He says, then, further:

The atmosphere is aggravated by the antitrust laws, which probably are responsible, more than any single factor, for turning American industry away from building on a technological science-oriented basis and toward the financially-based conglom

erate.

I won't go on. The article goes on and talks further about this from different points of view. And he feels that industry and science, scientific research and Government people should try to get together to change this atmosphere of hostility that has been arising. His final paragraph says:

The traditional relationship between science and its customers in the economic and governmental systems is based on mutual respect and understanding and a keen awareness of interdependence. American science must effect a return to these values, however old-fashioned they now appear to be.

I feel that this article in a way reflects what I said in my statement. And I have to confess that I wrote my statement before I read the article.

That, Senator Schmitt, concludes my formal statement. I would be glad to answer any questions you might have.

Senator SCHMITT. Thank you, Dr. Marcy. We will include that article by Drucker in the record. I would add, as a comment, that I appreciate the references that both of you have made to S. 414, the so-called Bayh-Dole bill. I am co-sponsor of that bill and it is, we believe, consistent with the direction we are trying to take in a somewhat broader sense in S. 1215.

Are you gentlemen familiar with the patent policies of other countries, particularly the major industrial countries, and if so, could you comment on how they compare with our patent policy or lack of same?

Mr. BREMER. As far as policies are concerned, we have all heard of Japan, Inc. I think that is an attitudinal approach in the sense that in Japan the Government tends to cooperate with certain companies to corner a share of the world market. This is certainly in contrast to the antitrust approach in the United States.

Where the foreign government is cooperating to take technology from outside, although the country itself has almost no resources, and to develop that technology and import it into our own market provides a formidable competitor.

I don't know that in the various other countries the governments support the R. & D. function to the extent that they do here, looking toward the cooperation under a free enterprise system between the private sector and the Government sector to transfer the technology to the public. As you are well aware, in Russia it is quite a different situation. In England-Dr. Marcy's reference to NRDC-it's an effort to pull together any inventions made at various universities, particularly where Government funding has been effected, and to use that agency, NRDC, to license those inventions and to ultimately earn money on them.

Senator SCHMITT. Have you any other comments about the NRDC, Mr. Bremer? Are you supportive of that concept?

Mr. BREMER. No; I do not support the NRDC concept. I support Mr. Tenney Johnson's view that there should be someone other than another Government agency or an already established agency

that oversees these things, perhaps a panel that is free from any agency intervention or control.

It is my understanding that currently the NRDC is under attack in Britain from various sources and is considered not to have been as successful as it may appear.

Senator SCHMITT. Dr. Marcy?

Dr. MARCY. Senator, I have to disagree with Mr. Bremer. The NRDC has been under attack, not only once, but about three times, and each time it has weathered the attack and has come back stronger than ever. At present, it was being supported very vigorously by the former British Government. I have not heard anything about the new Government that has come in, as to what they are planning to do.

Senator SCHMITT. Is there a summary or analysis of the NRDC, its history?

Dr. MARCY. Yes; there are many summaries and there are also Government reports that came out of these investigations that are available. I do not have them with me. They are easily available. I would be pleased to get them for you:

Senator SCHMITT. The staff may get in touch with you to ask for those.

Dr. MARCY. Very good. Not only in England and Japan, but also in many of the other European countries and in Canada, some South American countries, Australia and New Zealand also, also India and some of the Third World countries, there are government policies relating to patents and relating to science and research and development.

In this country we have no such overall policy and we are anomalous in that regard. The countries that have these science and technology policies most highly developed, are, of course, the industrialized countries. West Germany does not have such a general Government policy. They function more or less like we do, but with a great deal of Government money input to the R. & D. area, and also into the area of transferring of technology.

The countries that have the NRDC concept, in Mr. Bremer's testimony, he says they deal only with the universities. This is not true. They deal primarily with Government agencies. The agencies of the French Government and the British Government are constrained by law to send any inventions that they might come up with as a result of research supported by them to the NRDC, and in France it is the ANVAR organization. And these two organizations are then charged with trying to get these particular inventions into the marketplace.

The reason I feel it is important to have a centralized organization like that to do this kind of thing is that, as has been mentioned before this morning on several occasions, the Federal Government is just not capable of doing this on a piecemeal basis. One thing that was mentioned, for example, is that the Government does not defend its patents, and it would be kind of a horrendous thing to do this. But this is very important. There is no point in getting a patent if you are not going to defend it. It would be better to publish the results and let them be free for everybody and save the expense of patenting.

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But for an organization like the NRDC, defense of patents is possible, and it is a very important part of it.

Mr. Bremer mentioned that they are finally in the black. This is true, because one of their inventions happens to be supported primarily by sales of particular products in the United States; the licensee, the Eli Lilly Co., is practically solely responsible for putting NRDC in the black with the inventions that they have. So this kind of thing is something that I think ought to be seriously considered in developing legislation that is directed toward the next step down the road-what do you do with the patents after you get them.

Senator SCHMITT. I presume you would use this as a means of clearing the decks of the 28,000 patents that now exist in the Government?

Dr. MARCY. This would be one task that I would think could be assigned to such an organization. On the other hand, I think that task could be assigned to existing organizations within the United States at present through contracting operations similar to what the Office of Energy Related Inventions is doing and also similar to what the National Technical Information Service is currently doing on a very limited basis.

Senator SCHMITT. You are probably correct in part, at least, that agencies have so many other fish to fry that this issue does tend to get subordinated in contract discussions.

Mr. BREMER. May I add something else to that? When I said the universities were involved, I meant that the support of the Government goes to the universities for research projects and functions, much as it does in this country and they, of course, are required to bring any inventions made back to NRDC. That is the university involvement. I believe you will find an NRDC kind of organization in most of the Commonwealth countries or former British Commonwealth countries.

