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Secretary issued a Federal motor vehicle safety standard that could be met only by using a patented device, structure, or method and if the patent holder unreasonably refused to license the use of his patent or was willing to supply the item or permit its use only on unreasonable terms.
The automotive manufacturers therefore proposed an amendment that would bar patent holders from enjoining the use of any patent that is necessary to meet a Federal motor vehicle safety standard, and would limit the patent holder to a suit for damages in the form of a reasonable royalty.
The committee concluded that any legislative solution presents great complexities, since a balancing of equities as between the manufacturer and the patent holder is bound to vary from one case to another. The committee decided it would therefore be preferable to leave the matter for resolution by the courts on a case-by-case basis. In this connection, it is the committee's understanding that under established patent case law the Federal courts, in performing their traditional role of balancing the equities before issuing an injunction, will decline to enjoin the use of a patent when its use is required in the public interest. (See City of Milwaukee v. Activated Sludge, 69 F. 2d 577 (7th Cir. 1934). The committee therefore assumes that the courts are unlikely to enjoin the use of any patent when an automotive manufacturer can show that use is necessary to comply with a Federal motor vehicle safety standard and that the patent holder is refusing to supply the item or otherwise permit such use on reasonable terms. The committee also assumes that the Secretary is not likely to adopt a standard which can be met only by using a single patented device, and that the Secretary would, before doing so, take steps to obtain an understanding from the patent holder that he would supply the item or grant licenses on reasonable terms
Executive Communications Contains nothing helpful.
As H.R. 13228 in the House and S. 3005 in the Senate:
SEC. 104. The Secretary, in cooperation with other departments and agencies as provided in section 113, is au
7 thorized to undertake appropriate research, testing, and de 8 velopment for motor vehicle safety and motor vehicle safety 9 standards to accomplish the purposes of this title and, in 10 exercising this authority, may perform the following
(a) gathering or collecting existing data from any source for the purpose of determining the relationship between motor vehicle or motor veliicle equipment performance characteristics and (1) accidents involving motor vehicles, and (2) the occurrence of deatlı, personal injury, or property damaye resulting from such
(h) contracting for the fabrication of or directly purchasing. notwithstanding any other provision of law, motor vehicles or motor vehicle quipment for research and testing purposes, and the testing of motor vehicles and motor vehicle equipment to accomplish the purposes of this title, even though such tests may damage or destroy the vehicles or equipment being tested;
(c) selling or otherwise disposing of motor vehicles or motor vehicle equipment tested pursuant to subsection (b), notwithstanding any other provision of law,
and reimbursing the proceeds of such sale or disposal into the appropriation or fund current and available for the purpose of carrying out this title: Provided, That motor vehicles and motor vehicle equipment which have been rendered irreparably unsafe for use on the highways, by testing pursuant to subsection (b), shall be sold or disposed of in a manner insuring that they shall not be used on the highways or on vehicles for use on the highways;
(d) performing or having performed all research, development, and information gathering and disseminating activities necessary and appropriate for motor vehicle safety and motor vehicle safety standards, and purchasing or acquiring equipment and facilities related thereto, or fabricating needed motor vehicle equipment to accomplish the purposes of this title, including
(1) relating motor vehicle and motor vehicle equipment performance characteristics to motor vehicle safety;
(2) determining the effects of wear and use of motor vehicles and motor vehicle equipment upon motor vehicle safety;
(3) evaluating and developing methods and
equipment for testing. inspecting. and determining safety of motor vehicles and motor vehicle equipment;
(4) evaluating and developing methods and equipment for determining adequacy of motor ve hicle safety standards, and compliance of motor vehicles with motor vehicle safety standards; and
(5) developing appropriate motor vehicle safety standards.
(e) awarding grants to State or interstate agencies and nonprofit institutions for performance of activities
authorized in this section.
SEC. 106. (a) The Secretary is authorized to train, 7 or establish training programs for, personnel of Federal S agencies. State or other public agencies or institutions, pri
vate firms and private institutions by grants to or contracts with such agencies, firms, or institutions for the purpose of
achieving motor vehicle safety as provided in this title. 12 He may receive and expend funds made available under a 13 cooperative agreement or utilize motor vehicles or motor 14 vehicle cyuipment furnished thereunder for training purposes.
Such training may include
(1) interpreting and applying motor vehicle safety standards;
(2) using test methods and test equipment:
(3) testing and inspecting motor vehicles and motor vehicle equipment to determine motor vehicle
(4) such other training as may be necessary to carry out this title.
(b) The Secretary may purchase, use, and dispose of 12 2 motor vehicles or motor vehicle equipment for use, other 3 than for purposes of transportation, in the training author4 ized by subsection (a), under the same authority, and sub5 ject to the same conditions, as provided in section 104.