The colleges and universities regard the broad and flexible approach proposed in S. 1809 as greatly preferable to a policy of assigning to the Government all rights to all inventions at the time of contracting. We believe that in many cases inventions would not reach the civilian economy if reliance were placed on a kind of mail-order catalog of available new product ideas. Frequently aggressive search is required to find someone willing to devote the energy and the additional capital to the task. The goals of the Government agencies and of the universities would seem to be identical-to make available to the public and to the economy the fruits of univeristy research, as quickly and inexpensively as possible. With such an identity of goals, the question would seem to be simply one of determining who best can take the initiative. We believe that, given the safeguards and controls we have suggested, the universities are best equipped to perform this function. Senator JOHN L. MCCLELLAN, NICHOLS PRODUCTS CO., Moorestown, N.J., July 9, 1965. Chairman, Patents, Copyrights and Trademarks Subcommittee, Senate Office Building, Washington, D.C. DEAR SENATOR MCCLELLAN: The action of your subcommittee in holding hearings during the past month in connection with various legislative proposals having to do with the American patent system has come to the attention of the American Society of Inventors. We feel that we have a substantial stake in the continuation of a strong and effective patent system, and would like to take this opportunity to express our views. Much of the testimony presented before your subcommittee has been reviewed by us; and we feel that the statement presented by the national Small Business Association most nearly expresses the position of this organization. In essence, we favor the procedures prescribed by S. 1809 (McClellan bill) in determining the respective rights of the contractor and the Government in patents resulting from Government-sponsored research and development programs. The position of the individual inventor would be substantially preserved and strengthened by the addition of various features of S. 789 (Saltonstall bill) as amendments to S. 1809. Specifically, we feel that section 9 of S. 789, which would allow the inventor whose patent has been infringed in connection with Government procurement, to obtain early and inexpensive remedy by adminis trative means, is urgently needed. Individual inventors cannot afford the expense and delay of seeking remedy by way of suit against the Government in the Court of Claims. Section 11 of S. 789 would establish procedures and funds for the granting of awards to those whose inventions or discoveries were judged to be of outstanding merit. Various studies by the Department of Commerce and others have shown that the individual inventor is still a prolific source of important inventions and discoveries which contribute to the overall welfare. We believe that the recognition and rewards associated with an awards program would serve to stimulate creativity to the benefit of our national security and our society, and earnestly recommend that this provision of S. 789 be included in any overall patent legislation. S. 1047 (Williams bill), like section 9 of S. 789, would substantially strengthen the position of the inventor patent holder in that he and/or his licensees would not find his patents infringed as a matter of normal routine by suppliers to the Government. The provisions of S. 1047, which allows for unlicensed manufacture upon certification by the Secretary of Defense, we feel, would alleviate the likelihood of unreasonable allegations and demands by patent holders. We believe that the Government of the United States has an ethical and moral responsibility to deal fairly and honestly with all its citizens; and that it should take the leadership in respecting the rights implicit in the patent grant. For these reasons we vigorously urge that the substance of S. 1047 be incorporated in any forthcoming patent legislation. The American Society of Inventors appreciates the committee's courtesy in allowing it to submit these comments and respectfully requests that this statement is placed in the record of the hearings. Very truly yours, E. B. NICHOLS, Legislative Committee, American Society of Inventors. AMERICAN SOCIETY OF INVENTORS, DEAR MR. BRENNAN: Supplementing the statement of July 9 sent in by Mr. E. B. Nichols for our legislative committee, I am enclosing a proposed "Code of Creativity" for use by the Government agencies dealing with inventions. May I suggest that this be included in the transcript of the hearings following Mr. Nichols' statement, also the thoughts in this letter. Our society would like to make a further suggestion that hearings be held on the problems of the inventor and creative scientist in dealing with the Government. These problems are more important than the problems of patents equities between industry and Government. Thanking you for your cooperation in this matter, and the enclosed code will do much to improve the creativity and economic welfare of all concerned. Respectfully submitted. E. BURKE WILFORD, President. CODE FOR CREATIVITY FOR GOVERNMENT AGENCIES This code for creativity, designed primarily to give inventors and other creative scientists improved opportunity and incentive, will also promote progress in Government and industry. Economic growth and national defense will both benefit by revision of policies and methods for the purpose of encouraging creative workers and eliminating needless barriers in their paths. 