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The bills further provide that the rights of the United States shall not be affected by any such extension, and accordingly prohibit any claim by reason of the manufacture, use, or sale by or for the United States during the extended period.
We recognize the possibility that situations may exist which would justify the extension of a patent for the reasons enumerated in these bills, but we have no specific information as to their nature. No reason is apparent which would justify the extension of the term of a patent for such a broad and vague reason as the mere fact that the exploitation or promotion of the patent has been prevented or delayed by reason of some "circumstance beyond the control" of its owner (H. R. 323, sec. 1 (c))..
Because of the 1-year limitation upon the time within which applications for extensions may be filed, it would seem that this is in the general nature of a bill for the relief of a class of individuals, effective for the limited period of 1 year. In principle, it would appear that if the present patent laws or other statutes are inequitable in certain respects, the appropriate remedy would be to revise the general laws, without any time limitation.
Notwithstanding these general questions, we do not believe that the work of this agency would be impaired or otherwise be affected by the enactment of these bills, particularly in view of the provisions fixing the rights of Government as though there had been no extension of a patent. Moreover, we are not aware of any patent licenses which have been granted to the Government, as represented by this agency or any of its constituent organizations, which were "without payment of royalty or at a nominal royalty" (H. R. 323).
We have been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee, and that enactment of these bills would not be in accord with the program of the President.
JOHN L. THURSTON, Acting Administrator.
Mr. HARRIS. We received a statement from the Department of the Interior, and the Department of the Interior does not take a position on the bills.
(The statement referred to is as follows:)
DEPARTMENT OF THE INTERIOR,
OFFICE OF THE SECRETARY, Washington, D. C., April 18, 1951.
Hon. EMANUEL CELLER,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, D. C.
MY DEAR MR. CELLER: Reference is made to your request for a report on 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.
The bill does not appear to relate to any matter within the jurisdiction of this Department or to affect any matter upon which the Department would be in a position to give helpful information or advice. Accordingly, this Department has no comment to offer with respect to provisions of the bill.
I greatly appreciate your bringing this matter to my attention, and I welcome the opportunity to submit recommendations on any measure where the activities of the Department may possibly be involved, or where its experience may possibly be of value.
DALE E. DOTY, Assistant Secretary of the Interior.
Mr. HARRIS. I am also introducing a statement from the Department of Justice. We have a representative from the Department of Justice here, Mr. Brown, who will speak on the bills later. I believe the Department of Justice is not in favor of the legislation.
(The matter referred to is as follows:)
Hon. EMANUEL CELLER,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, D. C.
JUNE 20, 1951.
MY DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice relative to the bill (H. R. 323) 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.
Section 1 of the bill states that it is the policy and purpose of the measure that the term of any patent shall be extended to such extent as the normal use, exploitation, promotion, or development of such patent has been prevented, impaired, or delayed by reason of (a) the granting of a license to the United States without payment of royality 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.
To accomplish the stated policy and purpose, the bill would authorize the Commissioner of Patents, upon application made within 1 year after its enactment, to grant an extension of a patent for a period commensurate with the extent to which the normal economic return from such patent was prevented, impaired, or delayed during the period specified in section 1 and by reason of any of the circumstances mentioned therein.
Inter alia, the bill provides that no patent extended pursuant thereto shall, in any way, serve as a basis for any claim by reason of manufacture, use, or sale by or for the United States during the period of extension, and the rights of the United States shall remain in all respects as if such patent had not been extended (sec. 6 (b)).
The Department of Justice is of the view that the present statutory provision for the granting of patent monopolies for 17 years constitutes a fair and reasonable compliance with article I, section 8, of the Constitution and that extension of patents as contemplated by this measure is unwarranted. Even in those cases where the United States may have been granted a license by a patentee without royalty, or at a nominal royalty, there would seem to be no justification for extending the life of the patent so unlicensed. Such an extension would be operative against private users who derived no benefit from the grant of special concessions to the United States. To impose upon the public the burden of a patent monopoly for as much as 10 additional years beyond the original 17 years would be inequitable.
