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2 Proposed Revisions in the Patent Law

PAULINE NEWMAN

Downloaded by NATL UNIV OF SINGAPORE on May 5, 2018 | https://pubs.acs.org Publication Date: June 1, 1977 | doi: 10.1021/ba-1977-0161.ch002

F M C Corporation, 2000 Market St., Philadelphia, Pa. 19103

Over the past 10 years there have been continuing

and

diligent efforts to change the U. S. patent laws. The major areas for which changes have been proposed are discussed, including an analysis of the changes which are receiving the most serious consideration.

Emphasis is placed on the vari-

ous methods for reexamination on proposals for ensuring

and opposition of patents,

the completeness and scientific

validity of the technical content of patents, on proposals to encourage patent applicants

to disclose technology ordi-

narily called "know-how" in addition to the technology for which the patent may be granted, and on various other proposals which are receiving substantial

attention from

the

government and the patent community.

T n recent years, t h e r e has b e e n a sequence of b i l l s i n t r o d u c e d i n t o t h e C o n g r e s s to c h a n g e the p a t e n t l a w . T h e e x i s t i n g l a w , A r t i c l e 3 5 o f the U . S. C o d e , w a s p a s s e d i n 1952, c o i n c i d i n g w i t h t h e start of a r e m a r k a b l e u p s u r g e i n t e c h n o l o g i c a l g r o w t h a n d scientific a d v a n c e . T h e 1952 P a t e n t A c t w o r k e d w e l l i n this d e m a n d i n g e n v i r o n m e n t a n d s u p p o r t e d a n e x t r a o r d i n a r y n u m b e r of n e w p r o d u c t s , n e w areas of business, a n d n e w businesses, l a r g e a n d s m a l l , a l l of w h i c h flourished i n p a r t n e r s h i p w i t h a n effective p a t e n t system. A t the same t i m e , because of t h e i n c r e a s i n g c o m p l e x i t y of advances i n t e c h n o l o g y , because of t h e e x p a n d i n g v o l u m e of scientific l i t e r a t u r e , a n d because of t h e c h a n g i n g methodology

of r e s e a r c h a n d d e v e l o p m e n t , c e r t a i n areas of t h e p a t e n t

l a w have been singled out for r e v i e w a n d "modernization," resulting i n a n u m b e r of p r o p o s e d b i l l s f o l l o w i n g u p o n the r e p o r t i n 1966 of the P r e s i dent's C o m m i s s i o n t o S t u d y the P a t e n t S y s t e m . N o n e of these p r o p o s e d b i l l s has b e c o m e l a w p a r t l y because

these

b i l l s , p a r t i c u l a r l y those i n t r o d u c e d w i t h i n the past t w o or three years, 9

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

10

LEGAL

RIGHTS O F C H E M I S T S A N D E N G I N E E R S

h a v e p r o m p t e d a f a r - r e a c h i n g d e b a t e i n t o the r o l e of patents i n today's business a n d t e c h n o l o g i c a l c l i m a t e . T h e focus of this debate is reflected i n c e r t a i n specific p r o p o s e d changes i n the patent l a w , a n d these b e c o m e a p p a r e n t f r o m a r e v i e w of Senate B i l l 2255 w h i c h w a s p e n d i n g i n t h e 94th Congress. M a n y of these changes a r e of p a r t i c u l a r interest t o chemists a n d c h e m i c a l technology,

a n d thus over the years t h e A m e r i c a n C h e m i c a l

S o c i e t y has f o l l o w e d w i t h interest the progress of p r o p o s e d

modifications

i n t h e p a t e n t l a w . T h e s e p r o p o s e d changes h a v e i m p l i c a t i o n s f a r b e y o n d Downloaded by NATL UNIV OF SINGAPORE on May 5, 2018 | https://pubs.acs.org Publication Date: June 1, 1977 | doi: 10.1021/ba-1977-0161.ch002

t h e p u r e l y l e g a l / a d m i n i s t r a t i v e p a t e n t p r a c t i c e . T h e s e changes affect the h e a r t of the p a t e n t system, a n d the average, e m p l o y e d c h e m i s t has a stake i n the p a t e n t system.

I n order to carry out research i n the chemical

industry for n e w products, i m p r o v e d products, a n d n e w applications a n d processes, almost a l w a y s there is a c o m m e r c i a l n e e d t o p a r t i c i p a t e i n the p a t e n t system. W i t h o u t p a r t i c i p a t i n g i n the p a t e n t system, t h e bases f o r a tangible return o n research and plant investment w o u l d be

changed,

a n d the i n c e n t i v e for i n n o v a t i v e research a n d h i g h - r i s k p r o d u c t

develop-

ment w o u l d be diminished. E v e r y c o u n t r y i n the w o r l d has f o u n d reason to h a v e a p a t e n t system.

I t is i n t e n d e d as a n i n c e n t i v e system, a n i n c e n t i v e f o r a m a j o r

aspect of t h e e c o n o m y : t h a t w h i c h has to d o w i t h n e w p r o d u c t s a n d n e w ideas, t h e c o m m e r c i a l use of n e w ideas, a n d the i n v e s t m e n t of

risk

c a p i t a l i n n e w p r o d u c t s . T h i s i n c e n t i v e is m o r e i m p o r t a n t i n some

fields

t h a n i n others. F o r e x a m p l e , i n the p h a r m a c e u t i c a l a n d p e s t i c i d e

fields,

one w o n d e r s patents.

w h e t h e r there w o u l d e v e n b e p r i v a t e research

without

M a n y p e o p l e t h i n k n o t — o r n o t o n the present scale, b u t t h e n

t h e g o v e r n m e n t , H E W , a n d the D e p a r t m e n t of A g r i c u l t u r e m i g h t fill the gap. A

p a t e n t is also a n i n c e n t i v e for t h e d i s c l o s u r e of

advances t h a t m i g h t o t h e r w i s e b e k e p t secret.

technological

Patents are r e s t r i c t e d to

p r a c t i c a l , c o m m e r c i a l ideas; b a s i c scientific p r i n c i p l e s are n o t p a t e n t a b l e b u t are available to a l l u p o n their discovery a n d publication. M a n y n e w businesses s t a r t e d w i t h a n i d e a a n d a patent. H o w w o u l d t h e y h a v e b e e n affected b y a d i m i n i s h e d p a t e n t system?

