Improving American Patent Practice D. H. KILLEFFER 60 East 42nd Street, New York, N. Y.
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UR American patent system has become so complex as demands made upon it have multiplied that serious misgivings are being felt throughout industry as to its proper functioning. Designed originally for the promotion of science and the arts by insuring inventors the sole right to the use of their inventions for a limited time, patents have become fundamental charters of vast industrial enterprises, and so dependent is industry upon them that it is scarcely possible to imagine progress without patent or similar protection. Yet the very necessity for patent protection has been the means of building up a nuisance value which offsets to a large extent its obvious benefits. In view of the vital interest of chemical industry in this question, the opinions of many important executives have been sought and are here set forth in the hope that thought on the subject may be crystallized into helpful action. RIGHTSOF PATENTEES There is common misunderstanding as to just what rights a patent confers upon an inventor. One frequently reads in press notices of the granting of patents, that the government has in some way (unexplained) approved the inventor’s idea as expressed in his issued patent. This inference is erroneous and upon it hang multitudes of misunderstandings. A patent is evidence only that a t a certain time and under certain rather rigidly prescribed circumstances the patentee has disclosed a certain idea which he claims to be new and original to the Patent Office and through it to the public. In return for this disclosure the patentee receives an assurance that he will be supported by the law in the exclusive use for seventeen years of those parts (if any) of his idea which are actually new and original with him. There is no guarantee, express or implied, that the idea of the particular patent is new and original or that the exclusive right to its use has not already been granted to some prior patentee. Hence it is perfectly possible to obtain a patent which in fact belongs to some one else and which the patentee cannot use himself without permission from another party. It is true that certain investigations are made by theexaminers a t the Patent Office before a patent is issued and that the inventor is informed of the results of this search. He is given an opportunity to reply to objections to the grant of his patent based on the disclosures of the search, and he is permitted to argue his rights and to change his claims to meet the objections raised and sustained against him. In the end he may assume that he is free to practice the exact art described in the patent without molestation from others and that he can effectively prevent others from doing so without his expressed permission. Woe to him if he does! DISADVANTAGES OF THE PRESENT SYSTEM The system would appear to be highly satisfactory, both from the point of view of the public which receives the benefit of the ultimate disclosure, and of the inventor who is given some assurance of the validity of his claim to his idea. The difficulty arises in the practical working of the system. The public may well question its operation because the entanglements and discouragements into which the inventor falls often prevent the proper development of his idea in practice and deter him from disclosing subsequent inventions fully. The inventor’s road is so beset with pitfalls and legal in-
tricacies that he can seldom be entirely sure of himself. The industrialist who seeks to use a patented idea is reasonably certain of only one thing: If the idea is worth anything, he will be forced to spend time, energy, and money proving in the Courts that he is entitled to use it and to maintain the monopoly granted him by the patent. If the system already established worked with proper precision, many of the present troubles with patents would vanish, but unfortunately it does not. The present procedure begins with the submission by the inventor, through his attorney or not as he may choose, of a sworn statement of what he has invented and what he claims to be new. This statement, whose form is fairly well defined, must disclose the invention so clearly that “one skilled in the art” is reasonably able to practice the invention without other information. This application is referred to the proper division within the Patent Office and ultimately reaches, along with a number of others dealing with the same or a similar art, an examiner whose duty it is to look carefully into the matter and see that the idea expressed in the application is in proper form. In the course of his investigation the examiner finds certain other patents which have been issued and certain published articles which suggest that all the features claimed as new and original may not be so. In due course these references together with the examiner’s comments are sent to the inventor, or to his attorney, who is allowed to refute the contentions of the examiner in a reply filed within a reasonable time. This process of objection, rebuttal, and argument is continued until such a time as the examiner is satisfied that the patent in the form it has assumed is proper for issue, or the inventor and his attorney have decided there is no use in going any farther. During the entire period from application to issuance, the matter has been held in strictest confidence by the staff of the Patent Office. At no time during the proceedings is it possible for the examiner to seek outside advice, and his sole reliance for information has been printed material. This has not infrequently assumed an importance and an authority quite beyond its original intention, purpose, or value. Presumably the examiner is backed by the best library facilities that are to be had, but his use of them is necessarily cramped by his all too frequent lack of personal experience with the subject matter under his charge. The result of these negotiations is that a patent is ultimately granted which expresses some compromise between the optimism of the inventor and the conservatism of the examiner based upon published records. Numerous other safeguards of the interest of the inventor and of the public have been set up-interferences, appeals, reviews, etc.-but in general an issued patent is the result of negotiations between the inventor, or his attorney, whose interest is to secure the broadest possible patent; and the examiner. So much depends upon the examiner in the matter that it will be well to see upon what type of man this responsibility rests.
