Transcript of 18-month Publication of Patent Applications

 VSM UNITED STATES DEPARTMENT OF COMMERCE PATENT AND TRADEMARK OFFICE - - - - - - - - - - - - - - - - - - x : Notice of Proposed Rulemaking : To Implement 18-Month Publication : of Patent Applications : : - - - - - - - - - - - - - - - - - - x Holiday Inn - National Airport 15th Street and Jeff Davis Hwy. Arlington, Virginia Tuesday, September 19, 1995 The hearing in the above-entitled matter, commenced, pursuant to notice, at 9:45 a.m. BEFORE: BRUCE A. LEHMAN Assistant Secretary of Commerce and Commissioner of the Patents and Trademarks LAWRENCE J. GOFFNEY Acting Deputy Assistant Secretary of Commerce and Deputy Commissioner of Patents and Trademarks EDWARD R. KAZENSKE Deputy Assistant Commissioner for Patents NANCY J. LINCK Solicitor C O N T E N T S ORAL TESTIMONY BY: PAGE Herbert C. Wamsley Intellectual Property Owners 9 Don Dunner American Bar Association/ Intellectual Property Law Section 17 Joseph Mendelson, III Center for Technology Assessment 26 Orville J. Litzsinger Alliance for American Innovation 31 Lawrence J. Bassuk, Sr. Texas Instruments, Inc. 39 Glenn E. Wise Ad Hoc Groups 47 Frampton Ellis Anatomic Research, Inc. 56 Robert A. Armitage American Intellectual Property Law Association 69 


MR. LEHMAN: Good morning. Welcome everybody today. We'll be having Edward Kazenske join us in a few moments, the Acting Assistant Commissioner for Patents. My name is Bruce Lehman, and I'm accompanied here today by Lawrence Goffney, the Acting Deputy Commissioner of Patents, and Nancy Linck, the Solicitor of the Patent and Trademark Office. Actually, Mr. Goffney is the Deputy Commissioner of Patents and Trademarks. Sorry.

This hearing today is to receive public comment on the Notice of Proposed Rulemaking to Implement the 18-Month Publication of Patent Applications provided for in H.R. 1733. The public was first invited to comment on the procedures the U.S. Patent and Trademark Office should adopt if PTO is required to publish patent applications at 18 months in a hearing that we conducted on February 15, 1995.

A Notice of Proposed Rulemaking To Implement 18- Month Publication of Patent Applications was published on August 15, 1995 in Volume 60 of the Federal Register, pages 42352 through 42405, and also published on August 15, 1995 at Volume 1177 of the Official Gazette of the U.S. Patent and Trademark Office, at pages 61 through 110.

H.R. 1733 was introduced in the House of Representatives on May 25, 1995, and that bill provides for the publication of pending applications not subject to secrecy orders after 18 months from the earliest filing date for which a benefit is sought. H.R. 1733 further provides that the claims under 35 U.S.C. 119 and 120 must be stated by specified time during the pendency of the application determined by the commissioner, and that the failure to timely state a claim may be considered a waiver of such claim.

H.R. 1733 further provides that applications published pursuant thereto would constitute prior art under 35 U.S.C. 102(e). H.R. 1733 further includes a provision that upon request and under limited conditions an application of an independent inventor will not be published until three months after a first office action on the merits.

H.R. 1733 also includes amendments relating to 20- year patent term and provisional applications. Specifically, that bill provides for extending to the next business day the period of pendency of a provisional application where the one year anniversary of its filing date falls on a weekend or federal holiday.

It further revises the provisions for patent term extension based upon prosecution delays. Specifically, H.R. 1733 provides that term extensions based on prosecution delays: (1) will include an unusual administrative delay by the office in issuing the patent as a basis for an extension; (2) shall not cumulatively exceed ten years in duration, which is an extension over the current five year limit; (3) will not apply to a patent that has issued before the expiration of three years after the filing date of the application or entry of the application into the national stage under 35 U.S.C. 371; (4) will not extend the term of a patent beyond the expiration date specified in any terminal disclaimer to which the patent is subject; and finally the extension shall be reduced by the period during which the applicant for the patent did not engage in reasonable efforts to conclude processing or examination of the application, which is a replacement for the current due diligence standard.

The 18-month publication provisions of this legislation would apply to utility and plant applications other than provisional applications but not to design patent applications, and if it's enacted as proposed, it would be effective on January 1, 1996.

While the PTO supports this legislation, recent proposed budget cuts by the House and Senate may seriously impact on our ability to implement the provisions of this legislation. The House approved a PTO mark for funding in which they reduced our share of the fee revenue to which we are entitled to receive by $21 million. On September 7, the Senate subcommittee voted to divert nearly $55 million of fee revenue from the Patent and Trademark Office. Should these congressional actions be enacted into law, it is likely that the Patent and Trademark Office will not be able to implement all of the provisions of the legislation as currently planned, and I should say that there will be other quite catastrophic changes in the patent system here in the office. We can't operate for free.

A transcript of the hearing will be prepared, and a copy will be made for purchase by the public approximately ten days after this hearing. Copies of the transcript will also be available for purchase directly from the stenographer, and the name of the stenographer service today is Miller Reporting. Right there is Miller Reporting, and their telephone number is area code 202/546-6666.

Now we've received 13 written comments and 11 requests to appear orally at the hearing, and due to the number of requests to appear orally and to permit those persons signing up today to present testimony, we'd like each speaker to keep their remarks to ten minutes. Those persons who wish to provide additional comments must submit their comments to us in writing today. The speakers have been listed in the order in which requests were received by us. All persons who wish to speak and who have not previously informed us of their desire to do so are requested to add their names to the list located on the table in the rear of the room.

You may also pick up at the table copies of the Federal Register publication of The Notice of Proposed Rulemaking To Implement 18-Month Publication of Patent Applications. When you present your comments, you could help us a lot if you would give your name and address and whether the comments are your own as an individual or whether they represent those of your law firm or a company or whether you represent any organization or are presenting comments on their behalf.

The first person to put in a request to testify was Herbert C. Wamsley, who is, I believe, substituting for Gary Griswold.

MR. WAMSLEY: Commissioner Lehman and members of the panel, my name is Herbert C. Wamsley. I am testifying today on behalf of Intellectual Property Owners and substituting for Gary Griswold, the president of Intellectual Property Owners who was unable to be here today.

IPO is a nonprofit trade association located at 1255 23rd Street, N.W., in Washington, D.C. IPO wants to compliment the Patent and Trademark Office for working to complete this rulemaking before the end of the year for 18 month publication of patent applications, and we hope Congress will reverse its recent action withholding money from the Patent and Trademark Office that may jeopardize the implementation of 18 month publication.

We strongly support H.R. 1733, the bill pending in Congress that provides for 18 month publication. 18 month publication will make technological information and patent applications, particularly foreign origin patent applications, available to U.S. industry and inventors several months earlier than under existing law. 18 month publication including the provisional right to a royalty beginning on the date of publication complements the 20 year patent term measured from filing, which we also strongly support.

Our first point in commenting on the proposed rulemaking has to do with what should be published in the technical contents publication. The proposal in the Federal Register envisions publishing the application as filed. IPO urges that the technical contents publication should include all of the claims that are in the application by the time of publication and all of the amendments that have been made to the specification by the time of publication.

