for legislative or judicial functions. for court review of such actions.

In addition, careful provision was made

The Administrative Procedure Act, however, exempted the Patent Office from the requirement of hearing examiners. This was done at the recommendation of the Senate and House committees on the Judiciary, which stated that "whatever judgment the agency makes is effective only in prima facie sense at most and the party aggrieved is entitled to complete judicial retrial and decision." Reorganization Plan No. 5 does not limit or restrict the court review of the actions of the Patent Office on which the exemption from the Administrative Procedure Act was based.

In addition to the normal review provided by law, the Commissioner is also amenable to action in the nature of mandamus in the event of improper action or failure to act. Furthermore, section 9 of the Administrative Procedure Act provides specifically for court review to "compel agency action unlawfully withheld or unreasonably delayed." Thus it is clear that there is no danger of deliberate delay or withholding of approval of a meritorious application.

While, as I indicated above, the functions of the Patent Office are important and must be carried out in a skilled and professional fashion, I want to emphasize the fact that this is true of virtually all the work in the Department. The Civil Aeronautics Administration, the Bureau of Standards, the Census Bureau, the Coast and Geodetic Survey, and the Weather Bureau all have important tasks requiring the highest degree of professional skill and conduct. The Civil Aeronautics Administration, in its certification of airmen, aircraft, and air carriers, must exercise a similar semijudicial responsibility. The decision has a financial effect on the company or individual requesting certification; it also affects the property and lives of the public. The granting or denial of applications of export licenses under the Export Control Act also may have semijudicial aspects and may involve great loss or profit to exporter applicants.

The main functions of the Patent Office do not overlap or duplicate those of other bureaus and agencies of the Department of Commerce. In view of the technical analysis involved, the importance of the files and records of the Patent Office, and the immense volume of applications, it is not realistic to consider making any change in the organization or location of the functions of the Patent Office. The functions are now being carried out in accordance with the procedures established by the Congress, and by regulations approved by myself and by previous Secretaries of Commerce, in a skilled and professional fashion. I have no intention of changing the present procedures or the present powers of the Patent Commissioner or the Patent Office, and I have already announced my intention of authorizing the Commissioner and the Patent Office to continue to carry on their functions in accordance with their present statutory powers. I have prepared a draft of such an order which I would be glad to make available to you.

I have dealt at some length with the application of Reorganization Plan No. 5 to the Patent Office because of the background of the resolution before the committee. I would like, however, to emphasize the importance of the plan to the operation of the Department as a whole and as a part of the general pattern of recommendations by the Committee on Organization. I feel it is essential to good management of the Department that I, as the responsible head of the Department, should have authority equal to my responsibility. I would plan to delegate to the head of each bureau in the Department responsibility for carrying out the work of his bureau and the necessary authority for him to carry out that work. I am fortunate in having a group of capable bureau directors who will be able to exericse this authority and to carry out their responsibility. I consider this a sound and businesslike form of organization for the Government and I therefore recommend that this committee approve Reorganization Plan No. 5 of 1950.

Mr. HOLIFIELD. We have on the list, Mr. Robert C. Watson, American Patent Association. Is he in the room?

1 S. Rept. No. 752, 79th Cong., 1st sess., on S. 7, p. 202 of Legislative History of the Administrative Procedure Act, S. Doc. 248, 79th Cong.. 2d sess.; see also Senate Judiciary Committee print, June 1945, at pp. 21-22 of S. Doc. 248, 79th Cong.; H. Rept. No. 1980, 79th Cong., 2d sess., p. 260 of S. Doc. 248, 79th Cong.

STATEMENT OF ROBERT C. WATSON, REPRESENTING AMERICAN PATENT LAW ASSOCIATION

Mr. WATSON. Yes, right here, Mr. Chairman.

Mr. HOLIFIELD. We would be glad to have you take the witness chair, Mr. Watson.

Mr. WATSON. Mr. Chairman, could you tell me about how much time I have?

Mr. HOLIFIELD. If it is the will of the committee, we will sit until we have a quorum call bell. And I would say that, noticing the size of your statement, you will probably have time to give this statement, if you wish.

Mr. WATSON. I do not propose to make too long a statement. We, of course, were apprised of this hearing only last night.

The American Patent Law Association had been busily preparing for hearings in the Senate before your opposite-number committee tomorrow morning. The gentlemen who are to appear there are not available here today. I understand, from talking with the chairman and the clerk of this committee, that it will be possible for you to allow them to appear here tomorrow morning at 10 o'clock, so that they will in effect be testifying before the Senate committee and before this House committee simultaneously.

