sas City, is chairman of that committee, and I received permission from him just before leaving Kansas City to indicate that he, too, personally, not as spokesman for the bar, was in favor of the passage of these bills. We recognize the necessity of the law, particularly in our part of the country where a patentee was unable to obtain returns from what he felt was the contractual relationship between a patent owner and his Government. Mr. BRYSON. Why should your particular section of the country be any different from any other section in that regard? Mr. HOVEY. Why should it be? Mr. BRYSON. Yes. Mr. HOVEY. Because on the eastern seaboard and on the west coast I believe it is recognized that we have large businesses that are much greater in size, much more active in the trade, and are much more capable of handling defense orders than the small businesses that we have with a 50-foot front and 150 feet depth. Those large companies have had previous experience in their field, and are much more capable of meeting requirements of defense orders than the small businesses in Kansas City or its environs. Mr. ROGERS. Do you not think your chamber of commerce would dispute that? Mr. HOVEY. Well, we have a representative of the chamber of commerce who has moved into Washington, and who is making every effort to dispute those facts, and, incidentally, we have moved into that territory some very large companies which are manufacturing items for defense. We hope it will be possible in the near future to get defense orders out there, but during the last war I can point out to you factories which were closed because of the inability to produce. If you lived in the rural district about Kansas City, owned a patent, and some of the companies out there were paying you royalties on it, and would stop because of the war effort, they would simply write you a letter and say, "We are sorry, but your income is being stopped as we cannot produce." The answer to that lies in these bills and the passage thereof. Is there any other gentleman who desires to be heard at this time? STATEMENT OF H. A. McILVAINE, PRESIDENT, CONTINENTAL Mr. BRYSON. Do you have a prepared statement? Mr. BRYSON. This is Mr. McIlvaine, president of the Continental Electric Co. of Geneva, Ill. Mr. McILVAINE. We are small manufacturers, but we also do a little inventing ourselves through some of our men, and, of course, when the war came along some of the electric patents suffered so far as royalties from other companies, and so forth are concerned. However, since we are doing quite a little defense work this loss is partially compensated for by the increased volume due to the defense program. Therefore, since time is limited, I will not use these electric patents as an example. For the purpose of this discussion I will rather use another patent as an example. We have another industry which we started down in Florida a number of years ago. This is out of our electric line. We call the company manufacturing this article the Continental Fruit Co. We have made an item called the Fruitainer which uses the grapefruit completely and takes the place of tin and glass containers. Mr. BRYSON. It cuts the squirt out of the grapefruit? Mr. McILVAINE. It does that; yes. We clean off the surface of the grapefruit and take out the inside and crystalize the grapefruit shell into a container with sugar making it into a jar, and there is no waste, that shell of the grapefruit being edible. You eat the contents, then eat the jar. We had to take this through up to the Court of Customs and Patent Appeals to get a patent, and the court gave us a very fine decision and ruled we should have a patent, and we finally got a patent after some years of litigation. Then it took several years to develop the industry, and we just got going in it very well about the time sugar rationing came along. We were running about 3,000 Fruitainers a day, and of course we had to shut down suddenly because of that. Mr. WILLIS. May I say at this point that I represent the Sugar Belt where sugar is made, and we tried to give you all of the sugar the Government permits. Mr. McILVAINE. That is right. Mr. BRYSON. I understand the bootleggers down in my section were curtailed also in their supply of sugar. Mr. McILVAINE. So, the company was shut down, and we could not get it started again until now we are intending to vote a stock issue and start it up again. Mr. BRYSON. In other words, Mr. McIlvaine, you favor the general principles of these bills? Mr. McILVAINE. Yes. Mr. WILLIS. For how long a period of time were you closed? Mr. McILVAINE. Just about the beginning of the war, we had to shut down, and we are still shut down. Mr. BRYSON. Are you a small-business man? Mr. McILVAINE. Yes. Mr. BRYSON. You employ less than 500 people? Mr. McILVAINE. That is correct. We got up in the last war to 500 in this company and probably will again in this war, but in this other company we had financed that separately, and we would have had a separate problem with it anyhow. I just wanted to say one other thing. Using this patent as an example the opposition has stated that other businesses were hurt also. It looks to me as though these two things are not the same because this company would have been hurt if it had been shut down regardless of whether the patent is extended or not, a corresponding amount to what other businesses would have been hurt. So, the patent problem seems to be something entirely over and above the shutting down of a business like a garage or a business like the Continental Fruit Co. In either case they would be hurt whether the patent is extended or not. The companies having patents merely have the same patent advantage they would have had had they continued to operate. Mr. BRYSON. Thank you very much, Mr. McIlvaine. Is there any other witness here who would like to be recognized briefly? Mr. HOOPER. Yes, Mr. Chairman. STATEMENT OF JAMES E. HOOPER, VICE PRESIDENT, WILLIAM E. HOOPER & SONS, BALTIMORE, MD. Mr. BRYSON. Will you identify yourself for the record? Mr. HOOPER. James E. Hooper, vice president of William E. Hooper & Sons. I would like to be recognized for a hearing at another meeting. Mr. BRYSON. What is the nature of your business? Mr. HOOPER. We are cotton duck manufacturers and finishers. Mr. BRYSON. You are in the textile business? Mr. HOOPER. Yes. Mr. BRYSON. Well, I represent the largest textile district in the world; we ought to get together. Mr. HOOPER. Yes, indeed. Mr. BRYSON. We will arrange a hearing for you at the next meeting of the committee. It looks as though we can meet Friday morning. Mr. HOOPER. I am in favor of the bill with certain modifications