TO PROTECT THE UNITED STATES IN CERTAIN PATENT SUITS MONDAY, MARCH 8, 1948 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON PATENTS, TRADE-MARKS, AND Washington, D. C. The subcommittee met, pursuant to call, at 10 a. m., Hon. Earl R. Lewis (chairman of the subcommittee) presiding. Mr. LEWIS. The committee will come to order. Mr. Lanham. STATEMENT OF HON. FRITZ G. LANHAM, WASHINGTON, D. C. Mr. LANHAM. Mr. Chairman and members of the subcommittee, my name is Fritz Lanham. My home city is Fort Worth, Tex. My Washington address is Woodley Park Towers. I represent the National Patent Council, a nonprofit organization of small manufacturers, the primary purpose of which is to educate the people of America by impressing upon them the importance of the patent system as the basis of our progress and prosperity, to show that patents make jobs and assure employment, to stimulate useful inventions by preserving and fostering the incentive which produces them, and thus to protect the patent system as the foundation of the rights of the creative forces of this country. The president of this organization is Mr. John W. Anderson, with administrative offices in Gary, Ind. First, I should like to read Mr. John W. Anderson's statement with reference to this bill. Then I should like to offer some observations of my own. This is the statement of Mr. Anderson: * * The subject bill is substantially identical with the act of June 25, 1910 (U. S. C., title 35, sec. 68, amended July 1, 1918), except that portion beginning on line 15 and reading: “* and in addition, any written disclosure in the files of the War Department, the Navy Department, or any other Government agency having the national defense as its principal function, having a provable date prior to the invention or discovery of the patented invention or discovery or more than one year prior to the filing of the application for the patent in suit, which disclosure constitutes a sufficient description of the article, material, or process manufactured or used by or for the Government upon which the suit is based to enable others to make or use the said article, material, or process shall, unless such disclosure consists of information obtained directly or indirectly from the patentee, constitute a complete defense for the Government against the claim for compensation, but shall not invalidate any patent claiming the invention or discovery shown in such disclosure." It is desired first to direct your committee's attention to the extent to which the subject bill appears to reflect further the disposition of agencies of Government to seek constantly stronger positions from which to defend unconscionable abuse of the patent rights of its citizens. The above-quoted amendment clearly seeks to give Government a discriminatory advantage against the citizen-an advantage which one citizen is denied as against another. If a citizen buries in his files information disclosing a particular invention, and does not proceed diligently to bring about the issue of a patent covering it, with resultant disclosure to the public, the citizen is held to have abandoned the invention and his disclosure cannot be used to prevent the issue of a patent to a diligent citizen who later creates the same invention-nor can his disclosure be used to invalidate the patent after its issue. Under the bill as it reads, the Government could suspend all activity relating to an invention by one citizen, until another citizen had conceived the invention independently and had caused a patent to issue upon it-after which the Government could invalidate the second citizen's patent, as far as it might affect the Government, by asserting the abandoned disclosure. Among the vast number of ideas for inventions submitted to Government for its use, by its citizens, literally thousands passed upon for Government by individuals or groups serving Government for that purpose and by them rejected as worthless and sent to a file, may have embodied in their disclosure an idea of real potential value to the Government and perhaps of value for civilian uses. Inventive ideas condemned as worthless by those so acting for Government during World War II later were pressed sufficiently upon Government to bring about their use in war, with highly important results. It therefore seems that Government's demonstrated inability to evaluate, even approximately, the unpatented inventive ideas submitted directly to it for its use, should alone throw into serious question the equity of Government later asserting, to its advantage and to the disadvantage of the citizen, unappreciated and abandoned such disclosures which, for any other purpose, might as well have remained fleeting thoughts in the minds of citizens. Expressions by associates of this council, throughout the United States, being smaller manufacturers and patent lawyers in independent practice, show them to be, almost unanimously, unqualifiedly opposed to the above-quoted provisions of the subject bill. Many have taken equally strong positions adverse to certain provisions of the act of June 25, 1910. It is understood to be represented that the Army and Navy have caused the subject bill to be introduced and/or are sponsoring it. Is it, or is it not, significant, therefore, that the bill carries no prohibition against Government entering or promoting competition with its citizens, for civilian uses? It is understood that the Army and Navy are now including in licenses required from Government contractors the following provision: "That the license granted by this article shall not convey any right to the Government to manufacture, have manufactured or use subject inventions for the purpose of providing