novation incentives: Rarely does history have a chance to repeat itself, or do we have a chance to learn from it. The path in this country has not been even. Although inventors, investors, and industry in general have understood the factors underlying commercial risk-taking in new technology, history shows that these factors were less well understood by economists and even by judges. The subjective judicial determination of what was patentable contributed to the unreliability of the patent grant as a basis for investment. I suppose this will always be with us. An effective patent system not only aids industrial development, it also enlarges the body of knowledge by the public disclosure that's required of patentees. I like Jefferson's words, "He who receives an idea from me receives instruction himself without lessening mine; as he who lights his taper at mine receives light without darkening me." Much of today's technological information appears only in patent documents. The Patent and Trademark Office serves a vital function in disseminating this information. The core of an effective patent system is its administration by the Patent and Trademark Office. As technology becomes more complex, increasing reliance must be placed on the expertise of the patent examining corps. With the increasing costs of research and commercialization of new products and processes, it's of critical importance that a presumptively valid patent be granted. The patent should be, it must be, a reliable basis for commercial risk and investment when the patent is issued, not years later when it is litigated. Although the Federal circuit has added a certain stability to the law, we still have a way to go. A critical value of this stability is the increased reliability of the product of the Patent Office. A patent that is fairly presumed valid, as the statute states it must be, is a powerful resource-as an incentive, and as an instrument of justice. Mr. Chairman, I know that there are difficult questions on the agenda for these hearings. I welcome the chance to express my personal views on the importance of these issues to the Nation. I would be glad to answer your questions. Mr. HUGHES. Thank you, Judge. [The prepared statement of Judge Newman follows:] SUMMARY STATEMENT PAULINE NEWMAN Judge, United States Court of Appeals Foundations of the United States Patent System The governmental grant of patents for inventions is authorized in the Constitution. It was one of the first laws that President Washington asked the First Congress to enact. Although the patent law is well suited to an industrial culture that recognizes and encourages private enterprise, its philosophic and economic roots are in the principles of the American revolution. It is a system of property right, a simple system that recognizes the right of creators to the products of their ingenuity, while providing a natural incentive to investment and innovation. Concurrently it adds to the store of scientific and technologic knowledge, often providing information that is not available elsewhere. Thomas Jefferson, as first Secretary of State, examined every patent application filed under the 1790 Patent Act, granting fiftyseven patents out of several hundred applications. A formal Patent office was established in 1802, and an examination system was initiated in 1836, very much like the present one. The patent system is a foundation of today's high-tech industry, but the core of the patent system today is its administration by the Patent and Trademark Office. A patent is far more useful as a basis for commercial risk and investment if patent validity is reliably established when the patent is issued, not years later when it is litigated. It is important to the nation to have an effective patent incentive, for every stage of applied research and technologic advance is benefitted. STATEMENT to the Subcommittee on Intellectual Property and Committee on the Judiciary United States House of Representatives Hearings on the Patent and Trademark Office PAULINE NEWMAN Judge, United States Court of Appeals Foundations of the United States Patent System The activity that we consider today is as old as the nation. Unlike today's regulatory apparatus, it was envisioned by the nation's Founders. The governmental grant of patents for inventions was not only authorized in the Constitution; it was one of the first laws that President Washington asked the First Congress to enact. In striking ways the patent law is suited to an industrial culture that recognizes and encourages private enterprise. Yet its philosophic and economic roots lie in the principles of the American revolution. It is a system of property right, a simple system that recognizes the natural right of creators to the products of their ingenuity, while fostering the Framers' view of a great commercial, and literate, nation. The idea of granting the exclusive right to a new invention, for a limited time, was not new. In ancient Sybarus, a Greek colony on the foot of Italy, six hundred years before Christ, the cook who created a new recipe, a new confection, was granted its exclusive use for a year. The Venetians had an active patent law. History records the grant to Galileo in 1594 of the twenty-year exclusive right to a new pump that he invented, he wrote in his application, with "great labor and expense". And in 1624 when James the First agreed to eliminate the grant of monopolies as favors of the King, there was an exception for inventions. In France, one of the earliest enactments of the Revolutionary tribunal was a patent law, on the basis that "it would be a violation of the Rights of Man, in their essence, not to regard an industrial discovery as property of its author." The On this continent, ingenuity came with the early settlers. The colonial legislatures authorized patent grants, patterned after those in England, as early as 1641 in Massachusetts. securing of the exclusive right to one's "writings and discoveries", in the words of the Constitution, was the affirmation of a natural right. Chief Justice Marshall wrote, in a case decided in 1813, that patents fulfilled the "great fundamental principles of right, and of property." History ascribes to James Madison and Thomas Jefferson the concept and shape of the American patent system. In Madison's vision the grant of an exclusive right to the profits of invention would encourage practical application, while new ideas would add to the wealth of human knowledge. Imagine that extraordinary period in our newborn nation when Jefferson as first Secretary of State examined every application for patent. During the first three years of the nation's existence some three hundred patent applications were filed, and fifty-seven patents were granted. Jefferson's personal concern for the quality of the patented invention may have been due to his knowledge of the historical abuses in England, or it may have been his genius for technology and his interest in its advancement. He remarked of this experience that "the law has given a spring to invention beyond any conception." When Jefferson ran out of time to examine patent applications himself, a registration system was established. Jefferson explained that what he called the "maturing" of the process should be turned over to the judiciary, for the courts to develop the conditions for patentability and the laws of enforcement in an evolutionary way, in the common law tradition. Indeed, that is what happened. What must have been the first administrative agency, the United States Patent Office, was established in 1802. The first Superintendent of Patents, Dr. William Thornton, not only submitted the winning design of the Capitol, but he also dissuaded the British soldiers from burning the Patent Office in 1814, by telling them of the irreplaceable knowledge it housed. The need for reinstituting patent examination soon became apparent, and an examination system quite like the present one was established in 1836. The industrial revolution blossomed, |