[Pages H1629-H1643]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

21ST CENTURY PATENT SYSTEM IMPROVEMENT ACT

Mr. McINNIS. Mr. Speaker, by direction of the Committee on Rules, I
call up House Resolution 116 and ask for its immediate consideration.
The Clerk read the resolution, as follows:

H. Res. 116

Resolved, That at any time after the adoption of this
resolution the Speaker may, pursuant to clause 1(b) of rule
XXIII, declare the House resolved into the Committee of the
Whole House on the state of the Union for consideration of
the bill (H.R. 400) to amend title 35, United States Code,
with respect to patents, and for other purposes. The first
reading of the bill shall be dispensed with. All points of
order against consideration of the bill are waived. General
debate shall be confined to the bill and shall not exceed one
hour equally divided and controlled by the chairman and
ranking minority member of the Committee on the Judiciary.
After general debate the bill shall be considered for
amendment under the five-minute rule. It shall be in order to
consider as an original bill for the purpose of amendment
under the five-minute rule the amendment in the nature of a
substitute recommended by the Committee on the Judiciary now
printed in the bill, modified as specified in section 2 of
this resolution. The committee amendment in the nature of a
substitute, as modified, shall be considered as read. All
points of order against the committee amendment in the nature
of a substitute, as modified, are waived. During
consideration of the bill for amendment, the Chairman of the
Committee of the Whole may accord priority in recognition on
the basis of whether the Member offering an amendment has
caused it to be printed in the portion of the Congressional
Record designated for that purpose in clause 6 of rule XXIII.
Amendments so printed shall be considered as read. The
Chairman of the Committee of the Whole may: (1) postpone
until a time during further consideration in the Committee of
the Whole a request for a recorded vote on any amendment; and
(2) reduce to five minutes the minimum time for electronic
voting on any postponed question that follows another
electronic vote without intervening business, provided that
the minimum time for electronic voting on the first in any
series of questions shall be fifteen minutes. At the
conclusion of consideration of the bill for amendment the
Committee shall rise and report the bill to the House with
such amendments as may have been adopted. Any Member may
demand a separate vote in the House on any amendment adopted
in the Committee of the Whole to the bill or to the committee
amendment in the nature of a substitute, as modified. The
previous question shall be considered as ordered on the bill
and amendments thereto to final passage without intervening
motion except one motion to recommit with or without
instructions.
Sec. 2. The amendment in the nature of a substitute
recommended by the Committee on the Judiciary now printed in
H.R. 400 is modified as follows:
(a) page 14, line 19, after ``at'' insert ``a rate not to
exceed''; and
(b) page 46, line 15, strike ``activities'' and insert in
lieu thereof ``activities, subject to the submission of a
plan to the Committees on Appropriations of the House and
Senate in accordance with the procedures set forth in section
605 of the Departments of Commerce, Justice, and State, the
Judiciary, and Related Agencies Appropriations Act 1997''.

{time} 1215

Parliamentary Inquiry

Ms. JACKSON-LEE of Texas. Mr. Speaker, I have a parliamentary
inquiry.
The SPEAKER pro tempore (Mr. LaHood). The gentlewoman from Texas will
state her parliamentary inquiry.
Ms. JACKSON-LEE of Texas. Mr. Speaker, after the conciliatory remarks
of the previous speaker, I have an inquiry to the Speaker as to his
recollection: In the last 90 years of this House have we any time where
this House has voted to censor a Member the entire day by rollcall
vote?
I would appreciate a response on that inquiry, Mr. Speaker.
The SPEAKER pro tempore. The Chair would advise the gentlewoman from
Texas [Ms. Jackson-Lee] in the House Manual on page 322, the Chair
responded on June 25, 1992, to parliamentary inquiries relating in a
practical sense to the pending proceedings but did not respond to
requests to place them in historical context.
The gentleman from Colorado [Mr. McInnis] is recognized for 1 hour.
Mr. McINNIS. Mr. Speaker, for the purpose of debate only, I yield the
customary 30 minutes to the gentleman from Massachusetts [Mr. Moakley],
pending which I yield myself such time as I might consume. During the
consideration of this resolution all time is yielded for the purpose of
debate only.
Mr. Speaker, House Resolution 116 is a noncontroversial resolution.
The proposed rule is an open rule providing for 1 hour of general
debate divided equally between the chairman and the ranking minority
member of the Committee on the Judiciary. After general debate the bill
shall be considered for amendment under the 5-minute rule.
Furthermore, it shall be in order to consider as an original bill for
the purpose of amendment under the 5-minute rule the amendment in the
nature of a substitute recommended by the Committee on the Judiciary
now printed in the bill modified as specified in section 2 of House
Resolution 1616. The resolution waives all points of order against the
committee amendment in the nature of a substitute, as modified, and
provides that it shall be considered as read.
Furthermore, Mr. Speaker, the resolution allows the Chair to accord
priority recognition to Members who have preprinted their amendments in
the Congressional Record, and the Chair may postpone votes in the
Committee of the Whole and reduce votes to 5 minutes if those votes
follow a 15-minute rule.
At the conclusion of the consideration of the bill for amendment, the
Committee shall rise and report the bill to the House with such
amendments as may have been adopted.
Finally, Mr. Speaker, the rule provides one motion to recommit with
or without instructions.
Mr. Speaker, this open rule was reported out of the Committee on
Rules by a voice vote without any opposition. Under the proposed rule
each Member has an opportunity to have their concerns addressed,
debated and ultimately voted on, up or down, by this body.
I urge my colleagues to support the bill.
Mr. Speaker, I reserve the balance of my time.
Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I thank my colleague, my friend from Colorado [Mr.
McInnis], for yielding me the customary half hour.
Mr. Speaker, I think this is a day for celebration. We have finally
gotten an open rule here on the floor. One of the 13 bills brought to
the House by a rule this session, only 3 of them have been open. And as
all my colleagues know, Mr. Speaker, we were promised more open rules,
so I certainly hope that this is the beginning of a trend and not just
a one-time occurrence.
I do find it ironic, Mr. Speaker, however, that just 2 days ago, just
2 days ago my colleagues on the Republican side of the aisle spent an
entire afternoon trying to pass a constitutional amendment to require a
two-thirds vote for any tax increase. Now they are bringing to the
floor a bill that would pose new taxes. They can call them user fees,
but I have got a letter from the gentleman from Texas [Mr. Archer],
chairman of the Committee on Ways and Means, which says these are
taxes, and they still increase costs to the American people.

[[Page H1630]]

Mr. Speaker, the goals of H.R. 400 are laudable, to strengthen our
patent laws and patent process and to bring them into compliance with
the standards utilized by the international community. The bill would
also establish the U.S. Patent and Trademark Office as a separate
Government agency to serve in a more efficient manner for those who
utilize its services.
The United States, Mr. Speaker, is No. 1 in the world when it comes
to the production of intellectual property. The development of a sound
and effective policy for the protection of this property is critically
important to our Nation's future dominance in this area.
But having said that, Mr. Speaker, this bill is not without its
controversies. Some small inventors and others have some valid concerns
with this legislation. But the time and place to address these problems
is during the consideration of the bill itself. Under the open rule
process, any amendment or substitute that is germane and does not
violate any other House rules can be offered at that time.
Hopefully, these concerns will be thoroughly debated and addressed by
the full House.
So, Mr. Speaker, I urge passage of this rule so that we may proceed
to the consideration of the bill itself.
Mr. Speaker, I reserve the balance of my time.
Mr. McINNIS. Mr. Speaker, I yield 5 minutes to the gentleman from
California [Mr. Rohrabacher].
Mr. ROHRABACHER. Mr. Speaker, the day has finally come, and I rise in
support of the rule and in opposition to H.R. 400. I know a lot of
people may vote in favor of my substitute to H.R. 400 just to shut me
up and to keep me from giving all these special orders all the time,
but the day has finally come when we will have a head-to-head
discussion on the issue of what the patent law of the United States of
America should be, and as I have pointed out on numerous occasions over
the last few months, that the bill that was being crafted and, yes, the
bill that finally went through the system is taking America in exactly
the wrong direction.
Mr. Speaker, the United States of America has had essentially the
same patent protections, the strongest patent system in the world up
until this date, and if this vote passes today on H.R. 400, America's
patent system will be gutted, that is gutted, and we will hear during
this debate that they are doing it simply to get out a thing called the
submarine patent.
Let me note this: That is very similar by saying the only way we are
going to be able to handle Hustler magazine is to destroy all freedom
of speech in the United States or the equivalent of saying, ``You have
a hangnail that might be infected, and the only way to cure it is to
cut off your leg,'' and that is not the case. The Congressional
Research Service states that my substitute bill to H.R. 400 will
eliminate the practice of submarine patenting. It never was necessary
to cut one's leg off to handle the hangnail.
What we have here is an attempt to use a small problem which can be
cured in other ways, the submarine patent problem, as an excuse to gut
the strongest patent system in the world.
The essential ingredient, we have offered to compromise time and time
again with those people who are supporting H.R. 400, but they came back
and were unwilling to compromise on the essential point, which was our
country believes that, until a patent is issued, that the patent
applicant has a right of confidentiality. This bill as it is written,
and it has not changed, they have not exempted any of the small
business they claim to have exempted; this bill would mandate that all
of our secrets, every one of our secrets that would be held
confidential under the current system under what they are proposing is
a system that will publish them after 18 months for the world to see.
Everyone can understand that.
Mr. Speaker, that is why the American people have risen up and called
their Member of Congress to say we do not want to make America's
technology vulnerable to foreign theft and the theft from huge
corporations domestically. This, after asking for compromise for 2
years, we have not been able to compromise on this point because that
is what the purpose of this bill is.
H.R. 400, when it was introduced last session, was called the Patent
Publication Act. So all of the other wonderful things that we hear
about this bill we have accepted in the substitute. I will be offering
in the substitute almost all the wonderful things that we will hear,
but the disagreement, the fundamental disagreement, is, No. 1, should
we basically gut the patent system by corporatizing the Patent Office
and taking it out of the U.S. Government, making it a corporate entity,
taking our patent examiners, making them vulnerable to outside
influences, No. 1; and No. 2, should we publish the information about
our inventors' patent applications even before the patent is granted?
If we succeed today or if the other side succeeds today, foreign
corporations, whether in China or Japan or elsewhere, will be able to
steal this information, use it, go into production, but those
proponents say: But we give them the right to sue once the patent is
issued.
Mr. and Mrs. America has to decide on that. Is this really an option
if the People's Liberation Army is manufacturing some technology
developed here and 4 or 5 years later the patent is issued giving the
person who owns the patent the right to sue the People's Liberation
Army 5 years later? Is that really recourse?
This is setting up, this is a set up for the biggest ripoff of
technology in the history of the United States. Our most important
ideas will be stolen from us by our worst adversaries and used against
us; and when the court action comes up, what is going to happen? When
the court action comes up, they will be using the money for
manufacturing with stolen technology to defeat our people in court.
I ask my colleagues to support the rule, I ask my colleagues to
oppose H.R. 400, the Steal American Technologies Act, and to support
the Rohrabacher substitute.
Mr. MOAKLEY. Mr. Speaker, I would like to inquire of my distinguished
colleague from Colorado how many speakers he has left.
Mr. McINNIS. To my good friend from Massachusetts, I have a number of
speakers who have just now signed up, so I assume that I will take the
entire 30 minutes.
Mr. MOAKLEY. The only speaker I have is myself to finish our side of
the debate, so I will allow my dear friend from Colorado to go forward.
Mr. Speaker, I reserve the balance of my time.
Mr. McINNIS. Mr. Speaker, I yield 5 minutes to the gentleman from
North Carolina [Mr. Coble].
Mr. COBLE. Mr. Speaker, I have been called a puppet of the Japanese
industrial complex as a result of this bill. I resent it. I have been
called worse than that. We have tried to keep this on an evenhanded
course, but alas to no avail.
The patent law, Mr. Speaker, as my colleagues know, provides a forum
whereby cute, sexy questions can be propounded, but because of the
complexity of the subject matters, cute, sexy responses are not that
easy to be forthcoming.
This is a good bill. In contrast to what our opponents would have my
colleagues believe, H.R. 400 has received more process than any patent
bill in history. It is developed over a 2-year period and was the
subject of more than 50 negotiating sessions with interested parties
and the administration. And incidently, Mr. Speaker, in addition to the
Clinton administration, the Bush and Reagan administrations heartily
endorsed this proposal. During this time over 80 witnesses testified at
eight different hearings to help craft its contents. I have no pride of
exclusive authorship in H.R. 400 since so many fingerprints cover the
bill including those of independent inventors, small and big business,
industry groups, universities and research laboratories.

