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STATEMENT OF ARTHUR H. BOETTCHER, REPRESENTING THE CHICAGO PATENT LAW ASSOCIATION

The CHAIRMAN. All right, sir; will you give your name to the reporter, please.

Mr. BOETTCHER. I am Arthur H. Boettcher.

The CHAIRMAN. Whom do you represent?

Mr. BOETTCHER. I am a member of the bar of Illinois, and I have practiced patent law in Chicago for something over 30 years. I appear here as president of the Patent Law Association of Chicago, to record the position of that association in respect to H. R. 3360, and of the substitute submitted by Mr. Shea. That position is as follows:

One, that H. R. 3360 is unnecessary, because its purpose is already served by existing statutory provisions.

Two, that while H. R. 3360 may, therefore, not be underlyingly objectionable except as unnecessary legislation, it is objectionable in three subordinate phases.

(a) In the indefiniteness of the phrase "any established defense agency of the United States"; and

(b) In not being limited to the national defense; and

(c) In not stating from whom the patent owner shall receive his reasonable compensation.

Those are the three subparagraphs under "two."

Three, that the substitute submitted by Mr. Shea is objectionable because it needlessly subjects patents to seizure by executive decree. Thus it removes incentive to invention, a thing lodged in the Constitution itself, and now particularly at a time when scientific ingenuity and pursuit should be encouraged as never before.

Now, as to the first point, under section 63 of title 35, of the United States Code, our Government has been and is free to consider itself a special licensee under any existing United States patent, whether operation under the patent is by the Government itself, or by any private party for the Government, just compensation to the patentee being left to determination in the court of claims. Consequently there is no occasion for any legislation negativing injunctions which might interfere with the national defense. There is nothing that the Government might desire that it cannot have.

Two, as to the second point, if such a bill as H. R. 3360 were deemed necessary by the departments concerned with national defense, it should be amended in particular, (a) clearly to require that any new defense agency as yet unnamed in the bill be in the same category with the War Department, the Navy Department, and the Office of Production Management, in this order to obviate assumption of authority under the bill by any number of minor units, which may in fact be fairly regarded as established defense agencies.

And (b) to eliminate language broader than the national defense, in identifying inventions under the act. And (c) to specify that the patentee shall recover his reasonable compensation by suit in the Court of Claims.

Thirdly, as to the third point, the substitute bill submitted by Mr. Shea apparently conceived on the theory that neither the present law nor H. R. 3360 as introduced goes far enough, because they are limited to Government orders whereas Government orders alone might not

be adequate to build up plant capacity, proposes in effect a compulsory license to any party from the Government by executive decree may elect to put into the business, or civilian pursuits in order to build up plant capacity for military purposes.

No need for such a statute has been shown. Such a statute would be unnecessary since it leaves to the patentee nothing on his patent rights, but a cause of action in the Court of Claims, and the burden and expense of pressing his case would be great, if not indeed prohibitive.

Perhaps more important such a statute would be unwise, since it would remove the very purpose of patents, that is of stimulating invention. It is the patent system which encourages creative thinking, and warrants the expenditure of time, labor, and money for research and development.

That, gentlemen, is the position of the Chicago Patent Law Association. If I may, now that I am here, speak personally, in view of some of the questions and answers this morning, I would like to endorse what Mr. Christy, of Pittsburgh, had to say with reference to the nature of a patent monopoly. Patent monopolies are different from other monopolies. A patent monopoly I believe is in a class by itself, because as Mr. Christy pointed out it is born of something that, never existed before. It seems to me that it is important, since what the inventor or the patentee has is in the nature of an estate, not a life estate, but an estate for 17 years.

To my mind it is a very ingenious device, because it is in the nature of a reward for a contribution made to an art or an industry. It seems to me that that kind of a reward very fairly measures the contribution. If the invention is a valuable one, the reward will be great. If it is not valuable the reward will be measured accordingly.

I think therefore that there is something special about a patent monopoly, and the incentive which that gives to our people for scientific development and pursuit should at all costs be preserved. I think at all costs, of course making that subordinate to the national defense, but up to now I do not believe that I have heard anything which would in any wise indicate that the patent system interferes in any way with the national defense.

I thank you gentlemen for listening to my remarks.
The CHAIRMAN. Are there any questions?

Mr. CONNERY. Did we understand at the beginning of your statement, you to say that your organization is against any legislation at all? Did I understand that? Or are you for the principle of the bill if those items that you pointed out could be corrected?

Mr. BOETTCHER. Let me state it this way, if I may, that we first say it is unnecessary, and that just because it is more or less jelling or crystallizing that which is already on the books, it is not underlying objectionable, and if the Departments concerned think that that bill is a wise one, because it does bring things to a head, our association would not object except in the minor points that I brought out, and that is submitted merely in a way of helpfulness to the committee. The CHAIRMAN. Are there any further questions? If not, we thank you very much.

Now, are there any out-of-town witnesses here that have to leave, and that I have not called upon? If there is I would like to call them, because I know you probably want to get home.

If not, I will call Mr. Stowell.

STATEMENT OF HAROLD T. STOWELL, REPRESENTING THE AMERICAN PATENT LAW ASSOCIATION

Mr. STOWELL. I am Harold T. Stowell, representing the American Patent Law Association.

Mr. Chairman, when I appeared before this committee at the hearing on H. R. 3360 on March 11, I stated that the American Patent Law Association did not wish to oppose any measure of that type which the defense industries felt was necessary in the national defense; but since that statement was made no defense agency has stated that such a measure is necessary in the national defense, and I make that statement after full consideration of what has been said by the representatives of the Department of Justice.