During the first 15 months or so, many applications will have received the first action and the applicant will have responded by making amendments to the claims. In many applications, the claims will have been changed substantially from those that were filed originally. And even in applications that have not received a first action, claims sometimes are changed significantly through preliminary amendments. We believe it is necessary to publish the latest version of the claims available at the time of publication because of the requirement in Section 4 of H.R. 1733 that the provisional right to a reasonable royalty can be obtained only if the invention claimed in the patent is identical to the invention claimed in the published patent application.

And it will be more difficult for patent owners to obtain the provisional rights under H.R. 1733 if the claims that are published are the original claims since they're less likely to be identical to those in the patent that is issued.

It's also useful, we believe, to have the latest form of the claims and the latest form of the specification in the published patent application for purposes of studying possible infringement and validity questions in connection with the patent that will be issued. So, therefore, we recommend that proposed Rule 1.306 should be amended to provide that the technical contents publication will include changes made to the claims and specification by the time that the office begins the process of preparing to publish the application.

Our next point has to do with how published applications should be made available for searching. We recommend that a paper copy of the technical contents publication should be filed in the examiner's search files and then the files in the public search room. We believe this is the only way to make the technical contents publications as readily searchable as United States patents for the next few years.

The APS text searching system does not include drawings or other images that are critical for searching in many fields of invention, and the PTO's electronic image searching system currently is available only in a few examining groups. We recognize that there are logistical and cost problems associated with filing the technical contents publications in the paper search files, but we believe that it is essential to file them in the paper search files as long as the examiners and the public are relying on the paper search files as the primary tool for searching patents.

Now with regard to obtaining a first office action on the merits before the application is published, we believe that every patent application should be published no later than 18 months after the earliest filing date, and we also support the concept of the office giving a first action before the publication for those who need an initial determination of patentability before publication.

Under H.R. 1733, in an amendment to 35 U.S.C. 122 that is implemented by proposed rule 1.306(e), independent inventors who meet certain requirements will be able to obtain a first action on the merits or they would be able to defer publication of the application until three months after a first action on the merits. We support that provision of H.R. 1733, and we have recommended to Congress that it should be extended to all patent applicants who have a need to obtain a first action on the merits before publication and not just independent inventors.

At the same time, however, we believe the office should manage its workload so that every patent applicant can obtain a first action on the merits within about 15 months after the actual filing date in the office. This would give all applicants who are not claiming an earlier filing date a first action about three months before publication. We would suggest that in its current project for reengineering the patent process, the office should take into account the need to give every applicant a first action on the merits within about 15 months after the actual filing date.

My next point relates to extensions of the 20 year patent term for unusual delays and prosecution. We believe proposed Rule 1.701 dealing with extensions of the patent term due to prosecution delay needs some refinement. The rule's definition of unusual administrative delay, a term that is used in H.R. 1733, appears to be too restrictive. Proposed Rule 1.701 in paragraph (a)(4) sets forth three kinds of prosecution delays that will be considered prima facie unusual administrative delay, but we believe some other kinds of delay may deserve the same treatment. For example, what about a delay of many months more than normal before taking up an application for first action?

We are uncertain whether it is practical to identify in the rule all of the kinds of delays that should receive special status as prima facie unusual administrative delay. And we would also make a similar comment with respect to the portion of the rule that has to do with failure to engage in reasonable efforts to conclude processing or examination of application. In that portion of the rule, which is paragraph (d), there is a list of some specific activities that would be considered a failure to engage in reasonable efforts to conclude processing or examination.

Protests against published applications, the proposed rules contain a number of provisions that we supported at the earlier hearing held on February 15, 1995, and we want to particularly mention proposed Rule 1.291, which requires members of the public to submit protests against pending applications within two months after publication of the application. We strongly support this two month deadline in proposed Rule 1.291, and we believe the proposal in the proposed rule for a fee for filing a protest after the date of publication also appears to be appropriate.

In closing, I will note that the Federal Register notice also proposes several other rule changes including those relating to the format and standards of application papers and drawings to improve the standardization of patent applications and that the office indicates that it may adopt some of these rules even in the absence of 18 month publication system. We suggest that if H.R. 1733 is not enacted, that the proposed rules on standardization of patent applications should be republished to give the public an opportunity to comment on the desirability of those changes in the absence of an 18 month publication system.

I thank you for the opportunity to present these comments, and I would be glad to try to answer any questions.

MR. LEHMAN: Thank you. Does anybody on the panel have any questions? If not, thank you very much, Mr. Wamsley.

Next I'd like to ask Mr. Don Dunner to step forward, please.

MR. DUNNER: Commissioner Lehman and members of the panel, I appreciate the opportunity to testify today. My name is Donald R. Dunner. I'm appearing on behalf of the 14,000 members of the Section on Intellectual Property Law of the American Bar Association. I should note that I am not appearing with the blessing itself of the ABA, whose hierarchy has not approved the specific positions we are taking although the Section itself has.

A number of months ago, my predecessor, Tom Smith, testified before you, Mr. Commissioner, made a written submission, and dealt with a number of the provisions in the proposed rule changes. I am not going to repeat what he said here today. Brevity is blessed, and I intend to follow that rule. I would like to deal with just a few issues. In fact, most of the recommendations of Mr. Smith before me were adopted in the most recent proposal. There are two, however, that particularly concern us that were not adopted, and I'd like to restrict my comments to those two.

One is the concept of a first office action within 14 months of the filing date, and the second is access to biological materials. Let me deal with what I think is the most important point: first action within 14 months. There are two basic reasons for the Section's position on this issue, which is that a first office action should be available in all cases after the filing date. First of all, trade secret rights which hitherto had been protected under Section 122 of the statute will be given up to the extent they have not been given up already in foreign applications or publications. And it is critical, our members feel, that applicants have the opportunity to know, to have the views of a full search report and an examination to determine whether or not they should give up those trade secret rights.

Secondly, assuming there are provisional rights between publication and the issuance of the patent, it is important that applicants be able to amend their claims prior to having the application published since the provisional rights are keyed to the application claims as they existed at the time of publication, and without a first office action the ability to know how to amend the claims will be severely limited.

Now the Patent and Trademark Office in its proposed rules and in its commentary has provided a number of reasons as to why this isn't feasible. First of all, the Federal Register notice mentions that 92 percent of all applications already as of sometime earlier this year, already are given first actions within 14 months. Secondly, the notice remarks on the fact that independent inventors under 1733 are given the option to delay publication until three months after the first office action.

And thirdly, but not lastly, the Federal Register notice mentions that Rule 102 is available, that the MPEP has a provision 708.02 VIII, which permits accelerated examination, and I should mention lastly, and obviously not leastly, the Patent and Trademark Office is concerned about funding to permit it to do these necessary chores. Let me just deal with these issues and set aside funding just for a brief moment. We think that these reasons are not adequate reasons to deny 14 month publication.

First of all, though 92 percent of the applications are examined within 14 months, that last eight percent is a very important eight percent. It includes biotechnology applications, it includes computer program applications and the like, and we think it is just inadequate from our members' standpoint and from the public standpoint not to try to extend it to that last eight percent.

