(b) If any applicant for an extension is dissatisfied with the decision of the Commissioner of Patents or any board which may be established by the Commissioner of Patents for the determination of applications for extensions, he may appeal to the United States Court of Customs and Patent Appeals within thirty days of the decision from which the appeal is taken. When an appeal is taken to the United States Court of Customs and Patent Appeals, the appellant shall give notice thereof to the Commissioner and shall file in the Patent Office, within said thirty-day period, his reason for appeal specifically, set forth in writing. The Court of Customs and Patent Appeals, on petition, shall hear and determine such appeal in the same manner and with the same force and effect as other appeals from the Patent Office tribunals. (c) A certificate evidencing the granting of an extension pursuant to a decision by the Commissioner of Patents or the Court of Customs and Patent Appeals shall be issued by the Commissioner of Patents and a notice of the granting of an extension shall appear in the Official Gazette of the Patent Office. $ 200. Effect of extension (a) Upon the issuance of the certificate of extension, said patent shall have the same force and effect in law as though it had been originally granted for seventeen years plus the terms of such extension, except as otherwise provided herein. (b) No patent extended under the provisions of this Act shall in any way 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, and the rights of the United States shall remain in all respects as if such patent had not been extended. (c) No extension granted under the provisions of this chapter shall impair the right of anyone who before the passage of this chapter was bona fide in possession of any rights in patents or applications for patents conflicting with the rights in any patent extended under the Act, nor shall any extension granted under this chapter impair the right of anyone who was lawfully making, using, or selling before the passage of this chapter the invention covered by the extended patent, but any such person shall have the right to make, use, or vend the invention covered by such conflicting patent, or application for patent, or to continue or resume such manufacture, sale or use during the extension of the patent, subject to the payment of a resonable royalty for any period subsequent to the date on which the extension of the patent was granted. Any licensee under a patent which is extended shall have the option of continuing the license for the period of the extension or any part thereof on the same terms and conditions as contained in the existing license or of discontinuing said license on the expiration of the original term of the patent. If an extension is not issued until after the date of expiration of the original term of the patent, any machine, manufacture, or composition of matter made after said date and before the issuance of the extension, which would have infringed the patent had the patent been in force, may be sold or used after the issuance of the extension without any liability for infringement of the patent during the extended term by reason of such making, using, or vending, nor shall anyone who, after the date of expiration of the patent and before the date of its extension, shall have used an art which would have infringed the patent had the patent been in force, be liable for infringement of the patent during such period. (d) In any action for infringement after the expiration of seventeen years from the grant of the patent and during the period of such extension, the defendant may plead and prove that any material statement of the application for extension required by this chapter is not true in fact; and if any one or more of such statements shall be found untrue in fact, judgment shall be rendered for the defendant, with costs. SEC. 2. The analysis of part II of title 35, United States Code, immediately preceding section 100 is amended by adding thereto : "18. Extension of Patents____ 196" SEC. 3. Section 41 of title 35, United States Code, is amended by inserting at the end of subsection (a): "12. For filing an application for extension of a patent, $30." SEC. 4. This Act shall take effect ninety days after approval. Mr. WILLIS. Without objection, I am going to make the report of the Department of Commerce on this legislation a part of these hearings at this point and, Mr. Brickfield, will you see to it that any other reports from the various Government departments which are received hereafter are incorporated into the record at this point. Mr. BRICKFIELD. Yes, sir. Hon. EMANUEL CELLER, Chairman, Committee on the Judiciary, THE SECRETARY OF COMMERCE, 'c. House of Representatives, Washington, D. DEAR MR. CHAIRMAN: This letter is in reply to your request for the views of the Department of Commerce with respect to H. R. 2128, a bill to authorize the extension of patents covering inventions whose practice was prevented or curtailed during certain emergency periods by service of the patent owner in the Armed Forces or by production controls, and H. R. 3134, a bill for the same general purpose. If it should be determined as a matter of policy by the Congress that H. R. 2128 should be enacted, the Department of Commerce would interpose no objection to such action. We are, however, concerned with respect to certain administrative difficulties which may develop in connection with such a law. During the period covered there were approximately 