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As originally planned, the Plenipotentiary Conference was expected to produce draft definitive
arrangements. After several weeks, however, it was clear that the divergence of views of the member
countries and the complexity and difficulty of issues involved would require considerably more
extensive negotiation. The Conference recessed on March 21, 1969 and established a Preparatory
Committee to convene in Washington in June 1969 to develop draft agreements.

The Conference decided
tentatively to reconvene in November 1969 in Washington to conclude agreements based on the Preparatory
These developments came too late to make provision for the additional meetings in
Committee's work.
the regular appropriation request for FY 1970.

Forty-five nations participated in the Preparatory Committee meeting of June 23-July 11 and
Exercising authority given to it by the Conference, the Preparatory Committee
decided on July 10 that it would meet again in Washington in September and November, and postponed
progress was slow.
the reconvening of the Plenipotentiary Conference until February 1970. These decisions were reached
The U.S. Delegation agreed
in full consultation with the U.S. Delegation and the Department of State.
that the adjustments in the schedule were necessary.

Given the large number of countries involved, the divergence of views, the novelty of many of the
issues, the general complexity of the legal, technical, economic and political aspects of the negotiations,
and the importance of a sound outcome, more extended negotiations are clearly a necessity. It is also the
of the U.S. Delegation that a relocation of site of this Conference to another country could have
seriously adverse effects on the U.S. negotiating posture.
view

The United States has undertaken to act as host for these important additional INTELSAT meetings.
The cost of hostship of the Third Preparatory Committee meeting (scheduled for November 18-December 15, 1969)
is estimated to be $72,450 and of the resumed Plenipotentiary Conference (scheduled for one month beginning
February 16, 1970) $152,550. Total cost for the two meetings is $225,000. Details on these costs are set
It is not possible to meet these costs from the regular appropriation for FY 1970.
forth below.

For FY 1970 an appropriation of $1,845,000 was requested; $1,800,000 was approved. The unbudgeted
costs of U.S. hostship of the First and Second INTELSAT Preparatory Committee meetings, totaling $60,861
in FY 1970, have been met from the regular appropriation. Absorption of this unbudgeted cost has and
will require continued stringent management of the regular appropriation.

Absorption of the costs of U.S. hostship of the Third Preparatory Committee meeting and the resumed
INTELSAT Plenipotentiary Conference in the regular appropriation is not possible. From FY 1962 through
FY 1967 the regular appropriation for International Conferences and Contingencies remained constant at
$1,943,000 and has recently been at the lower level of $1,800,000. During this period the portion of this

appropriation required for Contributions to Provisional International Organizations, and the portion for U.S. hostship costs have increased steeply as the figures below show. The combined effect is that funds available to finance the participation of official U.S. Delegations in international conferences have decreased by forty percent from 1962 to 1969.

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Available for U.S. Delegations to
International Conferences

FY 1962 $ 1,943,000

FY 1969

$1,800,000

329,000

682,000

82,000

207,000

1,532,000

911,000

For FY 1970, with a regular appropriation of $1,800,000, the requirement for Contributions to Provisional International Organizations has increased to $735,000. U.S. hostship costs, including those for the Third Preparatory Committee Meeting and the resumed INTELSAT Plenipotentiary Conference will total $357,000. Thus, in the absence of the requested supplemental amount to meet these additional INTELSAT hostship costs, there would remain in the regular appropriation only $708,000 to finance U.S. Delegations to international conferences during the fiscal year. This amount is less than fifty percent of the amount for this purpose in 1962. A decrease of that magnitude would cripple U.S. participation It would be seriously disadvantageous to leave the U.S. chair vacant at the large number of international meetings which such a decrease in funds for this purpose in the work of many multilateral organizations. would require. Approval of the requested supplemental appropriation amount of $225,000 for these INTELSAT meetings will approximately maintain the FY 1969 level of U.S. Delegation conference participation, and will require continued stringent economies in the management of this activity.

Detailed costs of the two additional INTELSAT meetings follow:

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2. Diplomatic Conference to Negotiate a Patent Cooperation Treaty

$175,000

S.J. Res. 90, 91st Congress, or similar legislation when enacted into law would enable the Secretary of State and the Secretary of Commerce to take all necessary steps to organize and hold a Diplomatic Conference to Negotiate a Patent Cooperation Treaty in Washington, D.C. in Fiscal Year 1970. This legislation would also authorize to be appropriated to the Department of State a sum not to exceed $175,000 for the purpose of defraying the expenses incurred on behalf of the United States as host government of such a conference.

The proposed Patent Cooperation Treaty is the result of a United States initiative in September 1966 in the Executive Committee of the Convention of Paris for the Protection of Industrial Property. This Committee unanimously approved a resolution asking the Secretariat for that Convention, the United International Bureaux for the Protection of Intellectual Property (BIRPI), to undertake a study of practicable means to simplify the patenting of any given invention in a number of countries

Today patenting in each country is a wholly independent affair and the national laws of most countries as a rule do not take account of the fact that protection for the same invention may be sought in other countries. It is estimated that more than 50% of the 700,000 patent applications filed worldwide are duplicates of other applications Consequently, there is much duplication of effort and a considerable waste of time, talent and money, both for the patent applicant and the national patent offices.

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Obtaining foreign patent rights is important to U.S. patent holders and more patent applications are filed abroad by U.S. nationals than by the nationals of any other country. Foreign patents help protect markets for U.S. exports. U.S. firms which manufacture in foreign countries also have a strong interest in effective patent systems to protect their products and processes in these countries. And finally, the increasing number of U.S. firms which license their technology overseas also require patent protection abroad. Preliminary estimates of payments to U.S. firms from abroad for the use of their intangible property--largely but not exclusively patent protected--according to the latest available figures, were running at an annual rate of about $967 million in 1968.

If the full economic benefits of the patent system for American inventors and businessmen
to be maintained, we believe that a multilateral cooperative effort along
at home and abroad are
the lines of the Patent Cooperation Treaty is essential.

In carrying out the 1966 resolution of the Executive Committee of the Paris Convention, the
Secretariat for that Convention--BIRPI--released a first draft of a proposed Patent Cooperation
Treaty at the end of May 1967. This draft was prepared in consultation with interested governments,
including the United States, and with interested governmental and nongovernmental organizations.

Various meetings of experts were called by BIRPI during the latter half of 1967 and the first half of 1968 to consider the 1967 draft Treaty. In developing the United States position for these meetings the Patent Office and the Department of State carefully considered the views of representative bar and industry groups, with whom we have been meeting on a continuing basis. As a consequence, we proposed several important revisions which were accepted and incorporated in a second draft of the Treaty prepared by BIRPI and released publicly in July 1968. proposals by the United States were incorporated in the current draft of the Treaty which was issued in July of this year.

Additional

It would appear that on the basis of the deliberations at the international meetings held this spring a general consensus has been reached. While there are some matters still to be worked out, it is the general view of the countries most concerned that we have reached the stage where a Diplomatic Conference to Negotiate the Patent Cooperation Treaty should be held during the first half of 1970. It seems most appropriate for the United States, which took the initiative for this project and which stands to benefit substantially by it, to offer to serve as host for the Diplomatic Conference.

There has been widespread support for the basic principles of such a Treaty from many important industry and bar groups. These include the Chamber of Commerce of the United States, the Pharmaceutical Manufacturers Association, the National Association of Manufacturers, the American Bar Association's Section of Patent, Trademark and Copyright Law, the American Patent Law Association, the American Group of the International Patent and Trademark Association, the Boston Patent Law Association, and the Electronic Industries Association.

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