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joining us. Your name has been mentioned. I don't know if you have had a chance to hear all of the testimony, but most of it has not been very suportive of your views.

Admiral RICKOVER. Well, my first view is that you have a very lovely hearing room and one in which you cannot hear in the back. Outside of that, it's a very fine hearing room.

Senator STEVENSON. Well, I'm sorry about that, but maybe it's just as well. STATEMENT OF ADM. H. G. RICKOVER, DEPUTY COMMANDER


Admiral RICKOVER. I think you're probably right because I believe that this whole patent situation has gotten way out of hand. Before I start my statement, if you care to, I will tell you my feeling about the patent system in general.

Back in the Age of Mercantilism, monopolies, called letters patent, were granted by the king. Finally, Parliament passed a law abolishing all monopolies with one exception, and that was if an individual got an idea he could patent it. That was the one exception they made.

Now the whole patent situation has gotten out of hand because of patent lawyers. If we did away with the patent lawyers, we would simplify the system.

Senator STEVENSON. Are you confining it to patent lawyers?

Admiral RICKOVER. That's right, sir. Patent lawyers are responsible for the fouled up mess we have in patents. If you go back to the origin of the patent system, it was intended to protect the individual, who with his own money and his own time, developed a new idea. That was the one exception made by Parliament.

Senator STEVENSON. We heard this morning-Admiral, I'm sorry you didn't hear it—that all nations with the exception of the People's Republic of China have patent laws and presumably they have patent fraternities, and not in England but this system originated in Venice in the 17th century, and apparently since then it has moved to all countries, including all Communist countries with the exception of that one. Are they all wrong?

Admiral RICKOVER. I'm going back to the English laws. In England, as I said, they had a mercantile system and they had monopolies. But in 1624 Parliament abolished the system with one exception. The exception was monopoly rights granted to inventors. Parliament made that one exception. That is the origin of our patent system. This system has now grown into a vast complex issue.

The issue before us today is a simple one-if a man invents something on his own time and with his own money, he should get a patent. However, the issue becomes complicated when corporations enter the scene and introduce with all kinds of nuances on this patent issue which takes up the time of many people. I believe if you go back to the original principle, it will simplify the problem before you.

Senator STEVENSON. The original principle being?

Admiral RICKOVER. The original principle being that, if a man has an idea and on his own time and with his own money develops something, he should get certain rights. They made exceptions even to that for medical purposes. It was felt until very recently in all European countries that if a man developed something that had connotations of public health it was not patentable. One of the reasons for the exception was that the Chamberlen family, who invented obstetric forceps, did not release information about their discovery for 100 years. Therefor, over a 100-year period, many children died unnecessarily during childbirth and it was very difficult for mothers. And all that time the Chamberlens knew this and kept the forceps to themselves. When it became known, it aroused a great deal of public opinion which forced people who had ideas to make them known. That's another reason for the patent system.

The basic idea was for the public welfare and not for the welfare of corporations. Now patents primarily benefit big business, like almost everything else in this country. That is not in my written statement. But I think you should know my feelings, since this issue comes up annually. I believe it's a big waste of time over a simple thing. I believe this committee could accomplish something by taking a definite stand and making up some simple rules.

If I tried to do my technical work the way patents are handled in this country, we would never have any nuclear ships. We would constantly be arguing about things that have no real moment. How's that for a statement, sir?

Senator STEVENSON. I don't think so far the witnesses would disagree with you entirely.

Admiral RICKOVER. Well, that's wonderful. I'm glad to see that somebody is finally in agreement with me on the patent situation. I applaud that very much. I was thinking of another example I could give about patents. Let's take the case of Arizona-I believe that's the State that Senator Schmitt comes from-

Senator SCHMITT. New Mexico.

Admiral RICKOVER. OK. They're both about the same. They happened to come into the union at about the same time.

Senator SCHMITT. We both have very fine battleships. Unfortunately, our sister State's battleship disappeared in Pearl Harbor.

