ernment of having to make a plurality of decisions which could and should have been made as a single determination at the inception of the contract. Section 5 is endorsed by APLA. Section 6 is endorsed in principle, except that it would be preferred that judicial review be before the District Court for the District of Columbia or the Court of Customs and Patent Appeals. Traditionally, patent matters have gone before either of the above tribunals. It is realized that the particular review required is directed to the matter of title and not to patentable merit and that the procedure in appeals from the Patent Office is an exception to the general rules for appeal from administrative decisions. However, the question of ownership of an invention posed by the provisions of S. 1809 is closely analogous to the question of originality often arising in interference proceedings in the Patent Office and it could cause confusion if different courts had jurisdiction over like questions arising in an application involved in both situations. Section 7 is also endorsed with a minor exception. It is believed that the words "if he concludes that such an invention may contain patentable subject matter" are redundant in view of the definition of invention in section 2 and may, if left in, give rise to an implication that the agency may acquire exclusive rights in unpatentable subject matter. Since the entire purpose of the bill is directed toward a Government patent policy, any implication relating to unpatentable matter should be avoided. Such material would come within the purview of the "data" clauses of Government contracts. The first sentence of section 8(a) is superfluous since no law or Patent Office rule exists to prevent the filing of a patent application by the agency heads providing it is done in the name of the inventor. In addition, this sentence contains the same latent ambiguity shown in section 7 with respect to inventions. The second sentence of section 8(a) is believed to raise an unnecessary constitutional problem in requiring patents to be issued to the agency head per se instead of to the inventor or his assignee. The sentence is also superfluous since assignments from inventors or mesne assignments from the contractor may, where appropriate, be compelled by the agency head. The agency head is further protected by 35 U.S.C. 118. If either of these existing procedures is followed, the record made in the Patent Office will result in a patent that on its face will disclose both the inventor and the fact that the Government has title. With respect to the broad controversy between proponents of the "title" theory and those of the "license" theory, APLA believes that the statement of policy set forth in the beginning of this presentation is as clear and concise a representation of its position as can be made. This subcommittee has heard many articulate witnesses on both sides over the past 4 years. Included among those witnesses was W. Brown Morton, Jr., now president of the APLA. It is hoped that further argument will prove unnecessary and that the positive suggestions set forth here will be of value to the subcommittee in reporting a bill acceptable to APLA that will also commend itself to the Congress. AMERICAN PATENT LAW ASSOCIATION, Senator JOHN L. MCCLELLAN, U.S. Senate, New Senate Office Building, DEAR SENATOR MCCLELLAN: I should like to express my thanks personally and on behalf of the association for the opportunity afforded me of testifying in support of the association point of view concerning S. 1809. The thoughtful and informed attention given the witnesses appearing before your subcommittee does much to renew my sometimes wavering faith in the soundness of our legislative process. While I had completed at least a statement of the essential points I wished to stress in support of the association position, since my elaboration of a point with respect to the perhaps overstressed "cancer cure" hypothetical situation was cut a little short by a rollcall, I am taking this opportunity to carry the matter a little further. You will recall that in my oral testimony I stressed the importance of distinguishing at all times between the situations in which the Government could plainly justify taking title to an invention, including taking title to any patent rights covering, or potentially covering, the invention and the actual ownership and exercise by the Government of right to exclude others stemming from those patents. I had pointed out that certainly it could not be contended that an invention or any rights thereto were immune from the operation of eminent domain, any more than a man's farm is, but I stressed that it was an essential of our political and social system that the exercise of eminent domain be for truly governmental purposes and not simply a strong-arm method of setting the Government up in a commercial enterprise. Certainly if the National Institutes of Health, for example, were to contract for research intended to produce a cancer cure, it might logically require the dedication of the invention of such a cure, if made during that research, to the free use of the public. Let us suppose that the state of the art, as it may, leads one to surmise that cancer is the result of some virus action. Let us suppose further that one or two of our