Some Recent Trends in the.United States Patent System WILLIAM S . HILL Lrn.ited S t a t e s Patent Ofice, Richmond, 17irginia
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LTHOUGH, for the most part, i t is only the people most concerned who are aware of it, a t present history is being made in our patent system. After several years of comparative inactivity, much legislation concerning the patent system has recently been considered by Congress. More soon will come up for discussion. Some of this is an outgrowth of certain moves made by the Department of Justice in exposing "internatiorlal cartels" and "patent pools" both at home and abroad. As usual, the patent system itself was confused with the monopolies formed by a few large corporations allegedly violating our anti-trust laws. I t looked for a time as though the Department of Justice, or certain elements of it, wanted to uproot the whole patent system or a t least emasculate it. Here is how American industrialists and scientists reacted to the attack on our patent laws. Robert E. Wilson, a well-known industrial chemist, now president of Pan American Petroleum and Transport Company, New York City, devoted his speech to the problem upon being awarded the Perkin Medal January 8, 1943. He begins thus: "While the subject of my address is rather unusual for a Perkin Medallist, I fed sure that no apology is necessary for devoting my time t o a matter which gravely threatens the whole future of industrial m a r c h and our national welfare. I refer t o the recent widespread and unfair attacks upon our patent system. Unless we, as scientists, help to educate the lay public as t o the facts of the situation, ill-considered legislation may be adopted which would prevent the prompt and free exchange of new information, destroy the market of the independent inventor, and discourage the continuance of American industrial research of which we are so justly proud."'
Mr. Wilson went on to explain in more detail how American progress had been aided by patents. He also admitted, as did the Commissioner of Patents, Conway P. Coe, that patent laws do need changing from time to time because the world does move on and abuses of any law usually arise. He also pointed out that the Commissioner had suggested a number of administrative changes which had the general approval of those most concerned with patents and that most of these had already been adopted. Then Mr. Widson took up each of the more radical changes that had been urged (not by Commissioner Coe) and commented upon it.
Comfiulsory Licensing "The greatest objection to compulsory licensing in normal times is that i t largely cancels the very reward the inventor was suppased t o receive. It also interferes with the incentive of the patent owner or licensee t o make a large investment in a new 1 WILSON, "R-ch aqd patents," Ind.Eng. Chcm..Ind. Ed.. 35, 177-85 (Feb.. 1943).
development if he is faced with the possibility that he may at any time be forced to give a competitor a license on terms which are unpredictable. . . "
Profiosed Prohibition of Restriction i n Licenses. This refers to restrictions such as those of price, quantity permitted to be manufactured, geographical limitations, and limitations as to the use to be made of patents. He stated that he could not argue strongly against restrictions as tq price or quantity permitted to be manufactured under a license because his industry was tending away from those restrictions, itself. " . .However, even such prohibitions would tend to discourage licensing or force up royalty rates in certain cases where a patent owner feels that such restrictions on first sale are necessary for his self-preservation."
Mr. Wilson regards the prohibition of geographical restrictions as a much more serious matter from the practical standpoint since it would discourage the now common practice of a manufacturer's granting, a t comparatively low rates, a license to another manufacturer cov&ng a certain restricted temtory not in competition with his own. He also regards restrictions as to use just as unworkable. Mr. Wilson's speech has been discussed a t some length, both because he is a competent authority on the use of chemical patents and because he picked out for comment those proposed changes which have most alarmed the patent profession and inventors in general. William E. Crawford, speaking a t Marqnette University, tells of some of his experiences attending hearings of the Temporary National Economic Committee. ". . Some of the most significant statements that I heard were made by Edsel Ford and his attorney, Mr. Farley. Ford and Farlev testified that thev did not ask rovaltv . . for Datents that thry hold, and that their company could proceed without pate n t s M r . Parley, however, cmphnticnlly stated that patents werc necessary to perpetuate the smnll inanulacturer and to mi the individual inventor. . . ."2
And finally we have a statement from a typical American businessman operating a small manufacturing business. He was asked to testify before the Senate Patents Committee. He made a statement of which the following excerpts are typical. "I am a 'small-town' American now fearful that our Congress and our Courts may be persuaded, under the pressure of prevailing panic, innocently t o translate that panic into permanent paralysis. . . .
