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' Stedman, "Invention and Public Policy," 12 Law and,
Contemporary Problems, 652-5 (1947).



June 26, 1950



1027



3. It is a reward paid by the public through the
government for the inventor's valuable contribu-
tion to the art. It is also considered to give to the
inventor the fruits of his labor as a matter of
justice or natural right.

4. The grant of a monopoly right may induce
others to "invent around" the patented invention,
or the disclosure of the invention may stimulate
other similar inventions.

5. It encourages the exploitation and commer-
cial development of the invention.

6. It induces the importation of techniques and
ideas from foreign comitries.

On the other hand, the patent system may have
undesirable effects in actually discouraging rather
than encouraging invention in certain fields. This
situation may arise in areas in which a few large
industrial enterprises have strategic patent posi-
tions. An independent inventor may not be able
to utilize his invention without infringing at least
one patent in this large block, and he is in a weak
bargaining position in selling his invention to the
corporations.

The most important objection to a patent sys-
tem, however, is that it represents an unregulated
monopoly in the midst of a competitive economy.
Many countries meet this problem by including in
their patent laws provisions designed to prevent
the abuse of patents. These clauses are usually
called "working" provisions and generally provide
for compulsory licensing under certain conditions.
The United States, however, limits the patent
monopoly only when it is used in a manner incon-
sistent with the antitrust laws. Although some
observers feel that, on the balance, the disadvan-
tages which result from a patent system outweigh
the benefits, it will be assumed here that a patent
system can be an effective device for promoting
the progress of science and the useful arts.

The Present International Patent System

The field of industrial property rights (pat-
ents and trade-marks) is one which has a compara-
tively long history of international cooperation.^
The lack of adequate protection of foreign pat-
ents and inventions afforded by divergent national
laws and bilateral treaties became especially
apparent when the Govermnent of Austria-
Hungary invited the different countries to an inter-



national exposition to be opened at Viemia in 1873.

At that time, doubts were expressed by the for-
eign inventors concerning the advisability of ex-
hibiting their inventions at the exposition in view
of the inadequate protection given them. Even if
an Austrian patent were obtained, the requirement
that "manufacture of the invention shall take
place on Austrian soil within a year from secur-
ing the patent" made the protection granted rather
illusory. As a result of this situation, a Con-
gress for Patent Keform met at Vienna following
the exposition in 1873. These activities ultimately
led to the formation of the International Union
for the Protection of Industrial Property.

This Union was established by the "Convention
of the Union for the Protection of Industrial
Property," signed at Paris in 1883. The Conven-
tion is revised periodically, and the next meeting
for revision is scheduled for Lisbon in 1951.
Forty-two countries have adhered to one or more
of the revisions ; the adherents include the United
States ■* and most of the industrially developed
nations of the world. The notable exception is
the U.S.S.K.

The International Union for the Protection of
Industrial Property embodies two fundamental
lirinciples of protection.^

1. The nationals of members of the Union enjoy,
in each of the member countries of the Union, the
rights and advantages granted by the domestic
law to its own nationals.

2. The nationals of members of the Union also
enjoy special rights and advantages specifically
recognized, defined, and delimited by the Conven-
tion. These rights are in addition to the "national
treatment" described above and the most impor-
tant of these special advantages relates to "the
right of priority." This provision gives a person
who has filed a patent application in a country of
the Union a 12-month period of priority in filing
in the other countries of the Union. During this
period, the right of the patentee cannot be cut
off or invalidated by acts performed in the inter-
val, such as the filing of another application on
the same invention or publication of the invention.

The Convention also places certain restrictions
upon the use of "working provisions" in the na-
tional laws of the member countries. As stated
earlier, these provisions are designed to prevent



' Stephen P. Ladas, The International Protection of In-
dustrial Property, chap. IV (1930).



*53 Stat. 1748; U.S. Treaty Series 941.
• Ladas, op. oit. supra, note 3, 202-14.