PATENT EXAMINERS The system has so developed that it has become the custom for the examining staff of the Patent Office to supply men from whom the ranks of patent attorneys are recruited. The salaries paid and the opportunities for development within the service suffer so by comparison with the rewards available 1084
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outside that only very few men are able to advance satisfactorily in the service and to remain in the Patent Office indefinitely. Not only is it practically impossible to hold more than a minimum number of good men on the examining staff after they have acquired experience in patent matters but it is also virtually impossible to attract men of substantial industrial experience to enter the Patent Office a t the inadequate salaries offered. A man with reasonable personal equipment who has spent two or three years in the examining staff is usually able to leave a t will to undertake work paying immediately 50 to 100 per cent more than is provided him in the Patent Office. Men who have accumulated experience in industry which would make them especially valuable in the Patent Office have usually worked their way into an income class which would require serious sacrifice both for them and for their dependents if they should decide to ent,er this essential branch of government service. From industry’s point of view this is all wrong. The values involved are proportionately enormous when compared with the expenditures now made to secure them. Although it is true that probably less than one per cent of all patents granted have any worth whatever, it is also true that those few are often enormously valuable. Hence, industry can well sfford-and would gladly pay-more to insure that those patents found by closer search to be worth issuing would have a greater probability of validity and less likelihood of litigation to prove it. From the inventor’s point of view it is equally desirable that more meaning be given his patent if issued, and in general the added assurance of more probable validity would be worth its cost to him. The cost to an inventor of the issuance of a patent secured through a reputable attorney averages between $200 and $500, depending upon the complexity of the case. The major part of this cost pays the attorney for his necessary activities in connection with prosecuting the application; of it the Patent Office receives only $60. It is obvious that doubling or even trebling the government fees would cause only a relatively small change in the total cost, which would not be of serious consequence if the patent when issued had any particular value a t all. If the amount of money available to the Patent Office could be increased by raising its fees and if the increase could be spent in inducements to men of high caliber to join the examining staff and to remain there, much good would be accomplished for all concerned. This is said without disparagement in any way of the men now in or out of the service who find other markets for their abilities more lucrative. It is, however, vitally necessary that some step be taken to increase the probability of value of issued patents, and it appears that this is the proper direction for progress. The difficulty might even be solved more simply by conferring upon the Patent Office a greater degree of self-sufficiency. At present the system of handling fees paid on account of patents remains essentially the same as that developed a century and a half ago when the whole problem was simple. Instead of having any claim on its own income, the Patent Office must deposit its funds in the general treasury and must draw from the general treasury to meet its expenses. In other words, its income is lost sight of by inclusion in general income, and its expenditures are magnified as a separate section of the budget. If good is to be accomplished, some rearrangement must be made in this respect to permit the increased income of the Patent Office to be applied for its own purposes. Capable men, preferably with industrial experience which would permit them to evaluate properly the arguments of patent attorneys bent upon obtaining the issuance of a patent, could render invaluable service to industry and to inventors by reducing the number of needless patents issued
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and by making those granted more valuable. At present the tendency in matters of question is to allow the patent to issue and leave the question to be decided by expensive litigation, a needless extravagance and burden on all concerned. Many questions now left to the Courts could be decided before issuance if the examiners were familiar with the industry involved, either by virtue of experience gained before entering the service or through application of the German system of frequent furloughs of examiners to industry during their service. The avoidance of any part of present litigation would be well worth its probable cost to any owner of a patent, and a reduction of the number of patents granted by rejecting multitudes of useless ones now issued would so