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This letter has been rather hastily prepared to outline the proposal, not polish off the details.
JOHN M. COLE.
P. S.-According to a survey I made in 1944, and reported in Journal of the Patent Office Society, July 1945, at page 489, approximately 8 percent of the patents were issued within 12 months after filing, 20 percent within 18 months after filing, 40 percent within 2 years, 70 percent within 3 years, and 90 percent within 4 years.
Re H. R. 323
LAW OFFICES OF BUSSER & HARDING,
THE HONORABLE THE CHAIRMAN OF THE COMMITTEE ON THE JUDICIARY,
House of Representatives, Washington 25, D. C.
SIR: There are serious objections to the enactment of this bill introduced by Mr. Reed of Illinois even if amended as below recommended. It is not intended, however, in this letter, to specify such objections; but, assuming that it should receive favorable consideration, it requires, for clarity and to with certainty effect its purpose, amendment substantially as stated hereinbelow:
Reference is made to section 6 (c), particularly to the term "article or device" on line 11 of page 6.
This term is both ambiguous and inadequate. The patent laws do not provide for patenting articles or devices by such names. Section 35, U. S. C. 31, R. S. 4886, defines inventions that are patentable, namely: Any "new and useful art, machine, manufacture, or composition of matter."
The term "article or device" may or may not include machines. It may or may not include compositions of matter. It certainly does not include arts (processes or methods).
"Arts" (processes or methods) are not made or sold. They are only used. Hence, on line 11 of page 6, "article or device" should be changed to read "machine, manufacture, or composition of matter."
And to the end of the paragraph, following line 16 of page 6, should be added the following: "; nor shall anyone who, after the date of expiration of the patent and before the date of its extension, shall have used an art which would have infringed the patent had the patent been in force be liable for infringement of the patent during such period."
Section 6 (c) requires amendment in other particulars. Referring particularly to the same section 6 (c), lines 21-25 of page 5:
"Rights under a patent may include the right only to 'make and use', or the right only to 'make and sell', or the right to 'make, use, and sell', a machine, manufacture or composition of matter; or merely the right to 'use' an art (process or method)."
Therefore the following changes are suggested:
Page 5, line 21, after "manufacturing" insert ", selling or using."
Page 5, line 25, change "manufacturing" to "manufacture, sale, or use."
Re opposition to H. R. 3231, 4054, and 323.
FRANK S. BUSSER.
CHICAGO PNEUMATIC TOOL CO.
Chairman, Subcommittee on Patents, House of Representatives,
Washington, D. C.
DEAR MR. BRYSON: I am writing to record my opposition to the above three bills, all of which have a common purpose of extending patents owned by corporations where there was some impairment of the use of those patents during the war.
In order that you may be advised of my interest in these matters let me state first that this company is engaged in the manufacture of a wide variety of industrial products, including pneumatic and electric tools, Diesel engines, compressors, rock drills, oil-well drilling tools, etc. In the fields in which we operate we hold patents of our own, and there are patents held adversely to us. We would derive some benefit from the legislation on some of our products.
My primary objection to the legislation is the uncertainty it would create in the operations of this company. We have been engaged since the war in a large program of plant expansion with a view of expanding the production of present products and adding new ones. Such a program requires long-range planning, including the study of the patent situation as to each new product we contemplate making and as to any changes we contemplate in present products. Passage of any one of these bills would throw our program into a state of confusion. We would not know what patents might be extended or for what terms, and it would be extremely difficult and in some cases impossible to proceed with our plans in view of this uncertainty. The passage of any one of these bills would therefore result, so far as this company is concerned, in a sharp curtailment of our expansion program. It is my belief that there are a sufficient number of other companies who would be similarly affected as to result in danger of curtailment of development to such an extent as to impair the national economy. My second objection to this legislation is also based on its uncertainty, but from another standpoint. Patent suits are notoriously expensive and require months of preparation in order to prove what on its face looks like a simple question of whether a particular patent is being used in the apparatus accused of infringement. Under these bills a patentee would have to go farther in many cases and prove that a particular patent would have been used by him during the war period. Then he would have to prove his hardship and the fact that that hardship was caused by the war or Government orders. It seems to me that such legislation would produce a field day for lawyers to such an extent as to impose a serious burden on industry.