{time} 1230

Our bill is supported by 75 American companies responsible for 90
percent of the patents issued to American applicants in the United
States. Twenty-one CEO's of our Nation's high-technology companies
which employ 1.4 million men and women and which hold 55,000 U.S.
patents endorse H.R. 400 and oppose the Rohrabacher substitute. Mr.
Speaker, pardon my immodesty, but that hardly sounds like a puppet of
the Japanese industrial complex.

[[Page H1631]]

Title I of H.R. 400 would transform the Patent and Trademark Office,
or the PTO, into a Government corporation. It would remain a Federal
agency subject to congressional oversight and protected by all of the
benefits and safeguards afforded any agency and its employees under
title V of the U.S. Code.
The whole point of title I is to allow the PTO to operate more
efficiently on a day-to-day basis. To illustrate, the agency would no
longer be required to solicit permission from the General Services
Administration each time it wished to buy a box of pencils or note
pads.
Furthermore, title I would permit the PTO to keep all its funding
derived from user fees. Last year alone, $92 million were diverted from
those funds, which are exclusively funded by users, and the intent at
the time of collection is to use those fees to operate and maintain the
Patent and Trademark Office.
First, H.R. 400 helps American inventors under title II who file for
patent protection overseas. Since all other developed countries which
have patent systems require publication after 18 months, American
inventors have their applications published in the language of the
relative host country at this time. In contrast, foreign companies
which seek protection in the United States do not reveal their
applications until the U.S. patent issues. This is unfair on its face,
since foreign companies are therefore able to study our latest
technological developments abroad but are not required to reveal their
work to our inventors on these same terms here. Eighteen-month
publication, therefore, levels the international playing field.
Second, the publication inhibits the practice of patent submarining.
My colleagues will hear more about that as this debate develops. A
submariner is a bad-faith inventor who attempts to game the existing
patent system by indulging in dilatory tactics that prevent the
expeditious review of the application. By biding his time, the
submariner can eventually identify a company which has independently
developed the same idea, then sue for royalties. Quite obviously, this
constitutes bad public policy, since the submariner has no intention of
using an invention to manufacture a product or create a new job. The
motivation of the submariner is to subsist off the work of others, and
they do real well at it. I refer my colleagues to a recent article that
appeared in last week's Wall Street Journal.
Mr. MOAKLEY. Mr. Speaker, I yield 4 minutes to the gentleman from
Michigan [Mr. Conyers], the ranking member on the Committee on the
Judiciary.
(Mr. CONYERS asked and was given permission to revise and extend his
remarks.)
Mr. CONYERS. Mr. Speaker, I am here in my capacity as ranking member
to urge that this rule be adopted. I understand that everybody that has
spoken on the rule is supporting the rule, so very good. The only thing
is that the first speaker, the gentleman from California [Mr.
Rohrabacher], in supporting the rule, said this was a bill that would
gut the American patent process, if I heard him correctly. He is
nodding, and apparently I did hear him correctly; that this bill, H.R.
400, would gut the U.S. patent process.
This is the same bill that has passed out of two Republican
Congresses and two judiciary committees unanimously, and but for the
tremendous acumen of the gentleman from California [Mr. Rohrabacher] we
would unwittingly have passed out last Congress and this Congress a
bill that would gut the patent process of the United States of America.
We obviously owe this gentleman from California [Mr. Rohrabacher] a
huge debt. I mean our obligation must go up to the sky. I thank the
gentleman from California [Mr. Rohrabacher] for this great single feat
of saving the American legal system from what would happen were it not
for his substitute.
Fortunately, however, there is a remedy. The rule will call for the
substitute, but until the debate occurs, could the gentleman help us
keep the confusion level down to about its norm by refraining from
these unsubstantiated statements so far in this debate. I know in the
gentleman's mind the gentleman is pretty firm where he is coming from,
but for those who may not be committed yet to this bill and who may not
be on the substitute, could we have a debate that merely tries to
describe what our humble Committee on the Judiciary and two Congresses
have attempted to do on this, and if we could do that, I think it would
win the approval of all of us in the Congress and it would help us a
great deal.
Now, this bill is supported by five of the last six Commissioners of
the Patent and Trademark Office. That means that the highest Government
officials on this subject in the past have all signed off on this bill.
There have been years of negotiation on this bill. We have finally
reached, we thought, almost unanimity. It will stop cheating in the
patent process by ending the prime delaying tactic, and on this, the
gentleman from California [Mr. Rohrabacher] and I agree, submarine
patenting. It will end that process where lawyers now are coming
forward representing people that are subverting the patent process.
This is the best thing that has ever happened for the small inventor,
and I urge the support of the rule.
Mr. McINNIS. Mr. Speaker, I yield 5 minutes to the gentleman from
Florida [Mr. Goss].
(Mr. GOSS asked and was given permission to revise and extend his
remarks.)
Mr. GOSS. Mr. Speaker, I thank the distinguished gentleman from
Colorado for yielding me this time.
Mr. Speaker, I appreciate and I rise in strong support of this wide-
open rule providing for consideration of H.R. 400. This open rule will
allow for full debate on this very complex and controversial measure.
Mr. Speaker, the objective of this legislation is to promote greater
efficiency in our patent system, and of course put us on an even
footing overseas, at the same time balance this with fair protection
for the independent inventor, and this is obviously a very delicate
process.
My district is home to the Edison Inventors Association. We are very
proud of that. They have directly and personally conveyed to me their
very real concerns with the legislation as it is written, and I am sure
the gentleman from California [Mr. Rohrabacher] is going to speak to
several of those issues as the day goes along. I have also spoken with
proponents of H.R. 400, and they have made a compelling case for
certain items in H.R. 400. So it seems we are getting most of the good
issues out.
Among the inventors, there is a real concern that the 18-month
publication period provision in this bill will pose a risk to the
little guy, the independent inventor. We certainly do not want to
inadvertently create a situation, unintended negative consequences,
where these entrepreneurs are squeezed out in the courtroom by large
corporations. This is a real concern, and I know it will be addressed
today.
On the other hand, I think we all agree that the proposed diversion
of fees paid to the Patent and Trademark Office in the Clinton budget
is a very bad idea. There was unanimity on this issue yesterday, I
believe, in the Committee on Rules, and I am gratified that H.R. 400
hits this right on. Our inventors need to know that these fees are not
being diverted to fund other initiatives, but are helping to speed the
patent process along.
Mr. Speaker, I am not certain that the promised benefits in H.R. 400
are not outweighed by the potential setbacks. I am waiting to be
convinced by the debate. Whenever we consider sweeping reform we would
be wise, in my view, to follow the model of the medical profession.
First, do no harm. While I remain uncertain that H.R. 400 is truly a
step forward, I am glad that we are going to be able to have vigorous
debate on this floor where both sides can make their case, and I
certainly appreciate the hard work and long efforts of the committee on
this process.
What we have here today is deliberative democracy at work in the
people's House. I urge support for this good rule for that reason, and
I commend the gentleman from New York [Mr. Solomon] and the gentleman
from Colorado [Mr. McInnis] for bringing this rule forward.

[[Page H1632]]

Mr. MOAKLEY. Mr. Speaker, I yield myself 3 minutes.
Mr. Speaker, I really cannot pass this opportunity to mention one
more time that this bill contains a revenue increase. This bill
contains a tax increase.
The fee in question is clearly a revenue increase, under the
Speaker's guidelines on jurisdictional concepts distinguishing user
fees from taxes. The guidelines were announced again on opening day,
January 7, 1997, page H32, Congressional Record. The proceeds will be
used to benefit some who did not pay the charge, and thus cannot be
construed as a user fee. There are substantive charges to the existing
patent fee so as to make this charge a tax.
Mr. Speaker, I include for the Record at this time a letter from the
gentleman from Texas [Mr. Archer], the chairman of the Committee on
Ways and Means, making it very clear that this fee is a tax.

U.S. House of Representatives,

Committee on Ways and Means,

Washington, DC, April 16, 1996.
Hon. Henry J. Hyde,
Chairman, House Committee on Judiciary, Rayburn HOB,
Washington, DC.
Dear Chairman Hyde: As you know, H.R. 400, the ``21st
Century Patent System Improvement Act,'' would make various
changes regarding the Patent and Trademark Office. In
particular, section 122 would extend permanently these patent
and trademark fee surcharges. In addition, it would also
permit the imposition and collection of new fees to recover
the costs of publication of patent applications and
reexamination proceedings.
In determining what is a revenue measure within the
jurisdiction of the Committee on Ways and Means, the
Committee relies upon the statement issued by Speaker Foley
in January 1991 (and reiterated by Speaker Gingrich on
January 7, 1997) regarding the jurisdiction of the House
Committees with respect to fees and revenue measures.
Pursuant to that statement, the Committee on Ways and Means
generally will not assert jurisdiction over ``true''
regulatory fees that meet the following requirements:
(i) The fees are assessed and collected solely to cover the
costs of specified regulatory activities (not including
public information activities and other activities benefiting
the public in general);
(ii) The fees are assessed and collected only in such
manner as may reasonably be expected to result in an
aggregate amount collected during any fiscal year which does
not exceed the aggregate amount of the regulatory costs
referred to in (i) above;
(iii) The only persons subject to the fees are those who
directly avail themselves of, or are directly subject to, the
regulatory activities referred to in (i) above; and
(iv) The amounts of the fees (a) are structured such that
any person's liability for such fees is reasonably based on
the proportion of the regulatory activities which relate to
such person, and (b) are nondiscriminatory between foreign
and domestic entities.
Additionally, pursuant to the Speaker's statement, the mere
reauthorization of a preexisting fee that had not
historically been considered a tax would not necessarily
require a sequential referral to the Committee on Ways and
Means. However, if such a preexisting fee were fundamentally
changed, it properly should be referred to the Committee on
Ways and Means.
On October 20, 1995, I wrote to you regarding a fee
provision adopted by the Committee on Judiciary during its
budget reconciliation recommendations. That provision would
have extended the expiration date of certain patent and
trademark fee surcharges for four years, until 2002. Although
the Committee on Ways and Means did not assert any
jurisdictional claim over the fee at that time, I expressed
my strong interest in working with you to conform this
provision as closely as possible to a true ``fee.'' With
respect to similar ``fees'' that raise more revenue than is
reasonable, the Committee on Ways and Means has worked with
other committees on jurisdiction to design a means of
reducing the ``fees'' over time so that the charges become
true ``fees'' that are tied to the cost of the regulatory
activity. I extended the same offer to work with you and the
Appropriations Committee to reduce these charges over time so
that they become true regulatory fees.
I understand that H.R. 400 is intended to make the current
fees more closely resemble true ``fees.'' Since he surcharge
was imposed by the Omnibus Budget Reconciliation Act of 1990,
only a portion of the surcharge proceeds have been made
available to the PTO. The balance of the proceeds have been
diverted to finance other governmental activities. By making
the PTO fully financed through fees, this excessive
imposition of PTO fees should be substantially reduced.
Nonetheless, the surcharge and the reexamination fee (due
to its 50% reduction for qualified small entities) do not
meet all four requirements set forth above. To the extent
that any fee is set at a level to recover completely an
agency's costs associated with a particular entity, a
surcharge, by definition, will be excessive and therefore
cause the ``fees'' to exceed the agency's costs associated
with the entity. Moreover, at least a portion of the
activities of the PTO benefit the public generally and cannot
be recovered through narrowly-based fees.
With respect to the reexamination fee, to the extent that
it is based upon the size of the affected entity, rather than
the costs associated with that entity, it would violate (iv)
above. Accordingly, I have been advised that the bill in its
present form would violate Rule XXI clause 5(b) to the Rules
of the House, which provides that no bill carrying a tax or
tariff measure shall be reported by any committee not having
jurisdiction to report tax and tariff measures.
Although the amount of fees and the manner in which they
are imposed do not conform to the criteria discussed above,
the modifications made by the bill would make PTO fees
generally less of a revenue measure than they are currently.
I also understand that H.R. 400 reflects a carefully
constructed balance of competing interests, and is shortly
due to be considered on the House Floor. Accordingly, I will
not seek a sequential referral, or object to consideration of
H.R. 400 on the Floor at this time.
However, this is being done with the understanding that the
Committee will be treated without prejudice in the future as
to its jurisdictional prerogatives on this or similar
provisions, and it should not be considered as precedent for
consideration of matters of jurisdictional interest to the
Committee on Ways and Means in the future. It is also being
done with the understanding that you will contact me if the
fees are modified on the House floor or in conference, in
which case I reserve the right to seek to have Members of the
Committee on Ways and Means named as additional conferees.
Finally, I would appreciate your response to this letter,
confirming this understanding with respect to H.R. 400.
Thank you for your cooperation in this matter. With best
personal regards,
Sincerely,
Bill Archer,
Chariman.

