BEFORE THE UNITED STATES DEPARTMENT OF COMMERCE PATENT AND TRADEMARK OFFICE In RE: Public Hearing and Request for Public Comment on Issues Associated with Implementation of Eighteen- Month Publication of Patent Applications Patent and Trademark Office Room 912 Crystal Park Two 2121 Crystal Drive Arlington, Virginia Wednesday, February 15, 1995 The public hearing convened, pursuant to notice, at 4:35 p.m. BEFORE: BRUCE A. LEHMAN, Chairperson, Assistant Secretary of Commerce and Commissioner of Patents and Trademarks - - - PATENT AND TRADEMARK REPRESENTATIVES PRESENT: LAWRENCE J. GOFFNEY, Assistant Commissioner for Patents MICHAEL K. KIRK, Deputy Assistant Secretary of Commerce and Deputy Commissioner of Patents and Trademarks STEPHEN G. KUNIN, Deputy Assistant Commissioner for Patent Policy and Projects NANCY LINCK, Esquire, Solicitor, Patent and Trademarks Office - - - COMMENTORS' LIST Page CORNELL D. CORNISH7 GARY L. GRISWOLD, Intellectual Property Owners, Incorporated14 ANTHONY D. SABATELLI, Esquire Procter and Gamble22 RICHARD L. DONALDSON, Senior Vice President Texas Instruments, Incorporated30 R. J. RILEY, Riley and Associates39 ORVILLE J. LITZSINGER, Vice President Alliance for American Innovation45 ALAN W. FIEDLER, Becton, Dickinson and Company50 ROBERT ARMITAGE, American Intellectual Law Association59 PAUL WOLSTENHOLME, Inventor65 WILLIAM T. FRYER, III, Professor University of Baltimore69 HAROLD C. WEGNER, Esquire GWU National Law Center and Foley and Lardner74 LOUIS D. MAASSEL, World Intellectual Property Organization, Geneva, Switzerland83 FRANCIS M. VITAGLIANO, Inventor92 GLENN E. WISE, Professional Researcher98 H. JAY SPIEGEL, Esquire Patent Attorney and Inventor104 RENE TEGTMEYER, Esquire American Bar Association, Section of Intellectual Property and Law110 PROCEEDINGS COMMISSIONER LEHMAN: Good morning. I'd like to welcome everybody this morning. My name is Bruce Lehman. I am Assistant Secretary of Commerce and Commissioner of the Patent and Trademark Office. Joining me this morning at this hearing are, on my immediate left, Michael K. Kirk, who is the Deputy Assistant Secretary of Commerce and Deputy Commissioner of Patents and Trademarks. On his left is Nancy Linck, the Solicitor of the Patents and Trademark Office. Then on my immediate right, is Lawrence J. Goffney, the Assistant Commissioner for Patents and Steve Kunin, Deputy Assistant Commissioner for Patent Policy and Projects. This is a hearing to receive public comment on issues that are associated with implementation of 18-month publication of patent applications. A notice of public hearing and request for comments was published on December 12th last year, in Volume 59 of the "Federal Register," pages 63966 through 63971, and on January 3 of this year, at Volume 1170 of the official "Gazette" of the U.S. Patent and Trademark Office, at pages 390 through 394. The legislation has been introduced and it was introduced in the 103rd Congress. It has not yet been passed. It was really introduced too late in the Congress to be acted on -- which would have required publication of pending patent applications at 18 months. We anticipate that legislation with 18-month provisions in it will be introduced in the 104th Congress. We also anticipate that that legislation will be enacted. In the event that such legislation is enacted, the Patent and Trademark Office will have to implement the new law very quickly in order to meet a January 1, 1996, target date. That is why the public has been invited to comment on the advisability of introducing an 18-month publication procedure into the patent system of the United States, in a public hearing that we conducted on October 8, 1993, a year and a half ago. At that hearing, over 70 percent of the speakers favored early publication of patent applications. This hearing concerns what procedures the PTO should adopt if we do have legislation enacted that requires publication of patent applications 18 months after the first filing. The transcript of the hearing will be prepared and a copy will be made available for purchase by the public approximately ten days after this hearing. Copies of the transcript will also be available for purchase directly from the stenographer. I assume you can make arrangements here today. The name of the stenographer's service is Miller Reporting and their telephone number is area code (202) 546-6666, (202) 546-6666, Miller Reporting. We have received 19 written comments and 20 requests to appear and speak to us orally at this hearing this morning. Due to the number of requests to appear orally and also to permit those persons signing up today to present testimony, each speaker, we would appreciate it if each speaker would limit their comments to ten minutes. Of course, you can submit all the written comments that you want, fleshing it out. Those persons who wish to provide additional comments should submit them to us in writing. The speakers have been listed in the order in which the requests were received by us. Any persons who wish to speak and who have not previously informed us of their desire are requested to add their names to the list, located on the table at the rear of the room. You may also pick up at that table copies of the "Federal Register" publication of the notice of the hearing. Before we begin, I would like to remind everybody here that there is no smoking here in the conference room. That is pursuant to General Services Administration regulations. We have a smoke-clean building here. When you present your comments, please give us your name and address and also if you would tell us whether the comments are your own, your personal comments or whether they represent your law firm or your company or whether you represent an organization and are presenting comments on their behalf that represent their views. I would now like to call forward the first person who got the first request in. That is Cornell D. Cornish. So there's a podium right up here. If Mr. Cornish wants to come forward and use that, he is welcome. MR. CORNISH: My name is Cornell D., Judge Cornish and my address is Suite 301, 1101 New Hampshire Avenue, Northwest, Washington, D. C. 20037, phone (202) 429-9705. I am a practitioner representing myself. I'm not used to being first on the list, so I have to take a moment just to make sure I have my thoughts in order. There is nothing as consistent as the delusion of a paranoid or the story of a swindler. So, I hope what I say here will be taken in terms of what I feel is the best policy for the patent office and how they implement the 18-month bill if it is enacted in the law. The reason I'd like to speak is because I presented an amicus brief in the Chakrabarty case. I think it's related to this whole issue of 18 months, because in that case, I think one of the most important underlying issues was the workload of the Patent Office. Chakrabarty was a little bit unusual in its impact on the Patent Office. The Patent Office, I think, at that time and other people perhaps were worried about the workload that was going to be involved in implementing patents on living microorganisms. So, the Patent Office had a big job and hiring a lot of people, doing some things they never did before and also in acquiring art that wasn't available theretofore. So, it seems like to me there is an analogy here between that kind of thinking and what we have in front of us now. Eighteen months means that these applications are going to be published and there will be more of those applications published than we have now in the terms of patent, because obviously some of those patent applications drop out before they are published as patents. So, we're talking about larger numbers, maybe substantially larger numbers. I think the reason why it is really important to address the issue now is because of the short time we will have to implement it, but also the question of whether or not some of these patent applications will be published. Certainly some of them will not be published if they relate to subject matter that is barred by statute, namely restricted data and secret information. Therefore, those people who are denied publication of their applications will have to have a hearing. There are perhaps other areas in which the Patent Office will have difficult determining whether or not to publish, certainly publish without a hearing beforehand. So, I just urge the Patent Office to consider the possibility of many areas, publishing many patent applications where there is a question as to whether or not they are doing the right thing. That brings up the whole issue of what we're doing here. I think what we're doing here is presenting to the public a public forum, in which case the First Amendment is very, very closely implicated. That is to say, we have a government agency here who is deciding whether to restrain publication by prior restraint before this publication goes out to the public or to go ahead and publish it. So, therefore, it sounds to me like this is an issue relating to the First Amendment directly. If you, as a patent office, say you can't publish your patent application, you obviously have restrained prior to publication. It may be that I, as a solicitor or as an inventor, don't have another place to publish. In other words, I simply go to the Patent Office as my public forum, because that's where I want to publish my invention. So, I feel that it is important to distinguish at this point what we are doing, because I think the 18-month publication will open the door to many, many areas of publications that we were not used to heretofore. I think that's a good thing. I think it is a very good thing to publish what is a little bit controversial. As a matter of fact, the more controversial it is, that's perhaps the more important it is to publish it. So, I'm just urging at this point that, not only that the Patent Office take this job seriously and become the best patent office in the world by publishing everything that they can legally publish and that they do so in the form of an application published just like the patents are published now. You remember, in Britain and Germany and other countries, they publish the full application in a printed form. Obviously, it could be photo printed or automatically printed or printed by computer, but what I'm saying basically is, it is a printed document and it is available in the shoes [phonetic] for everyone to look at. That, in effect, is the most important document in the whole patent prosecution. There are two issues involved in a patent. One is the publication, which is dedicated to the public and, therefore, is open to the public to use. The other issue is when that publication is dedicated, namely how long the patent's exclusive rights last. Of course that has to do with the claims and how broad or how narrow the claims are. That's an entirely different issue. So, I look at the application as the most important document. That is where the Patent Office has to publish the whole thing, has to publish it in a form that is available to the public, just like the patents themselves now are. So, I urge the idea of addressing that particular aspect of the workload. It's going to be a big one, but it is the most important part of the patent process, to issue the letters patent at the time the application is made in the 18-month form, just as we have now in the German and the British and some of the other and the Japanese Patent Office. COMMISSIONER LEHMAN: Thank you very much. There are no questions, so why don't we call the next witness, S. S. Fishman, who is representing the Small Entity Patent Owners Association. Mr. Fishman isn't here, because I see that he was coming from Pleasant Hill, California, and the weather is pretty bad today. Maybe there is someone else representing that organization. Is there someone here from Mr. Fishman or the Small Entity Patent Owners Association? [No response] COMMISSIONER LEHMAN: If not, we will go on to Gary L. Griswold, representing Electrical Property Owners, Incorporated. MR. GRISWOLD: Good morning. COMMISSIONER LEHMAN: Good morning. One of the things that the people here -- you know, we're opening up in Sunnyvale, California. We're cooperating with the City of Sunnyvale and we are going to have a video conference facility there that will be available to lawyers on the west coast who want to do interviews with patent examiners and others. Perhaps in future hearings, we can use that for our California friends. Then they won't have to deal with the snow problems and so on and so forth. That's not quite in place yet. Hopefully, by the next time we have one of these hearings it will be. MR. GRISWOLD: Snow is not a problem for us from Minnesota. Good morning. I am Gary L. Griswold. I'm representing Intellectual Property Owners. I am their president. Our address for Intellectual Property Owners is 1255 Twenty-Third Street, Northwest, Suite 850, Washington, D. C., 20037. I appreciate the opportunity to speak on behalf of IPO relative to 18-month publication. IPO, as you know, represents a substantial portion of the R&D in the United States. In 1993, IPO members were granted 23 percent of all U.S. patents granted to U.S. patent owners, U.S. nationals. IPO strongly supports legislation that would provide for publication of patent applications 18 months after the filing or priority date. We supported S. 1854 and S. 2488 in the last Congress and look forward to the introduction this year of the bill, as you mentioned. The current U.S. patent system is causing uncertainty about the status of patent rights and new technology and is unreasonably delaying the dissemination of information to U.S. nationals. The uncertainty and delay, we believe, are weakening the incentives for U.S. innovation and investment in technology that the patent system is supposed to provide. It is weakening our technological competitiveness. Of course, we need to strike a balance between, on the one hand, the interests of U.S. patent applicants in keeping their information confidential and, on the other hand, the interests of the public in knowing what patent protection is being sought. Technology owners can rely indefinitely on trade secret protection instead of patents, but once they elect to file, then the public should know what they are seeking. Now, I'm going to speak initially here on three points which we think are the key points in this hearing this morning. Number one is, whether the entire application should be published at 18 months. That is your question number three. In response to that, we believe that the "Gazette" should include an abstract, a representative claim, what kind of information, but we believe the entire application should be published and be available for use by the examiners in their examination of applications. That's the IPO position relative to that. COMMISSIONER LEHMAN: What about to the public? Should they be available to them too upon request? MR. GRISWOLD: Yes, I think the application should be available to the public in a printed form, much like is the case in other parts of the world. This will allow people to know what the information is and also to look at the claim, so that they will be aware of what possible problems will exist in the future relative to their investment in this technology. On the other hand, we have a cost issue. I think at the Patent Office, there is kind of a shortage of cost data in this request for information. You need to, in my view, get your process people together with your controllers and do some heavy duty work on numbers. That's what we would do if we were making a decision like that. COMMISSIONER LEHMAN: Actually, we have done that pretty much. I think it's $11 million. MR. GRISWOLD: You need to translate that into what