meaning by litigation, and the prevention of the granting of such patents by any reasonable increase in the examining force of the Patent Office would, in many cases, be a very large saving. The inducement to inventors and investors in patents is consequently lessened, the standing of patents before the courts and the public is impaired, and the production of inventions discouraged.

Your committee accordingly recommends a substantial increase in the salaries of the Patent Office officials, and in the number and salaries of the examiners, as provided in the draft of the bill for that purpose which is attached hereto. While your committee believes the Patent Office so fully justifies its existence that it would be an exceedingly profitable investment, even though all expenses were paid from the public income, the Patent Office has always been selfsupporting and the increase in salaries and examining force which the committee recommends can easily be entirely taken care of by the Patent Office income, if necessary.

COMPENSATION FOR INFRINGEMENT OF PATENTS.

While an injunction can ordinarily be obtained against an infringer in a case where a patent is adjudged valid, except where it would interfere with Government work, a money recovery has not heretofore been generally possible except under most favorable circumstances. In a case where it can not be said that the entire salability of the article depends upon the invention, it has been necessary to show just how much of the price of the article is attributable to the invention, and as it is ordinarily impossible to make such a separation, and as most patent cases are ones in which it can not be said that the whole salability of the article depended upon the invention, it has resulted that recovery of money is seldom obtained in a patent suit.

Recently there have been two or three decisions in which the courts have taken a more liberal attitude, holding in effect that where an invention has been used by an infringer a reasonable royalty may be awarded to the patentee based on a mere estimation or on opinion evidence, even though no exact computation can be made. This in analogous to the attitude of the courts in personal-injury cases and is entirely just and reasonable. While, as stated, there have been two or three decisions to this effect, it may take a generation to induce United States courts generally to adopt this position, if at all, and the committee therefore proposes that the law be amended to provide that as damages to the complainant the court, on due proceedings had, may adjudge and decree to the owner payment of a reasonable royalty or other form of general damages. Such an amendment has been provided in the attached bill amending section 4921, the Revised Statutes of the United States, and reading as follows: "If proof is not offered, or, in the absence of adequate proof of the amount that should be awarded as damages or profits, the court, on due proceedings had, may adjudge and decree to the owner payment of a reasonable royalty or other form of general damages."

This proposed amendment would enable the patentee in all suits where the patent has been found valid and infringed to recover at least a reasonable royalty, and would provide a money recovery in the great majority of patent suits where no recovery would otherwise be possible. The committee believes that the comparative certainty of financial return would answer one of the most common and strongest reproaches against the patent system, namely, that a patent does not ordinarily pay the inventor any money, and it believes that the incentive to invent would accordingly be greatly increased.

There are some cases in which it seems to many who are familiar with such matters as though the courts were inclined to go to the other extreme and award damages out of all proportion. Where a complainant has shown that profits have been made by the use of an article patented as an entirety, the infringer is liable for all the profits unless he can show-and the burden of proof is on him to show-that a portion of them is a result of some other invention used by him. If the infringer can not show what proportion of the profits is due to such other invention, then all his profits must go to the complainant. Any rule by which the entire profits are given to a patentee in the absence of proof that they are all due to the invention of the patent sued upon is unfortunate and sometimes very unjust. The proposed amendment to the statute would permit a court under these circumstances to do substantial justice even though it could not be mathematically exact. In other words, the amendment to the statute would enable a court to avoid awarding either too much or too little.

CONCLUSION.

Your committee, believing that the American patent system is vitally useful in our system of Government, therefore recommends that the reforms herein discussed be enacted into law.

Your committee also recommends that this report be approved by the National Research Council and that the committee be continued for the purpose of arousing and coordinating interest in and support for the necessary legislation of various national societies, manufacturing interests, bar associations, and other elements of the public. Respectfully submitted.

L. H. BAEKELAND, Acting Chairman.
WILLIAM F. DURAND, Chairman.

(Absent in France.)

M. I. PUPIN.

R. A. MILLIKAN.

S. W. STRATTON.

(See reservation below.)

REID HUNT.

FREDERICK P. FISH.

