PROMOTE PROGRESS USEFUL ARTS

90TH CONGRESS 1 A DOCUMENT1st Session f SENATE No. 5

TO PROMOTE THE PROGRESS OFUSEFUL ARTS

REPORT OFTHE PRESIDENT'S COMMISSION

ON TIHE

PATENT SYSTEM

COMMITTEE ON THE JUDICIARYUNITED STATES SENATE

SUBCOMMITTEE ONPATENTS, TRADEMARKS, AND COPYRIGHTS

F'mtI'AI.Y 2, 1967.--Ordered to be printed, with illustrations

U.S. (;OVE'NRMFNT PRINTING OFFICE

"I-.I II--"'

71-181 WASIHIN(GTON 19>;7

COMMITTEE ON THE JUDICIARYJAMES O. EASTLAND, Mississippi, Chairman

JOHN L. McCLELLAN, ArkansasSAM J. ERVIN, JR., North CarolinaTHOMAS J. DODD, ConnecticutPHILIP A. HART, MichiganEDWARD V. LONG, MissouriEDWARD M. KENNEDY, MassachusettsBIRCH BAYH, IndianaQUENTIN N. BURDICK, North DakotaJOSEPH D. TYDINGS, MarylandGEORGE A SMATHERS, Florida

EVERETT McKINLEY DIRKSEN, IllinoisROMAN L. HRUSKA, NebraskaHIRAM L. FONG, HawaiiHUGH SCOTT, PennsylvaniaSTROM THURMOND, South Carolina

SUBCOMMITTEE ON PATENTS, TRADEMARKS, AND COPYRIGHTS

JOHN L. McCLE,LIAN, Arkansas, ChairmanPIIILIP A. IART, MichiganQUENTIN N. BURDICK, North Dakota

HUGH SCOTT, PennsylvaniaIIRAM L. FONG, Hawaii

THOMAS C. BRENNAN, Chief Counael

SENATE RESOLUTION 52

Submitted by Mr. McClellan of ArkansasIN THE SENATE OF THE UNITED STATES,

Agreed to Febrlary 2, 1967.Resolved, That the report of the President's Commission on the

Patent S'ystem, entitled "To Promote the Progress of Useful Arts", heprinted with illustrations as a Senate document.

SEC. 2. There shall )e printed three thousand additional copies ofsucl docuirnenlt for the use of the C(ommittee on the Judiciary.

Attest:FRANCIS R. VALIEO,

Secretary.I!

FOREWORD

The Senate Subcommittee on Patents, Trademarks, and Copyrightshas been engaged in recent years in a review of our patent system.As part of this undertaking the subcommittee published a series of 30studies exploring the scientific, economic, and legal aspects of thepatent system. To assist in evaluating various proposals to institutechanges, the subcommittee obtained the views of industry, inventors,economists, and the patent bar.On the basis of its study the subcommittee concluded in 1965 that

while "the objectives of the patent system are as valid today as at itsinception,"' there "has not been adequate adjustment of our patentlaws and procedures to reflect changing conditions and to respond tothe critical problems confronting the Patent Office." I, therefore,welcomed President Johnson's decision to establish the President'sCommission on the Patent System. This Commission, composed ofdistinguished public and Government members, has rendered a

significant service. It has undertaken a comprehensive survey ofour patent laws and procedures and addressed itself to the criticall)roblems which demand solutions. Its unanimous conclusion thatthe patent system continues to provide an essential incentive for theconduct of research and the investment of capital is in accord withthe findings of the subcommittee. Its concern with the long pendencyof patent applications and the great uncertainty and considerableeXl)ense involved in the enforcement of patents is shared by thesubcommittee.The 35 recommendations of the Commission deserve the careful

consideration of the Congress, the Patent Office, and all Americans\who desire to see a stronger patent system. In order to provide forat wider dissemination of the report, it hias been published as a Senatedocument. Of course, the views expressed are solely those of the('oImmission andt do not necessarily reflect the opinions of the Sub-(ommitittee on Patents, Trademlarks, and Copyrights. Its publica-tion, however, does testify to my belief that it represents a valuablecontribution toward the iml)rovemlent of the U.S. patent system.

JOHN L. MCCLELLAN,(Chairmann., Silbcommittee on Patents, Tradnemarks, and Copyr'ights.

III

"To PromoteThe Progress of

...Useful Arts"

In An Age of Exploding Technology

REPORT OFTHE PRESIDENTS COMMISSION

ON THE PATENT SYSTEM

WASHINGTON, D.C.1966

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TO PROMOTE THE PROGRESS OF USEFUL ARTS

November 17, 1966.The PRESIDENT,The White House,Washington, D.C.DEAR MR. PRESIDENT:

We have the honor to present the report of the President'sCommission on the Patent System.

Your Commission was established by Executive Order No.11215, on April 8, 1965, and the membership was announced onJuly 23, 1965. The Commission has held thirteen meetings,beginning August 15, 1965, each meeting lasting from one tofour days, for a total of thirty-one days.

The recommendations conveyed in this report have beendeveloped through study and discussion by the members of theCommission and, as a whole, represent their combined judgmentand general agreement. The recommendations, in all of theirdetails, however, do not necessarily bear the endorsement ofevery member.

Background material prepared by the staff and the Com-mission, reflecting more extensively the considerations taken intoaccount in the development of these recommendations, is beingcompleted and will be transmitted as a supplement to the report.

The principal objectives of the Commission's study are setforth in the Introduction. To the extent that the Commission'srecommendations promote the attainment of these objectives,they will assist in furthering the mission of the United Statespatent system-to promote the progress of useful arts, advancethe standard of living everywhere, and contribute toward worldpeace and tranquillity.

One point, Mr. President, merits emphasis. The accompany-ing recommendations should not be regarded as a catalogue of

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discrete remedies. The report considers the patent system as awhole and contemplates revision by means of a coordinated planof interrelated recommendations.

The recommended changes taken together, we respectfullysuggest, will strengthen the patent system, and thus will assistin the attainment of the Nation's domestic and internationalgoals in today's rapidly changing environment.

Members of the Commission deeply appreciate the responsi-bility assigned to them and offer their continued cooperation.

Respectfully yours,HARRY HUNTT RANSOMSIMON H. RIFKIND

Cochairmen.JOHN BARDEENJAMES W. BIRKENSTOCKEDWARD J. BRENNERCHARLES F. BROWNHOWARD W. CLEMENTEUGENL J. DAVIDSONJOHN M. MALLOYHOWARD K. NASONSIDNEY NEUMANBERNARD OLIVERHORTON GUYFORD STEVERCHARLES B. THORNTON

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THE PRESIDENT'S COMMISSION ON THEPATENT SYSTEMPublic Members

JOHN BARDEENJAMES W. BIRKENSTOCKHOWARD W. CLEMENTHOWARD K. NASONSIDNEY NEUMANBERNARD OLIVER

HARRY HUNTT RANSOM,Cochairman

SIMON H. RIFKIND,Cochairman

HORTON GUYFORD STEVERCHARLES B. THORNTON

Government Members

Secretary of Commerce JOHN T. CONNOREDWARD J. BRENNER, Designee

Secretary of Defense ROBERT S. MCNAMARAJOHN M. MALLOY, Designee

Small Business Administrator BERNARD L. BOUTINEUGENE J. DAVIDSON, Designee

National Science Foundation Director LELAND J. HAWORTHCHARLES F. BROWN, Designee

Official Observers

Secretary of State DEAN RUSKEUGENE M. BRADERMAN, Designee

Office of Sfcience and Technology Director DONALD F. HORNIGDAVID Z. BECKLER, Designee

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STAFF OF THE COMMISSIONALFRED C. MARMORExecutive Secretary

FRANK CACCIAPAGLIA, Jr.Administrative Assistant

CARL S. KOENIGCounsel

Research Assistants

Louis O. MAASSELJ. ADDISON MATHEWSIRVING R. PELLMAN

Secretarial and Clerical Assistants

JANIS A. EDWARDSFRANCFEC A. HUNTER

Editorial Consultant

GORDON L. HOUGH

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TO PROMOTE THE PROGRESS OF USEFULJ ARTS

ACKNOWLEDGMENTSThe Commission wishes to record its sincere gratitude for

the generous efforts contributed by its staff, and by many indi-viduals and organizations from both government and privatelife, which have been of inestimable value to the Commission indischarging its responsibilities.

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CONTENTSPage

Letter of Transmittal .----.-------------------------- iiNames of Commission Members and Observers -... ivNames of Staff Members ----------.-.. ---------------.-- vAcknowledgements .---------------------------------___- viINTRODUCTION..............-.-----1RECOMMENDATIONS----- -------------------.--..-- 5

Patentability of InventionsI Prior Art ----------_ --------..5----_ 5II Preliminary Application...___-8..8III Exceptions to Prior Art----------------9---_9IV Patentable Subject Matter -----.-_-----.. 12

Application Filing and ExaminationV Assignee Filing and Joinder of Inventors 14VI Claim for Priority Da-te.. 16VII Publication ---------------------------._ 16VIII Continuing Applications--------------------- 17IX Standby Optional Deferred Examination-..19X Burden of Persuasion ............. 22XI Citation Period -------------_-------_-_--- 23XII Quality Control-...------------..----------- 24

Direct Review of Patent Office DecisionsXIII Presumption of Correctness 26XIV Review by Court of Appeals ..--------------- 26

Procedure for Amending and Cancelling PatentsXV Cancellation --------------------...------_ 29XVI Reissue ----.. 30

Liability and EnforcementXVII Interim Liability-... -------.--------------- 32XVIII Term of Patent --------------------------- 33XIX Secrecy Order --.-----------------------..- 34XX Terminal Disclaimer 35XXI Importation--....----___ .____.--_35

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Patent Right Transferability- ..---.-.-

In Rein Invalidity- ..--..-......._Civil Commissioners ----------------------Expedited Procedure for Limited Claims-Statutory Advisory CouncilPatent Office OperationsPatent Office Financing ------Propriety of Final RejectionClassification and InformationInformation Dissemination- -

Transition -.....Government Patent Policy --

International ActionInventor's Certificates---Term Measurement ------.__Universal Patent System - - -.

Retrieval-___.