My third objection to this legislation is that the benefit to be granted bears no relation to the hardship which may or may not have been suffered. During the war many companies gave the Government a free license under their patents, some from patriotic motives and some from Government pressure because of the war contracts they were getting. Some companies suffered during the war; some prospered. Many got Government contracts through which they were more prosperous than before the war, although their peacetime patents were not used.
In the household appliance field, for example, where patents are numerous and where peacetime manufacture was curtailed, all of the big companies, and probably most if not all of the small ones, prospered through Government contracts, yet their patents would be extended indiscriminately with others. This is also true of Chicago Pneumatic's competitors who manufacture products for both wartime and peacetime use.
My fourth objection to this legislation is that the benefits to be granted bear no relation to the contribution to war effort. This follows from what I have just said above in connection with my third objection and I believe needs no elaboration.
My fifth objection to this legislation is that it unduly extends monopolies. Every patent is a monopoly, and in my opinion a very good one in every proper case. However our legal and economic system is committed to the principle of competition and I see no reason for extending these patent monopolies beyond their present duration. Seventeen years now granted in the United States, starting from the actual grant, is longer than is allowed in most countries of the world and is a long time for any monopoly. This company is not afraid of competition, and I believe that competition is good for the country. In my opinion the extension of unknown patents for an unknown length of time would be harmful for this company and I believe bad for the country.
My sixth objection is that it is class legislation. It singles out a single class -owners of patents-and endeavors to compensate them all for losses that may have been suffered by some. Other property owners such as storekeepers, landlords, filling station and motor hotel proprietors also suffered, as did nonproperty owners. I see no reason why a single class should be given special consideration.
W. L. LEWIS, President.
TERMS OF PATENTS
STATEMENT BY ALBERT E. NOELTE, CHAIRMAN OF THE COMMITTEE ON PATENTS OF THE NATIONAL ASSOCIATION OF MANUFACTURERS
Mr. Chairman and members of the committee, my name is Albert E. Noelte. I am chairman of the committee on patents of the National Association of Manufacturers, and am making this statement on behalf of that association, a voluntary organization of more than 16,000 manufacturers, 83 percent of whose members have less than 500 employees each.
This statement is in opposition to the two bills, H. R. 323 and H. R. 4054.
H. R. 323 was introduced by Representative Reed on January 31, 1951, and would permit the Commissioner of Patents to grant an extension of a patent commensurate with the extent to which the normal economic return from the patent was prevented, impaired, or delayed by reason of (a) the granting of a license to the United States without payment of royalty or at a nominal royalty; (b) any restrictions or prohibitions imposed by the United States by reason of a war or other national emergency; or (c) any circumstance beyond the control of such owner or holder or resulting from the existence in the United States of a state of war or other national emergency. If the applicant for extension is dissatisfied with the decision of the Commissioner or any board established by the Commissioner, the measure would allow an appeal to the United States Court of Customs and Patent Appeals within 30 days of the decision from which the appeal is taken.
H. R. 4054 was introduced by Representative Walter on May 10, 1951, and is similar to H. R. 323 and involves the same general principle but differs in what it covers. H. R. 4054 specifically states that the term of any patent may be extended if the normal return from the use, exploitation, promotion, or development of the patented invention has been prevented, impaired, or delayed during the period beginning May 27, 1941, through November 4, 1945, inclusive, by reason of inability to obtain materials due to the fact that materials required were subject to Government priorities or allocations.
The National Association of Manufacturers does not favor legislation of such general nature with respect to the extension of the terms of patents where the patent owners were unable to exploit the inventions during the war or in an emergency period. It believes that it is unnecessary to differentiate between patent property and other kinds of property in such respect. Especially is this true in view of the fact that Congress can, by special act, extend the term of any particular patent in meritorious instances.