Since it is a tax increase, Mr. Speaker, I am waiting to see if my
colleagues who supported the constitutional amendment to seek to amend
the rule to require two-thirds vote to increase taxes will come forward
because this is an open rule. They can come forward and put an
amendment in to increase the vote by two-thirds in order to pass this
bill because it has a tax increase.
Mr. Speaker, I reserve the balance of my time.
Mr. McINNIS. Mr. Speaker, I yield 3 minutes to the gentleman from
California [Mr. Hunter].
Mr. HUNTER. Mr. Speaker, I thank my friend for yielding this time to
me. I thank all of the Members of this debate, because I think we are
starting to frame the debate fairly effectively.
Let me say first that the gentleman from Illinois [Mr. Hyde], the
chairman of the full committee, is one of the giants of this
legislature, and I think we all recognize him as such on both sides of
the aisle; the gentleman from North Carolina [Mr. Coble], my good
friend, who is the chairman of the subcommittee, one of my finest
friends ever in the House of Representatives, and a superb legislator
and a guy for whom I have a lot of respect. I know both gentlemen have
worked long and hard on this bill.
Let me say that as we move along in this body, we begin to realize
more and more how easy it is to get up and complain about something
that is a work product that other folks have done a lot of work on, and
we should not take that role or that opportunity frivolously.
Mr. Speaker, I thought one of the last things that the gentleman from
Florida [Mr. Goss] said was a very important thing. He said that the
first rule of the physician is do no harm.

{time} 1245

While I think there are a lot of good things in H.R. 400, I think
there are a few fatal defects that do some harm.
The other thing that I think we have to realize when we go into this
debate is that this is an enormous debate because it has a great deal
to do with our most important property rights, our intellectual
property rights; the centerpiece of America, the idea, the creator of
technology, the innovator. And this property is just as valuable as
real property that we cherish, the right to have real property; this
right of an inventor to go out, come up with an idea, and get paid for
that idea. We have a system that accords certain rights and privileges
to that inventor. We are changing those rights and privileges markedly
in this bill.
There are two sides to this debate, I think that is something we need
to establish early, two legitimate sides to the debate. I was just
going through the list of people who oppose the bill.

[[Page H1633]]

Dr. Forrest Bird, inventor of the neonatal respirator; Dr. Paul
Burstein, the inventor of rocket motor inspection system. Raymond
Damadian, inventor of the MRI. He is opposed to the bill.
We have several Nobel laureates here: Gertrude Elion, the inventor of
leukemia-fighting and transplant rejection drugs, Nobel laureate; the
inventor of the Hovercraft, Charles Fletcher; Franco Modigliani, the
inventor of the credit management system, Nobel laureate.
There are legitimate arguments on the other side of this bill. We are
going to lay those out. The one thing that I am going to concentrate on
is publication, because every inventor needs a period of secrecy, and
there is no substitute for secrecy. I think that is what we are going
to find out as this debate goes on. If we publish, if we expose this
inventor's secrets 18 months after he has applied, it is going to kill
him. I think we can lay that out clearly in the debate. I thank the
gentleman for yielding me this time, and I like the rule.
Mr. MOAKLEY. Mr. Speaker, it gives me great pleasure to yield 4
minutes to the gentlewoman from California [Ms. Lofgren].
Ms. LOFGREN. Mr. Speaker, I think there has been a great debate in
the public that has unnecessarily and I think unduly alarmed Americans
who are not immersed or totally familiar with the arcane details of
patent law, and it has become very difficult for people to sort through
the various arguments that are being made back and forth, and I am sure
being made in good faith.
But I thought it would be helpful to this House to hear the comments
made by the technology chairs of the White House Conference on Small
Business, because much has been said that this might be a bill between
the big guys and the little guys.
For those of us who have spent the past 2\1/2\ years sorting through
this bill line by line so it would represent a good, solid, bipartisan
effort to protect American industry, we were encouraged that the
technology chairs of the White House Conference on Small Business were
assigned by the other small business men and women of America to take a
look at the bill and to examine the various claims being made.
It was very gracious of them to give the following report. I will not
read their entire comments, but I would like to quote a few specific
items. This is a direct quote: ``During the past year,'' all 10 chair
persons say, ``Independent inventors and the small business community
have been subjected to an intense campaign of fear, xenophobia, and
misinformation. The White House Conference on Small Business researched
many of the most emotional issues and found that much of the
information being promulgated is simply wrong. Legislation based on bad
data is bad legislation.''
And then they go through the issues. First, the 20-year system. They
conclude that ``We believe most of the hysteria over the new 20-year
term is based on misinformation.''
Regarding the publication of patent applications, they say, ``The
vast majority of American patent applications are also filed in foreign
countries where they are automatically published. Failure to publish
these applications in the United States gives our foreign competitors a
huge advantage. They can read our applications but we cannot read
theirs. We need a level playing field with our foreign competitors.''
Finally, on the issue of stealing American inventions, the small
business men and women said, ``It is misleading to suggest that the
opportunity to copy U.S. inventions would be newly created by either of
these bills.'' To that they refer to the predecessor bills to both H.R.
400 and the Rohrabacher amendment.
Mr. Speaker, the feared opportunity already exists. Foreigners are
presently free to read and copy any U.S. patent. The publication
provision of either of these bills will have no effect on this reality.
``Stealing'' is a false issue.
``The barrage of misinformation has caused great confusion and
alarm,'' they say. ``Further attention has been diverted from the much-
needed modernization of U.S. Patent Law.'' Then they go on to endorse
the elements that are encompassed in H.R. 400.
Mr. Speaker, it is important for the many citizens and Congress
Members who are watching this debate today to understand that it is
easy to make wild allegations, but hard, to do the tough work done by
the gentleman from Michigan [Mr. Conyers] and the gentleman from
Illinois [Mr. Hyde], by the gentleman from North Carolina [Mr. Coble]
and the gentleman from Massachusetts [Mr. Frank]--to go through the
bill that protects American inventions and fosters prosperity for this
country.
Mr. McINNIS. Mr. Speaker, I yield 1 minute to the gentleman from New
York [Mr. Forbes].
(Mr. FORBES asked and was given permission to revise and extend his
remarks.)
Mr. FORBES. Mr. Speaker, I rise today in support of the rule and in
vehement opposition to H.R. 400.
My dear friends, much has been made just a moment ago about small
business. I could tell the Members that the Small Business Legislative
Council, the Small Business Survival Caucus and Committee, and the
Small Business Technological Committee and Coalition have all opposed
H.R. 400 because they believe that it will be bad for small businesses
and even more horrendous for entrepreneurs and the people out there who
are working full-time jobs and spending extra hours at their garage or
kitchen table coming up with a new invention. We are talking about
Americans coming up with ideas that they will try to market here in
America, not abroad.
I would just reference two wonderful books, which are two of many. If
Members would remember, there are so many young children out there who
go to the fourth grade or fifth grade, they go to the library and they
take out books about Eli Whitney and books about Thomas Edison, and the
great inventors of this Nation. They come home and they get energized
about the greatness of America and that all things are possible.
H.R. 400 would kill that off, and it would make the entrepreneur
extinct as far as the current patent situation as we know it today.
Mr. McINNIS. Mr. Speaker, I yield 5 minutes to the gentleman from
California [Mr. Campbell].
(Mr. CAMPBELL asked and was given permission to revise and extend his
remarks.)
Mr. CAMPBELL. Mr. Speaker, there are two very serious errors in H.R.
400. Let me just start with these and try to return to these
frequently. They are these.
First of all, if you are an inventor, you should not have to publish
what your invention is until you get the patent. You should not have
to. The reason for that is that if you do not want to make it known to
the world at large, you should not have to, because you might be able
to market it to a company as a trade secret. The reward to inventors
sometimes is not to get it patented but to apply a trade secret. That
is what Coca-Cola has done for more than a century.
This bill, H.R. 400, requires that even if you have not gotten the
patent, when 18 months have run from the time that you have applied,
you have to publish. That is a mistake.
The second error is this: When there is a prior user, somebody else
who has been using this idea in a commercial way, under existing law
that person does not win over the person who invents, the person who
files the patent. That person has the right to that invention. But H.R.
400 says no, if there is a prior commercial user, that prior commercial
user can continue, and not only continue, he or she can expand. If they
were making 10 products a month, they can go to a thousand, and then if
they are seeking to be acquired by a company, what they can do is say,
``Look, here is the crown jewel. We have a prior commercial use as to
this patent. Take over our company, and maybe we do not have the
ability to go from 10 to 1 million units, but you do.''
On these two points there is a very serious taking away from the
patent applicant in the United States law from the present system.
Somebody who spends the time to invent right now has the right to go
around and market their idea and say, you know, it is a patent pending
right now. If we get the patent, I am willing to sell it to you. If we
do not, I am going to find that out from the Patent Office and keep it
secret and try to sell you a trade secret. That would now change.

[[Page H1634]]

These are very significant differences. I have to ask the question:
For what purpose? The answer we most frequently get is because there
are submarine patents out there, and this is the term of art we will
hear very frequently. The submariner is somebody who is gaming the
system. That person can be dealt with explicitly, with a laser beam
instead of with a floodlight.
The individual who is attempting to game the system is somebody who
files a patent application and then asks that it be continued, and asks
that it be continued and then delayed and delayed, waiting for some
other company to take the idea, turn it into a profitable enterprise,
and then the submarine surfaces and fires its torpedoes.
The solution to that is to deal with the person who is gaming the
system. In other words, let us just say that the publication
requirement, which obviously defeats this strategy, ought to apply if
you have filed applications to continue to delay, to postpone.
So I went to my good friend and colleague, the gentleman from
California [Mr. Rohrabacher], and asked if he could add that to his
bill, because I thought that the high-tech companies had a good point,
that there might be an occasional instance of this submarine strategy,
and he graciously agreed to do so.
My colleague and dear friend, the gentleman from North Carolina,
entertained the idea, but in the final event, he was not able to accept
it. So in H.R. 400, what we have is a very, very broad solution to a
very narrow problem, with the result that the inventor loses what he or
she has under American law.
We have heard already that H.R. 400 is supposed to level the playing
field. Let me assure my colleagues, the level playing field exists
right now. If you file in Europe, whether you are European, Asian,
African, or American, you have to disclose after 18 months. If you file
in America, whether you are Asian, European, American, or African, you
do not. So there are two systems in the world. They are fair to
everybody in each system, but the systems are different.
I wish to conclude with a personal note of gratitude to the chairman,
the gentleman from North Carolina, Howard Coble. This man is not
engaged with any intent to do harm to the American public or to do harm
to our patent system, by his lights.
I have respectfully come to the conclusion that I cannot support his
bill, but that does not diminish in the slightest my respect for him or
the intentions that motivate him, which I believe are of the highest
order. It is only my regret that after 2 months of good faith
negotiations, we were not able to reach the accommodations in H.R. 400
that I was able to achieve with H.R. 811 and H.R. 812.
I support the rule because it allows the Rohrabacher alternative to
be in order, and that, to me, is the preferable bill.
Mr. MOAKLEY. Mr. Speaker, in the spirit of comity, I yield 2 minutes
to the gentleman from Indiana [Mr. Pease], on the other side of the
aisle.
Mr. PEASE. Mr. Speaker, I thank the gentleman for yielding time to
me.
I had not intended that my first remark to this body would be without
aid of a script prepared by my staff; however, the script prepared by
my staff will be reserved for the later debate this afternoon.
Let me just say this. I bring, I hope, to this discussion a different
perspective. As many of the Members know, I am fortunate to have come
from higher education, and there, though I do not speak for higher
education, I have spoken extensively with the higher education
community on this subject. They bring to us a perspective that is
reflective of the inventor's community.
We have solo practitioners, faculty members, and students who work on
their own in the invention field, and we have those who work under
contract with major international corporations.