It should be noted that although a large number of patentees granted the Government patent concessions solely for patriotic reasons, many patent owners granted free licenses during the war as a part of an agreement in which other rights of substantial value passed to such patent owners. Another large group of royalty-free licenses was granted the Government by manufacturers of patented equipment who were 100 percent occupied with war contracts, being therefore unable to exercise their patent rights and being obliged to grant the Government free licenses so that patented equipment might be obtained from secondary
Farthermore, legislation such as the instant measure constitutes class legislation which might well be expected to bring demands for equivalent legislation from landlords whose rentals were frozen because of the war or from soldiers who were compelled to give up lucrative incomes when drafted or from others who were adversely affected economically by reason of the war.
Accordingly, the Department of Justice is unable to recommend enactment of this bill.
The Director of the Bureau of the Budget has advised that there is no objection to the submission of this report and that enactment of this legislation would not be in accord with the program of the President.
PEYTON FORD, Deputy Attorney General.
Mr. BRYSON. Mr. Steffens.
Mr. STEFFENS. Yes, sir.
STATEMENT OF FRED C. STEFFENS, REPRESENTING NATIONAL REJECTORS, INC., ST. LOUIS, MO.
Mr. BRYSON. All right, sir, will you identify yourself for the record?
Mr. STEFFENS. Mr. Chairman, and gentlemen, my name is Fred C. Steffens. I am connected with National Rejectors, Inc., of St. Louis, Mo., manufacturers of coin-detecting devices.
Mr. BRYSON. Do you have a prepared statement, Mr. Steffens?
Mr. STEFFENS. No, Mr. Chairman, I have no prepared statement.
I am in favor of this bill, and I would like to make a few statements which are not in favor of big business, but give the inventors' standpoint.
Mr. WILLIS. You are not in favor of what?
Mr. STEFFENS. Big business, or large corporations, but conveying the standpoint of the inventor as a whole.
Mr. BRYSON. You are in favor of the bill?
Mr. STEFFENS. Yes, I am in favor of the bill, and we are dealing with many inventors and other persons whom we pay royalties to, due to the fact that no company can develop, or, rather, has the brains to always come up with the device which may help to better our stand
ard of life.
I was born and brought up and educated abroad in a country whose very economy counted on, anyway up to that time, a lot of small people who tried to better their ways of life and their income by inventing or creating something.
Mr. WILLIS. What country was that?
Mr. STEFFENS. Germany.
I graduated over there in 1922, and I wanted to come to the United States. I was unfortunately rather unsuccessful in that, because I could not get anyone to give me an affidavit, as I did not know anybody. Finally, I did come over here in 1930, and started to work and saw that the only way to get forward, or get ahead was to work in your job and work hard. I was employed in industry. I was in San Diego and New York, and I was in touch with manufacturing and various industries and working conditions, and with many people exchanging ideas. We spent our time and our money trying to invent something which would be useful for the country, and which also would give you an opportunity to get ahead in life. For my own personal part I can say things in the United States met together. Mr. Ford has been very kind to me. I personally had other inventions, and other work, and have never heard the impact of depression.
In many cases with our small inventor the only protection he has against a large corporation from a small or large improvement is he can only rely on a United States patent.
A large corporation counsel is seldom interested in the small inventor at the beginning because he gets his fees on a retainer basis from a large corporation.
A patent is not so important to a large corporation because they all have ways and means of fighting competition in the form of prices and in other ways, whereas with the small inventor when he has a
patent, even though he has very little protection before the verdict in court as to how well his patent will stand up against prior art and other things which are brought up, the only protection the small man has is to give to the United States inventions.
I read about every one of them when I was abroad in school, that anybody who rises in this country, anybody who later on made an invention and formed a business out of it, started out as a small inventor who later harvested the fruits of his work, and about them being called many times even a crackpot or something like that, because a man like Henry Ford has been called a crackpot.
Mr. BRYSON. Edison, too?
Mr. STEFFENS. Edison, too. There are more. All look to the protection that the small man should have. A man is deprived of so many years. As in hundreds of cases, he has taken his inventive mind, given it to Army Ordnance or to the Navy for nothing. There is the case of the fuze under the shell. We have been vitally engaged in that war work. We lost money. The small inventor does not only lose money; he loses valuable time that he could be putting in on work for himself. He actually contributed his time to Uncle Sam during the war years.
