It is therefore submitted that the enforced licenses which follow from he operation of both sections of the act, whether the license be seized by the manufacturer under section 1 or by the Government under section 2, are a grave threat to American businesses. Few inventions are developed without much expenditure of money. The incentive to inventors and to corporations and others who develop and exploit the inventions is the hope of profit from the exclusive right to the invented subject matter. Confronted with the threat that no matter how much labor and money is spent in perfecting an article, etc., a license may then be seized by competitors under article 1 or the patent or a license seized by the Government under article 2, American business will lose much of its zeal for developing and marketing new or improved machines, articles, etc. When it is remembered to what extent this country has benefited by its encouragement of inventors, such a radical and drastic injury to patent property should be based on much greater showing of need than has been made by those departments of the Government which come in direct contact with business for the purpose of supplying their demands. Furthermore, it is such agencies as the War and Navy Departments and the Office of Production Management who will first know what needs exist and what if any obstruction in meeting these needs is encountered. Hence it would seem logical that, as provided by H. R. 3360, determination as to when action by the Government is desirable should be placed in their hands. Respectfully, LOYD H. SUTTON. Re H. R. 3360-Use of patented inventions for national defense. Chairman, Patent Committee, House of Representatives, Washington, D. C. MY DEAR MR. KRAMER: I have studied the above bill and the various substitutes which have been proposed for it, and wish to express my views. I am not in favor of the bill as it was originally introduced because (1) it does not take care of the situation with sufficient definiteness and (2) it is not limited to national defense, but includes the public interest, which is too far-reaching and outside of the present emergency. I am not in favor of the substitute proposed by the Department of Justice, and especially the second section thereof, which authorizes the President to acquire patents by condemnation, or otherwise, for the reason that it goes beyond what is required and may deprive patent owners of their patents and result in great injustice to them. The President may grant licenses to anyone whom he chooses and it is possible that this may not include the patent owner himself. I do not think that the patent owner should be deprived of his property unless there is a clear necessity for it. All that is required is that the use of the patent for national defense be not prevented by injunction. I have reviewed the bill presented by the National Advisory Council, and I am in favor of this bill, because it appears to me to take care of the situation with adequacy and definiteness. I think that section 4, relating to licenses containing restrictive clauses, is especially desirable. With respect to section 2, I believe that the bill will be improved if it provides positively that an opportunity be given the adverse party (patent owner) to be heard by the officer issuing the certificate before the certificate is issued and that such certificate shall then be accepted by the court as conclusive of the necessity specified therein. Mr. Shea has expressed objection to H. R. 3360 on the ground that the certificate provided for thereby will not be issued until after an infringement suit has been instituted, and that this may be a deterrent to anyone undertaking manufacture of the defense article, because he is not assured that he will not be enjoined. Under section 2 of the National Advisory Council bill, it appears that the same situation may exist if certificates are granted without affording the adverse party a hearing, because then the certificate is only presumptive evidence of the necessity and may be set aside by the court. There may be some objection to the bill providing that the hearing be mandatory on the ground that such hearing will introduce delay. However, I do not think that this needs to be so, because the officer set the time of the hearing promptly in accordance with the needs of the situation, and the parties can present their facts concisely and disposition of the matter can be had within a short time. In section 3 of the bill proposed by the National Advisory Council the last sentence appears capable of the interpretation that the statute of limitations is waived. I suggest that the following, or other more suitable, words to effect the purpose be added to the end of the section: "Nothing in this section shall be construed to repeal or modify the limitation provided for in section 70 of title 35 of the United States Code." I shall be very pleased if you and your committee will give consideration to the above suggestions and comments. Very truly yours, W. J. TESCH. The Honorable CHARLES KRAMER, WILLIAMSON & WALTON, Washington, D. C., March 20, 1941. House Office Building, Washington, D. C. DEAR MR. KRAMER: I thank you for your letter of March 1, 1941, advising me of the hearing to be held on H. R. 3360. Upon coming to the hearing this morning I learned that it had been postponed until some future date. When the committee determines to resume hearings on this bill would you be kind enough to have your secretary advise me. I have not been able to be present heretofore because of appointments which have kept me out of the city relative to