{time} 1300

So we come from the higher education community with the perspective
that includes all of the players that one would hope would be protected
in this legislation that is before us.
The higher education community has debated extensively about the
proposals in H.R. 400, and we have stayed in contact with them
throughout the time that I have been involved in this discussion as
well. Though most of them have not taken a position in terms of
opposition or support of the proposed legislation, I am convinced,
particularly with the amendments that will be offered through the floor
managers' work, that the concerns that have been raised on this floor
today will be addressed in the amended bill and that it will protect
both the small inventors and the major corporate inventors and be good
for the country.
I urge Members' support of the rule and of the bill.
Mr. McINNIS. Mr. Speaker, I yield 3 minutes to the gentleman from
Virginia [Mr. Goodlatte].
Mr. GOODLATTE. Mr. Speaker, I thank the gentleman from Colorado for
yielding me this time. I rise in support of the rule and in strong
support of H.R. 400.
This is a very good bill and a very, very important bill to protect
the competitiveness of American business and American inventors, large
and small. Let me make that point very, very clear.
I commend the gentleman from North Carolina [Mr. Coble], my good
conservative friend, and the gentleman from Illinois, the chairman of
the Committee on the Judiciary, for pushing this legislation forward.
Mr. Hyde and Mr. Coble know how important this legislation is for the
American people.
We are not dealing with what the opponents would tell us is the Steal
American Technologies Act. We are dealing with a situation where we
have got to act and act now to protect American inventors from a
situation where that technology is being stolen under current law.
Under current law, every single patent that is filed in the other
major industrial countries around the world is published after 18-
months, in Japanese, in German, in French, for those inventors and
those countries to see. Forty-five percent of all the patents filed
with the U.S. Patent Office are filed by foreign inventors, and U.S.
inventors do not get to see that technology filed here in the United
States.
This bill provides greater protection for the small inventor by
improving the patent pending provisions of the law. This bill protects
the small inventor in this country by giving them the opportunity to
get capital behind those inventions much sooner than they get under
current law.
The opponents would tell us that under the 18 month publication, they
are going to have a gap between that publication, when they get the
patent, and somebody is going to steal their ideas. That is not the
experience they have had in Europe.
In Europe they get that capital sooner because the entrepreneurial
investors in Europe know that that particular inventor is the lead
inventor on that item because it has been published, published ahead of
anybody else who might be in the system ahead of them. We have no way
of knowing that in this country. So the capital does not come here
until the patent is issued. In Europe that has changed.
This will help small inventors by giving them the opportunity to get
that capital, get that product on the market sooner. It will give them
the opportunity not to have to reinvent the wheel because they will
know whether somebody else is already in the marketplace with that
idea.
This is a good bill. It is a good bill for the little guy, and we
should vote for the rule and vote for the bill and get this major
improvement, major improvement to competitiveness in the United States
against our foreign competition done.
Mr. Speaker, I thank the gentleman for yielding me the time.
Mr. MOAKLEY. Mr. Speaker, I yield 3 minutes to the gentlewoman from
Ohio [Ms. Kaptur].
(Ms. KAPTUR asked and was given permission to revise and extend her
remarks.)
Ms. KAPTUR. Mr. Speaker, I reluctantly rise in support of this rule
because, once it is passed, Members like myself who oppose H.R. 400 are
going to be given about 15 minutes out of the hour, only one-quarter of
the time to present our views. That is typical of what has been
happening on this extremely important bill.
I understand what the floor managers have to do here, but I truly
object to the fact that we are not given equal time during debate to
handle a bill of

[[Page H1635]]

this magnitude. There is absolutely no question that this bill concerns
America's future. It concerns our jobs. It concerns who controls our
technology.
To be muzzled on the floor when we consider a bill that has
constitutional implications is beyond my wildest dreams. Why would they
do this to us? We know the Committee on Small Business has not been
able to hold hearings because small inventors have not been allowed to
present their case to the Congress. Now on the floor we will also have
our hands tied behind our backs and be allowed so little time to
discuss the merits.
In view of that, I say to the Members who are listening to this
debate and to the people of the country, how many complaints have you
ever gotten from your inventors about the current patent system? The
United States leads the world in patent filings. We have 10 times more
intellectual property breakthroughs than any other Nation in the world.
Why would we want to change our system?
I heard the prior speaker say, ``Japan or some other country.'' But,
we lead the world. Why would we want to do anything to harm the system
that has created the largest industrial and agricultural power on the
face of the Earth? There is much at stake here, and there are many
private interests that want to get their hands into what is happening
at our Patent Office. We understand that well.
But there is more at stake here than just arcane rules that may be
administered by a department that handles our patents.
I say to the membership, if they have not read this bill, if they do
not understand its implications, vote no on H.R. 400 and vote for the
substitute.
We will talk a lot about how the period is shortened for our
inventors where, if you file a patent, in 18 months they will be able
to get your blueprints. Your work will not be kept secret as it is
today until the patent is issued. That is absolutely wrong. Why would
we want to do that to the people who are creating our future in this
country?
Why would we want to corporatize the Patent Office and take away the
objectivity of its examiners? And why in heaven's name would you want
to produce a bill, page 11, lines 15 through 17, which permits this
Office, which will not have the same kind of control we have today, to
accept monetary gifts or donations of services, of real estate,
personal or mixed property in order to carry out the functions of the
Office? We have seen all kinds of bribes in this city.
I hear from the chairman that may be out. Well, I will be really
interested in what else is out of the bill because this truly is a work
in progress. It is unfair to the membership. It is unfair to the people
of this country who are creating our future to be muzzled here on this
floor.
Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume.
As I said before, just a couple days ago there was a bill to amend
the Constitution that required two-thirds to increase taxes. This bill
increases taxes. And I was waiting to hear the amendment to the rule to
require two-thirds vote for this bill to pass because it does raise
taxes, but evidently it is not coming forward.
Mr. Speaker, I yield back the balance of my time.
Mr. McINNIS. Mr. Speaker, I yield myself such time as I may consume.
I would like to clarify the comments just made by the gentlewoman
from the State of Ohio. Her remarks were that she would be and, for
some reason, Members that favor her position were being muzzled on the
House floor. It is unfortunate that she was not in here for the
previous conversations that we have had, but to assist her knowledge, I
would suggest that she study an open rule. This is an open rule. No one
is being muzzled here. An open rule allows open debate.
I notice that the gentlewoman on a number of occasions, at least two,
during her comments used the word ``muzzled.'' I think it is that kind
of rhetoric, frankly, that heats up the debate here unnecessarily. It
is an open rule.
Mr. Speaker, I yield the balance of my time to the gentleman from
Illinois [Mr. Hyde], distinguished chairman.
The SPEAKER pro tempore (Mr. HOBSON). The gentleman from Illinois
[Mr. Hyde] is recognized for 2\1/2\ minutes.
(Mr. HYDE asked and was given permission to revise and extend his
remarks.)
Mr. HYDE. Mr. Speaker, I say to my dear friend from Toledo, it is too
bad she did not come up to the Committee on Rules and ask to structure
a rule that would give her all the time she wants. But she did not, and
we got an hour's debate. And out of the goodness of our hearts, we are
yielding 7\1/2\ minutes, I assume the gentleman from Michigan [Mr.
Conyers], out of the goodness of his heart, will yield 7\1/2\ minutes,
and there is 15 minutes plus an open rule. I think that ought to be
enough, at least that is my humble opinion.
Ms. KAPTUR. Mr. Speaker, will the gentleman yield?
Mr. HYDE. I yield to the gentlewoman from Ohio.
Ms. KAPTUR. Out of an hour, then I understand, Mr. Speaker, we will
receive 15 minutes?
Mr. HYDE. We each have a half hour. We have a half hour over here. We
are going to give the gentlewoman 7\1/2\ minutes of it. She is against
our bill, yes.
Ms. KAPTUR. So 15 over 60 is 25 percent. So we are not being given
equal time.
Mr. HYDE. Mr. Speaker, the gentlewoman can talk to 6 p.m. or beyond
this evening because we have an open rule. The gentleman from
Massachusetts [Mr. Moakley] wanted it open.
Ms. KAPTUR. Mr. Speaker, the rule is open to some, not all.
Mr. HYDE. Mr. Speaker, let me just suggest to my friends that H.R.
400 is a very good bill. We have heard about corporatizing the U.S.
Patent Office, new word, ``corporatizing.'' There is more oversight
over the corporate U.S. Patent Office than if we kept it as a bureau of
the Department of Commerce. There will be an inspector general. There
are reporting requirements to Congress. There are reporting
requirements to the administration. The Government Cooperation Control
Act has over 100 accountability provisions plus there is an advisory
board, so that is a red herring.
What is really at stake in this issue, and I could not imagine patent
law could be made exciting or interesting, but we have submarines
floating around. I expect to see periscopes surfacing during this
debate because that is what this is all about, protecting people who do
not invent to make society a better place but to make a fast buck.
They file their applications and God forbid they should be published.
They want to keep it below the surface so some poor guy who goes into
business and is using a process and they find out about it, they
surface, up periscope, and sue. And one person made $450 million doing
that. His lawyer made $150 million, and they tell us submarine
patenting is not a problem.
If you want to protect your invention, you have to file overseas. And
when you file, it is published after 18 months. The whole patent system
was set up to give you exclusivity for a term of years, hopefully 20
years, in exchange for sharing your deep, dark secret with the world
and making this a better place to live. That is the trade-off. If you
do not want to have your secret published, do not file for a patent.
Keep it as a trade secret.
Now, not publishing protects the submarine patent gamester who is out
not to assist the economy but to fatten his personal treasury. It is,
as I have said, the foreign patents. If you want protection overseas,
you have got to file overseas in their language. They file here and it
is not published. Nobody can find it. We want to play by the same rules
overseas as we play here.
This is a good bill. I have a letter from the commissioners of
patents under Nixon, Ford, Reagan, Bush; all say this is an excellent
bill. And the Democratic administration presently, the President's
administration supports it.
I say, pay attention, something is going on here. One of the handouts
says, ``Don't be fooled.'' Those are good words. Do not be fooled. Do
not protect the submarine patent gamesters who use the system not to
assist society but to make a fast buck.
Mr. McINNIS. Mr. Speaker, I yield back the balance of my time, and I
move the previous question on the resolution.
The previous question was ordered.
The resolution was agreed to.

[[Page H1636]]

A motion to reconsider was laid on the table.

{time} 1314

The SPEAKER pro tempore (Mr. Hobson). Pursuant to House Resolution
116 and rule XXIII, the Chair declares the House in the Committee of
the Whole House on the State of the Union for the consideration of the
bill, H.R. 400.
The Chair designates the gentleman from Illinois [Mr. LaHood] as
Chairman of the Committee of the Whole, and requests the gentleman from
Michigan [Mr. Camp] to assume the Chair temporarily.

{time} 1315

In the Committee of the Whole

Accordingly the House resolved itself into the Committee of the Whole
House on the State of the Union for the consideration of the bill (H.R.
400) to amend title 35, United States Code, with respect to patents,
and for other purposes, with Mr. Camp, Chairman pro tempore, in the
chair.
The Clerk read the title of the bill.
The CHAIRMAN pro tempore. Pursuant to the rule, the bill is
considered as having been read the first time.
Under the rule, the gentleman from North Carolina [Mr. Coble] and the
gentleman from Michigan [Mr. Conyers] each will control 30 minutes.
The Chair recognizes the gentleman from North Carolina [Mr. Coble].
Mr. COBLE. Mr. Chairman, I yield myself such time as I may consume
and say, before I get into this, that I want to extend what the
gentleman from Illinois [Mr. Hyde] said to the gentlewoman from Ohio
earlier about being muzzled and having their hands tied.
We have, in the ultimate sense of fairness and comity, agreed to give
7\1/2\ minutes to the gentleman from California [Mr. Rohrabacher] to
manage as he sees fit, but that in no way binds the gentleman from
Michigan [Mr. Conyers]. That was an agreement on this side, and the
gentleman from Michigan may do as he likes.
I just wanted to get that on the table, Mr. Chairman.
Mr. Chairman, I ask unanimous consent to yield 7\1/2\ minutes to the
gentleman from California [Mr. Rohrabacher] and that he be permitted to
control that time.
The CHAIRMAN pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection.
Mr. ROHRABACHER. Mr. Chairman, I yield myself such time as I may
consume to thank the gentleman from North Carolina [Mr. Coble] very
much for the courtesy of being able to participate in this debate as it
goes along.
Mr. Chairman, I reserve the balance of my time.

