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service. This is also true of automobile companies. For such companies, patents are an unmitigated nuisance. They force them to do basic research in new fields so as not to be frozen out of new technologies. The patents cost them large sums of money for attorneys, patent fees and litigation in scores of countries. The officials of these companies frankly admit that if the patent system did not exist they would need to do less R&D, they could manufacture anything they wished and that their success depends on their economic strength, marketing abilities and their worldwide distribution of sales and services.

I believe that the present practice (due to the efforts of the Antitrust Division) that many large corporations must license others at some reasonable rate should be codified into actual legislation, that any corporation that has more than, say, 25 percent of an industry and has a gross income of more than, say, $500,000,000 must issue non-exclusive licenses are reasonable rates.

I wish to emphasize most strongly that patents are a means for increasing competition both by limiting the power of our large corporations and by forcing competitors to improve upon the patents developed by others. Patents are the main means of rewarding the brave soul who is willing to do something different. In a country without patents, power would be completely in the hands of those who have large sums of money and the chance for an innovative small company to become large or strong would be essentially zero.

Innovators suffer today because of the disillusionment of our investors, particularly Wall Street, with R&D. They also suffer because of the high interest rates that money can now earn. When capital can earn 12 or 13 percent essentially without risk, and double itself in some six years, and when a rich investor can double his money without paying taxes in about ten years, why should anyone invest in some new high technology with its attendant risk? Society must recognize that invention and innovation is basically risky and that many new ventures must fail. No intelligent society could or should make use of all new inventions that are produced in a given period. The fact that an improvement exists does not justify the necessary scrapping of an old device or an old process which is still economically viable. Society must pick and choose and the inventor must have hope that he or she will sometimes be chosen. Without that possibility, our economy dies. The United States must produce an ever larger pie to be divided among its people if the standard of living is to rise. It cannot do this by conquering other nations or exploiting them. It does not have enough raw materials to simply sell in exchange for foreign goods. Farming involves only 5 percent of our population and certainly cannot support all of us. The only way we can raise our standard of living is to produce more goods and services for every hour of our work. This means that our technologies must always improve; we must produce ever better products and ever more efficient services, not only for ourselves but to trade with others. Unless we do so, our average standard of living shall fall and we shall become a second-class nation.

Attached is a curve of patents issued to domestic corporations, independent inventors and foreign corporations from 1954 to roughly the present time. Attached is a list of important innovations that were made outside of the laboratories of large corporations. Thank you.

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Atomic energy
Microwave technology
Inertial guidance
Mechanized wiring (Printed circuits)
Mercury dry cell
OCR (Optical Character Recognition)
Magnetic core memories
Vacuum tube
FM radio
Catalytic cracking of roleum
Jet engine
Fiber optics
Flotation glass
Magnetic recording
Oxygen steel-making process
Heterodyne radio
Shell molding
Shrink-proof knitted wear
Dacron polyester fiber "Terylene"
Automatic transmission
Continuous hot-strip rolling of steel
Power steering
Color photography
Air conditioning
Polaroid camera
Tungsten carbide
Velcro fasteners
TV tape recording
Continuous casting of metals
Foam rubber

It is interesting to note that the first ten inventions on the list above were developed under Government sponsorship and many of the others had a considerable amount of Government aid in their development.

Senator SCHMITT. Gentlemen, I must go cast my vote, and I thank you for your testimony. Thank you again. This has been a very useful set of hearings. We anticipate that there may even be

some more.

Thank you.

[Whereupon, at 12 noon, the hearing was adjourned.]

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