say that this bill would remedy such a situation-in time of an emergeney-as exists now, and we then find ourselves with no other plant of this same kind, whether it is a Bausch & Lomb or Dow or any other concern, General Electric or who it might be, if there was no need for manufacturing, and no one came to them and asked them, and no one had the financial ability, and then we found ourselves, maybe in 10 or 20 years from now, in the same position that we find today

Mr. SHEA. You make all of those assumptions of fact.

The CHAIRMAN. I am just asking how would the bill affect it? Would we find ourselves in the same position?

Mr. SHEA. If you make all of the assumptions of fact which you do, and for which I know of no supporting data, I think that we can demonstrate, if you make all of those assumptions of fact, that no one would have been interested in going into the magnesium field, or the other field, even if they could have gotten in

The CHAIRMAN. I know of my personal knowledge, if the Dow Chemical Co., their financial situation back some 18 or 20 years ago, was rather thin and they were not in a position where I believe if the X Y Z Co. would have knocked down the door and said, "Mr. Dow, I want a license to manufacture this from you," he would have said, "Say! You are an angel, how much will you give us for a license to operate?" but no one came because there was no real demand for their product.

Mr. SHEA. If you will have an executive hearing and subpoena it, we will bring in the grand jury material. I am quite sure that you

are wrong.

The CHAIRMAN. They were not in the financial condition, I know that.

Mr. SHEA. Let me make this statement, if you make all of these assumptions of fact, that no one would go into any of these industries

The CHAIRMAN. I am assuming that no one would.

Mr. SHEA. May I just complete a statement-if you make the assumption that no one else would go into any of this production, even if they could, why, then, of course no bill will help us, but I want to say in that regard, first of all, that I have given you some specific examples of people trying to get in, to beryllium, and tungsten carbide, and we can give it to you in regard to most of these, and let me say further and finally, I think that American businessmen have shown a great deal of enterprise, and that in general I would be willing to rely on the enterprise of the American people, to get into production, and to build up production in magnesium, in excess of German production, if they were given a chance.

The CHAIRMAN. Now, right there, you have got right behind you here a machine, I think it is called a stenotype, and I know the thing has been kicked all over the United States and different types of machines originally came out, and the stenographer, instead of taking notes by hand, she went to school, and learned the stenotype.

I do not know how many more are manufacturing stenotypes today, but from what I know of the financial situation of the original stenotype, I think it had failed once or twice, just because it had no market, no one wanted the darn thing.

Mr. SHEA. May I say, Mr. Chairman, that I do not want to argue with you the needs of such a bill as this. I have discharged my

responsibility by putting these materials before you. It is now your responsibility.

The CHAIRMAN. I am trying to perfect something which has been claimed by Mr. Arnold's division and others, that it is an abuse of the patent, and you made some statements along that line, that there is abuse of patents.

Now, I want to correct, if I can, by reasonable legislation, and this committee is willing to give its aid, and I do not criticize your ability, nor your honest intent to aid the committee, and I think the committee is looking for support along that line, to how we can do something today, which will prevent a recurrence of what we are confronted with. Mr. SHEA. I have tried my best to lay before you a body of material bearing on that.

The CHAIRMAN. I think that you have done a mighty good job.
Mr. SHEA. The responsibility is now with the committee.
Mr. SCOTT. Could I come back for just one question?

This condemnation business worries me. Is it not possible under this law for the Government to condemn all of the patents, or a number of patents which would be essential, we will say, to the radio industry, to broadcasting, and then by a system of licensing those to such persons as they saw fit, to control in effect the broadcasting of and dissemination of news over the air?

Isn't it possible that they could?

Mr. SHEA. They could not do it except by an illegal use of this, if you mean "Could a wholly irresponsible Chief Executive of our Nation"

Mr. SCOTT. I do not assume that.

Mr. SHEA. Certainly not. That is not for national-defense purposes. Mr. Scorт. If it became advisable in the opinion of someone, who might in my opinion decide it wrongly but if in the exercise of the reasonable judgment of the Executive it became necessary to confiscate or condemn radio-certain radio patents, couldn't it be done under this bill?

Mr. SHEA. Well, if it is determined to be in the national defense, he can condemn and he can use them for purposes of the national defense. Mr. SCOTT. Let us take short-wave broadcasting; some of the shortwave broadcasting studios would be held to be interfering with national defense, because they were broadcasting German language programs to German citizens in some State.

Now, if the Federal Government felt that it was inconsistent with national defense to permit short-wave broadcasting of those particular kinds of programs, might it not get at that situation, at that station, by condemning the patents under which they operate?

You will have to make my excuses for ignorance of the patent law, but I am trying to get at the principles of the thing.

Mr. SHEA. That would be making a trip around the world to communicate with me.