Parliamentary Inquiries

Mr. HYDE. Mr. Chairman, parliamentary inquiry.
The CHAIRMAN pro tempore. The gentleman will state his parliamentary
inquiry.
Mr. HYDE. Mr. Chairman, it was our intention that the gentleman from
California [Mr. Rohrabacher] be given 7\1/2\ minutes from our side. We
had hoped, and I had not had the opportunity to ask the gentleman from
Michigan [Mr. Conyers] to give him 7\1/2\ minutes. The purpose was so
that he could go first and get his statements out and then we could
proceed with the rest of the debate.
Evidently, Mr. Chairman, the gentleman wants to go last. So if the
gentleman wishes to reserve his time and then go last, that is not in
the contemplation of our agreement or our wish.
Mr. Chairman, I would ask the gentleman from Michigan if he is so
inclined to give 7\1/2\ minutes to the gentleman from California?
Mr. CONYERS. Mr. Chairman, I hate to reveal my inclination at this
time, but there has been nobody that has requested it.
Mr. ROHRABACHER. Mr. Chairman, the gentlewoman from Ohio [Ms. Kaptur]
was probably not informed of the agreement.
Mr. HYDE. Mr. Chairman, on my parliamentary inquiry, I yield to the
gentleman from California.
The CHAIRMAN pro tempore. The gentleman may not yield on a
parliamentary inquiry.
The Chair would state that three Members are in control of time and
would ask which Member chooses to yield time.
Mr. ROHRABACHER. Point of information, Mr. Speaker.
The CHAIRMAN pro tempore. Does the gentleman wish to state a
parliamentary inquiry?
Mr. ROHRABACHER. Yes, or point of information.
Mr. Chairman, when someone yields a 7\1/2\-minute segment during a
debate like this, it is possible for us to have an interchange so that
the whole 7\1/2\ minutes is not used up at one moment, is it not, so
that we can actually have an exchange of ideas rather than just having
one person express their point of view and having the rest of the time
being used to refute those arguments?
The CHAIRMAN pro tempore. The gentleman controls his time and may
reserve it.
Mr. COBLE. Point of inquiry, Mr. Chairman.
The CHAIRMAN pro tempore. The gentleman will state his parliamentary
inquiry.
Mr. COBLE. Mr. Chairman, my point of inquiry is that I assume I have
the right to close debate; is that correct?
The CHAIRMAN pro tempore. The gentleman from North Carolina is
correct; he has the right to close debate.
Mr. ROHRABACHER. Mr. Chairman, I would ask permission from the
gentleman from Michigan [Mr. Conyers] if I can claim the 7\1/2\ minutes
and yield it to the gentlewoman from Ohio [Ms. Kaptur] if she does show
up here for the debate.
Mr. CONYERS. Mr. Chairman, if the gentleman would yield, I have never
yielded a Republican Democratic time in that large amount.
Mr. ROHRABACHER. So the gentlewoman from Ohio [Ms. Kaptur], another
Democrat, would have to come forward for that time to be yielded to.
I am told the gentlewoman is on the way, by the way.
The CHAIRMAN pro tempore. The Chair must insist on some Member using
his time.
Mr. COBLE. Mr. Chairman, to alleviate the problem, I will do that
with the understanding that our side has the right to close, which the
Chairman just assured me of.
The CHAIRMAN pro tempore. The gentleman from North Carolina [Mr.
Coble] is recognized.
Mr. COBLE. Mr. Chairman, I yield myself such time as I may consume.
Rhetoric is conventionally defined as the art of speaking or writing
effectively, but it may also be defined as speaking or writing
redundantly, deceptively, misleadingly, inaccurately, or untruthfully.
All these versions, Mr. Chairman, have surfaced during the debate that
has surrounded H.R. 400.
Patent law is complex and arcane. It is not sexy or engaging when
seriously discussed, especially on television or radio. And when the
rhetoric pertaining to such a subject is clearly manipulated and
twisted to distort the facts, the complexity of the issue is
compounded, and utter confusion is the result.
Mr. Chairman, I am not a patent lawyer, but the members of the
Subcommittee on Courts and Intellectual Property are not assigned the
duty of litigating contested patent cases. Our responsibility is to
draft and promote the enactment of responsible legislation as it
applies to the patent and trademark community, including the PTO, the
Patent and Trademark Office, inventors, small and large, those with
limited means and others blessed with more generous resources. The
ultimate beneficiary of our work is the American consumer.
One need not possess the intellect of a rocket scientist, and
incidentally, neither am I a rocket scientist, to conclude that H.R.
400 is sound, fair legislation that will benefit American consumers and
American inventors, contrary to some of the aforementioned rhetoric
that has been widely disseminated on the subject at hand.
Mr. Chairman, title I of H.R. 400 consists of those changes needed to
streamline the Patent and Trademark Office into a modern government
agency subject to the oversight authority of Congress. Currently,
patent filings have greatly increased, but the PTO, as a result of
government restrictions may not hire, train, and retain with extra pay
additional examiners. This regulatory burden only results in fewer
patents being processed expeditiously, which hurts the users of the
system who fund the agency.
Under H.R. 400, the agency will have the authority to earmark the
necessary funds more quickly, to hire

[[Page H1637]]

more examiners. Another prominent feature of title I is that all
application or user fees paid to the PTO will remain with the agency.
Last year, $54 million of PTO money was spent elsewhere, and this next
fiscal year, $92 million is proposed. This practice will cease under
H.R. 400.
I should also emphasize that nothing in title I compromises the
ability of the PTO employees to discharge their duties in a
professional manner. All workers under the bill are protected by the
full panoply of title 5 civil service safeguards.
Title II of H.R. 400 contains major improvements to our examining
procedures for patents. The first of these will require, in most
instances, the publication of a patent application after 18 months from
the date of filing. Since the entire patent system is predicated on
bringing new inventions into the public light for development, no
inventor who seeks court-enforced patent protection can credibly assert
his inventions should be kept secret based on a personal whim. If so,
such an inventor may pursue protection provided by State trade secret
and unfair competition statutes.
Most patents are granted within a 20- to 22-month timeframe, and all
patents under the current system are published upon grant. Why make the
change to 18 months?
First, it will enable small inventors to advertise or shop their
ideas to perspective backers. This is important because small investors
lack the necessary venture capital to commercialize an idea.
Second, it levels the playing field between our inventors and foreign
corporations. Under present law, all other developed countries have an
18-month publication requirement. This means that an American inventor
filing for protection abroad, and incidentally, Mr. Chairman, 75 to 78
percent of all patents filed in this country are filed abroad, this
means the American inventor filing for protection abroad has his
application published after 18 months in the language of the host
country, enabling foreign companies to review the latest developments
in American technology.
In contrast, however, a foreign corporation, filing in the United
States, does not have its application published within the same time
frame. This is unfair, since the practical effect is that they can
study our technology overseas while our inventors are denied the same
right to inspect their work in the United States.
The 18-month publication provision of H.R. 400 will, therefore, level
this playing field between American inventors and their foreign
counterparts.
Finally, publication at 18 months helps to deter an ongoing abuse in
the current system, previously mentioned, ``patent submarining.''
Submarining is appropriately described as those efforts in which a
patent filer games the existing system by indulging in dilatory
practices.
I quoted the words of a country song yesterday entitled ``Playin'
Possum and Layin' Low.'' That is precisely, Mr. Chairman, what a
submarine patent applicant does. But to what end? Such an ill-
intentioned inventor has no desire to help the Patent and Trademark
Office process his or her application to secure a patent as quickly as
possible.
Instead, the submariner waits to identify an unsuspecting inventor
who has no knowledge of the unpublished application. Upon locating a
company or inventor that has developed its idea independently and which
has commercialized it through investment, manufacturing and the
creation of jobs, the submariner surfaces and sues the company for
infringement.
Mr. Chairman, this activity damages the American economy by promoting
duplicative research, distorting financial decisionmaking and
encouraging unnecessary litigation.
The 18-month publication requirement will place the good-faith
company and inventor in this illustration on notice that a patent is
pending on an invention it wishes to develop. The inventor may then
decide how to devote or expend the financial resources to other
endeavors.
Notwithstanding these benefits that accrue from the publication
requirements of title II, a special provision has been inserted in H.R.
400 that will protect the independent inventors and small businesses
who are genuinely unsure as to the patentability of an idea. The
Manager's Amendment to H.R. 400, which we will discuss later, gives an
independent inventor or small business who does not file abroad the
option to withdraw his application up to 3 months prior to publication
if the PTO has made two determinations that a patent will not issue.
The inventor may then refine the application and try again, or seek
protection under State trade secrecy law.
Most importantly, title II of the bill creates the presumption that
any good-faith inventor who has diligently assisted the PTO in
prosecuting his application is the victim of unusual administrative
delay after 3 years of nonissuance, and at that point, the applicant is
granted a day-for-day protection once the patent issues, in other
words, a guarantee for a minimum of 17 years of term.
Finally, current law affords no protection against any third party
which appropriates the subject of a patent and commercializes it before
the patent is granted. H.R. 400 corrects this problem by establishing a
new inventor entitlement, a provisional right to compensation, which
addresses the problem the gentlewoman from Ohio mentioned. This would
allow an inventor to receive fair compensation from any third party who
commercializes his or her idea between the time of publication and the
time the patent issues.
Title III of the bill addresses the issue of prior domestic
commercial use of a patented technology.
I want to speed this up so I can give my chairman some time.
Title IV of H.R. 400 is designed to protect novice inventors from
unscrupulous invention development firms which often charge
unsuspecting clients thousands of dollars for little work that rarely
results in a patent or a commercial use of the invention.
Title V makes needed but limited changes to PTO reexamination
procedures. The existing system was intended to provide an efficient
and inexpensive way for the PTO to consider whether an issued patent
was violated in light of patents and printed materials which an
examiner may have overlooked during the initial examination.

{time} 1330

H.R. 400 amends the existing reexamination process to provide more
due process for a third party.
Mr. Chairman, this concludes my general description of the contents
of H.R. 400. The legislation will benefit members of the patent and
trademark communities as well as the public at large.
Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I rise to announce that, as Chairman Hyde
indicated, out of the goodness of my heart, I will yield to the
gentlewoman from Ohio [Ms. Kaptur], a dear friend of mine, 7\1/2\
minutes for her to dispense with as she chooses.
The CHAIRMAN pro tempore (Mr. Camp). Without objection, the
gentlewoman from Ohio [Ms. Kaptur] will control 7\1/2\ minutes.
There was no objection.
Ms. KAPTUR. Mr. Chairman, I yield myself such time as I may consume.
I thank the gentleman for yielding me the time. Though I hoped it would
be more, we will take what we can get at this point, so I thank the
gentleman very much.
Mr. Chairman, I rise in obvious strong opposition to H.R. 400. If
this bill were so wonderful, then why are America's preeminent
inventors opposed to it? Dr. Raymond Damadian, inventor of magnetic
resonance scanning, Dr. Wilson Greatbatch, inventor of the cardiac
pacemaker, Dr. Stephanie Kwolick, inventor of Kevlar, Dr. Jay
Forrester, inventor of core memory, the first practical RAM. If this is
such a great idea, then why are the people who have created America's
future opposing it?
I have to say this bill is about a whole lot more than just arcane
patent law. It is about what our Constitution guaranteed, and that is
the property rights of our inventors. I hear all this concern about
foreign countries and putting us on an equal footing with foreign
countries. The facts are, we are the leader in the world.
Why should we want to dumb down our system or make it easier for
others to tap into the inventions that our people produce? Why should
we ask our inventors to have a greater burden of