it would cost individually to do this work for applications. COMMISSIONER LEHMAN: Yes, 13.4 million basically for the capital project. The planning will depend on obviously -- we would have a cost to the people or a fee for people that requested copies. We built that 13.4 million, I think, into our capital budget basically for next year. So, I think the costs are pretty much under control. MR. GRISWOLD: Okay. COMMISSIONER LEHMAN: It will be done electronically. You know, we will use our automated system. You will get a paper copy, but we will push a button and you'll get the paper copy out of the automated system. MR. GRISWOLD: Okay, good. The idea here is, we would like to believe that there should be a paper copy of the application published and available to the public as well as the examination corps. Now, the second is, whether access to the contents of the application file should extend to materials added after publication. That's your question number ten. Our answer to that is, yes, there should be access to the application. The public needs to know what is going on with the application. We need to do that in a way so that it doesn't interfere with the prosecution of the application. We need to have access to that application. So, we strongly urge that that be available. The third key point is, whether protest procedures should be limited to prevent third parties from having opportunities to protest that would amount to opposition proceedings. Our answer to that is, no. We want to make sure that there are two things to balance it. One is to get the right priority so you can have a good examination. On the other hand, we don't like to set up a prehearing opposition like we, hopefully, just got rid of in Japan. So, we don't want that. So, I think there should be tight limitation on the access, on delivering information during prosecution. I think there shouldn't be comments. It should be considered in a finite period. Then after that, it's just put in a file. Reexamination is available if we introduce the --reexamination involves more activity on the part of the opposer, we will have a better system in that respect. Those are the three main issues that I wanted to comment on. I could hit the other questions if you want me to hit those quickly, if I have time. The first one, your question one related to: Should the PTO require that all application-related materials be delivered to a central location? That doesn't seem to be a problem. Even if you deliver something directly to the art unit, you should be able to deliver something to the central location. Number two: Should the PTO adapt a standard format? We think that would be okay. We certainly could live to that. I answered three. Number four: Should the patent applicant receive a copy of the published application? I believe they should and there will obviously be some cost associated with that. Number five: Should the PTO permit accelerated examination? I believe that they should and if they ask for it and seek it, then they should pay a fee for that. Number six: Since the cost of publishing applications must be recovered from fees, should the costs be allocated amongst the various fees? I think it should be allocated across the fees, probably front end loaded a little bit. Once again, you have to do the math and work that out. I don't believe that there should be a separate publication fee. I don't think we want to put in another cost factor in the process of collecting and getting extensions. All of that would be related to a separate publication fee. Number eight, a question relative to claiming priority, should you be able to -- what should be the deadline. I think we want to force people to drive through the process rapidly. So, I wouldn't give too much of an extension for requesting priority. Because of the timing, it could be involved with the provisional applications and what not. You might require -- it might be 15 months from the original priority date. By the way, I think the system should be set up that, once you file your application, you're on a track of publication. There shouldn't be a bunch of stops and starts and what not. It should be on a track of publication. If you want to get off that track, you have to do an affirmative act. That would be our position relative to that. Once the patent has issued, should the patent documents contain the -- should the information be removed from the search files? I think the search files should have in there the published application. Perhaps, I think you'd have to study whether or not the final, the patent as issued, should be published. I think we should have not only a published application, but a published patent that is a complete document, not a changed style document. Number eleven: After publication, should assignment records be published? Yes. Number twelve: After publication, should access include biological materials? On that issue, I think we'd better -- we will leave that up to the people that are in that business, because maybe they have good reasons why not. Number thirteen: What types of problems would be encountered if all amendments must be made by various changes to the present way we do things? We can live with that. We will just have to teach everybody how to do it differently. That may be tough, but we can try that. Then fourteen, I already answered. We will submit some written comments. These are our oral comments. Questions? COMMISSIONER LEHMAN: Thank you very much, Mr. Griswold. Are there any questions from any member of the panel? MR. GOFFNEY: I just wanted to be clear. When you said that you believe that the application should be published in a printed form, is that different in your mind than making it available upon seeing some summary or abstract? MR. GRISWOLD: I think it is. Having it in a published form is different than having it in just an abstract. Yes, I do. MR. GOFFNEY: So, isn't it a greater burden inasmuch as you want to have access to the full record after publication for making determinations about the specification and the claims? MR. GRISWOLD: Would you repeat that question? MR. GOFFNEY: I said, do you think that not to have the full application published is a greater burden, inasmuch as you would have to have access to the record in order to interpret -- MR. GRISWOLD: No, I think they may be used for different purposes. So, yes, I think that they are different and distinguishable events. So, that is separate in my mind from having the record available later. MR. GOFFNEY: Thank you. COMMISSIONER LEHMAN: Next, Mr. Anthony D. Sabatelli. MR. SABATELLI: My name is Anthony Sabatelli. I am employed at the Procter and Gamble Company, 11511 Reed-Hartman Highway in Cincinnati, Ohio, zip code 45241. My position is counsel of patents. The phone number there is area code (513) 626-3266. The comments I will be presenting represent the views of Procter and Gamble. Assistant Secretary of Commerce Lehman, Deputy Assistant Secretary Kirk, Commissioner Goffney, Deputy Assistant Commissioner Kunin, Solicitor Linck, Procter and Gamble would like to thank the Patent and Trademark Office for the opportunity to testify at this public hearing. Procter and Gamble is also a member of the Intellectual Property Owners, an organization that is presenting testimony today. Because of the significance of the 18-month publication change, we felt it was important to also testify on our own behalf. Procter and Gamble strongly supports 18-month publication. The major reasons why we support this change are provided in our written comments. In anticipation of the change to 18-month publication, the PTO is now seeking comments in 14 question areas. I will now address these. Our position is summarized on the handout that I've given you. We support publishing the enter patent application, including amendments as it exists at a fixed point, such as three months before publication. We support providing the public with continuing access to the entire application file after publication. We support publishing assignment records and making deposited biological samples available to the public. We support three month deadline after filing for making a claim for priority. We believe that 18-month publication should be automatic, unless the applicant timely and affirmatively acts to abandon the application. We support allowing third parties to submit prior art at the PTO up to a period of three months after publication. We support the PTO's proposal for submitting amendments to the application file. However, we oppose establishing formal, pre-grant protests or opposition procedures. Now, I will address some of these question areas in more depth. Questions three and ten are related. These questions seek comment on the scope of the information to be published at 18 months and on the extent of the access to the file to be given to the public after that time. Regarding the publication issue, the PTO is proposing four options. Our position is that the PTO should adopt option four, which proposes publication of the entire patent application as amended at some fixed, such as three months before publication. This option would make the greatest amount of published information available to the public. We do recognize that, this option might not presently be feasible because of monetary and logistical restraints. However, once electronic filing and a dedicated CD-ROM system are available at the PTO, it should be relatively easy and economical to provide the public with the entire application, at least, in electronic format. In the interim, until the PTO establishes such a computer system, we would support implementing option two, publication of an abstract, similar in format to that now published in the official "Gazette," provided this option is coupled with granting continuing public access to the application file. It is essential that the abstract contain sufficient information to enable a knowledgeable reader to determine whether seeking access to the application file is warranted. Therefore, the abstract must contain the broadest or a representative claim and appropriate bibliographical information. Regarding access to the application file after publication, the PTO proposes making the file available for public inspection either as originally filed or as exists at some fixed point before publication. We do not agree with this type of limited access. We strongly believe that the public should be provided with continuing access to the entire application file at the time that access is requested. The PTO is reluctant to allow continuing access, contending that it would require removal of the file from the examiner, thereby interfering with the examination process and causing delays. We do not agree with this reasoning and believe that any potential delays can be easily minimized by keeping duplicate or even triplicate file wrappers as is the practice at the European patent office. Also, once the PTO installs an electronic filing and CD-ROM system, the feared disruptions to examination should become non-existent. We believe that continuing public access to the complete file will provide the public with the greatest amount of information. An interested party would be able to check on the current status of the application, learn what prior art is being considered by the PTO and get a reading on the possible outcome of the examination. This information would help reduce the uncertainties inherent in the present system and would help reduce the potential for post issue litigation. This reduction in litigation will reduce the costs associated with technology development and will also provide more incentive for these developments. Regarding questions eleven and twelve, we support the PTO's proposal to make assignment information and deposited biological samples available to the public. Regarding question eight on handling claims for priority, we support the PTO's proposal that a claim should be forfeited unless it is made within a reasonable period, such as three months. Question seven relates to the publication mechanism. We believe that all patent applications should be automatically published unless some affirmative action is taken by the applicant to withdraw and abandon the application. Publication should proceed whether the applicant timely paid any required publication fee. This procedure is preferable to the alternative procedure where publication is made contingent upon payment of a publication fee. The alternate procedure opens an loophole whereby an applicant can potentially delay publication by submitting a late fee payment along with a petition to revive the application. We believe that the cost of publishing an application, where the fee is lacking and the application is allowed to remain abandoned, would be relatively small. This cost could be more than offset by the benefit of reducing delays and reducing the potential for abuse. Regarding question fourteen, the PTO seeks comment on the submission of prior art by third parties and also on the establishment of protest and opposition procedures. We do not agree with permitting unrestricted submissions. Unrestricted submissions, especially when coupled with continuing access to the file, could interfere with examination and could also be abused by third parties seeking to delay issuance of an application. We support a system in which a third party would be permitted to submit relevant prior art to the PTO up to a fixed period, such as three months after publication. For all subsequent submissions, the third party would be required to wait until the patent issues and then request the reexamination, as is the practice under the current system. We do not support establishing formal pre-grant protests or pre-grant opposition procedures. Our experience in Japan has shown that these procedures are costly and can unreasonably delay the prosecution and ultimate issuance of a patent. Also, pre-grant protests and opposition procedures could be abused by third parties seeking to harass an applicant by purposely delaying prosecution. Instead, we believe that post-grant reexamination and opposition procedures should be used for challenging a patent. Regarding question thirteen, we support the PTO's proposal for entering amendments with some suggested safeguards that we have in our written comments. In summary, Procter and Gamble supports 18-month publication of patent application. We believe that the PTO should publish a patent application as it exists at a fixed point, such as three months before publication unless desirable but acceptable interim procedure would be to publish an abstract containing the broadest or representative claim along with appropriate bibliographical information. In either case, we strongly believe that the public must have continuing access to the entire application file. Any potential disruption caused by such access could be minimized. We support publishing assignment records and making deposited biological samples available to the public. We support a three-month deadline after filing for making a claim for priority. We believe that 18-month publication should be automatic, unless the applicant timely and affirmatively acts to abandoned the application. We support allowing third parties to submit prior art to the PTO up to a period of three months after publication. We opposed the institution of formal pre-grant protest or opposition procedures. Finally, we support the PTO's proposal for submitting amendments to the application. COMMISSIONER LEHMAN: Thank you very much. Next, I'd like to call Mr. Richard L. Donaldson. MR. DONALDSON: Commissioner Lehman and panel, I am Richard L. Donaldson. I am the Senior Vice President of Texas Instruments, Incorporated and general patent counsel. I am appearing today