I think it is abundantly clear on the face of the testimony by the representatives of the Department of Justice, that the situations referred to in their testimony, can be and have been in large part fully cured by or under the provisions of present legislation, particularly the antitrust statutes, the present provision for the use of inventions by the United States Government or its contractors, and by the provisions for aid in financing new operations by the Government with the returns provided for in a limited period of time in the very rare cases where otherwise construction and operation might not be initiated due to the necessity for paying off investment in a short period of time.

I do not wish to repeat any of the arguments or statements that have been so ably made by preceding witnesses. There is one point I think however which will bear repetition, and possibly some clarification, and that is this: We can readily visualize how the Government can make use of inventions. Inventions, many of them, are of the highest utility in the national defense, and the Government under present legislation can freely use these inventions not only by itself, but by its contractors.

The thing we cannot visualize is how the Government can use a patent. A patent is not something they can use, a patent is a right given by the Government to prevent others from using an invention during a specified period of time. In brief, a patent is a right to sue. Now, why does the Government want to take that right to sue? The only use which the Government could make of a patent as distinct from an invention, is to limit production, not to increase production. A patent in the hands of the Government could only be used as a threat against those who might want to enter into production. It is the invention which the Government wants to use, and it is the invention which the Government now has the full right to use, without any hindrance from the inventor or the owner of the patent, except the constitutional right to obtain compensation in due

course.

In our defense effort today, we are reaping the fruit of our patent system. We are making the full use of the inventions which have been produced under the incentive provided by our patent system. In making use of that fruit, let us pick the fruit and let us not cut down the trees, and it is my belief that although that statement on its face may be irreverent, it carried a real lesson, and that in the proposed bill the Department of Justice does not pick the fruit, it cuts down the tree.

I think that that is all.

Mr. PLAUCHE. May I ask one question. It is said here that the Government has the legal right and power to use those inventions now under existing law, but I am not familiar with all of the patent law. I would like to have presented to the committee the law which gives the Government that right, in order to make it clear.

Mr. STOWELL. That statute has been referred to frequently in prior statements, and I believe the statute was read into the record. It is the act of July 1910, as amended in 1918. It provides, in brief, that whenever an invention covered by 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 them for manufacture of the same, such owner's remedy shall be by suit against the United States in the Court of Claims, for the recovery of its reasonable and entire compensation for use and manufacture.

I might say that that term "reasonable and entire compensation," has been interpreted by the courts uniformly to mean that when a contractor for the Government is making use of a patented invention, the owner of the patent cannot sue him, or cannot obtain an injunction against him, and the entire compensation means exactly what it says, the patentee can only sue the Government in the Court of Claims for compensation, and no injunction can issue.

Mr. EDELSTEIN. How about triple damages?

Mr. STOWELL. There are no triple damages; none at all.
Mr. PLAUCHE. Is there jurisprudence on that point?
Mr. STOWELL. Yes; there is, if it so appears to the court.
The CHAIRMAN. Is there any dispute on that, Mr. Shea?

Mr. SHEA. There is no dispute that there is that statute, and that that statute permits the Government to manufacture itself without being enjoined, or to order a person to manufacture for the Government and the person so ordered cannot be enjoined.

The CHAIRMAN. Thank you very much.

Are there any other questions from anyone?

I believe that that will conclude the list of witnesses that we have had for today. We have worked the committee pretty hard today, and I do not believe that we have had an opportunity to take care of our office duties.

I might say that Mr. Shea will have some witnesses here tomorrow afternoon, one or two of them, and we will go on tomorrow morning at 10:30 o'clock instead of 10 o'clock, and we will go as far as we can in the morning, and then conclude if we can possibly some time tomorrow afternoon with all of the hearings.

I think that that will be all. The committee will now stand adjourned until tomorrow morning at 10: 30 o'clock.

(Thereupon, at 3:30 p. m., an adjournment was taken, to reconvene the following morning, April 23, 1941, at 10:30 a. m.)

PREVENTING PUBLICATION OF INVENTIONS AND
PROHIBITING INJUNCTIONS ON PATENTS

WEDNESDAY, APRIL 23, 1941

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

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

The CHAIRMAN. Gentlemen, we will continue the hearing on H. R. 3360 this morning and the first witness will be Mr. C. V. Edwards, of the New York Patent Bar Association.

Mr. SHEA. Mr. Chairman, may I make a brief statement at the opening? I asked you yesterday if you would like to have me present here at the hearings two gentlemen with whom I have discussed this bill at length and the amendments to the bill before presenting them to the committee. My consultants have been Mr. Mothershead, who is the head of the Patent Section, and Mr. C. V. Edwards and Mr. Darby, who have from time to time acted as special assistants to the Attorney General.

I think that I may say of these gentlemen what I fear that they are too modest to say themselves, that they are among the very distinguished members of the patent bar.

The CHAIRMAN. You need not say anything in behalf of Mr. Mothershead, because I think that this committee has a very high regard for him and we think he is a very lovable gentleman.

I do not know the other gentlemen well enough, but if they match up with him they will be in the same classification.

Mr. SHEA. Mr. Edwards was last year the president of the New York Patent Law Association and Mr. Darby is also a member of that association and both are distinguished practitioners of the patent bar.

Now, I have been over these amendments, as I have said, carefully with these gentlemen and I thought it might be of use to the committee to have them available here to put any questions to them that you might want to put and I thought that I would make that introductory statement before we called on them to testify.

The CHAIRMAN. Thank you very much, Mr. Shea, and Mr. Edwards, will you just take a seat here? There may be some more members come in a little later.

Will you give your name and whom you represent to the reporter?

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