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INTRODUCTIONThe United States patent system is an institution as old as

the Nation itself. Stemming from a Constitutional mandate,patent acts were passed in 1790, 1793, and 1836. The Act of1836 established the pattern for our present system by provid-ing statutory criteria for the issuance of patents and requiringthe Patent Office to examine applications for conformancethereto. Although the law has been amended on numerous oc-casions-and even rewritten twice since 1836--no basic changeshave been made in its general character in the succeeding onehundred and thirty years.

However, during this period of few statutory changes,major developments have occurred in the social and economiccharacter of the country. The United States has undergone adramatic transformation, creating and utilizing an enormouslycomplex technology, to emerge as the world's most productiveindustrial community.

In the agricultural economy of 1836, individuals who en-gaged in inventive activity usually did so alone, and on their owninitiative. Such activity still continues. The lone, independentinventor, even in this day of sophisticated technology, still con-tributes most importantly to the useful arts. But the field is nolonger his alone. Organized research is carrying a steadily in-creasing share of the task of exploration.

Research and development are now commanding a scale ofexpenditure which is possible only because of the application, ofthe resources of government, private industry and institutions: oflearning.

Scientific and technical information is being generated andmade available to the public in an ever growing torrent. What

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the patent fraternity calls prior art is growing so fast that it isbecoming almost unmanageable by conventional means of stor-age and retrieval. Disclosures are becoming increasingly com-plex, and many are in foreign languages.

The trend in the number of patent applications is clearlyupward and their subject matter is increasing in sophisticationand complexity. The current backlog of pending applications isover 200,000, the average period of pendency being two and one-half years from filing to final disposition. However, a substan-tial number of applications have a period of pendency of five toten years or more.

All of these factors have cooperated to make it exceedinglydifficult for the patent examiner to screen what is truly noveland what is truly inventive.

Agreeing that the patent system has in the past performedwell its Constitutional mandate "to promote the progress of . . .

useful arts," the Commission asked itself: What is the basicworth of a patent system in the context of present day condi-tions? The members of the Commission unanimously agreedthat a patent system today is capable of continuing to providean incentive to research, development, and innovation. Theyhave discovered no practical substitute for the unique service itrenders.

First, a patent system provides an incentive to invent byoffering the possibility of reward to the inventor and to those whosupport him. This prospect encourages the expenditure of timeand private risk capital in research and development efforts.

Second, and complementary to the first, a patent systemstimulates the investment of additional capital needed for thefurther development and marketing of the invention. In return;the patent owner is given the right, for a limited period, to ex:elude others from making, using, or selling the invented productor process.

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TO PROMOTE THE PIOGRESS O' USEFUL ARTS

Third, by affording protection, a patent system encouragesearly public disclosure of technological information, some ofwhich might otherwise be kept secret. Early disclosure reducesthe likelihood of duplication of effort by others and provides abasis for further advances in the technology involved.

Fourth, a patent system promotes the beneficial exchange ofproducts, services, and technological information across nationalboundaries by providing protection for industrial property offoreign nationals.

Having satisfied itself as to the worth of a patent system,the Commission then undertook an extensive analysis of themany studies of U.S. and foreign patent systems. The Com-mission also sought and received additional views, criticismsand suggestions from numerous sources, including business andtrade associations, individual patent practitioners, patent lawassociations, groups and individuals within the Patent Office,educators, inventors, scientists, businessmen, and other inter-ested parties. From these sources the Commission identifiednumerous broad areas of concern.

Recognizing that it could not consider adequately all thematters of potential concern in the limited period of its existence,the Commission selected a number of areas with which it felt itcould deal most effectively. In making this choice, the Commis-sion took into account several factors, including its own member-ship, present investigations by other executive and legislativegroups, and the potential contribution the Commission couldmake in any given area.

Within the boundaries thus defined, the Commission identi-fied the following objectives:

1. To raise the quality and reliability of the U.S.patent.

2. To shorten the period of pendency of a patent ap-plication from filing to final disposition by thePatent Office.

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TO PRIOMlOTE 'rI l; PRO(GRESS OF USEFUL ARTS

3. To accelerate the public disclosure of technologicaladvances.

4. To reduce the expense of obtaining and litigatinga patent.

5. To make U.S. patent practice more compatible withthat of other major countries, wherever consistentwith the objectives of the U.S. patent system.

6. To prepare the patent system to cope with the ex-ploding technology foreseeable in the decadesahead.

Many of the problems related to these objectives are inter-twined. An attempt to solve or reduce a problem at one pointof the system can expose or create a dislocation at another.Separate and uncoordinated solutions to individual problemswould yield a gerrymandered patent system full of internalcontradictions and less efficient than the one we now have. Itis this circumstance--not any claim to superior wisdom-whichled the Commission to propose the following changes, all as partof one interrelated and coherent plan.

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TO PROMOTE TIHE PRIOGRESS OF USEFUL ARTS

RECOMMENDATIONSPatentability of Inventions

IThe following recommendation would result in several

significant changes in present practice: (a) when two or morepersons separately apply for a patent on the same invention, thepatent would issue to the one who is FIRST TO FILE hisapplication; (b) there would be no grace period; (c) foreignknowledge, use and sale would be included as prior art; and(d) there would be revised criteria for the form of prior art.

Prior art shall comprise any information,known to the public, or made available to thepublic by means of disclosure in tangible formor by use or placing on sale, anywhere in theworld, prior to the effective filing date of theapplication.A disclosure in a U.S. patent or published com-plete application shall constitute prior art as ofits effective (United States or foreign) filingdate.

(a) In a first to file system, the respective dates of "conception"and "reduction to practice" of the invention, presently of greatimportance in resolving contested priority for an inventionclaimed in two or more pending applications or patents, nolonger would be considered. Instead, the earliest effective filingdate would determine the question of priority. This necessarilyfollows from the provision that the disclosure in a patent orpublished complete application shall constitute prior art as ofits effective filing date. Interference proceedings thus wouldbe abolished.~~743-185~4O-67-3~~574-184 0 67 3

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Important considerations dictate this departure from ourpresent practice. A first to file system will: encourage promptdisclosure of newly discovered technology; substitute for thedelays and expense of interference proceedings a fair andinexpensive means by which an inventor can establish priority;and bring U.S. practice into harmony with that prevailing inalmost all other industrial nations.

The Commission believes it is as equitable to grant a patentto the first to file as to the one who wins an interference. Manycircumstances may determine the winner in either case. Butthe first to file is more apt to be the inventor who first ap-preciated the worth of the invention and promptly acted to makethe invention available to the public.(b) Regardless of the time the invention was made, any rele-vant information, known or made available to the public, ante-'dating the effective filing date of the first application containingthe subject matter on which the claim to such invention is based,would constitute prior art as to such claim. Even the applicant'sown earlier disclosure would bar the grant of a patent if madepublic before the earliest effective filing date to which the par-ticular claim was entitled. As a result, there would be no graceperiod, and the question of whether the invention is obviouswould be considered as of the filing date, rather than as of thetime the invention was made.

This change would speed the examination procedure in thePatent Office by eliminating the time-consuming consideration ofaffidavits presently submitted to establish an earlier date ofinvention and thus overcome prima facie prior art. Also, theapplicant no longer would need to maintain extensive recordsnow required to corroborate such affidavits, or thereafter, toprove his actual date of invention in an infringement suit.

Greater international uniformity would also be achieved,since the present grace period has no counterpart in most foreignsystems. Further, inventors no longer would forfeit theirforeign patent rights through disclosures made in reliance onthe U.S. grace period.6

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(c) Foreign knowledge, use and sale would be included asprior art. Present arbitrary geographical distinctions would beeliminated. The same high standard of proof now required forshowing domestic public knowledge, use or sale would also beapplied to such foreign prior art.

The anomaly of excluding, from prior art, public knowledge,use or sale in a border town of Mexico or Canada, and includingthe same kind of disclosure in Alaska or Hawaii, would beeliminated.

This change would prevent the granting of valid U.S.patents on inventions which would be unpatentable abroad,because of long use or sale there. It would be another steptoward conformity with European patent laws and wouldpromote acceptance of a common definition of universal prior art,Additionally, it would promote the establishment of internationalscientific data banks, thus eliminating one of the barriers tothe useful exchange of search results among patent offices ofvarious countries.

(d) "Printing," presently a technical requirement in certaincircumstances, would no longer be necessary for a publication toconstitute prior art. Instead, any information made available tothe public in a tangible (non-oral) form, prior to the effectivefiling date, could so serve.

Such a change would establish as a logical and modernstandard of the form of prior art: that either publicly knownor made available to the public in a preservable form. It shouldend present disputes and avoid future controversy, by acceptingas prior art typewritten copy, microfilm, computer print-out, orany other tangible expression of technological data, made avail-able to the public.

(e) The disclosure in a patent or published complete applicationwould have, as its effective filing date, the date of its earliestfiling in the United States or a foreign country. This wouldresolve present uncertainty caused by conflicting court decisions.

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T'() PIOMIOTI TH IIPHO("(;I'.SS O(F USIFUI ATS

This also would avoid an anomaly whereby two applications,with the same effective filing date, would have different dates forthe purpose of constituting prior art where one is based upon a

foreign application. Further, it would appear to be a necessaryadjunct of a first to file system, to prevent two patents fromissuing on the same invention.

To substitute for the present grace period, a first to filesystem should include some technique for allowing the inventorto seek support or test his invention in the marketplace. It alsoshould encourage the free discussion of new discoveries in theacademic and scientific communities. To meet these needs, a

preliminary application, an "instant" form of disclosure to thePatent Office free from the delays and expense of a formalapplication, is proposed.

A preliminary application may be used to se-cure a filing date for all features of an inven-tion disclosed therein, if the disclosure subse-quently appears in a complete application.Requirements as to form shall be minimal andclaims need not be included,One or more preliminary applications may beconsolidated into one complete applicationfiled within twelve months of the earliest pre-liminary or foreign application relied on.

Under this recommendation an applicant would file a writtendescription of his invention in a preliminary application, adocument with minimal requirements as to form and needing noclaims. This would permit early filing of an application, since itcould be prepared by someone having little knowledge of latentlaw and procedure. Applicants should be made aware, however,that the protection afforded by a preliminary application willdepend greatly upon the adequacy of the disclosure containedtherein.

Additional preliminary applications could be filed to coveraspects of the invention developed subsequent to filing of the first

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TO() PiRONIO'TI; '1'TH P1OGI();I S OF [tSF'.'FL ARTS\'1

I)reliminary application. Records an inventor now must keepcould be replaced by disclosures submitted to the Patent Office,where they automatically would be certified as to date. One ormore preliminary applications also could be used to supplementthe disclosure first presented in a foreign application.