Mr. WILLIS. What is the difference between that man and the garageman, the doctor or the lawyer, or the manufacturer of wooden boxes, or any other product that the inventive mind made it possible for him to produce? Weren't they all in the same boat?
Mr. STEFFENS. That is right. But I am now talking not only about the professional inventor but about the average mechanic. He may be in a garage or he may be some place else. He has an idea about the tools. He is not able to produce himself under today's mass production in machinery. He can very seldom raise the amount of money to start with himself, so he has to sell his patent to somebody who is equipped to turn out the product. The only protection that he has against a powerful, or even a small, medium, or large-size company, with its legal staff, is a United States patent.
Mr. ROGERS. You understand we are considering a bill here which is an extension of these patents?
Mr. STEFFENS. I do.
Mr. ROGERS. We are not going into the general theme of patents and their effect upon the economics of the country. Now, I believe that you stated you were engaged in manufacturing at the present time.
Mr. STEFFENS. Yes.
Mr. ROGERS. Are you manufacturing at the present time under any patents, the license of which may expire, which would be extended if this law were adopted?
Mr. STEFFENS. Yes.
Mr. ROGERS. How many?
Mr. STEFFENS. We personally have only one case where the patent has expired-in 1945. The life of the other patents have been cut short because we could not exercise.
Mr. ROGERS. Were you using it prior to 1945 under the license? Mr. STEFFENS. Yes.
Mr. ROGERS. Do you know whether or not the patentee was hampered in his work during the war period with that particular patent
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by virtue of the fact that he was unable to get steel or priorities under
Mr. STEFFENS. Yes. We were shut down from April 1942 until the end of the war entirely.
Mr. WILLIS. Completely?
Mr. STEFFENS. Completely.
Mr. ROGERS. After the war, when this patent ran out, you proceeded to use it?
Mr. STEFFENS. That is right.
Mr. ROGERS. If this law were passed and he was able to get the patent extended, you would have to pay him a royalty for that period of time that the Patent Office may extend it?
Mr. STEFFENS. That is right, sir.
Mr. ROGERS. And that is the only instance that you know of where the patent expired at the end of the war?
Mr. STEFFENS. In our case.
Mr. ROGERS. Are there any instances of patents that have expired since that time?
Mr. STEFFENS. I could not answer if they have expired, but the effect is the same. If you are unable to get materials and cannot use the patent for 4 years, the life of the patent has been reduced to 12.
Mr. BRYSON. Do I understand that you favor this legislation generally?
Mr. STEFFENS. I favor this legislation in general for the small inventor, and for the necessity of keeping small people working on ideas to submit for the purpose of bettering our standard of living, which has come out of small inventions, even though they are produced by larger companies. I do not think we should penalize the inventive mind of every person in America. This thing may happen again, and the only thing we penalize is the inventor and the smallbusiness man. The only protection that he has against large dynasties, large corporations, is his patent.
Mr. WILLIS. Of course, the United States did not bring about that penalty. The ones who brought on the war brought on that penalty; is that not so?
Mr. STEFFENS. It was an emergency; I agree with you. It was an emergency brought about that we did not want, but on the other hand it works a hardship.
Mr. BRYSON. Having stated that you favor this type of legislation, you have permission to extend your views and elaborate on them for the record. You may file a written statement for the record, if you desire. We have to do that in order to conserve time. The tax bill is coming up on the floor of the House today, and in order to give these other gentlemen who, like you, have come great distances, time, we would appreciate it if you would reduce your views to writing and put them in the record. You understanding that, do you not? Mr. SREFFENS. I do.
Mr. BRYSON. Now, Mr. Harris, who is next?
Mr. HARRIS. May I introduce two other letters, both in favor of this legislation? The first is a telegram from the Minnesota Mining & Manufacturing Co. of St. Paul, and the other is a letter from Mrs. M. R. Carpenter, Cleveland, Ohio.
Mr. BRYSON. They will be inserted in the record at this point.