If a patent is allowed to a man it is published; all a late comer can do it to have an allowed patent application adjudged as to its scope concerning prior patents so that a man who has priority gets the patent he applied for in the Patent Office.

The CHAIRMAN. Not only priority, but interference.

Mr. ZWINGENBERGER. Yes, sir; it is a nuisance and should be abolished, as former Commissioner Fenning stated right in this book here, and in view of that position the Patent Office could easily set up any new proceedings necessary for the adjudication of patents allowed on application.

Now, we have this in regard to trade-marks, no one complained of that. That is not a provision of the bill and the trade-mark section does wonderfully good work in the Patent Office. No one complains; censorship should not be made in regard to patents. Because a man knows your patent is filed and becomes a party to interference and if anyone has an interest in it he voices his opposition, and therefore he is reasonably sure that he was a willful infringer. A prior claimant can sue but after all his design may really be open, but by means of the opposition proceedings in the Patent Office the late comer would go home and say his patent is a valid one. A lot of time, disappointment, and embarrassment, might be saved, if this confused situation were cleared up.

That, together with those suggestions of mine as to protection by design patents, the examiners in the Patent Office would have time enough to devote to research of the patentability of inventions. It is better that the examiner of an invention sit at his desk a half day and has time to devote to things that interest him instead of the department standing idle and the machinery of operations resting because the officials do not know what the outcome of cases will be on account of the extended implications of patents previously granted for inventions.

The CHAIRMAN. We have the Vestal bill which tends to stop that. You are in favor of that bill?

Mr. ZWINGENBERGER. Yes, sir; taking care of foreign applications is adjusting itself. I have not seen any disposition to delay that development. That is one, I think, that comes under the jurisdiction of patent practice.

The CHAIRMAN. We might take that up later in the session, because I personally would like to see the same consideration given the bill abroad as in America.

Mr. ZWINGENBERGER. A patent man who had an office abroad took applications from Germans for filing in England and South America. He pocketed the money for the labor of those attorneys, and he cheated several other attorneys out of their pay and the clients out of their money. One day there were five patent attorneys in the district court of New York, but the fellow got away with the money of some of the clients in one case. I know that attorney got the

money.

The CHAIRMAN (interposing). Don't you think that belongs to the Bar Association or the Grievance Committee to go after them? Mr. ZWINGENBERGER. That fellow was not an attorney.

The CHAIRMAN. He wasn't?

Mr. ZwINGENBERGER. No.

The CHAIRMAN. He could have been prosecuted for taking money under false pretenses.

Mr. ZWINGENBERGER. There are all kinds of excuses. Those people should give a bond of $25,000 that would take care of any situation like that, for it is not endurable. He would be disbarred in Germany, and no one-a decent fellow would not pay out to invite dishonor on his name-a great many are respectable men; there are fellows among them, once in a while, like that one fellow.

The CHAIRMAN. You have them in every profession.

Mr. ZWINGENBERGER. Laws have to be made to protect the modern inventions. In one instance a party lost a case where a modern patent was sold for many hundreds of dollars and he lost that

money.

The CHAIRMAN. Thank you very much, Mr. Zwingenberger. Any written data you wish to file with the committee may be added here.

Hon. Doctor SIROVICH,

Chairman Committee on Patents,

NEW YORK, March 10, 1932.

House of Representatives, Washington, D. C.

SIR: In view of various notices in the press that your Committee on Patents will consider suggestions for the reform of the United States patent law, I herewith beg to submit some suggestions for this purpose, which has had my interest since several years.

There is a general concensus of opinion that the accumulation of work in the United States Patent Office is due to the long delay of pending applications by filing the amendments of the specifications and claims as late as possible. Many suggestions in this respect have recently been made, which, however, in my opinion, only would burden the Patent Office with more work and which would jeopardize the much desired secrecy of the examination in the Patent Office.

The increase of the filing fee was one step in the right direction, but apparently not effective enough alone to remedy the situation. If any increase in fees should still be considered, it might be very advisable to introduce a filing fee for amendments, the fee increasing very considerably for any amendment exceeding two.

The question of overwork of the Patent Office is also due to the general advertising by a group of attorneys who by their alluring ads induce a lot of simple-minded people to file an application for a nonsensical imaginative invention devoid of any patentability and utility, the applicant having not the slightest chance of ever making a cent from his "invention," or from the patent he might get therefor. If one looks at the size of these ads in the various magazines and makes a rough estimate of the prices these attorneys have to pay for these ads and considering, furthermore, that only a part of the fees thus obtained can be considered as a reimbursement for the depreciation of the cost of the ads, one can see immediately the enormous number of mostly useless applications which these attorneys must obtain to make their work pay and with which these attorneys burden the Patent Office. Reducing such ads to nothing but a professional card and strict adherence to these rules undoubtedly would bring great relief.