One of the main objections I have to an NRDC type of organization is that you are in essence, putting all of your eggs in one basket, under which a tremendous bureaucracy can be established. One of the repeatedly voiced criticisms of that kind of an organization, and which is now coming up again, is that the people at the universities conducting the research function do not feel that their inventions are getting adequate attention in each case because of the size of the organization and the manner in which invention evaluation is carried out.

I know Dr. Marcy with his organization, Research Corp., has encountered that same problem because of the very large number of universities for whom they work. I have, in fact, heard criticisms of Research Corp. for those very reasons.

Senator SCHMITT. Do you agree with Mr. Mossinghoff, who earlier said that the person who is most likely to see that something is made of an invention is the inventor?

Mr. BREMER. You need two people when you are in an invention licensing situation. At the universities, where most inventions tend to be embryonic in nature, the ones that have the know-how are the inventor and his immediate colleagues. We think it is imperative therefore, that he participate in any transfer of technology from the university.

The second person needed in a licensing situation is a champion for the invention within the company which is being licensed. In the absence of such a champion, one who really espouses the invention as a product line for the company, or espouses use of the invention by the company in another way, the invention will generally go nowhere.

We speak from and have had considerable experience along those lines and conclude that two people, the inventor and the invention champion are necessary for its successful transfer to the public.

Senator SCHMITT. Is this different from a Dr. Jeckyl-Mr. Hyde personality split within the inventor himself or herself that could be embodied in two people or one person?

Mr. BREMER. Speaking for the universities in general on that point is rather difficult, since there are various kinds of arrangements that are available. In some schools, for example, there is an employment agreement with the professors conducting the research. They then have a direct obligation to the university itself. Other places, as at the University of Wisconsin, they do not. At Wisconsin, absent an obligation to the Government because of Federal funding, the inventor is free to do with his inventions whatever he wishes. In that situation, he can go directly to the industry, participate in the invention development, and also receive some stipend back from any successful transfer of that technology; or he may even sell the invention outright. In other universities he cannot do that.

Also where he is essentially a free agent he is very often employed by the licensed company as a consultant. That is, however, on his own volition and a voluntary act.

Senator SCHMITT. Do you favor that kind of an arrangement? Mr. BREMER. It has been very successful, in our view, at the University of Wisconsin, and I must state that my experience has been primarily limited to that approach. That arrangement has generally been credited as part of the reason that that university has been so successful in technology transfer efforts.

Senator SCHMITT. Section 201(a) of S. 1215 creates a central review authority with power to determine with administrative finality any dispute between a Federal agency and a contractor as to the allocation of rights for an invention made under a Federal contract. Do you believe, Mr. Bremer, that this review authority could meaningfully address the concerns that you raised in this regard?

Mr. BREMER. I think it certainly can. In any situation you have an equity proposition that attaches, and we have found very often, that the old saw about what the Government pays for it should get is not, in equity, applicable. The university often provides physical space, the proper environment, and the principal investigator, who is generally salaried by the State, as well as other ancillary contributions. We have very often found that the equity position of the university vis-a-vis the Government is about 50-50.

As a consequence, a review authority could consider all of those factors in addressing a problem such as this.

Senator SCHMITT. In your statement-and Dr. Marcy may want to comment on this, also-you say the present Government patent policy has, in a way, insured that technology generated with Feder

al funding is available without charge or restriction to foreign competitors, and they have more successfully utilized such technology than we have. Do you think that S. 1215 would treat that problem?

Mr. BREMER. In my view, if we can give the contractor first option to title-he will make a selection to the best of his ability as to the invention disclosures which appear to have the best commercial potential and file patent application on them. We, for example, at the University of Wisconsin, may get 60 disclosures a year. We may file patent applications on about one-third of those. The remaining technology may not lend itself to patentability or is so narrow in scope that it doesn't lend itself to a patent licensing arising at a university however, it a generally disclosed through publication. It must be kept in mind that for a university or a nonprofit, a patent is the fundamental basis upon which a transfer of technology occurs.

The NTIS, of course, publishes-they even have an outlet in Japan, I understand, so they can transfer the technology more quickly to the Japanese, who can't seem to get it fast enough. I think S. 1215, with its basic thrust, would be favorable toward controlling at least some of that free dissemination of technology. Senator SCHMITT. Dr. Marcy?

Dr. MARCY. Well, I think one has to realize that the major funding of scientific research at universities comes from the HEW and from NSF. Therefore, generally speaking, the inventions that come out of this type of research are biological, chemical, pharmaceutical, biomedical devices, diagnostic testing procedures and so on rather than the so-called high technology inventions in electronics.

Now, the situation regarding that type of invention is quite different from the situation in the electronics and mechanical device area. Chemically-oriented inventions are much stronger and much more important to the industrial company that finally manufactures and sells these things.

Our practice at Research Corp., for the past 10 years at least, has been to try to develop patent packages overseas on this type of invention in foreign countries, and to license these things in foreign countries, certainly on terms no more favorable than in the United States, and in many cases even less favorable to the terms in the United States.

So that, in our view, the situation overseas for this type of invention, contrary to the way people say it has been, is that technology does not necessarily get used overseas freely, since we have seen to it that it doesn't get used freely overseas first. Sometimes our licensees overseas get on the market there first before the U.S. companies do here, and then these products finally end up in the States. The point I am trying to make is that, with the university type inventions, using our services, and I think with WARF's services, too, this does not happen in this manner.

Now, in the electronics and the mechanical devices area, where massive support for this type of investigation in the institutional area is centered in just a few institutions, like MIT, Princeton, Brookhaven and so forth, that is a different story. This type of research doesn't make very good patentable inventions. Frequently