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C M ~ ~ O R"Specrh D. prcscntd October I. 1912, before the combined cngincwing and technical socictics of Milwaukee a t Marquctte I'niversitv," J. Polen1 Ofice . S o r i ~ l y .25, 85 (hlarrlr. 1912
"MY company owns a number of patents and.during its 24 years has developed and marketed widely a variety of products embodying inventions of its own employees and of others. . . "Were it my task, as a super-saboteur, to destroy America, I should certainly want to begin by destroying her patent system. thus to sterilize her entire e ~ m o m y . " ~
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The Patent Office, itself, is awake to the dangers threatening its effectiveness. It is no less awake to the realization that the patent statutes need some modern streamlining. Back in 1939 Commissioner Coe, in a statement before the Temporary Economic Committee, recommended several changes4 Some of these improvements have already been adopted. Others have been r e s r m e d by President Roosevelt's National Patent Planning Commission. The following is a listing of the changes proposed by the Commissioner together with a brief summary of the main reasons for proposing some of them. 1. The "twenty-year bilY-restricting the time between filing a patent application and the time it expires to 20 years. The present period of 17 years does not begin to run until the date of issue of the patent. In the meantime i t is possible that the patent application may be kept pending in the office for many years although three years is considered plenty of time to allow for the thorough prosecution of the application. Delay may be brought about by sing an original application, prosecuting i t for two or three years to the point of issue, then filing a number of continuations, each of which delays the final issue of the patent for some time. There are many examples of applications kept pending for 10 years and some notorious cases of more than 20-year pendency, The idea is that a company, with little regard for business ethics, may keep a patent application pending for so long that other competing companies begin to make and use products or processes infringing it. Then the clever corporation gets into a long series of interference proceedings with the patents of its competitors as fast as they issue and later also starts many lucrative infringement lawsuits. 2. Creation of a single court of patent appeals. A patentee must now seek protection against infringement in a U. S. District Court. If either party is dissatisfied with the outcome, appeal may be taken to a Circuit Court of Appeal. If infringement has taken place in more than one federal district, suit may be filed in another District Court. When conflicting decisions have been obtained in two District Courts a writ of Certiorari may be requested in order to appeal to the United States Supreme Court. If the Supreme Court refuses Certiorari additional suits may be filed in other District Courts, theoretically a t least in some cases, until all 10 federal circuits are covered. A large corporation, fighting an inventor of limited means, can force its poorer antagonist to give up, since this ANDERSON, "Statement presented before the Senate Patents Committee, October 23, 1942," 1.Patent O&e Society, 2 5 , 2 R. (January, 1943). ' COE,"Statement of the Commissioner of Patents before the Temporary National Economic Committee, January 16, 1939," 5 Patent Ofice Society, 21,87 (February, 1939).
litigation is expensive. A single court of patent apDeals with iudEes trained to handle ,,atentcases would be of great benefit to the individual inventor. Creation of a court such as this should also result in more uniform standards of invention. As it is now, the treatment of patent cases varies greatly from court to court. Most judges did not get their positions because of any scientific training they might have had. 3. The elimination of the appeal from the decision of the Interference Examiner to the Board of Appenls within the Patent Ofice. This was to speed up interference proceedings and has already been put into effect. 4. The abolition of renewal applications. They tended needlessly to delay issuing of a patent, and the practice has now been discontinued. 5. Shortening the period in which an inventor may make public use of his invention before filing his patent application, from two years to one year. This, too, is now in effect. 6. Shortening the time allowed an applicant for a patent to copy claims from an issued patent for the purpose of determining priority of invention, from two years to one. This provision is now in etfect. 7 . Extending the authority of the Commissioner of Patents to allow him to require that an applicant respond to an ofice action in less than the wwsl siz-month period. This, too, has now been granted. Thesereforms which have been made since 1939 are seen to be more or less in the nature of means to speed up the passage of an application through the Patent Oftice. They have had the expected effect of making it more diicult for a company deliberately to delay prosecution of important patent applications so that competitive industry, all unsuspecting, could spend fortunes developing inventions which infringed the patents pending in the Patent Office, only to be faced with lawsuits for tremendous amounts of damages when the delayed patents finally issued. There are still companies exploiting nationally known brands of merchandise, who, aided by "slick" patent attorneys, seek to prostitute the patent law by taking advantage of every excuse for delay they can devise, to hold back final issuance of important patents. The present tendency of the Patent Wee, however, is to discourage such practice with every means a t its command. The American inventor of limited financial resources should be heartened to know that the Commissioner of Patents is his most sympathetic and most able defender. Although there have been literally thousands of suggestions by various individuals proposing this or that change in or addition to the patent system, the only other series of recommendations which i t is desired to take note of here is that of the National Patent Planning Commission.6 The National Patent Planning Commission was established by executive order of President Roosevelt, "The American patent system," report of the National Patent Planning Commission to the President, I.Patent O f i c e Society. 25, 455 Uuly, 1943).