national-defense matters. I may say that I am in favor of the broad proposition of the bill as are several of my clients who are now engaged in national-defense matters and who are also patent owners. The only possible change that we can see, at this time, that may improve the bill is some provision which would protect holders of infringed patents in the recovery of a reasonable license fee against those infringers who will dissipate their profits or assets in such manner as to thwart or prevent recovery thereof for such infringements. Probably some question of impounding certain funds or the provision of a bond may serve the purpose. I have not had time to work this matter out in detail to be presented as an amendment, but have discussed the matter with Assistant Attorney General Shea and Mr. Mothershead in charge of the patent section of the Department of Justice. It was my understanding that they agreed that the point was well taken and that they would give it some consideration. Very truly yours, Hon. CHARLES KRAMER, Chairman, Committee on Patents, EDW. R. WALTON, JR. WAR DEPARTMENT, Washington, May 2, 1941. House of Representatives, Washington, D. C. DEAR MR. KRAMER: Further reference is made to your letter of February 26, 1941, transmitting the bills H. R. 3359 and 3360, Seventy-seventh Congress, "To amend the act relating to preventing the publication of inventions in the national interest, and for other purposes" and "Prohibiting issuance and enforcement of injunctions on patents when necessary in the interest of national defense," respectively, with a request for reports thereon. In compliance with your request, the War Department prepared its reports on the bills H. R. 3359 and H. R. 3360, and transmitted them to the Director, Bureau of the Budget, for advise whether there was objection to the submission thereof to the Congress. To date neither of these reports has been returned to the War Department. As soon as these reports are cleared by the Director, Bureau of the Budget, they will be transmitted to your committee for its use. Sincerely yours, HENRY L. STIMSON, LETTERS FROM MANUFACTURING CONCERNS IN ILLINOIS Hon. CHARLES KRAMER, FOLGER ADAM, Joliet, Ill., April 19, 1941. Chairman, House Patents Committee, House Office Building, Washington, D. C. DEAR MR. KRAMER: In regard to H. R. 3360, it would appear to the writer that this is an unnecessary piece of legislation due to the fact that in 1918, the Congress of the United States enacted the following legislation: Section 68, title 35, United States Code Annotated: "Whenever an invention described in and covered by a patent of the United States shall be used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, such owner's remedy shall be by suit against the United States in the Court of Claims for the recovery of his reasonable and entire compensation for such use and manufacture." This statute did what it was intended to do during the World War and has protected the interest of the people of the United States against patent monopoly on Government-required goods ever since. The position that the United States occupies today industrially is very largely due to the efforts of its inventors such efforts having been properly stimulated by the protection of the United States patent laws. I urge you not to allow war hysteria to be used as an excuse for tinkering with one of the fundamental factors in American industrial supremacy. Very truly yours, FOLGER ADAM. Hon. CHARLES KRAMER, AMPRO CORPORATION, Chicago, Ill., April 24, 1941. Chairman, House Patents Committee, House Office Building, Washington, D. C. DEAR SIR: With respect to H. R. 3360 which you introduced in the House of Representatives on February 17, 1941, we wish to express our approval of this bill in the interests of national defense, providing such bill is amended to limit abrogation of injunctive relief only in cases where the alleged infringing manufacture, use, or sale is for national-defense purposes. DEAR SIR: This letter is to protest the passage of H. R. 3360 concerning the right of the Federal Government to take over any patents that it deems necessary for the furtherance of the defense program. This is another attempt at regimenting business, which we do not deem either advisable or necessary, in view of the fact that the Federal Government has the power to take over any industry which it feels is essential to the defense program. The taking over of such an industry would influence the taking over of any of its patents, and as a going concern, any royalties due inventors or from licensees would accrue to the benefit of the inventors; whereas, under the present proposed bill, as we understand it, civil action would have to be taken to determine the inventors' rights and amount of such royalties. There is where we believe that any situation that arises that might be considered as a threat to the success of the defense program involving patents could be successfully negotiated without the necessity of a law that would affect all patents and those interested in them. We believe that American businessmen can be counted on to be sufficiently patriotic as not to use any patent advantage to the detriment of the United States Government. The foregoing is good and sufficient reason we believe for withdrawing this bill. Yours very truly, Hon. CHARLES KRAMER, Chairman, House Patents Committee, THE BASTIAN-BLESSING CO. THE BEARDSLEY & PIPER CO., House Office Building, Washington, D. C. Subject: Proposal authorizing Federal Government to seize patents—H. R. 3360. DEAR SIR: I have read the above-mentioned proposal over very carefully and