Section 6 provides for the usual appeal from a decision of the Commissioner of Patents or any board established by him, to the Court of United States Customs and Patent Appeals which will proceed in the usual manner to hear any appeals from decisions of the Patent Office.

Section 7 provides for the issuance of a certificate evidencing the granting of an extension by the Commissioner of Patents pursuant to a decision by him or by the Court of Customs and Patent Appeals, and for publishing a notice of the granting of an extension in the Official Gazette of the Patent Office.

Section 8 provides that upon the issuance of a certificate of extension, the patent shall have the same force and effect in law as though it had been originally granted for 17 years plus the term of extension, but for the protection of the public includes the following exceptions:

(1) No extension of a patent shall serve as a basis for any claim by reason of manufacture, use, or sale by or for the United States during the period of extension;

(2) No extension shall impair the rights of anyone who before the extension was granted was in possession of any rights in patents or applications for patents conflicting with the rights of any patent extended under this act. Further, anyone who was lawfully making, using, or selling the invention covered by the extended patent may continue such manufacture, sale, or use of an invention covered by such conflicting patent or application for patent during the extension of the patent, subject to the payment of a reasonable royalty. Section 9 provides that a licensee under an extended patent may have the right of continuing the license for the period of the extension or any part thereof on the terms contained in the existing license or of discontinuing the license on the expiration of the original term of the patent. This section further provides that if an extension is not issued until after the date of expiration of the original term of the patent, any use of the invention after the date of expiration and before the issuance of the extension which would have infringed the patent had the patent been in force, will be without liability for infringement.

Section 10 provides that the defenses for infringement against an extended patent may include proof that any material statement of the application for extension is not true in fact.

Section 11 provides that the Commissioner of Patents, subject to the approval of the Secretary of Commerce, may establish regulations for the conduct of proceedings under this act including the establishment of a board to hear and determine applications hereunder.

Section 12 provides that the act shall take effect 90 days after approval.

DISCUSSION

The merits of patent-extension legislation have been the subject of numerous hearings by committees of the House and the Senate in several of the past Congresses. Witnesses have appeared from all parts of the country urging passage of similar bills. Many of the present members of this committee in the last Congress urged the passage of a general patent-extension bill. At the public hearings held on June 10, 1953, on various patent-extension bills, witnesses from all walks of life urged the Congress to enact such a law. The chairman, (Congressman Keating) in asking for passage of a revised bill which finally came out of committee, said in part:

"Now, as legislators we would be justifiably incensed if someone proposed that we enact a statute arbitrarily reducing the terms of patents heretofore issued and outstanding from the issued period of 17 years to a period of 13 years or even less. We would regard such a proposal as a clear violation of the obligations which the Government assumed when the patent was issued. And yet the result is the same when the Government during public emergencies, issues an order directing that for a period of time the holder of a patent shall not use certain machines or articles or materials or processes the use of which is necessary to the use or development or manufacture or exploitation of a patented invention. A similar result occurs when the inventor himself is drafted into the armed services or is accepted for enlistment therein.

"The fact that the Government does not take such drastic measures except during public emergencies does not justify the Government refusing to make reasonable restitution for that part of the 17-year period of the patent during which the action of the Government prevented or substantially curtailed the use and development of the patent. In my opinion, the provisions of this bill

would provide no more than reasonable restitution in those classes of cases most directly effected.

The right to the exclusive use of a patented invention for the full period of 17 years is analogous to, if not in essence, a right of property. Where the Government expropriates private property for public use it is required by the Constitution to pay just compensation therefor. If public emergencies such as World War II or the Korean conflict force the Government to abridge the special obligations it assumed by the issuance of patents, the least the Government can do to make good its original undertaking is to extend the terms of such patents for a period corresponding to that during which the normal use or development of the patent was prevented or substantially curtailed.

"My conclusion is that unless a bill such as H. R. 3534 is enacted into law, we cannot contend that our Government has fairly and justly carried out the obligations it assumed by the issuance of patents under our laws. To avoid such an unjust and distasteful consequence I urge all of my colleagues to support this bill" (Congressional Record, vol. 100, No. 142, p. 11631).

The particular merits of H. R. 3134 are found in the all-embracive qualification clause which permits any patent owner who has a just grievance to petition for relief. The general purpose of the bill is to afford a vehicle for a fair hearing and the granting of relief by way of extension of a patent upon a proper showing. The bill will give the Commissioner of Patents the sole jurisdiction over hearings on applications for extensions, his rulings being subject to the usual right of appeal to the United States Court of Customs and Patent Appeals, as is now regular procedure in all matters that come under the jurisdiction of the Commissioner of Patents.

The other bill before this committee seeks relief only for different groups or classes. It is defective in that it limits veterans' relief solely to individuals and their spouses, denying relief to all other veterans such as those who owned patents jointly with their fathers, mothers, sisters, brothers, or divorced wives or husbands. It is also silent on relief to veterans who have assigned their patents under an exclusive license agreement; also as to veterans who are coinventors with nonveterans. Clearly the Congress does not intend to grant relief only to a portion of the veterans and deny the same relief to others. The limiting language of Public Law 598, 81st Congress, denied relief to countless veterans who came in one of the categories mentioned above.