It should be borne in mind that the patentee by the grant of the patent receives no right to utilize his invention. Whatever right he has in that respect is a common law right which, of course, is subject to his not encroaching upon the rights of others. All the patentee gets by the grant of his patent is the right to exclude others from making, using, or selling the invention. Thus, whether or not he utilizes the invention, the patentee has been paid the full price to which he is entitled.
The primary object of the patent grant is not to reward the inventor but to induce an inventor to disclose his invention so that after the period for which the patent is granted the invention enters into the public domain. By the grant of the patent, the Government has paid the full price for the disclosure of the invention. The reward to the inventor is an incident of the transaction and the Government does not undertake to give to the patentee any right to utilize his invention.
The extension of the term of the patent would deprive the public of what they were entitled to receive upon the expiration of the patent; that is, not to be excluded from the use of the invention. The mere filing by the patent owner of a petition for the extension of the term of his patent would act as a deterrent to others who might wish to undertake the utilization of the invention after the original term of the patent has expired. The public would hesitate to make arrangements for going into a business which might be terminated by an extension of the term of the patent. Thus, even though the term of the patent was not extended, the effect of the petition for extension would, justly or unjustly, in effect give additional extension of the right of the patentee.
Bills of this nature would encourage the filing of the petition for extension, especially in view of the fact that it would cost the patentee nothing to file such petition and as stated the mere filing of a petition would deter others from exercising rights which under the law they are entitled to after the expiration of the patent.
Re Walter Bill (H. R. 4054).
THE PATENT LAW ASSOCIATION OF CHICAGO,
June 27, 1951.
Members of Congress and the House Judiciary Committee:
The Patent Law Association of Chicago has considered the above bill which was introduced on May 10, 1951, and wishes to record its opposition to the bill for the following reasons:
(1) The passage of this bill would cause unlimited confusion by making it impossible to determine the date on which a patent grant terminated without an investigation of the Patent Office file to find out if the patent had been extended under the provisions of this bill. The bill provides for proceedings for the extension of patents. Such proceedings may be long and drawn out, adding considerably to the difficulty in ascertaining when an existing patent will expire because of the uncertainty of the final outcome of the extension proceedings.
(2) The Patent Law Association of Chicago has repeatedly opposed this type of legislation on the ground that it is class legislation. We realize that a similar bill applying only to veterans of the last war was passed by Congress approximately a year ago. We believe, however, that legislation of this kind should not be passed and that the passage of the veteran's bill a year ago is no justification for changing our position with respect to this type of legislation.
(3) We recognize that there may be instances where a particular situation might warrant the extension of a patent beyond its normal 17-year term. Defeat of H. R. 4054 will not preclude an extension warranted by particular facts. Congress always has the right to pass bills extending individual patents and in a meritorious case would doubtless give favorable consideration to anyone entitled to an extension.
(4) The term "normal return" in line 4, page 1, is indefinite and may be incapable of being ascertained.
(5) The term "substantial interest" in line 16, page 2, is indefinite and the required degree of interest should be specified in the bill.
(6) Section 4 (a) should be modified to provide for notice to the opposer and afford the opposer an opportunity to present evidence at the hearing.
(7) Section 10 applies only to article and apparatus patents, and does not include process patents which should have the same standing as article and apparatus patents.
The Patent Law Association of Chicago is also opposed to Reed bill 323 to which objections were sent to you under date of April 12, 1951, and is also opposed to Davis bill, 3231, for the reasons set forth in a letter being sent to you today. The Reed and Davis bills also relate to the extension of patents. Respectfully submitted,
THE PATENT LAW ASSOCIATION OF CHICAGO,
THE SECRETARY OF COMMERCE,
Hon. EMANUEL CELLER,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, D. 0.
DEAR MR. CHAIRMAN: This letter is in further reply to your request dated March 9, 1951. for the views of the Department with respect to H. R. 323, a bill to provide for extension of terms of patents where the use, exploitation, or promotion thereof was prevented, impaired, or delayed by causes due to war, national emergency, or other causes.