drug companies have, with respect of virus regulating drugs in other than cancer-producing areas, a substantial background of past experience and patents. Certainly it would be good sense for NIH to spend its research dollars, in part at least, in support of cancer virus investigations, in these well-staffed and well-prepared virus laboratories. Does it follow that all inventions may flow from that research in the areas of non-cancer-causing virus control, which are incidentally made, should also be dedicated to the public because the laboratories had received unquestioned assistance from NIH? I think clearly not. Now to come directly to the point, let us suppose that because of NIH policy insisting upon such rights beyond the cancer program, these drug companies refused the NIH money but nevertheless, in the course of their normal work, a "windfall" invention is made, with all private funds, of a cancer cure. If the expenditure of NIH funds for the discovery and public dedication of a cancer cure was justified as a proper governmental activity, does it not necessarily follow that the Government would be justified in taking over the privately invented cancer cure under the power of eminent domain, paying, of course, just compensation therefor? Would anyone assert that although the cancer cure might properly be taken from private hands, that the Government had any justification for taking ordinary inventions made simultaneously in the private program which resulted in the cancer cure? We come back, therefore, to the situation that, as the association has repeatedly said, the patent system is premised upon the proposition that it affords the best means of promoting the progress of the useful arts in a private economy, just as does the private ownership of farms best promote agriculture in such an economy. Arguments which truly relate to the propriety of Government acquisition of private property by eminent domain do not belong in, and should not confuse the development of, a sound policy and we believe a private patent policy for procuring the exploitation of inventions arising in Government research in the commercial area. I have taken the liberty of sending a copy of this letter directly to Senator Scott in view of the interest he exhibited at the hearing. Respectfully, W. BROWN MORTON, Jr., President. Senator MCCLELLAN. The committee will recess until 9:30 in the morning. We hope to conclude with what we have scheduled before noon. If we can get through 30 or 40 minutes before noon, that much the better. (Whereupon, at 3:20 p.m. the subcommittee was recessed, to reconvene at 9:30a.m., Wednesday, July 7, 1965.) GOVERNMENT PATENT POLICY WEDNESDAY, JULY 7, 1965 U.S. SENATE, SUBCOMMITTEE ON PATENTS, TRADEMARKS, AND COPYRIGHTS OF THE COMMITTEE ON THE JUDICIARY, Washington, D.C. The subcommittee met, pursuant to recess, at 9:30 a.m., in room 3302, New Senate Office Building, Senator John L. McCellan (chairman of the subcommittee) presiding. Present: Senators McClellan (presiding) and Burdick. Also present: Thomas C. Brennan, chief counsel, Edd N. Williams, Jr., assistant counsel, and Stephen G. Haaser, chief clerk, Subcommittee on Patents, Trademarks, and Copyrights; Horace L. Flurry, representing Senator Hart. Senator MCCLELLAN (presiding). The subcommittee will come to order. Who is our first witness for today? Mr. BRENNAN. Dr. Charles Price, president of the American Chemical Society. Senator MCCLELLAN. Come around please, Doctor. Will you identify yourself for the record? I notice you have an associate with you. Will you identify him also? STATEMENT OF DR. CHARLES C. PRICE, PRESIDENT, AMERICAN CHEMICAL SOCIETY; ACCOMPANIED BY B. R. STANERSON, EXECUTIVE SECRETARY, AMERICAN CHEMICAL SOCIETY Dr. PRICE. I am Charles Price. I am chairman of the department of chemistry at the University of Pennsylvania. I am appearing here today in my capacity as president of the American Chemical Society. With me here is Dr. B. R. Stanerson, who is the executive secretary of the American Chemical Society. Senator MCCLELLAN. Very well, gentlemen. You are welcome. We are glad to have your advice and views regarding the pending legislation. Dr. PRICE. We are very pleased to be able to be with you. We have submitted to you a written statement which I would like to summarize and comment on. Senator MCCLELLAN. All right. It may be printed in the record in full and you may summarize it. Dr. PRICE. I would like to start by mentioning that our society was founded in 1876, and it is the largest membership organization devoted to a single science in the entire world. It now operates on an annual budget of $17 million. It was incorporated in 1937 by an act of Congress of the United States under Public Law 358 and signed into law by President Roosevelt. Our interest in presenting views on the subject before the committee today might be made clear by quoting the purposes of the society from our charter. These are, "that the objects of the incorportion shall be to encourage in the broadest and most liberal manner the advancement of chemistry in all its branches; the promotion of research in chemical science and industry; the improvement of the qualifications and usefulness of chemists through high standards of professional ethics, education, and attainments; the increase and diffusion