Secondly, independent inventors, we wholly support the concept that they will have the opportunity to delay publication until after they've had a first office action, but we agree with Mr. Wamsley and IPO that that option should be extended to all applicants.

As to Rule 102 and MPEP 708.02 VIII, that certainly is helpful in some respects. 102 is not terribly helpful because it has severe restrictions on when it can be used and who can use it. If you're over 90 or whatever the age is, you're fine. But if you're only 64 like me, you're not so fine.

As to 708.02 VIII, that's a little better in that the restrictions are not as severe, but there's no guarantee that even under those provisions that there will be 14 month office action, the first office action, within that time period. In short, these reasons really don't solve the problem.

Now I agree funding is a problem. Our Section has written a letter to Senator Hatch urging him not to support the $56 million reduction in the authorization to the PTO. We have also supported Congressman Moorhead's bill to have the PTO formed as an independent corporation and hopefully to eliminate the surcharge fund and what have you. But the fact is we think that the office should make every effort within whatever funding is available to have a first office action within 14 months. I don't think we would die if Mr. Wamsley's 15 month provision were accepted, but we think 14 months is a more adequate time period to do the necessary things that have to be done.

Now, the second point, deposit of biological materials and public access to them. Under the proposed rules, to the extent a biological deposit was, in fact, made, the public would have free access immediately after publication. Now, this rule, we submit, is not only unnecessary but would impose hardships on U.S. applicants that aren't imposed upon their counterparts in foreign patent offices and, moreover, we think it is fundamentally unfair.

Why do we feel this way? First of all, it is not required under United States law that the deposit be available at an early date such as the publication date. It is only necessary that it be available at the time of issue and, namely, after allowance of the case. Now it may be necessary notwithstanding that fact to file a deposit at the time of filing in the United States simply because if you want foreign patent protection, many foreign patent offices require that the deposit be made at the time of the earliest filing date.

And this is where the problem arises. In foreign patent offices, such as the European Patent Office, while the deposit must be made at the time of filing, it is made publicly accessible only under very limited restrictive conditions. So we have a situation where if a U.S. applicant wants U.S. protection and foreign protection, it has no choice but to follow the more expansive rules of the PTO as proposed, to get its filing date, to make its deposit available to the public at a date far earlier than that same deposit would be made available in Europe if it only filed in the European Patent Office.

An applicant in the U.S. Patent Office is thus put in the very difficult position of deciding whether or not it wants to give what in full effect is a little factory to the public, a factory which will permit unlimited reproduction of the biological material in question, in order to obtain foreign patent protection. Moreover, we think there are domestic problems. There is no injunctive relief under the proposed statute, under the proposed law 1733, during the period between publication and issuance of the patent.

You have, in effect, what is a compulsory license given to the public during that period of time, and giving the public further this little factory to do everything it needs to do to reproduce the biological materials in question. Now while you might say, well, that's no more than one has to do if one had an enablement requirement providing written materials, our Section members feel it is a lot more. It is, in effect, a little factory with lots of know- how built right into that factory, and we think it goes far beyond any requirement of enablement and any requirement that should be imposed by the PTO rules.

Those are my comments. I repeat the comments of Mr. Smith in his earlier submission though I will not repeat them orally here. They are in the record. If there are any questions, I'd be happy to try to answer them.

MR. LEHMAN: Thank you very much, Mr. Dunner.

MS. LINCK: I have a question. Mr. Dunner, the deferring publication for three months, as Mr. Wamsley and you both recommend, or your organizations recommend, would that address, or extending that to other than independent inventors, would that address everything except the provisional rights problem with respect to 14 months, your request that all applications be published at 14 months?

MR. DUNNER: If I understand your question correctly, the answer is yes.

MS. LINCK: Thank you.

MR. LEHMAN: Thank you. Next I'd like to call Joseph Mendelson, please.

MR. MENDELSON: Good morning, Commissioner Lehman and distinguished members of the panel. I am Joseph Mendelson, legal director of the International Center for Technology Assessment, a nonprofit organization formed to help the general public and policymakers better understand how technology affects people's lives. We are located at 310 D Street, N.E., Washington, D.C. 20002.

The Center performs assessments of technology encompassing economic, ethical, social, environmental and political impacts that can result from the application of technology and technological systems. The Center also provides the public with independent and timely information about the potential impacts of technology. I'm also here representing the Edmond's Institute. The institute is a nonprofit organization dedicated to public education on technology, environment and intellectual property rights. Unfortunately, I don't have their exact address with me, but I'll be happy to provide that for the record in writing later this afternoon.

I appreciate the opportunity to come before you and testify about the implementation of H.R. 1733. As you know, the patent reform debate, which is taking place both nationally and internationally, is one of key importance in the development in assessment of technology. Over the last century, the patent system has rewarded inventors in order to stimulate advances in technology. The now familiar congressional mandate is for the patent system to, quote: "to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their prospective writings and discovery."

It is often thought that conferring patent rights to inventors is the sole rationale and function of the patent system. This is incorrect. The patent system was also meant to provide a vital information service to the public primarily through the complete disclosure of an invention. This public service accomplishes several important goals including alerting society to new advances in technology, allowing for up to date assessment of technological advances, promotion and additional development of technology, and discouraging unnecessary duplication of research.

Therefore, the success of the patent system must be judged not only on how much incentive it provides to inventors but also how it balances the rights of individual inventors against the rights of the public.

The proposed rules that are the subject of today's hearing represent a significant step towards making our patent system more responsive to the public, and we commend the patent office for undertaking the development of these rules. The U.S. patent system has traditionally afforded applicants the right to keep patent applications confidential until the date of patent grant. Among other advances, this has permitted applicants to retain trade secrets protection for their inventions until the patent is issued and disclosed to the public.

The benefit is clearly an important one to the individual patent applicant. However, it badly skews the balance between the rights of patent holder to those of the public which is effectively locked out of information until the patent is published after the subsequent issue of the patent. Early publication of pending applications as mandated in H.R. 1733 and the proposed rule resolves this imbalance and represents a significant step in restoring the patent system's function of providing the public with information about technical developments.

Publishing patent applications as soon as possible after the expiration date of a period of 18 months from the earliest filing date has several benefits stemming from the acceleration of public access to information contained in the patent disclosure. It would permit early public interest assessment of technological developments. It would also reduce patent litigation by allowing for the identification of potential patent conflicts sooner.

This provision would also speed technological development by providing useful information as proposed in the rules such as the patent application notice, the technical contents publication, and the assignment records to the public at an early stage after discovery. Finally, it represents an important harmonization in the U.S. patent system with those of Japan and Europe, reducing conflicts between the international patent system.

In conclusion, the CTA applauds the PTO's efforts for swiftly implementing the changes in patent publishing procedures that will be mandated by H.R. 1733. In particular, the PTO's proposal not to increase the fees charged for publication products will ensure widespread access to this information about technological developments. This effort marks a significant step towards the PTO's procedures becoming more transparent and responsive to the public, and we thank the PTO for undertaking this endeavor. Thank you.

MR. LEHMAN: Thank you. Does anyone have any questions? If not, thank you very much. Next, Mr. Orville Litzsinger.