[[Page H1638]]

proof? Why should we make them be forced to get into this reexamination
system? Why should we do this to the people who have built the greatest
industrial and agricultural power on the face of the Earth?
I say to the membership, how many complaints have my colleagues
received from their small inventors except on this bill? The system
works for them. The only complaint one might get is about the
maintenance fees, how much they have to pay to maintain a patent, and
truly that needs to be improved. But we have a wonderful system that
says if you have an idea, you file it at our patent office, that that
idea is yours, it is secret until that patent is issued. Why would we
want to change that system?
Mr. HUNTER. Mr. Chairman, will the gentlewoman yield?
Ms. KAPTUR. I yield to the gentleman from California.
Mr. HUNTER. Mr. Speaker, I thank my friend for yielding.
The theme has been that we should be like Europe and Japan, but the
fact is that high technology startups are something that is uniquely
American. There are very few high technology startup companies in
Europe and Japan. That is because they lose the one thing which is
central to their success, and that is secrecy, because once they
publish in 18 months, the big companies come in and sweep them off the
map by patenting around them, which is called patent flooding. The
gentlewoman is absolutely right.
Ms. KAPTUR. Mr. Speaker, reclaiming my time, I thank the gentleman
for that comment. This whole question of submarine patents and so
forth, there is less than \13/1000\ percent of those that even affect
this entire system, and even then we have to be about the task of
protecting American inventors' rights. To the extent we can get other
nations to conform their systems to ours, terrific, but why should we
try to conform our system to theirs? Why should we make it more
difficult for our inventors to pay the fees?
This office I am told has been changed as we are sitting here today.
With this corporatization of the patent office, that now apparently is
not going to be allowed to accept gifts and real estate, because of
pressure from Members of Congress like myself, as it is in the base
bill, when I read the amendment, and I really do not have a copy of it
here, but it basically says you are going to require gift rules be
drafted to ensure that gifts to this new office are not only legal but
avoid any appearance of impropriety. Why should they be given those
gifts in the first place? Why should that be happening under this bill?
And why should we take away the objectivity of our patent examiners who
are completely insulated from any kind of economic coercion by the
current system?
I have to say that patents are the trade routes for the 21st century.
America under H.R. 400 is throwing away our technological lead by
publishing patent applications much earlier and taking away the secrecy
that is inherent in our system to our inventors and making other
radical changes which, by the way, to the membership, if anybody has a
final copy of this bill I hope they will give it to me because somebody
who has been as involved in this issue as any other Member, I cannot
give my colleagues a bill that we will be asked to vote on here today
that is accurate in terms of legislative language.
We have the choice here today to create prosperity for our Nation, to
provide opportunities to our children, but if we change the patent
system as H.R. 400 proposes, we will be throwing away the American
dream of opportunity embedded in the Constitution of the United States.
I guarantee my colleagues if this bill passes, there is going to be
decades of litigation as the American people fight for the rights they
were granted under our Constitution.
Our patent system is the heart of our economic strength because it
creates new money, jobs, and new industries. I ask the membership to
vote no on H.R. 400.
Mr. Chairman, I reserve the balance of my time.
Mr. ROHRABACHER. Mr. Chairman, I reserve the balance of my time.
Mr. COBLE. Mr. Chairman, I yield 6\1/2\ minutes to the gentleman from
the Roanoke Valley of Virginia [Mr. Goodlatte] who has been very
helpful in the movement of this bill, H.R. 400.
Mr. GOODLATTE. Mr. Chairman, I rise in strong support of H.R. 400,
the 21st Century Patent System Improvement Act. Just remember that
title. That is what this is about, improving our patent system. I would
like to thank the gentleman from North Carolina [Mr. Coble], chairman,
for his hard work and dedication on this important issue.
This legislation has been subject to a great deal of confusion in
recent weeks, due largely to the blatant misrepresentations of its
opponents. People who make their livings gaming our patent laws will
stop at nothing in their effort to prevent meaningful and necessary
reform of the system. Opponents of patent reform have engaged in a
campaign of deliberate misrepresentation and confusion in the hopes
that they might convince Members that H.R. 400 is an international
sellout that will undermine the patent system created by our Founding
Fathers. Nothing could be further from the truth.
H.R. 400 is one of the most thoroughly debated bills to come before
the House this year. The provisions contained in this bill have been
developed over the last 2 years and have been the subject of 10 full
days of hearings with over 80 witnesses. Patent and trademark
commissioners who dedicate themselves to the integrity of our patent
system, from the Nixon, Ford, Reagan, Bush, and Clinton administrations
support the major provisions of H.R. 400. These experts also oppose the
major provisions of the Rohrabacher substitute, which was written on
behalf of those who ignore the intent of our Founding Fathers by using
subterfuge to destroy the integrity of the U.S. patent system. Taking
the word of patent submariners on patent reform is like asking a fox
for advice on how to guard the henhouse.
H.R. 400 is the unanimous product of the Committee on the Judiciary.
Unanimous, 35 members of the committee. Not one voted against this, not
one Democrat, not one Republican. Yet this issue has been demagogued by
a very few. Through the legislative process, the committee has worked
with independent inventors, small businesses, universities, industry
groups, the White House Conference on Small Business, and the Senate.
Over 75 U.S. companies, large and small alike, which employ 1.4 million
American workers and hold 55,000 U.S. patents, support H.R. 400.
This legislation is critical to ensuring that America maintains our
position as the world leader in intellectual property. H.R. 400
benefits independent inventors, small businesses, and other Americans
who utilize our patent system in four key areas.
First, it guarantees diligent patent applicants at least 17 years of
patent term and ensures that they will not lose their rights due to
delays by the patent office. Second, the bill protects early domestic
commercial inventors, including universities and researchers who use
later patented technologies. Third, the legislation deters invention
promoters from defrauding unsus-pecting inventors. Finally, H.R. 400
gives all Americans a new property right while their patents are
pending before the Patent Office.
Unfortunately, opponents of patent reform are unwilling to give up
the loopholes through which they undermine the integrity of America's
patent system. Their proposal, offered today by the gentleman from
California [Mr. Rohrabacher] as a substitute to H.R. 400, would
encourage abuses of our patent system that currently cost American
taxpayers and consumers hundreds of millions of dollars. Although they
may argue otherwise, the Rohrabacher substitute is nothing more than a
recipe for economic disaster.
Since opponents of meaningful patent reform allege that H.R. 400 is a
huge corporate giveaway, I would like to respond by highlighting the
ways in which H.R. 400 benefit small inventors. First, under H.R. 400,
small inventors will be able to acquire venture capital to market their
inventions more quickly and easily. This will put small inventors on a
more level playing field with large multinational corporations,
allowing individuals and small businesses to fully compete in the
global marketplace.
Mr. Chairman, H.R. 400 also gives small inventors greater protection

[[Page H1639]]

against those who try to steal their ideas. Under current law, small
inventors have no protection against would-be thieves that steal the
subject of a patent and commercialize it before the patent is granted.
These inventors are then helpless to stop the commercialization of
their inventions or to share in the profits until the patents are
granted.
I should also note that the Rohrabacher substitute does nothing to
help small inventors with this problem.
H.R. 400, however, allows small inventors to receive fair
compensation from any third party who commercializes their ideas
between the time of publication and the time the patent issues. Every
one of us has seen the words ``patent pending'' on a product, but in
the current system, these words do not provide any legal protection.
Under H.R. 400, small inventors will be given a new property right
while their patents are pending, so they can punish intellectual
property thieves who try to steal their ideas.
Additionally, H.R. 400 gives small inventors longer patent protection
than they receive under current law. Under the old system, which the
Rohrabacher substitute seeks to resurrect, patent protection was only
available for 17 years from the date a patent was granted.
H.R. 400, however, guarantees good-faith patent applicants a minimum
of 17 years of patent protection, with most applicants receiving more.
The bill also provides extended protection for up to 10 years in cases
where the Patent Office fails to give applicants firm rulings on their
applications in a timely manner.
Finally, H.R. 400 gives small inventors a special option to avoid
publication of their patents. During the application process, some
inventors may have second thoughts about publishing their applications,
especially in cases where an initial Patent Office review is not
favorable.
Under H.R. 400, inventors may withdraw their applications prior to
publication and either refile them in the future or seek protection
under State trade secrecy law.
Mr. Chairman, the Framers of our Constitution created a system in
which the Government grants exclusive rights to inventors for a fixed
period of time, in exchange for the prompt public disclosure of their
inventions. This exchange allows all of American society to benefit
from the creation of new ideas.
H.R. 400 is exactly what our Founding Fathers intended. It promotes
invention by guaranteeing longer patent terms, prevents fraud and abuse
by stopping patent submariners from swindling American taxpayers out of
hundreds of millions of dollars, and protects small inventors by giving
them new property rights in their pending patent applications.
I urge my colleagues to vote for H.R. 400 and against the misguided
Rohrabacher substitute.
Mr. ROHRABACHER. Mr. Chairman, I yield 1 minute to the gentleman from
Maryland [Mr. Rosco Bartlett], one Member of Congress who has 20
patents to his name and who can speak with expertise on the issue of
patents.
Mr. BARTLETT of Maryland. Mr. Chairman, as the holder of 20 patents
myself, I feel compelled to rise today in support of the Rohrabacher
substitute. For over 200 years, the American patent system has
empowered inventors to make this country the most innovative in the
world.
If H.R. 400 becomes law, small businesses and inventors will be
forced to publish their patents before receiving a patent. This opens
the door for every copycat in the world to steal this information and
begin manufacturing and marketing before the inventor has patent
protection.
Ladies and gentlemen, our Founding Fathers had the wisdom to
recognize the need for a patent system unlike anywhere else in the
world that promoted the concept of entrepreneurship and protected
ingenuity.

{time} 1345

Their foresight has resulted in the greatest industrial power this
world has ever seen. Let us not weaken this protection in the name of
international harmonization.
Next week I will hold hearings in the Subcommittee on Government
Programs of the Committee on Small Business on this issue. I look
forward to continuing this dialog.
Mr. COBLE. Mr. Chairman, I have only one speaker remaining. As I have
the right to close, I will reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I yield 3\1/2\ minutes to the gentlewoman
from California [Ms. Lofgren], in whose district there are an
incredible number of inventors and biotech people.
Ms. LOFGREN. Mr. Chairman, I rise in strong support of H.R. 400 and
urge my colleagues to join me in voting for this important legislation.
As the gentleman from Michigan [Mr. Conyers] has just indicated, I
represent Silicon Valley in California. I know well the importance of
ideas and the value of intellectual property. Our thriving economy back
home is based on ideas and on technology.
It is worth pointing out to many Members who do not have exposure to
high technology in their own districts the origin and history of our
system of patent law. As my colleagues know, our Founding Fathers
recognized the value of ideas in American ingenuity, and they put in
our Constitution the authority of Congress to, ``promote the progress
of science and useful arts by securing for limited times to authors and
inventors the exclusive right to their respective writings and
discoveries.'' That is in section 8, article I of the Constitution. By
sharing ideas, inventors would advance the body of human knowledge and
they would avoid the duplication of other scientists and knowledgeable
people, and in exchange for sharing their ideas to advance human
knowledge the inventors would receive for a period of time the
exclusive ownership of that idea; and that really is the gist of patent
law then and now.
Obviously the patent system today is different than it was in the
19th century. The original patent reform legislation was in 1836. We
had revisions again in 1952. And here we are at the dawn of the 21st
century once again updating patent law for the information society.
H.R. 400 does that very well, as many of the speakers have already
indicated.
I do, however, want to talk about some of the comments that have been
made in criticism of the bill because it is important that they be put
in the context of what is actually part of the law.
First, I have heard today and elsewhere the issue of gifts. I think
that is quite a stretch, but it has confused many Members of this House
because H.R. 400 does not change the current law in any respect
relative to gifts. In fact, the Patent Trademark Office presently
enjoys the right to use the authority to accept gifts and bequests
granted to the Secretary of Commerce, and they are not unique in that
regard.
For example, the Library of Congress is able to accept gifts and
bequests along with the Secretary of Agriculture for the national ag
lobby. We have taken it out. Unfortunately we have taken it out in the
manager's amendment only to deal with an issue that did not need to be
dealt with in reality.
There has been a lot of discussion that all of the inventors and all
of the innovators are opposed to H.R. 400. Nothing could be farther
from the truth. I would like to tell my colleagues that of the really
thousands and thousands of people who are immersed and employed in
technology, the overwhelming thrust from Silicon Valley is in favor of
this reform of our patent bill, and of the high-tech companies who have
been in communication with me, I would say there have been none, none
who have opposed H.R. 400. Hewlett-Packard, Intel, and the inventors at
IBM all beg us to adopt H.R. 400. I must say also they are considerably
confused by the controversy that has erupted over this and cannot
understand any of the argument being made in opposition since those
arguments bear so little relationship to the law, to the facts and to
the need for this update.
Mr. ROHRABACHER. Mr. Chairman I yield myself 1 minute.
So we have heard the submarine patent, that is the reason why we have
to change the fundamental patent law of the United States that has been
in place, the protections have been in place since the founding of our
country. This is the equivalent of saying