Admiral RICKOVER. I served on the New Mexico, so I know something about that ship, sir.

Suppose you own a plot of land, let's say 1,000 acres. Because you think there might be minerals on that land you hire a group of prospectors to go out and dig holes in the ground. They come back and report to you they found gold or uranium. Who owns that gold or uranium? The guy who did the prospecting or the owner of the land? You're the owner. Who owns the rights to that, sir?

Senator SCHMITT. I own the mineral rights. I own whatever is under it, but I probably would have gone out and found it myself.

Admiral RICKOVER. Well, you could, because you are a geologist. But supposing you hired someone else to do it. Who would own the minerals? You paid the man for digging holes and he reported to you that there's gold in that ground. Who owns that gold?

Senator SCHMITT. I would own it.

Admiral RICKOVER. Let's say adjacent to your land is another 1,000 acre, plot that belongs to the Government. The Government hires the very same prospectors who search the land and come up with the same results. Who should own the gold? The man who did

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the prospecting or the Government, the 220 million people who own the land? Who should own the rights?

Senator SCHMITT. It depends on whether it's to the advantage of the Government to let the people who found it market it.

Admiral RICKOVER. But that is up to the owner, sir. You could also do that in your case. It belongs to the Government to dispose of it as it wishes.

Senator SCHMITT. The issue before us today is just how is the Government going to dispose of the valuable products developed under its auspices.

Admiral RICKOVER. That's right, sir. But the Government has the right to decide, not the man who did the prospecting. The prospector does not have any rights except as the Government gives him. That's the point, sir.

Senator SCHMITT. Well, the purpose of S. 1215 is for the government to make that decision. We are part of the government.

Admiral RICKOVER. Fine. We'll leave it up to the Government. But the way it is now, as I see it, the people who do the prospecting say they have a right. That's what I'm getting at, sir.

Senator SCHMITT. They only have title if we give it to them, Admiral.

Admiral RICKOVER. That's right.

Senator SCHMITT. The purpose is to try to determine those areas where giving away of title will accelerate the introduction of a technology into the private sector for commercialization.

Admiral RICKOVER. That should be a decision the Government makes without any threats or lobbying or anything else by the guy who did the digging. It should be entirely up to the Government. I thoroughly agree with that, sir.

Senator SCHMITT. That's consistent with what we're trying to do with S. 1215.

Admiral RICKOVER. In that case, I applaud this committee. Now, with your permission, I'd like to read my statement.

Thank you for inviting me to testify on S. 1215, the, "Science and Technology Research and Development Policy Act.” My comments on this bill are based on my dealings with various segments of American industry both as head of the Naval Nuclear Propulsion Program for the past 30 years and as head of the Bureau of Ships Electrical Branch during World War II. That was for a period of about 6 years.

The basic principle in most current laws concerning government patents is that the government should retain title to patents developed at public expense. The proposed bill would reverse this principle so that, except in unusual cases, government contractors would be able to take title to any inventions arising under their contracts with the Government. Government agencies could retain title to inventions only in the limited circumstances prescribed by the bill and only if retention could be justified to the satisfaction of the Secretary of Commerce.

I would like to repeat what I've said a number of times about the Department of Commerce in the issue of patents and others. The Department of Commerce, in my opinion, is about as useful to the government as a lighthouse without a light.

Under the proposed bill, each Federal agency would be required to establish a technology utilization program to promote the development and use of technology. The goals of the program would be to shorten the time from conception of an idea to commercialization; to encourage multiple secondary uses of technology in all areas of the private and Government sector and to understand the process by which technology is transferred from the government to the private sector.

In the event the Government determines that a firm has failed to introduce the technology to the private sector within a reasonable time period, the bill provides that the Government retains the right to claim the patent.

In my opinion, the proposed bill would impede, not enhance, the development and dissemination of technology; would hurt small business; would inhibit competition; would promote greater concentration of economic power in the hands of large corporations; and would be costly to the taxpayer.

