The "Taft Commission" recommended that a new building be constructed for the patent office which is specially designed and equipped for its needs. The current facilities were "so inadequate as to render extremely difficult any substantial improvement in the work of the office". The report quotes Senator Ruggles as saying the same thing during the floor debate preceding the 1836 Patent Act. During its long history the Patent Office had two buildings constructed specifically for its use. The first was occupied for only six months before it was destroyed by fire in 1836. The second was constructed in 1840, expanded several times, and was the home of the Patent Office until 1932.

In 1961, Commissioner David L. Ladd commissioned a management study of the Patent Office. Earl W. Kintner, former Chairman of the Federal Trade Commission, was responsible for the study. Commissioner Ladd transmitted the completed study, which contained 179 specific recommendations, to Senator John McClellan in June, 1962. 19611962 Management Survey of the U.S. Patent Office, Committee Print 87th Congress, 2d Session. Senator McClellan was the chairman of the Senate Judiciary Committee Subcommittee on Patents, Trademarks, and Copyrights. During the late 1950's, that subcommittee commissioned a number of studies of the U.S. Patent System. Commissioner Ladd's transmittal letter to Senator McClellan said:

As the report itself points out, the problems that plague the Patent Office are
well known to many. It is no secret that there has been more than a slight
degree of discontent with the operation of the Patent Office. (p. v)

The backlog of patent applications has been perhaps the most popularly used
indicator of the condition of the Patent Office. "Backlog" is so familiar a word
and so persistent a problem that preoccupation with it has tended to obscure
its causes. The management survey report exposes a variety of these causes.
In addition to eliminating the symptomatic backlog problem, I am hopeful that
forthright action to implement the recommended improvement measures
which are merited and practicable will lead to a cure, rather than superficial
treatment, of some of the chronic, long run problems which have troubled the
Patent Office for years and have been growing steadily and alarmingly more
severe. (p. vii)

The "Kintner Report" focused on internal Patent Office management, organization, and administration. The issue of the Patent Office as an independent agency is not mentioned. The report begins with an assessment of the major problems:

Personnel Turnover. The report states that 20% of the patent examiners leave each year because the incentives to stay are "few". Cited as problems are current "working conditions, salary scales, prestige and opportunities for professional growth." Promotions are made based on seniority, "causing younger men of ability to leave." (p. 18)

Management "Inertia". The 200,000 application caseload is testimony to the obsolescence of Patent Office organization, practice, procedures, and information retrieval techniques. Why hasn't something been done about this sooner? There is one reason--inertia. The Patent Office has had the same group of career persons in key positions for a considerable number of years. Accordingly, things have become stabilized. Maintaining the status quo has become to some of these key persons a primary objective. p. 18.

Poor Management. The report states that supervisory positions are filled by "seniority" and on the "basis of his ability to personally get out a certain number of cases in a satisfactory manner." So we had a situation whereby top technicians were being taken off the production line to do something for which they may not have had any aptitude; namely, to manage a division. As a result of such selection techniques the Patent Office has today many excellent technicians poorly fulfilling their managerial duties and responsibilities. p. 19.

Poor Planning. The report recommends that an individual of high rank be given the authority to stimulate and coordinate planning of all aspects of Patent Office operation.

The Kintner Report goes on in great detail to recommend changes to improve "very serious" problems with physical facilities, training and education, and internal operation procedures. Commissioner Ladd resigned on October 1, 1963, 17 months after the Kintner Report was issued. The reaction of the Senate Judiciary Committee was:

The subcommittee expresses its concern at the current state of administration
in the Patent Office. The departure of the Commissioner of Patents soon
after an extensive reorganization of the Patent Office has only added to the
serious problems already existing in the Patent Office. If significant reductions
in the backlog are to be effected, methods must be found to speed up the
prosecution of applications.

While the subcommittee is persuaded that it is not advisable to tinker with
present procedures just for the sake of change, it is clear that the existing
situation cannot be permitted to continue indefinitely. Larger budgets and
more examiners are not feasible answers to the Patent Office dilemma.
(Senate Report 1018, 88th Congress 2nd Session, p. 14.)

The 1960-1984 time period is particularly illustrative of the long history of Patent Office vulnerability. The Senate Judiciary Subcommittee during the late 1950's was particularly concerned with long patent pendency. Commissioner Ladd took office and commissioned the "Kintner Report." He warned the Senate Judiciary Committee that focusing long pendency or "backlog" "obscured" underlying Patent Office problems. Clearly Commissioner Ladd intended to institute meaningful reforms, and, also clearly the Senate Judiciary Committee supported that.

But in 1962, the Commissioner was "demoted" by the Commerce Department from the assistant secretary level to where he reported to an assistant secretary. In The Patent Office, the author Stacey V. Jones wrote:

It was generally understood that Mr. Watson's successor, David L. Ladd, has
resigned as Commissioner in 1963 in part as a protest at the department's
intrusion into internal affairs of the Patent Office. (p. 173)

Whatever the reason, the reform minded Commissioner was gone.

The downgrading of the PTO became more than symbolic during the decade of the 1970's. In 8 of those 10 years the PTO budget was effectively reduced. The Commissioner was not permitted to testify before the congressional appropriations committees. Finally in 1982, the Commissioner was "promoted" back to the assistant secretary level, but not at the initiative of the Commerce Department. Rather, the House and Senate Judiciary Committees held hearings in 1980 on bills which would establish the PTO as an independent agency. While not prepared to enact those bills, Congress once again focused on PTO problems and did enact a law to make the Commissioner an assistant secretary.