[[Page H1640]]

that because Hustler magazine is out, we have got to eliminate freedom
of speech and totally restructure the civil liberties concerning
freedom of speech in our country.
That is absolutely ridiculous. It is like saying, you got a hang
nail, thus you got to amputate your whole leg in order to solve that
problem.
No, the submarine patent issue is not the issue here. I put it into
my substitute, I have been willing to end this problem all along.
Congressional Research Service has found, has a finding, that my
substitute ends the practice of submarine patenting. This is being used
as a fig leaf to cover one of the most grotesque power grabs in the
history of this country.
Little Roscoe Bartlett, the Roscoe Bartlett's out there who
discovered the wonderful things that change our lives, are being put at
risk. It was very simple. We heard him say they are going to publish
everything that he does so that everybody in the world can steal it and
then say, ``Sue them,'' to get it back.
Ms. KAPTUR. Mr. Chairman, I yield 1\1/4\ minutes to the gentleman
from Cleveland, OH [Mr. Kucinich], our esteemed colleague.
Mr. KUCINICH. Mr. Chairman, I rise in opposition to H.R. 400.
The essence of this bill is a hostile takeover of the American patent
system by private interests. The American patent system is a public
trust. It is operated by a responsible government organization for the
benefit of the American people and individual inventors. It exists to
enhance the capacity of our economy to cultivate and commercialize new
technologies.
If H.R. 400 becomes law, the integrity and independence of the patent
system will be undermined. H.R. 400 would convert the Patent and
Trademark Office, now part of the Department of Commerce, into a
``corporate body not subject to direction or supervision by any
department of the United States.''
Another disturbing aspect of H.R. 400 is the establishment of a
management advisory committee composed of corporate and management
executives who will oversee the policies, goals and performance,
budget, and user fees of this new government corporation. Even though
the director of the Patent and Trademark Office would be appointed by
the President of the United States, the director would be compelled to
consult with a private sector board on all major decisions. The
transformation of the PTO into a corporate body combined with the
influence of the management advisory committee places our Nation on a
slippery slope to corporate domination of the patent system and the
destructive undermining of the democratic tradition which has produced
some of the greatest inventions in the world from the American people.
Mr. CONYERS. Mr. Chairman, I yield 3 minutes to the gentleman from
Massachusetts [Mr. Delahunt].
(Mr. DELAHUNT asked and was given permission to revise and extend his
remarks.)
Mr. DELAHUNT. Mr. Chairman, as a member of the committee and a
cosponsor of House Resolution 400, I rise in support of the manager's
amendment, and I want to commend our subcommittee chair, the gentleman
from North Carolina [Mr. Coble], for the fine work and for the patient
and thoughtful way he has tried to reconcile all interests to perfect
this legislation.
The critics have claimed that publication would enable foreign
competitors to appropriate American ideas. The truth is that
competitors who appropriate an invention after publication are liable
for damages to the applicant, just as they would be once a patent is
granted. The real issue is reciprocity.
The vast majority of American inventors seek patent protection not
only at home but in foreign countries as well. To do so, they must
publish their application in foreign countries 18 months after filing.
But since America is the only industrialized Nation that does not have
such a requirement, foreign companies seeking U.S. patent protection
have no obligation to publish in the United States.
In other words Americans have to publish abroad while foreigners do
not have to publish here. This puts U.S. inventors at a serious
disadvantage which the bill would correct.
This bill is about protecting American inventors, American businesses
and American workers, and I urge passage of House Resolution 400.
Mr. Chairman, as a member of the committee and a cosponsor of H.R.
400, I rise in support of the manager's amendment and in opposition to
the amendment in the nature of a substitute which will be offered by
the gentleman from California.
I want to commend our subcommittee chairman, Mr. Coble, for the
patient and thoughtful way in which he has worked with all interested
parties to refine and perfect this legislation over the past 3 years. I
also wish to thank the ranking member, Mr. Frank, and the chairman and
ranking member of the full committee, Mr. Hyde and Mr. Conyers, for
their efforts on behalf of this legislation.
As a new member of the Subcommittee on Courts and Intellectual
Property, I can sympathize with those of my colleagues who may feel
intimidated by this complex and arcane subject. Unfortunately, that
feeling has been compounded by a well-orchestrated campaign waged by
opponents of this legislation to convince independent inventors and
small businesses that this bill would benefit large international
corporations at their expense.
I am proud to have many independent scientists, inventors, and
startup companies in my district, and was appalled at what I was
hearing from some of them about this bill. If what they were saying was
true, this was David against Goliath, and I was not about to side with
the Philistine. Frankly, I was ready to get out my slingshot too, until
I learned the facts.
And the facts told a different story. I listened carefully to the
testimony and studied the language of the bill, and found that this
legislation had been totally mischaracterized by its opponents. The
truth is that this bill benefits not only the major corporations and
universities in my region who enthusiastically support it. It benefits
every inventor and developer of advanced technology, whether large or
small--from software developers and biotechnology companies on the
South Shore to marine biologists at Woods Hole.
H.R. 400 creates a level playing field between U.S. patent applicants
and their international competitors. It modernizes the patent office
and reduces administrative delays. It protects inventors even before a
patent is granted through publication of patent applications, and
creates a ``prior user'' defense against claims of infringement for
those who have independently developed and used inventions that are
subsequently patented. These reforms will help ensure that the U.S.
patent system keeps pace with the demands of the 21st century.
But what will all this mean for the independent inventor? Critics of
the bill have claimed that requiring patent applicants to publish their
application 18 months after filing would enable others to rob them of
their work. The truth is that by publishing the application, the
inventor gains a form of provisional protection not available under
current law. Today, an inventor has no protection against a third party
who exploits the inventor's idea while the application is pending. The
phrase ``patent pending'' announces to the world that an application
has been filed but affords no legal protection. By publishing the
application, the inventor stakes a claim that entitles him or her to
compensation for infringement from any third party that makes use of
the idea between the date of publication and the date the patent
issues.
Perhaps even more important for a small business or an independent
inventor is the fact that other applicants must publish, too. Under
current law, an applicant has no way of knowing whether another has
filed first until one of them receives a patent. By then, the losing
party may have invested everything it has in an idea that belongs to
someone else. Under H.R. 400, an applicant will know if a patent has
already been applied for.
The critics have claimed that publication would enable foreign
competitors to appropriate American ideas. The truth is that
competitors who appropriate an invention after publication are liable
for damages to the applicant, just as they would be once a patent is
granted. The real issue is reciprocity: The vast majority of American
inventors seek patent protection not only at home but in foreign
countries as well. To do so, they must publish their application in the
foreign country 18 months after filing. But since America is the only
industrialized nation that does not have such a requirement, foreign
companies seeking U.S. patent protection have no obligation to publish
in the United States. In other words, Americans have to publish abroad,
while foreigners do not have to publish here. This puts U.S. inventors
at a serious disadvantage which the bill would correct.
But what about inventors who have no intention of applying for a
patent overseas? The critics have claimed that they have no recourse.
The truth is that the bill will allow inventors applying for a patent
exclusively in the United States to delay publication until 3 months
after the Patent and Trademark Office

[[Page H1641]]

has taken a second action with respect to the application. Since, in
most cases, the second Office action is the issuance of the patent
itself, this provision effectively exempts independent inventors and
small businesses from the publication requirements. On the other hand,
if the second Office action is a determination that a patent is
unlikely to be issued, the applicant may withdraw the application and
seek protection under the trade secret and unfair competition laws.
The other major claim made by critics of the bill is that the
proposed term of 20 years from the date the application is filed would
give inventors less protection than the current term of 17 years from
the date the patent is granted. The truth is that those who apply in
good faith and do not attempt to delay their applications are
guaranteed a minimum of 17 years under the bill. Most applicants will
receive more than 17 years of protection, since most applications are
processed within less than 2 years. A diligent applicant who is forced
to wait more than 3 years would be granted an extra day of patent
protection for each day of delay.
I do not mean to suggest that all of the concerns that have been
raised about this legislation are illegitimate. What I do believe is
that the legitimate concerns raised by the gentleman from California
and other critics of the legislation as originally drafted have been
addressed. H.R. 400 includes numerous amendments that effectively
respond to these and many other concerns raised over the 3 years that
this legislation has been on the drawing board.
Those are the facts. It is unfortunate that the truth has been
obscured by misinformation and demagoguery. But the loudest voices are
not always right, and the constant repetition of a falsehood does not
make it true. H.R. 400 is good for inventors, both large and small. It
is good for our Nation as a whole. I urge my colleagues to reject the
Rohrabacher amendment and pass the bill.
Mr. ROHRABACHER. Mr. Chairman, I yield myself 1 minute.
Mr. Chairman, it should be apparent by now that there are some
fundamental issues at play here between two people over a disagreement,
an honest disagreement. Let me note this: that everything that has been
said that is good about H.R. 400 has been included in my alternative
bill which will be offered as a substitute on the floor.
What we have now are several issues that differentiate us, and one
is, of course, after 18 months all of our technological information
will be made public to the world. Why is this? Why are they insisting
on publication? They say it is to handle the submarine patent issue,
although we have already solved that according to the Congressional
Research Service. It is because there has been an agreement made with
Japan that I have put in the Congressional Record, time and time again,
to harmonize our law; in other words, make American law like Japan's.
Mr. Chairman, if our colleagues listen very carefully to the
arguments we have heard today that is what is being said. We have got
to have a law like they have in Japan and in Europe. How has it worked
in Japan? The little guy gets kicked and smothered and beaten down. We
do not want a system like that here.
Mr. COBLE. Mr. Chairman, as I said previously. I only have one
speaker left, and I have the right to close.
Mr. Chairman. I reserve the balance of my time.
Mr. ROHRABACHER. Mr. Chairman, how much time is remaining?
The CHAIRMAN. The gentleman from California [Mr. Rohrabacher] has
4\1/2\ minutes remaining, the gentleman from North Carolina [Mr. Coble]
has 5 minutes remaining, the gentleman from Michigan [Mr. Conyers] has
16\1/2\ minutes remaining, and the gentlewoman from Ohio [Ms. Kaptur]
has 1\1/4\ minutes remaining.
Mr. CONYERS. Mr. Chairman, I yield myself as much time as I may
consume.
(Mr. CONYERS asked and was given permission to revise and extend his
remarks.)
Mr. CONYERS. Mr. Chairman, we are gathered here under unique
circumstances. We have a manager's amendment which I think will clear
up many of the problems, I hope, that the gentleman from California
[Mr. Rohrabacher] has posed. I do not know if he is familiar with the
manager's amendment. Apparently he is not.
Mr. ROHRABACHER. It would be very difficult because it did not come
on the floor or was available to us until just a few hours ago.
Mr. CONYERS. Then the gentleman from California is not familiar with
it.
Just a moment; I have not yielded.
Mr. ROHRABACHER. I thought the gentleman from Michigan was asking me
a question. I am sorry.
Mr. CONYERS. No, I will handle this. The gentleman is not familiar
with it, and it just came on the floor. It was brought forward at the
Committee on Rules hearing yesterday that the gentleman attended with
myself and the chairman of the Committee on the Judiciary.
Mr. ROHRABACHER. If the gentleman would yield, I am sorry I was not.
Mr. CONYERS. Mr. Chairman, I did not yield to the gentleman from
California. Please. I know this is an anxious moment which the
gentleman awaited a long time, and we have granted him time, but he
cannot interrupt me.

