In consideration of this point of view, it is our hope that any patent regulation bill reported on by this committee will empower the Department of Health, Education, and Welfare to enter into an agreement with publicly supported health organizations for the equitable disposition of proprietary interests in discoveries arising out of research projects in which both were grantors. Thank you. Senator MCCLELLAN. In the last paragraph of your statement, what you would like to have is the Department of Health, Education, and Welfare authorized to grant exclusive license to any discovery made, where they have financed the research? Dr. WAKERLIN. The "they" means who, Mr. Chairman? Senator MCCLELLAN. The Federal Government or the Department of Health, Education, and Welfare-where they advance funds for research. If I understand this, you want the right reserved to that Department to make an agreement with publically supported health organizations for equitable disposition or for proprietary interests in discoveries "arising out of research projects in which both were grantors.' other words, to negotiate or work out an arrangement that would be satisfactory to both. Dr. WAKERLIN. Yes; that is right. " In Senator MCCLELLAN. In other words, leaving the discretion in the Department. That is what it amounts to. Dr. WAKERLIN. That is correct. Senator MCCLELLAN. As to how it will contract for or about proprietary rights where it provides all or some of the research funds. Dr. WAKERLIN. For example, if it should happen, which is not too common, that the American Heart Association contributed a major part of the research support for a given project which resulted in a particular discovery, and the Department of Health, Education, and Welfare, or more specifically the National Heart Institute contributed a minor part, the negotiations might result in the patent right being assigned to the American Heart Association, which would administer it in the public benefit, of course. Senator MCCLELLAN. In that respect, now, here is our difficulty, as I see it. It is impossible to write a statute with a formula in it that would cover each specific case or discovery or arrangement without leaving some discretion in the agency of Government involved. I do not know how we can do it, except to make a completely rigid Government take all, or that you set up guidelines whereby under those circumstances the Government may grant an exclusive license or grant the proprietary rights-but even where you set up guidelines a great measure of discretion must be reposed in the Government agency involved, as I see it. I do not know how you can write a rigid formula that would be applicable to each case. I just do not know how you can do it. Dr. WAKERLIN. Mr. Chairman, we do not seek a rigid formula. Senator MCCLELLAN. I know you do not. But I am saying while it would be desirable if it could be done, just to spell everything out in the statute, in the law itself, I do not believe it can be done. The further we go into this inquiry and study the subject, it seems to me as though it develops that it is just impossible to write a formula that would be applicable, that could say yes or no in each case. You have to leave a measure of discretion. Dr. WAKERLIN. That I would agree with, sir. This is what the American Heart Association is asking be written into the legislation. Senator MCCLELLAN. That is the way I interpreted the last paragraph of your statement-that you want some latitude, some discretion left in the Department of Health, Education, and Welfare. Dr. WAKERLIN. I might say that we have always found negotiations on other matters with the National Heart Institute and other portions of the Public Health Service and the Department of Health, Education, and Welfare most satisfactory, most congenial. Senator MCCLELLAN. In other words, you have had pleasant relations so far. Dr. WAKERLIN. All through the years, sir. Senator MCCLELLAN. You want to have it left that way. Dr. WAKERLIN. That is correct. Senator MCCLELLAN. That is what you are hoping for. Senator MCCLELLAN. Very well. Senator BURDICK. Your funds are derived from Federal sources and private sources? Dr. WAKERLIN. Our funds are derived from publicly contributed moneys, sir. In other words, we have a Heart Fund campaign which goes through the month of February, and certain contributions come in throughout the year. There are on occasion educational or community programs in the cardiovascular field where the National Heart Institute or the heart disease control program of the Public Health Service may contribute to the program and we contribute also. In that way, there is a certain amount of working together in terms of funds. Occasionally the American Heart Association-this is exceptional— may for a specific project, where it seems more desirable for one reason or another to have the funds expended by the American Heart Association, on behalf of Government has arranged for a grant from an agency of the Public Health Service. Thus, several years ago, the American Heart Association administered a travel grant from the National Heart Institute which enabled selected medical scientists to attend an important scientific meeting in Europe. Senator BURDICK. Can you give me any breakdown of what percentage of the funds come from voluntary contributions, what percentage of the funds come from Public Health Service, what percentage of your funds come from private industry? Dr. WAKERLIN. Money from the Public Health Service, sir, would be a fraction of 1 percent, and in some years it would be nothing. We receive contributions from industry-I cannot give you the exact percent. We have only one complaint about this, and that is we would like to have more funds contributed to us by industry. The major part of our funds come from individual citizens