Information contained in these applications could be dis-closed to the public without risk, through publication or markettesting, for example, as long as a complete application was filedwithin twelve months of the earliest preliminary or foreignappllication relied on. By a complete application is meant onewhich complies with present requirements for an application.Accordingly, many of the advantages of a grace period could beobtained without the associated problems.

Each claim in the complete application would be entitled.for the purpose of overcoming prior art, to the date on which itssupl)orting disclosure wasnirst fully l)resented in a validlyasserted foreign, preliminary or earlier complete application.Also, disclosure in a complete al)plication, if published, wouldconstitute prior art as of its first presentation (late.

The preliminary application technique would create no

significant burden for the Patent Office. Preliminary applica-tions need only be stamped with their (late of receipt and storedlending the filing of a complete application, and even thenwoulld only be considered if the effective (late of the completeal)llication was brought into question.

Prior art shall not include, as to the inventorconcerned, disclosures of an invention result-ing from:1. A display in an official or officially recog-

nized international exhibition; or

2. An unauthorized public divulgation of infor-mation derived from the inventor;

As provided below.

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1. Two international treaties define and regulate "official andofficially recognized international exhibitions." The Paris Con-vention for the Protection of Industrial Property requires that"temporary protection" be granted with respect to inventions ex-hibited at such exhibitions.

The United States has had no need for a special provisionwith respect to exhibitions because the present grace period pro-tects against the adverse effect of disclosures occurring withinone year before the filing date of an application. Since theCommission now suggests elimination of the grace period, amethod to safeguard patent rights under these circumstancesmust be provided to conform to the Paris Convention.

It would appear that the preliminary application (Recom-mendation No. II) complies both with the spirit and the letterof the Paris Convention in providing temporary protection forinventions shown at international exhibitions. However, if apreliminary application proves not to satisfy the Convention, itis recommended that:

A display at an official or officially recognized interna-tional exhibition by an inventor, or assignee, shall notconstitute prior art against his complete application tothe extent that the information disclosed by the displayappears in a notice having the format of a preliminaryapplication; provided: that the notice is filed in thePatent Office no later than the public opening of thedisplay and the complete application is filed within sixmonths after filing of the notice.

2. With respect to unauthorized public disclosures, it is rec-ommended that:

An unauthorized public disclosure of information de-rived from the inventor or his assignee shall not consti-tute prior art against him, if, within six months aftersaid disclosure, a complete application for the inventionis filed by the inventor or assignee.

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TO' PROMOTE THE PROGRESS OF USEFUL ARTS

Any allegation, that a disclosure should not constituteprior art because it was unauthorized, shall be consid-ered by the Patent office onyi. if it is verified, sets forthdetails establishing a pima facie case, and is accom-panied by proof that notice has been served on theparty accused of making the disclosure.If the party accused promptly contests the allegation,the application shall not' issue as a patent until thematter is finally judicially determined in favor of theapplicant.

Currently, undir certain circumstances, a disclosure willnot bar the issuance of a patent if such disclosure was madewithin the grace period.

In the absence of this recommendation, an inventor or hisassignee would lose his patent rights if an unauthorized publicdisclosure of the invention in any form (including patent appli-cations or patents) was made prior to his filing an application.This recommendation furnishes a procedure to nullify the effectof such disclosure upon the inventor. It would allow the Pat-ent Office to ignore alleged unauthorized disclosures as priorart in those instances where the allegation is not contested bythe accused party. At the same time, it is designed to dis-courage an unsupported assertion that a disclosure should not beused to bar a patent. In a subsequent litigation, failure on thepart of an accused party to contest the assertion in the PatentOffice would not preclude reliance on such a disclosure to invali-date the patent.

The application would not receive the benefit of the dateof the unauthorized disclosure for purposes of priority. - Rather,any intervening untainted disclosure, occurring between the dateof the unauthorized public disclosure and the application filingdate, would constitute prior art as to the applicant. The un-authorized public disclosure also would constitute prior art asregards all other applicants.

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The classes of patentable subject matter shallcontinue as at present, except:

.-. All provisions in the patent statute for de-sign patents shall be deleted, and anotherform of protection provided.

2. All provisions in the patent statute for plantpatents shall be deleted, and another formof protection provided.

3. A series of instructions which control orcondition the operation of a data processingmachine, generally referred to as a "pro-gram," shall not be considered patentableregardless of whether the program isclaimed as: (a) an article, (b) a process de-scribed in terms of the operations performedby a machine pursuant to a program, or(c) one or more machine configurationsestablished by a program.

This recommendation would end the practice of grantingpatents on designs and plants. It also would eliminate whateverpossibility exists under the present statute, if any, for directly orindirectly obtaining a patent covering a program or a patentcovering the operation of a data processing machine pursuant toa program.

The Commission believes strongly that all inventions shouldmeet the statutory provisions for novelty, utility and unobvious-ness and that the above subject matter cannot readily beexamined for adherence to these criteria.

1. Designs: A patent now may be granted on any new, originaland ornamental design for an article of manufacture. Despitethe statutory requirement of unobviousness, patents on designsare now granted, in effect, solely on the basis of novelty. Courtsoften find these patents invalid on the ground that the design isobvious.

The Commission is aware of legislative proposals to protectornamental designs against copying. Nevertheless, it believes

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that some means outside the patent system should be developedfor the protection of new and original ornamental designs.2. Plants: A patent may be granted today on any new anddistinct variety of specified types of asexually reproduced plants.The statute imposes the requirement of unobviousness forpatentability. In practice, however, patents are granted if theDepartment of Agriculture notifies the Patent Office that, as faras it can determine, the plant variety is new, and the examinerfinds no art indicating the contrary.

While the Commission acknowledges the valuable contribu-tion of plant and seed breeders, it does not consider the patentsystem the proper vehicle for the protection of such subjectmatter, regardless of whether the plants reproduce sexually orasexually. It urges further study to determine the most appro-priate means of protection.3. Programs: Uncertainty now exists as to whether the statutepermits a valid patent to be granted on programs. Directattempts to patent programs have been rejected on the ground ofnonstatutory subject matter. Indirect attempts to obtain patentsand avoid the rejection, by drafting claims as a process, or amachine or components thereof programmed in a given manner,rather than as a program itself, have confused the issue furtherand should not be permitted.

The Patent Office now cannot examine applications forprograms because of-the4ack of a classification technique andthe-requisite search files. Even if these were available, reliablesearches would not be feasible or economic because of thetremendous volume of prior art being generated. Without thissearch, the patenting of programs would be tantamount to mereregistration and the presumption of validity would be all butnonexistent.

It is noted that the creation of programs has undergonesubstantial and satisfactory growth in the absence of patentprotection and that copyright protection for programs ispresently available.

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To prevent delay, which may be detrimental to the ownerof an invention, while retaining safeguards to protect the rightsof the inventor, it is recommended that:

1. Either the inventory Laaite may file and.sign both the preliminary and completeapplications.Any application filed by the assignee shallincdecludea declaration f ownership at thetime of filing and, prior to publication ofthe application, shall include a declarationof. originality by the inventor and evidenceof a recorded specific assignment

2. Every application shall include, at the timeof filing, the name of each person believed tohave made an inventive contribution.

3. Omission of an inventor's name or.inclusionof the name of a person not an inventor,without deceptive intent, shall not affectvalidity, and can be corrected at any time.

1. The present patent act requires (with specified exceptions)that the inventor, at the time of filing, must sign the applicationand make an oath or declaration that he made the invention.Occasionally, inventors are unavailable or unwilling to sign anapplication immediately after it is prepared. Moreover, it issometimes difficult to determine the identity of an inventor atthe time the application is prepared. Delay in complying withthe requirements has resulted in loss of rights to the applicationowner. Such delay would be more serious when the effectivefiling date is treated as the date of invention.

The intent of this recommendation is to simplify 'theformalities for filing an application by allowing the owner of thepatent rights to sign and file the necessary papers. Manydetrimental delays thus would be avoided.

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Before publication of the application, however, the assigneemust provide both a declaration of originality and a specificassignment from the inventor to safeguard the interests of theinventor and the public. The present statutory exceptions whichallow an interested party to file an application whenthe inventoris deceased, is incapacitated, cannot be found or refuses tocooperate, would be continued to prevent forfeiture of rights.2. At present, it is often difficult to determine who should benamed as the inventor in any given application. A contributingfactor is court rulings that for a valid patent to be granted tojoint inventors, each person namedmust have been a jointinventor with respect to each claim in the patent.

Many complex inventions result from the combined effortsof persons working separately, often at different times and indifferent sections of an organization. In such cases, adequateprotection may be impossible because all of the claims requiredfor protection cannot be presented properly in a single applica-tion, and their individual contributions cannot properly be madethe subject matter of separate patets.

This recommendation would simplify the initial determina-tion of who should be named as inventors in a given applicationand render it unnecessary for each person named to be the jointinventor of the invention asserted in each: claim in a patent.3. Today, a patent in which a sole inventor is incorrectly namedwill be held invalid. In the case of joint inventors, the omissionor improper inclusion of a name will not necessarily invalidate apatent; however, correction procedures may be burdensome andthe issue of whether correction is required can become an itemof costly litigation.

This recommendation is intended to avoid a holding ofinvalidity, as above mentioned, as well as to facilitate correctionof applications and patents.

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' \Claim for a priority date must be made whena complete application is filed.

This recommendation would require that any claim for apriority date based on an earlier U.S. or foreign applicationmust be made at the time a complete application is filed. Pres-ent practice allows a claim for priority to be delayed until thefinal fee is paid.

Early knowledge of the priority date on which an appli-cant intends to rely would become more important with theadoption of a first 'to file system. Such knowledge would benecessary for proper determination, without wasted effort onthe part of the Patent Office, of what references may be used asprior art against an application.

IDPublication of a pending application shall oc-cur eighteen to twenty-four months after itsearliest effective filing date, or promptlyafter allowance or appeal, whichever comesfirst.An applicant, for any reason, may requestearlier publication of his pending completeapplication.An application shall be "republished" prompt-ly after allowance or appeal subsequent toinitial publication, and again upon issuance asa patent, to the extent needed to update theinitially published application and give noticeof its status.

The only printed publication now made by the PatentOffice of an application is that which occurs upon the issuanceof a patent. Today, such publication can be delayed signifi-cantly beyond two years from the effective filing date of anapplication.