W o u l d small

i n v e n t o r s w i t h g o o d ideas m e r e l y t r y to sell the ideas to b i g business i n the knowledge business?

that w i t h o u t patents t h e y c o u l d n ' t c o m p e t e w i t h

big

W h a t is the inventor's p r o t e c t i o n against a p p r o p r i a t i o n of his

i d e a w h i l e h e is t r y i n g t o s e l l it? Y e t , o v e r t h e years, there h a v e b e e n cases w h e r e p a t e n t o w n e r s h a v e b e e n f o u n d to h a v e a b u s e d t h e i r p a t e n t rights i n seeking t o use the p a t e n t asset f o r m o r e t h a n its l i m i t e d p r o p e r l e g a l p u r p o s e .

A t t e m p t s to

e x t e n d a p a t e n t m o n o p o l y to c o v e r u n p a t e n t e d goods, f o r e x a m p l e , h a v e cast a c l o u d over t h e e n t i r e system. I n today's e n v i r o n m e n t of free enter-

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

2.

NEWMAN

11

Revisions in the Patent Law

prise a n d encouragement

of c o m p e t i t i o n , s u c h abuses a p p e a r t o

have

s h i f t e d c e r t a i n i n f l u e n t i a l attitudes t o w a r d h a r s h restrictions o n the r o l e of patents i n o u r e c o n o m y . W h e r e is the p r o p e r b a l a n c e ? p u b l i c interest—in strong encouragement

W h e r e is t h e

of n e w discoveries, o r at t h e

other extreme, a c o m p l e t e l y o p e n m a r k e t p l a c e at the p o s s i b l e expense of n e w discoveries?

W i l l o u r n a t i o n a l e c o n o m y b e stronger o r w e a k e r i f

w e sacrifice some p r i v a t e r e s e a r c h a n d c r e a t i v i t y for a m o r e o p e n m a r k e t place? T h e a n s w e r isn't clear a n d is t h e subject of c o n t i n u i n g a n d h e a l t h y Downloaded by NATL UNIV OF SINGAPORE on May 5, 2018 | https://pubs.acs.org Publication Date: June 1, 1977 | doi: 10.1021/ba-1977-0161.ch002

debate.

T h e p o s i t i o n has b e e n t a k e n b y s o m e g o v e r n m e n t

spokesmen

a n d some legislators t h a t it's too easy t o d a y to get a p a t e n t a n d t h a t c o r p o r a t i o n s p a r t i c u l a r l y s h o u l d h a v e extra obstacles p l a c e d i n t h e p a t h of p a r t i c i p a t i n g i n t h e p a t e n t system.

O t h e r government spokesmen, other

legislators, a n d most of the i n d u s t r i a l / s c i e n t i f i c c o m m u n i t y h a v e a r g u e d t h a t o u r n e e d f o r t e c h n o l o g i c a l a d v a n c e is greater t h a n e v e r a n d t h a t d i m i n u t i o n of t h e p a t e n t i n c e n t i v e is n o t i n the n a t i o n a l interest a n d n o t i n the interest of e c o n o m i c g r o w t h a n d i n d u s t r i a l e x p a n s i o n . T h i s debate has b e e n s t i m u l a t e d b y the c o n s i d e r a t i o n i n the Senate over the past f e w years of v a r i o u s proposals for c h a n g i n g the present p a t e n t l a w , c u l m i n a t i n g i n the passage of Senate B i l l 2255 i n F e b r u a r y 1976.

T h i s b i l l w a s not c o n s i d e r e d b y the H o u s e i n the 9 4 t h C o n g r e s s ,

a n d it is h o p e d t h a t t h e H o u s e J u d i c i a r y S u b c o m m i t t e e w i l l h o l d p u b l i c h e a r i n g s s h o u l d S.2255 or s i m i l a r f a r - r e a c h i n g p a t e n t l e g i s l a t i o n c o m e before it. F o l l o w i n g are some of t h e p r o p o s e d changes t h a t w o u l d h a v e a n i m p a c t o n t h e interests of chemists a n d t h e c h e m i c a l i n d u s t r y .

Reexamination and Opposition I t is g e n e r a l l y a g r e e d t h a t there s h o u l d b e some c h a n g e i n t h e l a w t o f a c i l i t a t e p u b l i c p a r t i c i p a t i o n i n t h e p a t e n t e x a m i n a t i o n process.

This

is a result of t h e g r o w i n g v o l u m e of t h e scientific l i t e r a t u r e a n d t h e i n c r e a s i n g c o m p l e x i t y of the sources to b e searched. A p e r s o n w h o k n o w s of reasons w h y a p a t e n t s h o u l d n o t h a v e i s s u e d s h o u l d b e a b l e t o b r i n g these reasons b e f o r e t h e P a t e n t Office, a n d the P a t e n t Office r e e x a m i n e t h e p a t e n t a n d r e v i e w its p r i o r d e c i s i o n .

should

T h e s e reasons

are

almost a l w a y s p u b l i s h e d l i t e r a t u r e r e f e r e n c e s — c a l l e d " p r i o r a r t " i n t h e t r a d e — t h a t t h e p a t e n t e x a m i n e r m i s s e d i n t h e search. T h e r e h a v e b e e n m a n y proposals o n h o w t o a c c o m p l i s h r e e x a m i n a t i o n . M o s t f o r e i g n countries h a v e a r e l a t i v e l y s i m p l e p r o c e d u r e , w h e r e b y f o r a f e w m o n t h s after a p a t e n t is p u b l i s h e d some t h i r d p e r s o n c a n file w i t h the P a t e n t Office, i n w r i t i n g , t h e reasons w h y t h e P a t e n t Office s h o u l d n o t g r a n t t h e patent. T h e o p p o s e r a n d t h e p a t e n t a p p l i c a n t t h e n

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

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RIGHTS O F CHEMISTS A N D ENGINEERS

a r g u e a b o u t i t i n w r i t i n g ; i f n e w references are c i t e d b y t h e o p p o s e r , as is u s u a l l y the case, t h e y argue a b o u t the references.