and in small amounts. Senator BURDICK. Would it be a fair statement to say that a major7 of your funds come from contributions of citizens? Dr. WAKERLIN. Yes, a very distinct majority, approaching 95 percent. Indeed, approximately $10 million was raised on Heart Sunday last February by door-to-door solicitation. Senator BURDICK. And notwithstanding the fact that close to 95 percent of the funds come from the public by way of dollar donations $5 donations, and maybe 5 percent from private industry, you would like to grant this exclusive license to them for discoveries? Dr. WAKERLIN. Only if this were necessary in order to be certain that a particular discovery was properly made available to the public. In other words, if the American Heart Association-on negotiation with the Department of Health, Education, and Welfare did receive proprietary rights, the association would administer the patent in the public interest, and if that required giving leadtime to a commercial organization, we hope we might have the right to grant an exclusive license for a limited period of time in order to make appropriate development of the discovery possible. For example, although penicillin was discovered in 1929, it became available only a good many years later when efforts were made to develop it, including pilot plant operation and then large-scale production. This required large sums of money and adequate facilities which are frequently available only to commercial organizations. There might be other patents which would not require this kind of leadtime or exclusive license. Senator BURDICK. Well, I share the chairman's concern to write a section in this law to do the things you want to do, with all the safeguards you would want, is a very difficult assignment. Dr. WAKERLIN. Well, I think that if the chairman's suggestion is adopted, that Department of Health, Education, and Welfare officials are given authority to negotiate with voluntary health agencies who are in the research support field when the appropriate occasion arisesthis would take care of the matter. Senator BURDICK. I have a little concern for the people of the United States who put their dimes and nickels in there, too. Dr. WAKERLIN. We do, too, sir. They are our lifeblood. Senator BURDICK. That constitutes almost 95 percent of your contributions you say. Dr. WAKERLIN. Yes sir. Senator BURDICK. That is all. Senator MCCLELLAN. Thank you very much. Mr. BRENNAN. Mr. Howard I Forman, president of the Philadelphia Patent Law Association. Senator MCCLELLAN. Very well, Mr. Forman. I note you have a prepared statement. It is of some length. Would you be willing to file it and let it be printed in the record and highlight it for us? Mr. FORMAN. Yes, sir. I will not refer to the statement as such today. Senator MCCLELLAN. Beg pardon? Mr. FORMAN. I would appreciate having my formal written statement filed in the record. Senator MCCLELLAN. It may be received and published in the record in full. 54-400-65-pt. 2- -6 (The prepared statement of Mr. Forman follows:) STATEMENT BY HOWARD I. FORMAN My name is Howard I. Forman. I am from Philadelphia, Pa., and my principal occupation is that of a patent attorney. I appear today in a dual capacity: (1) as president of the Philadelphia Patent Law Association; and (2) as a private citizen who, as a taxpayer and a longtime student and critic of our Government's patent policies, is vitally concerned with the effects which the bills under consideration may have upon the public welfare if enacted into law. With respect to my first capacity, I presume no statement of my qualifications is needed. As to my second role, I would like to briefly state my qualifications in an effort to establish justification for my claim to speak solely with the public interest in mind. I feel this is important because of a tendency of some persons in public life to belittle the views on Government patent policy matters of spokesmen who come from segments of industry or the patent profession, particularly if they happen to make their livelihood by serving industrial organizations not normally classified as small businesses. I have been engaged in the practice of patent law for over 20 years, the past 9 in the employ of a corporate chemical manufacturer whose only Government contract in that period has been the operation of a small research laboratory for the Army. Prior to my present position my entire working experience, covering a span of 23 years, has been as a Government employee, as a clerk, as a chemist, and as a patent attorney. In 7 of the past 9 years I have been a lecturer in political science and public administration at Temple University, in which two fields I have had conferred upon me, the earned degrrees of master of arts and doctor of philosophy by the University of Pennsylvania over 10 years ago. My doctoral dissertation, incidentally, has been published as a book entitled "Patents-Their Ownership and Administration by the United States GovernIt was based on my experiences while serving as consultant to the first Chairman of the Government Patents Board in 1950. Since then I have had published at least seven major articles, in law reviews, textbooks, or encyclopedias, on the subject of Government patent policy. A list of those publications is appended hereto. I am also the author of one other book and editor of two books dealing generally with patent law and practice, and author of approximately two dozen more law review articles on patents and related matters. My views on Government patent policy, incident to which I have long exhorted the Congress to adopt a number of the proposals which have been incorporated in the bills under consideration, are a matter of public record. They appear ment." not only in the publications on the attached list, but also in the records of the hearings