1028



Department of State Bulletin



the abuse of the patent grant. The most common
conception of abuse of a patent is the suppression
or "failure to use" the invention. This abuse is
usually interpreted to mean failure to use the
invention in the particular country granting the
patent.

Before the Convention, many countries pro-
vided for forfeiture of the patent for nonuse of
the invention in that country after a specified pe-
riod of time. Some countries also invalidated
the patent where the invention was not used in the
granting country but where an attempt was made
to import the invention. Still, other cotintries re-
tained for the government the right to designate
licensees to use the patented invention when the
patentee failed to use it in the jurisdiction of the
granting country (compulsory licensing). The
most recent revision of the Convention (London,
June 2, 1934) abolishes forfeiture of the patent as
a penalty for importation and permits the forfeit-
ure for abuse of the patent right (failure to use)
only after compulsory licensing has failed to cor-
rect the situation.

Inadequacy of Present System

Despite the advances made in international co-
operation on patent matters, the increasing im-
portance of science and technology and the in-
creasing industralization in the world make it
necessary to take further steps toward achieving
an eifective international patent s^'stem. Such
I^rogress is required in order to insure that patents
and patent systems will accomplish the purpose
for which they were designed ; that is ''To Promote
the Progress of Science and the useful Arts."
Under the present international patent system,
an inventor must, for the recognition of his rights,
comply with all conditions and formalities of the
domestic law of each country, whether or not that
country' is a member of the International Union
for the Protection of Industrial Property. These
domestic laws differ in five major aspects: ^

1. The definition of a patentable invention.

2. The condition and formalities necessary for
the gi-anting of a patent.

3. The administrative procedure of the patent
grant.

4. The term of the patent and annual taxes.

5. The obligations of the patentee (e.g. "'work-
ing" the patented invention).



Thus, the patentee, in order to obtain protection
abroad, must file an application, specifications,
and drawings in each country and he must use
the language of the country ; he must enumerate
his claims according to the particular method of
the country; he must pay various fees and
charges; and, in most countries, he must appoint
an attorney or ageJit domiciled therein to receive
official notices and to prosecute his application in
the national patent office. Furthermore, these
actions must be taken within fixed legal periods
in accordance with the law of each country.

In order to obtain complete international pat-
ent protection, the requirements of the patent laws
of approximately 140 separate ' patent territories
must be fulfilled. This situation points up the
inadequacy of the present international patent
system. In practice, applications are not filed in
every patent jurisdiction. A decision is usually
made as to whether the possibilities of commercial
exploitation in a particular area will justify the
effort and expense involved in filing and prose-
cuting a patent application. Many times, how-
ever, a patent must be obtained in a certain juris-
diction, merely as a protective device, to prevent
the unlicensed use of the invention. This prob-
lem is especially acute in an area like Europe
wliich is highly industrialized and has a number
of separate jurisdictions, each covering only a
relatively small area and population. Here, the
present system of requiring a separate filing in
each country results in an enormous duplication
of effort by the patentee and the governments,
particularly where the patent law of the juris-
diction provides for a search for novelty. Yet,
before the commercial exploitation of an inven-
tion is feasible, adequate protection over a fairly
large area must be provided for. This protection
is especially true in cases where the use of the in-
vention requires a large outlay of capital.

The present international patent system may
interfere with the achievement of the objectives
of a patent system. The difficulties and expenses
involved in obtaining international patent pro-
tection may not fully encourage inventions. These
obstacles to obtaining world-wide patent protec-
tion may not always induce the inventor to dis-
close liis invention to the public. Also, the failure
to get full international protection may raise arti-



'Ladas, op. cit. supra, note 3, chap. X.
June 26, 1950



~ Many of these territories are colonial, trusteeship,
etc. areas and the filing requirement is only nominal.

1029



ficial barriers to trade, because, under the patent
law of most countries, the exclusive right granted
by the government includes the right to prevent
goods produced by the unlicensed use of the pat-
ented process or device from entering the terri-
tory of the patent grant.