December 12, 1941. For about a year and a half the Commission was engaged in a study of the American patent system and its operation, finally submitting its report to the President, who transmitted it to Congress June 18, 1943. The Commission had a very competent personnel. Its chairman was Dr. Charles F. Kettering of General Motors, and the rest of its members were almost equally well known nationally. Introducing its report, the Commission said of the American oatent system: ". . . The system has contributed to the growth and greatness of our nation; it has ( I ) "encouraged and rewarded inventiveness and creativeness, producing new products and processes which have placed the United States far ahead af other countries in the field of scientific and technological endeavor; A~~~~~~~ inventors to originate a major (2) ort ti- -on - ~ of - the imoortant industrial and basic inventions of the past 50 years; (3) "facilitated the rapid development and general application of new discoveries in the U. S. to an extent exceeding that of any other country; (4) "contributed to the achievement of the highest standard of livinn that any nation has ever enjoyed; (5) " ~ t i m u l a t ~creation d and development of products and processes necessary to arm the nation and to wage successful war; (6) "contributed to the improvement of the public health and the public safety; and (7) "operated to protect the individual and small business concerns during the formation period of new enterprise. "The strongest industrial nations have the most effective patent systems, and after a careful study, the Commission has reached the conclusion that the American system is the best in the world. However. as with anv of lonr standinn. . system . conditions arise which were not foreseen at the time of its establishment. The American patent system should be adjusted to meet existing conditions without destroying its basic principles."
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Amonz the soecific recommendations made hv the Commission are the following: 1. Recording of contracts. It was recommended that there should be recorded in the Patent Office all agreements ( a ) to which one of the parties is a citizen of a foreign country; (b) any present agreement including any restrictions as to price, quantity of production, geographical areas, or fields of use; (c) all future agreements of any nature. 2. No comfiulsory licensing except in the case of patents affecting national defense, public heelth, and public safety. 3. Opportunity be accorded any member of the fiublic to challenge the ualidity of any patent within six months after its grant. This is an admission that it is impossible for the examination of applications in the Patent Office to uncover all possible "prior art" that might prevent the issue of the patent. The issuance of many invalid patents has resulted from the inability of the patent examiner to make a complete search through patents and other publications in the limited time allotted to him. Through this provision i t would be possible to have brought to the attention of the Patent Office any evidence bearing on the validity of a patent. Industry
is often in the best position to know of the existence of facts which might prevent the grant of a particular patent. The Patent Office could then reexamine its decision in the light of the new evidence and might revoke its grant. Appeal could be taken through the usual channels. 4. Public register of patents auailable for licensing with the Commissioner of Patents empowered to fix the terms when patent owner and interested party are not able to agree. 5 . Declaration of a national bolicv that would attempt to establish a ukiform standark of &mention. There is a wide discrepancy a t present between the standard of invention found in the Patent Office and that adhered to by some of the federal courts. Each judge to have his own personal ideas on the subject, and a t least some of the Supreme Court justices robably have the most awesomely hiph standards of all. he Commission has recommended that patentability be determined objectively by the nature of the contribution to the advancement of the art. and not subjectively by the nature of the Process which the invention may have been accomplished. Actually this seems to be somewhat of a disagreement with the supreme court because of one of its 1941 decisions, of which be said later' 6. Simplifying appellate procedure in the review of decisions of the Patent Ofice Board o.f Appeals. An - applicant who has rece&ed an adverse decision regarding patentability from the Patent Office may now either to the Court Customs and Patent Ameals or file suit against the Commissiouer of ~ a i e n t sin the U. S. ~ i s t r i c tCourt for the District of columbia. ~h~ commission dropping the latter procedure and confining jurisdiction to the former court which is better aualified to deal with Datent cases. 