In private industry, the company that pays for the work generally receives the patent rights. Similarly, companies generally claim title to the inventions of their employees on the basis that the company pays their wages. In doing business with the Government, however, these same companies reverse the standard, contending that the patent rights should belong to the one who comes up with the idea, not the one who foots the bill.

The patent interests have been working behind the scenes for many years to promote, in one way or another, policies and legislation along the lines of S. 1215.

May I interrupt, Mr. Chairman, and say I'm very grateful that Senator Long has arrived. My first testimony on patents was about 20 years ago before Senator Long and his committee. Some people complain about him because he's involved in income taxes. That's a very unfortunate situation to be in because that's a field that people don't like. He gets the blame for income taxes. But knowing Senator Long, I know as far as he's concerned it's like water off a duck's back. He apparently has enough popularity with the people in his State that he keeps on getting elected in spite of what some newspaper people think about him. As a matter of fact, Senator, if I lived in your State, I'd vote for you, too. But anyhow, I do thank you for coming here and for all the previous support you have given to protecting the people's rights. This fact is not known about you and I'd like to get it advertised. I know you and your father shared one thing—you both tried to protect the people. You don't mind my bringing your father in, do you sir?

Senator LONG. No, I don't mind at all.

Admiral RICKOVER. I will continue now from my prepared statement.

Some people claim that by retaining title to publicly funded inventions the Government stifles technology; that the results of the Government's large research and development expenditures are reflected in the approximately 25,000 patents the Government presently owns; that the public is not receiving the benefit of this technology because only a small percentage of these patents are in use. The patent lobby contends that in the absence of patent protection individuals and companies will not invest in the develop

nghe the people's rised. I knee the peopl

ment and marketing of this technology, but that this could be resolved by giving contractors the exclusive rights to inventions developed at Government expense.

As I see it, those who would benefit most from the proposed legislation are patent lawyers and large corporations who, year after year, receive the lion's share of Government research and development expenditures.

In my view, the importance of patents has been greatly exaggerated. Truly good ideas tend to be used. Even without a patent, many of the worthwhile inventions would be discovered and adopted in the marketplace based on their merits. If one company did not generate the idea, another firm would have because of the nature of the work being done. Often, identical ideas crop up almost simultaneously in different companies, and different countries. Further, many good ideas can be implemented or commercialized without special investment in R. & D. or new facilities. Or, they are sufficiently promising that companies will invest in them without patent protection. In such cases, rather than promoting technology, the patent system becomes a process for determining whether or not someone is entitled to exact a royalty for use of the idea.

It is nonsense to think that our technological growth will suffer unless contractors receive title to patents generated under Government contracts. From what I have seen over many years, the majority of patents are of little or no significance. Many companies seem to file patents defensively; meaning that they file numerous patents for minor details primarily to keep someone else from getting a patent in that area or to discourage potential competitors. Some file patents as status symbols; others simply misjudge the attractiveness of their ideas. The Patent Office itself, when in doubt, tends to patent questionable items on the assumption that, if the patent becomes important, the validity of the patent can be tested in court.

The important factor for an industrial organization is the knowhow developed by it—the trade secrets and the techniques; these are not patentable qualities. They are things which are inherent in a company, in its methods, in its management and trained employees, in the kind of machine tools it has, how it uses these tools, and so on.

It is often said that unless the Government gives away its patent rights, companies will refuse Government contracts. While many contractors would like to obtain exclusive rights to patents developed under their Government contracts, few value patent rights to the point they are willing to forego Government business.

I have never seen one Government contractor in the many years I have been in this field that has ever refused to take a contract because it wasn't able to get patent rights.

From what I have seen, Government patent policy is rarely the dominant factor in company decisions to accept or reject work. The tangible benefits of profits and technical know-how from Government orders are far more valuable to most contractors than the speculative benefits of patent rights. For more than 30 years I have been able to obtain the R. & D. and manufacturing work needed

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