There is not any question that any power can be used dangerously if you do not have a Congress to look with a critical eye, if you do not have courts to review with a critical eye, and if you have thoroughly arbitrary persons that exercise the power, but it seems to me that only in such a case where the patent was in the interest of the national defense, would it be used.

Looking back at the experience we have had with this power now, and we had the power in regard to airplanes, and we had the power generally in regard to the setting up of nitrogen plants

Mr. SCOTT. I think that that establishes my point; this is a power that would be dangerous if not used wisely, and with the greatest care, isn't that right?

Mr. SHEA. Well

Mr. HARRIS. Is it not true that all emergency powers are dangerous? Mr. SCOTT. They are dangerous if they are not used wisely.

Mr. SHEA. You can see, in the first place, it is perfectly obvious, you gentlemen here have control over any such situation as you are talking about. There is a compensation provision, and reasonable compensation has to be paid, and that means that if you started out to acquire all of the patents in the United States, you would have to come to Congress for an appropriaion.

Mr. SCOTT. I am trying to get at the truth of the thing.

Mr. SHEA. And I am responding seriously. It could only be used, or it could only be used in a fashion, within the appropriation. There are no jokers in this thing.

Mr. SCOTT. I am interested in having you elucidate the point.

Mr. EDELSTEIN. Wouldn't it be an answer to what my colleague is asking you, in the event the Government seized property that was not in any way related to national defense, wouldn't the court enjoin that, if you could show beyond question, that it had no relation to national defense?

Mr. SHEA. I should think that you could test the constitutionality, or the statutory authority, if it was within it.

Mr. Scort. It is like a question of when is a man drunk. That is just like national defense.

Mr. HARRIS. You might have a question of defining national defense. The CHAIRMAN. What is the language proposed?

Mr. SHEA. "Whenever the President shall determine it shall be in the interest of national defense." I eliminated the "public safety and public interest"-"he is authorized during the continuance of the national emergency."

The CHAIRMAN. We can only have an emergency as long as it is for the defense of the Nation, is that right?

Mr. SCOTT. We have been defending the country ever since the 4th of July, 1776.

The CHAIRMAN. Does any other member of the committee wish to make any other observation?

We have gone past the noon hour, and I want to thank Mr. Shea for his very fine presentation and I want to ask if you will go over your transcript so that we can get it to the printer, and I will adjourn the hearings here today, until next Tuesday morning, at 10 o'clock, in order to have the committee print made of the substitute, and that it might get out to the industry, or others.

The committee will then adjourn until next Tuesday at 10 o'clock. (Whereupon, at 12:15 p. m., an adjournment was taken until Tuesday, March 18, 1941, at 10 a. m.)

PREVENTING PUBLICATION OF INVENTIONS AND
PROHIBITING INJUNCTIONS ON PATENTS

WEDNESDAY, MARCH 19, 1941

COMMITTEE ON PATENTS,
HOUSE OF REPRESENTATIVES,
Washington, D. C.

The committee met at 10 a. m., Hon. Charles Kramer (chairman) presiding.

The CHAIRMAN. The committee will come to order for further hearings on H. R. 3360.

I understand we have Mr. Hayward H. Coburn, from Philadelphia, and that he has some remarks that he wants to make, or he wishes to express his opinion.

STATEMENT OF HAYWARD H. COBURN, REPRESENTING THE PHILADELPHIA PATENT LAW ASSOCIATION

Mr. COBURN. I understand that Mr. Jackson could not be here today.

The CHAIRMAN. Will you please state whom you represent?

Mr. COBURN. Mr. Helberg and I represent the legislative committee of the Philadelphia Patent Law Association, of which Mr. Jackson is the chairman. And we have been instructed by the committee to present its views on the substitute for H. R. 3360 that was proposed by Mr. Shea, Assistant Attorney General.

The CHAIRMAN. The committee will be glad to hear from you. Mr. COBURN. The legislative committee of the Philadelphia Patent Law Association met in special session on Monday, March 17, 1941, to consider the proposed substitute bill.

Mr. HARRIS. May I have a copy of the substitute bill?

The CLERK. It is in the copy of the hearing.

Mr. HARRIS. On what page?

Mr. SHEA. Page 154.

Mr. HARRIS. That is right. There is one here, but I do not know if it is the same one.

Mr. COBURN. It will be more convenient to state the position of the committee separately with regard to sections 1 and 2 of the proposed substitute bill, respectively.

The committee does not oppose in principle

The CHAIRMAN. I might say to the gentleman, and for the benefit of everyone, the committee has taken no action on that at all. Mr. COBURN. I beg your pardon. I meant the legislative committee of the Philadelphia Patent Law Association. There may be some confusion. Therefore, I will just use the word, "We."

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