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issued to a prior inventor which may prevent manufacture for a portion of the term or even the entire term of his patent. In such cases no revenue may be derived from the patent, but it is not a concept of our law that the terms of patents should be increased in such circumstances. In fact, it has been the established policy of the Congress since 1861 that no extension of the terms of patents should be granted, regardless of the importance or value of an invention and paucity of the return to the inventor.
The only exceptions to this rule in the present century are the extensions that have been granted for individual design patents on the emblems of fraternal organizations and patriotic societies, such as those of the American Legion and other large organizations where the purpose is to prevent the indiscriminate manufacture and sale of the emblems to nonmembers.
Mr. WILLIS. The period of the patent has been 17 years since 1861 ? Mr. ROSE. Since 1861.
Mr. BRYSON. How does that period of 17 years compare with that of major countries?
Mr. ROSE. Other countries vary from 14 to 19 years. England is 16 years. Some countries 14, 15, and some you can get varying terms depending on the amount of fee you pay; 17 years is about an average. I do not know whether other countries have been influenced by our period of 17 years, but is about an average.
The term of United States patents up to 1861 was 14 years and with a possibility of a 7-year extension. It was due to the inclusion of the extension law, or rather the repeal of that law at that time, that the period was extended to 17 years. The Congress apparently felt at that time that it was better to have a fixed term longer than had previously been granted so as not to have the possibility of extensions and the Congress has for 90 years adhered to that theory.
The only extensions of patents granted in that time are a few extensions on design patents of patriotic organizations as I have mentioned, for instance, the American Legion and Veterans of Foreign Wars— the design patents of their emblems.
The extension of the patent in the Ronson Lighter case to compensate the owner because of the proven defection of a Federal judge in holding the patent invalid was another exception and also veterans' patents under the provisions of the extension legislation enacted after both world wars.
Mr. BRYSON. Yes. There was the veteran's extension.
Mr. ROSE. The veterans' extension bills which were passed by the last Congress.
Mr. WILLIS. But those are the only three categories. Have you made a study of that?
Mr. ROSE. Yes, sir.
Mr. WILLIS. Those are the only three categories?
Mr. Rose. Yes. There were hearings on broader bills during the last session of Congress and they came out with the Veterans Extension Act. The thesis of extension of other patents on the broad front was rejected.
Mr. ROGERS. We had some testimony before this committee to the effect that many of the foreign countries have given extension of patents due to war and invasion and things of that character. Have
you any comment on the application of that law to foreign countries or whether it should be applied to us?
Mr. ROSE. A number of foreign countries have had extension acts. They were, however, promptly passed after the termination of the war and for the most part were effective for limited periods. A good many of them, as was brought out in the testimony Wednesday, were reciprocal types of legislation. They would grant the right of extension to citizens of other countries only if the countries involved granted the same rights to their citizens.
Mr. ROGERS. Do the pending bills have any such reciprocity?
Mr. ROSE. I do not believe they do. There is no use putting it in because of the extension acts in other countries. They have expired and there would be no purpose for reciprocal provisions in this law as far as American citizens are concerned because they would not let them have the benefit of these expired laws in other countries.
Mr. ROGERS. Well, pending bills would apply to foreign patentees. Mr. ROSE. To foreign patent owners of United States patents. Mr. ROGERS. Aside from the reciprocity question before us, have you any comment as to what effect it might have in those other countries by having this extension? What I mean by that is, it has been brought out here that in many instances the patents have expired and are now free to the public. Large companies and small companies have since gone into business with the result that if we extended this law there is a possibility that they would be caught in a squeeze. They would either have to adhere to the royalties demanded by the patentee or go out of business. In those foreign countries where the extension has been added, do you know how that situation worked there? Or do you have information?
Mr. Rose. I do not have any direct information as to that and I do not have any particular knowledge, but due to the fact that most of those countries were closed up tight and occupied during the war and the extension laws were passed so quickly after, there was not much opportunity for the public to get into the field if the patent had expired.
Mr. ROGERS. What about the countries not occupied?
