May 2, 1939 (18th Parliament, 4th Session)

LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

That was in 1937. I quote that in order to illustrate what manufacturers may do in connection with our Patent Act, and the use that they may make of it.
Mr. Justice Maclean of the exchequer court of Canada, discussing patents and our patent law, in 1932 Exchequer Court Reports, page 106, dealing with the case of Lightning Fastener Company v. Colonial Fastener Company, used these words:
It must be remembered that the object of the claim is to give a perfectly clear statement of the invention claimed. Of late years a superstition has arisen that a patent is more valid and has a greater hold over infringement if every possible permutation and combination of the elements entering into the invention is separately claimed; and it has become a practice to file claims which are copies of those used in American specifications. American claims may be very useful in dealing with American law, but in English law prolixity does not help a court which, whether in considering subject matter, novelty or infringement, invariably seeks to obtain an answer to the particular question, what has this man invented.
Again in the same report, by the same judge:
Prolixity and repetition in patent claims have also been frequently condemned in the United States courts. If the provisions of the Patent Act are not in terms sufficiently clear to enable the patent office to prevent a useless and confusing multiplicity of claims, and repetition in the separate claims, I would respectfully suggest to the commissioner of patents that he urge that the Patent Act be so amended as to
bestow ample power on the patent office, to curtail the abuse to which I refer and which is calculated to bring the whole law of patents into disrepute. I need hardly observe that my remarks are not applicable to all applications . . . perhaps only to a relatively small number, but in my own experience I have frequently noticed that claims are allowed which appear to me to be objectionable because of repetition in the separate claims, and the practice in my opinion should not be permitted to gather weight.
Again, by way of illustration, I would call attention to what has happened in connection with radio. It was referred to yesterday by the hon. member for Kootenay West (Mr. Esling) in his speech. One is astounded to know just how far people will go in order to exploit the consuming public of Canada. Dealing with this question of radio the statement has been made, and it has not been contradicted-I believe it is borne out by the evidence taken before the tariff board-that when the patent situation with regard to electrical apparatus was examined, it was found that this field was largely controlled by six companies who have pooled an innumerable number of good and bad patents. The companies are: Canadian General Electric Company, Canadian Westinghouse Company, Canadian Marconi Company, Northern Electric Company, Rogers Majestic Corporation Limited, Radio Corporation of Canada.
These six companies were involved in an investigation a few years ago under the Combines Investigation Act, and after the findings were made no action was taken against them. They have extended their operations to some other companies, and it would be astonishing to read the agreement that these companies entered into whereby they arranged that one company should have the manufacturing of one particular article and the others would not interfere, another company would have the manufacturing of some other article and the others would not interfere, and so on all through. The parent concerns are American, and they hold patents in Canada in connection with everything electrical connected with radio. Only ten per cent of the patents are held in Canada, ninety per cent being held in the United States; the parent company dictates what shall be done here, what price shall be charged; and if you buy a radio manufactured in the United States not only are you subject to a duty on bringing it in, but you are also liable to prosecution for infringement of patent rights by having it in Canada contrary to our own patent law.
' I will not take up any more time in this connection except to suggest that the defects which have been found in our Patent
The Budget*-Mr. Bothwell

Act might be outlined as follows-and I hope the minister in charge of patents and the government will see that the matter is looked into just as it was in the United States, where it was found that the manufacturer who is unconscionable enough to take advantage of the laws there is able to exploit the people unmercifully. And in Canada they can do it to a greater extent even than in the United States. I am going to suggest for consideration by the minister in charge of the Patent Act that there is lack of efficient examination of patent applications. The high cost of taking advantage of the remedies set forth in the Patent Act to curb abuses under it are prohibitive. Another defect is the cumbersome method by which such relief may be obtained and the uncertainty of the outcome. Other defects are: lack of responsible officers to investigate abuses; lack of power to punish patentees who have been found guilty of abusing patent rights; the large number of patents issued for the same articles; no positive, inexpensive way of ascertaining what patents cover a certain article; lack of positive control over the patentee; the wide powers given the patentee by means of which he may destroy the business of a competitor. These are matters for consideration. When one looks into the findings in the United States and considers some of the expressions that have been used there in the investigation, he will find that the chairman, after a hearing of several days, makes this statement:
The greatest handicap under the present system arises from the fact that there is no single court of patent appeals and no effective limitation upon the number of baseless attacks which may be made in the patent office by an applicant who desires to exploit or hamper an inventor.
Among manufacturers as well as among inventors there seems to be an agreement that patent procedure should be so changed that action on a patent application may not be unduly delayed in the patent office and that the entire life of a patent from the date of the application to the date of expiration shall not be more than twenty years.
One instance was brought to the attention of the committee of the extension by means of delays of the period of exclusive use from the seventeen years contemplated by law to forty-four years.
I might give an illustration of a company in the United States called Owens Illinois which is possibly a subsidiary of Hartford-Empire. No doubt Hartford-Empire control a large number of patents in the United States. They do not manufacture. For the period from 1925 to the end of 1937 they had an income of $49,479,062 from licence fees and royalties without manufacturing anything. It was "found that that company and Owens Illinois controlled 67 [DOT] 4 per cent and 29-2 per cent respectively of all glass
containers produced in the country, leaving about 3 per cent for all independent competitors. Two companies control the whole situation there in connection with glass containers. An investigation. in Canada might reveal a somewhat similar situation. My studied conclusion on the whole matter is that by the patent laws we have in Canada we are enabling foreign manufacturers to exploit the Canadian public to an extent that could not be done even under the tariff of the late administration.

Topic:   THE BUDGET
Subtopic:   DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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