850,000 patents in effect. Of these, approximately 450,000 would not be eligible for the benefits of the law because of their dates of expiration. The actual number of owners who would seek the benefit of the law is, of course, unknown but might be very large. All applications under the bill are required to be filed for processing within 1 year from enactment of the law and to be processed within 6 months after filing. Such action could, depending on the demands, present an extremely difficult and expensive administrative problem. Consistent with Reorganization Plan No. 5 of 1950, the authority granted by H. R. 2128 should be placed in the Secretary of Commerce rather than the Commissioner of Patents. Adequate authority exists under the reorganization plan to allow the Secretary to arrange for the performance of such functions as described by the bills. The bill appears to lack specific authority for the promulgation of regulations. Such action would appear necessary in carrying out the functions. With respect to H. R. 3134, a bill for the same general purpose, now under consideration by your committee, you are advised that the Department of Commerce is opposed to its enactment. The benefits of the law would be applicable on a much broader basis than in the case of H. R. 2128 and in addition would be unlimited as to the period covered. We are advised by the Bureau of the Budget that it would interpose no objection to the submission of such report as is deemed appropriate in this matter. 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." Sincerely yours, SINCLAIR WEEKS, Secretary of Commerce. DEPARTMENT OF JUSTICE, Hon. EMANUEL CELLER, OFFICE OF THE DEPUTY ATTORNEY GENERAL, Chairman, Committee on the Judiciary, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice concerning the bill (H. R. 2128) to authorize the exten sion of patents covering inventions whose practice was prevented or curtailed during certain emergency periods by service of the patent owner in the Armed Forces or by production controls. The bill would authorize the extension of the terms of certain patents, the normal use, exploitation, promotion or development of which was prevented or substantially curtailed either because of service of the owner in the Armed Forces, or because of the grant of royalty free licenses to the United States, or because of an order by an agency of the Government which limited or prohibited production. The owner of such patents would be permitted to file an application with the Commisisoner of Patents who would take action either granting or refusing the requested extension. Appeal processes would be provided to the United States Court of Customs and Patent Appeals or the District Court for the District of Columbia in the event any applicant is dissatisfied with the decision of the Commisisoner. The bill would benefit only some of a group of manufacturers who were prohibited from producing similar articles. Many groups, other than patentees, can claim injury to their business due to the war and war orders. Furthermore, many of the patents that might be extended have expired. The extension and subsequent revival of these expired patents would create inequity in their effect upon investments, commitments and plans made in reliance on the normal expiration of patents. The bill would create uncertainty as to the expiration date of all patents. Persons and corporations who have made plans and preparations to begin manufacture of a patented item when the patent therefor expires should, except in extraordinary cases, be secure in the knowledge that the patent will expire in accordance with its terms and not be extended or revived for an indeterminate period. It is the view of the Department that the present statutory provision for the granting of patent monopolies for 17 years constitutes a fair and reasonable enactment under article I, section 8 of the Constitution, and that extension of patents as contemplated by the bill is unwarranted. Accordingly, the Department of Justice is unable to recommend the enactment of this bill. The Bureau of the Budget has advised me that there is no objection to the submission of this report. Sincerely, WILLIAM P. ROGERS, Deputy Attorney General. Mr. WILLIS. The first witness we will have on the list today is our colleague from Texas, Mr. Fisher, who, I think, offered the bill, H. R. 2128, and I might mention that a bill along that line, or probably almost identical to it, was the subject of quite extensive hearings heretofore under the chairmanship, or at least under the sponsorship of one of our distinguished colleagues on this committee, Mr. Crumpacker, and that that bill was approved by this committee, passed by the House, and was approved by the parallel Senate committee on patents, but somehow did not reach conclusion on the floor of the Senate. Mr. Fisher, we will be glad to hear from you. STATEMENT OF HON. O. C. FISHER, REPRESENTATIVE FROM THE 21ST DISTRICT OF TEXAS, HOUSE OF REPRESENTATIVES, UNITED STATES CONGRESS Mr. FISHER. Mr. Chairman, as you have stated, this bill is identical in every respect with H. R. 3534, which was passed by the House last year and introduced by a distinguished member of this committee, Mr. Crumpacker. It is actually the same bill. It encompasses, I think, and as I understand it, the best features of several bills last year, covering all pertinent phases of the subject of patent extensions. It received the unanimous support of the subcommittee of the Judiciary here which handled it, it passed