MR. LITZSINGER: Good morning, Mr. Commissioner and members of the panel. I'm Orville Litzsinger and I'm vice president of the Alliance for American Innovation. I'd like to thank you for the opportunity to be able to speak with your this morning. I'll directly address the rules associated with this legislation, and first I'd like to briefly comment on who I'm speaking for and where we are. The Alliance for American Innovation is an organization less than a year old. We have over, well between six and 8,000 affiliates coast to coast that are independent or small business inventors, entrepreneurs or biotech companies.

In addition to these affiliates, we are joined by on most issues coalition of various small business and self- employed people of over one-half million Americans and representing over 100 trade associations involved in our emerging economic sectors. Some of those in the coalition are with us on all issues and some of them are with us on others. But anyway I do speak for that group. We have received copies of inputs from those people, and I will try to address the rules based upon the inputs that we have received.

We're the only organization headquartered in Washington representing this group exclusively and trying to participate and ensure their inputs are heard in forums such as this.

Now for some direct comments relative to these rules. Our concerns focus in three primary areas: the fees, national security, and the degree of detail which are contained within those items which are published. Let it not be mistaken that inputs in this area endorse the provisions of 1733. They do not. But approaching those rules as published, when we talk about fees, the rules state that the cost of publishing will come by adjusting the filing, issue or maintenance fees, separate publications fees or a combination of the above. Let's hope that there really is not a serious consideration for the inventor to pay to have his intellectual property published.

Let's hope that if this is for the good of the public, the public can pay. If the inventor is charged in any fee manner whatsoever for this publication, it is like leading someone to the hangman's area and supplying him with a noose and en route saying, by the way, you owe us 100 bucks for the noose. This is not what we look upon as a level playing field or a fair way to treat this issue.

The second issue is one of national security. There are provisions in the rules dealing with national security, and we hope that those are followed. There have been recent reports out of our government where the Commerce Department hasn't necessarily followed the rules dealing with export licenses. And I would hope that this section of the Commerce Department abides by those laws and those rules to the letter so that there aren't reports of otherwise.

Next I'd like to discuss the level of detail. I was in one of the previous -- well, first of all, I've traveled around the country and I've talked to corporate executives as well as independent inventors about the factors surrounding this legislation. The justification from the large corporate intellectual property people that I talk to was that this was a good thing because it kept corporate America from spending a lot of their money developing manufacturing capabilities to produce a product when, in essence, there was a confidential patent in being that would have caused them to make another management money decision otherwise.

That has a ring of logic to it, and that, of course, would have to be considered. And I'm not saying that we felt that that was the most important factor. In fact, it was not. However, I attended a meeting with members of the PTO staff, when we discussed with many of the corporate representatives the level of detail of the drawings and of the information to be published. There was discussion and a proposal to publish the drawings as an artist rendition and to publish the description of the patent in a broad way. Well, if, in fact, your objectives were to keep industry from wasting money, this probably would have satisfied that requirement to a large degree.

But en masse, the corporate representatives stood up and said, no, we need this down to the minute detail, the nut, the bolt, the spec for each one. To our people that were there, it signaled that the purpose and the reason that the publication was needed was maybe another motive, and that's, of course, what our people fear is that this 18 month publication list will be a shopping list to the world from which to flood, from which to copy, and what have you. And we think that the threat of that far outweighs the benefits which may be gained otherwise.

Briefly, I'd also like to read an input from one of our affiliates which typify some of the concerns and some of the information relative to these rules. And that input has been sent in formally for this hearing. Information contained in the patent applications of large entities will automatically be published after 18 months or sooner if requested without examination and will constitute prior art for subsequent applicants regardless of whether the published information is overly broad, indefinite, vague, describes an unworkable or unpatentable invention or is merely a phony futuristic idea or concept.

Thus, a large entity could easily abuse the system and sabotage competitors for filing a patent application for an invention on a concept for which the technology does not yet exist and containing limitless, overly broad claims and request early publication. Publication of this hypothetical invention would serve as prior art and would prevent subsequent legitimate applications from being granted and discourage further development by competitors. The phony prior art would discourage others from pursuing a patent application or developing a potentially useful product -- exactly the opposite effect of what pre-grant publication is supposed to promote.

Instead of submarine patents, we will have submarine publication, which will do far more harm to the patent system. Additionally, this input states that the whole purpose of the patent is to prevent others from making, using or selling or offering for sale or importing in the U.S. the invention covered by the patent claims. Publication of technical information or a drawing from an application as filed would allow others including competitors and large multinational and foreign companies to: (1) use the invention in other countries; (2) use the information to design around the invention; (3) lodge a protest against issuance; (4) claim prior user rights.

The protection from any of these measures would risk delay or loss of his rights and would be forced to allow others to produce and sell his invention and would be forced to accept a reasonable royalty only if he could afford the litigation. This would also destroy the patentee's ability to offer an exclusive license.

There were a number of inputs that we had, and I'm not going to belabor them other than to say, Herb, there --

MR. LEHMAN: If you'd like to submit those, and then we could study them carefully.

MR. LITZSINGER: Yes, sir, we will, those that haven't been submitted to you.


MR. LITZSINGER: Many of these that I am referring to were submitted under separate cover as well. Herb, I'd like to say that there is light at the end of the tunnel because there are some of the things which you said earlier, and the second speaker as well, that we can build upon.

Our constituents, of course, are alarmed about the legislation, in some degree about the rules, and in summary, I think I can probably not say more than that. Thank you very much for the opportunity.

MR. LEHMAN: Thank you very much. Are there any questions? If not, thank you very much. Mr. Goffney has to leave to go to a meeting in the Secretary of Commerce's Office, and so Susan Mann, the administrator of the Office of Legislation and International Affairs, who works under Mr. Goffney, will take his place and report to him.

Next I'd like to -- we have three witnesses, I guess, listed to represent the International Federation of Industrial Property Attorneys. I'm not sure which one is going to present the testimony, Mr. Waldbaum, Jennings or Stewart. Are any of you three gentlemen here? Well, it looks like no one is because none of the people are here.

Okay. In that case we'll move on to the next witness, Lawrence Bassuk, Sr.

MR. BASSUK: Good morning, Honorable Commissioner of Patents and Trademarks, ladies and gentlemen. My name is Lawrence Bassuk. I'm a senior corporate patent counsel with Texas Instruments, Incorporated. Our address is 13510 North Central Expressway, Mail Station 219, Post Office Box 655474, Dallas, Texas 75243.

I will speak on behalf of Texas Instruments in place of Mr. Richard Donaldson, the general patent counsel, who sends his regrets. Texas Instruments, headquartered in Dallas, Texas, is a high technology company with sales and manufacturing in 30 countries. Our products and services include semiconductors, defense electronic systems, software productivity tools, printers, notebook computers, consumer electronics and other things.

We like the present United States patent system that requires a best mode disclosure of the invention. We also like disclosing art to the examiner during prosecution. Both requirements result in a stronger patent that benefits our citizens and the patent owner. If the U.S. patent system is to be harmonized with the patent systems of the rest of the world, either the systems of the rest of the world must be raised to our higher standards disclosing best mode, requiring duty of candor in enforcing patents, or we must lower our standards to those of the rest of the world. Otherwise, we penalize our citizens.

