available to the U.S. Patent Office has been employed for nothing more useful than the creation of examiner production records. There certainly appears to a complete misunderstanding here of exactly what projects should receive priority with respect to the use of computer time.

Now the last paragraph I have on the quota system is entitled, "The Bounty System."

Any quota system must inevitably lower the quality of the prod uct which is produced under it. Just taken by itself the devastating effects it produces are cause enough for alarm. But the U.S. Patent Office has succeeded in adding even one more refinement which serves to lower the quality of the product produced under its quota system still further. This is the bounty system, i.e., an extra reward for exceeding an assigned quota which by itself leads to a lower quality product.

The system employed here is very simple. If an examiner succeeds in exceeding his assigned quota by 10 percent, he then receives a bounty of $350. The total number of hours he spends per annum in examination of applications is still the same, so that the end result must be less time spent on examining each case. The resultant quality of the product is thus lowered even more. This is not a trivial issue. According to one published report this bounty system was the cause of much wrangling between the former Commissioner of Patents, Gottschalk, who wanted to abolish this system, and the former Assistant Commissioner Wahl, who favored it. Chemical Week, August 1, 1973, page 13. [Exhibit D.]

Now I spent quite a bit of time on that. I will try to summarize a little bit more.

Senator HART. The five specific topics

Mr. WEISSMAN. Well, do you want me to just briefly summarize! There are other issues here on what else the Office is doing, which I consider pretty bad in harming the system and causing them to issue invalid patents.

Senator HART. All right. Proceed. I have been following your testimony and the positions you have taken on the five specific items as mentioned in your testimony, and while I have interrupted you, me see if I can summarize at least that part.

let

Turning to page 24, is it correct that as an individual you believe that the opposition proceeding as suggested in the bill is desirable? Mr. WEISSMAN. Yes.

Senator HART. That the deferred examination, provided there is a prompt issuance of a report of patentability, you suggest is desirable?

Mr. WEISSMAN. Correct.

Senator HART. And on the maintenance fee, you believe the proposal is desirable?

Mr. WEISSMAN. Yes.

Senator HART. And on the independent agency, you believe it is desirable?

Mr. WEISSMAN. Yes, I spelled that out in quite some detail. Senator HART. The one I haven't finished reading, so I will ask you briefly to tell us before you turn back to the rest of the statement, is the public counsel section.

Mr. WEISSMAN. Well, I went into points of detail there and the reason I like it is because the Office gets the blame for a lot of invalid patents, that is, as they are invalidated in the courts, on grounds which the Patent Office presently can't review. In other words, supposing somebody has publicly used an invention, that would be grounds for invalidating a claim and it can be invalidated in a court, but the Office has no way to.

I go into other things. I go into a detail we have, Senator, a rule for public use proceedings, but it is never used, or is rarely used.

And what I tried to explain, there are certain aspects of Office practice, such as this public use, where, if we had a public counsel with the proper powers, this issue could be disposed of right in the Office. And that is not the only one, there are others.

In other words, what I would like to see is the Office go into all issues that could invalidate a patent and not leave it to some court, and thereby give us a black eye on something which we don't have any power to investigate right now.

Senator HART. Well, I wanted to make sure we got your position as an individual on those items. Now you can proceed as you desire. Mr. WEISSMAN. Yes; well, briefly, what I did, I went into quite great detail in trying to show the way the Office operates. Although I am not going to say it is all at fault, but because of the way they operate, they just turn out a product that isn't too good, and this next section I entitle, "Lack of a Meaningful File Wrapper Record." Now, do you want me to just summarize it?

Senator HART. If you would, please.

Mr. WEISSMAN. Well, when you get into court, the validity of the patent is based almost solely on its file wrapper and the purpose of this section is to point out that the way the Office is presently operating tends to lower the value of this file wrapper history. In other words, we have what we call a PO-1142, a first action form, which is so brief that it doesn't really explain anything. There is no chance. to develop the issues properly. If a patent gets into court and a judge sees this first PO-1142 form, he is not going to be impressed by it very much because it doesn't say very much. And unfortunately, if a case goes out like that, there has just never been any development of the prior art or of the issues involved.

The second section is entitled, "The Insistence of the Patent Office on Shortening Prosecution Time." This is very interesting because there has been quite a bit of testimony to the panel on the shortening of prosecution time. The present goal is to get the patent issued in 18 months.

