COMMISSIONER LEHMAN:  Thank you very much.
        Next, I'd like to call Mr. Richard L. Donaldson.
        MR. DONALDSON:  Commissioner Lehman and panel, I am Richard L.
        Donaldson.  I am the Senior Vice President of Texas Instruments,
        Incorporated and general patent counsel. I am appearing today on
        behalf of Texas Instruments.  I really do appreciate the opportunity
        to address this hearing.  Judging from the testimony given so far
        today, I think we will be giving a little bit different view of what
        you have heard so far.  I do have a number of comments concerning
        the procedures for implementing the 18-month publication.  We are
        submitting written responses to the 14 questions that were
        identified in the December 12th "Federal Register." So, I'm not
        going to dwell on those right now.  We will submit those before the
        end of the week.  What I would like to discuss are a couple of
        issues which have caused TI to have some serious concerns about the
        effects the implementation of these procedures will have on the U.S.
        patent system.  I think from the bottom line point of view, our
        conclusion is that the type of procedures that will be required to
        implement the 18-month publication will have the effect or, at
        least, the potential of significantly reducing the enforceability of
        patents in the United States.  There are two areas that I really
        want to concentrate on and address this morning.  One is what we
        believe to be an incompatibility between procedures for implementing
        an 18-month publication and the duty of candor as required by Rule
        56 and the protest proceeding as we currently know it.  The second
        area I'd like to discuss is an area, again, of what we considered to
        be an incompatibility between procedures for implementing an
        18-month publication and our requirement in the United States for
        disclosing the best mode.  We'd like to address the conflict first
        that we see between the duty of candor and the protest procedure. 
        As we all know, Rule 56 is an area that really sets U.S. patent
        acquisition apart and above prosecution in the rest of the world. 
        We strongly support Rule 56, because you get stronger patents and
        they are more enforceable. What it requires is for the applicant or
        the attorney to have the affirmative duty to provide prior art to
        the Patent Office that he thinks may be relevant.  When you couple
        this with the protest procedure, at least, as it currently exists,
        we think that there is a very substantial potential for abuse.  A
        couple of the people who have testified already today have pointed
        out part of the problem.  If you have the 20-year term for the
        patents, the delays that are possible by considering before the
        grant of the patent prior art could very well delay issuance of the
        patent and really make the effective life of the patent shorter. 
        But I think it goes beyond that.  I think third parties would have
        the opportunity, not only of submitting prior art to the Patent
        Office, but submitting prior art to the applicant or attorney.  We
        see that quite often in our activities.  This puts the attorney
        really on the horns of a dilemma.  He now has prior art that someone
        has said may be more relevant.  He may, perhaps, have no
        opportunity, no choice other than to submit it to the Patent Office
        and delay the issuance of the patent, otherwise he runs the risk of
        violating Rule 56.
        COMMISSIONER LEHMAN:  Well, isn't that what we want, though?  If
        there is prior art that is relevant, we only want that to get into
        the process.
        MR. DONALDSON:  Absolutely and if it is really relevant prior art,
        the patent attorney will delay issuance if necessary to get the
        Patent Office to consider it.  Where abuse could come in is, if
        someone gives you a piece of prior art that you don't think is
        relevant, but you also do not feel comfortable in not submitting
        that to the Patent Office, even if it delays, even if you have to
        withdraw it from issuance, because if you are wrong, if someone else
        disagrees with you, then you have violated Rule 56.  I think there
        are ways that can be addressed in the procedures for implementing
        this, but I think two things would have to happen.  One, the protest
        period should not be permitted prior to grant, if you want to call
        it a protest period.  I think we should have opposition, post-grant
        opposition where this material could be considered.  I think the
        second thing that would need to be addressed is relaxation of Rule
        56.  So, during this interim period, from the period of publication
        to when the patent is finally granted and can now be opposed, the
        attorney would not be required to submit prior art given to him by
        third parties at his own risk.  I mean, it could be considered
        during the opposition period, but he shouldn't have to be faced with
        that decision, whether to delay issuance of the patent or not.  So,
        I think those would be two types of changes that would be required.
        MR. KIRK:  In terms of your proposed grant opposition that you
        referred to, would you contrast that with reexamination?