The United States is considering 18 month publication in return for the Japanese patent system removing all forms of pre-grant oppositions. We're opposed to administrative rule as refined, and we believe that by doing so emphasize our pre-grant opposition procedures. This seems unfair to applicants in the United States. This also seems incongruent with our requirements for foreign patent systems.

A third party in a foreign country has an excellent opportunity during post-grant opposition to raise material art and invalidate the patent. The third party is excluded from prosecution and holds any art until opposition. Modifying our pre-grant protests and public use proceedings to be in alignment with the rest of the world will help make workable a system of 18 month publication of patent applications. In short, if we're going to be like the rest of the world in providing publication of patent applications, let us be like the rest of the world and eliminate pre-grant oppositions.

The duty of disclosure allows a third party to control and delay patent prosecution. A problem occurs when the applicant receives art from a third party after the application is published. The comments to the proposed regulations explain an easy case: when the art from the third party is known to the applicant and is cumulative to the art already cited to the examiner. A much worse case occurs when the third party cites art to applicant, the art is not previously known to applicant, the third party comments explain that the art is material, and the comments provide reasons, well founded or otherwise, tracking the language of Rule 56 that refute the position of applicant for patentability of the claims.

Since the third party comments on their face refute the applicant's position for patentability, the applicant must cite the art to the examiner, paying any required fees. The applicant alone cannot decide that the art is immaterial, that the comments of the third party are wrong, and that the art can be kept out of the prosecution.

Applicant needs the decision of the examiner for protection against accusations of inequitable conduct. The third party can cite art multiple times during prosecution of the application, even after allowance. The applicant is bound to cite the art and pay the fees and maybe even pay to continue the application to cite the art. With public access to the prosecution history, the third party can time their submissions as they please.

MR. LEHMAN: Are you talking about the reexamination now?

MR. BASSUK: No, I'm talking about a protest and public use proceedings and citing art to the applicant --

MR. LEHMAN: What protest and public use proceeding?

MR. BASSUK: Please excuse me. Citing art to the applicant after publication. During publication, the name and address of the applicant is known. So is the entire content of the application. A third party can cite art to the applicant directly and not to the office.


MR. BASSUK: And that's the problem. Because now the applicant is stuck. The third party says here is this art, rightfully or wrongfully. And says here are some reasons that this is material and it refutes its arguments. What's the applicant to do? He has to cite it to the office at maybe a very inconvenient time. Even more so, with our now having the term of the patent counted from the filing date, any actions of this sort, even a protest or public use proceeding, is going to delay issuance of the patent and shorten the actual term of any enforceable rights.

We believe these regulations encourage such activity. It's ethical aggressive advocacy by a third party.

MS. LINCK: But wouldn't you rather have it cited during prosecution than during litigation after the patent issues?

MR. BASSUK: Yes. And if it is close art, we would like to have it there. But we see an ability for third parties to abuse this system, to cite a piece of art that may only be cumulative, but say that this piece of art is more material than anything else in the file, and use the language of Rule 60 that says if the commentary refutes the arguments for patentability or presents a prima facie case for unpatentability, we're then, even if we disagree and we know that it's wrong, we are now forced to cite it at perhaps an inopportune time, things that will cost us money, things that will delay the issuance of our patent and shorten our patent term.

So, yes, there are times we would like to see some of this art. We want it in there. I would prefer to have it, but there is also the opportunity for some people would say abuse. But these rules don't control third parties. We can't control third parties. They're beyond our power even in another court action. They're beyond your power to control anything they do. There's a real possibility for abuse here.

Now take the case of a software patent where software has a very short time for its market. A third party who can delay issuance of the patent for even six months would allow the market to peak and pass preventing that patent owner from getting any return by doing just this type of activity. That's the problem we see. Does that answer your question?

MS. LINCK: Thank you.

MR. BASSUK: Concerning Rule 60, we believe that the changes to Rule 60 should positively state the correct content of the Rule 60 application when the original application is nonconforming to the new application format. The present rule simply says what do you do when the Rule 60 application doesn't fit the new format, what should we file for the Rule 60 to meet the new rules and the new format when the original application didn't fit the format.

Rule 306(e), we believe that being able to delay publication should extend to both large and small entities, not just individual inventors, and the publication should occur sometime after first examination.

Concerning Rule 701(d), we believe this should indicate whether a three month extension of time that is provided for by statute and paid for by the applicant is failure to engage in reasonable efforts to conclude processing.

Thank you very much.

MR. LEHMAN: Thank you very much. Next I'd like to ask Peter Tracy to come forward, please. Mr. Tracy is not here. Glenn Wise.

MR. WISE: Good morning, Commissioner Lehman, ladies and gentlemen. Thank you for the opportunity to come to speak to you this morning. I'm a self-employed patent agent. I entered the Patent Office in 1956 as an examiner and subsequently I worked as a classifier. For the last 35 years, I've been an almost daily member in attendance at the public search room as a professional searcher because my practice has been primarily search practice.

I am testifying both for myself and in behalf of informally for a great many professional searchers whose comments have tempered my remarks. I am here today to contend that the following five proposals by the PTO constitutes solutions that are not in the best interest of the U.S. patent system.

Three of these proposals relate to the publication at 18 months rulemaking. The other two proposals do not, but are so intimately related that I feel that they should also be discussed, especially since I doubt that many practitioners and other interested members of the public including many in this room are even aware of them.

The first three relate to the rulemaking at hand here. I agree fully, as do the professional searchers, the majority of professional searchers in the search room, that we need more than the patent application notice in the classified files. We need the technical contents publication, at least in one set of the classified files, preferably the examiner's files. So in this regard, I agree fully with Mr. Wamsley.

The second proposal by the Patent Office of charging $9 a copy for the technical contents publication, which equals the as-filed application, is in my mind highly overpricing the publication. I say this because insofar as I'm aware, and I'm fairly aware of what goes on in the Patent Office, that there's been no attempt to compress this document so we can put a much lesser charge on it. It appears that it has more to do with the mathematics of the $3 coupon presently charged for patent copies and the fact that the as-filed applications are 36 pages in length as opposed to approximately 7-1/2 or 8 for the published patent.

However, as far as I know, there's been no real attempt on the part of the Patent Office to compress this TCP, say by printing on both sides of the sheet or compressing the line spaces between the line, things like that. So I suggest that the Patent Office go back to the drawing board and see if they can get that cost down.

The one redeeming feature here is that the outside contractors are going to undercut that price very substantially if it stays that way which is probably good for private enterprise, but for the poor guy or woman in mid-Wyoming who has to write the Patent Office for a copy, it's going to cost them. Also, if it stays at that rate and the outside contractors aren't immediately available to get copies and make them for much lesser cost like they are now for patent copies, it's going to really open the eyes of some practitioners who write in and want, for example, an art collection on some item. I've cited four to 500 patents already on art collection searches, and if they get a time charge for, say, I probably collect four or 500 patents on some subjects for say five, $600 time charge, and they get a cost charge for 36 or $4500, that's going to open their eyes pretty fast, not immediately but as the publications pile up.

