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The only way, as I see it, that the Government may be disturbed is in a secondary way. That is so. If the Government wanted to buy a gun, for instance, and the gun is patented—but possibly the Government wants to increase the production of aluminum. Aluminum is produced by a patented process. There are several patented processes, and more than one process is being worked at the present time; but if the Government wanted to increase the aluminum output, and the Government desires to buy that aluminum, the contractor purchases the aluminum and consequently the manufacture of the aluminum is a secondary matter. That is, it is not directly done for the Government and is not a Government infringement. If the Government wants to increase the aluminum output, for instance, then the Government may seize a license under the aluminum process patent and hand it to some one and say, “You proceed to manufacture aluminum and we will have more of it, and you sell it to the people who are going to make it into munitions, or what not."
Now, unfortunately, this bill is so drawn that it does not cover the process patent or the method patent. The bill is limited to munitions and instruments. It does not cover processes at all, and they are very important.
Certainly, if you are going to do anything, you should have permission for the Government to require a license, transferable and divisible, under process patents as well as munitions and machine patents.
Now, in addition, it seems to me that the statute should be very clearly limited to the use which the Government or its transferee is to make of the license.
I have referred to aluminum. There is a reason, from the national defense standpoint, that the Government should go to a man and say, “I want you to make aluminum and make it for delivery only to those people who are making instruments of national defense;" but there is no reason, under cover of national defense that the Government should go to a man and say, “Here, I will set you up in business. You make aluminum and sell it for kitchen utensils, or sell it for road signs, or anything of the sort," and enter into direct competition with the original manufacturer of aluminum in matters which have nothing to do with national defense.
So that I think that the license which the Government takes, if it does take a license, and the license which the Government gives to the manufacturer should be strictly limited to use for national defense.
Now, if the Government seizes the patent, and can seize it, then the Government takes the entire patent for all rights, and while the national-defense phase of the patent may be merely incidental, the Government may under this, set up a man in business and let his business be not merely one of national-defense business, but cover the whole country and compete with those who are already established.
A patent is a peculiar sort of an instrument. It is incorporal. It has no habitat. If you are seizing a table, you can go out and pick up the table and walk off with it, and if the man who owns the table happens to be around and sees you and later on wants to take it, he knows who has taken it and he can follow it up;
but if you seize a patent, the patentee does not know anything about it. You just go ahead and do your work, so far as this statute is concerned, and there is no provision for any particular method of giving notice to the patentee. It just says that the Government shall seize the patent. How it is going to seize it or where, nobody knows. It seems to me there should be something in this statute to implement the seizure activity, and it seems to me that it might be reasonable either for the Government itself to go to the Patent Office and make a search of the Patent Office files and find out who is the owner of record and notify the owner of record and give him an opportunity to be heard, or in the absense of that, especially with respect to some foreigner on whom notice may be difficult to get at the present time, it might be entirely sufficient to notify the Commissioner of Patents and have him spread it on the public records. We have an assignment record in the Patent Office showing title to patents. You could have him spread the seizure by the Government on that record. That is the procedure which was adopted by the Alien Property Custodian during the last World War.
Then, the statute should provide that the Commissioner of Patents himself should notify, as well as may be the owner of the patent, and give an opportunity for him to come in and then negotiate the price which is to be paid for the patent rights.
Senator KILGORE. Mr. Chairman, may I make an inquiry?
Senator KILGORE. Under this, your interpretation is that the patent could actually be seized and the owner know nothing of it, which would make useless the clause in here providing for giving him an opportunity to execute a license and other grants.
Mr. FENNING. I think so.
Senator KILGORE. He would, or might have no notice and the statute would run against him?
Mr. FENNING. If it was seized. I do not know how you are going to seize it; but if you succeeded in seizing it, then there is nothing here which requires him to be given notice that would do him any good.
Senator KILGORE. He would have no opportunity to waive his rights? Mr. FENNING. No.
Senator DOWNEY. Mr. Chairman, may I intervene to point out that in this qualifying clause the expression "seize” is not used. It reads as follows: "That if, within 10 days after the requisitioning under this act."