on behalf of Texas Instruments. I really do appreciate the opportunity to address this hearing. Judging from the testimony given so far today, I think we will be giving a little bit different view of what you have heard so far. I do have a number of comments concerning the procedures for implementing the 18-month publication. We are submitting written responses to the 14 questions that were identified in the December 12th "Federal Register." So, I'm not going to dwell on those right now. We will submit those before the end of the week. What I would like to discuss are a couple of issues which have caused TI to have some serious concerns about the effects the implementation of these procedures will have on the U.S. patent system. I think from the bottom line point of view, our conclusion is that the type of procedures that will be required to implement the 18-month publication will have the effect or, at least, the potential of significantly reducing the enforceability of patents in the United States. There are two areas that I really want to concentrate on and address this morning. One is what we believe to be an incompatibility between procedures for implementing an 18-month publication and the duty of candor as required by Rule 56 and the protest proceeding as we currently know it. The second area I'd like to discuss is an area, again, of what we considered to be an incompatibility between procedures for implementing an 18-month publication and our requirement in the United States for disclosing the best mode. We'd like to address the conflict first that we see between the duty of candor and the protest procedure. As we all know, Rule 56 is an area that really sets U.S. patent acquisition apart and above prosecution in the rest of the world. We strongly support Rule 56, because you get stronger patents and they are more enforceable. What it requires is for the applicant or the attorney to have the affirmative duty to provide prior art to the Patent Office that he thinks may be relevant. When you couple this with the protest procedure, at least, as it currently exists, we think that there is a very substantial potential for abuse. A couple of the people who have testified already today have pointed out part of the problem. If you have the 20-year term for the patents, the delays that are possible by considering before the grant of the patent prior art could very well delay issuance of the patent and really make the effective life of the patent shorter. But I think it goes beyond that. I think third parties would have the opportunity, not only of submitting prior art to the Patent Office, but submitting prior art to the applicant or attorney. We see that quite often in our activities. This puts the attorney really on the horns of a dilemma. He now has prior art that someone has said may be more relevant. He may, perhaps, have no opportunity, no choice other than to submit it to the Patent Office and delay the issuance of the patent, otherwise he runs the risk of violating Rule 56. COMMISSIONER LEHMAN: Well, isn't that what we want, though? If there is prior art that is relevant, we only want that to get into the process. MR. DONALDSON: Absolutely and if it is really relevant prior art, the patent attorney will delay issuance if necessary to get the Patent Office to consider it. Where abuse could come in is, if someone gives you a piece of prior art that you don't think is relevant, but you also do not feel comfortable in not submitting that to the Patent Office, even if it delays, even if you have to withdraw it from issuance, because if you are wrong, if someone else disagrees with you, then you have violated Rule 56. I think there are ways that can be addressed in the procedures for implementing this, but I think two things would have to happen. One, the protest period should not be permitted prior to grant, if you want to call it a protest period. I think we should have opposition, post-grant opposition where this material could be considered. I think the second thing that would need to be addressed is relaxation of Rule 56. So, during this interim period, from the period of publication to when the patent is finally granted and can now be opposed, the attorney would not be required to submit prior art given to him by third parties at his own risk. I mean, it could be considered during the opposition period, but he shouldn't have to be faced with that decision, whether to delay issuance of the patent or not. So, I think those would be two types of changes that would be required. MR. KIRK: In terms of your proposed grant opposition that you referred to, would you contrast that with reexamination? MR. DONALDSON: Yes, I would contrast that with reexamination. I would support a more effective opposition than under the current reexamination. I'd like it to be inter-parties. MR. KIRK: But given the legislation that was introduced to part of the last Congress that would open up reexamination, that would make it more inter-parties in nature -- I'm not sure if you're familiar with that, but that is a broadening of the participation by the third party, yet still under some control. Assuming that that were the type of reexamination that we had, would that be the same as this protest procedure or would they be different? MR. DONALDSON: No, I think that would be basically the same. I think I would still want to see how that is going to -- I am familiar with it and I still would be curious to see how exactly that is going to be implemented. We are familiar with some post-grant opposition systems that still permit very lengthy periods. I think we need to address that. The second concern that we have is a little bit more difficult to come to grips with. That is the best mode, what we consider to be the best mode conflict. I believe this places, when you couple this with the early publication procedures, that this is going to place U.S. inventors at a disadvantage to the rest of the world. I also believe that it will have a chilling effect on innovation and R&D, particularly in one aspect and that has to do with process patents. We currently -- and I'm not sure how other companies handle it, but we currently do not file process patents overseas, because of the disclosure, you know, the early publication. They are basically unenforceable. In the judicial system, you don't have discovery. So, we basically do not file process patents overseas. We do file them in the United States. We have the opportunity to determine whether or not we will be able to obtain patent protection and make the choice. Do we want to accept the patent or do we want to try to rely on trade secrets? The 18-month publication, however that is implemented, will basically take away that choice, because the 15 month period where you're going to have to make a decision whether or not to have your patent application published or not, you will not know whether you're going to get a patent or not. I think what would happen in our case is, we would elect in almost all cases to try trade secret protection. I think this could have an unintended result and the public will get less information about new inventions, particularly with respect to processes. I don't think that was intended. I've mentioned the uncertainty of whether you would get patent rights after 15 months. I think the workload on the Patent Office is going to be very heavy. I don't think it is realistic to expect that the prosecution will have developed to a point where you can make a realistic or informed choice as to whether or not or what kind of patent you're going to get at 15 months. This leads to another aspect. The potential patent right that you might get, we do not think, is fair return for disclosing your best mode of operation. I know there is the possibility of a post-publication, pre-grant royalty, but this really puts an inventor in a difficult choice. He still does not know what patent protection he's going to get. In all likelihood, the claims will change from what was published and what he finally gets. So, he may have no opportunity for royalty during that period anyway. In addition to that, actual notice is required. So, he has to go to his competitor and tell them his best mode of doing something that he has no idea about whether he will get a patent on or not. I think that is an unrealistic choice to force an inventor or a company to make. So, I think it could have a chilling effect also in that respect. I think part of the negative impact of this could be having procedures that really restrict or eliminate the best mode requirement. The U.S. is the only country that has that requirement. I think this is a tremendous advantage to people and companies and other countries, but also I don't think it is in our interests to do that. I think the duty of candor and the best mode requirements are two of the things that make the U.S. patent system the strongest in the world. I really think we ought to keep those. I also believe that there is some difficulty and incompatibility with procedures that will implement this early publication. Just as a final point, it perhaps goes beyond what the comments are intended to address here. But TI really does support patent harmonization. We think patent harmonization needs to be looked at under the entire patent system basis, not a piecemeal approach. I don't think that we should, in the interest of harmonization, lower our standards to where we have uniform mediocrity with the rest of the world. We had a strong system and we need to keep that system. We have identified some changes that we think are necessary if we go to the 18-month publication, but even then, we will continue to have concerns about the effects it is going to have long term on the U.S. patent system. Thank you very much. COMMISSIONER LEHMAN: Thank you very much, Mr. Donaldson. Next, I'd like to call R. J. Riley. MR. RILEY: My name is R. J. Riley. I represent Riley and Associates. I'm an independent inventor. My address is 1323 West Cook Road, Grand Blanc, Michigan, 48439. The phone is (810) 655-8830. I'm going to address each of the, I believe, 14 items in order. I won't read the questions, since everybody should be aware of them. Regarding question one, I do not believe it's reasonable to require materials to be sent to one location. The practice would add delays in processing materials and would make it likely that material would not be processed in a timely manner. Question two, I do not believe that a standard application format is practical. By the nature of innovation, all inventions are unique. While many of them might fit in a standard format, I suspect that there are always going to be exceptions where it won't. I also believe that will add significant costs, indirect costs to inventors. Number three, to minimize burdensome costs associated with publishing, the "Gazette" should only publish the patent description of an inventor. Any additional information should be purchased by the party that wants the information, with that party bearing all the costs associated with publishing, including all administrative costs associated with preparing the information for publication. Four, my answer is, yes, the cost of sending the notice should be borne by those companies who would benefit from the publication. Five, the PTO claims that the average pendency is 19 and a half months. The PTO should face sanctions for failure to process a patent within that time. I think that the PTO should use the money that would be associated with publishing to improve the system so that all patents are published within the 18-month interval. COMMISSIONER LEHMAN: Can I ask you a question? What kind of sanctions would you consider? MR. RILEY: I don't know. I think that would be an interesting thing to discuss. I do believe that submarine patents are a direct result of the Patent Office not prosecuting things in a timely manner. I understand that some patents, once they become delayed, become dogs for the examiners involved. I think that most examiners are probably trying to do a good job, but if they get a file that has a long history in, it represents a huge amount of work. You get a job like that, you tend to put it on the bottom of the pile and it makes the problem even worse. Six, all costs associated with 18-month publication should be borne -- did I address that or not? I guess I tried to -- should be borne by those who wish to access the patent information. Any indirect costs incurred by inventors should also be passed on in the publication fee. The application fee should be lowered to reflect a refund for those increased costs. I do fee that this is going to add indirect costs in prosecuting patents. Item seven, the PTO should not publish unless they receive notice to do so. Patents are property, intellectual property. To publish without an explicit consent, could cause publication to occur where it wasn't intended. It is taking away the option of using trade secrets as a method of protection. If something is lost in the mail -- or there could be a lot of reasons, followups, paperwork followups. Eight, my answer is, no. Nine, this will be a moot point if the PTO processes all patents in a timely manner, i.e., before 18 months. Ten, yes. Eleven, yes. Twelve, no. Thirteen, no comment. Fourteen, I think like most other people, I don't want to see an opposition system like we've had here in item fourteen. I also have some other concerns. I don't think that the estimate of cost on this, your estimates are reasonable. I have done a great deal of systems work related to computers in the industrial sector. I think we can look at your existing computer system and the fact that it is dramatically beyond the original schedule and my understanding is, at this point, it's over a billion dollars. That is what I have been told. If that's wrong -- COMMISSIONER LEHMAN: No, we spent about a half a billion dollars since it was initiated in 1983. MR. RILEY: It's still significantly beyond its schedule. I think that what is going to happen if you try to implement a system like this, in a year, you aren't going to be successful. Then you're talking about giving people access to the patent files. I believe that's going to delay the patents and bog the system down even more. I just don't think that the numbers are realistic. I think you have past experience that indicate that that might be the case with the existing computer system. It is dramatically over budget, right? COMMISSIONER LEHMAN: It's not over budget, no. MR. RILEY: Well, that's not the information that I had. COMMISSIONER LEHMAN: Well, we have to operate on the basis of facts. Probably nobody is more audited than we are by everybody, from the General Accounting Office, to the Inspector General to everybody else. MR. RILEY: The last thing, all bureaucracies like to increase their size and that's true whether you're talking corporate or government or whatever. Most certainly, we are seeing dramatic downsizing in corporate America, where it sort of crept up on them and they had layers and layers of middle management. But almost every manager wants a bigger organization under them. So, it's more budget and everything associated with it. I can't help but wonder if the 18-month disclosure, the cynic in me wonders if this is a method to dramatically increase the budget and the scope of what the Patent Office does. So, with that comment, are there any other questions? COMMISSIONER LEHMAN: No, there aren't. Thank you very much. I'd like to remind people that President Clinton actually has indicated that we're going to eliminate a thousand people. President Clinton has indicated that he is going to reduce the size the Federal Government by 250,000 employees. We already have achieved about a 100,000 reduction already. So, I