Number three proposal that I think should be relooked at is the charges that are being proposed on file histories for the published applications. The present proposal in the rulemaking is if I want to get a file history, it will cost me $75 for the first paper, not for the file history, for the first paper, and then $25 each for papers after that with what appears to be a cap at $150 because the rule also states that I can buy the whole application file history for $150. So that, I think, should be relooked at because the $75 for the first paper figure, if we base that on the Patent Office hourly charge for miscellaneous services, which is $30 an hour, they're saying it's going to take them 2-1/2 hours to get that first paper. I don't think that is realistic.

Also, it's questionable to those who deal daily with certification and areas which furnish file histories how they're going to handle this because, in effect, you'd be taking a great deal of the work presently accomplished by very small business entities into the Patent Office by not allowing the public to touch these files and transferring it to contractors familiar with government contracting to a large extent because the Patent Office I can see no way that they're going to be able to handle the bulk of file histories that are involved here.

Now the two proposals that I'm going to discuss that do not have direct relation to pre-grant PUB are as follows, and this is the one that most people in this room may not be aware of, but as of October 1 upcoming, the Patent Office intends to file no more foreign patents if they're still standing on that policy; is that correct? Mr. Kazenske; is that correct?

MR. KAZENSKE: Filing in paper.

MR. WISE: In paper?

MR. KAZENSKE: Exactly.

MR. WISE: Filing no more paper copies of foreign patents as of October 1. Last year they filed in the neighborhood of half a million. We think that is bad news. They're, in effect, saying we're going to file, getting back to point one, we're going to file these PANs, which are patent application notices, in the classified files, which being generous may give you 25 percent of a disclosure in an as-filed application if you're lucky or hint at 25 percent, and then they're going to not file any foreign patents, and that would take away from our availability, those U.S. already issued counterparts that we've had in the past, and this relates particularly to the deep searches like validity and infringement, and infringement becomes more and more important as the world becomes more smaller and the corporations become more and more international.

I'm asked time after time now to be sure to check the foreign part because just for that reason, that companies now are international. Many companies are now international in scope.

The fifth proposal of the Patent Office that I think should be reexamined is the policy to cut back over 50 percent of the traditional classification professional staff, reclassification professional staff. They have to move a lot of the classifiers over into the pre-grant PUB if it goes through, and that will leave -- I think my figure is correct -- around 37 professional classifiers, which is too small a staff to keep up with the requirements to keep the subclasses in a size that are manageable.

In summary, the Patent Office's two missions of granting quality patents relate to proposals one, two, four and five that I mentioned, and it seems to defy logic how you can put less art in the classified files and still expect to put out quality patents, as high a quality of patent as you had before, even with APS, which most professional searchers still look on at as an adjunct to manual searching. A lot of people are trying to become 24 year searchers which is the 1971 on full text capability, but it just doesn't work out mainly because of semantics and even with the systems coming along like the EDS system that looks over words in claims and things like that. They're still found wanting at this juncture. Now a year from now, ten years from now, it may all be different, but at this moment, automated searching just hasn't got it completely.

The second function of the Patent Office or the secondary function, of course, is efficient information dissemination. The points that relate to that, of course, were the cost of the TCP copy and the file histories generally and also placing the patent application notices instead of the TCPs in the classified files.

I believe others to follow me will speak to the question of also having the as-filed document in the classified files, and I want to encourage whoever is interested in that aspect to be sure to speak to it. We have an ongoing proposition in the search room where we're filing individual letter comments to you, sir, because when we filed signature bearing sheets at the last hearing, relative to the last hearing, we are not sure they were counted to their full extent. Over 260 professional searchers signed that document as concerns the as-filed documents in the classified files, and yet somehow the notice in the OG states there were only 62 comments. So I guess it's a matter of how you look at statistics, but we don't feel that we were given full weight.

And also in the regard to the access fees for the file histories, over 200 people signed signature sheets relating to that from the search and photocopy area. In summary, once again thank you for letting me testify, and if there are any questions, I'd be happy to answer.

MR. LEHMAN: Are there any questions? If not, thank you very much. I would just note that with regard to the last two points of the five that you raised, you know, this hearing really isn't about those issues and so that's something we take up for another day.

MR. WISE: I might respond, sir, that the hearing isn't about whether or not pre-grants should go through, I mean either, but that's been discussed.

MR. LEHMAN: Next I'd like to call Frampton Ellis.

MR. ELLIS: Thank you for the opportunity to present my oral testimony on the proposed rulemaking on changes to implement the 18-month publication of patent applications.

MR. LEHMAN: I'm sorry. Are you going to tell us who you are representing?

MR. ELLIS: Yes. I will provide a written copy for the record. My name is Frampton Ellis. I'm an independent inventor holding a number of U.S. and foreign patents and head of a small corporation, Anatomic Research, located here in Arlington on 2895 South Abington Street. The views expressed here are my own.

First, some comments on the underlying basis for the proposed rules H.R. 1733, which is, of course, currently only pending legislation. Why exactly is it is that the U.S. should harmonize its patent law? After all, the U.S. leads by far the rest of the world in innovation, especially major technological breakthroughs. Not by coincidence, that uniquely American innovation is supported by a patent system unlike those of any countries in many important ways.

All those other countries, especially Japan, primarily copy U.S. breakthrough technology and only add incremental improvements in developing it. And consequently, their patent systems are designed to facilitate copy and innovation cheaply, not creating it. Does it make any sense then for the U.S. to fundamentally change its patent laws just to make them the same as the those of the rest of the world? Do we not risk killing the only goose that lays golden eggs?

Unfortunately, even if such change makes little sense, the fact is that just before its historical electoral defeat last year, the previous Congress did pass a GATT related law changing critical and longstanding provisions of the U.S. patent system. The principal purpose inexplicably was to harmonize our patent laws with those of Japan and other countries. Using its popular mandate, the new Congress should correct this flagrant error by passing Senate 284 and H.R. 359 and should definitely avoid passing H.R. 1733.

My small breakthrough technology company is affiliated with the Alliance for American Innovation and strongly supports its efforts on the behalf of independent inventors and small business for their unmatched ability to create basic innovations and new jobs. Beyond rebuilding its own patent law and avoiding further deterioration as proposed by H.R. 1733, the U.S. should very aggressively assert its position that Japan and the rest of the world must in their own best interests harmonize their patent laws with those of the U.S. Everyone would benefit.

If those countries adequately protected the innovations of their individual citizens as the U.S. has generally done, then their internal economies would not be exclusively dependent on exporting improved copies. Instead, their economies would be balanced by creating their own original breakthrough technologies. As a result, world trade as a whole would tend more naturally to balance and massive trade imbalances like those that currently exist between Japan and the U.S. would be reduced.

While the general rationale for the proposed 18 months publication is harmonization, the official consensus seems to be that, or a specific rationale is, the hypothesis that the rapid publication of patents speeds up the process of innovation to the benefit of the public. My own actual experience suggests that that hypothesis is not correct.

My experience is highly unusual and really unique. Although a small independent inventor, I have filed PCT applications on nearly all of my U.S. applications and consequently those applications were published 18 months after U.S. filing. As you probably know, small inventors almost never file PCT applications due mainly to the relatively high initial costs and very much higher later nationalization costs. So my real world experience in living with the 18 month publication may constitute a rare and important real world test of the impact of the proposed legislation on small inventors.