1. The Government and industry can encourage economic growth by early recognition of inspirational ideas in the pioneering stages of development. 2. Analysis and recognition of the idea should include what is advantageous, as well as that which is not worked out and requires exploratory development. Direction of inventive thought into the right channels is very important. 3. The creator or inventor should be given a letter of status from the Government or development group about possibilities of production, so that he can develop solutions quickly and build a team or small organization. He should also not think too highly of his idea and work practically. 4. A portion of the expenses of every R. & D. contract or study should be used to have the inventor working with the development. If this is impossible, due to distance or personalities, the creative mind should make periodic visits to the development as a working consultant. Much leadtime is wasted by having the larger group in any development duplicate the work already done by the inventor and in some cases the development is spoiled by Government in-house development or a too long-haired approach. 5. If an idea is worthy of development, the inventor should be told when, how much, and at what point he can expect money from the R. & D. contract or a royalty on a test quantity. Waste of leadtime should be avoided in every stage of development. 6. Big and small industry working for the Government must be more receptive to the use of outside designs and systems, which are of a proprietary nature, and the status of the creative mind should be recognized when the development for production starts. 7. The patent and legal profession should see to it that all patent and proprietary data receive proper awards through administrative settlements, and Congress should provide a special fund out of which DOD can act quickly in these matters. Bureaucracy should treat the inventor with more personal attention, responsibility, and speed. 8. No patent legitimately issued and not assigned should be attacked by the Government lawyers on a basis of invalidity. If assigned, the inventor personally should share in the award and other solutions for blocks to inventions and adequate recognition of the inventors and creative scientists. 9. Nearly every country in the world has a more generous policy of pay for patents bearing on the national defense, and many countries have awards systems where the civilian and military personnel as well as the outstanding inventors and scientists receive reasonable sums of money to compensate them for their contributions beyond the call of duty. The U.S. Department of Defense has recommended that the Congress pass an awards bill patterned after the British system. 10. The Government should not hold any patents for contractors or Government employees except when they pay for the background work. Nonexclusive licenses suffice and incentive to develop civilian uses is needed to inspire creativity for economic growth. More liberal ways of dealing with inventors and creative scientists will be forthcoming by Government and industry through realistic code of creativity for R. & D. staffs of the Government. This will gradually cause industry to revise their thoughtless ways of treating inventors and bring better awards and royalty without so much legal delays and costs. Creativity will do more than any factor in raising the percentage of economic growth and is the best counter force to Parkinson's laws. AMERICAN SOCIETY FOR PHARMACOLOGY Hon. JOHN L. MCCLELLAN, DEAR SENATOR MCCLELLAN: The American Society for Pharmacology and Experimental Therapeutics is gravely concerned over the effects which pending legislation, in particular S. 1809, may have on research programs of university and other laboratories which are supported jointly by both governmental and nongovernmental funds. It is feared that unless the equities of all parties are properly recognized, the traditional collaboration of governmental, academic, and industrial organizations in research and development may be jeopardized, and progress for the benefit of the public thereby stifled. Accordingly, at the business meeting of our membership which was held at the University of Pennsylvania in Philadelphia on August 19, 1965, as a part of our fall meeting, the following resolution was passed which I was instructed to transmit to you: "The free enterprise system, the source of many benefits to the public health, is based in part on the concepts of patent rights and of the exclusive control of an invention for a limited period. Legislation defining the assignment of inventions made in laboratories and by scientists enjoying support from public funds should preserve wisely the principle of patent protection. The rights of the public to benefit fully from the fruits of public research must be maintained without destroying the basis of