services or supplies to the public in competition with contractor in contractor's established fields of activity." It is also understood that the Atomic Energy Commission is granting, with its contractors, no such recognition of constitutional intent or of the basic, and vital, economic principles involved. This attitude of the Atomic Energy Commission seems, however, to be entirely consistent with the Sovietized provisions of the Atomic Energy Act as relating to inventions and patents, and consistent with other stifling provisions of that act. uses. It has been somewhat more than apparent in recent years that somewhere among influential personnel of important agencies of Government there has been carried a conviction that Government should be free to compete with its citizens in the manufacture, sale, and use of patented and unpatented products for civilian There are consistent indications that extreme care is being exercised to shape Federal legislation, also research and development contracts between Government and its citizens-and all related activities-so that in the event some future Congress yields to Government pressure for legislation permitting competition by or from Government in civilian fields, the general pattern will readily accommodate such legislation. It is regarded as not in the public interest to enact any legislation serving further to disadvantage the citizen inventor and patent owner in his relations with Government. This council respectfully urges your committee to examine this bill very carefully as to its probable effects. It is believed that such careful examination will not serve to incline the committee toward approval of the bill. Mr. Anderson, as president of the National Patent Council, also presents for the record, and suggests perusal and consideration of, a supplementary statement with reference to certain features of the act sought to be amended by this bill. Mr. LEWIS. That may be included. Supplemental statement re H. R. 3929. NATIONAL PATENT COUNCIL, INC., Chairman, Subcommittee on Patents of the Committee on the Judiciary, MY DEAR MR. LEWIS: Supplementing our statement of even date. We desire here to submit, for the files of your committee, as of possible significance with relation to the trend of the amending portion of the subject bill, criticism of the act of June 25, 1910, which criticism perhaps would have been submitted before enactment had there been articulate at that time a smaller manufacturers' organization devoted exclusively to the clarification of questions relating to our patent system. Referring to the format of the subject bill the following suggestions have been offered: (a) Line 1, page 2: After the words "United States" there should have been inserted the words "for its military use." It is thought that the act should expressly forbid the manufacture, by or for the United States, of any product intended to be sold for civilian uses in competition with its citizens. (b) The patent owner's remedy for infringement by Government should be by suit brought in the same court and in the same manner as suit may be brought by a patent owner against any other infringer. The Government should not be restrained from manufacture of a patented invention for its military uses-if necessary to make the invention adequately available for such uses-but should compensate the patent owner for the use of his invention. (c) Beginning line 12, page 2: The Government asks for itself the privilege of "any and all defenses, general or special, that might be pleaded by a defendant in an action for infringement, as set forth in title 60 of Revised Statutes, or otherwise." Does it seem consistent for the Government to expect to deny the patent owner access to courts available to him for remedy against infringement by a citizen (and thus force him to the tedious and sometimes almost interminable processes of the Court of Claims) while Government asks the privilege of availing itself of such defenses? When a citizen contracts with Government knowing that, if a claim against Government arises from the relationship, he must await adjudication by the United States Court of Claims, the citizen at least has had, and exercised, an option. Is it not quite another matter for the citizen to be confronted by an attack arbitrarily imposed by Government and to be told then that he must await adjudication by a court whose deliberations so often mature at a date beyond the normal life expectancy of the citizen? (d) Beginning line 6, page 3, the bill reads: “And provided further, That the benefits of this Act shall not inure to any patentee who, when he makes such claim, is in the employment or service of the Government of the United States, or the assignee of any such patentee; nor shall this Act apply to any device discovered or invented by such employee during the time of his employment or service." Is this intended to mean, for example, that an employee of a civilian corporation, which may have accepted from the Government a development project relating to storage batteries of submarines, would be held to be "in the service of the Government"-and therefore disadvantaged with relation to an invention conceived by him when in such service-even though that invention relates to a field entirely remote from storage batteries? It is well understood that the citizen patent owner, in the absence of the act of June 25, 1910, would be entirely without the privilege of suing the Government for patent infringement. That act therefore has served a purpose beneficial to the citizen. However, it does seem that, if that act were to be amended, the amendment should be prepared with first consideration for the above-reported