think that I want to make it perfectly clear that, no one in this administration is interested in expanding the size of the bureaucracy. Next, I'd like to ask Thomas Irving, please, to come forward. [No response] COMMISSIONER LEHMAN: Is Mr. Irving not here? [No response] COMMISSIONER LEHMAN: I will then ask Mr. Litzsinger to come forward, please, to fill this spot. MR. LITZSINGER: Thank you, Mr. Commissioner. I sincerely appreciate it. We had a conflict, as you are probably aware of, later. I'm Nip Litzsinger and I'm the Vice President of the Alliance for American Innovation. We're located on Connecticut Avenue, downtown. The phone number is (202) 293-1414. In Washington, the Alliance represents over 3,000 independent and small business inventors along with working in the best interests of a number of venture capitalists in a number of biotech firms. Our clients are from coast to coast, border to border. We're the fastest growing and only group within Washington that are actively representing the independent inventors as we progress. You note a large audience today and none of our over 3,000 affiliates are here other than myself. I know many of them have submitted testimony for the record. We have received information copies of that testimony. I've taken their comments in the development of the response to your 14 questions. Most of our affiliates believe that the discussion of the 18-month publication in isolation without discussing the 20-year term, without discussing prior user rights might be improper because they old fold together as far as the inventor is concerned and as far as the innovative community in the nation is concerned. Additionally, reference to the 18-month publication may be very misleading, because I know I sat in on one of your presentations in Houston two weeks ago, to the inventors group and also to the patent attorneys down there. At that time, there was a lot of support issued by your office for the provisional application. In response to a question, the representative of your office indicated that the clock on 18 months started ticking at the submission of the provisional application. So, we're not talking about 18-month publication. We're talking about six month publication in some cases. Most of our folks are betting on the fact that, when their application is reviewed in six months, large multinational and foreign interests will have a product on the market that is significant by the time their patent is issued. So, that, to us, is a real threat. It's a real threat to the venture capitalists in this country and the others that are interested and anxious about what is happening as we go along. COMMISSIONER LEHMAN: If that were true though, wouldn't the patentee at that time have exclusive rights vis-a-vis that other enterprise that would be on the market? MR. LITZSINGER: He may or may not. It would depend on enforcement and many of the patentees that we're speaking of find themselves on the short end of the stick because they don't have the financial resources to pursue the money that supports those other actions. So, it isn't a given that this is a level playing field. It is not a level playing field. If in fact most patents are granted in 19 and a half months, then why is 18-month publication required. Why are we spending the money that we're spending on 18-month publication if the data shows that we are now issuing in 19 and a half months and we're going to get better? Well, it seems to me that we're not going to get better. We're going to get worse. We're adapting our system to harmonize with foreign systems inferior to ours and less responsive to ours in issuing patents. Needless to say, the following response that I have to your 14 questions does not in any way endorse your basic proposal, but here it goes quickly. I have submitted them in writing for you. These responses are a gathering of the responses of our affiliates throughout the country. All official application-related materials could be delivered to one place. There is no problem with that as far as our folks are concerned, in difference to what Mr. Riley said. Standard application format is not necessary. Information to be published may include the filing date, but not more than the abstract, if we have to live with this system. The patent applicant should absolutely receive a copy of the published information upon publication. Accelerated examination under the present conditions should be permitted and there should be absolutely no charge to the applicant for filing and all costs should be borne by the PTO. The answers to question seven are yes, no and should be definite, in that order. Should priority or benefit be lost if not made within a reasonable time after filing? The answer is no. The answer to question nine is, that we do not care what is removed nor what is enclosed on the issued patent. The answer is yes to questions ten, eleven and twelve. Our affiliates suggest that you tell us of the problems you anticipate in question 13. Last but not least, protest procedures should be modified to permit third party submission as suggested. Our question is, how? Untimely submission by a third party should be handled as they are now. I have been fortunate to travel in the past five years to about 15 foreign countries. I am amazed at these European and Asian countries, of all of the innovation that is ours that is there, much of it under foreign corporate logos. It is our innovation. This is our system that has been in place for 200 years. In the past six months, we have taken some gigantic steps to put it out to sea, to be mediocre like the other systems are. We are really playing with fire. We believe that not only on behalf of the inventors, but of all of the innovative community in the United States, whether you're in corporations or whether you act as individuals or small business people, this could be tragic. We are taking a successful system that served in not only our interests, but the world's interests and we are submarining it. Thank you. COMMISSIONER LEHMAN: Thank you very much, Mr. Litzsinger. Next, I'd like to call Alan Fiedler, please. Is Mr. Fiedler here? MR. FIEDLER: My name is Alan Fiedler and I'm a patent attorney at Becton, Dickinson and Company, a medical devices and diagnostic systems manufacturer international company. My comments are mine and a co-author of mine. They are not necessarily the views of the corporation, Becton Dickinson and Company. Basically, we didn't present comments when the 18-month publication was first addressed. I think it is important -- my comments will show that it is different to separate the 20-year term of patents from the 18-month publication. My colleague will be speaking tomorrow at the 20-year term presentation. Our concern with 20-year term patents is, it is very misleading. You're not getting 20 years of enforceability rights. That is going to be shortened by the amount of prosecution that takes place. I think it is unfair and unjustifiable to have some patents issue with longer enforceability periods than other patents. Today, every single patent that issues has a 17-year enforceability period and I think that should continue. You should be able to know how long your patent is going to be enforceable. It is even more unfair to take the enforceability off the front end of your rights. That is the time when you're more likely to be able to reap rewards before the technology ages. I think that 18-month publication would be a way to solve that problem that we have with 20-year terms, but I think we need to consider what is done in the EPO in Japan and Australia, where provisional remedies are granted when the application is published. Provisional remedies being that, you are entitled to go back to your publication date to obtain royalties or whatever may be necessary based upon what those claims said, as compared to what the claims said when the patent issued. I think it is important for us to consider this if we really intend to harmonize our laws with the rest of the world, the major leaders. Without provisional enforceability, I think that many inventors will be harmed. The inventors that are most likely going to be harmed are the inexperienced, pro se inventors who are trying to prosecute their first application through the Patent Office. If they unfortunately are assigned an inexperienced examiner who has to have his work reviewed by a senior, that prosecution is going to be delayed and delayed. Why should they suffer? I think the patent system is really meant for their benefit as well as anybody else's and they should be able to reap their rewards. The other people that are going to suffer are technologies that are well-advanced, biotech technologies. Software is where prosecution takes quite a while. Why should they lose the front end of their royalty stream because of the long prosecution? In addition, being a corporate patent attorney, we try to value applications that are submitted to us for purchase. The trouble we have is, if you have a patent application where you have an indefinite enforceability period, the more money you invest in an asset, the value of that asset continually depreciates, because your enforceability period continually decreases. So, it makes it even more difficult now to value such assets. So, we understand the PTO has recognized that, in certain situations, extensions should be permitted, say, if you are up on appeal, secrecy orders or an interference. We don't see that that kind of solution would solve the discrepancy between the enforceability periods between patents. We also are encouraged with H.R. 359 that was introduced on January 4th that seeks to amend the term to be the longer of the 20 or the 17 years. I think that would solve this discrimination problem between applications. However, we are concerned with the publication provisions in there, because they do not address providing any enforceability rights that you can go back to when the application is published. Many applications we file, in fact, all of them, contain proprietary information. The only reason we're filing them is to obtain a patent. If we are forced to publish applications, that technology will be turned over to our competitors and they will have a jump on us where we cannot proceed with any enforceability against them when our patent finally issues. We will have to wait until the patent issues and then try to get them off the market. So, basically before I get to the specific questions that I want to address, we encourage the Patent Office and Congress to consider publishing applications at 18 months, but also granting applicants and patent owners some form of provisional protection and remedies after the patent issues covering the period starting on the publication date of the application. Now, specifically to the questions, I won't address them all. With respect to question three, what should be published, we encourage the Patent Office to see what the EPO does and analyze their procedures on how they handle it. I think the publication could be limited to something like in the office "Gazette." At a minimum, it should be a selected claim by the applicant, a selected drawing by the applicant and the abstract. Of course, then we also propose that the full application, as filed, be available either on Internet or at the Patent Office so people can make copies. It also should be put into prior art database so that software examiners will have those publications available to improve their search on their software applications, as well as all the other examining fields. Question seven, I think that applicants should be entitled to abandon their applications maybe three months prior to the publication date to avoid the application being published to protect any trade secrets they may have if issuance seems doubtful. Question ten, I think full access should be available upon publication to the entire file wrapper. We do not want to hinder the time of the application in the Patent Office. Maybe have copies available like we do have patents available. There should be some way to handle that, if at all. Question twelve, regarding biomedical substances, I think access should be granted upon publication. But of course, all of my views in favor of publication are conditioned some provisional enforceability. We do not want access to the biomedical materials unless we have some way of going back to that publication date, if we do get a patent, to seek some kind of royalty payments. We are not in favor of substitute sheets for amendments, in response for question thirteen. We do not think that is needed, because we hope the entire prosecution file will be available. Regarding question fourteen, I think it would be wise to have third parties submit prior art, with some description as to why it is relevant to what they see in the application. I don't think it should be an entire protest or opposition situation. That's it. COMMISSIONER LEHMAN: Thank you very much. MR. GOFFNEY: I have one question. MR. FIEDLER: Yes. MR. GOFFNEY: I was wondering how you characterize the enforceability and the royalty flow being taken from the front end under a 20-year term. How is that the case? MR. FIEDLER: Well now, the term of the patent will be from the original filing date up until 20 years from that filing date. Enforceability -- MR. GOFFNEY: The term of the patent? MR. FIEDLER: The term of a patent. MR. GOFFNEY: No, the term of the patent is from the date it issues up until 20 years from the filing date. MR. FIEDLER: Right. MR. GOFFNEY: That's different from what you said. MR. FIEDLER: A basic situation that would get the point across is, if you have two inventors who have substantially similar levels of technology in their inventions. They are simple mechanical devices. They shouldn't take more time to prosecute than another. You have one inventor who is inexperienced. For some reason his application is delayed. Let's say it issues 19 months after it was file. But then the more experienced inventor gets a senior examiner and his case gets through in 18 months. Somebody is being short changed one month of enforceability. I think that's coming off the front end. MR. GOFFNEY: Wouldn't that happen for a 17-month term? That is, for a patent that issues at a time when the market is right for using that particular patented device. The date it issues, then you get your front end royalties and the better market. One that is delayed in the process, regardless of how long the term of the patent is would lose that opportunity. Isn't that the case in the present system? MR. FIEDLER: Yes, that would be the case, but basically what is going on now is, you are forcing it to be off the front end because we do have that 20-year cutoff at the end. MR. GOFFNEY: Thank you. COMMISSIONER LEHMAN: I think those questions will be more relevant at tomorrow's hearing. MR. FIEDLER: Yes, it will be addressed more tomorrow. MR. KIRK: One question. You commented about the provisional rights issue. Are the provisional rights that are provided, that were provided in the bill that was introduced in the last Congress, specifically S. 1854 and S. 2488, were those along the lines that you're talking about here in terms of providing the provisional rights that you have in mind? MR. FIEDLER: I'm not prepared to address those. Basically what I present there is what we're looking for and similar to what we have obtained in Australia, Japan and the EPO. MR. KIRK: I think that is very similar. MR. FIEDLER: Yes. There are a lot of details as to what you're claiming and what you end up with that would have to be analyzed. So, I haven't looked specifically at those bills to see if they address all of that. COMMISSIONER LEHMAN: Thank you. Next, I would like to ask Robert Armitage to come