No confusion in determining the term of a patent should result, for it would be administratively simple to stamp the extension date on the face of the patent as is now done for term on originals in the Patent Office files. Full provision has been made for the protection of intervening rights. Unfortunately in the closing days of the Senate session, with the bill on a Consent Calendar, attention was called to the Senate Judiciary Committee report which included negative comments from the agencies of Commerce and Justice. These letters were dated July 17, 1953, and July 22, 1953, respectively, and pertained to the original H. R. 3534 before it was amended some 11 months later. These comments did not take into consideration the revised position of the Department of Commerce or the attitude of the Justice Department in view of the Commerce Department's reconsideration. Through some inadvertence these memoranda were the only formal transmissions received and therefore the only ones available for printing. Confirmation of the new Commerce position was sought and received and the Senator handling the objection on the floor withdrew in favor of the bill. By this time the bill had been called on the floor and passed by. Time ran out and the session was recessed. We sincerely believe that but for the loss of time involved in securing the true facts this bill would have had Senate approval on the calendar call. There can be little doubt the bill could have been passed had it been put to a vote. We respectfully request your consideration of the legislative history of H. R. 3534 in order to effect expeditious action on the identical bill now before you, H. R. 2128. Mr. WILLIS. Thank you very much, Mr. Lyons. (Thereupon there was a discussion off the record.) Mr. WILLIS. Our counsel will keep the record open for the submission of statements and other data by those who wish to make them, either in support of or in opposition to the bills, or in reply to any statement which may have been made here today. The meeting is now adjourned. (Thereupon, at 12:47 p. m., the committee was adjourned, subject to the call of the Chair.) APPENDIX MEMORANDUM OF REPRESENTATIVE LAURENCE CURTIS (MASSACHUSETTS) TO THE JUDICIARY COMMITTEE This bill should not be enacted, principally because the main provision in subsection 2 is unsound. That subsection provides for extension of patents whose exploitation was interfered with by wartime controls, defined in the bill as those cases where "the normal use, exploitation, promotion, or development of the inventions described and claimed in any patent of the United States was prevented or substantially curtailed by any order of any 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." REASONS FOR REJECTING THIS PROPOSAL 1. It singles out patent owners as a preferred class for relief from losses due to wartime controls, which is unfair to others who suffered equally from the same cause, such as filling stations which could not get gasoline and steak houses which could not get steak. 2. It opens up for extension thousands of patents, throws a heavy burden on the Patent Office, and sets up such a vague standard that it leaves too wide an administrative discretion. 3. It would result in uncertainty as to the expiration dates of patents, a matter of great importance to manufacturers who are planning new products. 4. The National Organization of Patent Lawyers is opposed. 5. The National Association of Manufacturers (many of whose members are owners of patents) is opposed. 6. The Department of Justice has reported adversely on this bill. 7. The Bureau of the Budget has voiced the following objections to the bill: "The Bureau of the Budget further advises that it ‘is opposed in principle to using exceptions to the patent system as a method of bestowing benefits on selected individuals or corporations. Benefits under these bills would have little, if any, relation to the injury sustained by the patentee; persons reasonably relying on the terms of a patent might be damaged; administration of the exceptions would present difficulties and may require increased funds for the Patent Office; and extension of patents whose practice was curtailed by production controls would so widen the area of exceptions as to serve as an important precedent for additional exceptions in the future. A great many people were unable to fully exploit their profession or property as a result of production controls. Enactment of these bills would bestow benefits on a very small group of them even though there seems to be no convincing evidence that this group has a specially meritorious claim'." 8. This bill is now too late. Relief to applicants will depend on events and facts which occurred in 1942-45. The evidence is cold. Witnesses will be unavailable. Bills seeking this relief have been filed in several previous Congresses and have always been rejected. This bill should not be enacted at this late date. 9. The argument for this relief based on justice and equity is a false argument. Why should patent holders be granted relief from the results of wartime controls when we do not give relief to others who suffered business losses due to those same controls? The answer of the proponents is that the Government was in a special relation to patent holders and violated its special obligations to them when it first gave them patents assuring them of the use of their inventions and then limited such use by the imposition of wartime controls. This is a false argument based on an incorrect view of the law as it the rights given to a patentee by the grant of a patent. All that the Government agrees to when it grants a patent is that it will prevent others from making use of the invention for 17 years. The patentee receives no right to use the invention. 