Some well-known examples are-
(a) Yellow fever eradication;
(b) Chlorination of water;
(c) Nuclear power;

(d) The modern aircraft;

(e) Blood-plasma substitutes;

New high temperature alloys; and

(g) Antimalarial drugs.

Some, less well-known, but equally, if not more, valuable, include(a) Nitrogen-mustard treatment of leukemia and other

cancers;

(b) Many of the better insecticides and rodenticides;

(c) Mechanical smoke generators for crop protection;

(d) Flame-proof fabrics;

(e) Heat-resistant and fire-retarding paints;

(f) Aircraft engines;

(g) Helicopters;

(h) Anti-icing equipment;

(i) New plastics and adhesives;

(New automobile power-steering and suspension systems; (k) Advanced weather-prediction techniques;

(1) Tissue-bank techniques;

(m) Miniature electronic components;

(n) Automation equipment;

(o) Silicon transistors; and

(p) Automatic electronic computers.5

In those cases where large sums of money are needed and where private industry will not willingly gamble in the absence of the prospect of a short-run payoff, the Government plays a very important role in bringing about innovations much earlier than might normally be the case.

During 1961 the Federal Government will obligate an estimated $9.1 billion for the support of scientific research and development. This compares with obligations of $8.6 billion for fiscal year 1960 and $7.4 billion in fiscal 1959.

Since the U.S. Government finances over 65 percent of all research and development performed by industry and since a large part of Government-financed research is devoted to pushing forward the frontiers of knowledge, it can be seen that Government activities in this field have an exceedingly important and direct impact on the growth of our economy, its market structure, and our defense effort. Government research and development, in addition to their effect on the growth of our economy, have an equally profound effect on the structure of our economy. The channeling of research and development funds into an industry can insure its expansion and prosperity; the withholding of such funds can stifle or retard its growth. Similarly, the awarding of research contracts to particular corporations, especially in trailblazing developments, confers incalculable advantages in know-how which generally presages the growth, domination, or competitive superiority in these or related fields.

Operation Research Office, Johns Hopkins University, "Defense Spending and the U.S. Economy" (operating under contract with the Department of the Army), Bethesda, Md.: June 1959, vol. I, p. 17.

The disposition of rights resulting from Government research and development can increase monopoly and the concentration of economic power or alternatively can spread the resulting benefits throughout our society with consequent benefit to the maintenance of a competitive free enterprise system and more rapid economic growth.

I have, therefore, introduced S. 1176 on March 2 of this year. The bill has three provisions:

The first provision is that the U.S. Government should acquire title and full right of use and disposition of scientific and technical information obtained and inventions made at its direction and at its expense, subject to waiver of Government title when the equities of the situation so require.

The basic premise of S. 1176 is that inventions should belong to "those who pay to have them created." It is for that reason that section 3(b) of the bill provides that title to an invention shall be taken by the United States for the benefit of all people of the United States if made in the performance of a Government contract.

To insure that the United States in fact will get what it pays for, section 2(i) applies that premise when the "conception or first actual reduction to practice" occurs incident to the performance of a Gov

ernment contract.

It is recognized that in practice situations do occur in which both the Government and private industry have made contributions to an invention. Thus, section 10 of the bill makes provision for waiver of title by the United States, when it is shown that the equity of a contractor predominates. In this respect, I consider S. 1176 to be more realistic than other formulations which include no such provision.

In waiving Government title, I must insist upon effective protection of public interest in inventions at all times. This will include:

(a) An administrative ascertainment of the facts concerning the making of particular inventions as to which waiver is claimed; (b) A written record of the basis for and the terms of any such waiver; and

It

(c) The imposition of such conditions upon that waiver as may be required to protect the public welfare in the use of an invention to which the Government has made any contribution. 2. The second provision calls for the establishment of a Federal Inventions Administration, which would administer all Governmentowned patents and make necessary determinations of the act. would be affirmatively charged with the duty of protecting the public interest in scientific and technological developments achieved through the activities of departments and agencies of the U.S. Government and would be charged with the dissemination of knowledge so developed. It will undertake a program of utilization (take inventions off the shelf) as a means of widening the uses of Government-owned patents, discoveries, and new scientific and technical knowledge.

This, I expect, will stimulate invention and innovation which will cut costs, produce new products, and increase per capita industrial production through efficiency and new technology.

3. The third provision is intended to stimulate discovery and invention in the public interest by providing for the making of generous monetary awards as well as public recognition to all persons

who contribute to the United States for public use scientific and technological discoveries of significant value in the fields of national defense or public health, or to any national scientific program, without regard to the patentability of the contributions so made. I believe this will serve as an incentive, which will elicit from private, commercial, or Government scientists their best efforts on behalf of the whole country.