I n most countries

the applicant can change the claims if appropriate to a v o i d the references.

new

E x c e p t for t h e p o s s i b i l i t i e s of abuse i n t h e a m o u n t of t i m e

a p a t e n t c a n b e t i e d u p b y v i g o r o u s opposers, this isn't a b a d system. S.2255 goes f a r b e y o n d this t y p e of o p p o s i t i o n p r o c e d u r e . are t w o q u i t e different p r o c e e d i n g s k i n d s of p a t e n t oppositions. opposition proceeding,

There

i n S.2255, b o t h of w h i c h are

new

S e c t i o n 135 p r o v i d e s f o r a c l a s s i c a l sort of

a v a i l a b l e for the first y e a r after the p a t e n t is

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g r a n t e d b u t w i t h e m b e l l i s h m e n t s . T h e o p p o s i t i o n is n o t l i m i t e d to w r i t ten or o r a l a r g u m e n t s o n a r e c o r d , b a s e d o n p r i o r a r t o r other reasons. T h e r e is a v a i l a b l e t o t h e opposer, to the a p p l i c a n t , a n d to the P a t e n t Office S o l i c i t o r the f u l l s w e e p of f e d e r a l d i s c o v e r y

procedures—discovery

of e a c h other, of t h e i r chemists a n d t h e i r m a n a g e r s , of t h e i r files a n d t h e i r notebooks.

T h e r e is also a v a i l a b l e , i n n e w S e c t i o n 23, t h e right to

s u b p o e n a p e o p l e a n d records that h a v e n o r e l a t i o n to either the p a t e n t a p p l i c a n t or the o p p o s e r a n d n o i n v o l v e m e n t i n t h e o p p o s i t i o n .

For

e x a m p l e , i f I at F M C w a n t e d t o o p p o s e a n a p p l i c a t i o n filed b y C y a n a m i d i n the s y n t h e t i c fiber area, a n d I t h o u g h t t h a t D u P o n t or E a s t m a n or M o n s a n t o m i g h t h a v e w o r k e d i n r e l a t e d areas—i.e., h a d " p r i o r k n o w l e d g e " t h a t m i g h t h e l p p r o v e t h a t the C y a n a m i d i n v e n t i o n w a s " o b v i o u s to one s k i l l e d i n t h e a r t " o r subject to other d i s a b i l i t i e s — I c o u l d seek t o b r i n g out this p r i o r k n o w l e d g e of D u P o n t a n d E a s t m a n a n d M o n s a n t o .

Of

course t h e y m i g h t resist, a n d there w o u l d be m o t i o n s to q u a s h s u b poenas, m o t i o n s for secrecy orders, a n d m a n y other l e g a l actions.

The

P a t e n t Office S o l i c i t o r o r e x a m i n e r c a n also d o this o n his o w n i n i t i a t i v e . T h e p u r p o s e is c l e a r a n d c l e a r l y s t a t e d : " a c o m p r e h e n s i v e p l a n f o r t h e parties to a n Office p r o c e e d i n g t o o b t a i n e v i d e n c e . " O n e can't a r g u e w i t h the p h i l o s o p h y b e h i n d this p u r p o s e .

One can

a r g u e o n l y w i t h t h e n e e d f o r so e l a b o r a t e a r e m e d y at this stage of the p a t e n t a p p l i c a t i o n process w h e n t h e p o s s i b i l i t i e s f o r abuse a n d harassm e n t are e n o r m o u s .

O n e c a n t i e u p a p a t e n t for m u c h of its l i f e , w h i c h

w o u l d r u n f r o m the filing date a n d n o t b e e x t e n d e d b y s u c h p r o c e e d i n g s . T h i s seems to m e t o o u t w e i g h the l e g i t i m a t e benefits of b r i n g i n g p e r t i n e n t , u n p u b l i s h e d p r i v a t e i n f o r m a t i o n b e f o r e the P a t e n t Office to i m p r o v e t h e p a t e n t e x a m i n i n g process.

( P u b l i s h e d information could be

sub-

m i t t e d b y s i m p l e r , s t a n d a r d p r o c e d u r e s . ) W h e n y o u finish, i f y o u r f u n d s h o l d out a n d a s s u m i n g it's a v a l u a b l e i n v e n t i o n ( i f i t w e r e n ' t , i t m i g h t n o t b e so v i g o r o u s l y o p p o s e d ) , y o u m a y h a v e to go t h r o u g h a l l this a g a i n i n a n i n f r i n g e m e n t s u i t against the same opposer. T h e c h i e f v i c t i m s of this p r o c e d u r e c o u l d w e l l b e s m a l l c o m p a n i e s , o r i n d i v i d u a l s , w h o m a k e g o o d i n v e n t i o n s i n fields w h e r e other c o m p a n i e s are a l r e a d y e s t a b l i s h e d . T h e c h i e f beneficiaries w o u l d seem t o b e estab-

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

2.

N E W M A N

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l i s h e d businesses w h o c o u l d b e h u r t b y the c o m p e t i t i o n of n e w ideas or i m p r o v e m e n t s i n t h e i r e s t a b l i s h e d businesses.