This recommendation sets an outside limit on the time forpublication. An application, unless abandoned and kept secret,16

24


would be made available to all concerned within a reasonablyshort time. Early publication could prevent needless duplica-tion of the disclosed work, promote additional technological ad-vances based on the information disclosed, and apprise entre-preneurs of their potential liability.

An applicant would be permitted to abandon his applica-tion prior to the time for publication and retain the inventionin secrecy. Alternatively, an applicant could have his applica-tion published promptly after filing, with or without abandon-ment, which would make his disclosure available earlier forprior art or interim liability purposes. However, the Commis-sioner could refuse such publication where the subject matter isnonstatutory, immoral, or the like.

In the case of an application which is given a notice of al-lowance, or in which an appeal is filed to the Board of Appeals,within the eighteen to twenty-four months after its earliesteffective filing date, immediate publication would permit cita-tion of prior art by the public (Recommendation No. XI).

Republication after a notice of allowance or the filing of anappeal would be required if amendments to the claims or specifi-cation are made after the first publication. Printing costsshould not be increased substantially since republication couldconsist merely of a notice, published in the Official Gazette, withcopies of the allowed claims prepared and made available to thepublic. When considered appropriate by the Commissioner,integrated copies of the specification and drawings could beprepared and made available.

VmThis recommendation is intended to prevent the repetitive

filing of dependent applications. It is designed to eliminateundue postponement of the publication of the scope of protectiongranted, bring the United States into accord with internationalpractice, and permit more efficient Patent Office examination.

17

25

TO PROMOTE THE PRORRESS OF USEFUL ARTS

Unless a later filed application is:1. A continuation application and is filed be.

fore the occurrence of anyof the followingevents: (a) the abandonment of, (b) theallowance of all pending claims.i, or (c)the filing of an appeal to the Board of Ap-peals as to any claim in, the original parentapplication; or

2. A continuationin-part application and isfiled before the publication of any of its par-ent applications; or

3. A divisional application filed (a) on one ofthe inventions indicated to be divisible in arestriction requirement and is filed duringthe pendency of the application in which therestriction was first required, or (b) duringthe pendency of the original parent appli-cation;

The later filed application shall not be entitledto the effective filing date of a parent applica-tion for matter disclosed in the parent, and theparent, if published, shall constitute prior artagainst the later filed application.

At present, an applicant may serially file continuing ap-plications for an unlimited period of time and maintain hisinvention in secrecy. Such practice makes effective examinationin the Patent Office more difficult and expensive, and indefinitelyprolongs the time before the issuance of a patent and theresultant publication of the scope of protection granted.

Permitting an applicant to file a continuation applicationduring the indicated portion of the pendency of his originalparent application would provide some latitude for one who feltthat inadequate opportunity existed in the parent case to reacha clear issue. At the same time, it would avoid needless effort inpreparing examiner's responses to appeal briefs, as well asunduly prolonged prosecution of the same invention.

Requiring that a continuation-in-part application be filedbefore publication of the parent application, as would appear to

18

26

TO. PROMOTE THE PROGRESS OF USEFULt ARTS

be required if the provisions-of the present Council of EuropeTreaty and proposed Common Maarket Pate System wereobserved, normally would allow both the parent and continua-tion-in-part; applications to be examined contemporaneously,possibly by the same examiner. -Further,: the public would learnsooner of the scope of patent protection that ultimately mightbe obtained based on the invention disclosed in the parentapplication.

Providing that all divisional applications must be presentedduring the pendency of the original parent application, or theapplication in which restriction first was required, would shortenthe period of public uncertainty as to the scope of patent protec-tion that eventually may be granted on the subject matterdisclosed in the parent application.: ,On the other hand, theapplicant would have ample opportunity Wto perfect; an appealor to file a petition that may affect the propriety of a restrictionrequirement.

,, v ,:i.

The Commission clearly favors a high quality immediateexamination system if it can be maintained without a constantlyincreasing backlog. Nevertheless, it is recommended that:

Standby itattory authority should be'pro-vided for optional deferred' examination.

Although this recommendation reflects tie consensus of theCommission,' a split exists among the members as to when andhow such authority should be exercised.

One view favors optional deferred examination going intoeffect, on a pilot basis, as soon s apiropiate legislation can beenacted. Propoiientis'of this view feel that early experiencewith optional deferred examination is desirable, and that it canbe obtained effectively only by institUting a pilot program asearly as possible. For example, the pilot prpgam could applyto applications filed within a given period of time or to applica-tions concerned with some; given subject matter.

19

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The other view favors the institution of optional deferredexamination, whether on a pilot basis or in whole, only if theStatutory Advisory Council (Recommendation No. XXVI)should find that a high quality immediate examination systemno longer could be maintained.

Justifications for an optional deferred examination systemare that not all applications for patents are of the same value,that it is not good economic practice for the Patent Office to de-vote substantial effort to applications having little value, andthat the applicant and his competitors are in the best position toselect out such applications.

Such a system should reduce the number of applicationsrequiring prompt examination. It is probable that a numberof applicants, such as those who had not yet determined thevalue of their inventions, would prefer to have examination oftheir applications deferred. To the extent that applicationsare deferred, the remainder should be reached for examinationsooner. In some cases, examination might never be requested,and the applications would become abandoned.

An optional deferred examination system shallinclude the following provisions:1. The examination shall be deferred at the

option of the applicant, exercised by his elec-tion not to accompany the complete applica-tion with an examination fee.Request for examination, accompanied bypayment of an examination fee, may bemade anytime within five years from theeffective filing date of the application.

2. A deferred application shall be promptlyinspected for formal matters and then pub-lished.

3. Any party, without being required to dis-close his identity, may provoke an examina-tion upon request and payment of the fee.

4. Unless made special upon the request of anyparty, an application initially deferred shall

20

28

TOPPOMOTS TBfElPGBfl8S OF UBEWUL ATSr

* . .birnti U* ai t .hOqS 4s.--plbtioSr.i :..in'f/'<.a~~!tt' .J... T net:.~be. de,,f ere.-e::.''-

tke:.,,t .1r4imted

of any of the parent or Coiimt lonie.l ,itin

1. 'ASfln ooefrpeio dShouldiance iti of t'pblic,the ppiaiit"nditi hitent 'Ol . The: public oli d iearn,within a reaonable time, about any patent protection.'Appi,cants should have adequate tiie to.'ascertain the commercialvalue of their inventions before investing in an examinationfee andi' i:etion o Tfr''"P^ t fce: shbid benefitfrom the ,ib ndo eint of a iunber ' pplicatio prior toexamination. . ,; . :S* } i ? .; . ; '.'; ^ W -.

£ 1t ;;' ' :; B'

n A1i¢f .J:-:^ '̂.'î

;2. A compete applitlon wch isnot accompanied by an ex-amination ftp wQuld be, inspected for formal, matterI imhiedi-ately upon filing. The appliation wold be clssified under thePatent Qffice classification system and published at the earlitpossible date . No prior art earch would be made before a fullexamination is requested, since otherwise the saving of ex-aminer's time would be minimal.

3. By requesting an examination,a potential infringer or ~otherinterested party could receive a relatively prompt determinationof the invention's patentability,.

A third party could initiate the examination Witiout id ti-fying himself to the Pateniit Office. As a result, the appllctwould not be given any additional advantage hen drafting hisclaims, nor would the'third party be inviting suit for infringe-ment after issuance of the patent. .4. The provision as to order of examination is intended toas-sure fair treatment to those who initially paid for an immediateexamination..

2174-14 0 17 - 5

29

TO PROMOTE THE' PROGRlSS OF USEFUL ARTS

5. Concurrent examination and protection Of the entire fam-ily of pending parent and continuingapplications would berequired in those cases where examination $f one of such appli-cations has been requested. If a third party requests and paysthe fee for examination of an application, the applicant would berequired to pay the examination fee promptlyfor all other parentor continuiiig applications.

This contemporaneous examination would provide earlierdetermination of the scope of the composite monopoly to begranted.

.- '. ;',... ,.X' . : . i,, .

To reinforce the'statutory presumption of validity, andto assist in the prevention of the issuance of invalid patents:

The applicant shall have the burden of persuad-ing the Patent Office that a claim is patentable.

Until recently, the Patent Office 'ha followed a policy of,(a) instructing the examiner to resolve all reasonable doubts infavor of the applicant, and (b) prohibiting the examiner' fromindicating that he is allowing a claim despite his doubt as to itspatentability. The Commissioner has instructed the examinersto abandon this policy in obedience to the views expressed thisyear by the Supreme Court. Present experience is insufficient toreveal how the courts directly reviewing Patent: Office practicewill treat this change,

Many have long recognized that resolving doubt in favor ofthe applicant is inconsistent with giving a patent a strong pre-sumption of validity. 'Little justification exists for giving weightto a decision made by the Patent Office when it resolves doubt inthis manner, since it is passing the question of patentability onto the courts instead of exercising its'judgment. Inasmuch asthe examiner does not indicate when he has applied the rule ofdoubt, all patents may be questioned in this regard.

This recommendation would require the applicant, in allcases, to persuade the Patent Office by a preponderance of proof22

an

TO .PROMOTE THE PROORESS OF USDFUL: ARTS

that bis claims are allowable. By eliminating doubt as anelement favoring patentability, the overall standards of patent-ability applied by the Office should be raised.

"' ";;' ':. ;';

iBL .-'"',i,'','. j. .'To increase the likelihood that all pertinent prior art is

considered before issuance of a patent, the following technique isprovided.

The Patent Oflice shall consider all tents orpublications, the pertinency of which is ex-plained inwtritng, cited against an applicationanytime until six months after th;:publicationwhich gives noe that the application has beenallowed or appealed to the B rd',of AppealsIf the Patent Oflce, after the dttion period,determines thet a'ielait hold not beor havbein, allowed, the applicant*hall be otifled andgiven an opportunity exporteboth to rebut thedetermination and to narrow the scope of theclainL The identity of the party citing refer-ences shall be maintained in confidence.Public use proceedings, as at present, may beinstituted during the citation period.

Presently, anyone who has reason to believe that an ap-plication is pending may seek an inter parties proceeding toto determine whether alleged public use or sale should barissuance of a patent. Also, publications or patents may besubmitted for exz paerte consideration by the Patent Office.