Mr. FENNING. Well, say "requisitioning.” I do not know that requisitioning means anything differently. I used the colloquial term. I have not tried to use the technical words here.
I do not know how you are going to requisition a patent. Certainly the bill does not tell you how to requisition a patent.
Senator LODGE. Have you prepared an amendment to this bill?
Mr. FENNING. I have not. My purpose in coming here was to try to explain a few principles to you, because I appreciate that the Secretary of War will want to revamp anything which is done anyway. I will be very glad to suggest something, if you think it is worth while.
The CHAIRMAN. Mr. Fenning, may I suggest that you prepare an amendment and submit it to the committee for its consideration in executive session when this matter comes up?
Mr. FENNING. I would be very glad to do that.
Senator KILGORE. Would it be possible, for instance, to take over, by requisition, property, including a patent, for the duration of the emergency, or say for the duration of a national emergency, we will say, so that it would cover anything in the future!
Mr. FENNING. Everything is possible.
Senator KILGORE. It might be necessary or might be advisable to limit the manufacture of an article, a defense article, so that it could not get into the hands of our own manufacturers who might sell it,
Mr. FENNING. The secret statutes cover that. Senator KILGORE. And not sell it to our best interests? Mr. FENNING. Yes; that is possible. Senator KILGORE. And by getting the patent, itself, for the duration of the emergency rather than just a license to manufacture, the Government might be in a position to prohibit its manufacture by manufacturers who would not conform so far as the sale is concerned to proper agencies.
Mr. FENNING. That is so; but so far as I know, the Government has never used any patent—and it owns a great many patents—has never used any patent to restrain manufacturing. The Government has never sued for an infringement of a patent, and I think there is no reason to suppose that the Government ever will sue for an infringeinent of a patent.
Now again, if the Government seizes the patent for the emergency and the Government grants a license under the patent during the emergency, that license will continue, or may continue, after the emergency. Again, if the Government seizes a patent today and there is a license outstanding that does not cancel that license.
So that if the Government seized all of these foreign patents, foreign-owned patents, the licenses which are now subsisting under those patents would continue as they are.
Senator DOWNEY. If I may interpolate, the Government could go further and seize all of those licenses, of course?
Mr. FENNING. It might do that; yes.
Mr. FENNING. Yes; but if the Government seizes merely a license under the patent, the same thing can be accomplished by the Government going to the manufacturer who has a license from abroad and saying to that manufacturer, “You give up that license and take a license from me," and the manufacturer can give up his license. He can stop making his reports; stop making his payments for his present rights, and the Government will take care of him, but the only way, as I see it, to return it at the end of the emergency to the man who has a patent, the thing which he wants, is to take a license from him and let that license itself be limited to the duration of the emergency, and at the end of the emergency it stops, and he reverts to, as nearly as may be, his present situation.
The CHAIRMAN. Any further questions, gentlemen? If not, we thank you very much. "You will submit those amendments?
Mr. FENNING. Yes, Mr. Chairman. Thank you.
S. 1579 [Committee print No. 1]
Page 4, line 12 after “tools” insert "processes."
Page 4, line 13 cancel “patents” and at the end of the line insert: “or a nonexclusive, divisible, transferable license under any United States Letters Patent or Patents.
Page 5, line 6 before “patent” insert "license under a”; same line cancel "or patent right”.
Page 5 line 11 add : “Every license so acquired or disposed of shall be limited to production for National Defense purposes and shall be limited in time to, and shall expire with, the emergency. To requisition a license under a patent the President shall send a notice identifying the patent to the Commissioner of Patents who shall record it in the Records of Assignments and publish it in the Official Gazette of the Patent Office and send a copy to the address of the owner of the patent."
Page 5, line 21 after “President” insert: "within thirty days of the date of the requisition".
STATEMENT OF LESTER P. BARLOW, STAMFORD, CONN.
The CHAIRMAN. Mr. Barlow will be the next witness.
Mr. Barlow, will you be good enough to provide the reporter with your full name?
Mr. BARLOW. Lester P. Barlow, mechanical engineer, Stamford, Conn.