62 The Supreme Court has pointed out that he has that right anyway under common law. Furthermore, a patent may be granted notwithstanding the fact that a prior patent dominates its use so that in fact the patentee cannot use it. The following decisions so hold: In Bloomer v. McQuevan et al. (14 How. (55 U. S.) 539, 549 (1852)), the Court said: "The franchise which the patent grants consists altogether in the right to exclude every one from making, using, or vending the thing patented, without the permission of the patentee. This is all that he obtains by the patent." In Continental Paper Bag Co. v. Eastern Paper Bag Co. (210 U. S. 405, 424 (1907)), the Court said: "Those cases declare that he [an inventor] receives nothing from the law that he did not have before, and that the only effect of the patent is to restrain others from manufacturing and using that which he has invented." In Crown Co. v. Nye Tool Works (261 U. S. 24, 35 (1922), the Court said: "The Court held that the Government did not confer on the patentee the right himself to make, use, or vend his own invention, that such right was a right under the common law not arising under the Federal patent laws and not within the grant of power to Congress to enact such laws ***. The Court further held that in its essence all that the Government conferred by the patent was the right to exclude others from making, using, or vending his invention." (See appendix A, annexed hereto, for many further authorities on this point.) The Government did not violate its agreement with patentees. It gave a patentee the right to exclude others from the use of his invention for 17 years. The fact that a war situation supervened and made it difficult for anyone to exploit the invention does not indicate any breach of that agreement. The patentee's right to exclude others remained unimpaired. The Government gave the patentee no guaranty that during the 17-year period he should have any special protection from the risks of war or from the effects of war controls which were of general application. To express this another way, it should be emphasized that any wartime curtailment of the right of a patentee to manufacture, use, or sell an invention was not a curtailment of a right obtained by a patent. It is not here contended that patentees were not injured by war controls. Of course they were; but so were a lot of others, and the contention here merely is that patentees cannot be differentiated from those others on the ground that the Government had violated some special obligation which it had to them. 10. The proposed relief is harmful and costly to the public. Proponents who argue for the "justice" or granting this relief overlook the cost to the public. Of course, it would be nice to grant relief to all who suffered from wartime controls. But the question here is not of granting such general relief. The question here is whether there is adequate reason for differentiating patent holders from others who suffered from wartime controls. The question is whether they should be singled out for a form of relief which is difficult to administer and costly and harmful to the public. It is costly and harmful to the public both from the point of view of monopoly and "giveaway." As to monopoly, the 17-year period during which the public is excluded from use of an invention by a patent is frequently referred to as a "patent monopoly." Monopoly is costly to the public. Its purpose and effect is to raise prices to consumers. This monopoly should not be extended unless necessary to fulfill the purposes of the patent law. As to "giveaway,” the courts have pointed out that a patent is in the nature of a bargain. The Government agrees that others shall be prevented from using the invention for 17 years, and the patentee agrees to disclose the invention at once, and permit the public to share it after 17 years. To extend the patent is to give away part of the public's side of the bargain. Congress should not lightly give away the public's rights unless necessary to fulfill the purposes of the patent law. 11. Business losses resulting from general acts of the Government undertaken for the defense of the country and affecting all alike have never been recognized as a basis for a claim for relief. They are not a proper basis for the relief here sought. For a valid claim to arise there must be a more particular injury to the claimant's property or business. Respectfully submitted. LAURENCE CURTIS. APPENDIX A, ANNEXED TO AND MADE A PART OF THE MEMORANDUM SUBMITTED TO THE JUDICIARY COMMITTEE BY CONGRESSMAN LAURENCE CURTIS OF MASSACHU SETTS CASES AND AUTHORITIES IN OPPOSITION TO THE CONTENTION THAT THE GOVERNMENT BREACHED CONTRACTS WITH PATENTEES BY IMPOSING WARTIME CONTROLS (1) The only right that a patentee received by the issuance of a patent was the right to exclude others from making, using, or selling the invention, and this right was not impaired by the imposition of wartime controls. In Bloomer v. McQuevan et al. (14 How. (55 U. S.) 539, 549 (1852)), the Court said: "The franchise which the patent grants consist altogether in the right to exclude everyone from making, using, or vending the thing patented, without the permission of the patentee. This is all that he obtains by the patent." In Continental Paper Bag Co. v. Eastern Paper Bag Co. (210 U. S. 405, 424 (1907)), the Court said: "Those cases declare that he [an inventor] receives nothing from the law that he did not have before, and that the only effect of the patent is to restrain others from manufacturing and using that which he has invented." In Bauer v. O'Donnell (229 U. S. 1, 10 (1912)), the Court said: "The right to make, use, and sell an invented article is not derived from the patent law. This right existed before and without the passage of the law and was always the right of an inventor. The act secured to the inventor the exclusive right to make, use, and vend the thing patented, and consequently to prevent others from exercising like privileges without the consent of the patentee." [Emphasis was that of the Court which printed the word "exclusive" in italic.] In U. S. v. United Shoe Machinery Co. (247 U. S. 32, 57 (1917)), the Court said: "We must keep in mind the quality of the right we are considering and that the inventor gets nothing from the law that he did not have before and that the only effect of his patent is to restrain others from dealing with or using its device * * *. Or to put it another way, the inventor does not get from the law a right to a use that he did not have before but he gets the right to an exclusive use." [Emphasis was that of the Court which printed the "exclusive” in italics.] In Crown Co. v. Nye Tool Works (261 U. S. 24, 35 (1922)), the Court said: "The Court held that the Government did not confer on the patentee the right himself to make, use or vend his own invention, that such right was a right under the common law not arising under the Federal patent laws and not within the grant of power to Congress to enact such