in order, because the other has quite some controversial matter, and I do not believe that we are going to dispose of it just as quickly as we would like to. Mr. LANHAM. I will say for my friend Mr. Heidinger, I have been on this committee now for about 20 years and there are so many situations, and so many technical considerations that enter into a problem as involved as that which has been indicated by these gentlemen with reference to these applications for patents in foreign lands, that it is inconceivable that just in a very short length of time, they could agree upon language that would fit that situation adequately, and it is for that reason that I was making my suggestion, that for the benefit of the Army and the Navy, that they might in the meantime, until we can get this other legislation, and until it can be drafted and presented to us, that they might have the benefit of what they desire from the standpoint of these inventions made in the United States. I think that it would help them in their work on defense. The CHAIRMAN. Do you not think that that would be a good suggestion? Mr. EYRE. I think so. It would be very much better to divorce that foreign application. Mr. LANHAM. That is very complicated, and this is relatively simple. The CHAIRMAN. You do not know these patent lawyers as I do. I have practiced in Federal courts for many years, and whenever a patent case got ahead of me, you never knew when it was going to end. Mr. LANHAM. I will confess that I have gleaned a great deal of ignorance during the last 20 years. I still know very little about them. The CHAIRMAN. Do you have anything further? Mr. STOWELL. I have only one further point, Mr. Chairman, and that was with reference to the penal clause, section 5. We had a proposal to sharpen it, by inserting before "publishes" in line 24 of page 2, the language "contrary to the provisions of such order or permit," and I wish to say that we have no pride of authorship in that phrase, and I feel that as far as I can determine from reading it over, that General Shea's proposed revision of section 5 is very satisfactory. Mr. LANHAM. And would include, would it not, the provision that you are suggesting? Mr. STOWELL. Yes; that is right. The CHAIRMAN. I believe that we will conclude there, unless you have sumething else. Mr. LANHAM. I suggest, if any further modifications are to be suggested to this bill, by way of amendment, that we get them before us as soon as possible, from these various gentlemen. The CHAIRMAN. I think Mr. Shea would want to have some further conference with the Department on that, and with Mr. Mothershead, and when could you have that ready and prepared for us, so that we would not hurry you too much on it? Mr. LANHAM. I was thinking about the present, for amendments on inventions made in the United States, and then at their leisure, whenever they have the time, they could go into the other thing. Mr. SHEA. I can work tonight if these gentlemen are available. Mr. SHEA. I should think Thursday. Mr. LANHAM. That is all right with me. The CHAIRMAN. Now, with reference to 3360, I do not believe that we will be able to take that up until we have finally concluded this other bill. There are a great many parties that are at a distance who undoubtedly want to be heard, and it has never been my policy to cut off anybody from appearing before this committee, if they had some matters to discuss in reference to some legislation, so that I believe that we will adjourn here today until Thursday. Mr. LANHAM. Are there not some gentlemen present who have come from quite a distance to testify about this other bill? Mr. CHRISTY. I would venture to suggest that if it be at all possible we would be glad—or at least I speak for myself-we would be glad to be here for a few minutes on 3360 tomorrow, perhaps, if it be possible. Mr. EYRE. A number of us, because, primarily on 3360, most of us agree with the spirit of 3359. Mr. LANHAM. All right. The CHAIRMAN. Unless we can get consent to go on this afternoon. Mr. LANHAM. I think that that would be difficult. We have some other matters this afternoon. The CHAIRMAN. We will meet tomorrow morning at 10 o'clock. Mr. HARRIS. Tomorrow being Wednesday, I imagine that there are a number of other members that meet on other committees on Wednesday. The CHAIRMAN. I have another meeting on Wednesday which I would just abandon; that is all. Mr. LANHAM. Tomorrow we will take up 3360 and on Thursday suggested amendments to H. R. 3359? The CHAIRMAN. Yes; and if any of you gentlemen who want to stay here and discuss this other matter, it is perfectly agreeable that you do so. (Whereupon, at 12 m., an adjournment was taken until 10 a. m. tomorrow, Wednesday, February 26, 1941.) PREVENTING PUBLICATION OF INVENTIONS AND WEDNESDAY, FEBRUARY 26, 1941 HOUSE OF REPRESENTATIVES, Pursuant to adjournment, the committee met at 10 a. m., Hon. Charles Kramer (chairman) presiding. The CHAIRMAN. Gentlemen, we will come to order. There may be more of the committee members here soon, but some are detained. We will call up H. R. 3360. (Bill H. R. 3360 is as follows:) [H. R. 3360, 77th Cong., 1st Sess.] A bill prohibiting issuance and enforcement of injunctions on patents when necessary in the interest of national defense Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That notwithstanding the provisions of sections 4919 and 4921 of the Revised Statutes (U. S. C., title 35, secs. 67 and 70), whenever, on the advice of the Secretary of War or the Secretary of the Navy or the Director General of the Office of Production Management, or the chief officer of any established defense agency of the United States, the Commissioner of Patents shall certify that the manufacture, use, or sale of an invention covered by a United States patent or patents is, or was during the period covered by this Act, necessary to the national defense or required by the public interest or public safety, no injunction based upon any such patent or patents shall issue or be enforced during the continuance of the national emergency declared by the President of the United States to exist on September 8, 1939, and the sole recovery of the patent owner shall be the reasonable compensation for the infringing Acts, whether or not injunctive relief is sought. Any certificate issued in accordance with this Act shall be binding upon the courts. SEC. 2. This Act shall take effect on approval and shall remain in force until the expiration of the emergency referred to in section 1. The CHAIRMAN. I will ask Mr. Coe to make the statement with respect to this bill. You are the Commissioner and you have had something to do with the origination. STATEMENT OF CONWAY P. COE, COMMISSIONER OF PATENTS Mr. CoE. The purpose of this bill is to make it certain that holders of patents may not attempt to interfere with the national-defense program and to dispel any fears of such interference. This