The CHAIRMAN. Mr. Barlow, I understand that you want to speak particularly in connection with the question of patents.
Mr. BARLOW. Yes, sir. Mr. Chairman and members of the committee, gentlemen who have preceded me have discussed the law phase of the proposed patent requisition. My case certainly could be held here as exhibit No. A, of how the patent works in time of war, and how compensation is finally if ever paid to the patentee, the inventor.
I have been 23 years trying to get paid for my patents' use in the last war, and not on something they just took at the War Department, but on two patent contracts they there actually voluntarily wrote without my presence but for my protection.
These contracts originally were drafted in 1916, and I was told at the time by several officers of the War Department I should be more careful about my business relations with the Government. I always came back with the statement that I did not feel that the Government would try to rob a man, and particularly in connection with munitions experimenal work, and that after the war I certainly thought I would be properly taken care of. In those days honor meant something in our War and Navy Departments.
Now, here is a letter which was printed in the records during the Barlow and War Department litigation. Subsequently, as most of you may remember, last year the Congress voted to me almost $600,000 as the result of the suit against the War Department that I won in the Court of Claims, and the President signed the bill, and the Comptroller General cleared me of all obligations to the Government, I have had to sue the Treasury Department for that money again, and I am still suing for half of it; suing the Government for more than half of it again, and if I can live another 25 years, I might get it; but I do not want that kind of business in the future. I want to know where I stand in this war. I'll give the Government the Glmite patent rights for military weapons, but I just do not want any more contracts with the War Department.
Here is a letter written to me by Col. Jay E. Hoffer. This man was in charge of the Ordnance Department section pertaining to bombs and certain types of munitions and he was honest. He wrote this letter on September 14, 1925, to assist me in my litigation, against the War Department because he was the man who knew the history of the matter.
Men come into the defense departments years afterward and know nothing about it, get all kinds of ideas, honest and dishonest, and conjure up all kinds of thoughts; but the man on the job at that time away back in 1916, in every particular question, sustained me in the Barlow v. Iar Department litigation, and here is his letter:
SEPTEMBER 14, 1925. Mr. LESTER P. BARLOW,
Borglum Studios, Stamford, Conn. DEAR MR. BARLOW: With reference to your claim before Congress for compensation for your bomb inventions, I am sending you the following statement which I would be glad to send to anyone you may name.
"From the beginning of the calendar year 1916, and until December 15, 1917, I was on duty in the office of the Chief of Ordnance, Washington, D. O., as head of the division having charge of the design and procurement of certain classes of ordnance material, which included bombs.
"During the 15 months prior to the declaration of war, the Ordnance Department became greatly interested in the designs of bombs submitted by Mr. Lester P. Barlow, and encouraged the work of development to the extent of placing the facilities of the Frankfort Arsenal at his disposal. The designs were considered so promising that the question of their production in quantity became of great potential importance. As neither the Ordnance Department nor Mr. Barlow was in a position to undertake this work, Mr. Barlow was encouraged to interest private manufacturers, who either had the necessary technical knowledge and facilities or who were in a position to procure the same. The company he interested and with whom the Ordnance Department made contracts for the manufacture of bombs of his designs was the Marlin-Rockwell Co. of New York." With kindest regards and best wishes, Very sincerely yours,
JAY E. HOFRER,
Colonel, United States Army (Retired). Now, you see, gentlemen, I was going to go ahead in 1916 with those designs long before the emergency arose. That was during a time when we were running a campaign in this country io elect a President because he had kept us out of war. There was anything but a war spirit going
I had put in years developing this explosive and these munitions. I had served a period of 4 years in the Navy, years before, in gunnery and ordnance; torpedo and electrical work, and so on, and I had gone into the Mexican revolution to develop and test my early bombs. My first bomb—I did not pick these inventions off of trees or up off the ground. All of those development years I had been operating without compensation and I considered that some day when the necessity arose for bombs in national defense I might be paid. The officers in the War Department wrote those two contracts with the MarlinRockwell Co. to take care of the bomb patent rights after the war was