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COMMITTEE ON THE JUDICIARY

JAMES O. EASTLAND, Mississippi, Chairman ESTES KEFAUVER, Tennessee

ALEXANDER WILEY, Wisconsin OLIN D. JOHNSTON, South Carolina

EVERETT MCKINLEY DIRKSEN, Illinois THOMAS C. HENNINGS, JR., Missouri ROMAN L. HRUSKA, Nebraska JOHN L. McCLELLAN, Arkansas

KENNETH B. KEATING, New York
JOSEPH C. O'MAHONEY, Wyoming

NORRIS COTTON, New Hampshire
SAM J. ERVIN, JR., North Carolina
JOHN A. CARROLL, Colorado
THOMAS J. DODD, Connecticut
PHILIP A. HART, Michigan

SUBCOMMITTEE ON PATENTS, TRADEMARKS, AND COPYRIGHTS

JOSEPH C. O'MAHONEY, Wyoming, Chairman OLIN D. JOHNSTON, South Carolina

ALEXANDER WILEY, Wisconsin
PHILIP A, HART, Michigan

ROBERT L. Wright, Chief Counsel
JOHN C. STEDMAN, Associate Counsel
STEPHEN G. HAASER, Chief Clerk

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FOREWORD

Should the Government enter into research and development contracts which may produce patentable inventions without retaining even a license to use the invention? This is one of the questions posed by the following report on the patent practice of the Treasury Department.

The report was prepared by Herschel F. Clesner of the subcommittee staff, under the supervision of Robert L. Wright, chief counsel of the Subcommittee on Patents, Trademarks, and Copyrights, as part of the subcommittee's study of the U.S. patent system, conducted pursuant to Senate Resolution 53 of the 86tb Congress, 1st session. It is the eighth of a series of studies dealing with patent practices of the various Government agencies. Purpose and scope of the studies are more fully described in the forewords of the reports on patent practices of the Tennessee Valley Authority and the National Science Foundation and in the annual report of the subcommittee issued on March 9, 1959.

This report illustrates how patent practices within the same Department may vary widely when the Department has a number of different functions. Thus the Treasury Department's Bureau of Engraving and Printing follows a policy of obtaining a royalty-free license to use inventions developed by its contractors, while the Coast Guard, another branch of the Treasury, in most cases obtains no licenses to use inventions developed by its contractors. The Coast Guard is more liberal to research and development contractors than is the Defense Department, apparently because it spends considerably less for research and development than do agencies of the Department of Defense. Nevertheless, the situation illustrates anomalous aspect of Government patent policy which points to the need for legislative standards to cover all research and development expenditures. In the Treasury Department, as in many others, patent policy is made by contracting officers and may vary substantially from contract to contract.

This report also brings to light a troublesome problem which occurs occasionally when the Government takes an assignment of a patent to secure the payment of a tax. As matters stand the Government's ability to restore title to the patent owner when the tax is paid is in doubt and the Treasury's recommendation for legislative action to resolve this doubt should receive the close attention of the Congress.

JOSEPH C. O'MAHONEY, Chairman, Subcommittee on Patents, Trademarks, and Copyrights,

Committee on the Judiciary, U.S. Senate. MAY 25, 1960.

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