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Mr. WILLIS. I think, Mr. Chairman, Mr. Federico will enlighten
us some more.
Mr. BRYSON. You have permission to file a supplemental statement on that particular point.
SUPPLEMENTAL STATEMENT OF HARRY H. HITZEMAN
During the hearings on H. R. 323 on June 20, 1951, I stated to the chairman of the committee that I would be glad to furnish him with information as to the previous patent extension laws of the United States.
In 1836 on July 4, the Twenty-fourth Congress at its first session. passed a patent law, which among other things provided in section 18 for the extension of patents, the particular section reads as follows:
"SEC. 18. And be it further enacted, That whenever any patentee of an invention or discovery shall desire an extension of his patent beyond the term of its limitation, he may make application therefor, in writing, to the Commissioner of the Patent Office, setting forth the grounds thereof; and the Commissioner shall, on the applicant's paying the sum of forty dollars to the credit of the Treasury, as in the case of an original application for a patent, cause to be published, in one or more of the principal newspapers in the city of Washington, and in such other paper or papers as he may deem proper, published in the section of country most interested adversely to the extension of the patent, a notice of such appleation and of the time and place when and where the same will be considered, that any person may appear and show cause why the extension should not be granted. And the Secretary of State, the Commissioner of the Patent Office, and the Solicitor of the Treasury, shall constitute a board to hear and decide upon the evidence produced before them both for and against the extension, and shall sit for that purpose at the time and place designated in the published notice thereof. The patentee shall furnish to said board a statement, in writing, under oath, of the ascertained value of the invention, and of his receipts and expenditures, sufficiently in detail to exhibit a true and faithful account of loss and profit in any manner accruing to him from and by reason of said invention. And if, upon a hearing of the matter, it shall appear to the full and entire satisfaction of said board, having due regard to the public interest therein, that it is just and proper that the term of the patent should be extended, by reason of the patentee, without neglect or fault on his part, having failed to obtain, from the use and sale of his invention, a reasonable remuneration for the time, ingenuity, and expense bestowed upon the same, and the introduction thereof into use, it shall be the duty of the Commissioner to renew and extend the patent, by making a certificate thereon of such extension, for the term of seven years from and after the expiration of the first term; which certificate with a certificate of said board of their judgment and opinion as aforesaid, shall be entered on record in the Patent Office; and thereupon the said patent shall have the same effect in law as though it had been originally granted for the term of twenty-one years. And the benefit of such renewal shall extend to assignees and grantees of the right to use the thing patented, to the extent of their respective interest therein: Provided, however, That no extension of a patent shall be granted after the expiration of the term for which it was originally issued."
In the Thirtieth Congress', first session, on May 27, 1848, the patent statute was amended to place the duty of determining whether or not the extensions should be granted solely in the hands of the Commissioner of Patents. The original law as indicated above having appointed a board consisting of the Secretary of State, the Commissioner of the Patent Office and the Solicitor of the Treasury to decide patent extension cases.
The Thirty-sixth Congress in the second session on March 2, 1861, chapter 88 repealed by section 16 of a patent law passed at that time the section of the previous law extending patents. This is the law incidentally in which the original term of patents was extended from 14 years to 17 years.
PRIVATE BILLS TO EXTEND PATENTS
The United States Statute at Large are replete with instances of passages of private patent extension bills, a cursory examination of the United States Statutes disclosed the following:
February 7, 1815, third session, Thirteenth Congress, chapter 37, Oliver Evans patent extended.
March 3, 1821, third session, Sixteenth Congress, chapter 62, Sam Parker, two patents both extended for 14 years.
John Adamson, page 458, second session, Twenty-first Congress, chapter 73, patent extended for 14 years.
Sam Browning, page 467, second session, Twenty-first Congress, chapter 113, patent extended for 14 years.
Jam Barron, page 678, second session, Twenty-fourth Congress, chapter 334, patent extended for 14 years.
Thomas Blanchard, page 748, third session, Twenty-fifth Congress, chapter 14, patent extended for 14 years, February 6, 1839.
William Gale, page 895, Twenty-seventh Congress, third session, chapter 131, renewal of patent authorized.
S. K. Jennings, 899, third session, Twenty-seventh Congress, chapter 150, renewal of patent authorized.
William Woodworth, page 936, Twenty-eighth Congress, third session, chapter 27, renewal of group of patents authorized.
James C. Holm, page 557, chapter 14, second session, Thirty-fifth Congress, 1859. Harvey Lull, April 29, 1876, Patent No. 10,477, chapter 87, session 1, Fortyfourth Congress, to get extension for 7 years from date of enactment of law. John R. Harrington, August 14, 1876, patent extended for 7 years, chapter 281, session 1, Forty-fourth Congress.