is done by modifying or restricting the rights of patentees in several respects during the period of the present emergency. It is provided that during this period the courts shall not issue or enforce any injunction on a patent, if such injunction would interfere with national defense or be detrimental to the public safety. Further, the sole recovery of the patent owner is limited to reasonable compensation for the infringing acts. With these restrictions a patent owner could not interfere with the production of any manufacturer engaged in defense work through the medium of a patent suit. Likewise, the patentee could not sue for damages, or aggravated damages, but would be limited to the recovery of reasonable compensation only, which compensation would necessarily have to be determined from all the circumstances of each case. The bill provides that the Commissioner of Patents shall certify to the fact that the issuance of an injunction would interfere with national defense, on the advice of the Secretary of War, the Secretary of the Navy, the Office of Production Management, or the chief officer of any established defense agency. My opinion originally was that the certifying agency should be placed in the Office of Production Management. However, its officials indicated to me that they felt that the administrative authority should be placed in the Patent Office, with their Office acting in an advisory capacity, similar to the procedure adopted in the administration of Public Act No. 700. Attention is called to the act of June 25, 1910, as amended July 1, 1918 (U. S. C., title 35, sec. 68), which provides that whenever an invention covered by a United States patent is used or manufactured by or for the United States without license, the patent owner's sole remedy is the recovery of reasonable compensation. Under this act neither the Government of the United States nor any manufacturer producing for it may be subjected to injunctions or to suits for damages for using any patent. The present proposal in effect broadens this provision so as to apply to any production for national defense or vital to the public safety and interest during the present emergency. As the Secretary of Commerce indicated to the chairmen of the respective Patent Committees of Congress, on February 8, 1941, the objectives of this proposed legislation meet the full approval of some of those charged with production for defensive needs. In addition, it has been approved and recommended by the Patent Office Advisory Committee, whose membership includes business leaders, engineers, and prominent patent lawyers. The CHAIRMAN. Mr. Coe, have you any additional comments to make with reference to this bill, or with reference to the act of 1910? Do you think that the present act covers the situation sufficiently or do you think that this bill is one that would go a little bit further? Mr. COE. I think this additional legislation is necessary, for the reason that the present act embraces only those cases in which there is a contract between the Government and the manufacturer. It is even open to doubt, I should say, as to whether or not a subcontractor falls under the provisions of the present law. I will not be any more positive about that, except to say that it is certainly questionable. However, there are other situations, in which the Government does not, at the time have any contracts and yet the activity of the manufacturer would be regarded by defense agencies as necessary for the national defense. The purpose of this bill, generally, is to see that during the present emergency it would not be possible to use a patent to interfere with production. The CHAIRMAN. I presume that most of you men that are here, are probably here in opposition, so I am going to hear further from those who may be in favor of the bill. I am going to ask Major Vanderwerker to express himself with reference to the views of the War Department. STATEMENT OF MAJ. FRANCIS H. VANDERWERKER, OFFICE OF THE JUDGE ADVOCATE GENERAL, DEPARTMENT OF WAR Major VANDERWERKER. This bill has not officially been referred to the War Department by this committee, and consequently I can only speak personally and not officially concerning it. I might mention that the corresponding Senate bill has just been referred by the Senate committee for report, which report will in time be prepared, and submitted to the Budget, and, if approved by them, sent to the Senate. The War Department is not the author of this bill, and it came to us just a few days ago. We are particularly interested in the protection of our subcontractors, and feel that in the interest of the national defense any material which is being manufactured for the Government should be free of injunctions, and punitive damages, particularly injunctions. It is very clear to me, at least, that the act of 1910, as amended, will take care of the prime contractor. The present tendency is moving toward the spreading out of production orders, farming them out by the prime contractor to as many subcontractors as possible, to take advantage of the little fellow, and all of his facilities, and there is, I will confess, a question in my mind, and I have looked up the law as thoroughly as time has permitted, with respect to the question of an injunction lying against the subcontractor who is working on a Government order, or production. We would, of course, not care to be faced with the concrete proposition of a subcontractor being enjoined, which would necessitate, maybe, rushing up here with legislation, and trying to get it through to prevent a repetition of that. I am not sure that the subcontractor can be enjoined. Looking at this bill from that viewpoint, it can be said that perhaps this is a form of insurance, protecting us in the future, so that it cannot happen. In that view it might be desirable. Whether or not this bill goes far enough, and meets every need of the War Department, is something that we do not know, because we do not know what our needs are going to be. The War Department is not opposed to the passage of this bill, viewed in the light of insurance against the future. However, it may develop that when the situation, if it ever does arise, comes before us, that this bill will not suit our needs in every respect, and at that time we want to feel free to present our further needs, and ask for further legislation. The CHAIRMAN. Major, you do not believe that the present act as it stands in the present form, as amended in 1918, would be sufficient to protect any subcontractor? Major VANDERWERKER. Mr. Chairman, I feel that with the present feeling in the country, the present defense program, and the present objectives of the Government that no court would issue an injunction against a subcontractor. However, I must confess that there is some doubt in my mind as to that fact, and I have looked into the law, and 315217-41- -5 |