This recommendation would provide a citation period ofat least six months'in which the public, iiformied by publicationof the content of an application, could submit patents or publica-tions, together with an explanation` of their pertinency. Suchreferences would be evaluate 'and, to the' extnt fond appli-cable, used to reject claims even if such claims previously wereallowed or under appeal.

Little delay in the issuance of patents would result fromthis procedure. The applicability of newly cited art would be

28

31


determined immediately after expiration of the six month periodfollowing the publication which gives notice of allowance or ofthe filing of an appeal. Moreover, the applicant need not sufferfrom such delay since, under certain circumstances, damagescould be recovered for infringement during the period followingpublication (Recommendation No. XVII).

The recommended procedure could benefit both the applicantand the public. The applicant could gain by the opportunityto narrow his claims, when possible, to avoid prior art, ratherthan having the claims later held invalid. Inasmuch as theprocedure will be an ex parte; one, as distinguished from a fullscale adversary procedure, the additional cost of the citationpractice to an applicant would not be great. The public shouldbenefit by the opportunity to cite prior art inexpensively to thePatent Office rather than through costly litigation. Under thisprocedure, both would benefit from the greater reliance thatcould be placed upon the validity of patents in general.

Citing, or failing to cite, prior art during this periodwould not preclude a later challenge on that art.

XII

Indispensable to the improvement of the quality and theacceptability of patents being issued is the establishment of anobjective technique for measuring the quality of the workproduct of the examining corps. The Commission thereforerecommends that:

The Patent Office shall develop and maintainan effective control program to evaluate,, on acontinuing basis, the quality of the patentsbeing issued by the examining groups and artunits therein, and to furnish information forthe publication of an annual rating of the over-all quality of the patents issued each year.

The Patent Office is presently in the process of putting intoeffect a quality control program.24

32


This recommendation is intended to encourage and expandthis effortso that an effective quality measurement can be made,on an objective basis, of the patents being issued by each of theexamining groups and art units within the Patent Office.

Development of an effective patent quality measurementtechnique should be followed by the publication of a ratingreflecting the quality of patents issued during a given period.For example, if effective quality measurement is achieved during1968, the quality rating for that year could be used as a base ofcomparison and set at 100. Each year thereafter, a qualityrating could be determined with this technique and the trend inthe quality of patents being issued observed.

Such ratings should prove helpful to the Patent Office, thepublic, the courts, and the Congress in making required judg-ments concerning the patent system.

The continual review by a Statutory Advisory Council(Recommendation No. XXVI) of the quality of patents beingissued and the effectiveness of any quality control program inoperation should result in greater acceptability of the qualityrating and the control program by all concerned.

25

33

TO PROMOTE THEPROGRESS OF USEFUL ARTS

E. Ruin@1 t* :..' .INA Patent Office decision refusing a claim shallbe given a presumption of correctness, andshall not be reversed unless clearly erroneous.

Currently, the weight given on appeal to a Patent Officedecision denying a patent depends upon which court reviews thedecision. The Patent OfiMce's decision is presumed correct in theDistrict Court for the District of Columbia and the Court ofAppeals for the District of Columbia^Circuit but not in theCourt of Customs and Patent Appeals.

The Patent Office should be recognized as having technicaland legal expertise, important in deciding questions- of patent-ability. While a reviewing court certainly will have legalexpertise, and perhaps general technical knowledge, it seldomwill possess the particular technical skill in the art with which aPatent Office examiner is equipped. Further, it is only afterboth the examiner and the Board of Appeals have concurred; inthe refusal of a claim that the matter comes before a reviewingcourt. Such concurrence should not be rejected by the courtunless the action is, in its judgment, clearly erroneous.

This recommendation should settle the conflict over "scopeof review," by defining the court's responsibility to be reviewof the Patent Office decision, rather than substitution of its ownjudgment. The court would determine only whether the PatentOffice had reasonable basis for its decision, not whether a differ-ent decision logically could have been reached on the same record.The burden of persuasion would be on the applicant, and the Pat-ent Office decision should not be reversed unless, in view of all ofthe evidence, the court has a thorough conviction that there wasno reasonable basis for the decision.

xlVEither the applicant or the Patent Office mayappeal from a decision of the Court of Customs

26

34

TO PR)OMOt' THE PROGRESS OF USFISUL ARTS

and Pateit Apptel to tlie United States Courtof Appeals for the District of Colmbia Cir .cuit, and from a decision of the latter courteither may petition the Supreme Court foxr awrit of certiorar.

An applicant presently may seek review by two alternativeroutes from a decision by the Board of Appeals of the PatentOffice. He may appeal to the Court of Customs and PatentAppeals (C.C.P.A.) on the record made in the Patent Office; or,he may proceed in the United States District Court for theDistrict of Columbia where he may offer evidence and issues notconsidered by the Patent Office. Only a decision of the DistrictCourt may be appealed, by either party, to the United StatesCourt of Appeals for the District of Columbia Circuit.

When the Court of Appeals and the C.C.P.A. render con-flicting decisions reflecting a disagreement on a point of sub-stantive law, the Patent Office must choose one of the decisionsto follow, for the sake of uniformity within the Office. Inpractice, the Patent Office generally adopts the guidelines in thedecision most favorable to the applicant, since it is the applicantwho selects the reviewing court

The present procedure also has caused inconsistency in theapplication of the law. As recently observed by the SupremeCourt [Graham v. John Deere Co.], there is "a notorious dif-ference between the standards applied by the Patent Office and bythe courts." This difference results not only from the fact thatproceedings in the Patent Office are ex parte, but also because theC.C.P.A., which to a large extent determines the standardsapplied in the Patent Office, is a court which has neither generaljurisdiction nor jurisdiction in infringement cases.

Under the recommendation, all immediate direct reviewof the Patent Office would be subject to further review by theUnited States Court of. Appeals for the District of ColumbiaCircuit. Thus, a single court of general jurisdiction ordinarilywould be the final reviewing authority. This should producedecisions wherein interpretation and application of substantive

27

35


law is more akin to that in infringement suits in the severaljudicial circuits. Thus, the public reasonably could expect thatthe law relating to patentability as applied in the Patent Officewould conform more nearly to that applied in the infringementcourts.

28

I38

TO PROMOTE THE PROGRESS OF USEDUL ARTS

Preuiag br RAM&li Us Cumnihi Fulxk[orlmssm .s;.:tannXV

This recommendation provides an ex parte administrativeprocedure in the Patent Office for cancellation of claims, whichshould be faster and less costly than court proceedings.

The Patent Office, upon receipt of a relativelyhigh fee, shall consider prior art of which itis apprised by a third party, when such priorart is cited and its pertinency explained in writ-ing within a three year period after issuance ofthe patent If the Patent Office then deter-mines that a claim should not have been al-lowed, the patent owner shall be notified andgiven an opportunity ex parte both to rebut thedetermination and to narrow the scope of theclaim. Failure to seek review, or the affirmanceof the Patent Office holding, shall result in can-cellation of the claim.When the validity of a claim is in issue beforeboth the Patent Office and a court, the tribunalwhere the issue was first presented shall pro-ceed while the other shall suspend considera-tion, unless the court decides otherwise forgood cause.Anyone unsuccessfully seeking Patent Officecancellation of claims shall be required to paythe patent owner's reasonable cost of defendingsuch claims, including attorney's .fees. TheCommissioner shall require an appropriate de-posit or bond for this purpose at the start ofthe action.

Presently, there is no provision for the Patent Office ad-ministratively to cancel any claim in an issued patent. Evenwhere a claim appears to be clearly unpatentable in view ofnewly discovered prior art, only a court can declare the claiminvalid. As a result, the patent owner can continue to assertsuch a claim because no one is willing or able to expend the re-sources necessary to obtain a court decision.

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37


To discourage harassment and to promote the citation ofreferences prior to issuance (Recommendation No. XI), a rela-tively high fee would be required. Further, the patentee'sdefense costs would be assessed against any party who uasuc-cessfully sought cancellation. To insure payment, anyone initi-ating such action would be required immediately to post adeposit or bond in accordance with a schedule fixed by theCommissioner.

In some instances, the cancellation proceeding would bene-fit even the patent owner, since he still would have an opportu-nity to narrow any claims found to have been erroneouslyallowed.

If a party were successful in seeking cancellation, afterciting only prior art which he previously presented during theopposition period, the cancellation fee should be refunded.

A three year limit on the time within which a cancellationprocedure could be instituted should be sufficient for most priorart to become readily accessible.

It would be desirable for the Statutory Advisory Council(Recommendation No. XXVI) to review this procedure aftersufficient time has elapsed to determine its effectiveness, andto recommend any appropriate changes.

XIvA claim shall not be broadened in a reissueapplication.

Presently, there are few statutory restrictions againstbroadening the scope of the invention claimed during prosecutionbefore the Patent Office. Because of this, the potential valueof early publication (Recommendation No. VII) cannot befully realized, since unclaimed disclosure in a published applica-tion could not be used by the public free from the possibility thatit might be protected by broader claims in the: subsequentlyissued patent. The public would have no guide, other than theentire disclosure, to determine the limits of final patent protec-30

38


tion. Possible claim scope could be divined only after theinterested party conducted his own examination of the prior art.

Hence, it is desirable that claims never be broadened afterpublication, whether presented in the published application or arelated continuing or reissue application. However, an all-inclusive prohibition to this effect might be impossible to enforce.Accordingly, this recommendation is directed solely to reissueapplications, where broadening of claims can be prohibitedeffectively.

31

39

TO PROMOT'E THE PROGRESS OF USEFUL AARTS

iubiliyandlEi,-,,:-. ,3i . ..,;In view of the recommended publication of applications by

the Patent Office before a patent issues (Recommendation No.VII), some protection for the. patent owner for the period frompublication to patenting should be made available. Therefore, itis recommended that:' ..

For infringement of a claim which appears inboth an application as initially published andin the issued patent, damages may be obtainedfor an interim period prior to issuance. Suchperiod shall be measured from after the occur-rence of all of the following events: (1) theinitial publication, (2) a Patent Office holdingthat the claim is allowable, and (3) a transmit-tal to the alleged infringer of actual notice rea-sonably indicating how his particular acts areconsidered to infringe the claim.The applicant's election to create such interimliability, by his transmittal of notice, shall con-stitute the granting of a reasonable royalty,nonexclusive license, (1) extending only untilthe issuance of the patent for any infrilnmentinvolving a process, and (2) extendingto andbeyond issuance for any infringerm involv-ing a machine, manufacture or composition ofmatter, which is made prior to tk issuance ofthe patent.In exceptional cases, d**es for interim in-tfingement up (t to\s reasonable royalties

Under the present statute, liability for infringement beginson the date a patent is issued.