O n e cannot expect that

a l l oppositions w i l l b e filed solely w i t h the p u b l i c interest i n m i n d . T h i s leads to a n o t h e r of t h e objections t o this sort of c o m p l e x o p p o s i t i o n p r o c e e d i n g : that i t n e e d not b e u s e d a n d there m a y b e l i t t l e i n c e n t i v e t o use it. T h u s the l e g i t i m a t e p u r p o s e of i m p r o v i n g the e x a m i n a t i o n o f patents may be thwarted. I a m i n f a v o r of p r o c e d u r e s

that b r i n g a l l pertinent information

b e f o r e the P a t e n t Office. I a m i n f a v o r of p r o c e d u r e s for the c i t a t i o n a n d Downloaded by NATL UNIV OF SINGAPORE on May 5, 2018 | https://pubs.acs.org Publication Date: June 1, 1977 | doi: 10.1021/ba-1977-0161.ch002

a r g u m e n t of references. K n o w l e d g e of p r i o r use or sale s h o u l d b e b r o u g h t out r e a s o n a b l y . F r o m there o n , I b e l i e v e t h a t the

financial/legal

burden

t h a t w o u l d be i m p o s e d b y S.2255 w o u l d h a v e a n adverse effect o n p a r t i c i p a t i o n i n t h e p a t e n t system a n d t h a t this adverse effect

outweighs

a n y p u b l i c benefit of not l e t t i n g e v e n one m a r g i n a l p a t e n t s l i p b y . A s a r e s u l t of a l o t of t h i n k i n g b y a lot of p e o p l e , t h e r e has e m e r g e d a n a l t e r n a t i v e p r o p o s a l that attempts t o c o n s o l i d a t e

the best of

the

o p p o s i t i o n a n d r e e x a m i n a t i o n p r o c e d u r e s to a c h i e v e the b e n e f i c i a l effects a n d yet to r e d u c e t h e costs of n o t o n l y o p p o s i t i o n s b u t also p a t e n t l i t i g a tion.

T h i s a l t e r n a t i v e p r o p o s a l has p r o v i d e d the focus f o r attempts to

i m p r o v e S.2255.

T h i s p r o p o s a l has c o m e to b e k n o w n as " C h a p t e r 3 1 "

b e c a u s e t h a t w a s its p l a c e i n a b i l l i n t r o d u c e d i n the Senate b y Senator Fong.

It h a d b r o a d s u p p o r t f r o m i n d u s t r y a n d b a r associations, b u t i t

d i d n ' t c a r r y i n t h e Senate i n its o r i g i n a l f o r m . C h a p t e r 31 p r o v i d e d t h a t a n y o n e c o u l d request the P a t e n t Office at a n y t i m e to r e e x a m i n e a n i s s u e d p a t e n t b y c i t i n g n e w references.

Written

arguments c o u l d b e s u b m i t t e d , t h e patentee c o u l d n a r r o w his c l a i m s , a n d the P a t e n t Office w o u l d r e e x a m i n e t h e p a t e n t i n the l i g h t of this new information.

If, d u r i n g l i t i g a t i o n , t h e v a l i d i t y of a p a t e n t

were

a t t a c k e d because of n e w references that w e r e n ' t before t h e P a t e n t Office, C h a p t e r 31 r e q u i r e d t h a t this too go to the P a t e n t Office for r e e x a m i n a t i o n a n d f o r a n a d v i s o r y o p i n i o n b y t h e e x a m i n e r . T h i s is b a s e d o n t h e statistic t h a t s o m e w h a t over 7 0 %

of t h e patents t h a t t h e courts h a v e

h e l d i n v a l i d o v e r t h e past f e w years w e r e h e l d i n v a l i d o n the basis of references t h a t w e r e not b e f o r e t h e P a t e n t Office, a n d p r e s u m a b l y i f the P a t e n t Office h a d h a d the references, t h e y w o u l d n o t h a v e i s s u e d t h e patent. R e e x a m i n a t i o n u n d e r C h a p t e r 31 w o u l d b e l i m i t e d to p u b l i s h e d references, a n d thus there w o u l d b e n o n e e d f o r d i s c o v e r y o r depositions or c r o s s - e x a m i n a t i o n . It w o u l d b e a n i n e x p e n s i v e p r o c e d u r e t h a t w o u l d c o v e r a l m o s t a l l of t h e reasons f o r i n v a l i d i t y t h a t c o u l d arise i n a f u l l b l o w n opposition proceeding. C h a p t e r 3 1 w a s o p p o s e d b y the J u s t i c e D e p a r t m e n t a n d some l e g i s lators. O b s e r v e r s b e l i e v e t h a t there are t w o m a j o r reasons.

O n e reason

is a p p a r e n t l y t h a t i t does n o t a l l o w as f a r - r e a c h i n g a n attack o n a p a t e n t

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

14

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RIGHTS O F CHEMISTS A N D ENGINEERS

as c o u l d arise i n a f u l l y contested o p p o s i t i o n , so t h a t m a r g i n a l patents or c l a i m s c o u l d s l i p t h r o u g h a C h a p t e r 31 p r o c e e d i n g .

T h e other objection

is the o b l i g a t o r y r e f e r r a l t o t h e P a t e n t Office d u r i n g l i t i g a t i o n . I t is g e n e r a l l y b e l i e v e d t h a t judges are h a r d e r o n p a t e n t s — e s p e c i a l l y w i t h a v i g orous a d v e r s a r y a t t a c k i n g t h e patent, t h e i n v e n t o r , a n d the i n v e n t i o n — t h a n w o u l d b e the P a t e n t Office o n its o w n r e e x a m i n a t i o n . T h u s , the c o m p u l s o r y r e f e r r a l of C h a p t e r 31 w a s v i g o r o u s l y o p p o s e d . N e v e r t h e l e s s , there w a s a p a r t i a l c o m p r o m i s e i n c l u d e d i n S.2255 i n the f o r m of a l a s t - m i n u t e a m e n d m e n t t h a t appears as S e c t i o n 135A. Downloaded by NATL UNIV OF SINGAPORE on May 5, 2018 | https://pubs.acs.org Publication Date: June 1, 1977 | doi: 10.1021/ba-1977-0161.ch002

p r o v i d e s f o r a r e e x a m i n a t i o n p r o c e e d i n g after the one-year

It

opposition

p e r i o d has r u n . A t a n y t i m e d u r i n g t h e r e m a i n i n g l i f e of the p a t e n t , a n y o n e c a n r e q u e s t t h e P a t e n t Office t o r e e x a m i n e a p a t e n t b a s e d n e w references.

on

T h e p a t e n t o w n e r c a n t c h a n g e his c l a i m s as a r e s u l t of

r e e x a m i n a t i o n , except t h r o u g h a reissue p r o c e d u r e as at present.