There is attached a proposed report of the Department of Commerce with respect to the bill. We hope this will serve as an answer to your request.
We are advised by the Bureau of the Budget that it would interpose no objection to the submission of this report and, further, that this legislation is not in accord with the program of the President. If we can be of further assistance in this matter please call upon us.
THOS. W. S. DAVIS, Acting Secretary of Commerce.
VIEWS OF THE DEPARTMENT OF COMMERCE WITH RESPECT TO H. R. 323
H. R. 323, of the Eighty-second Congress, would provide for extension of terms of patents where the use, exploitation, or promotion thereof was prevented, impaired, or delayed by causes due to war, national emergency, or other causes. Section 1 of the bill provides for the extension of patents when the "normal use, exploitation, promotion, or development of such patent has been prevented, impaired, or delayed" by various causes specified in paragraphs (a), (b), (c). In view of the use of the word "or" in paragraph (c), paragraph (c) actually specifies two different things. The various causes for the loss are as follows: (1) "Any circumstances beyond the control" of the owner or holder (par. (c), first part).
(2) "Any circumstance resulting from the existence in the United States of a state of war or other national emergency" (par. (c), second part). (3) "Any restrictions or prohibitions imposed by the United States by reason of a war or other national emergency" (par. (b)).
(4) "The granting of a license to the United States without payment of royalty or at a nominal royalty" (par. (a)).
It is thus seen that the bill provides for extensions of patents generally without limitation, and also for extension on account of what might be termed war loss. The Department of Commerce and the Patent Office have had occasion in the past to report to Congress on similar extension bills. We have opposed generally such proposals for extending the term of issued patents. We believe this position which is based upon the policy of Congress over a long period of time as well as upon other reasons, to be sound and reaffirm it with respect to H. R. 323.
The term of patents under our earliest patent laws was 14 years. Many inventors found this period too short and petitioned Congress for individual extensions which were granted in some cases by special acts. In view of this experience, Congress in the Patent Act of 1836 retained the term of patents as 14 years but provided for an extension of 7 years to be granted by the Patent Office on fulfillment of certain conditions. These extensions were abolished by Congress in 1861. At the same time the term of patents was changed to 17 years as a sort of compromise of compensation for the elimination of the extension. The term has remained at 17 years since that date.
Numerous attempts have been made by patentees to obtain from Congress special extensions of these patents issued for 17 years. Many bills were introduced in each session since 1878, when the first of them began to expire, but in the face of many expressions of policy from the committees, the number introduced has fallen to a handful in each Congress. Only twice, once in 1886 and once in 1943, has Congress extended any of these patents, and in 1928 and 1950 some general legislation was passed applying to veterans only. (A number of design patents relating to badges of patriotic or religious organizations have been extended.)
The effect of granting extensions of patents is frequently detrimental to industry because patents have a fixed term, and frequently developments are undertaken and industries built up in anticipation of the expiration of the patent term when teaching of the patent becomes freely available to everyone. That general consideration makes any patent extension undesirable.
To prolong the grant for a term in excess of 17 years, therefore, would be to profit individuals at the expense of the whole public which, as the source and protector of the grant to the inventor, has a right to expect that it shall be able, within a reasonable time, to enjoy the benefits of an invention that it has helped to make successful.
The public should have ample notice beforehand as to the date when a patent shall expire, so that industry and business may adjust themselves to the conditions accompanying and following its expiration. If there be a probability of the extension of thousands of patents, there would be also uncertainty and confusion throughout industry. Those engaged or intending to engage in manufacture could make patents subject to further prolongation and effectiveness.
We do not favor the singling out of owners of property rights arising out of patents as a class to be provided relief against war losses. In general, there appears to be no more reason for Congress to provide relief for patent owners who were unable to use their patents because of conditions growing out of the war than for it to provide relief for owners of other kinds of property, such as a factory, or a store, who suffered losses due to shortages of material and manpower during the war period.
In view of the above comments, adverse to the purpose of the bill, no comments are made on specific details of the bill and on the procedure outlined therein.