In sum then, Commissioner Ladd began his term by taking action to upgrade and reform the Patent Office as an institution. The result was that the PTO suffered a 20-year period of being downgraded and subject to severe financial stress. The very thing he cautioned against, allowing patent pendency to obscure "the chronic long run problems" of the PTO, happened and continues today.

C.

President's Commission on the Patent System

The report of this commission was transmitted to President Johnson in November, 1966; To Promote Progress of...Useful Arts In An Age of Exploding Technology", Report of the President's Commission on the Patent System. The recommendations of the commission were primarily directed to changes in the patent statute and enforcement of patents in courts. Very little attention was given to Patent Office management or performance except in reference to goals. Among the overall purposes of the commission study were "to raise the quality and reliability of the U.S. patent" and "to shorten the period of pendency of a[n] application". p. 3

However, Recommendation XXVI, is relevant:

A Statutory Advisory Council, comprised of public members selected to
represent the principal areas served by the patent system, and appointed by
the Secretary of Commerce, shall be established to advise him, on a continuing
basis, of its evaluation of the current health of the patent system, and
specifically, of the quality of patents being issued and the effectiveness of any
internal patent quality control program then in operation, and whether an
optional deferred examination system should be instituted or terminated.

Every fourth year the Council shall publish a report on the condition of the
patent system including recommendations for its improvement.

The membership shall consist of not less than twelve or more than twenty-
four. The term of appointment shall be four years, with a maximum tenure
of eight years. An executive director, and other support as deemed necessary,
shall be provided. (p. 43)

The commission recognized institutionalizing a role for users of the patent system is "indispensable":

In view of the great pressures on the patent system brought by, for example,
the escalating information explosion, the Commission believes that the
system's continuing welfare must not be left entirely to those preoccupied with
its daily administration, or to examination by a one-in-a-generation Commis-
sion. Continuous review of the Nation's changing needs and the capacity of
the system to respond is indispensable.

The United States Senate Committee on the Judiciary has demonstrated a particular interest in the patent system and the operation of the PTO in the recent past. See: Proposals for Improving the Patent System, Studies Nos. 1-30, 1959-1963 by the Subcommittee on Patents, Trademarks, and Copyrights. The proposal to establish the PTO as an independent government agency was considered during this period. The conclusions of the subcommittee staff in 1959 are quoted in part on page 9 of this report.

In 1973, during the 93rd Congress, the Senate Judiciary Subcommittee on Patents, Trademarks, and Copyrights considered a general revision of the patent law (S. 1321). The bill provided that the PTO be established as an independent agency. The bill also provided that an "Advisory Council on the Patent System" be established to, among other duties, "study and appraise the methods and operations of the United States Patent Office" as President Johnson's Commission on the Patent System recommended in 1966. S. 1321 was not acted upon.

In the 96th Congress, Senator Bayh with cosponsors introduced S. 2079, a bill which would establish the PTO as an independent government agency and provide the Commissioner of Patents and Trademarks with a fixed 6 year term of office subject only to removal for cause. In 1980, joint hearings before the Committee on Governmental Affairs and the Committee on the Judiciary of the Senate were held on S. 2079. The opening statements of Senators Bayh and Danforth are contained in Appendix I.

The hearings were noteworthy because six former Commissioners appeared as witnesses: David L. Ladd, William Schuyler, Edward Brenner, Robert Gottschalk, C. Marshall Dann, and Donald W. Banner. These witnesses had served as Commissioner under Presidents Kennedy, Johnson, Nixon, Ford and Carter. All of these former Commissioners supported the enactment of S. 2079. Mr. Banner testified that the two other living former Commissioners, Conway P. Coe (under Presidents Roosevelt and Truman) and Robert C. Watson (under President Eisenhower) who were unable to appear had asked him to convey to the committees their support for the bill. Mr. Gottschalk testified that deceased former Commissioners Ooms, Marzall, and Kingsland (all of whom served under President Truman) had all "expressed their views" that the Patent Office should be an independent agency. Therefore, the committees heard that the eleven men who served as Commissioners from 1933 to 1980 all agreed that the PTO should be independent from the Department of Commerce.

The former Commissioners who testified concluded that the PTO was not functioning properly and that an efficiently operated PTO was needed to stimulate innovation. They expressed frustration with the Commerce Department for hindering management decisions, preventing direct communication with OMB on PTO budget requests, and not permitting direct communication with Congress on both budget and substantive patent system issues. None put the blame on individuals who served in the Department, but rather cited the unsatisfactory nature of the institutional structure. Several pointed to frustration and the inability to perform their duties as they saw them as a reason for the short tenure in office of Commissioners. All agreed this was a serious management problem, and all supported a fixed six year term of office.

Senator Danforth stated that the principal objection to S. 2079 was that many bureaus in cabinet agencies would likely want to be independent to make their own decisions, but consolidation is desirable for "good administrative practice." The Senator asked why should an exception be made for the PTO. The Commissioners responded that the PTO performs a quasi-judicial function which, all studies, including that of the Hoover Commission, conclude should be reposed in an independent agency.

Pertinent comments on these issues follow.