the House unanimously, and was objected to by one objection in the Senate when it was put on the consent calendar over there, unfortunately. I will be very brief and let others discuss the details of this. As was the case with the bill last year, there are three main objectives of this bill. First, to give relief to members of the Armed Forces who were prevented from exploiting their patents while in the service. Second, to give relief to owners who were prevented by direct Government stop orders from using their patents. Third, to give relief to patent owners who granted free licenses to the Government and were deprived of any or received only nominal return during the free Government license period. As you know, the term of a patent is 17 years, and when through Government action this term is reduced, in justice to the patent owner, it seems to me that the time taken away should be restored. Without going into the niceties of legal theories regarding the characteristics of the rights granted to inventors, it seems to me the good faith of the Government is involved here. In this connection, I would like to call your attention to the significant words of the Constitution by which Congress is granted the power to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive rights to their respective writings and discoveries (art. I, sec. 8, clause 8). The basic question presented by this bill is whether or not the Congress, pursuant to this purposeful grant of power in the Constitution. already has passed legislation under which the Government has fully discharged the obligations it assumed by the issuance of patents to inventors. To weigh the equities of the proposed legislation now under consideration, it is immaterial to me whether the holder of a patent issued under our present laws has the exclusive rights to its full use and exploitation or whether he has merely a right to exclude others from its use. Under any theory, the fundamental issue here is whether or not the Government has fairly and diligently and completely carried out the obligations thus assumed. Essentially, the rights granted to an inventor by the issuance of a patent under our laws are analogous to those which arise out of a simple contract. In exchange for the public disclosure and dedication of an invention, the Government of the United States solemnly undertakes to secure to the inventor the exclusive rights to the use of his invention for a full period of 17 years. That is the inducement to inventors which the Government has long offered by law and upon which inventors have been led to rely. 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 ma teriale or proves 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 refing to make reasonable restitution for that part of the 17-year period of the patent during which the action of the Government presented or substantially curtailed the use and development of the patent. In my opinion, the Congress should make a reasonable restitution in those classes of cases most directly affected by restoring the parties affected as far as possible to their original position after the emergency that necessitated the unilateral action on the part of the Government. The right to the exclusive use of a patented invention for the full 17 years is analagous to a right of property. Where the Government expropriates private property for public use, it is required by the Constitution to pay just compensation for it. 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. In conclusion, it seems to me that unless a bill such as H. R. 2128 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. Mr. WILLIS. Thank you very much, Mr. Fisher. Mr. FISHER. Thank you, Mr. Chairman. (The written statement of Mr. Fisher follows:) STATEMENT OF CONGRESSMAN O. C. FISHER Mr. Chairman, I want to express my appreciation to you and to the members of this committee for granting early consideration to the bill, H. R. 2128, and for affording me this opportunity of being heard on the subject of patents extension. This bill is identical in every respect to the bill (H. R. 3534) passed by the House last year, and which was introduced by a distinguished member of this committee, Mr. Crumpacker. You will recall that the bill (H. R. 3534) that passed last year encompassed the best features of several bills covering all pertinent phases of the subject of patents extension. It received the unanimous support of the subcommittee, and subsequently, the unanimous support of the full Judiciary Committee. The bill passed the House without objection and was favorably reported by the Senate Judiciary Committee during the last few days of the 83d Congress. When the bill was up for consideration on the Consent Calendar, there was an objection so it failed of passage. As was the case with the bill last year, there are three main objectives of the bill (H. R. 2128): First, to give relief to members of the Armed Forces who were prevented from exploiting their patents while in the service. Second, to give relief to owners who were prevented from using their patents by direct Government stop orders. Third, to give relief to patent owners who granted free license to the Government and were deprived of any or only nominal return during the free Government license period. The term of a patent is only 17 years, and when through Government action this term is reduced, in justice to the patent owners, it seems to me that the time taken away should be restored. Without going into the niceties of legal theories |