Henry Walter, March 3, 1877, granted extension of patent for additional 14 years, Forty-fourth Congress, chapter 150, session 2, Forty-fourth Congress. E. T. Bussell, March 3, 1877, granted extension for 7 years, chapter 207, second session, Forty-fourth Congress. Thirty-Fourth Congress, first session, 1854, extended both Bishop patent No. dated July 15, 1829, and Bishop & Arnold patent No. dated October 20, 1836, for second terms of 14 years each by private bill. The authorities are numerous to the effect that Congress may extend or revive expired patents. The courts have repeatedly upheld this power in Congress. In the case of Blanchard Gun-stock Turning Factory v. Warner (Fed. case No. 1521) a suit on an extended patent decided in the circuit court, district of Connecticut, Justice Nelson says:
"In the exercise of the power conferred by the Constitution, Congress may, without doubt, extend or make provision by law for the extension of the exclusive privilege to inventors, beyond the time originally limited, if that is deemed too short to them an adequate reward or encouragement. As Congress is vested with full power to reward inventors by granting or extending to them for limited times, at its own discretion, the exclusive rights to their inventions, it follows that it has the power, in granting such privileges, to make such exceptions out of the grant as justice will require."
In the case of New American File Co. v. Nicholson File Co. (8 Fed. 16), decided in the circuit court of Rhode Island in 1881, the constitutionality of an act of Congress extending patent No. 29,236 for 14 years was attacked. The Court held the act constitutional.
In the case of Bloomer v. McQuewan (14 How. 539), the Woodward patent was twice extended.
Chief Justice Taney in expressing the opinion of the Court upheld the right in Congress to extend, revive, or grant new patents in the following language: "Congress might well suppose that one inventor has stronger claims on the public than another and might, on that account give him larger privileges on renewal.
"The patentee who made the invention and through whose ingenuity, labor, and expense a great benefit has been conferred upon the public, in justice, is entitled to remuneration and that only was the ground of extension."
It is true that in recent years, the Congress has not seen fit to extend patents by private bill; one exception, however, is the cigarette-lighter patents
which were extended because the owners were deprived of recovery in a lawsuit by fraudulent action of a United States district judge. Should this be the only reason for extending the patent? The owners in this case suffered a loss as a result of his action in the same manner that thousands of other patent owners suffer loss as the result of some other agency of the Government, such, for example, by prohibiting the manufacture of a certain thing during the war or an emergency, or by restricting the use of certain materials which prevented in the same way the use of the patented inventions.
If a madman shoots a person and he is killed, or if some innocent driver should accidentally run over and kill a person, the end result is the samethe person is dead in either case, and in the same way, whether by act of a judge or other branch of the Government a person is deprived of the income from his patent, the end result is exactly the same he has suffered a loss.
In conclusion, it is clear from the statutes which I have quoted and from the reference to the many private bills which have been passed in previous Congresses that there is both precedent and repeated occurrences of the consideration by Congress of both public laws to relieve injured patent owners, as well as private laws.
Mr. HITZEMAN. Secondly, I would like to point out that the inventions which seem to have been deprecated by Mr. Hoxie are very important.
The framers of our Constitution wrote it into the same Constitution in which the Bill of Rights was contained.
Next, he has spoken about the administrative difficulties. I do not believe there are any. After all, the Eighty-first Congress passed a law extending patents for veterans.
Mr. BRYSON. Yes.
Mr. HITZEMAN. And to my knowledge, over 200 or more applications have been filed. They have been processed and have been issued. The public knows about them, and it is all mostly clerical work. That is how simple it is. Anyone who would be harmed by an extension has an opportunity to appear in the Patent Office and state his position. From there, of course, any patent ultimately goes to the United States District Court, if you want to enforce it, so of course the courts of this country control that. The administrative difficulties, in my opinion, are not present at all.
There is another thought on that subject: This committee or previous committees have thought too much discretion was placed in the hands of the Commissioner if a bill like this were passed. On that I would like to point out that, after all, the Commissioner decides what is and what is not an invention, which is a far greater and more important discretionary power.
Unless you have some questions that is all that I have.
Mr. BRYSON. We will now hear from Mr. Foote.
STATEMENT OF FREDERICK D. FOOTE, OF ALLOYS DEVELOPMENT CO., PITTSBURGH, PA.
Mr. FOOTE. My name is Frederick D. Foote. I do business under the trade name of Alloys Development Co. of Pittsburgh, Pa. Mr. BRYSON. Are you a patent attorney?
Mr. FOOTE. I am not. I am one of these so-called businessmen. My business consists of developing, promoting, and licensing of patents, particularly in the field of steel alloys. I am interested in the so-called Cor-Ten patents, covering a steel alloy, which, as indicated by its name, is a corrosion-resistant high-tensile, or highstrength, composition. The invention of Cor-Ten has ushered in an
extremely important development in the steel industry and one which will have a marked effect upon the economy of our country. This new type of steel conserves our natural resources because 3 pounds of the finished product will do the work of 4 pounds of ordinary steel and do it better, thus conserving thousands of tons of iron ore, coal, manganese, scrap, and several other essential raw materials. In order to do this, relatively small quantities of chromium, copper, and nickel are used in addition to the more common elements, such as manganese, phosphorous, and silicon. From the production of Cor-Ten by steel manufacturers, I receive payments on a tonnage basis.