There will be a distinguished group representing the Patent Law Associations of the various cities of the country, New York, Chicago, Pittsburgh, Cleveland, and other associations. In addition to that, Mr. Foulk, representing the National Association of Manufacturers, desires to make an appearance, and other members concerned with the effect of plan No. 5 upon industry as well as those who are primarily concerned because they are patent lawyers and are interested in the legal side.

The American Bar Association, I hope, will be represented. It is somewhat difficult to secure the permission of the board of governors of the American Bar Association between meetings of the association for an appearance on a technical matter of this kind, but I think that such an arrangement has been made.

I will not at this time attempt to anticipate the statements which will no doubt be made by the gentlemen who will appear before you tomorrow. I was not a scheduled witness myself. I am here in my capacity as vice president of the American Patent Law Association. Mr. Ashton, who is our president, is fully prepared to make the statement on behalf of the association and will do so.

I might say, however, that the patent bar throughout the country is amazed that the Patent Office should be included within the scope of operation of the proposed plan No. 5. The reports that come to me, the resolutions that are forwarded, the messages which the American Patent Law Association receives, indicate, in fact conclusively demonstrate, that the patent bar is of one mind on this proposition, namely, that while we have no quarrel with efficiency, no quarrel with economy, and we are for it, we think that the Patent Office should have been exempted. We are surprised, and with justification I believe, that while in prior reorganization laws attempts have been made to exclude from the operations of such reorganization plans those bureaus and agencies of the Government which perform

quasi-judicial functions or straight judicial functions. The Reorganization Act of 1949 is silent in that respect. I know that in the 1945 Reorganization Act there was a clause which excluded any plan interfering with the operation of an agency performing quasi-judicial functions. There was no correspondence with any member of the Patent Office prior to the forwarding of this plan to Congress, and you might say that it came as a bombshell, not only to all lawyers who practice before the Patent Office, but to the Commissioner of Patents and his staff.

Mr. HOLIFIELD. Mr. Watson, the ringing of the bells is a summons for the committee to go to the floor.

The committee will stand adjourned until 1 o'clock. We will reconvene at 1 o'clock, and we will be glad to have you back at that time. (Whereupon, at 11:25 a. m., the committee recessed until 1 p. m., this same day.)

AFTERNOON SESSION

(The committee reconvened at 1 p. m., upon expiration of the noon recess.)

Mr. HOLIFIELD. The committee will come to order.

We will now hear Mr. Watson in the continuation of his testimony.

FURTHER STATEMENT OF ROBERT C. WATSON, REPRESENTING AMERICAN PATENT LAW ASSOCIATION

Mr. WATSON. I believe that prior to the recess I had commented upon the fact that the patent bar at large was taken by surprise when the President's plan No. 5 was transmitted to the Congress containing no exemption of the United States Patent Office.

Under previous reorganization acts, as I understand it, and under the 1945 act, there was a saving clause which exempted from the operation of those acts, administrative agencies performing quasi-judicial and quasi-legislative functions.

The CHAIRMAN. You do appreciate why that happened in those acts, do you?

Mr. WATSON. I have no recollection of any hearings which eventuated in those particular acts but I do see a reference to a clause contained in the 1945 act at the bottom of page 5 of the committee report which you submitted to the House, reporting out this Reorganization Act of 1949, which reads as follows:

SEC. 5 (a) No reorganization plan shall provide for, and no reorganization under this Act shall have the affect of- * ** (6) imposing, in connection with the exercise of any quasi-judicial or quasi-legislative function possessed by an independent agency, any greater limitation upon the exercise of independent judgment and discretion, to the full extent authorized by law, in the carrying out of such function, than existed with respect to the exercise of such function by the agency in which it was vested prior to the taking effect of such reorganization; except that

and so forth.

So we were somewhat at a loss to understand why there was no exemption of the Patent Office which in our opinion is distinctly an agency performing judicial or quasi-judicial functions. There is some clue, however, to the reason for the omission contained in

the letter addressed to the Honorable Sam Rayburn by Herbert Hoover and which is set forth at length on pages 3, 4, and 5 of the report to which I have referred, and I call your attention particularly to the paragraph appearing at the top of the page, page 5, which reads as follows:

Similarly, the inclusion of general language like is contained in section 5 (a) (6) of the Reorganization Act of 1945 intended to prevent the submission of any plan which imposes limitations upon the independent exercise of "quasilegislative" or "quasi-judicial" functions would, in the committee's judgment, be unwise. The phrases are extremely vague and of uncertain meaning. Ingenius and plausible arguments can be made to apply them to a wide range of functions which should clearly be subject to reorganization procedure. Such arguments would not be matters of purely theoretical concern or legislative debate, for the validity of reorganization should be made the subject of protracted litigation by private interests resisting the acts of a reorganized agency on the ground that it was illegally constituted. It might take several years of litigation to lay down interpretations of these general phrases, and even then uncertainty would remain.