This

r o u t e c a n t b e u s e d i f the p a t e n t is i n l i t i g a t i o n unless the j u d g e h i m s e l f decides to ask the P a t e n t Office f o r a n a d v i s o r y o p i n i o n , b u t t h e j u d g e doesn't h a v e t o ask f o r t h e a d v i c e , a n d of course h e doesn't h a v e to t a k e the a d v i c e . I n e a r l y 1976 i t a p p e a r e d that t h e H o u s e of R e p r e s e n t a t i v e s w o u l d t a k e u p S.2255 d u r i n g t h a t session of C o n g r e s s .

I n a n t i c i p a t i o n of t h a t

action, Congressman H o r t o n introduced a reexamination b i l l drafted b y the R o c h e s t e r P a t e n t L a w A s s o c i a t i o n b a s e d h e a v i l y o n C h a p t e r 3 1 b u t m o d i f i e d i n a f e w areas. W h e n a s i m i l a r b i l l w a s i n t r o d u c e d i n t h e p r e v i o u s session of C o n g r e s s , i t r e f e r r e d to a n e a r l i e r l e t t e r to t h e Senate submitted b y the A m e r i c a n C h e m i c a l Society r e c o m m e n d i n g

stepwise

l e g i s l a t i o n i n specific areas of the e x i s t i n g p a t e n t l a w a n d s u g g e s t i n g t h a t o p p o s i t i o n p r o c e e d i n g s w o u l d b e a g o o d p l a c e to start. I n J u n e 1976 C o n g r e s s m a n W i g g i n s i n t r o d u c e d a b i l l w h i c h e m b o d i e d C h a p t e r 31 i n its o r i g i n a l f o r m as a n a m e n d m e n t to the e x i s t i n g p a t e n t l a w . T h i s a p p r o a c h has r e c e i v e d g e n e r a l s u p p o r t f r o m the p a t e n t c o m m u n i t y as a s o l i d a n d i m p o r t a n t step i n m e e t i n g the needs of a p a t e n t system i n t e n d e d to e n c o u r a g e t e c h n o l o g i c a l g r o w t h .

Joint Inventorship O f m a j o r c o n c e r n t o t h e scientific c o m m u n i t y are those aspects of S.2255 t h a t r e l a t e to j o i n t i n v e n t o r s h i p . L e g i s l a t i o n is n e e d e d i n this a r e a to c l a r i f y a m b i g u o u s a n d c o n f l i c t i n g decisions, l a w , a n d p r a c t i c e . S.2255 t o o k a g i a n t step b a c k w a r d . W i t h the g r o w t h of t e c h n o l o g y a n d t h e i n c r e a s e d c o m p l e x i t y of i n v e n t i o n s , o f t e n m o r e t h a n o n e p e r s o n makes a n inventive contribution to a patentable advance. N o t every i n v e n t i o n is c r e a t e d f u l l - b l o w n i n the m i n d of one p e r s o n b u t is c r e a t i v e l y d e v e l o p e d , sometimes b y teams of researchers, sometimes b y successive

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

2.

contributors.

15

Revisions in the Patent Law

N E W M A N

S.2255 expressly does n o t p e r m i t this r e c o g n i t i o n of

i n v e n t i o n s are m a d e .

how

S.2255 r e q u i r e s that a l l j o i n t inventors m u s t h a v e

c o n t r i b u t e d to e v e r y c l a i m i n the patent. P r o p o n e n t s of this r e q u i r e m e n t h a v e stated that t h e i r p u r p o s e is to r e d u c e , as a m a t t e r of n a t i o n a l p o l i c y , t h e issuance of patents b a s e d o n " c o r p o r a t e i n v e n t i o n s . " I d o , t h i n k i t w i l l h a v e this effect.

I t presupposes

indeed,

that inventions made

by

t w o p e o p l e are not i n the n a t i o n a l interest w h i l e i n v e n t i o n s m a d e b y one p e r s o n are. I k n o w n o basis f o r t h e c o n c l u s i o n t h a t c o m p l e x i n v e n t i o n a n d c o r p o r a t e t e c h n o l o g i c a l l e a d e r s h i p i n this c o u n t r y s h o u l d b e i s o l a t e d Downloaded by NATL UNIV OF SINGAPORE on May 5, 2018 | https://pubs.acs.org Publication Date: June 1, 1977 | doi: 10.1021/ba-1977-0161.ch002

f r o m o u r o n l y i n v e n t i o n i n c e n t i v e system.

T h e existing l a w on joint

i n v e n t o r s h i p needs c l a r i f i c a t i o n . O t h e r b i l l s b e f o r e t h e Senate

offered

advances i n this area, b u t these w e r e not e m b o d i e d i n S.2255.

Assignee Filing S.2255 p r o v i d e s t h a t a p a t e n t a p p l i c a t i o n m a y b e filed a n d i s s u e d i n the n a m e of the p a t e n t o w n e r ,

p r o v i d e d t h e i n v e n t o r s are

correctly

i d e n t i f i e d a n d p r o v i d e d t h a t joint i n v e n t i o n s m e e t t h e r e q u i r e m e n t s d i s cussed a b o v e .

T h i s is different f r o m t h e present l a w , w h i c h p r o v i d e s

that a p a t e n t is filed a n d i s s u e d i n the n a m e of the i n v e n t o r s w i t h t h e p a t e n t o w n e r also l i s t e d o n the patent.

I k n o w of n o c o r p o r a t e

group

t h a t v i g o r o u s l y u r g e d this c h a n g e , a n d i t p r o v i d e s v e r y l i t t l e l e g a l a d vantage.

I f i t w a s i n s e r t e d as a sop to the c o r p o r a t e a p p l i c a n t , i t is a

m i n o r concession.