wish to state that our company, over a period of 26 or 27 years, has put out more than 100 patents; and if this bill went into effect I would feel just like disposing of our entire experimental division, both in the drafting room and the factory, until we had some substantial evidence that patents would be worth a man's time and money. It would entirely take away the incentive that now is held as the primary object of sometime ever realizing from patents. As I see it, the only reason the Government would want to do such a thing is to get quicker deliveries for articles that are closely held under patents, or to keep the price down. As far as we are concerned, our deliveries are 4 to 12 weeks, which, you will admit, is good. Also, we are not shelving any patents; they are all being offered to the public. On the other hand, we have been stripped of our benefits from our patents in Germany for quite a number of years, without the hope of ever realizing again from them. I would suggest, if German patents are what is in the road and really holding back the defense work, why not "jump these patents"? We are as good as being in war with them, anyway. Use everything you have, which you know technically belongs to them; that is what they would do to us, and I don't mean maybe. As far as I am concerned, if this bill goes through, out go a bunch of men, and I am going to quit thinking. Very truly yours, THE BEARDSLEY & PIPER Co., Hon. CHARLES KRAMER, Chairman, House Patents Committee, CHERRY-BURRELL CORPORATION, Chicago, Ill., April 16, 1941. House Office Building, Washington, D. C. DEAR SIR: We have given careful consideration to H. R. 3360 and revisions of this bill which have been requested by the United States Department of Justice. We are sincere in our belief that the recommendations of the Attorney General would have a very damaging effect upon American industry. We do not question that H. R. 3360 contains provisions that may be exceedingly desirable in the interest of national defense. It seems to us, however, that the interest of national defense could be properly served, provided it is amended so as to make it clear that the denial of the injunction shall only apply to cases of alleged infringing manufacture, use or sale for purposes of national defense. We very sincerely hope this matter may have favorable consideration on the part of your committee. Yours very truly, CHERRY-BURRELL CORPORATION, Hon. CHARLES KRAMER, THE CHICAGO ASSOCIATION OF COMMERCE, Chairman, Committee on Patents, House of Representatives, Washington, D. C. DEAR MR. KRAMER: The attention of the Board of Directors of The Chicago Association of Commerce has been directed to bill H. R. 3360. Our directors are of the opinion that this bill would adversely affect many of our manufacturers, and are opposed to its passage. Our position in that respect is the same as that taken by the Patent Law Association of Chicago, and the Illinois Manufacturers Association. We respectfully request that our views on this matter be taken into account in your committee's consideration of this bill. Sincerely yours, LEVERETT S. LYON. CRANE CO., Hon. CHARLES KRAMER, Chairman, House Patents Committee, Chicago, April 17, 1941. House Office Building, Washington, D. C. PROPOSAL AUTHORIZING FEDERAL GOVERNMENT TO SEIZE PATENTS-H. R. 3360 SIR: Our attention has recently been directed to the subject legislation. We take this opportunity to express our serious objection to this bill primarily because, in our opinion, it would deprive inventors of all incentive toward the development of improved articles, machines, and methods or processes of manufacture, and the direct effect would be to endanger our patent system. While we regret that we are unable to appear at the hearing before your Committee in Washington on April 22 and 23, nevertheless we hope that this letter will receive due consideration. Respectfully yours, CRANE CO., J. O. LANGE, Engineer of Patents. FELT & TARRANT MFG. CO., Re H. R. No. 3360. Hon. CHARLES KRAMER, Chairman, House Patents Committee, House Office Building, Washington, D. C. SIR: At the time that the T. N. E. C. was conducting hearings in Washington on the patent situation, the writer attended some of the sessions, including the one in which Commissioner of Patents Coe testified. After the day's hearings had concluded, Senator O'Mahoney listened to my story in his office and, in reply, made the statement that it was not the intention of his committee to recommend any legislation of a patent nature which would embarrass or in any way injure the small company whose greatest competitive weapon was its patents. House bill No. 3360, which on its face reads quite innocently, is so general in its terminology that it goes, in my estimation, to the very roots of the patent system. The question immediately arises as to when the national emergency covered by this provision would cease to exist. We have had 8 years of national emergency so far which, had this proposed bill been a law, could have resulted in the ruination of many companies. The bill wouldn't be quite so bad if it specifically stated that the use of the patent by others than the owner thereof was to be restricted exclusively to the product or products being ordered by the Government for use by the armed forces of the United States. In our particular field, we are one of the small companies, but we spend considerable in the way of researching to improve our product in order that, through patents, we will be enabled not only to furnish the customer a more useful piece of equipment but in order to protect ourselves against the competi |