(See reservation below.)

THOMAS EWING.

EDWIN J. PRINDLE.

Approved: Except the separation of the Patent Office from the Interior Department.

JAMES T. NEWTON, Commissioner of Patents.

RESERVATION BY DR. STRATTON.

I agree to the terms of the report with the exception of that portion which refers to the establishment of the Patent Office as a separate Government institution. It is not quite clear in my own mind that this would be the best thing to do since in general it is best for all Government establishments to be represented in the Cabinet.

RESERVATION BY MR. FISH.

S. W. STRATTON.

I entirely concur in the substance of the conclusions set out in the above report.

I think, however, that the words "if proof is not offered, or " in that portion of proposed section 4921 which deals with damages and profits, should be omitted so that the sentence in which those words appear should read:

"In the absence of adequate proof of the amount that should be awarded as damages or profits, the court, on due proceeding had, may adjudge and decree to the owner payment of a reasonable royalty or other form of general damages."

I do not think that statute should directly or indirectly contemplate a condition in litigation in which “proof is not offered." I believe that the clause which I suggest would accomplish the desired purpose and that the courts in applying the clause would be embarrassed if the phrase "if proof is not offered " were in the statute.

I think also that general damages by way of a reasonable royalty or otherwise should not be awarded unless it appeared that actual damages or actual profits due to the unlawful use of the invention could not be determined and that there should not be any language in the statute which implied that no effort be made to determine such actual damages and profits.

FREDERICK P. FISH.

APPENDIX B.

[H. R. 5011, Sixty-fifth Congress, first session.]

A BILL To establish a United States Court of Patent Appeals, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. That there is hereby created a United States Court of Patent Appeals, which shall consist of seven judges,

of whom five shall constitute a quorum, and shall be a court of record with jurisdiction as is hereinafter limited and established. Such court shall prescribe the form and style of its seal and the forms of its writs and other process and procedure as may be conformable to the exercise of its jurisdiction as shall be conferred by law. It shall have the appointment of the marshal of the court, who shall have the same powers and perform the same duties under the regulations of the court as are now provided for the marshal of the Supreme Court of the United States, so far as the same may be applicable. The court shall also appoint a clerk, who shall have the same powers and perform the same duties now possessed and performed by the clerk of the Supreme Court of the United States, so far as the same may be applicable. The salary of the marshal of the court shall be $3,500 a year, and the salary of the clerk shall be $5,000 a year, both to be paid monthly in twelve equal payments. The costs and fees now provided by law in the Supreme Court of the United States shall be the costs and fees in the United States Court of Patent Appeals; and the same shall be collected, expended, accounted for, and paid over to the Treasury Department of the United States in the same manner as is provided by law in respect to the costs and fees in the Supreme Court of the United States. The court shall have power to establish all needful rules and regulations for the conduct of its business within its jurisdiction as conferred by law.

SEC. 2. That the President of the United States, by and with the advice and consent of the Senate, shall appoint a chief justice of said United States Court of Patent Appeals, and as vacancies occur shall in like manner appoint others to fill such vacancies from time to time. The acceptance of that office by a circuit or district judge of the United States shall vacate his office as circuit or district judge.

SEC. 3. That upon the taking effect of this act the Chief Justice of the Supreme Court of the United States shall designate from among the circuit and district judges of the United States six judges to sit as associate judges of the United States Court of Patent Appeals, three of them to sit for three years from the first day of the first term thereof, and three of them to sit for six years from the first day thereof, as associate judges of the same court for six years from the first day of the first term thereof. And after that, as the periods expire for which such designations shall have been made, the Chief Justice of the Supreme Court of the United States shall fill the vacancies thus occurring by designation of the same or other judges from among the circuit and district judges of the United States, to sit for periods of six years each. In case of the death, resignation, or disability of any associate judge of the said court or of his resignation of his seat in said court the Chief Justice of the Supreme Court shall designate another circuit or district judge of the United States to sit for the unexpired period for which his predecessor has been designated. The designation of a judge to sit as associate judge of the United States Court of Patent Appeals must be with his consent, and his service in that court shall not vacate his office as circuit or district judge, as the case may be.

