the present system; if you add 3 years for the period of prosecution, it is 20 years. Twenty years happens to be the patent duration in most European countries. We thought there were so many advantages in adopting it, especially the motivation it provided was advantageous that way, that we adopted the 20-year term.

Chairman KASTEN MEIER. Recommendation XXIV of the Commission's Report would create civil commissioners to preside over pretrial proceedings. From your own substantial experience at both the bench and the bar, and in view of your own aversion to special courts, are your persuaded that the public interest requires that the patent field be singled out for this special treatment?

Mr. RIFKIND. Well let me give you a two-pronged answer. There was so much pressure for the doing of something which would moderate the cost of patent litigation, that we had to respond to it. Personally, I felt that anybody-and I expressed myself to the effect-who can invent a method by which to reduce the cost of patent litigation ought to get a patent. Such a remedy would be universally applicable to all litigation. My experience is that all litigation has become enormously burdensome and expensive; indeed some of the very advantageous liberation of the rules which has been developed during the past generation and which has served a very great purpose in improving the quality of our judgments has enormously increased the expense of obtaining those judgments. This is a recommendation with respect to patent practice which is equally easily available for every other field, and indeed occasionally, of course, courts do appoint masters to preside at pretrial proceedings. We could not make a recommendation universally applicable because we thought that would be beyond the proper scope of our assignment. So we did recommend that for patent litigation there be Commissioners who would preside at these pretrial hearings and thereby shorten them, furnish rulings more quickly and so shorten the extraordinary lengths to which they now go.

Chairman KASTEN MEIER. Judge Rifkind, recommendation No. XXII of the Commission's report, would have written into the statute a formulation of the so-called rules of reason as a guide in determining issues of patent abuse. The bill before us does not follow this recommendation. Would you comment upon that exclusion?

Mr. RIFKIND. This is one of the areas with respect to which I said that I had very small, if any, expertise. My own private view, and perhaps I am being disloyal to my Commission, that this is an area which requires attention but that we did not have the time to go into it in sufficient depth for us really to make a first-rate recommendation. I think having it here is good, because it draws attention to it. Not having it in the bill is also good because at this time it is not ripe, in my judgment, for translation into legislative form. You have two systems, the patent system and the antitrust system, which are compatible if carefully put together and yet they appear to have points of conflict. It is true that in recent years every time you want to enforce a patent, you are confronted with an antitrust counterclaim; it has become additionally expensive by reason thereof. You have got to get expensive counsel, because not many lawyers go into that field. It needs attention, Mr. Chairman, serious attention, but we did not have on our Commission a representative from the Department of Justice or the antitrust division as we did from other agencies. So that we really did not have the opportunity, in our debate, to clash ideas with those whose function it is to serve the antitrust policy of the United States. There was a lot of feeling about this and the Commission did vote it but I think it is really an invitation for further study rather than capable of being translated into immediate legislative policy.

Chairman KASTEN MEIER. Thank you.

Mr. Edwards?

Mr. EDWARDS. Judge Rifkind, I found your testimony very enlightening and, better still, enlightened, and I thank you for coming. I have one short question, Mr. Chairman. If the bill is passed, generally in its present form, do you think its effect would be to improve the competitive situation of the little man as against the large corporation?

Mr. RIFKIND. I think it would. I think there are a number of provisions here which would serve the interest of the small businessman and the independent inventor. I'll go so far as to suggest to you Mr. Edwards, that if you think about it deeply enough you will come to the conclusion that it is possible that the really great aggregations, the Du Pont's, the IBM's dont' need patent protection. They are running so far ahead that they can take advantage of their very momentum to have competitive advantage. The patent system is essentially desirable from the point of view of the small businessman.

Mr. EDWARDS. Thank you.

Chairman KASTEN MEIER. Mr. Hutchinson?

Mr. HUTCHINSON. Judge, I too want to state to you that I appreciate very much your discussion this morning. As you know, no member of this committee, at this time at least, claims to have any expertise in this field of patents. We are here to become informed. Your statements have been very helpful to me.

Mr. RIFKIND. Thank you.

Mr. HUTHINSON. I do have a couple of questions which probably will simply exhibit my present general ignorance on the subject. You talked about under the present system there are a good many patent applications which remain hidden in the pipelines for 2 or 3 years and nobody knows much about them. But all of my life I have seen things on which

there has been a little notice "U.S. Pat. pending." Now I take it that this is a situation where someone files an application for a patent? Mr. RIFKIND. That's right. The patent has not been granted but he publishes to the world that he has made an application for the patent.

Mr. HUTCHINSON. There must be other situations though where the inventor chooses not to utilize his patent until it is granted. Is that the situation?

Mr. RIFKIND. The fact is a simple one. You may have filed an application for a patent, then actually manufacture and put such a notice on your product. To that extent it becomes disclosed. During that period anybody could use it without liability but at least he knows that when the patent is issued he is in trouble.

Mr. HUTCHINSON. Oh, he could use it.

Mr. RIFKIND. Oh, yes; without liability. Under the present law that is my understanding of it. But a great many applications, the great bulk of the applications remain in the dark, unpublished in this pipeline because either the owner of that invention has not found the finances to exploit it or it isn't ripe yet for public exploration; or for whatever reason the inventor wants to defer its exploitation.

Mr. HUTCHINSON. Or he doesn't want to disclose it?

Mr. RIFKIND. Yes; or he does not want to disclose it. I would say, and I am guessing now, that numerically the number of those that actually exploit are but a small fraction of all the applications which are in the pipeline.

Mr. HUTCHINSON. Thank you Judge. Now the only other question I have, if you haven't already answered it, is this: As between these two available routes of appeal up through the Court of Patent Appeals or up through the district court, did the Commission discover relatively which court is more frequently used? Do most of these things go up in one court or the other?

Mr. RIFKIND. Mr. Hutchinson, I have only hearsay. I can only tell you the hearsay I have heard. I have never appeared in the Court of Patent Appeals; I don't think I have. The impression that I have got from speaking to the professionals that appeared before the Commission is that, generally speaking, the disappointed inventor will get a warmer reception in the Court of Patent Appeals than he would in the district court. That may be all wrong. I am not an authority for that proposition, but I got that impression from listening to the discussions at the Commission.

Mr. HUTCHINSON. As to the challenger of a patent, the man who says. your patent is no good, I am going to sue you, what about him? Mr. RIFKIND. He doesn't go there at all.

Mr. HUTCHINSON. Oh, he has to go to the district court. He can't go into the Court of Patent Appeals?

Mr. RIFKIND. Oh, no. He has to go through one of the district courts of the United States.

Mr. HUTCHINSON. Thank you, Judge.

Chairman KASTEN MEIER. If there are no other questions, the committee again desires to express its thanks to you for coming, Judge Rifkind.

Now the committee would like to call Mr. Philip F. Zeidman, General Counsel of the Small Business Administration.

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