With a requirement of pre-issuance publication of anapplication, absent this recommendation, anyone could copy theinvention and make, use or sell it until a patent is issued,possibly even exhausting its commercial value.

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By this recommendation, a patentee whose claims are"infringed" before the patent issues, would have some degree ofprotection, while at the same time the public would be providedwith a clear indication of its possible liability.

The provision that a claim will not be held infringed unlessit appears both in the application as first published and in theresulting patent should encourage the applicant, before publica-tion, to present claims he considers patentable. The furtherrequirements of an allowable published claim and actual noticewould reduce public uncertainty as to possible interim liability.1ANo, an infringer would be provided with an opportunity tocease and desist before damages accrue.

In exchange for the right to recover images during thisinterim period, an applicant would have to give up any right toan injunction as to things made prior t issuance, and couldrecover no more than a reasonable xl\W ty for any infringingacts occurring prior to the issuanrce the patent. Under anycircumstances , suit could not be\ c<ought before issuance of a,Atnt.

. t,.it'l3~! St iould elect not to pursue an infringer forinterim liability, by withholding the required notice, presentremedies available after the patent issues would remainundisturbed.

XImThe term of a patent shall expire twenty yearsafter its earliest effective U.S. filing date.

The term of a U.S. patent now extends for a period ofseventeen years from the date of issuance. Measuring thepatent term from this point encourages deliberate delays in theprosecution of applications, particularly those filed primarily forspeculative reasons and those having little immediate value.Another effect can be the filing-of continuing applications solelyto delay the start of a patent term.

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The proposed change would induce the applicant to presentclaims promptly that he believes patentable and to avoid delayingthe prosecution of the application. Since the term of a patentstemming from a continuing application would expire on thesame day as one issued on its parent application, there would beless incentive to use a continuing application for the purpose ofdelay.

Measuring the patent term from the earliest domesticfiling date will bring U.S. practice into closer conformity withmost foreign systems. This would become advantageous if theParis Convention were to be modified to permit measuring fromthe earliest foreign filing date asserted (Recommendation No.XXXIV).

mIThe term of a patent, whose issuance has beendelayed by reason of the application beingplaced under secrecy order, shall be extendedfor a period equal to the delay in issuance ofthe patent after notice of allowability.

At present, whenever publication or disclosure of an inven-tion by grant of a patent might be detrimental to nationalsecurity, the application may be placed under secrecy order bythe Commissioner of Patents.

The applicant, provided he receives a notice of allowability,is entitled to compensation for use of the invention by the Gov-ernment and for damages caused by the secrecy order. Indetermining this compensation, consideration has been given tothe fact that the applicant may lienefit by a delayed monopoly,running seventeen years from the date of issuance of thepatent.

With the patent expiring twenty years after its earliesteffective U.S. filing date (Recommendation No. XVIII), anapplicant would receive no such benefit. Accordingly, it isproposed to extend the term of such a patent for a period equalto the delay in issuance of the patent after notice of allowabilitycaused by the secrecy order.

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The filing of a terminal disclaimer shall haveno effect in overcoming a holding of doublepatenting.

This recommendation is intended to endorse the interpre-tation given the present statute, with regard to the filing of aterminal disclaimer to overcome a holding of double patent-ing, by the Court of Appeals for the District of Columbia Circuit.A contrary decision by the Court of Customs and Patent Appealshas created confusion in this area.

The Commission supports the position that the granting ofmore than one patent on a single invention, even if there is acommon inventor or assignee, would constitute, inter alia, anundue "extension of monopoly." While a terminal disclaimerwould prevent the extension of monopoly in time, it would notpreclude the undue extension of monopoly in scope. In this re-gard, it would not keep the patentee from "blocking out a field,by successfully prosecuting applications covering otherwise un-patentable variations of what he already has patented. Further,it would discourage attempts by others to "invent around" thepatented invention by developing modifications and improve-ments.

The granting of more than one patent on obvious varia-tions of a single inventive concept also would minimize advan-tages to be obtained by the provision for in rem invalidity(Recommendation No, XXIII). Otherwise, a patent owner,even after claims in one such patent had been held invalid, stillcould threaten suit on similar claims in his other patents.

XlXThe importation into the United States of aproduct made abroad by a process patented inthe United States shall constitute an act ofinfringement

The unauthorized importation into the United States, or saleor use, of a product made abroad by a process patented in the

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United States, does not now constitute infringement. A processpatent owner may seek to have the offending product excludedfrom this country under the Tariff Act of 1930, on the groundthat importation will tend to cause substantial injury to anefficiently and economically operated domestic industry. How.ever, because of these requirements, the patent owner has littleprospect for success.

This recommendation would make it possible to preventevasion, of the process patent owner's exclusive rights in the

"United States, by the practice of his process abroad and -heimportation of the products so produced into this country.

xxnThe licensable nature of the rights grantedby a patent should be clarified by specificallystating in the patent statute that: (1) applica-tions for patents, patents, or any intereststherein may be licensed in the whole, or in anyspecified part, of the field of use to which thesubject matter of the claims of the patent aredirectly applicable, and (2) a patent ownershall not be deemed guilty of patent misusemerely because he agreed to a contractual pro-vision or imposed a condition on a licensee,which has (a) a direct relation to the disclosureand claims of the patent, and (b) the perform-ance of which is reasonable under the circum-stances to secure to the patent owner the fullbenefit of his invention and patent grant Thisrecommendation is intended to make clear thatthe "rule of reason" shall constitute the guide-line for determining patent misuse.

There is no doubt, in the opinion of the Commission, of theimportance to the U.S. economy of both the U.S. patent systemand the antitrust laws. Each is essential and each serves its ownpurpose within the framework of our economic structure. How-ever, conflicts between the two have arisen. But this does notmean that the two systems are mutually exclusive, that a strongpatent system is a threat to the antitrust laws, or that the latter36

44


cannot be effectively enforced so long as a patent system grantslimited monopolies.

On the contrary, the two systems are fully compatible, onechecking and preventing undesirable monopolistic power and theother encouraging and promoting certain limited beneficialmonopolies. In this way, each may easily achieve its objectivesin a strong economy.

The Commission, therefore, does not favor any proposalwhich would weaken the enforcement of the antitrust laws orwhich would curtail in any way the power of the courts todeny relief to a patent owner misusing the patent he seeksto enforce. However, uncertainty exists as to the precise natureof the patent right and there is no clear definition of the patentmisuse rule. This has produced confusion in the public mindand a reluctance by patent owners and others to enter into con-tracts or other arrangements pertaining to patents or relatedlicenses.

No useful purpose would be served by codifying the manydecisions dealing with patent misuse into a set of rules ordefinitions permitting or denying enforceability of patents ingiven circumstances. The risk of unenforceability is too greatand such a codification is wholly unnecessary. All that theCommission believes to be required is explicit statutory languagedefining, for the purpose of assignments and licenses, the natureof the patent grant heretofore recognized under the patentstatute or by decisional law. This is, the right to exclude othersfrom making, using and selling the'patented invention.

The mere exercise, conveyance or license of these conferredrights should not in itself constitute misuse of a patent. A pat-ent owner should not be denied relief against infringers becausehe either refused to grant a license or because he has exercised,transferred or licensed any of the conferred patent rights him-self. This should not include immunity of even these conferredpatent rights from the antitrust laws when the patent ownerbecomes involved in a conspiracy to restrain or monopolize corn-

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merce, or when the patent is itself used as an instrument forunreasonably restraining trade.

There are also a number of conditions and provisions longassociated with the transfer or license of rights under patentswhich must be distinguished from the exclusive right to make,use and sell conferred by the patent grant. Among these areimprovement grant-backs, cross licenses, package licenses, patentpools, no contest clauses, and many others which are simplymatters of private contract, ancillary to the conveyance orlicense of a patent right. As such, these conditions and pro-visions must be judged, along with other purely commercialpractices, under the antitrust laws and the patent misuse doctrine.The Commission does not recommend immunization of any ofthese other provisions or conditions from either the antitrustlaws or the application of the misuse rule.

This recommendation also makes it clear that a patent maynot be used to control commerce in subject matter beyond thescope of the patent. For example, it could not be considered"reasonably necessary" to secure full benefit to the owner of amachine patent that he attempt to control any of the commercein an unpatented raw material to be used in the machine.Neither could it be held that such an attempt had a direct re-lation to the machine claims in his patent. By the samestandards, the patent owner could not control commerce in oneof the unpatented elements of his combination invention wherehis claims are to the whole combination.

XmA final federal judicial determination declar-ing a patent claim invalid shall be in rem, andthe cancellation of such claim shall be indicatedon all patent copies subsequently distributed bythe Patent Office.

Under present law, even though one or more claims of apatent have been held invalid in one Federal circuit, the patenteemay pursue a different defendant in another circuit for infringe-ment of the same claims.

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TO PROMOTE THI PROGRESS OF USEFUL ARTS

As a result, a party may be held liable as an infringer orrequired to pay royalties in one circuit, while his direct com-petitor is practicing the same invention without restriction inanother circuit. Moreover, the mere possession of a patent, eventhough held invalid in one or more circuits, serves as a potentialthreat to persons unwilling or unable to defend a suit on thepatent.

Under the proposed recommendation, a claim, once heldinvalid, would be treated as cancelled from the patent. No onethereafter could be required, on the basis of a royalty agreementpreviously made part of an infringement judgment, to continueroyalty payments on the claim. Furthermore, the proposalwould preclude a subsequent suit on a patent claim previouslyheld invalid by a Federal court.

A patentee, having been afforded the opportunity to exhausthis remedy of appeal from a holding of invalidity, has had his"day in court" and should not be allowed to harass others on thebasis of an invalid claim. There are few, if any, logical groundsfor permitting him to clutter crowded court dockets and tosubject others to costly litigation.

xxIgOne of the most common grievances called to the Commis-

sion's attention, by all branches of the patent-using community,has been the high cost of patent litigation. The followingrecommendation is directed toward the pretrial period, now theoccasion for much expense and vexation.