collaboration between governmental, industrial, academic, foundation, and other laboratories on which scientific developments depend." We should like to submit this resolution for the official record. GEORGE B. KOELLE, Ph. D., M.D., President. AUTOMOBILE MANUFACTURERS ASSOCIATION, INC., Senator JOHN L. MCCLELLAN, Detroit, Mich., June 14, 1965. Chairman, Subcommittee on Patents, Trademarks and Copyrights, U.S. Senate, Washington, D.C. DEAR SENATOR MCCLELLAN: The Patent Committee of the Automobile Manufacturers Association, Inc. appreciates this opportunity to express its views with regard to the Saltonstall bill S. 789, the McClellan bill, S. 1809, and the Long bill, S. 1899, all of which relate to Government patent policy. After careful study of each of these legislative proposals, the members of the committee voted to endorse your bill S. 1809, in preference to S. 789, as representing the most reasonable approach to a solution to the problem of determining property rights as between the Government and its contractors in inventions made through the expenditure of public funds. The committee strongly opposed S. 1899. In endorsing S. 1809, the committee requested that serious consideration be given to the following suggestions for amendment of the bill which they believe will benefit both Government and industry. In section 3 (a), to be consistent with the aforementioned definitions, it appears that the word "person" in line 16 should read "contractor". The latter term as it is defined in section 2(d) includes the former and makes the language consistent with the newly added provision of section 3(b) (3) which assures a license to the contractor in any event and represents an important consideration. As you are aware, American industry as a whole has not looked with favor on compulsory licensing such as is contemplated under section 3(b)(5). This provision could be rendered somewhat more palatable by the insertion in item (a) thereof of a minimum time interval, following the issuance of the patent such as 5 years, during which the patent owner could develop the invention to the point of practical application. This follows the existing philosophy of the NASA patent waiver regulations (title 14, pt. 1245, subpt. 1, Code of Federal Regulations). The provisions of section 3(b) (8) for forfeiture of any rights where the contractor was found to have knowingly withheld a prompt and full disclosure are indefinite and susceptible of misconstruction. The terms "prompt and full" are subjective in the context used since ideas and innovations are intangible and not readily identified as to time of conception. Such time varies depending upon whether the bare idea or the practical embodiment of the idea is referred to for determination. Similarly, the requirement for a full description makes such requirement dependent on how far the idea has been carried to practical embodiment. It should be noted in this regard that the term "disclosure" has been defined in section 2 to cover a complete description, it being understood that this means such description to the extent available so that the contractor does not have to go out on his own to complete the description. Accordingly, it is urged that the reference to "prompt and full" be deleted from line 4 and from lines 12 and 13. As regards the term "knowingly," this should be clarified to cover intent to avoid compliance with contract requirements. In the performance of any R. & D. contract, the contractor must always make a judgment as to whether an invention is reportable under the contract and when he does so in good faith on an informed basis, he is doing so knowingly. Accordingly, it is urged that line 12 be amended to insert" and in bad faith" after "knowingly". Section 3(b) (9) would be more properly rewritten as a separate section in the bill since it would be unusual to require contract language interpreting the language of the act. It is also urged that the language be clarified to assert a positive prohibition against depriving the owner of background patent rights without compensation. The taking of such rights without compensation is considered to be inequitable and contrary to basic legal principles. In section 4(a) (2), we again direct your attention to the practical impossibility to define or limit the application of the provision especially as it concerns the term "public welfare." It would be preferable to substitute for "welfare or safety" the phrase "safety or security and the inventions likely to result would be useful directly in such fields." Since the final paragraph of section 4(a) in lines 18 to 22 inclusive on page 7 of the bill paraphrases section 1(a)(4)(ii) of the Presidential memorandum and statement of policy issued October 10, 1963, there appears to be no reason for omitting the additional provision of that policy. This can readily be achieved by the insertion of the following in line 22 of the bill: "Greater rights may also be acquired by the contractor after the invention has been identified, where the invention when made in the course of or under the contract is not a primary object of the contract, provided the acquisition of such greater rights is consistent with the intent of this section 4(a) and is a necessary