forward, please. Robert, the CD-ROM version will come. We will all get them eventually. MR. ARMITAGE: My name is Robert Armitage. I'm here on behalf of the American Intellectual Law Association, although the views that I will express here will largely be my own as well. We're located at 2001 Jefferson-Davis Highway in Arlington, Virginia. I'd like to begin by offering to the Patent and Trademark Office and particularly to you, Commissioner Lehman, a round of applause. I think the initiative to move ahead in this Congress with 18-month publication will be a magnificent achievement for the patent system should Congress enact it. The American Intellectual Property Law Association began its active support for 18-month publication coupled with 20-year patent term from filing, coupled with an option for accelerated examination back in May of 1990, when our board of directors unanimously approved a set of legislative initiatives that would accomplish these three objectives. We did not take this step of proposing modifications to the U.S. patent system lightly at all. We had a select committee that met for approximately three years, under the chairmanship of one our past presidents, Bob Benson [phonetic], that consulted leading academics and economists, as well as a wide variety of members of the private sector to answer a simple question. What is it we need to do for the 21st century to make our patent system as competitive, as great an incentive as it can possibly be to enhance the competitiveness of U.S. industry? We believe that the Uruguay Round Agreements Act, enacted by the last Congress, was an important first step because enactment of the 20-year patent term from filing obviously ended what had become a potential for inventors and patent owners to take abuses of the patent system. We hope now that, with this rulemaking and with the favorable reception in Congress that, we can put the remaining pieces of our proposed legislative initiatives of 1990 into effect. Let me say that, in our written statement, we have taken what I view to be a long term perspective on how 18-month publication should take place. We realize fully that there is a relatively short period of time between now and January 1, 1996 and it is certainly our intention to work with you closely to make sure that what is done is something that obviously can be done and can be done successfully within the time interval. It is obviously a very dynamic environment in which we work with electronic filing and other technological changes in the offing. Let me say that, one brief, cogent summary of all of our testimony would be that our bedrock principle is that published patent applications should be searchable and retrievable and citable with the same degree of facility that issued U.S. patents are searchable, retrievable and citable. We see, particularly when we review how foreign patent offices work that, it is the published patent application that is the primary document that is cited by examiners. It is the primary document which patent applicants reference in their patent applications as prior art. To us, that document needs to be available in essentially the same form that issued patents are now available. What this means, of course, is if the paradigm is a paper search system, with search files for the examiner, that there should be a printed document constituting essentially what is in the issued patent in the examiner's search files. Similarly, where the paradigm is the APS system of the Patent Office, this means that the full text of the application is published and the image of the application as published ought to be in the PTO database. In the propose rules, there is a suggestion that a patent application notice might be sufficient in the examiner's shoes. We question whether this is feasible as an alternative either in the public interest long term or in the interest of the examining corps long term. Certainly, like every other witness who will testify here today, we would like to see the PTO to minimize its costs, but we also realize that it is our burden as applicants to help you recover your costs from us. Therefore, what we are proposing in the way of cost minimization is that, the Patent and Trademark Office take every effort it can, by rule and otherwise, to prevent duplicate technical disclosures from being put in the examining shoes and being put in the APS system. If this means requiring applicants to incorporate by reference technical disclosures from published applications and issued patents, we think, particularly as electronic search becomes the predominant form, that this would be an excellent tool for reducing costs. Also, we would urge you not to create a new fee for publication, because it not only costs the office money to collect a new fee, but it costs applicants indeed money to pay a new fee. We would rather suggest that the fees be allocated an increase as necessary to meet any incremental costs, particularly if we are accelerating the timing of the incurring of costs for publication from around the time of issue to closer to the time of filing. Then we propose perhaps the issue fees and filing fees be readjusted. The last important issue for us, of course, is the issue of public access. We believe that it is very important that the patent application be available to the public, that the patent prosecution history be available to the public on request, but in a way that doesn't interfere with the examining process. If this means that files can only be copied by examiners and only copies of the files be made available and that this procedure only be done evenings and weekends and on overtime, we would support it. Obviously, any access to an application file that incurs costs, ought to be borne by the person making the request. I will not go through questions one through fourteen. You will note in our materials that we have answered each of the questions fundamentally and in accordance with the principles I have just enumerated. COMMISSIONER LEHMAN: Thank you very much, Mr. Armitage. If there are no questions, then we will go on to Paul Wolstenholme. MR. WOLSTENHOLME: My name is Paul Wolstenholme. I live at 630 Dushane Drive in Bellefontaine, Ohio. I'm here to speak on my own behalf, as an individual inventor. I've been awarded two U.S. patents and one Canadian patent on a highly successful, low cost grain storage structure. At this very moment, I estimate that over 50 million bushels of grain are being stored in my patented system in this country. My system reduces the cost of storage by 75 percent, benefiting everyone from the farmer to the consumer. The bad news is most of this use is unauthorized by me and, therefore, infringing my patents. I'd like to speak to you today about how third party involvement in a patent examining process would affect middle class, individual inventors like myself. On December 12, 1995, the PTO invited testimony from the public to include comments on procedures for accepting third party submitted prior art, question fourteen. I don't speak from the perspective of a patent law expert, a politician or a special interest spokesman, but from the perspective of an ordinary citizen who invented something of value almost by accident during the course of his normal activities. This perspective is often overlooked but is important and should be considered. Common sense is often lost in the technocratic details. If we lose the critical components of our patent system, I don't think we'll ever get them back. In my view, the ex parte nature of the examining process is critical. I know what it is like to have others to oppose the issuance of your patent. I have been forced to initiate seven patent infringement suits against grain companies like Cargill, ConAgri and Continental. The infringers have asked the court to declare my patents invalid due to prior art, even though that prior art had been fully considered by the PTO on reexamination. Their actions forced me to pay attorneys to write a total of four legal briefs in opposition to their motion for summary judgment on non-validity. This latest 21-page brief filed on November 30, 1994, I was billed for 45 hours of preparation time and it cost me $6,750 for this one brief in opposition to the motion. On February 10, 1995, the court ruled that my patent was not invalid due to the prior art. If I had not been able to finance the rebuttal, I would have lost by default. The only reason I was able to bear this defense is because I have strong patents in hand and I've been able to attract investors to buy a piece of them. I am currently working on new systems that would result in even more savings to our consumers. I feel that the cost of patent prosecution under the new system would be out of my reach. If potential infringers can offer prior art and arguments to defeat your patent before it is even issued, investors would be impossible to find. Foreign nations and large corporations will monitor all the applications as they are published at 18 months. When they find one that is of value and owned by an individual of moderate means, they will unleash their attorneys and the results will totally depend on whether you have the money to pay an attorney to argue your case. The unintended result would be that, people like myself would be well advised to stay out of the invention business. Thus another unintended result would be that, American citizens are deprived of the efforts of a large portion of current American innovation. The framers of our Constitution had it right when it came to encouraging invention, but it seems our leaders today just don't get it. When I contemplate a patent system that makes our application public after 18 months, I see an inventor-unfriendly system. Illustrate my point, imagine being on a surgery table for a heart transplant. You look at your doctors and are comforted by knowing that they are highly competent and dedicated to saving your life. Then you look at another team of competent doctors standing on the opposite side of the table, highly paid by a third party and equally dedicated to the opposing outcome. [Laughter] MR. WOLSTENHOLME: What inventor would put himself in this situation? What investor would support him? I respectfully recommend that if the 18-month rule is implemented that third party actions be severely restricted. COMMISSIONER LEHMAN: I thank you very much. That is really one of the questions that we have, what kind of protest procedures should there be. I want to be clear that your opinion is there clearly should be virtually no protest procedures. MR. WOLSTENHOLME: Not being a patent attorney, I don't know how to comment to that, but I think that it is something that the PTO has to consider. COMMISSIONER LEHMAN: Yes. Your primary concern is that you not be subjected to pre-grant litigation? MR. WOLSTENHOLME: Yes, sir. COMMISSIONER LEHMAN: Thank you very much. Next, I'd like to ask William T. Fryer to come forward, please. MR. FRYER: I have a few handouts for the class. [Pause] MR. FRYER: Commissioner Lehman and other distinguished members of the Patent Office staff, it is my privilege to speak to you today. My name is William T. Fryer, III. I'm a professor at the University of Baltimore School of Law. The address is 1420 North Charles Street, Baltimore, Maryland, 21201. My work telephone number is (410) 837-4553. I'm speaking today with my own views. I do not represent any of the organizations with which I am involved. I will skip over my background that is in my paper. Generally, I have been involved in the development of design law. Particularly, I will mention thought that I have been involved in the process that is going on now concerning the Hague Agreement, the revision of the Hague Agreement on industrial designs. With that background, I can perhaps give you some insights that might not be available. I think I'm adding another question to your list or perhaps I'm asking for clarification on a question that is implied. My recommendations are that the Patent and Trademark Office should not publish design patent applications as a part of the proposed 18-month publication plan. COMMISSIONER LEHMAN: Professor Fryer, I think it is important to understand that the legislation which was introduced in the last Congress and that we contemplated introducing to date does not cover design patents. So, your question is already answered and affirmatively. We're not going to do that. MR. FRYER: I'm very pleased to hear that and I had that general information, but I felt it was important to lay a foundation for this position. I think there was some question in some of the earlier legislation that did not clear state whether there would be publication of design patent applications. I do appreciate the fact that this patent office is now on top of this matter. For that reason, I have tried to be very brief in my paper and just make a few points. The most important point, I think, is that, when we have been discussing patent law harmonization over the years, I think generally speaking we have been talking about technology inventions. In the context of WIPO's discussions, which I participated in to some extent, their discussions -- and there is even a definition, a clarification in the notes that say that it is not, that these discussions are not relevant, are not to be applied to design patents and utility models. It is my view that the discussions that are taking place now at WIPO in connection with the revision of the Hague Agreement are the most important preliminary steps to determine just how to change the design patent system. One of these issues that we are discussing at these meetings is the question of secrecy of the design registration. So, the question of publication is involved. There is also an element of pendency. In other words, when will things be published? I've given you a chart from an article that will be published in the "University of Baltimore Intellectual Property Law Review," which points out that, in general, once an application is filed at WIPO, it is published in three months. So, I am actually saying to you that we will probably have in the long run a publication system of maybe six months for design patents. But I think we should wait for that opportunity. One of the continuing problems, I think, is when we speak, we speak of patents. We speak generally. They cover design patents, utility patents and plant patents. I think we imply and I think we should recognize in these discussions that we are talking about utility patents, possibly plant patents, but we are not talking about design patents, I believe. I think that the organizations that have had these debates and had these discussions have consciously excluded that area, if not literally excluded it. So, my recommendation then and my experience is that any legislation that we file clearly state the exception, which you did with regard to provisional applications. So again, I think you are on track. I'm so glad. I will make another few comments that are not in my written records on the issues that you really came here to listen to. In general, I support 18-month publication with the right to control the publication and to allow completion of the examination, at least, to the final rejection. My reason for that is, the global picture of information flow now requires us to have that information and we are getting it overseas. So, there is a global dimension to this and I think it's important that we have this. I am concerned about what Mr. Donaldson from TI said of the inequitable conduct. I'm very concerned about that in terms of making special an application. This is going to be the trade secret owner's only approach. This Monday night in class, we picked out a current development, a General