questionsand should not attempt merely to put the citizen at a further, and unfair, disadvantage at the hands of Government. Respectfully, NATIONAL PATENT COUNCIL, Mr. LANHAM. I might say with reference to that supplementary statement that in the first place the law gives the Government certain advantages which the citizen does not enjoy. It provides, for instance, that the Government may avail itself of different defenses, whereas the citizen has to plead them. I recall that Mr. Fenning, in a hearing held in 1940 before the Committee on Patents of the House of Representatives, elaborated that difference, and you will find his statement in the hearings at that time. Mr. KEATING. Is there a difference between "avail" and "plead"? Does this bill mean that the Government will not have to plead certain defense? Mr. LANHAM. Yes, in the first instance. I do not think it should be necessary in the first instance to require the patentee as plaintiff to go through a great deal of work and indulge in a great deal of expense before he knows what the Government is going to plead. You will find that rather amply discussed in the hearings formerly held. Mr. KEATING. I think that is quite important. Mr. LANHAM. That is one of the pertinent suggestions made with reference to amendment of the original act. However, we are trying to devote our attention particularly at this time to the proposed amendment of the act by this bill, rather than to amendments of the provisions of the original act. Each should have proper study. Mr. KEATING. There was a suggestion made here by one of the other witnesses regarding an amendment to this bill to provide that the Governinent must plead that defense within a certain length of time. Mr. LANHAM. I think the same procedure should be required of the Government that is required of the patentee. Otherwise, I think it would not be fair practice. Further, this says: And provided further, That the benefits of this Act shall not inure to any patentee who, when he makes such claim, is in the employment or service of the Government of the United States. The patentee might have invented many things before he went into the employ of the Government. He might have been employed by the Government for some particular purpose, and yet the Governinent could go back and dig up documents and prevent him from getting the benefits of his former patents. Mr. LEWIS. Just a minute. I do not understand that. How could the Government do that? Mr. LANHAM. By going back through all of its various documents. Mr. LEWIS. You mean under this act the Government could do that? Mr. LANHAM. Yes, because it states very clearly on page 3: that the benefits of this act shall not inure to any patentee who, when he makes such claim, is in the employment or service of the Government of the United States. He might have gotten a great many of his patents before he went into the service. Suppose this had been in effect in Thomas Edison's lifetime, and he had been called upon to render some special service for the Government. The Government under this provision, if it had any such memoranda or documents in its files, could attack any invention that Edison had made before he was employed by the Government. Mr. KEATING. I thought that was in there in order to make it clear that this act was only for the benefit of the Government and was not for the benefit of an individual patentee, that he could not avail himself of the defenses which are given to the Government. That is the way I interpreted that. Mr. LANHAM. Well, the Government here would be attacking the patent of the patentee. He would already have his patent. There would already be the disclosure, but the Government could go back, to a time even before he was connected with the Government, and produce any sort of document that it could, because this provision applies to the time when he makes such claim. Mr. KEATING. In the first place, I differ with your statement that the Government attacks anything. This is a bill, as I read it, giving the Government a defense, not giving the Government a sword. I certainly do not understand the force of your objection to the last proviso. Mr. LANHAM. That is with reference to the present law, and you will find that rather amply discussed in the former hearings, and also in the testimony of Mr. Henry the other day. I want to devote my discussion principally to the proposed amendment of the existing law. I wish to speak, Mr. Chairman and gentlemen of the committee, from the angle of the inventor and from the standpoint of small business. After all, the constitutional provision is for the protection of the inventor, and our patent system and our patent laws have had in mind primarily and principally the protection of the inventor, because he is the one who makes for our progress. I want to call your attention, in the first place, to the fact that this is not a bill based on the preservation of national defense. It is very much broader than that. I defy any proponent to show where this bill says anywhere in it that it is a bill for national defense. Mr. KEATING. It is applicable only to the War Department, Navy Department, and a Government agency having national defense as its principal function. Mr. LANHAM. Yes; I understand, but it is not limited to what they may have with reference to national defense. The War Department and the Navy Department and these agencies of the Government may have had ideas presented with reference to many things which have nothing to do primarily with national defense. It Mr. KEATING. That may be, but it seems to me extremely inaccurate to characterize it as having nothing to do with national defense. has that express language in it. |