of chemical knowledge; and by its meetings, professional contacts, reports, papers, discussions, and publications, to promote scientific interests and inquiry, thereby fostering public welfare and education, aiding the development of our country's industries, and adding to the material prosperity and happiness of our people.' This is a quotation from the incorporation. I personally support this mission of the American Chemical Society to help chemistry serve the American people and improve the general welfare. I am sure that the general objectives of everyone participating in these hearings are undoubtedly similar, whether they are speaking for themselves or representing large organizations. I think all of us want the United States to utilize its discoveries for the greatest benefit of its people. But there are obviously honest differences of opinion as to the best way to accomplish this general objective. And we in the society have reviewed the proposed legislation which is before the subcommittee, and we would like to comment a little later specifically about S. 1809, sponsored by Senator McClellan; S. 1899, introduced by Senator Long; and S. 789, introduced by Senator Saltonstall. We might say to begin with that we find the first two of these generally acceptable, but do not find that introduced by Senator Long acceptable in our view. I would like to just say a word or two in the introduction about the interest of chemists in patents. It seems to me from what has been said at these hearings and elsewhere that there are certain misunderstandings about the main purpose and significance of a patent. I would like to just interject that patents are of great interest to chemists. There are more chemical patents every year than there are any other single branch-I think some 22 percent of the patents are issued for chemical processes or products. As the Constitution states, the purpose of the patents system is to "promote the progress of science and the useful arts." This is accomplished by encouraging the creation of useful innovations, by providing an environment of limited protection to the first to create new ideas, so that the inventor is encouraged to develop the bare idea to a useful product and to disclose it to the public, and to have it manufactured and sold. A patentable technical development is, by definition, one which is creative, new, and useful. Inventions actually represent a small fraction of the total results of research and development. Of that $15 billion which the Government helps with in the area of research and development, only a small fraction actually results in patented inventions. Much of the basic scientific work which is produced is not patentable, but is made available by publication in scientific journals, such as the many publications by the American Chemical Society. I might just indicate, for example, that in Chemical Abstracts, which is one of the major publications of the society, which abstracts all scientific publications, both journals and patents, there are many more scientific papers published every year than there are scientific patents, even in the area of chemistry. Before an invention is made, a certain amount of research and development usually precedes it. In some cases, the inventor performed his own research, developed his invention, applied for his own patent. And to some degree this is still the practice. However, research and development has gotten so costly, particularly in modern scientific areas, that the individual inventor is not able to carry on this kind of work and turns for financial support for his work to such institutions as universities, research foundations, industry, or Government laboratories. Now, the traditional pattern has been for the potential inventor to enter into an agreement on the assignment of the patent issued to the inventor but financed by an employer. This is true even of a college professor like myself in some instances, and it is certainly true of inventors who work for other institutions. There conventionally is no difficulty about such agreements when all the financial support of developing an invention comes from one source any one of those previously mentioned. As might be expected, differences of opinion do occur when research and development are shared by more than one source. This is the cause of the society's concern over the proposed legislation on Federal patent policy and its impact on the utilization of scientific discovery for the benefit of the public. Now, in order for the United States to maintain its preeminence in scientific and technological developments, Congress, in our opinion, properly has approved large expenditures for research and development in recent years. This program has been of such magnitude that Government agencies and their employees alone could not do the entire job. It has been necessary to ask academic institutions, research foundations, industry, and newly created mission-oriented organizations to assist. The question of who is entitled to patent rights resulting from such programs is indeed complex, so complex that we believe a flexible system of handling cases should be provided for in any legislation. We feel that the rigidity called for by S. 1899 would not result in the greatest usefulness and benefit to the general public. |