Thus, a United States patentee who fails to take
out patents all over the world may, if a third
person obtains a patent on the same invention in
another jurisdiction, not be able to ship the goods
produced in the United States under his patent
into that jurisdiction.

Possible Solutions

Most of these problems would disappear with
the issuance of an international patent, valid
throughout the world. However, the possibility
of agreement on the abrogation of national patent
laws and the renunciation of national patents in
favor of an international patent law and the grant
of an international patent appears to be remote.

As in other fields of international cooperation, it
is necessary to proceed step by step. One possi-
bility which might not meet with too much opposi-
tion is a system for an international filing of a
patent application. The individual country would
retain its right to examine the application and
issue a patent in accordance with its national
patent law; but it would eliminate the need for
filing a separate application in each country al-
though the requirements of the law of each country
would still have to be met and the application
prosecuted in each patent office. A comparable
system has been in operation for 58 years regarding
international registration of trade-marks under
the Madrid arrangement of 1891.*

Under this arrangement, the International
Bureau communicates" the registration to each
of the participating countries, thus, eliminating
the necessity for the applicant to file in each coun-
try. Each country, within a limited period of
time, may reject the registration. The domestic
law of each country is not affected, and many of
the troublesome features inherent in the present
system of separate filings are overcome. This
plan would, of course, present many more prob-
lems in the field of patent applications. These
problems would arise mainly from the wide di-



vergencies in the domestic laws as to the informa-
tion to be supplied in the patent application. Also,
as stated before, the domestic laws differ in their
concept of what constitutes a patentable inven-
tion and how the claims are to be presented.

Recent Developments

A more fruitful approach to improving the in-
ternational patent situation may be along the lines
of the recent action taken by France, Belgium, the
Netherlands, and Luxembourg. On June 6, 1947,
these countries signed an agi'eement concerning
the establishment of an International Patent Of-
fice at The Hague. This agreement became ef-
fective on June 10, 1949, with the deposit of the
declaration of ratification by the four signatory
powers at the Ministry of Foreign Affairs at The
Hague. The Board of Directors of the Interna-
tional Patent Office held its first meeting at The
Hague on July 28, 1949, to make plans for the
operation of the Office in 1950." They discussed
jDroblems relating to the recruitment of person-
nel and the compilation of the necessary docu-
mentation. During its period of organization,
the new Office decided to utilize the facilities of
the Netherlands Patent Office (Octrooiraad).
The Office will be financed through an initial con-
ti'ibution and annual subscriptions of the partici-
pating countries and the yearly income derived j
from the fees for each opinion issued. The annual "1
patent fees will remain with the issuing countries.

The International Patent Office at The Hague
is not what its name implies. Its membership is
presently limited to four countries although other I
European nations have indicated an interest in
joining. It will not issue patents nor will it, in
its present form, eliminate the necessity for the
filing of a separate application in each national
patent office. The International Patent Office will
have only the limited function of giving qualified
advisory opinions on the novelty of the inventions
submitted to it for examination. The Office will ,
possibly be used as follows : the inventor files his |
application, as before, in the national patent office ;



' The United .States lias not adhered to this arrangement.

'The Uureau at Bern is also the adniiiiisfrative office
for the International Union for the Protection of Indus-
trial Property.

1030



'° The Federal Political Department of the Swiss Gov-
ernment at Bern was notified on Sept. 30, 1949, by the
Netherlands Government of the establishment of the In-
ternational Patent OflJce at The Hapue under art. 15 of
the "Convention of the Union for the Protection of In-
dustrial Property." Art. .5 of the agreement setting up
the International Patent Office at The Hague establishes
the relation of the International Patent Office to the In-
ternational Bureau for the Protection of Industrial
Property.

Department of State Bulletin



the national patent ollice then forwards the appli-
cation to the International Oflice which gives an
opinion on the ori



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 22, Apr- Jun 1950) → online text (page 103 of 116)