Electro case, which had to define what a formal search was. There is a real trap in that area about whether you have performed the steps necessary under the present rules to make special. I suggest you take a look at the requirements that must be met for someone to make special, one of which is that you must conduct a search. In that case, that Federal Circuit case said that that particular patent attorney did not conduct a "formal search," within the well meaning understanding of that term, although he did go around and ask people and did check a few things. Admittedly, it was not a strong case for the patent attorney. I think if you could delete that provision, that requirement for a mandatory formal search, that you perhaps might eliminate one of the obstacles Mr. Donaldson had mentioned. That's essentially my statement on all the issues. Thank you very much. COMMISSIONER LEHMAN: Thank you very much, Professor. Next, I'd like to ask Professor Harold C. Wegner to come forward, please. MR. WEGNER: Thank you, Mr. Assistant Secretary, Mr. Deputy Assistant Secretary, Mr. Assistant Commissioner of Patents, your solicitor and Mr. Kunin. I consider it a privilege to address this hearing. One of the highlights of this administration has been the sunshine aspect of this administration, with unprecedented numbers of opportunities for those of us in the public sector to speak. I should identify myself first. I'm Harold C. Wegner, professor of law, of the George Washington University National Law Center, Director of the Dean Dinwoody Center for Intellectual Property Studies and I'm counsel to Foley and Lardner. My address for purposes of this hearing is, Foley and Lardner, Washington Harbor, Suite 500, 3000 K Street, Northwest, Washington, D. C., 200007. All of my views are personal, on my own behalf. I reserve answers to all of the fourteen questions in written remarks. Two areas deserve special comment, question ten, dealing with the publication of the entire application and number fourteen, with what to do with protests. Let's dispose quickly of number ten. The entire application should be published. Most of the requests for information will be satisfied by looking at the full application. A bureaucratic nightmare will be created if we don't have these published. There should be totally free access to the full contents of the application, free in terms of the scope of the request, but it should be at a fee, a user fee. I endorse the remarks of Mr. Armitage who said, if has to be on weekends and at a fee for the user so we don't slow the examiner down, so be it. It is absolutely, totally vital that we have full access. It is ludicrous to think of having just a printed application with no access. Otherwise, we don't need the system at all. We can go to Europe and get the parallel patent applications published in Europe and we are wasting our time. So, 18-month publication implicitly means access to everything. Let's talk about number fourteen. Everyone in this room who has testified expresses an implicit or explicit concern that there would be time-consuming protests that would bog us down. Nobody wants to permit games. Nobody wants to permit sandbagging of prior art. Nobody wants to let third parties destroy prosecution before the examiner. You have recognized this in your questions and in your discussions. What we must do is strictly limit what can be filed. I would go so far as to have a very strict limitation that prior art could be submitted, but accompanied only by the briefest statement identifying the prior art and what is relevant. This would be followed by totally ex parte prosecution, with 0.000 percent chance of intervention by a third party. By combining these features, you would emulate the practice of the European patent office, where interventions before grant are rare and unwise for a third party. To put your powder exploded in an ex parte proceeding before a grant is to shoot off your weapon before the grant and then you have nothing left for an opposition. So, if we look at the experience of Europe, I think we will completely, almost completely avoid any problems of protests before grant and we must have careful rules to do so. We need to modify Rule 56. Mr. Donaldson made a very good comment. Now, in the overall picture, we should be changing Rule 56. Excuse me, may I take a glass of water? COMMISSIONER LEHMAN: Certainly. [Pause] MR. WEGNER: In the overall scheme, we should be getting rid of Rule 56, getting rid of this curse on patentees and litigation where over 90 percent of patentees are accused of fraud, sham charges, real charges and other charges. The public should protect itself. A combination of 18-month publication and a post-grant opposition will permit the public to take care of itself. This is a far superior system. We should move in that direction. Short of that, we should modify Rule 56. I share Mr. Donaldson's concern that, after allowance, prior art may come in. I would say that if prior art is submitted after allowance, that Rule 56 should be modified. The third party prior art can simply be placed in the file. You discharge your duty of disclosure under Rule 56 if you choose to take the patent out and let the public take care of itself through a reexamination or opposition or whatever and enhance the procedures we are going to provide. We talk about a heart transplant. Really what we have now with secrecy before grant, we have heart transplants performed by charlatans, sometimes by good people. I would rather have sunshine in the operating room. I would rather have public scrutiny. We need to recognize that maybe 90 to 90 plus percent of patent attorneys are excellent. The one or two percent who are not, we need to expose them. Mr. Riley, I think, should apologize for his slanderous comments about the corps generally. The submarine patents, the one where we pay a submarine patent tax, the major problem is due to refilings by applicants. Yet there are occasionally bad actors inside the office. The way to weed this out is through the bright spotlight of open prosecution. We don't need sanctions. I think that goes without saying. The commissioners are able to redistribute work and retrain, whatever else where necessary. Again, I think on access, to return to access, access to everything. Sunshine for everything is the best policy. I would go even further and say that, the day that the law passes, there should be access to pending applications, not publication of cases already on file. One of the critical weaknesses in the office now, despite the excellent reforms made by the assistant secretary made in biotech, the most dramatic, wonderful reforms, still we have a cloak of secrecy governing the Board of Patent Appeals and Interferences. Virtually zero board opinions are now published by the Patent Office. Those are the statistics for 1994. In previous years, there may be ten to 20. Thousands of cases are available. They could all be put on line. Then patent applicants, in seeking advice whether to appeal or not, could search by a whole text of individual examiners. What is their record on this issue? Has the examiner made this rejection and been affirmed? If he or she has been affirmed, can we work around this rejection? Can we challenge it? Can scholars scrutinize, criticize, praise? This secrecy is one of the strong weak points remaining that has been inherited in this administration which has yet to be dealt with. So, I would take the opportunity of using this legislation to open access to everything. Everything that has been on file for 18 months should be made open and we could make radical and great reforms at the board. Finally, let's talk about strengthening America. This proposal is not about copying foreign systems. It's not about weakening American systems. It is about strengthening the United States' patent system. It is about simplifying bureaucracy by getting better prior art available, by getting the opportunity for interfering applicants to recognize the existence of a potential interference and bring it to the attention of the office. We are simplifying interferences. This is about simplification. It is about parity. Just yesterday, it seems, foreign systems started to introduce the 18-month publication system. So, Japanese get native language publication at 18 months. Americans, if they are in big companies and can afford Durwin's Services and other services to get these translations from Japan to get information about American inventions that have been filed in Japan, they may be all right. The individual inventor can't afford this. This is about parity with foreign systems. It's not about weakening our system. It's about redressing something that happened yesterday. Yesterday was 1964, when the Dutch introduced the system. Once any system has an 18-month publication, with native language publications in their home language, then why should that one country have the benefit over the rest of the world? It was only a couple of years, 1968, that Germany emulated this. Then Japan followed. Well, we're only 30 years behind the times, 31 years now. So, I applaud you Assistant Secretary Lehman for catching up. Thank you very much. Any of you have any questions? Yes, Mr. Kunin. MR. KUNIN: I just have one clarification. You were talking about modifying Rule 56 and I thought I heard you say that you were talking about after allowance. There was a further statement made earlier about further publication. Did you mean after allowance or after publication? MR. WEGNER: Well, I think what we're concerned with, I think if I am prosecuting an application, I would welcome frankly getting every bit of prior art information, if it is at an early stage, because particularly if it is sham prior art, this strengthens my case. Now, I can go and say, Mr. Examiner, this third party says that this is dynamite prior art. Look how weak it is. Look how strong my invention is. What would concern me is where the third party sandbags the prior art and waits until it is procedurally too late to submit it under the present rules. So, I think that has to be addressed. Now, the overall scheme should in the long range, in my opinion, be to abolish Rule 56 all together, abolish inequitable conduct all together, but only at the time when we have not only 18-month publication, but a very strong, hardball inter-parties opposition system in place so the public can take care of itself. The reexamination law doesn't get quite that far. Various bar groups and interested circles are studying the possibility of an opposition system and, hopefully, that time is not that far off. But on an interim basis, we must address Mr. Donaldson concern. It is a very valid concern. Also with respect to the trade secret issues, that is too much to address in the time today, but it is another issue that has to be addressed and can be addressed. COMMISSIONER LEHMAN: Thank you very much. MR. WEGNER: Thank you very much, Mr. Assistant Secretary. COMMISSIONER LEHMAN: Next, I would like to call Louis D. Maassel. MR. MAASSEL: My name is Louis Maassel. I'm at 12716 Buckingham Drive, Bowie, Maryland. The telephone is (301) 464-4006. I am currently a consultant for the World Intellectual Property Organization, Geneva, Switzerland, a specialized agency of the United Nations. I am here on my own behalf and my comments are my own. Most of my comments, I wish to direct it to something that was really not discussed in the notice nor by any other people here this morning. This relates to the Patent Cooperation Treaty and international applications. I would like to submit the following observations so that they can be considered in developing the procedure and regulations for the publication of the U.S. patent applications soon after 18 months from the priority date or original filing date is no priority is being claimed. My comments relate mainly to international applications filed under the Patent Cooperation Treaty, international applications designating the United States of America and international applications entering the United States' Patent and Trademark Office as a designated office 20 or 30 months after the priority date. As you know, the Patent Cooperation Treaty has been in effect for the filing of international applications since June 1, 1978, over 16 years. The PCT provides for the publication of all international applications promptly after the expiration of 18 months from the priority date of that application, subject to the reservation of PCT Article 64(3). This reservation was taken by the United States of America and provides that a PCT contracting state may declare that, as far as it is concerned, international publication of international applications is not required. The result is that, only those pending international applications which designate only the United States of America are not published by the International Bureau of the World Intellectual Property Organization promptly after the expiration of 18 months from the priority date of that application. I should note that the PCT defines the priority date for the purpose of computing time limits to mean the earliest claimed priority date or if no priority of an earlier application is claimed under the Paris Convention, the filing of the international application. The matter of the United States of America withdrawing its reservation under Article 64(3) should also be considered now, since the reason for the reservation, no 18-month publication in the U.S., will no longer exist. Any such withdrawal becomes effective three months after the day on which the Director General has received the notification. Therefore, any such withdrawal should be forwarded three months prior to the effective date of the 18-month publication procedure in the U.S. PTO. Note that, PCT Rule 48.5 currently provides that if an international application is not published due to Article 64(3), the U.S. PTO is required to notify the international bureau promptly after effecting national publication that is granted by the U.S. patent. When a national application or a patent -- the United States the international application will nevertheless be published by the international bureau [sic]. So, when the U.S. patent issues, WIPO is to be notified and WIPO will then publish. Almost all international applications designating the United States of America as one of the countries in which the patent protection is desired or published after promptly after the expiration of 18 months of the priority date [sic]. Between 1978 through 1994, 207,696 international applications were filed worldwide. In 1994, 34,104 international applications were filed worldwide. Of these, 20,032 designated the United States of America or 58.74 percent of all filings. I point this out to indicate that publications promptly after the expiration of 18 months from the priority date of the applications has occurred for many years for United States' patent applications and have, therefore, been publicly available for copying of claims for interference and the citation of prior art by third parties. If the international application is filed in Chinese, English, French, German, Japanese, Russian or Spanish, the international application itself is published in that language in which it was filed. International applications filed in other languages are published in English. All published international applications contain the title, abstract, search report in English. Then I include a table which indicates the language of publication. Basically, 68 percent are filed and published in English, 14 percent German, six percent Japanese, five percent French, one percent Russian, .4 percent Spanish, .3 percent Chinese. Other languages such as Dutch and Swedish are published in English and amount to four