O w n e r s h i p r i g h t s as to p a t e n t a p p l i c a t i o n s are b a s e d

o n the l e g a l r e l a t i o n s h i p b e t w e e n the i n v e n t o r a n d the assignee a n d n o t o n the t e c h n i c a l i t y of i n w h o s e n a m e the p a t e n t a p p l i c a t i o n is

filed.

Disclosure Requirements T h e r e seems t o be, i n some circles, the s u s p i c i o n t h a t the d r a f t s m e n of p a t e n t a p p l i c a t i o n s t r y to c o n c e a l the substance of a n i n v e n t i o n r a t h e r t h a n t o e m p h a s i z e i t . W h e t h e r this w a s e v e r the case, I m n o t sure, b u t t o d a y the penalties for p r o v i d i n g a n y t h i n g other t h a n a f u l l y e n a b l i n g d i s c l o s u r e are so great t h a t a p a t e n t a p p l i c a n t is c e r t a i n l y i l l - a d v i s e d t o p l a y t h a t game.

O n e hears chemists c o m p l a i n a b o u t the difficulties of

t r y i n g to repeat experiments i n t h e Journal of the American Society, o r w o r s e , i n Chemical

Chemical

Abstracts, b e c a u s e of the l a c k of d e t a i l .

M o s t p a t e n t a p p l i c a n t s i n the c h e m i c a l field find t o d a y t h a t i t is a d v i s a b l e legally to include more detail than w o u l d be i n c l u d e d i n a journal article s i m p l y b e c a u s e the risk of e v e n a n a p p e a r a n c e of w i t h h o l d i n g p e r t i n e n t d a t a carries s u c h h i g h penalties. S.2255 p r o v i d e s f o r t e c h n i c a l d i s c l o s u r e a n d r e v i e w a n d d i s c u s s i o n of the l i t e r a t u r e w e l l b e y o n d t h a t w h i c h a chemist m i g h t feel called u p o n to include i n a technical article on w h i c h his p r o f e s s i o n a l r e p u t a t i o n m i g h t

ride.

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16

LEGAL

RIGHTS O F C H E M I S T S A N D E N G I N E E R S

T h e r e are n e w p r o v i s i o n s i n S.2255 r e l a t i n g t o the o b l i g a t i o n

to

m a k e "reasonable i n q u i r y " i n t o a l l r e l a t e d i n f o r m a t i o n " i n the possession or c o n t r o l " of t h e i n v e n t o r , the a p p l i c a n t , the assignee, a n d the p a t e n t agent or l a w y e r .

S o m e p e o p l e i n t e r p r e t this as m e a n i n g t h a t a l a w y e r

w i t h different clients m i g h t b e c o m p e l l e d to t e l l t h e P a t e n t Office

the

t r a d e secrets of one c l i e n t i f t h e y m i g h t h a v e a n y r e l a t i o n s h i p to the p a t e n t a p p l i c a t i o n of a n o t h e r c l i e n t . T h i s is p e r h a p s n o t the i n t e n t i o n , a n d I t h i n k i t c o u l d b e c l a r i f i e d . I t is g e n e r a l l y a g r e e d t h a t this clause, a l t h o u g h n o t u n r e a s o n a b l e o n its face, p r o v i d e s f u r t h e r g i m m i c k y t e c h n i c a l i t i e s to Downloaded by NATL UNIV OF SINGAPORE on May 5, 2018 | https://pubs.acs.org Publication Date: June 1, 1977 | doi: 10.1021/ba-1977-0161.ch002

be resolved i n future litigation.

Importation of Products Made Abroad S e c t i o n 271 of S.2255 w o u l d p r o v i d e some s m a l l m e a s u r e of

protec-

t i o n to m a n u f a c t u r e r s w h e n t h e i r process w h i c h is p a t e n t e d i n this c o u n t r y is p r a c t i c e d outside of t h e c o u n t r y , p r e s u m a b l y b y c h e a p e r

labor,

w i t h t h e goods t h e n i m p o r t e d to the d e t r i m e n t of the U . S . m a n u f a c t u r e r a n d to l a b o r p a i d o n U . S . standards. H o w e v e r , this p r o v i s i o n takes effect o n l y i f t h e i m p o r t e r is t h e exclusive o r p r i m a r y d i s t r i b u t o r . I f there are several non-exclusive distributors—none being " p r i m a r y " — t h i s safeguard w o u l d not a p p l y .

T h i s e n t i r e p r o v i s i o n thus w o u l d b e easy to a v o i d .

T h e r e are i m p o r t a n t issues h e r e i n v o l v i n g l a b o r p o l i c y a n d i n t e r n a t i o n a l t r a d e as w e l l as p a t e n t l a w a n d fairness. A n y c h a n g e i n the l a w s h o u l d c o n s i d e r a l l the issues. A n o t h e r n e w p r o v i s i o n i n S e c t i o n 271 p r o v i d e s

that a

patented

i n v e n t i o n , i f s u b s t a n t i a l l y c o m p l e t e d w i t h i n t h e U n i t e d States a n d t h e n finally

completed

elsewhere,

cannot

a v o i d i n f r i n g e m e n t of

the U . S .

patent. T h i s is a u s e f u l clause because a recent U . S . c o u r t d e c i s i o n h a d h e l d t h a t a l l aspects of a p a t e n t e d i n v e n t i o n m u s t b e p r a c t i c e d w i t h i n t h e U n i t e d States i n o r d e r to i n f r i n g e t h e U . S . patent.