The second class mentioned in section 1, subsection a, paragraph 2, “curtailment by an order of an agency of the Government prohibiting or limiting the production or use of any class of machines, articles, or materials, or the use of any class of processes or formulas" is again restrictive in that it applies only to those persons who can show direct prohibition or limitation. While this could be done in most cases, there would be others who were indirectly affected by the same prohibition or limitation and they would be denied relief. The third class mentioned in section 1, subsection a, paragraph 3, provides for extension of patents where the owner of such patent granted a license to the United States or to manufacturers, producers or contractors furnishing to the Government without royalty or at a nominal royalty, and since September 1, 1939, under the authority of such license, the United States, or manufacturers, producers, or contractors furnishing goods or services to the United States, such use of said invention having been of material assistance and benefit to the United States.

Here again, relief is granted only to an owner, not an inventor who may have sold outright prior to the existence of conditions which later developed so that the present owner now receives relief by way of extension and the original inventor has no forum to seek relief. Further, the language "and since 1939 * * * the United States, or manufacturers, producers or contractors furnishing goods or services to the United States" apparently means continuously. This condition clearly does not exist in the majority of cases and could clearly deny relief to most persons affected. And further, the language "such use of said invention having been of material assistance and benefit to the United States" would not necessarily be true in many cases. The manufacturers or suppliers who obtained such free license may have engaged in direct competition with the licensor in private business and this would be the controlling factor in determining whether relief by way of patent extension should be granted. These very facts were brought out in the testimony of James E. Hooper in the hearings in June 1953 (p. 63).

The purpose of this discussion is not to condemn H. R. 2128 or any other proposed patent-extension legislation. Because of the considerate interest Con

gress has shown for the inventor and the patent owner's plight, it is believed that all these pertinent facts should be brought to the attention of this committee.. That is why the passage of an all-embracing bill such as H. R. 3134 is respectfully urged.

H. R. 3134 is sufficiently broad so that it covers any and all of the classes of patent owners who would be affected by the passage of the other bill before this committee. If H. R. 3134 is passed it would eliminate the necessity of considering other bills in succeeding Congresses and would cover all of the conditions which might arise under which inventors or patent owners could appeal to Congress. The necessity of considering private bills would be eliminated. The passage of this bill would not require the appropriation of any moneys by the Congress, the Commissioner of Patents having the right to set up appropriate fee payments for any and all action taken under the law. The relief afforded to patent owners, if the Commissioner of Patents is satisfied with the requirements, would only be an extension of the period of time of the patent. The serious consideration of this bill by the committee is again respectfully urged.

Mr. WILLIS. We have Mr. Lyons listed to testify jointly with Mr. Scully. Mr. Lyons, do you have a separate statement?

Mr. LYONS. Mr. Scully was talking as director of the Patent Equity Association and I am talking on behalf of the G. & W. H. Corson Co., of Plymouth Meeting, Pa., and the Scully Signal Co., of Melrose, Mass. I have a very brief statement I would like to make, Mr. Chairman.

Mr. WILLIS. All right. We did not mean to exclude you. Please identify yourself for the record, giving your name, address, and occupation.

STATEMENT OF JOHN J. LYONS, OF WASHINGTON, D. C.

Mr. LYONS. I am John J. Lyons, of Washington, D. C., representing G. & W. H. Corson, Inc., of Plymouth Meeting, Pa., and the Scully Signal Co., of Melrose, Mass. I am here before you in behalf of the enactment of H. R. 2128. As legislative director for Patent Equity Association of New York, I was the registered representative for H. R. 3534 last year, which is identical with H. R. 2128 now before your committee for consideration.

Mr. CURTIS. After it was amended in committee?

Mr. LYONS. That is right.

Mr. Chairman and members of the committee, I believe I can best serve the committee by giving a brief résumé of the nature of patent extension petitions in the past and in particular the preparation and legislative history of H. R. 3534 in the 83d Congress together with the difficulties encountered. The points involved related to H. R. 2128 presently before you for consideration because the language of H. R. 3534 and of the current bill H. R. 2128 is identical.

Prior to 1954 the legislative and the administrative climate for the extension of patents had not been favorable. Discussions with members of the committee and with personnel in the Commerce Department revealed that former presentations had been too general in nature. Furthermore, the basis of validity submitted for the ex tension of patents had become confused with economie impingements suffered by nonpatent holders who also had been affected by the exigencies of the wartime economy. In the committee hearings of June 10, 1953, the distinction between the position of patent holders and nonpatent holders was clarified for the first time. Patentees have in principle a contract with the Government. As a condition precedent to the granting of a patent the Government promises to secure the patentee in the exclusive rights to his patent for a period of

17 years and in turn the patentee agrees to disclose immediately the mysteries of his art or invention and to dedicate that improvement to the general economic welfare of the national economy at the end of these 17 years. The reasonable interpretation of that provision in the patent law is that a full net 17 years of protection for the inventor is intended.