7. Adoption of the "20-year bill." The Commission thus reaffirms the recommendations made in 1939 by Commissioner Coe. 6. Creation of a single court of fiatent appeals for all U. S. districts. This is also a reassertion of ,\Ir Coe's earlier suggestion. The Commission recommends that the Court of Customs and Patent Appeals is the logical court to which to take all such appeals and that the Court could easily be enlarged to handle the increased load. The existence of the National Patent Planning Commission did not terminate with the submission of this fine report. It is now engaged in further study of the patent system and proposes to issue further summaries of its findings. It is plain to see that the Commission has attempted to solve the most troublesome problems connected with the workings of the patent system. These problems may broadly be stated as follows: 1. First, to give more assurance that after an inventor has received his patent he really has a valid one. At present, too many prove to be worthless when attacked in the courts. Sometimes this is due to the ~
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inability of the Patent Office to uncover all facts when the patent application is prosecuted before it. Just as often i t is due to the lack of uniform standards of patentability in the district courts. It must seem to the bewildered inventor that some of the district courts wouldn't know a valid patent if they did see one. 2. The other main idea appears to be to make it possible for the inventor of limited means to get his patent and defend i t without spending a small fortune. The obtaining of a patent from the Patent Office is not unreasonably expensive unless interference proceedings are involved. But the fighting of infringement suits through the U. S. District Courts often requires plenty of financial backing. Regarding the recommendation on the establishment of more uniform standards of patentability, something must be said about the Supreme Court decision referred to earlier. This decision was rendered in November, 1941, and the particular case was Cuno Engineering Corp. vs. Automatic Devices Corp., 62 S.Ct. 37; 51 U.S.P.Q. 272. Mr. Justice Douglas wrote the opinion of which the part that has excited most of the patent profession appears below:'
Court's most recent patent decisions will be noted. The members of our highest tribunal cannot even agree among themselves as to what constitutes invention, let alone agreeing with the Patent Office and the lolver courts. The decision was rendered in a lawsuit involving one of America's really historic patents. This was patent No. 763,772 granted June 28, 1904, t o Marconi for an improvement in wireless telegraphy. The cases were Marconi Wireless Telegraph Co. of America vs. The United States; The United States vs. Marconi Wireless Telegraph Co. of America. The cases were numbered 360 and 373 and were decided June 21, 1943, and published in the Oflcial Gazette 556 O.G. 339 (Tuesday, November 16, 1913). Ever since it was granted in 1904 this patent has been in and out of the courts and is just another argument for the adoption of some of the recommendations of the National Patent Planning Commission. hlarconi's reputation does not stand or fall on this patent, it is true. That great inventor had many patents issued to him. However, this patent was regarded as one of his basic grants. Now, after almost 40 years, our highest court holds that the only valid claim in "Since Hotchkiss v. Greenwood 1851, 11 Howard 248, ik has the patent is claim 16. It doesn't seem to matter that been recognized that if an improvement is to obtain the privileged the now obvious and seemingly small advance which position of a patent more ingenuity must be involved than the that one patent represented a t that date marked a work of a mechanic skilled in the art. great step forward in wireless telegraphy by greatly "That is to say, the new device, however useful it may be, must reveal theflash of creative genius, not merely the skill of the extending the distance across which messages could calling If it fails, it has not established its right to a private be sent and received. To anyone skilled in modern grant on the public domain. radio science the change which Marconi made back "Tested by that principle Mead's device was not patentable. about 1900 (when the application for patent was We cannot conclude that his skill in making this contribution filed) doesn't look very big. But back around 1000 rcached the level of inventive genius which the Constitution, it did. Article 1, Section 8, authorizes Congress to reward." Mr. Chief Justice Stone wrote the majority opinion Those innocent little words "flash of creative genius" of the Court, and a very logical and convincing one have truly started an avalanche of comment which i t seems. The writer is not in any way seeking to dishasn't subsided entirely yet. Does the Patent Office credit the wisdom of the Chief Justice but is simply have to decide whether or not the inventor has ex- trying to prove his point that to establish a' uniform hibited the "flash"? It is not difficult to see that a standard of patentability is difficult. Justices Frankdoctrine such as this could lead to a great deal of con- furter, Roberts, and Rutledge dissented in part from fusion. Now go back t o the National Patent Planning the majority opinion. Commission's recommendation number 5 and