I am aware that the basic principle of S. 1176 faces opposition from industry groups and from the organized patent bar. That principle, however, is not novel. In the past it has been applied frequently to specific areas of Government-financed research.

In fact, Mr. Chairman, I believe you will find that in every instance where Congress has spoken affirmatively on this issue, Congress has applied this principle that I am advocating:

That is, that when the Government pays for the invention, the title to the invention is to be in the Government. Examples include the following agencies of Government:

The Atomic Energy Commission, the Department of Agriculture, the National Aeronautics and Space Administration, the Office of Coal Research and Development, the Tennessee Valley Authority, the Department of Health, Education, and welfare, and the Veterans' Administration.

What is new in S. 1176 is

(1) The application of a time-proven principle to all forms of Government-financed research; and

(2) The provision for the administration of Governmentdeveloped inventions to provide for the widest possible dissemination and use of those inventions for the benefit of the Nation as a whole and the citizens who have paid the necessary developmental costs.

The general application of the basic principle of Government ownership of Government-developed inventions is required by the phenomenal growth of Government-financed research which has occurred in the past decade, and which will continue in the future, probably at an accelerated pace.

The provision for effective administration of those inventions is required by plain commonsense. One of the objections heretofore made to the so-called "Government title" theory has been that Government patents have not been put to productive use. That Government-owned inventions will be buried is not an inevitible consequence. In fact, the experience of the TVA and the Department of Agriculture testifies to the contrary.

TVA has succeeded in achieving wide use of its developed fertilizer improvements. It is estimated that the processes and methods controlled by TVA patents are used in the production of about twothirds of the granular fertilizer manufactured in the United States. TVA also licenses to numerous corporations the use of processes and equipment relating to aluminum-silicon alloys, calcium metaphosphate, superphosphoric acid, wet ground mica, phosphorous and phosphoric acid carbon monoxide catalyst, fused tricalcium phosphate, slag expansion, phosphate reducing furnace, and a rotating furnace."

Preliminary report of the Subcommittee on Patents, Trademarks, and Copyrights, "Patent Practices of the Tennessee Valley Authority." Washington, D.C.: Committee on the Judiciary, U.S. Senate, 85th Cong., 2d sess., pp. 8-9.

The Department of Agriculture has licensed the leading drug manufacturers in the United States under its patents on the "methods for the isolation of penicillin from aqueous solution" and "methods for production of increased yields of penicillin" and related subjects." Under patent No. 2,879,549 for cotton carding apparatus, the Department of Agriculture has issued 11 licenses to companies in many areas in the United States. This item, by the way, cost about $150,000 to develop and was released publicly on March 31, 1959. A preliminary evaluation indicates a potential saving of $40 million annually by the entire U.S. cotton textile industry.

Mr. Chairman, those are just examples that have come to my attention of instances where it would appear that industry has made very effective use of Government research without private patents.

I have challenged industrial representatives to submit to me the first example of any consequence or significance where some major development has not been developed because the researcher was not able to get a patent monopoly on the product.

And I have yet to have one submitted.

Now it is contended that perhaps the fact that none have been submitted and that no examples are known might not prove the point. But if there had been some processes developed in which a monopoly would have guaranteed the development of the product, I would suggest that the people who have a vested interest in maintaining private patents on public research would be those in the the best position to know. In many instances either they or their competitors have had contracts to develop products on which they would have liked to have had patents but were not able to obtain them.

It has been claimed by some private interest groups that this bill would destroy or impair the present patent system, and in some indefinable way would deprive industry of some constitutional right. To that, I make the following answer:

1. There is no constitutional right in any individual or corporation to receive or hold patent rights. The Constitution gives to the Congress the power to adopt, revise, or abandon patent systems. The truth is that this legislative act (S. 1176) is a more direct attempt than even the present patent statute to carry out the constitutional mandate to promote the progress of science and useful arts.

2. The present patent laws are intended to confer a legal monopoly upon the inventor who devotes his own efforts and resources to the development of an invention which may produce public benefit. The reward so given is just and proper. S. 1176 would not change this in

any way.

3. Where the inventor has not devoted his own independent efforts and resources to the development of an invention, but has used his employer's resources, it is a well-known common law doctrine that any resulting invention is the property of the employer."

Similarly, when the inventor or the contractor has used Government money or facilities or both and has been compensated by the Government for his efforts with a guaranteed profit, there is no justification

Report of U.S. Department of Agriculture, Agricultural Research Service, "Penicillin," June 23, 1959. 8 Report of U.S. Department of Agriculture, Agricultural Research Service, "Cotton Carding Apparatus (Patent No. 2,879,549)." For example, Standard Parts Co. v. Péck, 246 U.S. 59 (1926).