When in times of emergency other agencies of the Government are obliged by unilateral action to breach that agreement between the Patent Office and the patent holder it is only just and equitable that our Government take steps to restore the parties as far as possible to their original positions. It is within the power of the legislative branch to do so and at no expenditure of public funds for the petitioners ask no monetary remuneration, only repayment in kind—a restoration of the time taken out of their limited 17-year term.

In the case of nonpatent holders such as automobile dealers who were unable to secure cars to sell, gas stations which were unable to get supplies and others so affected, no such agreement was involved. The Government did not agree to secure them in any exclusive rights, nor limit the terms of their activities to 17 years, nor require them to dedicate their businesses to the general welfare of the public after any period of time. Furthermore, such businesses had elements of convertibility, while patent holders are so circumscribed by the specifics of their patents that stop orders amounted to immobilization.

A review of the initial print of H. R. 3534 with personnel of the Commerce Department and the Patent Office revealed some very real difficulties and resulted in constructive solutions. The Department of Commerce had already furnished formal comments to the committee which were unfavorable to H. R. 3534 but the agency now pointed out that if amendments embodying these solutions were adopted by the Congress, the difficulties posed in that memorandum would be vitiated and the act then would be feasible of administration by the Patent Office.

Some 11 months after the hearings of July 10, 1953, a collation of the five bills before Subcommittee No. 3 embodying all essential points and all the suggested amendments resulting from the Commerce Department conference was reported out unanimously in an amended H. R. 3534-that is the original so ably done by Mr. Crumpacker and his staff last year.

Subsequently this bill received the unanimous approval of your full committee, the House of Representatives and the Judiciary Committee of the Senate. I relate this to you at this time because at a later date when the bill reached the Senate floor claims were received from opposing petitioneers that: (1) patent extension had been traditionally opposed by our Government; (2) the bill was extremely complex and would introduce confusion as to the actual term of the patents in question; (3) the bill would place a heavy burden and expense upon the general public and the Patent Office which would not have the money for processing; (4) the advantages would be outweighed by the burdens which would be placed upon the whole country; and (5) the Secretaries of Commerce and Justice had written in opposition to the bill.

These points were refuted in a telegram from a patent attorney sent to the objections committee of the Senate. This was sent to Senator Hendrickson, who was the opposition member on the floor, and, there

fore, may not have represented himself. He may have represented any objections that were sent to him from the outside.

Senator ROBERT C. HENDRICKSON,

Senate Office Building, Washington, D. C.:

I have been a private patent practitioner for 30 years, as member of New York and New Jersey bars, and am actively engaged in practice in both New York City and Boonton, N. J. Various of my clients are small New Jersey manufactuers. Am aware of no client who will have occasion to seek extensions if the bill is enacted.

Bill imposes no financial burden on Patent Office, is limited to 1 year for seeking extensions and in my view contains adequate safeguards.

Arguments advanced in P. L. Young's telegram to you of August 6 contain factual inaccuracies. Contrary to point 1, Congress has heretofore enacted patent extension legislation. Contrary to point 2, bill is much less complex than present statute under which patents are granted. Contrary to point 3, bill contains adequate provisions for payment of costs by patentees so no financial burden will be imposed on Patent Office. Contrary to point 4, it has been estimated that the number of patents that will be extended is relatively small. Contrary to point 5, my information is that letters of Secretary Weeks and William Rogers of Department of Justice were directed to predecessor drafts, not bill as now before Senate.

Main argument of P. L. Young would apply to grant of patents under present statute, not merely extension of such patents. In my view P. L. Young's arguments are in substance arguments against the patent system.

Twenty-two countries enacted legislation for patent extension because of effect of war. In my view present United States bill would encourage United States inventors and strengthen patent system.

CHARLES F. CHRISHOLM,

Boonton, N. J.

Factually H. R. 3534 as amended was a considerably clarified and delimited bill and was possessed of adequate safeguards.

In the first place, an increase in the number of applications for relief in private bills for patent extension since World War II pointed up the need for a bill of general applicability. The handling of such cases which are quasi-judicial in nature properly belong in the Patent Office rather than in the Congress which is neither technically equipped nor should be burdened with this increasing workload.

Under the provisions of the identical bill H. R. 2128 now before you for your consideration, qualified applicants are limited to three classes.

Each of these applicants must prove to the satisfaction of the Patent Office prevention or substantial curtailment of the normal use, exploitation, promotion, or development of his patent within the emergency periods set forth.

Applications must be filed within 1 year of enactment of this legislation into law. The servicemen's provisions are but an extension of Public Law 598 for the purpose of covering the Korean emergency period. You see, the servicemen's bill only covered World War II and this is only bringing it up to date. The Patent Office which under this bill has the responsibility for administration has already had successful experience administering such extensions under Public Law

598.

The fee provisions were designed to preclude any requirement for additional funds for administrative processing by the agency. I would like to add here that the original recommendation was to leave the fees to the discretion of the Patent Office so that the operation could be self-liquidating. No limitation was suggested and all petitioners with whom I discussed this matter expressed complete willingness to pay whatever costs the processing would involve.