HOUSE REPORT NO. 96-1307 (Part II), SEPT. 23, 1980
Additional views of Honorable Jack Brooks
The major problem I have with H.R. 6933 is that it violates a basic provision of the unwritten contract between the citizens of this country and their government; namely, that what the government acquires through the expenditure of its citizens’ taxes, the government owns. Assigning automatic patent rights and exclusive licenses to companies or organizations for inventions developed at government expense is a pure giveaway of rights that properly belong to the people.
The argument is made by proponents of the bill that it will spur productivity, a goal that is both necessary and desirable if the United States is to regain its position in the world economy. But that argument ignores the fact that the federal government is already paying half the costs of research and development in the United States at an annual cost of $30 billion. No companies or nonprofit organizations that I know of have been turning down that money because they are not now receiving automatic patent and exclusive licensing rights. So unless it is the intent of the supporters of H.R. 6933 that the government greatly increase this already enormous public investment in research and development, I fail to see how enactment of the bill will lead to increased production.
It is also argued that this legislation will increase competition in industry and thereby spur production. But again the connection is hard to establish. Under current practice, inventions, new products and technological advances developed under government contracts– unless awarded to a specific contractor under existing permissible arrangements– are available to all. That approach would seem to offer far greater potential for increased competition and productivity than handing over exclusive rights to one company. In the latter case the company might even choose to reduce production with the aim of increasing its profits.
Admiral Hyman G. Rickover testified at the hearings by the legislation and national security subcommittee that:
Based on 40 years experience in technology and in dealing with various segments of american industry, I believe the bill would achieve exactly the opposite of what it purports. It would impede, not enhance, the development and dissemination of technology. It would hurt small business. It would inhibit competition. It would promote greater concentration of economic power in the hands of large corporations. It would be costly to the taxpayer.
I do not overlook or underestimate the importance of patents in developing and maintaining a thriving economy. My concern is simply the role of the government and the rights of the people in the patent process. When a private company risks its own money to develop new products and procedures it deserves and receives the profits that may result. There should not be a different standard applied when it is the government that risks the taxpayers’ money. The rewards of successful research and development conducted at government expense should go to all the people.
I agree wholeheartedly with the establishment of a U.S. patent policy that encourages the development and production of new products, that will reward those who take risks, and that will inspire increased confidence in our economy. My comments above deal only with the very special issue of government-funded research and development activities. (a fuller explanation of my views can be found in the report of H.R. 6933, as reported by the House Judiciary Committee, H. Rept. 96-1307, Part I, pp. 29-32).
The federal government has the equivalent of a fiduciary responsibility to the taxpayers of this country. property acquired with public funds should belong to the public. Deviations from that fundamental principle should be allowed only where a compelling justification can be shown and where the voice of the public can be heard in protest. This legislation stands that principle on its head by automatically conveying title or the exclusive right to use public property to private entities and placing the burden on the federal government to demonstrate that a retrieval of those rights is in the public interest.
Additional views of Honorable Toby Moffett
Encouraging industrial innovation and increased productivity by u.s. businesses is central to retaining our commercial primacy in the world marketplace. For that reason, the goals of H.R. 6933 and its sponsors are easily shared and properly applauded by all of us.
Unfortunately, the approach taken by H.R. 6933 appears to be seriously flawed. I share the general view expressed by Chairman Jack Brooks in fearing that the bill constitutes a ‘giveaway of rights that properly belong to the people.‘ Sections 6 and 7 of the bill go too far in favoring the commercial rights of contractors doing research with government– that is, taxpayers’– funds. And it does so without adequate demonstration that the stated lofty goals of increased innovation and productivity will in fact result from shifting the law for the benefit of these contractors.
To pursue that point, let me turn one of the proponents’ arguments on its head. It is said that we need ‘uniformity‘ in this area, and it is pointed out that there are now ‘26‘ different statutory schemes affecting this question of the commercial rights to inventions and discoveries generated under government research grants and contracts. The fallacy of that argument can be seen by looking more carefully at some of those 26 specific arrangements established by statute. The fact is that each statutory enactment was rooted in specific events, specific cases or situations examined by the appropriate congressional committees. In each instance, the considered opinion of the congress was that the results of the research being promoted in that case could best be preserved for the benefit of the public by the commercial licensing arrangement sanctioned at that time. Some of those congressional determinations, moreover, are quite recent, such as the federal mine safety and health act of 1977 and the water research and development act of 1978.
In my judgment, those statutes demonstrate that the case can be made for diversity rather than uniformity. It would appear more appropriate for the judiciary committee to have produced a bill which precisely assessed the arrangements in each of the 26 cases, in consultation with the committees having jurisdiction in each of those areas, and to have produced a bill creating the best arrangement for each of those areas. Such a bill would not seek uniformity for its own sake, but would analytically design the best arrangement with regard to commercial use for each of the many areas in which the federal government sponsors research. Such a bill might produce uniformity, but it might also reflect the fact that different cases sometimes deserve different treatments.
That observation leads to an additional compelling reason why this legislation should not be passed by this congress at this time. I fully respect the extensive efforts of the judiciary committee. I am well aware of the hard work involved in holding numerous days of hearings and in drafting a large piece of legislation. Nevertheless, I believe it can fairly be said that not all of the committees whose jurisdictions would be significantly affected by this legislation have been adequately consulted. Their judgment and experience is vitally needed to assure that this bill’s approach is indeed a sound one for all the diverse areas which it will affect, as its sponsors take great pride in pointing out.
For that reason, I urge my colleagues to opt for further consideration of this measure. i specifically urge that all committee chairmen whose substantive jurisdictions will be affected by the impact of this bill on government-sponsored research in their areas be given adequate time to assess this bill and to consult with one another before the house takes action. I am aware that genuine consultation of this sort probably cannot be achieved in the waning hours of this congress. If not, i believe the long-term implications of this measure are far too important to go forward at this time.
As with so many of our problems as a nation, we did not get into this problem of lowering productivity and declining ingenuity overnight. It is a complex problem reflecting many developments over many years. There is thus no need to rush out a bill now without being certain that we are doing the right thing, based on the full and deliberate consultation among our colleagues with the greatest knowledge of the potential effects of this legislation.