Mr. ROSE. England was the only country that was not invaded, and they were in a purely wartime economy much more than we were. Another factor there, is that in the foreign countries, I do not believe that the economies are based on patents to the extent that they are in this country. They issue relatively few patents in most of those countries.
Mr. BRYSON. How do the other major countries compare in volume and numbers of patents with our country?
Mr. ROSE. We have in this country issued over 212 million patents. There are now in force over 500,000 patents. In the foreign countries the total numbers of their patents and their systems have been running longer than ours, I do not believe that any of them run over 1 million. So, we issue two and a half to three times as many patents as any other country in the world.
Mr. BRYSON. We issue nearly as many patents as all the other countries?
Mr. ROSE. I believe the total would prove that to be the case. This country probably issues as many as nearly all the other countries combined.
Mr. BRYSON. We have been advised that Russia has preceded us in many patents. Have you made a study of that?
Mr. ROSE. I take that as the usual party line.
Mr. ROGERS. Did your committee in arriving at your conclusions make any survey as to the number of businesses that may be affected if this were extended?
Mr. ROSE. No, sir. We did not have time, and such a survey would be very difficult due to the fact that there are 500,000 patents in existence today.
Mr. WILLIS. Live patents?
Is it correct that the beneficiaries of this law would be the small business as compared to the large corporations who are alleged to hold most of the patents?
Mr. ROSE. I think H. R. 4045 would benefit any patent in which there could be shown any semblance of return before or after the war in a monetary sense. And H. R. 323 is so broad that it amounts practically to a general extension act. Now, you ask if we had made a study. We have not made a study, but you can look around you almost anytime, at any item of machinery or item that you use every day, and the chances are that some portion of it is covered by a patent. So, that as to the patents which have expired in the past 4 years, taking that as the norm of the extension that would probably be granted if these bills were passed, it is safe to say that many thousands of items would be affected.
Now, how many people, members of the public or businesses which did not have patents on particular items, have gone into those businesses? We do not know, but presumably there have been many instances of that.
Mr. WILLIS. But this would be in each case where the patent owner's rights were impaired-whether he is big or small. Take du Pont and General Motors or RCA-they certainly control a lot of patents. On the other hand, these corporations derived revenue out of war contracts and their earnings on patents might have been equally impaired as the earnings of a small patent owner.
Mr. ROSE. That is true.
Mr. BRYSON. And a greater degree probably because they were earning much more money and, of course, the more money they earned the heavier their taxes.
Mr. WILLIS. So, when the witnesses say that we must shut our minds to the position of big corporations, I am not an advocate of big business, nor have I a particular love for any phase of the economy. But when they say we must shut our eyes to that because they got war contracts you must nevertheless know that this law would come to their rescue as to their patents that were impaired. It would follow from this law that they would increase their huge earnings that they got under war contracts.
Mr. ROSE. It is as much for the large corporations as the small ones unless they just happened to make items covered by their patents during the war.
Mr. WILLIS. Then they could not make application for this.
Mr. ROSE. We have heard about the inventor being guaranteed by the patent contract of the right of getting a return from his patent or the opportunity to get it. We already had a law extending the period from 14 to 17 years in 1861. The public has a right under
that same contract. The public through the grant of a patent gives up the right of manufacture, excluding itself by the grant on the theory that it will have the right of free access so far as the invention is concerned when the patent expires. The public was injured the same as were patent owners by wartime restrictions. Many businesses had to close due to shortage of materials and manpower and not being protected by patents they cannot get any relief comparable to the proposed extension under these bills. So, they have a right too, at the termination of the patent, which right they have purchased by granting the monopoly in the first place, to have access to the invention at the termination of the 17 years.
Mr. CRUMPACKER. Let me go back to this big-corporation business. Isn't there a patent pooling agreement in existence among all the automobile manufacturers whereby a patent controlled by one is available to all?