Offices of "Civil Commissioner" shall be createdin those U.S. district courts where justified bythe volume of patent litigation. In patentcases, unless otherwise ordered by a districtcourt judge for good cause, a Commissionershall conduct pretrial hearings, preside at depo-sitions of parties, supervise discovery proceed-ings upon an accelerated and abbreviated basis,make preliminary rulings upon the admissi-bility of proofs, and be empowered to vary the

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burdens of proof for good cause in secrecycases.

The wholesome effect of the liberal discovery provisions ofthe Federal Rules of Civil Procedure (FRCP) is undeniable.Adversaries are compelled to reveal the facts of their cases toeach other sothat trials are conducted more fully and fairly.Like any other right, however, the right of discovery can beabused and it has been used to harass and oppress litigants.Uncontrolled discovery in patent cases is a prime cause of theenormous expense frequently encountered by the litigants.

One source of this expense is the man-hours required tosearch for, collect, and assemble for inspection, thousands ofdocuments called for under Rule 34 FRCP. More thousandsof documents and other kinds of information may be requiredto answer interrogatories under Rule 33 FRCP. In the eventof a disagreement between the parties about discovery, muchmore time may be needed for legal research, brief writing andargument before a court. In any event, the general rule in thecourts is that the acknowledged burden of a request for dis-covery is not a valid excuse to avoid producing the information.

Another source of considerable cost comes from takingadverse discovery depositions of parties or of the officers, di-rectors and managing agents of corporate parties. The wit-nesses may be examined over a wide subject area and forprotracted periods of time. Rule 30(b) FRCP provides thata court may limit or terminate an examination if it is beingconducted unreasonably or in bad faith. However, this re-course involves still more time and expense.

As a consequence, the high cost of patent litigation resultsin good and valid patents being defied and going unenforced,invalid patents being kept from court scrutiny, and, finally,compromises, settlements and licensing arrangements, whoseonly justification is an economic one, i.e., the avoidance ofenormous litigation expense.40

48


Adoption of this recommendation should reduce consider-ably the time and expense to litigants in patent cases. Theprovision of Civil Commissioners, who would supervise discoveryprocedures, should help correct abuses and bring about moreeffective utilization of these procedures.

XXvThe previous recommendation should substantially reduce

the cost of litigation. However, even the reduction so accom-plished may not be sufficient to insure a "day in court" for theindividual or corporation of modest means. The followingrecommendation is addressed to this problem.

A party to a patent case seeking to reduce hislitigation costs, with the consent of the adverseparty, may submit his case to the court on astipulation of facts or on affidavits withoutthe usual pretrial discovery. This proceduremay be used where no injunctive relief is askedand only limited damages are sought. Incen-tives shall be provided to consent to this pro-cedure, as set forth below.

The Commission does not seek to discourage the settlementof patent infringement controversies. On the contrary, publicpolicy strongly favors this method of resolving disputes. How-ever, since there is always a public interest or aspect involved ina patent license, a strong patent system requires that only goodand valid patents be the subject of licensing arrangements.Attainment of this desirable objective is presently hampered bythe many settlements and patent licenses brought to pass in orderto avoid high litigation expenses. But just as it is contrary tothe spirit of the patent laws to recognize and pay tribute to aninvalid patent, it is also unfair to expect individual or corporatepatent owners of limited means to settle, and accept less thantheir just due, simply because they cannot afford expensivelitigation.

The Commission believes that a truly just patent systemshould provide all patentees fair opportunity for a "day in

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TO PROMOTE THE PROGRESS OF USEFUL AFP't

court." Similarly, all alleged infringers should have an oppor-tunity to test judicially the validity and scope of patents assertedagainst them. Neither should be made to suffer or be deniedaccess to the courts because of intolerable litigation expenses.

The expedited procedure recommended should be madeapplicable to both infringement suits and declaratory judgmentactions involving patents.

As an incentive for the alleged infringer to consent to thisprocedure, any subsequent judgment favoring the patent owner,under this procedure, would omit any injunctive relief and wouldbe confined to a reasonable royalty license for future infringe-ment and reasonable royalties for past infringement. Royalties,both past and future, could not exceed a fixed amount, such as$100,000, unless a higher figure is agreed to by the parties. Inaddition, if an alleged infringer should refuse to consent to thisprocedure, and the patent owner, after regular proceedings, issuccessful, he would be entitled to a mandatory award of allreasonable litigation expenses, including attorney's fees.

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TO PROMOTE THE PROGRESS OF USEFUL ARTS1

Statuory AIvbwy CmuliXIn

A Statutory Advisory Council, comprised ofpublic members selected to represent the prin-cipal areas served by the patent system, andappointed by the Secretary of Commerce, shallbe established to advise him, on a continuingbasis, of its evaluation of the current health ofthe patent system, and specifically, of thequality of patents being issued and the effec-tiveness of any internal patent quality controlprogram then in operation, and whether anoptional deferred examination system shouldbeen instituted or terminated.

Every fourth year the Council shall publish areport on the condition of the patent systemincluding recommendations for its improve-ment

The membership shall consist of not less thantwelve nor more than twenty-four. The termof appointment shall be four years, with amaximum tenure of eight years. An execu-tive director, and other support as deemednecessary, shall be provided.

Under this recommendation, a standing advisory bodywould be created by statute with public members representingthe principal areas served by the patent system. Thins groupwould meet at regular intervals and would be responsible, on acontinuing basis, for effectively analyzing the contemporarycondition and needs of the system. The Council would utilizeand suggest modern techniques for measurement and evaluation,and regularly report its findings and recommendations to theSecretary of Commerce.

The composition and continuity of the Council should insureobjective evaluation of the quality of the patents being issuedand enable it to recommend the institution or termination of anoptional deferred examination system (Recommendation No.

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IX). It also could observe the effectiveness of the recommendedcancellation procedure (Recommendation No. XV).

In view of the great pressures on the patent systembrought by, for example, the escalating information explosion,the Commission believes that the system's continuing welfaremust not be left entirely to those preoccupied with its dailyadministration, or to examination by a once-in-a-generationCommission. Continuous review of the Nation's changing needsand the capacity of the system to respond is indispensable.

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Paten Omffic operation

XXV

Adequate support of the Patent Office is required in orderthat it properly may perform its mission, now and in the future,irrespective of the nature of the patent examining systemutilized. Therefore, it is recommended that:

The Patent Office should be supported ade-quately to insure first-class staffing, housingand equipment, andPatent Office financing should be establishedon the following basis:1. The Patent Office should not be required to

be entirely self-sustaining.2. The Commissioner of Patents should be au-

thorized to set fees for Patent Office serv-ices within broad guidelines established byCongress. Such fees shall be apportioned inaccordance with the cost of providing theservices.

3. The Patent Office should be authorized toestablish a "revolving fund" of all itsreceipts to support its operation.

The Commission cannot emphasize too strongly that theprime requirement for optimum Patent Office operation is adedicated corps of career employees possessing a unique com-bination of scientific and engineering knowledge and the abilityto make sound legal judgments. Assembling and retaining sucha staff of highly trained professional personnel in a. competitivemanpower market requires, among other things, an increasingexpenditure of resources.

Maximum utilization of the skills of any staff requires aworking environment conducive to intellectual output. Supple-menting such environment, the best available equipment must beprovided for obtaining, storing, and retrieving pertinent priorart and for all other required supporting functions.

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1. To recover 100% of Patent Office operating expenses on asustained basis would require substantial fee increases. Thiscould reduce overall inventive activity which, together with theresultant loss of technological disclosure, could adversely affectour economy. Limited subsidization of the Patent Office hassubstantial justification. The patent system's incentive to in-vent, disclose, innovate and market new inventions createscapital, jobs, and tax revenues which more than justify therelatively small expenditure of tax funds required to supportPatent Office operations.2. At present, Congress periodically enacts Patent Office feelegislation which includes a schedule specifically listing the feesthat the Patent Office must charge for most of the services itprovides. The fees set do not necessarily reflect the actualexpense to the Patent Office in rendering particular services.Although Patent Office costs may rise, there is no present pro-vision for a corresponding increase in its service charges. Hence,it is unlikely that any long term fixed relationship between feesreceived and Office expenditures could be maintained withoutcontinuing prompt legislative adjustments. This recommenda-tion would permit the Commissioner of Patents, und',.r, guidelinesestablished by Congress, to set fees for types of services andchange them as conditions may demand. This would permitrecovery of any desired percentage of expenses and provide amore equitable fee structure directly related to the cost ofparticular services.

3. At the present time, all fees received by the Office must beturned over to the Treasury promptly and the Patent Office mustoften seek supplemental appropriations because of conditionsbeyond its control. These include unexpected rises in printingcosts and unpredictable increases in demand for services that arefurnished below cost. Consequently, it faces periods of uncer-tainty and delay in carrying out needed programs.

Adoption of the present proposal would establish a fund,consisting of the fees paid for Patent Office services, for

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partially financing Patent Office operations. Congressional ap-propriations could supplement this fund as necessary. Theavailability of this "revolving fund" would lessen the disruptiveeffects caused by delayed legislative action on appropriations.It would also enable the Patent Office to offer additional servicesto the public on a reasonable cost recovery basis.

maThe

The applicant should be permitted to' amendhis case following any new ground of objectionor rejection by the Patent Office, except wherethe new ground of objection or rejection isnecessitated by amendment of the applicationby the applicant.

The Commission believes that the desirable goal of reduc-ing the backlog of patent applications reasonably should bebalanced with the opportunity for an inventor to'obtain a validpatent of proper scope. Thus, the applicant should be provideda fair opportunity for reshaping his claims to meet new rejec-tions of the Patent Office. On the other hand, it is desirable toavoid prolonged pendency, which can be caused by successiveamendments that substantially shift the subject matter areaclaimed.

Applied to specific problems which most commonly arise inPatent Office prosecution, a practice is envisioned in which: (a)if, prior to final rejection, the applicant should introduce newlimitations not found in any of his original claims, the PatentOffice could cite a reference in the final rejection to show thesenew limitations and refuse further amendment to the case; and,conversely, (b) if, following an amendment prior to final rejec-tion, the Patent Office should cite a new reference which is abetter anticipation of features previously claimed, the PatentOffice could not terminate prosecution of the application.

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To accelerate the attainment of a system for the rapid andeffective retrieval of pertinent information concerning patents,it is recommended that:

A study group comprising members from in-dustry, technical societies and governmentshould be established to make a comprehensivestudy of the application of new technologyto Patent Office operations and to aid in de-veloping and implementing the specific recom-mendations which follow.1. The United States, with other interested

countries, should strive toward the estab-lishment of a unified system of patent classi-fication which would expedite and improveits retrieval of prior art.The United States should expand its pres-ent reclassification efforts.

