Please provide your position on 8. 2130? We Answer: We strongly support the provisions of S. 2130, but would prefer that it not be limited to nonprofit organizations. have long opposed the restriction under present law that prohibits multiple extensions of a patent containing claims that cover a class of new chemical entities of which more than one could be developed into a commercially valuable product. Due to this restriction, many potentially beneficial drugs may never become available to the public simply because they are covered by a patent that was once extended for a different chemical entity. Without patent exclusivity, an innovator or its licensee cannot recoup the financial investment needed to develop a new drug and to obtain its regulatory approval. This certainly holds true for universities that wish to license their pharmaceutical patents to private companies for commercial developments. It is just as important, however, to that sector of industry which conducts its own original research and obtains patents on chemical entities that have various potential commercial applications. Enactment of S. 2130 would go a long way to overcome this impediment under present law, especially if it were not limited to nonprofit organizations. In this respect, we expressed strong support for S. 2744 during the 100th Congress, a bill that would have accomplished the same purpose as S. 2130, and was not restricted to nonprofit organizations. Question 7. AIPLA's proposal for converting PTO to a Government Corporation includes a recommendation for a private sector advisory board that would advise the Commissioner. Does the Administration support this proposal? Answer: We believe that it is unnecessary to establish by statute a special private sector advisory board for the U.S. Patent and Trademark Office. Currently, advisory committees can be and have been established for the Office under the Federal Advisory Committee Act. For example, a Public Advisory Committee for Trademark Affairs has been in existence for 20 years and we have just proposed creation of a similar committee to focus on patent issues. We expect that it will begin meeting before the end of this year. Question 8. In a recent joint hearing between this Subcommittee and the House Subcommittee on Intellectual Property and Judicial Administration, several witnesses advocated the implementation of a 18 month publication rule including Professor Harold C. Wegner, Professor Robert Merges, and witnesses for the American Intellectual Property Law Association, and the National In your testimony for that hearing, you estimated a cost of $34.3 million for publication of entire applications and $10.5 million for laying open applications. A) How did you arrive at these estimated costs? Answer: To estimate publication costs, it is necessary to make some assumptions about the number of applications that would be published and the system for publication and distribution of these printed applications. We assumed that all applications would be published within 24 months of their earliest effective filing dates. Given a filing rate of 160,000 applications per year (the current filing rate is higher), we estimated that we would have to publish about 80,000 more original documents than we would under the current system. (It should be noted that if the time between filing and publication were reduced to 18 months the number of additional original documents printed each year would increase. As a result, costs would increase.) We assumed that the procedure and distribution would be similar to our current practice. That is, clerks in the Patent Examining Corps would still initially prepare applications for printing and examiners would indicate the original and cross-reference classifications of the applications. The staff in the Publication Division would complete the preparation for printing copies of the applications and entries in the Official Gazette. The same information about these applications would be published in the Official Gazette as is currently published in the Gazette about patents. Copies of these documents (originals and crossreferences) would be labeled and placed in the examiners' search files and in the Public Search Room, and would be loaded into the Automated Patent System. Also, copies will be archived and distributed to foreign patent offices. Copies must be provided to Patent Copy Sales for reproduction and sale to the public. (Cost of reproducing copies for the public will be recovered from fees.) To avoid disruption in the patent prosecution or in the availability of abandoned files, we would photocopy the file and use the photocopy to generate the printed application. Using these assumptions, we estimate that our costs for printing applications within 24 months of the earliest effective filing date include: In estimating the cost of laying open applications, many of the assumptions we made were similar to those we made for publication within 24 months. The number of applications to be laid open would be 80,000. Laying open would consist of publishing the same information in the Official Gazette as we now include for patents, and making microform copies of the application files available to the public. As with publishing the entire application, clerks in the Patent Examining Corps would initially extract information to be included in the Official Gazette and examiners would indicate the original and cross-reference classifications of the applications. The staff in the Publication Division would complete the preparation for printing in the Official Gazette. The scope of these tasks will, however, differ from those for publication. Copies of the information for each application that appears in the Official Gazette will be copied, labeled, and placed in the examiners' search files and in the Public Search Room. In the course of searching, examiners will come upon these portions of the Gazette and may believe that the information disclosed in the laid open application may be relevant to the application under examination. In that event, the examiner will retrieve a copy of the laid open file and review it. This will increase the cost of examining applications. In addition, the examiner may determine that contents of the laid open application should be included in the examiners' search files. If so, paper copies of the application file will be placed in the examiners' search file. It was estimated that approximately 80,000 of these copies would be inserted in the examiners' search files annually. Using these assumptions, we estimate that our costs for laying open applications within 24 months of the filing date include: Photocopying files for Official Gazette Preparation by the Patent Examining Corps Preparation by Publication Division and other documentation processing Microfilming application files and Providing copies of application files for Other Processing Costs Subtotal Overhead (18.5 percent) $231,000 $1,301,000 $472,000 $238,000 $69,000 $1,087,000 $485,000 $598,000 $792,000 $8,859,000 $1,639,000 $10,498,000 Question 8 (B). Many foreign patent offices simply make a facsimile copy of the patent applications available upon request subject to a fee. Thus, the costs of making such copies available would be offset by the charge for the copy from your office. Would you support such a proposal for the PTO? Answer: No decision has yet been made regarding the nature of the early patent application publication system that would be adopted should the United States go to such a system. However, if it were decided to have an early publication which consisted only of the laying open of the patent application, I would see no problem with the direct costs of making copies of applications being recovered from those requesting copies. However, it is not clear that the large costs associated with establishing and maintaining a system having available all patent applications for copying could be recovered from those requesting copies. Question 8(C). Some foreign patent offices simply omit republication of the patent specification at the time of the patent grant. Thus, only amendments to the patent specification and the It is my issued patent claims would require publication. Would you support such a proposal for the PTO? Answer: Should the United States go to an early patent application publication system that involves the printing of the applications, the United States could consider omitting the full republication at the time of the patent grant. Should the United States adopt an early publication system which only involved the laying open of the applications, as suggested in Question 8 (B), full republication system would not be required. Question 9. In August 1976, without public hearing or comment, the Federal Highway Administration (FHWA) implemented procurement regulations 23 C.F.R. 635.411. Those regulations provide in part: "(a) Federal Funds shall not participate, directly or indirectly, in payment for any premium or royalty on any patented or proprietary material, specification, or process specifically set forth in the plans and specifications for a project, unless: (1) such patented or proprietary item is purchased or obtained through competitive bidding with equally suitable unpatented items; or (2) the state highway agency certifies either that (3) such patented or proprietary item is used for research or for a distinctive type of construction on relatively short sections or road for experimental purposes. Paragraphs 2 and 3 of the regulations would allow very limited use of patent products or processes in specific circumstances. Under these regulations, widespread use of a patented product or process could only occur if they were "purchased or obtained through competitive bidding with equally suitable unpatented items." The Committee has been made aware of a circumstance where implementation of these regulations has prevented specific patented process for making asphalt rubber (patent numbers |