To forestall the objection that these inventors have a right to obtain for their inventions protection by the United States laws, it might be advisable to extend the law on design patents and to register, without examination, the ornamenal designs and the designs for machines which are nothing but a colorable modification of some more or less known constructive principle.

A certificate of registration of a constructive design under such a modified design act, requiring no examination, would be similar to a certificate for a German Gebrauchsmuster or a French patent.

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Such switching off of minor inventions into the class of designs would considerably reduce the work of the examiners and would leave them free to devote considerably much more time to serious improvements of the arts on which the industrial progress of the country actually is based.

A drawback of the United States patent law lies in the system of interference proceedings. If one considers that an interference is a proceeding to find out, by due process of law, who of two applicants is the first inventor, and, if one considers that the average cost of such an interference is about $3,000 for each party one must concede that the people of the United States pay too high a price for this particular institution.

Considering that the numbers of the recently declared interference cases move at about 63,000, and that, according to information by the honorable Commissioner of Patents, about one-sixth of this number are decided by the tribunals, one arrives at the stately figure of $63,000,000 as the cost of interference litigation. This amount does not take into consideration the interest on the money thus spent within a few decades for fighting such interference cases. Moreover, it must leave entirely out of consideration the enormous loss of money sustained, because machinery could not be used to the full extent and laborers could not be employed because the outcome of interference had to be waited for; and this outcome being uncertain, no investments could be made and the development of the industry had to wait. Moreover, it leaves out of consideration the mental anguish many a junior party of the remaining fivesixths of parties to interferences has suffered when he had to waive his rights because he found out that he was too poor to fight for his right.

The amount of money spent on litigation for interference, with the compound interest thereon, represents a small national fortune, which could be saved if the interference proceedings are entirely abolished and are substituted by the provision that the first applicant gets the patent, similarly as this matter is now governed in England, France, and Germany.

If one looks at the Rules of Practice of the United States Patent Office one finds, disconsidering some rules of general importance, that there are about 69 rules governing the examination and proceedings to obtain a patent, whereas there are 58 rules governing the proceedings on interferences. These aforesaid figures show that a form of proceeding, which should only be a minor part of the work of the Patent Office actually and materially contributes to procrastinate the industrial progress, for it is mostly the industrially valuable inventions which come into interference. An interference involves a proceeding which is one of the most technical and intricate legal procedures of the entire legal system of the United States.

But the industry has nowadays grown out of those conditions under which this interference may have been advisable. Now the industry involves too great an investment to have some party pull the brakes by an interference, because for some selfish reason of his own he had deemed it advisable to postpone for years filing his application until he learned that somebody else got in ahead of him.

The rules governing the interferences are also occasionally not flexible enough and often a party obtains an undue advantage over his opponent.

All this is avoided if we introduce the English and German system that, as soon as a patent is allowed upon an application, the latter is open to inspection by parties having interests in that particular matter. If the first applicant is to get the patent, all a late comer can do is to have an allowed patent application adjudged as to its scope concerning prior patents, etc. This simplifies the whole procedure and the law examiners and the other higher officials of the Patent Office, acting now on interferences, could easily set up any new proceedings necessary for the adjudication of patents on allowed applications. This very same institution, suggested above, we have already in the United States Patent Office in the practice of registering trade-marks. And as everybody familiar with trade-mark work will readily acknowledge that the trademark division does admirable work and absolves each application in record time, if only the attorney in each case will properly cooperate with the division, I can not see any reason why, after relieving the patent divisions of the burdensome work on the many minor and absolutely useless "inventions" by registering them as designs," the Patent Office should not be able to give an official action on any patent application after approximately eight weeks from its filing date.

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Finally I wish to add that a fundamental change in the term of the validity of a United States patent may also help to greatly accelerate the amending of pending applications so as to bring them to an early issue. This change would require the provision in the law that a patent under all circumstances expire after 20 years from the date of the filing of the application. This will expedite the amending of pending cases to let the inventor have the benefit

of a patent at as early as possible a date and as a premium a diligent inventor might enjoy the validity of his patent for 18-19 years instead of 17 years allowed to him now.

I regret that lack of time prevents me from personally submitting my views on this matter and that I have to submit the same in a somewhat abbreviated form; should you care to have above suggestions explained more fully, I will gladly be at your service.