I am appearing here in support of H. R. 4054, the bill introduced by Representative Walter on May 10, 1951. It proposes to prolong a patent, for a period commensurate with the extent that the use of the patent was prevented, impaired, or delayed during World War II, as the result of governmental restrictions on essential materials.
I believe that such legislation is urgently needed for several reasons: First, it is needed so that the patentee will receive the full period of protection that the Government purported to give him through the issuance of his patent; secondly, unless such relief is given, there is danger that invention will be stifled and that the sources of the risk capital, necessary for this purpose, will dry up; third, without such relief, the patent owner suffers and will continue to suffer great hardship; fourth, the proposal is based on a sound principle, which can be readily administered; fifth, nearly all important foreign countries grant such relief to the injured patentee; and sixth, such law in this country will relieve Congress from the burden of, and the criticism attendant upon, granting relief, piecemeal, by means of private bills. Let me touch briefly on each of these points.
Through its patent laws, the Government asks the inventor to disclose his invention and ultimately permit its free use by the public, in exchange for a protection granted by the Government during a 17-year period. Usually, a considerable part of that 17-year period is necessary for development and to test and prove the merits of the invention in industrial applications. In the field of metallurgy, it has become accepted as axiomatic that a period of 7 to 9 years is required in this experimental period, and 10 to 12 years are required in certain other fields of use, such as the railroad and shipping industries. Thus, there usually remains a period of only 5 to 10 years of profitable use before the patent expires. In the case of the Cor-Ten patent issued in 1935, the remunerative years were just beginning in 1941, when, owing to wartime needs, the Government imposed restrictions upon the use of essential raw material. This had the effect of curtailing drastically the production of our patented composition. In January 1942, by order of OPM, the use of chromium was confined solely to direct war uses, and since this element was essential to the Cor-Ten composition, its production all but ceased until the end of the war. Thus, there was eliminated about 5 years, or almost one half, of the remaining years of the patent.
The facts in this respect have been set forth in an article which I wrote for the August 1950 issue of the Journal of the Patent Office Society. I submit herewith a reprint of that article, and I request that it be incorporated in the record.
Mr. BRYSON. It is so ordered.
Mr. FOOTE. The effects of the wartime restrictions of 1941 to 1945, inclusive, are shown on page 5 of that article. You will note that during this 5-year period, the anticipated normal production should have averaged upward of 283,000 tons per year, whereas the actual production averaged 28,464 tons per year, or less than one-tenth of the anticipated normal. As a result, my partner, the inventor, and I were obliged to sell a substantial interest in our Cor-Ten patent, in order to survive the period of Government war restrictions.
Mr. BRYSON. May I ask, was not this process, Cor-Ten a way of treating steel, and of vital need in the war effort?
Mr. FOOTE. It was not, for this reason: It was introduced into direct war work, such as in some of the tanks and other small parts, but we had not yet established it fully with the Government in Washington, or I should say the different departments of Government— the Army, the Navy, and so forth.
Mr. BRYSON. They had not generally recognized the merits of the process?
Mr. FOOTE. No. It had been introduced, however, in the railroad field for the enlargement of freight cars, making them lighter and able to carry more lading, but unfortunately since freight cars had previously been built of ordinary steel, the Government said, "We need the chromium for other important uses; therefore, it must not be used for that purpose."
Mr. BRYSON. But if this system were adopted it would save approximately one-fourth of the steel. You can treat 3 pounds of metal by your process and get the equivalent of 4 pounds?
Mr. FOOTE. That is correct.
Mr. BRYSON. Roughly one-fourth?
Mr. FOOTE. The steel is of higher strength and greater corrosion resistance; therefore, less is required to do the same work. Also, the natural resources of the country would be conserved thereby.
This invention has introduced a great development in the steel industry of this country, and not only that, but also in the steel industry of the world. We have patents in other countries, and this steel is being made elsewhere, as well as in this country.
I might add at this moment, and I shall bring it up later, that they, the patents, have already been extended in some of those countries.
If you will turn to page 6 of the article, you will see a chart, which shows graphically the extent to which the normal anticipated production was curtailed during those war years. You will also note that immediately after the lifting of those restrictions at the end of 1945, the production during the subsequent years resumed in accordance with the curve that would normally have been anticipated beginning with 1941. In other words, during the war years, the Government restrictions on chromium resulted in depriving us of almost 5 years of the final 10 years of the patent period. This is a serious matter, because the patent will expire next year, in July of 1952.
Now, in 1951, at the beginning of the last year of the patent, the Korean War has brought about another curtailment of the production of Cor-Ten, this time due to the Government's restrictions on the use of nickel, which, though used in very small quantities, is also an essential ingredient in this steel composition. If 1951 and the first half of 1952 prove to be a repetition of the curtailment suffered during the World War II period, then we will have had only 42 years of fruitful