simplify the problems of industry as to be well worth while. ADVANTAGES OF BRITISHAND GERMAN SYSTEMS The British and German patent systems have frequently been suggested as improvements over ours. The most obvious differences are that in both countries the term of the patent runs from the date of application, and that applications are thrown open to inspection and objection before issuance. Inspection of applications before issuance gives reasonable assurance of validity to the owner of an issued patent. In effect it places a t the disposal of the Patent Office all the knowledge and experience of that particular art, and thus the public whose interest in patents is often overlooked is given an opportunity to learn what monopolistic grants it is being asked to make. Anyone interested in the matter is allowed to present his views under certain safeguarding rules so that the patent as issued has already met objections which we leave to the Courts in this country. In operation this system reduces the number of issued patents to a reasonable minimum and minimizes the opportunity for racketeering in patents so frequent in our system. The inventor is necessarily careful to limit his patent applications to those most likely to be issued and his subject matter to well-considered points, because the disclosure of half-formulated ideas could easily result in losing rights to claims which might be retained if work on them were carried to completion. The principal valid objection to amending our patent system to operate on this basis is that the change would simply transfer the period of litigation to an earlier date. Instead of avoiding litigation, many believe that the adoption of such rules would simply mean that every patentee would be forced to go through its equivalent before his patent would be issued and that the benefit from it would be virtually nothing. Obviously there are two sides to the question, based upon suppositions which the innate conservatism of American law is unlikely to permit to be resolved. The other point of difference between European practice and our own-dating the life of issued patents from the day of application instead of the day of issuance-has several advantages and few disadvantages from the point of view of American industry and American inventors. Under our present system it is possible to maintain an application in the Patent Office without loss for a practically indefinite period by taking advantage of permitted delays. This period of delay in issuance operates to prolong the monopoly of the patent and averages about three years, although it may be and often is prolonged far beyond that time. It is thus possible to stretch the effective life of a patent monopoly from the statutory seventeen years to twenty, thirty, and even more without in any way violating legal requirements. The secrecy which surrounds an application while it is in the Patent Office allows the inventor to extend his monopoly in
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hime. It also permits him to broaden the scope of the original idea by continuing development and fling subsequent applications covering corollary phases of the invention before publication of the original idea. In this way it gives the inventor rather important, quite legitimate advantages over others who may work in the same field. On the other hand, this long secrecy permitted by our statutes without serious restraint is the basis for a form of most objectionable racketeering in patents. An inventor bent on preying upon legitimate industry may hold an application in the patent office until such a time as some one else has developed and even patented the same or a similar idea. When this has happened, he may bring his application to belated issue and seriously interfere with the other’s legitimate enterprise without himself contributing anything of value to the situation. No patent search, however carefully pursued, will reveal to another the existence of his application unless an interference is declared in the Patent Office by its own staff. A recent case in point illustrates the seriousness of this fault in the secrecy of our Patent Office. An inventor in good faith patented a method of synthesizing a particular material which was superior to the methods previously available in many respects. In due course a manufacturer became interested and spent substantial sums of money in making the idea useful. Certain questions regarding it were subjects of differences of opinion, and another manufacturer, looking a t these questions from a different point of view, infringed the issued patent. The matter reached the Courts and was finally decided in favor of the patentee whose patent was declared valid. On the basis of this favorable decision, the matter was further developed, more money was spent, and production as well as investment was increased many fold. Presumably having seen this prosperity, another inventor whose application had lain dormant in the Patent Office during a decade or more of development and litigation of the issued patent, took Advantage of certain legal technicalities to