see if The patent which the Court used to invalidate Maryou do not agree with the writer's comment stated coni's grant was one issued to Stone (not the Chief there. Justice, of course) on February 2, 1902. The decision As a matter of sober fact, however, the Patent Office is written around the opinion that Marconi's patent as well as any cokrt does, for the most part, require involved no invention over Stone's, although Stone that more than mere mechanical skill be shown by an apparently never accomplished the results that hlarinventor. If the improvement is perfectly obvious coni did. Naturally many other factors could have or is one which is so simple that any mechanic or entered in there. There were two different dissenting laboratory technician would have thought of it, it is opinions. They are both more interesting than the not regarded as novel enough to be patentable. The majority opinion. Mr. Justice Frankfurter apparently confusion lies in where to draw the line. What is mere tried to get a t the equities of the case. He said, in part, mechanical skill and what is "patentable novelty" or with Mr. Justice Roberts concurring: "flash of creative genius" or whatever name you choose "The real question is how significant a jump is the new disto call i t ? Most of the adverse comment on this decision has come from those who think that this sets closure from the old knowledge. Reconstruction by hindsight, making obvious something that was not at all obvious to superior the standard of patentability too high and out of reach. minds until someone pointed it out-this is too often a tempting To illustrate just how difficult i t is to establish a exercise for astute minds. The result is to remove the opporuniform standard of patentability, one of the Supreme tunity of obtaining what Congress has seen fit to make available.
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"The inescapable fact is that Marconi in his basic patent hit upon something that had eluded the best brains of the time
working on the problem of wireless communicationsClerk Maxwell and Sir Oliver Lodge and Nikola T d a . . . The fact is that they did not have the 'flash' (a current term in Patent opinions happily not used in this decision) that begot the idea in Marconi which he gave to the world through the invention embodvine " the idea. But it is now held that in the important advance upon his basic patent Marconi did nothing that had not already been seen and disclosed. "To find in 1943 that what Marconi did really did not promote the progress of science because it had been anticipated is more than a mirage of hindsight. . . ."
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Mr. Frankfurter's dissent started a real old-fashioned backyard brawl between Roberts and himself on one side and the Justices who had voted with Stone on the other. The dissenters were accused of disregarding the legal merits of the case. The writer is not taking sides and is of the opinion that this particular disagreement was just one episode in the rift that has been apparent in the Court for some time. Mr. Justice Rutledge wrote his own dissenting opinion on this case. The first paragraph of his opinion follows: universal in ,,Until now law has united with acknowledging Marconi ar the first to establish wireless telegraphy on a commercial basis. Before his invention, now in issue, ether-borne communication traveled some 80 miles. He lengthened the arc to 6000. Whether or not this was 'inventive' legally, it was a great and beneficial achievement. Today. 40 vears the event. the court's decision reduces it to an electrical > . -after ~~~~~~~~-~ mechanic's application of mere skill in the art."
This is simply one of the latest illustrations of the attempt of the courts to define what is or is not patentable. Do not make the mistake that this decision and many others like it do not concern all chemists. Many chemists readinp this either have already or will obof wisdom tain patents. Therefore it is only the for chemists to keep themselves informed as to how their Congress and their are with the patent right secured to them in the Constitution. The vatent examiner is veni much concerned that the co&s do not have the same standards of adjudging the merits of a patent as he himself has. His standards, which are, of course, the standards of the Patent Office, should be neither higher nor lower than those of all tribunals which may pass on the validity of patents he helps to issue. While no d d n i t e conclusion as to whether the standards of the Patent Officeshould be higher or those of the courts lower will be attempted here, almost anyone would be forced to admit that if the Patent Office regarded inventiveness as does the Supreme Court and many District Courts, there would be very few patents issued. This in turn would greatly disco&age the dling of patent applications and the very purpose which the courts are honestly w i n g to serve would be defeated. Instead of defendinp the public from those who would harm it, we wouid be of the disclosures which depriving science and . it must have to keep advancing. Let us not return to the day of secret processes,