So it would appear that the reason, prima facie, for the omission of an exemption in favor of the Patent Office would seem to flow back to the fact that the Hoover Commission could not conclusively define the difference between quasi-legislative and quasi-judicial functions and other functions.

Mr. HOLIFIELD. Well, let us consider that point a moment. We tried reorganization under the 1945 act and there were so many loopholes in the 1945 act, that reorganization could not be accomplished. Under the 1949 act which we are discussing here plans are being set up and the Hoover Commission expressly left that type of consideration out in order that this great area which was debatable and in which different agencies had certain quasi-judicial and certain quasi-legislative functions, that that area might be subjected to reorganization for the efficiency of the Government. So the Hoover Commission expressly, in its recommendations, included bodies which have quasi-judicial and quasi-legislative powers within the scope of its legislation as was outlined in its report on regulatory commissions. Mr. WATSON. We draw different conclusions from the same language, but the conclusion which I draw from the language which I have just quoted is that the Hoover Commission is sympathetic to the idea that quasi-judicial agencies should be excluded and he would have exempted these agencies had he known how to write a definition of a quasi-judicial agency.

Mr. HOLIFIELD. And it is just because he did not know how to write the definition, sir, that the Hoover Commission recognized that it would leave such a great scope of the Government in that debatable area, that particular provision was not written in and that particular attempt to define was not attempted.

The CHAIRMAN. The Hoover Commission was directly opposed to any exclusion within the executive department from reorganization. When each formal reorganization was considered by the Congress the different agencies had friends come up to the Hill and exert influence on the different groups to exclude them from any reorganization. So you will find that year after year since they first started out, 11 different agencies were excluded from the first law.

Mr. HOLIFIELD. In the 1945 act, I believe.

The CHAIRMAN. I think so. Then a lesser number was excluded in the 1947 act and in this act we set out to exclude them, but even then pressure was brought to bear when in the initial instance in the House we had to put some back in order to get the bill through the House because of the friends of those special agencies who came up to the Congress and lobbied and exerted influence.

You take, for instance, the Corps of Engineers. When you start to touching the Corps of Engineers from far and near you get letters and so forth, pressures brought to bear, "Keep your hands off; it is doing a good job."

So it was in conference that we were able for the first time to get out a reorganization bill. We were able to make those provisions and put ourselves in position to follow the Hoover recommendations in order that sprawling executive departments which had been built up through the years could be brought into order and direct lines of authority be established to the President. As long as these regulatory bodies are a part of the executive department they should be brought into line. Therefore we have been proceeding along that line. Now the language you read first was the language put into the 1945 act in order to keep these regulatory bodies from being touched by the reorganization plans.

Mr. WATSON. Yes.

The CHAIRMAN. Mr. Hoover did not agree with that provision. He said it was vague and that no language should be put into the bill seeking to exempt any one of these bodies.

Mr. WATSON. That is just the point I made. It was impossible to define.

The CHAIRMAN. So they should not be exempt from reorganization, and not being exempt from reorganization they are now before us to do the thing that ought to be done in the judgment of some people, that is, reorganization of the executive department so as to establish clear lines of authority and to establish responsibility. We are endeavoring to do that. The President is endeavoring to set his house in order by sending plans to us, based primarily upon the recommendations of the Hoover Commission.

Mr. WATSON. Yes; and I will make some further reference to this particular point later. I thank you for your explanation.

We do take comfort from a statement which appears on page 4 of the same letter signed by Herbert Hoover, which reads as follows:

But in saying this the Commission should not be understood as giving sweeping endorsement to any and all reorganization plans. It does believe that the safeguard against unwise reorganization plans lies both in a sound exercise of the President's discretion and in the reserved power in the Congress by concurrent resolution to disapprove any proposed plan.

And of course that is why we are here to ask you to disapprove this plan. Before you came in I made reference to the fact that many independent bar associations had disapproved plan No. 5, and I will just give you the names of a few such organizations which have forwarded resolutions which I happen to have with me. The first one is by the Chicago Bar Association. I will not read it but it is by the Chicago Bar Association, and not merely by the patent section of that association. I will leave it with you.

The second one is by the St. Louis Bar Association and I believe that I would like to read two or three paragraphs from that resolution be