Respectfully,

ОTTO K. ZWINGENBERGER.

The CHAIRMAN. We will now call upon Mr. McKenna.

STATEMENT OF ROYAL MCKENNA, REPRESENTING GENERAL MOTORS CORPORATION, DETROIT, MICH.

The CHAIRMAN. State your full name to the stenographer.

Mr. MCKENNA. Royal McKenna. The views entertained by the General Motors Corporation are identical with those of the Ford Motor Co. Mr. Farley will speak to you on behalf of the General Motors Corporation, which has 34,000 shareholders, as well as on behalf of his own company; so in the interest of time I will not address the committee any further.

The CHAIRMAN. For the sake of the record, would you care to make a statement?

Mr. MCKENNA. The views expressed by Mr. Farley will be in the interest of the General Motors Corporation, as well as those by the Ford Motor Co.

The CHAIRMAN. We will now call upon Mr. Farley.

STATEMENT BY I. JOSEPH FARLEY, COUNSEL FORD MOTOR CO., DETROIT, MICH.

The CHAIRMAN. Please give your full name to the stenographer. Mr. FARLEY. My name is I. Joseph Farley; am patent counsel in charge of the Ford Motor Co. matters and appearing before the committee to speak also in behalf of the General Motors Co. in support of these various bills before the committee.

The CHAIRMAN. Do you wish to be seated?

Mr. FARLEY. I prefer to stand. The automotive industry and particularly the Ford Motor Co. and the General Motors Co. have not progressed or reached the enormous volume of business they have because of patent monopoly or patent protection. These two companies are the largest in the country, and perhaps in the world. They have been built up more because of efficient management and splendid method of production, rather than because of the patent monopoly. Both companies are heartily in favor of the legislation that has been proposed. The opposition that has been found to some of the bills I find from reading the hearings together is opposition advanced more by the patent attorney than those whom we represent; the single inventor, rather than the corporation. I recall very definitely during my service in the Patent Office that I wrote some articles at that time in which I charged the corporations with being in favor of the long pending application. Now we have the situation that the large corporations of the country are supporting the measures that have been placed before the committee. Now we are supporting these measures, not because we consider they are to be

helpful to the corporate interests, but we concede them to be necessary for the promotion and progress of industry.

At the beginning of the almost important time, the inception of the Ford Motor Co., it was confronted with litigation on the Selden patent, and that was one of the companies wherein the patent was pending for many years in the Patent Office. The Selden patent did nothing to advance the industry.

The CHAIRMAN. What was the Selden patent?

Mr. FARLEY. The Selden patent covered rather broadly a general combination fixture of an internal-combustion engine to propel the motor car. We are continually confronted with the situation wherein, as has been told the committee, by many other speakers who appeared before it of the great harm that may result to industry because of an application pending in the Patent Office a long time. The industry does not have an opportunity to find out about these pending applications and after very large sums of money are expended, after an investigation to find out whether or not any investigations control it, find out in word construction they find a faulty case we had many years later, and find something which has been developed by the engineers of the company and the manufacturing program begun in the belief that the company had a perfect right to make this particular thing. A great deal has been said in some of the meetings to the effect that some of the bills are not necessary, that the Commissioner of Patents does not favor them.

The CHAIRMAN. And by the way, while on that subject, where you spend a fortune of money on your own engines, how about the original individual who puts in a claim and keeps on paying on the original claim and it happens to be the very thing that your industry has put in? How about the priority of the original claim?

Mr. FARLEY. We have an instance of that.

The CHAIRMAN. Have you been affected?

Mr. FARLEY. Very materially. We have one case, very recently filed against us in which the patent application was filed in 1910 or 1911 and was pending before the commissioner in the Patent Office until 1921. In 1916, five years before the patent was issued, the commissioner called upon that applicant to place his patent for final action as promptly as possible. During the prosecution of the case a personal letter was sent him by the General Indemity Corporation urging upon him the necessity of getting it in shape for final action, and although for a number of years every letter that went from the Patent Office calling upon that attorney to place his patent for final action, the attorney succeeded, after five years, even before the letter was sent, in keeping his case before the commissioner in the Patent Office.

The CHAIRMAN. And succeeded in hurting his case?

Mr. FARLEY. In that particular case; yes. There are two very large industries in this country that develop this particular type of patent, and although that patent disclosed a very fine thing, and that became a regular installation on their automobile, this application was amended to cover up the practical construction. Now the industry is confronted with expending considerable-and I will not endeavor to say how much-money we will have to spend to defend that suit.