It n o w remains

f o r t h e courts to d e c i d e w h a t is m e a n t b y " s u b s t a n t i a l l y c o m p l e t e d . "

'Patentability Brief A n o t h e r p r o v i s i o n of interest to chemists is the c o m p u l s o r y filing of a " p a t e n t a b i l i t y b r i e f , " w h e r e i n t h e i n v e n t o r discusses p e r t i n e n t l i t e r a t u r e references a n d other b a c k g r o u n d i n f o r m a t i o n a n d explains w h y his i n v e n t i o n is p a t e n t a b l e i n t h e l i g h t of this b a c k g r o u n d . T h i s r e q u i r e m e n t f o r a p a t e n t a b i l i t y b r i e f is n o t i n itself disadvantageous. I t does, h o w e v e r , present risks t o t h e p a t e n t a p p l i c a n t w h e n c o n s i d e r e d i n the context of other p r o v i s i o n s of S.2255, p a r t i c u l a r l y t h a t w h i c h r e q u i r e s t h a t t h e i n v e n t o r , t h e assignee, a n d the a t t o r n e y i n v e s t i g a t e a l l sources of i n f o r m a t i o n w i t h i n t h e i r possession o r c o n t r o l — t h i s s u r e l y means w i t h i n a l l

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

2.

NEWMAN

Revisions in the Patent Law

l a b o r a t o r i e s , e v e n overseas

17

laboratories of a m u l t i n a t i o n a l c o r p o r a t i o n ,

a n d a l l other chemists w o r k i n g i n these l a b o r a t o r i e s — t o i n c l u d e i n t h e p a t e n t a b i l i t y b r i e f a l l p e r t i n e n t i n f o r m a t i o n w h i c h the c o m p a n y have.

may

A n y chemist i n a b i g company w h o thought he was w o r k i n g i n

i s o l a t i o n w i l l n o w find h i m s e l f i n contact w i t h colleagues t h r o u g h o u t t h e c o m p a n y a n d its s u b s i d i a r i e s .

Deferred Examination

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D e f e r r e d e x a m i n a t i o n w a s i n i t i a l l y u s e d i n countries w i t h

five

or

m o r e years of b a c k l o g of u n t o u c h e d patent a p p l i c a t i o n s a n d w h e r e the b a c k l o g w a s g e t t i n g w o r s e e a c h d a y . T h e U . S . P a t e n t Office h a d a l a r g e b a c k l o g itself a f e w years ago, b u t t h a n k s t o efficient commissioners a n d v a r i o u s p r o c e d u r e s f o r a c c e l e r a t i n g p r o s e c u t i o n , at present i n the U n i t e d States t h e m a j o r i t y of p a t e n t a p p l i c a t i o n s are processed w i t h i n 18 m o n t h s of

filing.

N e v e r t h e l e s s , S.2255 p r o v i d e s for d e f e r r e d e x a m i n a t i o n , e v e n

t h o u g h f e w p a t e n t users are n o w u r g i n g this step. T h e r e isn't t i m e to go i n t o t h e a r g u m e n t s for a n d against d e f e r r e d e x a m i n a t i o n or to discuss the other n e w p r o v i s i o n s c o n t a i n e d i n S.2255. M a n y of us w h o b e l i e v e t h a t a g o o d p a t e n t system, d e s i g n e d to e n c o u r a g e t e c h n o l o g i c a l progress, is i m p o r t a n t to o u r c o u n t r y , are c o n c e r n e d the m a j o r a n d m i n o r changes b e i n g p r o p o s e d

about

i n the patent l a w w i t h

inadequate study a n d inadequate p u b l i c participation.

Cost and Benefits H o w m u c h s h o u l d i t cost to get a patent? W h o s h o u l d p a y this cost: the inventor?

the

government?

the public?

A n Inflationary

Impact

Statement w a s p r e p a r e d b y the g o v e r n m e n t i n c o n n e c t i o n w i t h one

of

the b i l l s t h a t l e d to S.2255. It w a s e s t i m a t e d t h a t the cost to t h e g o v e r n m e n t u n d e r present l a w averages

$1500 p e r p a t e n t a p p l i c a t i o n ( t h i s

average w a s b a s e d o n the t o t a l of m e c h a n i c a l , e l e c t r i c a l , a n d c h e m i c a l patents).

T h e statement e s t i m a t e d t h a t a n a d d i t i o n a l $1233 p e r a p p l i -

c a t i o n w o u l d b e a d d e d , m a k i n g the cost to t h e g o v e r n m e n t a n average of $2733 p e r a p p l i c a t i o n . T h e g o v e r n m e n t also e s t i m a t e d t h a t the i n creased cost t o the p a t e n t a p p l i c a n t w o u l d b e 8 0 %

o v e r present cost.

M a n y i n d u s t r i e s h a v e e s t i m a t e d t h e increase to b e several times t h a t a m o u n t , w i t h t h e h i g h e s t e s t i m a t e d increase c o m i n g f r o m the c h e m i c a l industries

because

c h e m i c a l processes a n d

the

ordinary practice

of

c h e m i c a l e x p e r i m e n t a t i o n w o u l d present t h e greatest b u r d e n s i n c o m p l y i n g w i t h the p r o p o s e d n e w l a w . The patent

government,

filing

u s i n g these

figures,

w o u l d drop b y one-third.

e s t i m a t e d t h a t the r a t e

T h e y d i d n o t r e s p o n d to

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

of the

18

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RIGHTS O F CHEMISTS A N D

ENGINEERS

q u e s t i o n of w h e t h e r this is a d e s i r a b l e r e s u l t or the d e s i r e d result. N o t h i n g has b e e n h e a r d f r o m the sponsors of t h e a d m i n i s t r a t i o n - s u p p o r t e d p a t e n t b i l l s as to w h e t h e r this r e s u l t is i n the n a t i o n a l interest. P e r h a p s w e r e a l l y are b e t t e r off w i t h o n e - t h i r d f e w e r t e c h n i c a l d i s closures, b u t w h i c h t h i r d ?

M a n y of o u r m a j o r i n d u s t r i e s , p a r t i c u l a r l y

h i g h - t e c h n o l o g y i n d u s t r i e s , are d e e p l y i n v o l v e d w i t h t h e p a t e n t system. W e d o n t k n o w h o w the next g e n e r a t i o n of p o s s i b l e n e w i n d u s t r i e s w o u l d a p p r o a c h t h e h i g h i n v e s t m e n t a n d h i g h risk c l i m a t e of t o d a y . T h e conse-

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q u e n c e s are n o t w e l l u n d e r s t o o d a n d c o n c e r n us a l l .