percent. Therefore, a total of 72.5 percent of the international applications are currently published in their entirety in English. This is relevant when the U.S. PTO considers whether to re-publish any, all or only non-English international applications when they enter the international phase at 20 or 30 months after the priority date. It should be noted that the English version of the "PCT Gazette" publishes all of the bibliographical information from the request form, figures if the application contains drawings and the title of the abstract in the English language. This provides the basic identifying information for all published international applications to the public in English. Consideration should be given as to whether the U.S. PTO official "Gazette" should include basic information such as the title of the invention, the name of the applicant, claim or abstract, et cetera, at the time of an international application designating the United States of America is published by the international bureau. Such a practice is currently provided by the European Patent Convention in Article 158, which provides that: "Publication under Article 21 of the Patent Treaty of an international application for which the European office is designated as a designated office shall, subject to paragraph three, take the place of the publication of a European patent application. It shall be mentioned in the 'European Patent Bulletin.'" That is to say, the European office does not re-publish them. However, it's "Gazette" includes a notice identifying the application and the fact that it has been published by the international bureau. As to the questions raised, really no comment on question one. On question two, on the standard application format. It should be noted that the PCT provides in Article 27(1) that, no national law shall require compliance with requirements relating to the form or content of the international application different from or in addition to those that are provided for in this treaty and the regulations. The provisions for the physical requirements of the international application is set forth in PCT Rule 11. The current U.S. PTO rules of practice take these provisions into account. To require international applications entering the U.S. PTO as the designated office to meet different or additional formal requirements would be contrary to the Patent Cooperation Treaty. Also note that PCT Rule 49.5 provides that no designated office shall require that the translation of the international application comply with physical requirements other than those prescribed by the international application that is filed. Although the PCT provisions do not control what a patent office require in non-international applications, it seems to be preferable to have only one set of formal requirements for patent applicants to follow and that these requirements be that that are internationally used so that U.S. applicants need not reformat their applications for foreign filing and that foreign applicants need not reformat their applications for filing in the U.S. PTO. It should also be noted that the PCT regulations may be changed by action of the PCT Assembly, however any substantial change would probably not be acceptable to the 76 other member countries of the PCT who have all changed their requirements to be those of the PCT. Rule 11.5 requires that the size of all sheets of an international application be A4, that is 29.7 by 21 centimeters. U.S. PTO rules of practice are more flexible and provide that the range of sizes for international application sheets and drawings [sic]. The sanctions under the PCT are that, if the receiving office believes that the international application does not comply with the prescribed formal requirements, it invites the applicant to correct the defects within a prescribed period which may be extended, failing which the application is considered withdrawn. That is abandoned in U.S. PTO terminology. The PCT also requires that the description claims drawing as an abstract, each commence on a new sheet. No surcharge is made for any correction of any lack of compliance when a time limit for correction is set. COMMISSIONER LEHMAN: Mr. Maassel? MR. MAASSEL: Yes. COMMISSIONER LEHMAN: We have to keep things to ten minutes, because it wouldn't be fair to the other individuals who are here. We have your complete set of comments. So, we will study those. MR. MAASSEL: May I ask how much time I have consumed? COMMISSIONER LEHMAN: You've consumed all your time. MR. MAASSEL: The major reason I asked is because I presented this as oral mainly to inform other people of some of these concerns that they may wish to comment on. COMMISSIONER LEHMAN: Well, this will be available to other people as well. As we indicated at the beginning, the transcript will be available and people will have access to it. MR. KIRK: And we have copies of all the submissions. COMMISSIONER LEHMAN: We have copies of all the submissions too that you can get here. AUDIENCE MEMBER: Are you going to break for lunch? COMMISSIONER LEHMAN: No, we are going to continue straight on through. It may be if we don't finish before 12:30, then I will have to leave the rest of the hearing for my colleagues. We will try to move right along. Next, I'd like to call Francis Vitagliano. MR. VITAGLIANO: My name is Francis Vitagliano, from Boston, Massachusetts. The address is 117 Revere Street. I am a private inventor. The views I present today are only my own and I thank you for the opportunity of coming here today. I have received one patent with a co-inventor and we are working with others. We have looked at the issue of the 18 months. I have looked at the fourteen questions and I notice that you did ask us to try to stick to that. I will address question number three: What information concerning application should be published in the "Gazette?" As a private, independent inventor, the only information I would be happy about having you publish is the fact that an application came in from somebody, somewhere on that day. As an inventor, we tend to answer questions that others have not asked. My experience has indicated that the 18-month publication rules and the information that would be published about it might very well not add to the fuel that President Lincoln had talked about, but rather throw cold water from a private inventor's point of view. We are concerned, my colleague and I, that our application, once it goes in, if it were to be published in 18 months, our names would be published. We have not checked out the coordination of publishing the entire application with the Privacy Act. Some 20 years ago, I worked at the National Security Agency and I've been quite sensitive to those issues. I've heard distinguished colleagues in the area talk about the research that they can do in CD-ROMs and what have you. As private inventors, our research and development budget is quite constrained. Here, in 1995, we've had to cut it back a little bit, because of the increase of the postal rates from 29 to 32 cents in '95. Our governmental relations budget was taken up entirely by my plane ticket today. Our patent research is done, however, at the Boston Public Library and we appreciate the fact that the system is set up to let us get into the system for free. I have spent about 12 or 15 years, along with Professor Modigliano [phonetic] who is my co-inventor, doing research on that. We have retained, we believe, competent, capable patent attorneys, but we try to do as much of the work as we can. We obsessed over the issue of when we filed that patent of whether or not we should also file overseas. The market was rather large for our patent and we knew it had some value. We obsessed over the fact that it was going to be published when applied for and that was a real issue for us. So, we delayed up until the last day and we made some changes. We would have made changes in our application in the United States if the rules had been changed and said that the application would be published. COMMISSIONER LEHMAN: You did file overseas? MR. VITAGLIANO: We did finally file overseas, but because we had already had a little bit of interaction with the Patent Office here in the United States, we changed the claims. What happened is, as a result of the interaction with the Patent Office in the United States -- by the way, it's just been extremely responsive and very positive. We changed our claims. We took one out and we're now working on that separately. It would have been detrimental to our process and our licensing process, in finding a large company, if that had already been published. That is a very, very important issue to us. COMMISSIONER LEHMAN: If subsequent to the 18 months you still change your claims, you can hold off on that decision. That's not in your 18-month publication. I mean, I don't understand the difference between -- you published abroad at 18 months. MR. VITAGLIANO: Right. COMMISSIONER LEHMAN: If you were published in the United States at 18 months, you are apparently subsequently making these changes in claims. What is the difference between if we had an 18-month publication and all the other countries you have operated in? MR. VITAGLIANO: Okay. The issue is, if we could get a response, a guaranteed response for the Patent Office within 18 months so that we could determine which claims we are going to take out or expand, then I think we could feel comfortable in having that published. We were able to make those changes as the result of a very qualified examiner. He asked the right questions and challenged us in the right places, so that we changed our claims, took a major one out, having to now rework that. When we filed abroad, that filing did not include that claim. We would have been hurt if that claim had been published. So, we have taken that out. One of the things that -- I want to do it in summary, because I was very happy you gave us only ten minutes to do 14 questions, but I really like that from a governmental agency. If at all, if there is anything I think from a private inventor's point of view that we can do to help the Patent Office move along your reaction time so you can begin to either grant or absolutely deny patents within 18 months, that would be very helpful. The second best answer is a quick no. So, in summary, I'd just like to say that the 18-month publication rule, no matter what is published, could very well increase the number of inactive private inventors in the United States. COMMISSIONER LEHMAN: Thank you very much. MR. VITAGLIANO: Thank you. COMMISSIONER LEHMAN: I think that point about helping us to streamline the process is a really important one. Commissioner Goffney is heading up an effort to reinvent the patent operation to try to apply modern business process, engineering techniques to an analysis of the office. At some point, he will want to have hearings and get some ideas from people. Thank you very much. MR. VITAGLIANO: Thank you. COMMISSIONER LEHMAN: Next is Glenn Wise. MR. WISE: Commissioner Lehman, ladies and gentlemen, I am here representing myself and two ad hoc groups that have formed in the search room. They were formed by what I will call the nuts and bolts guys that have to do the outside searching, somebody equivalent to the examining corps on the inside. We are the liaison between the PTO and corporations, firms and individual inventors who don't want to come down here or can't come down here. My address is 6450 Georgetown Pike, McLean, Virginia, 22101. I am representing not only myself, but these two ad hoc groups. I'm not going to read the entire ad hoc group name, because it is rather long. The first group is for having both the application as filed in the classified files as well as the OG notice section. That is a second ad hoc group which is against imposition of access fees to obtain the file history or electronic equivalent thereof should you be peeped by an OG notice. I might start out by using a very trite expression that, those who ignore history are bound to repeat it. We may be about to do that. I'll mention three different occasions where the Patent Office has started something and then backed off. In 619OG258, back on 1/25/49, the Patent Office, then the Patent Office published a notice whereby you could publish abstracts of applications. That went on for a while. I'm not able to tell you exactly when it stopped, but I know now that maybe one in 250,000 documents in the office is an abstract only. This will all be submitted with my written testimony on Friday. So, they decided to go to what I'll call option two in the "Federal Register" notice, whereas we are requesting options two and three and then they backed off from option two later. Later on, they decided to do the space requirements, which I'll address a little later. We will take the jumbo patents and instead of giving you the jumbos, we will give you one sheet, which you can see throughout the Patent Office now. But after several years of complaining, we told them that that just wasn't sufficient notice for search purposes. So now, we have them up to a magnificent normally five sheets and depending on the particular application involved, sometimes more. What they promise now to give us is the front sheet, the first two pages of specifications and all the claims. The one I have in my hand has a total of seven pages, which it took to do that. So, in both cases where the Patent Office was considering option two only, they have backed away from that. The third situation I'll mention where they backed down -- that was in the early, primitive days of microcapture. They had the machine tool arts on microfiche. Within about two years of its institution, everybody knew that it was bad news. Both in and out and the outside was as strong about trying to get rid of it as the inside, but it took about 15 years to get that microfiche back on paper and full copies of the patents, during which time we suffered through unreadable 'fiche and the like, I'm just suggesting that, we are at a point now where it is decision making time again if this legislation goes through. Let's not repeat the same mistakes. We have different search requirements than the corps on the outside. We have to do what are called infringement searches, which the examiners do not do. We have to study claims. I am submitting examples of three patents into the record which on their face would appear to relate only to apparatus. Here is one of them. The first seven claims are to apparatus and the title is apparatus. The claim made is a method. If you give me one sheet with just what is on that one sheet, I'd never know there was a method claim in that. The documentation classification system is based on claim disclosure. The subclasses are formed by reading the claims in the active area at least and they are put in the subclasses based on claim disclosure. Without that, we'd almost have to check every patent in some subclasses by taking the abstract, if it went that way and going to the file room or wherever to get the full disclosure, at least, as filed. So, we're not asking beyond the as-filed in the classified files, but we do need that to be able to do our business. Now, whenever I mention this around the corps and I see a lot of people every day, not only in the corps, but you gentlemen sometimes and others in the hierarchy, I get the answer, well, where are we going to put it. I've worked a long time with the PTO on various problems and I have suggestions and we will submit that, as to where you can put it without involving any more floor space than you now have. Another thing is that I think some people have overlooked. If you publish an application and then it goes abandoned, it's still going to be prior art forever. So, what we're