Now, what is done there, there are certain ways of shortening the prosecution time in the Office. You try to move up the time as fast as possible to where you act on a new case as quickly as possible, that is, as soon after it is filed as you can. Second, the Office likes to see a second action in a case within 2 months time of the time that the first amendment comes back, and they also would like to see that second action made final. Now, this is very nice. It shortens the prosecution time. But what I try to do here is point out that when you do that, when you do shorten the prosecution time that much, then there are certain undesirable results which follow. You won't be able to research the chemical literature in chemical cases. It is unlikely you will be able to get recent foreign patents. In other words, with

patents having a very short prosecution time, well, there is just no way to search the records properly. You have left out those two very important sources of prior art.

I could try to clarify that a little bit further.

Senator HART. I think you have spelled it out understandably in here. I am following it.

Mr. WEISSMAN. Well, in chemical cases, for instance, we rely on chemical abstracts to do the searching in the chemical literature. In other words, suppose a case is allowed to go out to patent in 18 months. Now presently the indexes which we use to search the chemical literature, those indexes come out a year to a year and one-half later. The abstract itself is of no value. You can't consider that. You must have the index. In other words, we will just barely get the index by the time the patent is issued so there is no way to search that.

Now on the foreign patents, it just takes a little time until they are shipped over and until somebody looks them over-especially if they are not in English because you have to translate-and it takes time because you have to get them up to the examiners and they have to put them into the files. It all takes time. It is very haphazard, and with this shortened prosecution time we almost have a guarantee we will never see recent foreign patents. So the greatest evil of shortened prosecution time is it totally eliminates very important areas of prior art.

Now I will just briefly summarize these other sections. There are certain things the Office does. We have a manual on patent examination procedures. We have a rule of practice that says for instance, when it comes to an interview, that after the interview, a complete written record is supposed too be placed in the file wrapper so anybody can see what transpired. But yet we have what we call an office form POL-327 and I quote: "All of the claims being allowable. prosecution on the merits is closed in this application and the Notice of Allowance or other appropriate communication will be sent in due course, in view of" and then it lists the following: "telephone interview" and "personal interview."

Now, when that letter goes out, when that 327 goes out, the case is allowed so the attorney couldn't even get the written record in, or there is no necessity to get that written record in of what transpired as a result of that telephone interview even though the rules of practice definitely require that.

Of course what is even worse is that if it gets into a court contest and a judge sees that, then I don't think he is going to like the idea at all that happened. In other words, as a result of that telephone interview a case could be allowed, and yet the record would be totally devoid of the slightest indication of why it was allowed.

The next section I will just briefly go over. I feel that the Office just isn't using its personnel in the best possible manner. I think they could be a little bit more, well, I think they could be a little bit more efficient in the way they use that personnel. I will just leave it at that.

We went into the five sections that you had discussed previously. Senator HART. Yes.

Mr. WEISSMAN. I have mentioned others just very briefly. I don't know if you want any comment on that at all except for, well, I would like to comment on a couple of things. There are some things in there which are really of interest. Your bill now requires that a primary examiner fully set forth in the record the reason for everything he does, and that is extremely interesting because the way things stand right now, Senator,, no examiner ever need explain why he allows an application. There is just nothing that requires it, and that is the reason we get a black eye so much in court. An examiner might have a very good reason for allowing it, but there is no way for him to present it. However, when it gets into a court the judge looks at it and is completely mystified. The judge can't figure out what happened. And your bill would require that everything that a primary examiner does be written in a form that the judge likes to see, you know, that no matter what he does, he sets forth findings of fact, conclusions of law, et cetera. The judge will be able to review it intelligently and see what happened. Today I believe that is one of the biggest defects in file wrappers, because no examiner ever needs to explain why he allows a case. If he tries to object to allowance he is in trouble. He has to explain. But of course when a patent gets into court there is a bad thing, because the judge would like to know what the basis was for allowing it and most of the time he just can't figure it out. As I said, the examiner might have very good reasons but they are not in there.

Now, this chapter 12, section 132 (c) and subsections 1, 2, 3, and 4 very clearly spell out this must be done. Of great interest is the fact that subsection 4 also says that it would require a narrative report of all meetings between an examiner and an applicant or his representative. That relates back to what I was just discussing previously, where you could have a telephone conversation and no report of it. This provision of the bill would completely eliminate that situation. Well, I think I have pretty well covered it. As I say, the paper itself is pretty lengthy.