SEC. 4. That a term of the United States Court of Patent Appeals shall be held annually at the city of Washington, beginning on the second Monday of October in each year, and the same may be adjourned from time to time as the court shall order. If at any time for the meeting of the court a quorum of the judges shall not be present, the judges present may adjourn the court and, if necessary, adjourn again from time to time until a quorum appear. If at any sitting of the court the chief justice shall be absent, the associate judge senior in commission as circuit judge, or senior in age in case of commissions of even date, shall preside. If no circuit judge shall be present, the associate judge senior in commission as a judge of a district court of the United States, or senior in age in case of commissions of even date, shall preside. Until it shall be otherwise provided by Congress the sessions of the court shall be held in a building or rooms to be provided by the marshal of the District of Columbia, under the direction and approval of the Attorney General of the United States. The court shall by order authorize its marshal to employ such deputies and assistants for himself and the clerk of the court and such criers, bailiffs, and messengers as the business of the court shall require, and to pay the salaries of such employees at rates of compensation not exceeding those paid for similar services in the Supreme Court of the United States, and to pay all other necessary incidental expenses of the court. The

chief justice and each of the associate judges shall be entitled to employ a clerk, whose salary, at a rate not exceeding that allowed the clerks of the Chief Justice and Associate Justice of the Supreme Court, shall be paid as part of the expenses of the court. The court shall have power, in its discretion, to appoint a reporter and to fix by order his salary or other compensation and direct the form and manner of the official publication of its decisions.

SEC. 5. That the chief justice of the United States Court of Patent Appeals shall receive a salary of $12.000 per year. The circuit judges of the United States sitting as associate judges of the same court shall each receive the salary allowed him by law as a circuit judge, and in addition thereto during the time of his service as associate judge of the United States Court of Patent Appeals, but not longer, such additional sum as will make his entire compensation during that service $11,500 per annum. The district judges sitting as associate judges of the United States Court of Patent Appeals shall each receive a salary allowed to him by law as district judge, and, in addition thereto, during the term of his service as associate judge of the United States Court of Patent Appeals, but no longer, such additional um as will make his entire compensation during that service $11,500 per annum. All the said salaries shall be payable in twelve equal monthly installments. The time during which any judge shall serve in said court shall be deemed continuous service with that in any other court of the United States, before or after such service within the meaning and intent of section seven hundred and fourteen of the Revised Statutes. The additional compensation received by a circuit or district judge while sitting as associate judge of the United States Court of Patent Appeals shall not be taken into account in determining the amount to be received by him after retirement.

SEC. 6. That the United States Court of Patent Appeals shall have jurisdiction to hear and determine appeals and writs of error from final judgments and decrees in the district courts of the United States in cases arising under the laws of the United States relating to patent for inventions, and from final judgments and decrees in cases arising under the laws of the United States relating to patents for inventions rendered by any other court having jurisdiction under the laws of the United States to hear and decide such cases in the first instance: Provided, however, That it shall have no jurisdiction in cases originating in the Court of Claims. All such appeals shall be taken within six months after the entry of the order, judgment, or decree sought to be reviewed. The practice, procedure, and forms to be observed in the taking, hearing, and determination of such appeals and writs of error shall conform to the practice, procedure, and forms observed in like ca es in the Supreme Court of the United States, subject to such rules and regulations as shall be prescribed by the court.

SEC. 7. That whenever, by an interlocutory order or decree in a district court of the United States or other court having jurisdiction under the laws of the United States to hear and decide in the firt instance cases arising under the patent laws, in a case in which an appeal may be taken from the final decree of such court to the United States Court of Patent Appeals, an injunction or restraining order shall be granted, or refused, or continued, or vacated, or modified, or retained without modification after motion to modify the same, an appeal may be taken from such order or decree by the party aggrieved to the United States Court of Patent Appeals: Provided, That the appeal must be taken within thirty days from the service of notice of entry of such order or decree; and it shall take precedence in the appellate court; and the proceedings in other respects in the court below shall not be stayed unless otherwise ordered by that court, or the United States Court of Patent Appeals, or a judge thereof, during the pendency of such appeal.