revive his claim and ultimately secured the grant of a patent covering almost precisely the ground of the first one issued but having priority over the issued patent by virtue of a somewhat earlier application date. In the eyes of the law the earlier applicant, despite the fact that he contributed practically nothing to the art and that his invention was dormant during the long period of building industry on the basis of another’s discovery, was entitled to demand settlement of his claim on any terms he cared to make with the present users of the process. In other words, the law gave him a weapon and invited him to hold it to the head of the industry. This particular situation is an almost too perfect illustration of patent racketeering, Fortunately such misuses of our patent law and system are rare, but innumerable cases of a less degree of flagrancy are known to all who deal with patents. CONCLUSIONS The most important failures of our patent system to serve industry well, and through industry our army of inventors, are based upon the discontinuity of the examining staff and its consequent repeated loss of men who have gained valuable experience, the secrecy surrounding applications which prevent proper use being made of industry’s knowledge and experience, the possibilities of delay in the granting of patents which permit the continuance of development of half-formulated ideas under officially sanctioned secrecy into full-fledged patents to annoy others, and the extension of a patent’s
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actual life far beyond the statutory seventeen years under the same rule of secrecy. Although the opinions of many qualified, interested persons (none of whom was a patent attorney) have been sought and included in the foregoing, it is doubtful a t present whether industry itself could reach an agreement on even the major phases of a program of amendment and improvement of Patent Office practice. There is universal agreement on only one point: Some provision should be made to attract and hold in the Patent Office men who have gained experience either in industry (preferably) or in the examining staff. This necessitates higher salaries to reduce the temptation for men to leave after two to four years of training, and there is reasonable agreement that the advantages to industry from such increased rewards to capable men would be well worth the cost. Only less universal is the opinion that the time an application can lie secret in the Patent Office should be strictly limited either of itself or by dating the life of the patent when issued from the day of application. On the question of publication of applications after they have passed through a part at least of the necessary red tape, there is no agreement. 3 Some of those interested contend that this would lead to a vast amount of unnecessary hearings and arguments before the board that might take the place of the Courts which now hear the same facts after patents have been issued. Others point out that this would tend to burden the individual inventor unduly while giving the large corporation a substantial advantage against him. Certainly with the examining staff constituted as a t present and serving as a temporary training for men going later into the practice of patent law, the possibility of working such an idea is rather remote. On the other hand, if this step is preceded by a revamping of the examining staff to include men of substantial industrial experience whose tenure is likely to be quite permanent, it seems probable that it might be practicable. In addition to the effect that it would have in enhancing €he value of issued patents, it appears probable that this use of the knowledge and experience of industry in granting patent applications might have a highly salutary effect in deterring inventors from making applications indiscriminately in the hope that some of them might later prove valuable for racketeering purposes. Most of these points raised here have appeared elsewhere before. The reader who is interested in following the matter farther is referred to the Journal of the Patent O.fice Society, in which the affairs of the Patent Office are actively discussed, and particularly to the publications noted below. Whatever may be the specific value of any of these suggestions, they a t least indicate that all is not as it should be in American patent practice. Undoubtedly, too, industry is looking for improvements and merely needs leadership to take action. It is hoped that by thus pointing out some of the more striking present thoughts on the subject here others may be induced to think about the subject and that satisfactory results may ultimately be achieved. BIBLIOGRAPHY (1) Anonymous, Vorld’s Work, 61,No.1,40(1932). (2) Manufacturers’ Group Rept., J . Patent Ofice Soc., 13,668 (1931); 14,53, 104 (1932). (3) Rossman, Joseph, Ibid., 15,110 (1933). (4) Vaughan, F. L., “Economics of Our Patent System,” MacMilbn Co.,New York, 1925. (5) Willits, G. H., J.Patent Ofice Soc., 12,313 (1930). RIEEIVBDJune 19, 1934.
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