incenive to call forth private risk capital and expense to bring the invention to the point of practical application." In section 4(b), lines 7 through 11 on page 8 of the bill, the head of the executive agency involved is given the right to take title to any invention made even though the invention does not come within the scope of whatever standards for taking title have been set up in section 4(a) upon a finding that "the public interest would suffer" if the contractor got title. Such a proviso is totally without reason and is considered to be entirely improper and unfair. Under such conditions, a potential contractor would have absolutely no basis for believing that he would under any circumstances be entitled to ownership of an invention made under a contract. Personalities and politics would have full reign under such a legislative device. The committee recommends that lines 7 through 11 on page 8 in section 4(b) be deleted without substitution. This revision would also require that the reference to section 4(b) in line 14 on page 9 under section 5(a) (1) should likewise be stricken. To insure that any patent application filed by an agency head may be properly identified, it should be filed in the name of the inventor or inventors. This necessitates the insertion of the phrase "in the name of the inventor or inventors" in section 7 at line 21, page 13, after "invention" and in section 8(a) at line 18, page 14, after "application." It is further recommended that the last two sentences in section 8(a) beginning in line 23 on page 14 and all of section 8(b) be deleted in their entirety. It has ever been the philosophy of Government since the report and recommendations of the Attorney General to the President by Attorney General Tom C. Clark in 1947 that the public interest would best be served by opening Government-owned inventions to the general public and that licensing of such inventions for a royalty is not only difficult and likely to be inequitable but would necessitate detecting and prosecuting infringers. To the end that this bill would comply with the foregoing recommendations of the Attorney General, section 8(b) should be changed by the entire deletion of its present text in lines 3 to 11 on page 15 and substituting "Every citizen of the United States shall have a free right to practice the invention covered by any patent to which the U.S. Government acquires title." The members of the AMA Patent Committee desire to commend your efforts in presenting the bill, S. 1809, and specifically oppose the Long bill, S. 1899. Respectfully submitted. WILLIAM L. SCHERER, Secretary, Patent Committee. STATEMENT BY ANDREW J. BIEMILLER, DIRECTOR, DEPARTMENT OF LEGISLATION, AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS Mr. Chairman, my name is Andrew J. Biemiller. I am director of the Department of Legislation of the American Federation of Labor and Congress of Industrial Organizations. I appreciate this opportunity to set forth our position on legislation to clarify the patent policies of the U.S. Government. The basic principle which is the foundation of the AFL-CIO concern with the patent policies of the Federal Government is that all patents developed with public funds should be in the public domain. At present, this general principle is followed by most Federal agencies. With the major exceptions of Department of Defense contracts and National Aeronautics and Space Agency contracts, any patent issued on inventions made by a contractor with a Federal agency is issued to the U.S. Government. The contractor receives a nonexclusive, royalty-free license, and the patent is available for use by other firms through cross-licensing procedures. Federal Government expenditures in research and development have risen over the past 10 years from about $3 billion to $15 billion. This outlay is not likely to get any smaller in the foreseeable future and, indeed, is likely to rise still further. The Department of Defense is now spending R. & D. money at the rate of about $72 billion a year, and NASA alone hands out some $4 billion to $5 billion a year in R. & D. funds. The Federal Government spends at least two-thirds of the Nation's R. & D. money, and about 60 percent of these public funds go to 10 giant private corporations. The U.S. Government has made an enormous investment in research and development in defense and nondefense activities. Invention has become big business. The lonely inventor in his own private workshop is the exception today. Seventy percent of all patents are issued to corporations. Clearly there is a big public interest in the spending of public funds which bring profits and progress to private business. Furthermore, there is a serious danger that public funds will subsidize private monopoly. This will occur if the giant corporations hold exclusive patents on federally subsidized inventions. We oppose the use of public money to strengthen private monopoly. In 1947, Supreme Court Justice Tom Clark, then Attorney General of the United States issued a report containing this statement on the issue before this committee: "When patentable inventions are made in the course of performing a Government-financed contract for research and development, the public interest re |