talking about here, if my recollection is correct, you issue now about 65 percent and abandoned about 35. Is that correct, Mr. Kunin? I think under the publication system the abandonment will be less at 18 months, because some people won't even have an action. They won't even know. So, I would just guess off the top of my head that maybe 25 percent will go abandoned and I think that's probably high. But at any rate, 75 percent of what is filed, let's say, is going to have to go into the files somehow, either option two or option three, preferably option three. Based on that, it just seems to me that since the patent is going to go in one of the issues anyway, you might as well go the other half mile and put the whole thing in. Now, if anybody has seen recent reexamines, they are kind of like the re-issue in that, whereas, new matter is added where they Italicize it and if it is taken out, they put the brackets around it as most of you are probably familiar with. I believe myself that the ideal way to do this would be to put the as-filed application in and then put the changes in, perhaps, on a different color of paper, like the reexams I've read now are pink. Just attach, in this case, just three sheets to what is probably a rather large reexam. I don't know how big it is, because I didn't get the whole patent. It would seem to me that that would make sense to do it that way. I might close just by saying, if we go back to the founding fathers, one of them had some expressions that were pretty good. Mr. Franklin was that gentleman. He said that a job worth doing is worth doing well. I hate to almost say it, it's so trite, but I think that's where we are at the moment. I thank you for your time and I will be submitting testimony. I have one more thing to say, excuse me. These ad hoc groups will be submitting signature sheets stating their position as to as-filed and access fees we have been circulating two or three weeks. So, there are scores of signatures. Most of the people on what we need in the search files are professional searchers. A lot of people on no access fees are photocopy personnel or service personnel who don't have all the money in the world. Often times, an access fee might even kill their ability to get a file that somebody requests them to copy. I know many occasions where especially the younger people are waiting for the check from the last job to come in before they can do the next job. I'm not kidding. Thank you very much. COMMISSIONER LEHMAN: Thank you, Mr. Wise. Next, I'd like to ask Terrence Brown to come forward, please. Is Mr. Brown here? If not, Jay Spiegel. MR. SPIEGEL: I'm H. Jay Spiegel. My address is 703 King Street. That's in Alexandria, Virginia. I'm in private practice as a patent, trademark, copyright lawyer and the views expressed are my own. By brief background, I was a primary examiner in the Patent Office. I have been in private practice for over 12 years as a patent, trademark, copyright lawyer. I also have the perspective of being an inventor. I hold five United States patents. Some corresponding foreign patents have some applications pending on diverse inventions including a football kicking tee, which was used by 23 NFL teams last year, including eight times by the San Francisco Forty-Niners in the Super Bowl. [Laughter] MR. SPIEGEL: And incidentally, no times by the Chargers. [Laughter] MR. SPIEGEL: I bring this perspective and I believe it gives me a perspective to discuss some of the issues which are before the Patent and Trademark Office on the issue of publication. I might say from the outset that, while I would characterize myself as being generally against the concept of publication, I realize that it is beyond the scope of this hearing to discuss that, because I think at this point it is a fait accompli. We are going to have publication and so we have to figure out how to best operate that system. I believe it is important for the United States Patent and Trademark Office to understand that, when it comes to reviewing published applications, I would think that the predominant reason for review of those applications by the public is to determine their status as prior art. Of course, a patent is not enforceable until it is a patent. When it is an application, it has claims. As they are filed and as the prosecution goes along, those claims are amended and cancelled and added. I would think that the primary reason why a member of the public would want to have access to a pending patent application would be for its value as potential prior art. Given that supposition, I think that the Patent and Trademark Office would be doing itself a big favor if it published as much as the application as possible at the publication time. I think that because of the fact that the claims are not quite as important as the disclosure when the application is pending in terms of its value as prior art, if the Patent and Trademark Office wants to save some money, it might not be necessary to publish every claim which is in the application at the time that it is determined that publication is going to take. For example, one could limit the publication of claims to each independent claim which is of record at the date on which we have determined that the subject matter in the application is going to be filed. For example, if it is going to be at the 15-month mark, I think that would be of the greatest value. It is important for the Patent and Trademark Office to recognize that when people are reviewing these files, when they are patented files, they are normally reviewing to see if there has been fraud perpetrated on the United States Patent and Trademark Office, if there are any mistakes in the record which would raise issues concerning the validity and also to see what estoppels there are in the record which would limit the scope of the claim coverage. Again, these are issues which are more pertinent to when the patent is actually issued than during the prosecution. I think that if the maximum amount of information from the patent file on the date which is decided is actually published and is available for the public to review, that will limit the number of members of the public who will actually desire to actually review the patent application file. I think that under that sort of a system where the most information is disclosed to the public at the publication time, it would not be necessary to create a separate area to allow review of pending patent applications. I think that under those circumstances, the Patent and Trademark Office would discover that the system which currently exist where people with appropriate powers of attorney can go right to the examining group and review a pending application file could also be employed in this case and perhaps the files would be given some sort of a special designation by stapling or somehow attaching something to the file so that the clerks in the actual examining group would understand that this is a file which the public has access to. Concerning the protest aspect, which seems to be a topic which is quite popular in the discussion today, I think if the Patent and Trademark Office limited the time period after the date of publication within which other members of the public could reveal prior art which was within their knowledge to the Patent and Trademark Office, that would only be allowed to limit their comments concerning the relevancy of that prior art. Then the prosecution would continue between the actual applicant and the United States Patent and Trademark Office, with the applicant being given some opportunity to comment on the relevancy of that prior art prior to the issuance of a final office action or if a final office action has already been issued, giving that member, the applicant the opportunity to comment on the relevancy of the prior art. I think that would be something which could balance the interests in an appropriate way in terms of giving the public an opportunity to give comments while doing the minimal disruption to the actual patent application prosecution. I have submitted a letter, which I addressed to Jeff Nase. I think in the interests of the economy of time, I think that I will leave it at that. You can go on to the next speaker, unless there any questions. COMMISSIONER LEHMAN: Thank you very much, Mr. Spiegel. MR. SPIEGEL: You're welcome. COMMISSIONER LEHMAN: Frampton Ellis, please. MR. ELLIS: Most of my comments concern tomorrow's subject matter and I'll make them then. COMMISSIONER LEHMAN: Right, thank you very much. Rene Tegtmeyer is our final witness. MR. TEGTMEYER: My name is Rene Tegtmeyer. I am associated with the Law Firm of Fisch [phonetic] and Richardson. My address is 601 Thirteenth Street, Northwest, Washington, D. C., 20005. I am here today to present the views of the Section of Intellectual Property Law of the American Bar Association in response to the request by the Patent and Trademark Office for comments on 18-month publication. The section's views are set forth in the form of a number of resolutions that were recently approved by the section and in a report that accompanied those resolutions, which was also presented to counsel for the section, which approved the resolutions. The views, I should say, are the comments that I am submitting here today. They have not been approved by the Board of Governors or the House of Delegates of the American Bar Association. They do represent, however, the views of the Section on Intellectual Property Law of the American Bar Association. The comments that I have given to you in the form of resolutions have accompanying them a report, which I mentioned before. In that report, each of the fourteen questions that are posed by the Patent and Trademark Office have been individually addressed. So, you will see in writing there the response and a formal set of comments will be submitted by Tom Smith, the Chair of the Intellectual Property Law Section by mail which will reach you before the February 17th deadline. I'm going to give some abbreviated comments of what is contained in the paper presented to you and in what will be presented to you by Tom Smith. I'm going to do so by addressing three broad issues or broad areas of questions. One is publication. A second is a protest question and the third is what I'm calling under the heading of service. With respect to publication, there are several things that ought to be taken into account in deciding what to publish and what should be made accessible to the public. I think several speakers have already mentioned the fact that the document that is being published at 18 months will be prior art. In fact, it will be prior art under Section 102(e) as of the filing date of the application in this country. Accordingly, information needs to be published which will support the use of that document as prior art. Secondly, the document being published broadly is new technology, new information, probably in most cases being published for the first time with 18-month publication and parallel possibly with publication in other countries. So as such, both as prior art and as a publication of technology, the publication should be such that it is disclosive to the public, to the users of those documents. That means in effect what some of the earlier speakers have said, a printed publication, one that is feedable into databases, accessible to the public and the like. It is also a grant of provisional rights in the situation where the claims that ultimately issue are substantially the same as those which are published. So, what gets published needs to be suitable for that purpose as well. In other words, the publication should include a readily accessible disclosure in printed form of the claims which create the provisional rights or may create provisional rights. So, that is another very important aspect of the publication. In regard to the question of the availability or accessibility to biological deposits, again, consideration has to be given to the fact that only provisional rights will accrue with publication, which means an injunctive relief against other parties who are practicing the claimed invention in the publication will not be able to be stopped. Therefore, the section's views are, that access to the biological deposit should be restricted much in the manner that they are in the European patent office. That is that, parties that want to have access to the deposit should make a certification that it is for experimentation only and, if requested, be limited to access to third party experts. The second issue which I will address is protests. I think most of the earlier speakers have already addressed it, but protest should be limited in time and in such a way not to interfere with the process of the examination. That is very important because of the 20-year term that may be running. In some cases it may be important at that stage to the applicant so the protest should be kept to a minimum for that reason and also because they offer an opportunity to harass or interfere with the ultimate issuance of the patent and with the enjoyment of that patent in as much of its term as possible by the applicant. I think a question was raised as to whether there should be any stays. I think the answer is obviously, no, there shouldn't be any stays for consideration of protests. Under the heading of service, I'll just briefly address a few key points. This just means the views of the section are to allow applicants as much flexibility and make procedures as simple as possible. That means that it should be possible to abandon the application as late as possible before publication. The first office action should be received as early as possible, preferably within 14 months of the U.S. filing date or 14 months, I should say, of the U.S. filing of a complete application or a provisional application, which may be difficult in the case of provisionals. That will give the patent owner an opportunity to amend claims, which will go in the published application and an opportunity to abandon if that is the preference. The ability to submit late priority claims should be possible, but with limitations obviously. I think in terms of fees, they should be spread over the various existing fees if possible and should be reasonable if a separate fee is set at the time of publication. I think that is a summary of the views of the section. I'd be happy to answer any questions. COMMISSIONER LEHMAN: Thank you very much, Mr. Tegtmeyer. If there are no questions, that brings us to the end of our scheduled witnesses. Is there anyone else here who would like to present testimony? [No response] COMMISSIONER LEHMAN: If not, let me mention that the written comments can be received until February 17, 1995. A transcript of this hearing, as soon as it is available, as well as the written comments that we have received, will be available for review on or about March 3rd, in Room 520 of Crystal Park One, which is at 2011 Crystal Drive. These comments will also be available on the Internet through the anonymous file transfer protocol, that is FTP, address FTP.USPTO.GOV. All written comments and the oral comments made here today will be taken into consideration before proposed rules are published. Any written comments received after February 17, 1995, however, can't be assured of consideration. I want to thank everybody for coming. It has been very useful to me to hear these comments. It is a good example of the value of doing things in the sunshine, hearing what everybody else has to say. So, this concludes today's hearing and I want to thank everybody for coming out on a snowy day like this. [Whereupon, at 12:38 p.m., the hearing was concluded.] MILLER REPORTING CO., INC. 507 C STREET, N.E. WASHINGTON, D.C. 20002 (202) 546-6666