Summary S.2255 represents, I b e l i e v e , a c a l c u l a t e d m o v e t o w a r d a d i m i n i s h e d p a t e n t i n c e n t i v e system. I f this p h i l o s o p h y p r e v a i l s — t h a t patents s h o u l d i n d e e d be a d i m i n i s h e d factor i n our competitive e c o n o m y — w e m a y never k n o w where our technology might have gone i n an environment more supp o r t i v e of c r e a t i v i t y a n d n e w ideas. I t is m y p e r s o n a l v i e w t h a t the

risks

o f d a m a g e to o u r t e c h n o l o g i c a l f u t u r e are sufficiently r e a l t h a t n o c h a n g e of t h e m a g n i t u d e of S.2255 s h o u l d b e m a d e unless w e h a v e a b e t t e r i d e a of t h e consequences. I a m n o t i n f a v o r of S.2255 because I b e l i e v e t h a t the d i s a d v a n t a g e s o u t w e i g h t h e advantages.

I s u p p o r t stepwise a m e n d -

m e n t t o t h e present l a w , to m o d e r n i z e i t w h e r e a p p r o p r i a t e , t o

codify

j u d g e - m a d e changes i n the l a w as a p p r o p r i a t e , to c l a r i f y a m b i g u i t i e s t h a t h a v e d e v e l o p e d since the 1952 P a t e n t A c t , a n d , as the foremost c o n s i d e r a t i o n , to p r o v i d e a n i n c r e a s e d i n c e n t i v e t o o u r n a t i o n a l e c o n o m i c s t r e n g t h a n d t e c h n o l o g i c a l p r e e m i n e n c e . I h o p e t h a t scientists a n d c h e m ists, as users of t h e p a t e n t system, w i l l speak out o n w h a t e v e r t h e i r v i e w s m a y b e as n e w p a t e n t l e g i s l a t i o n is p r o p o s e d . R E C E I V E D September 17,

1976.

Discussion Q.

W h a t c a n the average p e r s o n d o i n this context?

A.

I b e l i e v e t h a t p a r t i c i p a t i o n i n the p o l i t i c a l process is i n o r d e r —

to express w h a t e v e r v i e w s a p e r s o n m i g h t h a v e . I t h i n k t h a t is a b o u t a l l t h e average p e r s o n m i g h t d o , b u t i t is s o m e t h i n g t h a t w e are i n c l i n e d n o t to do, a n d I t h i n k this l e g i s l a t i o n is i m p o r t a n t e n o u g h to act o n . Q . W h a t d o y o u t h i n k w i l l b e the cost t o the average s m a l l i n v e n t o r u n d e r this n e w b i l l ? A . Y o u h a v e to l o o k at the cost of this b i l l i n phases. T h e filing p h a s e w i l l p r o b a b l y increase his l e g a l fees s u b s t a n t i a l l y i n terms of t h e i n c r e a s e d

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

2.

NEWMAN

19

Revisions in the Patent Law

effort i n filing a n d p r o s e c u t i o n , b u t the r e a l cost a n d , I t h i n k , the r e a l h a z a r d is the p o s s i b i l i t y of p u t t i n g the s m a l l i n v e n t o r i n a s i t u a t i o n w h i c h h e c a n t h a n d l e financially i n the o p p o s i t i o n aspects of the b i l l ; these c o m e at a t i m e f a i r l y e a r l y i n t h e l i f e of a p a t e n t w h e n the i n v e n t o r m a y n o t k n o w the t r u e w o r t h of the i n v e n t i o n . T h e d i v e r s i o n of t h e i n v e n t o r s resources to w h a t has b e e n c o m p a r e d w i t h a f u l l - s c a l e d i s t r i c t c o u r t p r o c e e d i n g , w i t h the k i n d s of d i s c o v e r y a n d t e s t i m o n y t h a t o n e sees i n p a t e n t l i t i g a t i o n , w o u l d p u t t h e p a t e n t o p p o s i t i o n system i n t h e context of l i t i g a t i o n r a t h e r t h a n i n a n a d m i n i s t r a t i v e p r o c e e d i n g .

The

figure

of

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$10,000—20,000 is b e i n g u s e d i n e v a l u a t i n g t h e cost of fighting a n o p p o s i t i o n t h r o u g h its f u l l p o t e n t i a l b u r d e n u n d e r S.2255. Q . Is there a n y c h a n c e of a m e n d i n g t h e b i l l t o separate the c o r p o r a t e i n v e n t o r f r o m the p r i v a t e i n v e n t o r ? A.

T h e r e has b e e n a n a t t e m p t i n t h e b i l l t o r e c o g n i z e the d i s a b i l i -

ties, the extra b u r d e n s , o n the s m a l l i n v e n t o r i n t h a t there is a p r o v i s i o n w h i c h says that f o r a n i n d i v i d u a l i n v e n t o r , or those w h o m e e t the d e f i n i t i o n of a s m a l l business as d e f i n e d i n o u r l a w s , there is a n u p p e r l i m i t o n t h e filing a n d issuance fees of t h e patent. T h a t u p p e r l i m i t is $100. T h a t same clause says t h a t t h e r e w i l l b e a m i n i m u m l o w e r l i m i t

of

$200 f o r t h e c o r p o r a t e a p p l i c a n t . N o w t h a t difference does n o t solve the q u e s t i o n t h a t y o u r a i s e d , b u t i t is as f a r as the sponsors of t h e b i l l are a p p a r e n t l y w i l l i n g to go.

I t h i n k t h a t w h e n associations of b i g business

t e l l the g o v e r n m e n t t h a t t h e y are w o r r i e d a b o u t h o w this is g o i n g to h e l p or h u r t the s m a l l i n v e n t o r , t h e y d o n ' t r e c e i v e m u c h a t t e n t i o n . isn't r e m e m b e r e d t h a t most b i g business s t a r t e d s m a l l .

Niederhauser and Meyer; Legal Rights of Chemists and Engineers Advances in Chemistry; American Chemical Society: Washington, DC, 1977.

It