        MR. DONALDSON:  Yes, I would contrast that with reexamination.  I
        would support a more effective opposition than under the current
        reexamination.  I'd like it to be inter-parties.
        MR. KIRK:  But given the legislation that was introduced to part of
        the last Congress that would open up reexamination, that would make
        it more inter-parties in nature -- I'm not sure if you're familiar
        with that, but that is a broadening of the participation by the
        third party, yet still under some control.  Assuming that that were
        the type of reexamination that we had, would that be the same as
        this protest procedure or would they be different?
        MR. DONALDSON:  No, I think that would be basically the same.  I
        think I would still want to see how that is going to -- I am
        familiar with it and I still would be curious to see how exactly
        that is going to be implemented.  We are familiar with some
        post-grant opposition systems that still permit very lengthy
        periods. I think we need to address that.  The second concern that
        we have is a little bit more difficult to come to grips with.  That
        is the best mode, what we consider to be the best mode conflict.  I
        believe this places, when you couple this with the early publication
        procedures, that this is going to place U.S. inventors at a
        disadvantage to the rest of the world.  I also believe that it will
        have a chilling effect on innovation and R&D, particularly in one
        aspect and that has to do with process patents.  We currently -- and
        I'm not sure how other companies handle it, but we currently do not
        file process patents overseas, because of the disclosure, you know,
        the early publication.  They are basically unenforceable.  In the
        judicial system, you don't have discovery.  So, we basically do not
        file process patents overseas.  We do file them in the United
        States.  We have the opportunity to determine whether or not we will
        be able to obtain patent protection and make the choice.  Do we want
        to accept the patent or do we want to try to rely on trade secrets?
        The 18-month publication, however that is implemented, will
        basically take away that choice, because the 15 month period where
        you're going to have to make a decision whether or not to have your
        patent application published or not, you will not know whether
        you're going to get a patent or not.  I think what would happen in
        our case is, we would elect in almost all cases to try trade secret
        protection.  I think this could have an unintended result and the
        public will get less information about new inventions, particularly
        with respect to processes.  I don't think that was intended.  I've
        mentioned the uncertainty of whether you would get patent rights
        after 15 months.  I think the workload on the Patent Office is going
        to be very heavy.  I don't think it is realistic to expect that the
        prosecution will have developed to a point where you can make a
        realistic or informed choice as to whether or not or what kind of
        patent you're going to get at 15 months.  This leads to another
        aspect.  The potential patent right that you might get, we do not
        think, is fair return for disclosing your best mode of operation.  I
        know there is the possibility of a post-publication, pre-grant
        royalty, but this really puts an inventor in a difficult choice.  He
        still does not know what patent protection he's going to get.  In
        all likelihood, the claims will change from what was published and
        what he finally gets.  So, he may have no opportunity for royalty
        during that period anyway.  In addition to that, actual notice is
        required. So, he has to go to his competitor and tell them his best
        mode of doing something that he has no idea about whether he will
        get a patent on or not.  I think that is an unrealistic choice to
        force an inventor or a company to make.  So, I think it could have a
        chilling effect also in that respect.  I think part of the negative
        impact of this could be having procedures that really restrict or
        eliminate the best mode requirement.  The U.S. is the only country
        that has that requirement.  I think this is a tremendous advantage
        to people and companies and other countries, but also I don't think
        it is in our interests to do that.  I think the duty of candor and
        the best mode requirements are two of the things that make the U.S.
        patent system the strongest in the world.  I really think we ought
        to keep those.  I also believe that there is some difficulty and
        incompatibility with procedures that will implement this early
        publication.  Just as a final point, it perhaps goes beyond what the
        comments are intended to address here.  But TI really does support
        patent harmonization.  We think patent harmonization needs to be
        looked at under the entire patent system basis, not a piecemeal
        approach.  I don't think that we should, in the interest of
        harmonization, lower our standards to where we have uniform
        mediocrity with the rest of the world.  We had a strong system and
        we need to keep that system.  We have identified some changes that
        we think are necessary if we go to the 18-month publication, but
        even then, we will continue to have concerns about the effects it is
        going to have long term on the U.S. patent system.  Thank you very