SEC. 8. That the chief justice and the associate judges of the United States Court of Patent Appeals shall each exercise the same powers in term and vacation in the allowance of appeals, supersedeas orders, and other matters incidental to the jurisdiction and business of the court as are now exercised by the Chief Justice and associate justices of the Supreme Court of the United States in relation to the business and jurisdiction of that court.

SEC. 9. That the decisions of the United States Court of Patent Appeals in all cases within its appellate jurisdiction shall be final, except that it shail e competent for the Supreme Court of the United States to require by certiorari or otherwise, any such case to be certified to it for its review and determination

with the same power and authority in the case as though it had been carried by appeal or writ of error from the trial court directly to the Supreme Court. SEC. 10. That whenever any case shall have been certified from the United States Court of Patent Appeals to the Supreme Court of the United States, by certiorari or otherwise, it shall be, upon its determination by the Supreme Court, remanded to the district court of the United States or other court in which it originated for further proceedings to be taken in pursuance of such determination. And in every case determined by the United States Court of Patent Appeals upon appeal or writ of error, the case shall be remanded to the district court of the United States or other court from whence it came, for further proceedings to be taken in pursuance of such determination.

SEC. 11. That all appeals and writs of error in cases in which appellate jurisdiction is by this act conferred upon the United States Court of Patent Appeals which shall have been pending without hearing in the United States circuit court of appeals or other court of appellate jurisdiction for less than three calendar months prior to the taking effect of this act shall be transferred from such circuit courts of appeals or other courts to the United States Court of Patent Appeals and be heard and determined in that court as though they had been taken there from the trial courts by appeal or writ of error without further payment for certifying the record or any new or additional docket or calendar fee; all other appeals and writs of error in cases in which appellate juisdiction is by this act conferred upon the United States Court of Patent Appeals which shall be pending in the United States circuit courts of appeals or other courts of appellate jurisdiction at the time of the aking effect of this act shall remain and be heard and determined by the courts in which they may be pending, respectively, as though this act had not been pas ed.

SEC. 12. That after the taking effect of this act no appeal or writ of error shall be taken from any district court or other court of the United States to any United States circuit court of appeals or other appellate court in any case in which an appeal or writ of error may be taken to the United States Court of Patent Appeals under the provisions of this act.

SEC. 13. That all laws and parts of laws inconsistent with the provisions of this act are hereby repealed.

of

SEC. 14. That this act shall take effect and be in force on thenineteen hundred and

day

A BILL To establish a patent and trade-mark office independent of any other department and to provide for compensation for infringement of patents in the form of general damages, and for other purposes, and amending sections 440, 441, 475, 476, 479, 481, 483, 484, 486, 487, 496, 4898, 4906, 4921, 4934, 4935, and 4936 of the Revised Statutes of the United States and to amend the act of January 12, 1895, chapter 23, section 73; 28 Stat. L. 619.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That as much of section 440 of the Revised Statutes as follows the words "In the Patent Office" and refers to said office only be repealed.

SEC. 2. That section 441 of the Revised Statutes be, and the same is hereby, amended to read as follows:

"SEC. 441. The Secretary of the Interior is charged with the survision of public business relating to the following subjects:

"First. The public lands, including mines.

"Second. The Indians.

"Third. Pensions and bounty lands.

"Fourth. Education.

"Fifth. Government Hospital for the Insanc

"Sixth. Columbia Asylum for the Deaf and Dumb.”

SEC. 3. That section 475 of the Revised Statutes be, and the same is hereby, amended to read as follows:

"SEC. 475. There is hereby created an office known as the Patent and Trademark Office, where all records, books, models, drawings, specifications, and other papers and things pertaining to letters patent, trade-marks, prints, and labels shall be safely kept and preserved. The short title of the office shall be Patent Office. Wherever in existing law there are provisions referring to the Patent Office these provisions shall remain in full force and effect and shall apply to the Patent and Trade-mark Office hereby created.”

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