2. The Patent Office should be encouraged aidgiven resources to continue, and to intensify,its efforts toward the goal of a fully mecha-nized search system.

3. The Patent Office should acquire and storemachine-readable scientific and technical in-formation as it becomes available.The Patent Office should encourage volun-tary submission by patent applicants ofcopies of their applications in machine-readable form.

4. The Patent Office should investigate thedesirability of obtaining the services ofoutside technical organizations for specific,short-term classification and mechanizedsearch projects.

1. Until the advent of fully automated searching, when allprior art can be retrieved readily, a classification system willcontinue to be one of the important tools for conducting a prior48

56


art search.. The present diversity among. national patent lawsand-classification systems results in a substantial amount of du-plicative effort- in examining applications on the same inventionfiled in: more than one country. A common classification systemwould move the world closer to' the desired international patent,if principles of patentability are similar (Recommendation No.XXXV), since each country would know what segment of priorart was previously searched by another patent office on an appli-cation for the same invention filed in that country. Moreover,it would insure that specialized data banks would be more com-plete by providing common guidelines as to what informationshould be included in each of these data banks.

2. As the amount of scientific and technical information con-tinues to grow at a pace which makes the information unman-ageable manually, mechanization appears to be the only solutionto obtaining reliable, quality searchers of prior art. Hence, itis imperative to utilize fully the existing techniques of mecha-nized searching and to study new ones as they become available.

The Patent Office should cooperate with- other U.S. agenciesengaged in the development and' implementation of mechanizedinformation retrieval systems, to maximize their value to theOffice as well as the other agencies.

X* . '.

The need for cooperative efforts with foreign nations andactive participation by the Patent Office in international orga-nizations studying problems of mechanical' information retrievalis self-evident and should be pursued.3. Obtaining as much contemporary information as possiblein the. form of perforated or magnetic tape, or 'the like, wouldpermit continuous build-up of a data bank suitable for auto-mated searching. This would avoid the future necessity-'oftranscribing 'at one-time huge amounts of printed informationinto computer-usable form and permit a speedier and les, ex-pensive change-over from a manual to an automated searchsystem.

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To insure compatibility of information in machine-readableform with automated data systems envisioned for future PatentOffice use, industry, professional societies, government and allothers generating data should cooperate in setting up acceptablestandards for format and media for machine-readable data.

4. Utilization, on a contract-basis, of any knowledge, experi-ence and expertise of outside organizations specializing inmechanized information retrieval technologies could serve asan expeditious and economical means for solving problems whichotherwise would require very expensive in-house training, ex-perimentation and delay.

XXX

To facilitate the public dissemination of technological knowl-edge, and other patent related information, it is recommendedthat:

The Patent Office should:1. Proceed vigorously with the implementing

of its plan for microform reproduction ofall search files; and

2. Cooperate with foreign national patentoffices and international patent organiza-tions to develop a worldwide index of patentsand published applications for patents.

1. The Commission recognizes that any visual microformsystem is intended only as a bridge between the present methodsof information storage and retrieval, and future fully automatedmechanized search systems (Recommendation No. XXIX).Meanwhile, however, there is the possibility of storing greatamounts of information on small quantities of film or cards,which can be readily inspected with semi-automatic readingdevices. This not only increases the capability of the searcher toscan more material in a given time but also makes economicallyfeasible the placing of complete copies of classified search filesin locales outside the Patent Office. This would permit establish-

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ment of satellite public search facilities throughout the UnitedStates, resulting in greatly improved dissemination of the tech-nological and legal information contained in patents.

2. On an average, patents now are granted in three differentcountries for each invention, and an average of 650,000 patentapplications are filed each year in eighty different patent offices.These figures lend substantial weight to the desirability of aworldwide patent index. Such an index would provide promptand reliable means for obtaining information relative to theexistence and status of particular patents or applications in anycountry in the world.

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Trutuital

XXXI

The legislation implementing the proposedrecommendations of the Commission shouldbecome effective as soon as practical withregard to both patents and pending applica-tions.

Many recommendations, such as the presumption of correct-ness to be given Patent Office decisions, reasonably could beapplied to all pending applications. Others, such as those relat-ing to patent term and prior art, should not apply to pendingapplications. Specifically, any application filed prior to theeffective date of implementing legislation, which is still pendingfour years after its earliest effective filing date, or two yearsafter the enactment of such legislation, whichever is later, shouldbe published in a manner similar to that of the recommendedinitial publication (Recommendation No. VII).

Many recommendations, such as those concerning the CivilCommissioner and the expedited procedure for limited claims,could apply to all patents, whenever issued.

It is expected that the legislative draftsmen will determinethe time each statutory change proposed may be implementedmost effectively.

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Cmmrnl htotPr e

The Commission has noted the increasing participation ofthe Federal Government in the financing of research, develop-ment, testing and engineering, and the many problems relatedto the ownership of patents resulting from such work.

The Commission decided not to address itself to the questionof the distribution of rights in inventions resulting fromresearch and development work financed wholly or in part bythe Government. This question is being considered activelyelsewhere in the Executive Branch and by Committees of theCongress.

Nevertheless, it is the Commission's hope that any actionCongress may take in this regard will promote the purposes ofthe patent system to encourage invention and innovation and theresulting economic development and benefits.

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TO PROMOTE THE PROGRESS OF USEFUL ARFTS

hmtaltadl AJtlis

To promote more harmonious international relations,particularly with regard to the protection of industrialproperty:

The United States should take a position infavor of the proposed revision of the ParisConvention whereby a right of priority maybe based on an application for an inventor'scertificate.

Some member countries of the Paris Convention, in par-ticular the U.S.S.R. and some Eastern European countries, issueinventor's certificates as well as patents. While some Conven-tion countries voluntarily recognize inventor's certificates forpriority purposes, there is no obligation under the Conventionto do so. At present, the U.S. patent statute prevents therecognition for priority purposes of anything but an applicationfor patent in another Convention country.

The proposal for revision is on the agenda of the StockholmConference, which is to be held in 1967. According to theproposal, the date of an application for an inventor's certificatein one Convention country would be recognized for prioritypurposes in all Convention countries. It is noted that the pro-posed revision is limited to inventor's certificates from countriesin which inventors have the right to apply for either a patentor an inventor's certificate.

XXiV

Efforts should be made to have the Paris Con-vention modified to remove any obstacle tomeasuring the term of a patent from an effec-tive foreign filing date.

The present text of the Paris Convention requires that"Patents obtained with the benefit of priority shall have in thevarious countries of the Union a duration equal to that which

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they would have had if they had been applied for or grantedwithout the benefit of priority."

Since the Convention forbids calculation of the term of apatent from the foreign filing date, it prevents measurement ofthe term from the effective filing date when foreign priority isclaimed. Thus a foreign applicant who can claim a foreignpriority date would receive a longer period of protection thanan applicant who filed a domestic application on such date. Ofcourse, a corresponding advantage is accorded U.S. inventorsfiling abroad.

Movement toward a universal patent system (Recommen-dation No. XXXV) would be promoted if an entire internationalfamily of related patents expired at the same time. This re-quires a common measuring point for the patent term. Theeffective (foreign or domestic) filing date, unlike the earliestdomestic filing date, would constitute such a common measuringpoint.

The Commission believes that the ultimategoal in the protection of inventions should bethe establishment of a universal patent, re-spected throughout the world, issued in thelight of, and inventive over, all of the prior artof the world, and obtained quickly and inexpen-sively on a single application, but only in re-turn for a genuine contribution to the progressof the useful arts.To this end the Commission specifically recom-mends the pursuit of: (1) International harmo-nization of patent practice, (2) the formation ofregional patent system groups, and (3) a uni-versal network of mechanized informationstorage and retrieval systems.

There are great differences today among the patent systemsof the various countries. The inventor who desires worldwideor even multi-national patent protection for his discovery mustfile a multitude of applications, each governed by a separateand distinct system of laws, rules, regulations and procedures.

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Even after the patent has been obtained, the inventor is con-fronted with diverse systems of maintaining patent protection.

These factors increase the cost of securing multi-nationalpatent protection and often cloud the status of an invention in aparticular country, thus discouraging foreign investment andmarketing.

If change is to be achieved, nations must adopt a singleset of long-range goals to guide their intermediate and short-range movements. Any attempt by revolutionary change, toscrap present systems in favor of new ones, in the United Statesor abroad, is neither feasible nor desirable. It is, however, bothpossible and advantageous o'i promote and direct interim stepstoward the ultimate goal-a universal patent.

To the extent that harmonization of U.S. practice withprevailing foreign practice can be attained without injury to thequality of the U.S. patent system, such harmonization should beintroduced as a- first step toward the desired goal. This con-sideration applies both to the substantive law and to the formsand procedures for implementing it. Other recommendationsin this report are responsive to this general objective.

Where, however, U.S. practice appears to be the superiorone, it is recommended that appropriate Federal agencies makeefforts to secure harmonization compatible with U.S. practice.

As an intermediate step toward attainment of a universalpatent, the formation of regional patent system groupings shouldbe encouraged. Within such groupings there; will inevitablydevelop a mutual respect for'the search and judgment capabili-ties of the members. This should lead to cooperative searchingand, beyond that, to mutually recognized patents among themembers of the group. The avoidance of the duplication ofeffort, expense and delay is a clearly attainable benefit fromsuch a development.56

64


Finally, as an adjunct to achieving the ultimate goal of auniversal patent, the Commiissioni isages the establishment ofa universal network of mechanized information storage andretrieval systems involving all of the patents and other technicalliterature of the world.

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CHARTSCharts 1 through 5 illustrate a number of recommended

changes by providing a graphic representation of proceduralsteps and effects arising therefrom. Much of the wording usedis abbreviated and should be read in the context of the specificrecommendation referred to by number.

The flow of events proceeds from top to bottom. Broadarrows pointing into the system indicate conditions affectingthe system's flow, while broad arrows pointing outward fromthe system, signify results emanating from the system's flow.

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CHART 1

Filing An Application

R-XVIII.

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R-VIII

.ALTERNATIVES

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CHART 4

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CHART 5

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Documents

PROMOTE PROGRESS USEFUL ARTS