Mr. ROSE. I am not familiar with the agreement under which patents are controlled to which you refer except by hearsay. I understand that the members of the National Automobile Chamber of Commerce do have an agreement by which after a limited period, possibly, 1 or 3 years, the other members of the chamber can utilize patented inventions of other members. But I do not know whether they make provision for royalty payments in case they do. That
is as much as I can say on it. I am only speaking from hearsay. I do not know the facts of that agreement.
Mr. ROGERS. You represent who?
Mr. ROSE. The American Patent Law Association.
Mr. ROGERS. But generally, patent lawyers' associations are opposed to these extensions?
Mr. ROSE. That is a fair statement. Yes, sir.
Mr. ROGERS. Is that based upon a study of the impossibility of administering law of this type or is it due to the fact that we have a number of people sitting around in patent offices retained by a greater class so far as fees are concerned than those retained by the ordinary inventor who only has a few patents. Does that have anything to do with the thinking of the attorneys?
Mr. ROSE. The passage of this bill would give us business. We are looking at it from the standpoint of the public interest. We have about 1,400 members in our association and I dare say 1,000 of them represent small inventors and small business.
Most of the attorneys do not represent big business because there is not that much big business. Our principal business, speaking of patent attorneys generally, is in obtaining patents rather than seeking to avoid patents.
If you represent a client that wants to manufacture something and you find a patent in the way you insist on determining whether that patent is valid and you might hope to determine it is invalid because it is on the other side of the fence.
But I think I can honestly say that the patent lawyers of the country are opposed to this legislation, not because it will benefit one type of client over the other, since we have both types in every office and we would have to take sides amongst our clients to adopt one position or the other as far as monetary return is concerned, but because we have felt that the policy established in 1861 is the correct one for the patent system of this country. The Congress has felt so
for 90 years and all extension bills providing for extension of patents because of paucity of return or losses caused by shortages of materials in war, have been rejected by the Patent Committee of the House. There have been many hearings. This is not a new thing at all. What I am saying has been said before by representatives of the American Patent Law Association and by many other legal groups in the country as well as representatives of manufacturing groups.
Mr. WILLIS. Was there similar legislation after World War I?
Mr. ROSE. There was a Veterans' Extension Act in 1928, but I do not know whether there was a proposal after World War I for the general extension of patents. There have been a number of bills. following World War II.
Mr. WILLIS. Of course, we did not have the type of control during World War I.
Mr. ROSE. The First World War was short in the impact on the national economy and there would have been little demand for it. It would only be a year or so.
Mr. BRYSON. It would be the feeling of your association and others that the enactment of legislation of this type would tend to impair or break down or weaken our world-famed patent system?
Mr. ROSE. We think it would. We do not think patent owners should be treated as a class for special privilege aside from the grant of the patent for which the Constitution has provided. We think patent owners should stand in the same rain as others stand in during war. They may be hurt a little more or a little less depending upon circumstances, but since the basic right granted by the patent, which is the right of exclusion, was not the thing that was curtailed by the wartime regulations and shortages, but only the opportunity to produce which was leveled against all industry alike, we feel that the patent owners should not be placed in a special class.
You might have two vending-machine businesses, one engaged in the manufacture of a patented machine and the other an unpatented machine. Assume they both closed up and went into the war effort filling war contracts. And then after the war they both started in business again. When the man who operates under a patent resumes normal business he still has that protection. The other man has to start up in a field of free economy and he may find it much harder. We feel that all of them are war casualties and that it is the fortunes of war and not a matter calling for special consideration of patent
I would like to touch briefly on those principles in H. R. 323 with regard to grant of a royalty-free license to the Government.
Mr. BRYSON. We would like to have some special comment in view of this textile man here.
Mr. ROSE. The association is opposed to the provision in H. R. 323, section 1 (a), that the granting of a license to the United States without payment of royalty or at a nominal royalty should be a reason for extension of the term of a patent. Such a proposal was the subject of H. R. 6607 in the Eighty-first Congress, which was opposed by the association at hearings held by this committee.
Many patent owners during the period of hostilities offered royaltyfree licenses to the Government. Others were requested to grant such licenses where the Defense Department wanted to get secondary sources of supply. In most of those cases of the latter type, in which