Senator HART. Mr. Weissman I think that the record has benefited from having your testimony, given the background and experience from which you speak. As one interested in this particular bill I appreciate very much your individual support for it, and your comments on the five specific items that we wanted direct focus in these hearings to be on.

Mr. Brennan?

Mr. BRENNAN. No questions.

Mr. NASH. No questions.

Senator HART. Thank you.

[The statement of Milton Weissman in full follows:]

PREPARED STATEMENT OF MILTON WEISSMAN

1. INTRODUCTION

My name is Milton Weissman. I am a primary examiner in the United States Patent Office, having close to twenty-nine years of experience in patent examination, and over two years of experience in patent classification and retrieval systems. I am also Editor-In-Chief of the "Journal Of The Patent Office Society," a position which I have held since April 1967. Previously, I was the Assistant Editor of the Journal, a position to which I was appointed

in February 1963, so that I have over ten years of editorial experience in patent and related matters.

The opinions expressed in this statement are solely those of the author, and are not to be construed as having been adopted by any organization of which he is a member.

II. PATENT INVALIDITY: A CRISIS FOR THE U.S. PATENT SYSTEM

Almost all recent discussion, either written or oral, dealing with the subject of the invalidity of patents is based on the premise, either stated expressly or implied, that the courts are applying a standard of patentability which is far too strict. It is high time indeed that the opposite side of the coin be closely scrutinized. The conduct of those responsible for the issuance of patents should be questioned, and this is true regardless of whether or not one agrees that the courts are applying a too strict standard of patentability.

Do the officials of the Patent Office really care about the validity of the patents which are issued from their agency, as long as the production goals which they set for the patent examiners concerning the disposal of patent applications are met? The official position of the Patent Office is that they desire the issuance of patents of the highest possible validity. But, in view of their actual conduct concerning production goals, this position must be viewed as at least open to question. As long as the officials of the Patent Office demand greater production of disposals each year, even though the number of examiners remains about the same and the amount of prior art to be searched increases ominously each year, it is difficult indeed for anyone with an objective viewpoint to be convinced that they are paying anything more than lip service to the concept of the highest possible patent validity.

Nor are the others involved in the issuance of invalid patents to be considered entirely blameless. Do patent attorneys and their clients, the inventors, really care anything about the validity of the patents issued to them, as long as they can obtain these patents (which may or may not be valid)? Here again all concerned take the position that they only want patents of the highest possible validity to be issued. But again, in view of their actual conduct in the prosecution of patent applications, their strict adherence to this viewpoint is open to question. Is it too much to ask, for example, that they at least disclose to the Patent Office the best prior art of which they are aware? Then the examination process could be focussed on the issue of whether or not patentable subject matter has been disclosed, in view of the examiner's and applicant's best prior art, which is the best possible way to buttress the presumption of validity accorded to patents by statute.

Furthermore, the attitude of the patent bar toward any proposal for altering the present patent system, even though expressly designed to aid in the goal of having patents of greater validity issued by the Patent Office, can at best be described as merely lukewarm. Is it really too much to ask that they put aside self-interest, at least to some extent, to pursue a goal of having patents of the highest possible validity issued by the Patent Office?

The Patent Office has always had a tremendous problem, i.e., insufficient time in which to perform a proper examination of a patent application, without any solution therefor. Thus, note the following statement by Mr. Donald Brown, then Vice President and Patent Counsel of Polaroid Corp., which appeared at pp. 266-67 of "Hearings before the Subcommittee on Patents. Trademarks, and Copyrights of the Committee on the Judiciary, United States Senate, 84th Congress, 1st Sess. (1955).

"We believe that the present shortage of Patent Office personnel makes it impossible for the examiners adequately to search the art if the work of the Office is to be kept on a reasonably current footing. For example, it is our common practice, even in fields in which we are reasonably expert, to search the art before introducing a new product commercially. These searches, which are usually limited to United States patents of the last 15 or 20 years, may average 4 to 5 days of 1 man's time. An exhaustive literature search, such as we make if we are charged with infringement of another's patent, may run from 10 to 20 days of 1 man's time or even longer. As opposed to this, it is our understanding that the Patent Office's examiners, on the average, can devote not more than one-half day to the preparation of each Office action. . . . We do not believe that it is possible, even for a skilled examiner familiar with