thereof. Mr. BRYSON. You do not have a prepared statement, do you? Mr. HOOPER. Yes, sir; we have submitted a preparted statement which I would like to comment on. Mr. BRYSON. We have to go to the floor now, Mr. Hooper. Mr. BRYSON. But we will meet at 10 o'clock Friday morning. Mr. BRYSON. Yes, sir. (Thereupon, the subcommittee adjourned to meet at 10 o'clock, Friday, June 22, 1951.) PATENT EXTENSION FRIDAY, JUNE 22, 1951 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE No. 3 OF THE HOUSE JUDICIARY COMMITTEE, Washington, D. C. Subcommittee No. 3 of the Judiciary Committee met, pursuant to adjournment, at 10 a. m. in room 346, Old House Office Building, Hon. Joseph R. Bryson (chairman of the subcommittee) presiding. Present: The honorable Messrs. Bryson, Willis, Rogers, Reed, and Crumpacker. Also present: Mr. L. James Harris, committee counsel. Mr. BRYSON. We will come to order. We have to meet in the House at 11 o'clock, so we will have to ask the witnesses to bear that in mind in giving their testimony. Is Mr. Harold Watson present? Mr. J. Warren Brown? Mr. Hooper? We will hear Mr. Hooper. Mr. HARRIS. Mr. Chairman, may I introduce Mr. Watson's statement for the record? Mr. BRYSON. That will be done. (Statement of Harold F. Watson follows:) STATEMENT OF HAROLD F. WATSON ON BEHALF OF AMERICAN BAR ASSOCIATION IN REGARD TO H. R. 323 This bill to provide for extension of patents where the exploitation thereof was prevented or impaired by war, national emergency, or other causes, is opposed by the American Bar Association. For many years the American Bar Association has uniformly been in opposition to legislation seeking to extend the terms of patents, including both general legislation and private bills relating to particular patents, on grounds of public policy. In 1947 the American Bar Association opposed H. R. 1984 of the Eightieth Congress, first session, filing a statement which is reproduced at page 59 of volume No. 12 of the reports of hearings before the Subcommittee on Patents, Trademarks, and Copyrights of the Committee on the Judiciary. That statement contains a brief résumé of the attitude of the American Bar Association toward bills of this character, and the reasons for such attitude. The statement filed in 1947 includes the following passage: "In 1943 the patent section unanimously disapproved bills providing for extension of patents, where the use of the latter was prevented by shortage of materials, labor, or transportation caused by war. "In 1944 the 1943 action of the patent section was duly approved by the house of delegates. In that year the section also disapproved in principle specified bills to extend the terms of particular patents, but this action was not presented for ratification by the house of delegates by reason of previous action of the association which had already defined its position in opposition to the extension of patents." Under our patent system a contract exists between the patentee and the public, by which the patentee is granted exclusive rights in his invention for 17 years, 59 in return for a full disclosure of his invention, so that when the 17-year term of a patent expires the public may make use of the invention. Any legislation having the effect of extending the terms of patents would, therefore, adversely affect the public interest by depriving the public of its right to free use of the inventions during the periods of the extensions. In industry, improvements are constantly being made which are themselves the subject of patents but, of course, no such improvement can lawfully be used if the improvement itself infringes an unexpired patent. Obviously, therefore, if the term of the earlier patent were extended, the time within which the original invention might be freely used by the public, and the time when an improvement on the earlier invention could be used at all, unless a license were granted under the earlier patent, would be delayed for the duration of the extension. Almost everyone in the United States was injured in some way by reason of this counrty's participation in World War II. It is impossible to compensate for every such injury. To select patentees to be the recipients of special favor in regard to such compensation, is unjust in principle and contrary to public policy. In Report No. 1214, Eighty-first Congress, first session, the Committee on the Judiciary in dealing with H. R. 4692 of that Congress, a bill to provide for an extension of patents issued to veterans of World War II, stated that "Representations were made and were seriously considered by the committee that the benefits of such legislation should inure to all patentees who suffered losses by reason of being unable through shortages of materials or other reasons during the war to prosecute and exploit their patent rights. The committee, however, felt that to provide relief for all such persons who suffered losses in this manner would be to overlook the many thousands of persons in other walks of life who suffered grievous and irreplaceable losses in their fortunes because of the circumstances of war. For most of such persons no governmental relief has been or could reasonably be afforded, for such conditions cannot reasonably be considered by thinking persons the responsibility of the Government to restore." The predecessor of this committee, therefore, has endorsed and applied the same fundamental principles which have motivated the American Bar Association, from the beginning, in opposing legislation of this character. The American Bar Association disapproves in principle any extension of the terms of patents as against public policy, and therefore opposes H. R. 323 of the Eighty-second Congress, first session. Mr. BRYSON. Mr. Hooper? HAROLD F. WATSON, Chairman, Legislative Committee, Patent Section, American Bar Association. Will you identify yourself for the record? STATEMENT OF J. E. HOOPER, VICE PRESIDENT, WILLIAM E. HOOPER & SONS CO., PHILADELPHIA, PA. Mr. HOOPER. I am James E. Hooper, vice president of the William E. Hooper & Sons Co., of Baltimore, Md. Mr. BRYSON. Do you have a prepared statement? Mr. HOOPER. No, sir. We filed a prepared statement by Mr. Brock the other day and I would like to make some brief comments on it. STATEMENT SUBMITTED IN BEHALF OF WILLIAM E. HOOPER & SONS Co., PHILADELPHIA, PA. SUMMARY OF CONTENTS On February 20, 1943, William E. Hooper & Sons Co., a Maryland corporation, was the owner of six patents covering the invention of certain "finishes," or mixtures of chemical compounds, which, when properly applied to cotton duck and other fabrics as a finish, impregnate the fabric, will not wash out, and |