Privacy, Business and Law

On August 12, 1994, the Congress held a Joint Hearing before the cognizant subcommittees of the Senate and the House concerning the “fast track” GATT intellectual property legislation proposed by the Clinton Administration.

The transcript of that hearing indicates that Commissioner Lehman testified about the “submarine patent” problem and that “…we have discovered 627 cases in the Patent and Trademark Office from 1971 to 1993 where the patent pendency has exceeded 20 years. In one case, it was 36 years.”

He used those statistics to show that “in fact, those applicants have been able to have an advantage of patent protection on some of those inventions while keeping other claims secret in the Patent and Trademark Office. Then, their claims are patented and emerge like a submarine, and torpedo people in the industry . . . .”

In response to a subsequent Congressional request, the PTO eventually supplied a list of the 627 patents on which Commissioner Lehman’s testimony was based.

That PTO supplied list of purported “submarine” patents included 257 owned by the United States Government which had been kept secret for security reasons, about 41% of the 627 the Commissioner testified about. In addition, the list included approximately 75 other patents, not government owned, which apparently were under Secrecy Orders by the U.S. Government for extended periods. Are these patents – totaling about 300 in number – evidence of any “submarine” patent problem? Were they kept secret to “torpedo people in the industry?”

Concerning the Commissioner’s testimony that one of these patents was pending for 36 years, U.S. Patent 4,233,183, assigned to Bell Telephone Laboratories, was indeed pending for 36 years. It was filed in September of 1944 and placed under a U.S. Government Secrecy Order the next month. It remained under a U.S. Government Secrecy Order for 35 years, and finally issued in 1980.

Was the above information known to be “material” to congressional consideration of this legislation, which purported to solve a significant “submarine patent” problem? Was it omitted from the testimony so as to mislead the Congress and induce it to support the Clinton Administration’s Patent Legislation? Was that information “inconsistent with” the thrust of the testimony about the “submarine patent” problem?

Surely not. And no doubt it was an oversight not to mention that an 18 month publication agreement with Japan was clearly in the works and in fact signed four days after the Congressional hearing. That agreement, ill-advised as it is, would have sunk any sub threat, real or imagined, and deflated the main argument for changing the term of patents.

Even assuming there were 300 “submarine patents” in the 23 year period used by the Commissioner in his testimony, in the average year there were 13 such patents issued out of over 100,000. There were a total of over 2,300,000 patents issued in that 23 year period. This works out to be one such patent for every 7700 issued, or thirteen thousandths of one percent. Is it desirable to change the patent system to solve this “problem”?

by Donald W. Banner