"Harmless But Useful"

On Thomas Jefferson's birthday last week, hearings opened on the subject of one of Inventor Jefferson's favorite Constitutional guarantees: Article I, Section 8, which-"to promote the progress of science and useful arts" -calls for "securing for limited times to authors and inventors exclusive rights to their respective writings and discoveries."

From this benevolent clause has grown the U.S. patent system -often described at home and abroad as the most liberal, invention-inviting system in the world. Yet the Senators who packed the smoke-filled Patents Committee room last week were told that that system had also fostered monopoly and -more sinister at the moment -had helped the Nazis.

The room was hot and tempers hotter. The Justice Department was conducting a drive along the lines of its Standard Oil action three weeks ago (Time, April 6, et seq.). Gape-jawed Senators were told that General Electric (through its subsidiary Carboloy Co., Inc.) and Remington Arms (Du Pont-controlled) had conspired with German munitions interests (Krupp and I. G. Farben) to monopolize vital war materials, restrict their availability to the U.S. and Britain. Angry Carboloy and Remington officials made the familiar reply: if they had not made a deal to get.the German patents, the U.S. would have entered the war entirely without these vital materials*, not to mention the secret of how to make and use them. Carboloy's President W. G. Robbins got so mad at having his patriotism impugned (and at being "smeared before trial by the official prosecutor" of an antitrust indictment against him) that he stamped out of the room, saying "I refuse to be called un-American ! " But no voice was raised against the bill which these doings were designed to promote. S. 2303, sponsored by Senators Bone (Chairman of the Patents Commit tee), O'Mahoney and La Follette, gives the President power to grab any patent needed for war or national defense, to license it to anyone he cares to for as long as he deems necessary, for payment of a "reasonable royalty fee." One section of S. 2303 looked to nervous anti-New Deal ers like a New Deal foot in the post-war door: it provides that the President's1 patent-grabbing powers may hold not only in wartime but "during any period of national emergency declared by him to exist." But Thurman Arnold's consent decrees with German patent licensees like Standard Oil, Alcoa, Dow Chemical, et al, have already resulted in freeing many U.S. as well as German patents for the duration.

Main criticisms leveled against S. 2303 were that it did not go far enough. Thur man Arnold, flushed with power, called it "harmless but useful." Cried he, "Patents [are] the protective coloration of the worst economic abuses of mechanized industry. ... If we strip the patent power of its use as ... a regulatory device by which large corporations create cartels to govern domestic and international economic policy -it may become what it was intended to be under the Constitution, a method of advancing the progress of sci- ence and the useful arts." Many a student of U.S. patent law and practice figured that, at that point, Thur an Arnold was cooking with gas. His wartime witch hunts have actually obscured the real need for over-all revision of U.S. patent laws. Without such revision, the question plaguing the U.S. now will plague it even more at peace, when wartime-seizure powers no longer exist: How can a patent law encourage individual inventors without at the same time discouraging competition? Too often the patent laws have been used to restrict the use of new inventions rather than to assure an adequate reward to the inventor and their full enjoyment to the public.

The modern "inventor" is likely to be a big corporation. Big corporations have not only the best laboratories, but the most money and the most staying power in infringement suits. These suits can be so costly and long-drawn-out that the poorer contender can be bought or frozen out, however valid his claims.

More than three years ago, TNEC made an exhaustive study of patents and monopoly. In their hundreds of pages of testimony and analysis, the cartel menace with which Arnold now salts his case was barely mentioned. But the patent system's dangerous "corrosion" of competition at home was made very real indeed. TNEC Chairman Joe O'Mahoney already has an other bill in the hopper to overhaul the U.S. patent laws. Chief proposed changes: 1) a much-mooted provision now almost standard in foreign patent laws, that the owner of a patent must license all comers who offer a reasonable royalty; 2) compulsory supervision by the Justice Department of all international patent agreements. Some other reforms suggested by the Justice Department last week : > Forbid price or market-area restrictions in licensing agreements.

> Restrict infringement suits, to prevent their coercive use.

> Bigger penalties on use of patents to restrain trade.

The problem of encouraging invention and competition at the same time is as tangled as any that U.S. democracy faces.

If the U.S. at war can solve it for a future U.S. at peace, free enterprise will have won more than a military victory.

*-Carboloy's was cemented tungsten carbide, an exceedingly hard metal composition important for cutting tools. Remington Arms' was tetracene, an ammunition primer, which, the Justice Department contended, the ever-logical Germans licensed Remington to sell to the British "for shooting quail and pheasants but not for shooting Germans."

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