For lack of others, I probably represent de facto the literally hundreds of thousands of small inventors who apply for patents every year in the U.S. I should, I think, digress here for just a second to explain why I took such an unusual and expensive course of action. I believed initially and still do that my particular invention is very fundamental and a highly unique breakthrough and therefore potentially of uncommon value. Believing so, I have firmly resolved that I would not, absolutely not, allow to happen with my technology that which normally happens. That is U.S. consumers are normally indirectly forced to pay, in effect, an innovation tax by paying a patent licensing cost markup while foreign consumers use technology originated in the U.S. for free. Because the cost of filing foreign patents is so high, such patents are not normally afforded by independent inventors.

Consequently, against all conventional wisdom, I have filed extensively in major foreign markets, which brings us directly to the most critical issue of the debate on harmonization. If patent costs are not harmonized between the U.S. and the major other countries, then harmonization of any part of the patent law is utterly meaningless. Let me repeat that slowly for emphasis. If costs are not harmonized between the U.S. and other major countries, then harmonization of any other part of the patent law is utterly meaningless. After all, what point can there possibly be in theoretically having the same harmonious patent rights in Europe and Japan as in the U.S. if as a practical matter virtually all independent inventors are locked out of those foreign markets by hugely higher patent costs, generally on the order of ten times, and often very much more?

Even large multinational corporations have very significant difficulty dealing with these disproportionately higher costs. And yet apparently costs, patent cost harmonization, is currently not yet even on the table for negotiation. But it should be the first priority for the U.S. And any other forms of patent harmonization should be deferred until the overriding issue of patent cost harmonization is properly addressed and resolved.

But back to my own personal experience with the 18 month publication. My first application was published on January 25, 1990, and many subsequent applications in 1991 and later. Today, more than five years after the initial publication, which outlined clearly the basic invention, no products based on my invention are available to the public. This delay is not too surprising. Studies indicate on average that it takes about seven years for an independent inventor, even when successful, to commercialize his or her invention. Despite eight separate PCT applications, application publications, my inventions were ignored by the industry until a favorable write-up appeared in The Wall Street Journal in May of 1992.

Even then, and again this is absolutely typical for potentially revolutionary changes like mine, the industry did not instantly embrace the idea, to say the least. As almost always happens, the inventive concept was ignored as impractical by all the industry except a few despite unusually substantial publicity including television news at this early stage in addition to the PCT applications. Happily, right on the average time frame, my inventions are finally, seven years after the first application filing in the U.S., in prototype development under license to a subsidiary of a major international corporation.

Did the PCT application speed up the commercialization of my inventions making them more quickly available to the public? Absolutely not. But the PCT applications, despite having no benefit to me or the public, have not been without effect. They unquestionably reduce my ability to patent my development improvement of the general inventive concept. This loss occurs despite the fact that the publications were apparently ignored by all others. I'm enclosing a copy for the record of an international search report of a PCT application of mine that was filed after a number of my earlier applications were published. The only art that was cited in that report as anticipating or making obvious the invention of that later application were my own earlier PCT publications.

The only discernable effect of the 18 month publication of applications is to restrict the clear-cut ownership of the development improvement rights by the inventor to a narrow window of 18 months. For the independent inventor, 18 months is a very narrow window indeed. Often, as is the case for me, the independent inventor is working fulltime in a field without direct relationship to his or her invention.

So very little time is even potentially available and what time there is is usually spent between prototype development and testing, patent drafting in response to actions on earlier applications, business plan developments and fund-raising, enlistment of assistance from others in and out of relevant fields, publicity solicitation and so on and so on, nearly all of which are practically new endeavors for the inventor.

Believe me this is a formidable undertaking if not overwhelming. Put simply, with this heavy load, it is nearly impossible for independent inventors to compress all the improvement and development of their inventions into just 18 months before publication of the original application. But if they cannot, they will have no patent rights to the improvements after 18 months unless they can overcome the burden of proof against them that the publication of their own original invention anticipates or makes obvious improvement.

Even if eventually successful, a great deal of additional time, expense and effort must be made by the inventor. Moreover, a substantial additional risk of potential failure is imposed on the individual inventor which makes fund-raising more difficult and more costly.

In summary, independent inventors and small business will be the clear losers if 18-month publication is enacted. Who gains from 18-month publication? Obviously, all those who copy rather than innovate. In addition, any business whose principal capability is limited to relatively small incremental improvements to basic technologies after those technologies have been originated by independent inventors and small business, as they generally are. In many cases, that means big business in the U.S., but particularly it means foreign business, which will then be more quickly able to copy U.S. technology in their own companies without paying for its development.

Alternatively, as a reasonable compromise, I support the application of patent applications after 60 months in the U.S., as proposed in Senate 284 and H.R. 359. And the time has come for the U.S. to push aggressively for foreign and PCT adoption of the same 60 month publication as standard in the best interests of all.

A final cautionary note for the architects and supporters of H.R. 1733 and H.R. 1732, who clearly continue to believe in business as usual in Washington, and thereby misread the overall political direction of this country. Last year, they caught unawares independent inventors and the public at large when they at least appeared to manipulate a closed-door political process during the final days of the last Congress, just before that Congress was tossed out by the electorate. It appeared to sneak in a GATT unrelated change to the 20-year patent term.

Although avowedly acting for the benefit of the hundreds of thousands of independent inventors who annually make up most of the Patent Office's real customers, no effort was ever made to find out whether, in fact, any independent inventor supported that critical earlier change. Nor is any such outreach effort being made now. But now a large and growing number of the electorate, particularly independent inventors, have been awakened to the important danger to the national interest that the earlier changes represent and that those now proposed represent.

An insurrection is slowly but surely being incited. Last year's 20-year patent term change has already swung an enormous pendulum way off center, abolishing a long-established law of well proven effectiveness. If H.R. 1733 and H.R. 1732 are passed by this Congress and signed by this President and in the same closed manner as last year, without any real effort to gauge the reaction of hundreds of thousands of independent inventors of this nation or the public, then the reaction will come, however delayed, and will be all the stronger.

To whatever extent that pendulum is pushed again now, moving it even farther off-center, as proposed by H.R. 1733 and 1732, then the pendulum will swing back with all the more velocity and all the more force by 1997, and the momentum of that pendulum built up will almost certainly carry it beyond its 1994 starting point.

On the other hand, cooperation and compromise now in passing some version of Senate 284 and H.R. 359 offer the only remaining possibility of long-standing stability in U.S. patent law, if indeed that is still possible. It may not be. The pendulum has already been set in motion. Thank you.

MR. LEHMAN: Thank you, Mr. Ellis. Next I'd like to call Robert Armitage, please.

MR. ARMITAGE: My name is Robert Armitage. I'm here this morning on behalf of the American Intellectual Property Law Association. Our address is 2001 Jefferson Davis Highway in Arlington, Virginia. I have a fairly extensive written statement so I will attempt to keep my oral comments extremely brief. I will also attempt not to repeat everything that's been said this morning by other speakers with whom I've agreed. I may say a few things not in my written statement concerning comments made by a few of the speakers with whom I disagree.

Let me say that AIPLA begins our testimony today, as we did in February, by applauding the work of the administration both in terms of the agreement with the Japanese that was concluded last August and in terms of their support, administrative support, for enacting not only the 18-month publication law, but the hard work of implementing 18 month publication. That is figuring how to do it in the Patent and Trademark Office.