on Government patent policy held before this same subcommittee (re S. 1084 and S. 1176) on May 31, 1961, and the hearings before Subcommittee No. 3 of the Committee on the Judiciary of the House of Representatives, on March 3, 1958, re House Joint Resolution 454 regarding the rights in inventions made by Government employees. I submit that, in view of my background of government, university, and industry experience, with the past 15 years having been extensively devoted to studying, writing and lecturing on Government patent policy, my personal comments and suggestions which follow deserve to be considered on their merits and only on their merits. I do not feel beholden to any industrial organization or professional association, be it my employer or any group in which I hold membership, to express views or recommendations which necessarily coincide with theirs. In stating my personal views I speak only for myself, and disclaim speaking for any other person or organization with whom or with which I may happen to be or have been affiliated. Reverting to my first capacity, I now wish to make a statement as president of the Philadelphia Patent Law Association, an organization of patent attorneys and agents whose active members reside or are employed in the eastern half of Pennsylvania, all of Delaware, and roughly the southern half of New Jersey. On behalf of that association's board of governors, it is my privilege to report on the following action which was taken at a meeting held in Philadelphia on May 27, 1965. This action, incidentally, followed a careful study and report of the four above-mentioned bills by the association's special subcommittee on Government patent policy. PHILADELPHIA PATENT LAW ASSOCIATION, We believe that the progress of the useful arts is most effectively advanced when private enterprise is made secure in the exclusive right to what it has created. We believe that the machinery of government is ill adapted to the economic and effective exploitation of inventions in the civil field, and should not, on principle, compete with private enterprise, nor favor one enterprise as against another. We believe, in short, that patent protection is an essential element of industrial progress, and that governmental ownership of patent rights leads to stagnation, because government, as such, is not in a position to enforce the protection which is a patent is intended to afford. With these principles in mind, we earnestly commend the terms of Senate bill 1047, which would bring to an end the unauthorized taking of patent rights by government, except when national security requires. With these principles in mind, we also earnestly commend the provisions of Senate bills 789 and 1809, but not in the precise form presently proposed. Rather, we very greatly hope that these two measures might be consolidated and then streamlined, in accordance with the accompanying recommendations of our committee on Government patent policy. If such a consolidation could be effected, the resulting system would be flexible enough to permit accommodation to widely varying circumstances. On the other hand it is our view that S. 1899 is unduly rigid in its terms, and that it would provide a less effective means for stimulating real advancement, since it would increase the number of instances in which the patent would be owned by government, and would therefore afford no real protection to a licensee. We authorize and request our president, Howard I. Forman, to present to the Senate Judiciary Committee, Subcommittee on Patents and Trademarks, the views expressed above and the specific recommendations of our committee on Government patent policy. The foregoing statement was adopted by the board of governors, at a meeting held on Thursday, May 27, 1965. Your WILSON OBERDORFER, Secretary. PHILADELPHIA PATENT LAW ASSOCIATION, committee on Government patent policy offers the following recommendations: S. 1047 (Williams, N.J.). This bill requires the Government to acquire a license before using a patented invention unless the Secretary of Defense certifies that the national security requires its use. We urge the board to favor the prompt enactment of this much needed legislation; in the hope that it will stop the wholesale emasculation of privately owned patent rights which has become a national scandal. S. 789 (Saltonstall); S. 1809 (McClellan) and S. 1899 (Long) are all directed to the handling of patent rights in inventions made under R. & D. contracts. We shall compare their more important provisions in what follows: We think that section 3 of S. 789, which provides that the Government shall always receive the free and nonexclusive right to use any invention made with the use of Government funds but shall take no greater right except under specified circumstances, is less likely to lead to unnecessary restrictions on creative industries than section 4 of S. 1809, which provides for the taking of broader rights (including title) unless certain specified circumstances justify exceptions. We think that section 7 of S. 789, which calls for renegotiation only when subsequent and unforeseen events requires it, is sounder in principle than those provisions of section 4 of S. 1809 which require renegotiation every time an invention is made. The taking of greater rights under S. 1809 should be conditioned upon a finding that the public interest will be better served by such taking, in addition to the finding presently required, that the Government has the right to take. We see no prospect of commercial exploitation of a patented invention owned by Government unless the Government grants an exclusive license, as provided by section 8 of S. 1809, but such a license is of little value unless it is implemented by the right to sue infringers. It seems anomalous to us that the Gov |