{time} 1400

Now, the manager's amendment might help bridge the difference between
the unanimous conclusions of every Democrat and Republican on the
Committee on the Judiciary and the distinguished gentleman from
California. Manager's amendments have a way of coming up at Committee
on Rules hearings. If it had been prepared earlier, we would have
brought it out with the bill.
So I would propose that myself and the chairman of this committee
make available to the gentleman from California [Mr. Rohrabacher] the
amendment, if the gentleman has not seen it, to see if it actually
bridges any of the differences that we have, or if it fails, because if
it does not, it limits what we are doing.
Now, according to the gentleman from California [Mr. Rohrabacher] and
the document the gentleman has held on the floor, the submarine issue
is resolved. We resolved it, the gentleman resolved it, it is not in
contention from the gentleman's position. The manager's amendment also
might help resolve some more issues. I am just trying to reach some
resolution here. So hopefully, that will happen.
Now, the vast majority of patents are filed both in the United States
and abroad simultaneously, 80 percent of them. Abroad they are required
to be published. So this requirement will not affect 80 percent of the
patents. There is an exemption from the publications requirement for
small businesses, and for the small inventor there is an exemption.
This is relatively fundamental. It is in our bill.
Mr. HUNTER. Mr. Chairman, will the gentleman yield?
Mr. CONYERS. I yield to the gentleman from California.
Mr. HUNTER. Mr. Chairman, it is not in the bill, and I would like to
ask a question about that. As I read the manager's amendment, there is
the opportunity for a small business to opt, if they have had two
office actions, to either opt out of the patent system or to delay
publication for 3 months, but they still have the publication mandate
after 18 months, from the way I read the manager's amendment, and I ran
that by the inventors.
Mr. CONYERS. Mr. Chairman, as far as the Rohrabacher group goes then,
we do not solve that.
Then let me try the prior-use doctrine. The prior-use doctrine here
protects the first to invent, not the person who steals the
intellectual property, and we are attempting to give that protection,
which does not exist now, and that is why publication in the end, I say
to my colleagues, is so important. It stops the process whereby foreign
competitors can game our patent system process by filing incomplete
patent applications and extend their legal monopoly rights up to 40
years.
Now, the Wall Street Journal is not for or against H.R. 400 or the
Rohrabacher substitute, but they are writing about Americans who are
gaming the system. That is what we are trying to stop. Hence, the bill.
So there is something missing here in this debate. After years of
working with both sides, inventors, lawyers, former patent
commissioners, the administration, we finally come to closure with a
unanimous vote in this Congress, and the last, and now the gentleman is
telling us that this thing really was not cured. And I am stunned to
find the Wall Street Journal pointing out that these kinds of fellows
are

[[Page H1642]]

the ones that we are trying to stop with this H.R. 400 and that we are
not undermining the American patent process, we are really undergirding
it and bringing the protection to small inventors.
That is why this Member supports the bill. I am not a shill for big
corporations or any other kind of association, but the fact of the
matter is, we are making this a better patent law by improving the
defects that have existed for a considerable number of years. I urge
Members to think of these arguments.
We will have the 5-minute rule in effect, and I hope that we can take
care of every one of the reservations that my dear friend from Ohio
[Ms. Kaptur] has so articulately put forward in this debate, because
that is what we are here for. We want to do the right thing, and I hope
that my colleagues will move our debate along in that spirit.
Mr. Chairman, I reserve the balance of my time.
Mr. ROHRABACHER. Mr. Chairman, I yield 1 minute to the gentleman from
California [Mr. Campbell] who represents the Silicon Valley area.
(Mr. CAMPBELL asked and was given permission to revise and extend his
remarks.)
Mr. CAMPBELL. Mr. Chairman, I wish to speak on the question of who is
on which side. I think that is a useful way to analyze the factors in
these bills.
The inventors want to keep the rights that they have when they invent
and do not want to be forced to disclose. The commercializers want to
have as much disclosure as possible so that they can make use of those
inventions.
I am not condemning either side, but by identifying them, I think we
see that if we can achieve the commercializers' legitimate interests
without undercutting the inventors, then we have achieved something.
That is what is in the Rohrabacher bill.
Some of my colleagues on the other side have spoken about the high-
tech companies who support H.R. 400, and I agree they do. But it is
very interesting to me that the university community has been silent
and has not rushed to support H.R. 400. In fact, I have had extensive
dealings with the university community and they are staying off,
because they are worried about what this might do to the inventive
process.
Mr. Chairman, I would conclude with one last observation, and that is
that people speak of a level playing field with Europe. I say to my
colleagues, I do not want a level playing field. We are better.
Mr. ROHRABACHER. Mr. Chairman, I yield 1 minute to the gentleman from
New York [Mr. Forbes].
Mr. FORBES. Mr. Chairman, much has been made about previous
administrations supporting this kind of initiative. Well, I have in my
hand a Commerce Department news release which shows clearly what this
is really about. It is not about submarines. It is about gaining access
to foreign markets.
In this news release it says, quite specifically, that in exchange
for loosening up U.S. patent protections that we will make concessions
to other nations, and that clearly is what it is about, access to
foreign markets. It is no secret why the political appointees want this
for access to greater markets overseas, but let us talk about why we
need to protect American ideas, American patents within America's
borders. That is the key here.
Patent examiners, their association, oppose this bill. They find it
horrendous. And it will hurt the small business people and the
entrepreneurs, and if we care about small business and the
entrepreneurs, the little guy, then my colleagues will support my
amendment to this legislation.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, our hearings have revealed, and this is why we support
the bill, it showed that 300 foreign companies were able to come into
this country and game the process, so the previous speaker who says
that this is all just about domestic, well, it is about foreign
companies coming onto our turf, sir, and taking our patents. That is
what we are trying to stop.
So to say that it does not involve foreign companies, it involves 300
foreign companies, according to our hearings. In one case, a British
pharmaceutical company was so effective at the submarining game that
the United States competitor had to relocate its operations abroad to
be able to produce a competing project.
So we have our companies going out of the United States to come back
in because of the submarine system, and some say this is just a
domestic problem. It is not. It is a national, international problem.
Now, the submarine patents which we claim are now corrected on both
sides, I would point out that there was one American, and this is not a
foreign entrepreneur, was able to get $500 million in royalties. For
doing what? For simply delaying for 35 years in some instances, the
prosecution of a patent, and then suing other manufacturers who, in the
meantime, not knowing about it, started using the process. Gilbert
Hyatt submarined his patent for 20 years and extracted $70 million from
Texas Instruments, who started using the same computer chip technology,
totally unaware of Hyatt's submarine patent.
If the Rohrabacher bill cures it and the bill discussed by all of the
members of the Committee on the Judiciary and two Congresses, what is
wrong with H.R. 400? As a matter of fact, the gentleman from California
[Mr. Rohrabacher] came before the committee, and his ideas and
discussion were taken into consideration, and we thought that we
treated him very kindly.
So this is a big problem we are curing. It is not overturning the
patent system; it is not undermining the American process which we have
put together; it is really taking care of a problem that has to be
addressed and is being addressed in the committee bill. Mr. Chairman, I
urge its continued support.
Mr. Chairman, I reserve the balance of my time.
Mr. ROHRABACHER. Mr. Chairman, I yield 1\1/2\ minutes to the
gentleman from California [Mr. Hunter].
Mr. HUNTER. Mr. Chairman, I thank the gentleman for yielding.
We were told in some previous statements, I think the gentleman from
Virginia [Mr. Goodlatte] pointed to Japan and Europe and said, why can
we not be like them? This poster shows the number of Noble Laureates in
science and technology from the United States as opposed to the number
from Japan. There are 175 from the United States, that is our broken
system; and there are 5 from Japan, that is the good system.
Now, why are there so many from the United States and why are there
so few from Japan? And I think my colleagues would see exactly the same
numbers with Europe. Why are there almost no high-technology startup
businesses in Japan and Europe and lots of them in the United States?
Secrecy. Being able to keep one's idea under a cloak while one lines up
the money and the power to get it into production.

{time} 1415

You can do that in the United States. You cannot do it in Japan, you
cannot do it in Europe. There is no running room.
We want to give our innovators running room. Do Members know
something? We give it to them. They have some secrecy. There is no
substitute for that secrecy, because after two of these office actions,
we still are going to publish under the main bill, we are going to
publish those folks. That is what we have said. The Patent Office tell
us that clearly, more than 30 percent of the patents that are
ultimately issued go past two office actions. So that means those folks
are going to be exposed.
Submarine patents, do Members know how many submarine patents there
have been in the last 2.3 million patents that have been issued? Three
hundred and seventy. We do not need to expose all of our people to cut
out 370.
Mr. COBLE. Mr. Chairman, will the gentleman from Michigan [Mr.
Conyers] yield 2 minutes to me?
Mr. CONYERS. I yield 2 minutes to the gentleman from North Carolina
[Mr. Coble].
Mr. COBLE. Mr. Chairman, I had not planned to, but it is tough to
remain silent here. As my friend, the gentleman from Michigan, said,
there has probably been more excitement surrounding the law of patents
than has happened in the last 15 years. But the gentleman from New York
stood in the

[[Page H1643]]

well and said, this is not about submarine patenting. Mr. Chairman, it
is about submarine patenting.
I direct the gentleman's attention to the front page of the Wall
Street Journal, to which the gentleman from Michigan previously
alluded, indicating in broad print that it is a big-time problem,
submarine patenting. For the benefit of the uninformed, the last time I
checked, the Wall Street Journal is not a yellow journalistic sheet, so
I think there is some authenticity behind that.
I say to my good friend, the gentleman from California [Mr.
Campbell], one of the most learned people in this body, he mentioned
the university system. He will recall that in the dialog in which he
and I engaged we made amendments in order, and the manager's amendment
reflects some of that, that satisfies the university community. They
came back to me, and perhaps to others on the committee, telling us
that it is far better than it was earlier. I think they are taking no
position on either bill. So we did do some good work on that.
Mr. ROHRABACHER. Mr. Chairman, I yield myself the balance of my time.
The CHAIRMAN pro tempore. The gentleman from California [Mr.
Rohrabacher] is recognized for his remaining 1 minute.
Mr. ROHRABACHER. Mr. Chairman, that is why this is not about
submarine patents, because the Congressional Research Service has found
that my bill, as well as the bill we are talking about, H.R. 400, deals
with submarine patents. What we are talking about is a subterranean
agreement with Japan, which I have held up, put in the Congressional
Record, no one wants to comment on it, to harmonize our law with
Japan's; Japan, where economic shoguns beat their people into
submission because all of the secrets of the average person are made
vulnerable to the big guys coming in and stealing it legally.
It does not make me feel any better that you have given the rights to
the American people, after exposing them to theft, to sue Mitsubishi
Corp. or the People's Liberation Army if they come over here and start
stealing from our people.
This is about exposing the gentleman from Maryland [Mr. Roscoe
Bartlett] and every other inventor in this country, and the five Nobel
laureates who support my substitute bill, to grand theft and the
lowering of the American standard of living because we have lost our
technological edge, because we have given it away.
We have exposed it to theft, and if we pass this bill, a bill that
opens up all of our secrets for our enemies to steal, we deserve it.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, we heard about a secret agreement with Japan that no
one speaks about. I am happy to find out about it. I presume that the
gentleman from California is referring to a part of the GATT
conference?
At any rate, I will be happy to deal with that in the 5 minutes.
Mr. Chairman, could I just review a few circumstances that may come
out as the debate goes on. The substitute of the gentleman from
California [Mr. Rohrabacher] provides that applications filed in this
country may not be published sooner than 5 years after they are filed,
and then, not if the application is under appellate review.
This is one of the ways a submariner delays its own application, is
to file spurious law claims and appeals. In addition, the director of
the PTO must find that the application is not being pursued by an
applicant before the publication can occur. I think we have some
problems, because as anyone can imagine, it is almost impossible to
identify maneuvers by patent lawyers to delay the processing of their
applications.
So this provision is not very helpful in eliminating submarining, and
is almost impossible to enforce, from my perspective. Imagine telling a
judge that he can only allow the public to see the court documents
relating to a case when a finding was made as to whether the merits
were diligently pursued.
All judges, patent judges included, must give the benefit of the
doubt to the filers that they are proceeding in good faith, and that
they are legitimately pursuing their claims, or the whole system goes
down.
The Rohrabacher substitute, as I understand it, demands a presumption
of guilt in order to require publishing. This is a presumption that
almost never can be established, and therein lies a serious grievance
between the substitute and the bill, H.R. 400.
Mr. Chairman, what we are saying here is that we have a little
submarining going on here on the floor. We have one bill that corrects
submarining, a substitute that says, but we do, too, and then when we
look at it a little more carefully there are a number of questions. And
they may be drafting problems, or they may just not have been as
tightly drawn, but they certainly cannot equally be said to deal with
the problem of submarining. I do not think that is the case.
There is another way to game the system, under the Rohrabacher
substitute. An applicant could file appeals, and listen carefully to
this, an applicant under the Rohrabacher substitute could file an
appeal to the Board of Patent Appeals which, while unlikely to succeed,
are not so frivolous as to draw sanctions. That is what submariners
love, new ways to game the system.
I am not saying this is done in bad faith. I am sure he is trying to
cure it. But it simply does not cure it. That is why 37 members on the
Committee on the Judiciary took this approach in H.R. 400.

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