We believe that it remains important to get the rulemaking done and the legislation passed in time for the January 1, 1996 deadline by which the U.S.-Japan accord was to be implemented, and we hope to be able to work with you and the Congress to see if in the remaining few weeks, between now and then, that can't be done.

We obviously are already benefiting from important improvements in the Japanese patent system, and AIPLA has for many, many years believed one of the most important improvements that could be made to the U.S. patent system would be if we had a system of publication of pending applications at 18 months.

We submitted in February a fairly complete discussion of what we hoped an 18-month publication scheme would look like. In our view, when United States Patent and Trademark Office fully implements 18-month publication, its patent office searching process, the private sector searching process will mirror those outside the United States. In other words, the published patent application document will be the principal document used in the search process, in the citation process, in the evaluation of prior art, in the technical disclosure relied upon by workers in the field, and, therefore, from our point of view, a complete 18-month publication system would necessarily mean that the full text of the published application would be available for classified searching purposes. The full text would be available for on-line text searching, and the full text, or image, that is to say, facsimile image of the patent application, would be available in the APS system.

Moreover, we believe, as several witnesses have testified earlier this morning, that it's very important that what be available for searching, what be available for citation, not be the application as filed but the application that was prepared for publication, the application that would include amendments made up to three months before the date of publication. But our purpose here today is not to restate what we stated in February because we believe that it is not practical to do a complete publication system as we defined it in time for the January 1996 deadline, and therefore we come here today really to support the basic outlines of what the Patent and Trademark Office has proposed, but perhaps with a couple of key modifications to our point of view clearly need to be made.

It is very important, as several speakers have indicated, that what provides provisional rights be the published claims that are pending in the application preferably within about three months from the date of publication. It's very important, because manual searching remains for certain purposes a necessary element in both examiner searching and private sector searching, that in the examiner search used and in the public search room we have access to the complete technical disclosure of the application.

And, therefore, what we would propose is that the simplest possible system be implemented so that at least a facsimile image of the TCP, as it's called, be included together with the PAN, as it's called, in the proposed rules.

Let me also make perhaps one or two other comments. We are and have long been in favor of providing at least certain members of the inventive community with a first office action or perhaps even a greater degree of prosecution prior to the time of publication. And we clearly support at least some of the limitations put in H.R. 1733 to accomplish this end. We believe that people who file foreign shouldn't receive such a guarantee. We believe that people who file multiple applications such that were not dealing with the initial application but one claiming priority from other applications shouldn't be guaranteed a first office action. But we think more importantly that an additional limitation ought to be imposed. Someone actually ought to request in a timely way that they receive a first office action before publication.

We believe that a request coupled with the other two limitations would reduce to a very, very small number the inventors who are actually concerned about forfeiture of trade secret rights before publication, and we believe that that small number of applications or applicants could easily be accomplished in a way that wouldn't delay the 18 month publication. Perhaps what hasn't been said earlier this morning is that not only does the public benefit from the certainty of an 18 month publication in the timely available of technology but every inventor seeking to get a patent issued relies on the fact that all the prior art in a timely way, namely the published applications that were prior filed, are in the examiner's shoes when they need to be for those later filed applications when they're actively being searched.

Let me say that on the issue of concern over the possibility of third party citations of prior art coming back to inventors in an untimely way, in a way they would need to be cited to the examiner that might delay prosecution, we are at the present time, at least, unpersuaded that there's a potential for abuse in that process. It seems to us there are only three possibilities: someone is going to cite to an inventor prior art that is not cumulative in which case there is absolutely every reason why that art, even in an untimely way, should be back before the examiner before the application issues; where the prior art is clearly not cumulative -- I'm sorry -- where the prior art clearly is cumulative, if I misspoke earlier, we believe that there is no reason to cite the art, and that most inventors simply would put it in the drawer with a small note that says the examiner has already considered this substance; in a questionable case, we believe again it's to the inventor's profound benefit to have a questionably cumulative reference put before the examiner, even in an untimely way, with a statement of what's in the reference.

Indeed, if an inventor wishes to do otherwise, it's that inventor's choice to have that issue be faced in litigation rather than examination, and in none of those three circumstances do we see really a powerful case being made for abuse.

The question of the deposit of biological materials is another area in which we testified in February, and I don't wish to fully repeat what we said in our written statement there. It clearly is a different situation we have when we accord provisional rights to a remedy in a published application because having accorded provisional rights, the public really needs an enabling disclosure of the invention. The public needs to have access in at least a restricted way to the invention so that they can determine whether or not they infringe the invention.

If it's a biological deposit and if the claim in the application relates to a product made by that process of using a deposited organism, perhaps the only way to know whether or not you're an infringer is if you have access to the deposited material, and, therefore, we believe that perhaps somewhat more thought needs to be given to when a deposit needs to be made if enforceable rights are to apply to a pending application, and if, indeed, a deposit will need to be made before a grant, and, in fact, prior to publication. Then, of course, the question becomes more forcefully what limitations need to be placed on those deposits because like the American Bar Association, we believe that restrictions such as those that are applied in the European Patent Office would appear to us to be the most appropriate solution.

Again, my heartiest congratulations for proving that the Patent and Trademark Office can move expeditiously on an important rulemaking package. Perhaps this rulemaking package will ultimately make more changes in the way the office operates than any other I can imagine in recent times. We hope to work with you to see if a January 1, 1996 implementation can be achieved, and if it cannot, we have work ahead to ultimately enact what we hope will be a complete publication scheme. Thank you.

MR. LEHMAN: Thank you very much, Mr. Armitage. Are there any questions? If not, thank you. The final witness that we have on our list is Samuel Shipkovitz. Is Mr. Shipkovitz here? If not, are there any other people who have signed up at our invitation while we had the hearing? If not, that completes the list of persons who have asked to testify.

Let me remind everybody here that the written comments on the Notice of Proposed Rulemaking To Implement 18-Month Publication of Patent Applications must be submitted by today, by the end of today. A transcript of this hearing, as soon as it's available, as well as written comments received will be available for review. And that will be on or about October 2, 1995 in Room 520 of Crystal Park One, which is at 2011 Crystal Drive, and it will also be available on the Internet through the anonymous file transfer protocol, address All written comments and the oral comments made here today will be taken into consideration before the final rules are adopted.

And any written comments received after today, though, because I mentioned we had to have them by the end of the day, cannot be assured of consideration. I'd also like to remind everybody here who might be interested that we're having the hearing tomorrow on the proposed rulemaking entitled "Rules of Practice in Patent Cases: Reexamination Proceedings." And that will be held at a different hotel, the Stouffer Renaissance Crystal City Hotel, at 2399 Jefferson Davis Highway, at 9:30 a.m.

I just would say, you know, the reason we have to have these hearings in a room like this is because we don't have any rooms within our patent operation, our Patent and Trademark Office, that are large enough so we have to, you know, rent space, and that's why today we're here at the Holiday Inn and tomorrow we'll be at the Stouffer Renaissance Crystal City Hotel. This concludes the hearing, and I want to thank all the witnesses and all the spectators for taking an interest in this.

[Whereupon, at 11:20 a.m., the hearing was adjourned.]

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