laws, and that in the absence of the express statutory imposition upon the patentee of the obligation to make, use or vend his patented invention as a condition of receiving his patent, it would not be implied. The Court further held that in its essence all that the Government conferred by the patent was the right to exclude others from making, using, or vending his invention." * In Special Equipment Co. v. Coe (324 U. S. 370, 378 (1944)), the Court said: "The patent grant is not of a right to the patentee to use the invention, for that he already possesses. It is a grant of the right to exclude others from using it * As the statute, Revised Statutes, section 4884, provides, the grant is of the 'exclusive right to make, use, and vend' the invention ***. By the very terms of the statute the grant is nothing more than a means of preventing others, except under license from the patentee, from appropriating his invention." In U. S. v. Line Material Co. (333 U. S. 287, 308 (1947)), the Court said: "During its term, a valid patent excludes all except its owner from the use of the protected process or product ***. This monopoly may be enjoyed exclusively by the patentee or he may assign the patent. * (2) In fact the statutory grant to the patentee was amended to make it clear that a patentee receives only the right to exclude others; and the patentee's rights are only those given him by statute. As a result of the above and other decisions, the Patent Act of 1952 changed the wording of the statute defining the patent grant. Before 1952 the words of the grant were "of the exclusive right to make, use, and vend the invention or discovery" (35 U. S. C., 1946 ed., sec. 40). The 1952 act changed these words to read "of the right to exclude others from making, using, or selling the invention" (35 U. S. C. 1952 ed., sec. 154). Mr. P. J. Federico, Examiner in Chief of the United States Patent Office has commented on this change as follows (title 35, U. S. C. A., vol. 1, p. 1): "The contents and term of the patent are specified in section 154. The patent contains a short title of the invention, a grant to the patentee of certain rights for the term of 17 years, and a copy of the specifications and drawings forming a part thereof. In the language of the old statute the grant was of the exclusive right to make, use, and vend the invention or discovery *** throughout the United States and the Territories thereof.' This has been changed in wording to the grant of the right to exclude others from making, using, or selling the invention throughout the United States,' following the language of court decisions explaining the nature of the right conferred by a patent; for example, in Crown Dye and Tool Co. v. Nye Tool and Machine Works (43 S. Ct. 254, 261 U. S. 24, 67 L. Ed. 516), the Supreme Court said of the rights granted a patentee in its essence all that the Government conferred by the patent was the right to exclude others from making, using, or vending his invention. The exact rights conferred by a patent were difficult to understand and explain under the old language." (2a) The only rights which a patentee acquires are those given by statute. In Dr. Miles Medical Co. v. Park & Sons Co. (220 U. S. 373, 401, (1910)), the Court said: "But whatever rights the patentee may enjoy are derived from statutory grant under the authority conferred by the Constitution." In Bauer v. O'Donnell (229 U. S. 1, 9 (1912)), the Court said: "The protection given to inventors and authors in the United States originated in the Constitution. *** This protection, so far as inventors are concerned, has been conferred by an act of Congress passed April 10, 1790, and subsequent acts and amendments." In Beidler v. United States (253 U. S. 447, 453 (1919)), the Court said: "The statutes, which are the source of all patent rights, provide that a valid patent may be granted for a new and useful machine. **** In U. S. v. Dubilier Condenser Corp. (289 U. S. 178, 189 (1932)), the Court said: "The title of a patentee is subject to no superior right of the Government. The grant of letters patent is not, as in England, a matter of grace or favor, so that conditions may be annexed at the pleasure of the Executive. To the laws passed by the Congress, and to them alone, may we look for guidance as to the extent and the limitations of the respective rights of the inventor and the public." (3) References to the patent as a contract are in explanation of the public policy of giving to a patentee the rights contained in a patent grant, and do not imply any enlargement of those rights. The leading case for describing a patent as in the nature of a contract, by pointing out the mutual considerations involved, is Grant v. Raymond (6 Peters (31 U. S.) 218, 242 (1832)): "It [the patent grant] is the reward stipulated for the advantages derived by the public for the exertions of the individual, and is intended as a stimulus to those exertions ***. The full benefit of the discovery, after its enjoyment by the discoverer for 14 years, is preserved; and for his exclusive enjoyment of it, during that time, the public faith is pledged." The same thought is repeated in Kendall et al. v. Winsor (21 How. (62 U. S.) 322, 327 (1858)): "It is undeniably true, that the limited and temporary monopoly granted to inventors was never designed for their exclusive profit or advantage; the benefit to the public or community at large was another and doubtless the primary object in granting and securing that monopoly. This was at once the equivalent given by the public for benefits bestowed by the genius and meditations and skill of individuals, and the incentive to further efforts for the same important objects." In Scott Paper Co. v. Marcalus Co. (326 U. S. 242, 255 (1945)), the Court said: "By the patent laws Congress has given to the inventor opportunity to secure the material rewards for his invention for a limited time, on condition that he make full disclosure for the benefit of the public of the manner of making and using the invention, and that upon the expiration of the patent the public be left free to use the invention ***. As has been many times pointed out, the means adopted by Congress of promoting the progress of science and the arts is the limited grant of the patent monopoly in return for the full disclosure of the patented invention and its dedication to the public on the expiration of the patent." |