[Pages H6211-H6212]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        GOOD FAITH EXCEPTION TO THE IMPOSITION OF CERTAIN FINES

  Mr. ISSA. Madam Speaker, I move to suspend the rules and pass the 
bill (S. 3960) to amend title 35, United States Code, to provide a good 
faith exception to the imposition of fines for false assertions and 
certifications, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                S. 3960

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. GOOD FAITH EXCEPTION TO THE IMPOSITION OF CERTAIN 
                   FINES.

       Title 35, United States Code, is amended--
       (1) in section 41(j), by inserting ``, unless the entity 
     shows that the assertion was made in good faith,'' before 
     ``be subject''; and
       (2) in section 123(f), by inserting ``, unless the entity 
     shows that the certification was made in good faith,'' before 
     ``be subject''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Issa) and the gentleman from Georgia (Mr. Johnson) each 
will control 20 minutes.
  The Chair recognizes the gentleman from California.


                             General Leave

  Mr. ISSA. Madam Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
insert extraneous material on S. 3960.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. ISSA. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, this bill is a win for small businesses and small 
inventors.
  Small businesses may qualify for reduced application fees when 
applying at the United States Patent and Trademark Office. However, 
under 35 U.S.C. sections 41 and 123, a small business may claim small-
entity or micro-entity status. For example, the standard cost of filing 
a utility patent is $320. A small entity, however, pays just one-half 
of that, $128; and a micro entity is charged only $64.
  When Congress passed the Unleashing American Innovators Act in 2023, 
the law required the United States Patent and Trademark Office director 
to impose punitive fines on entities falsely asserting or certifying 
entitlement to these reduced fees. This was intended to deter 
unscrupulous actors from claiming the benefit for which they did not 
qualify.
  However, in that bill, we granted no exceptions under existing laws 
for those who made an honest error in good faith. For example, if an 
employee is mistakenly categorized as a contractor rather than an 
employee, a good-faith mistake could cause them to claim the wrong 
status. Or if there is a mistake in information provided by another 
company that is a licensee, that could also result in that.
  The impact of these punitive fines would be disproportionate to the 
honest mistake. These harsh fines may deter entities from seeking the 
benefit of small- or micro-entity status since

[[Page H6212]]

the potential cost of the fine would far outweigh the benefit.
  To ensure that small businesses can get these reduced fees, in 
concert with the House, S. 3960 gives the USPTO director the authority 
to waive punitive penalties when a business demonstrates that it acted 
in good faith.
  Madam Speaker, I urge my colleagues to support S. 3960 which will 
ensure that small businesses, if claiming incorrectly, have an 
opportunity to make right their mistake, and I reserve the balance of 
my time.
  Mr. JOHNSON of Georgia. Madam Speaker, I yield myself such time as I 
may consume.
  Madam Speaker, I rise in strong support of S. 3960. This legislation 
makes a minor technical change to give the Patent and Trademark Office 
the flexibility to decide when to penalize patent applicants for false 
certifications of eligibility for fee reductions.
  When Congress passed the Unleashing American Innovators Act as part 
of the government funding package for fiscal year 2023, we did so with 
the intention of making patents no longer the sport of kings but an 
opportunity for inventors to make a decent living.
  Innovators should not have to work for a Big Tech company, major 
manufacturer, or any other powerhouse of industry to be able to file a 
patent, but that is exactly what often happens.
  Financial hurdles associated with obtaining and owning a patent, from 
hiring a lawyer to searching for prior art, to paying standard 
application fees, can prevent individuals from seeking patents for 
their inventions. Barriers to entry like these hurt everyone, but above 
all they hurt women, veterans, and minorities who often do not have the 
resources to go it alone.
  The result is that fewer ideas make it out there into the American 
innovation space. All of our talent becomes siloed in just a few 
companies and in just a few industries, and prospective creators shelve 
their ideas for another day.
  The Unleashing American Innovators Act sought to disrupt the current 
state of play by making a series of good-government changes to the way 
the USPTO works, including by increasing the discount on fees for small 
and micro entities and by imposing penalties for making fraudulent 
certifications to obtain a discount.
  However, I am sure many out there will be shocked to learn that 
Congress sometimes makes mistakes, and in creating these new fee 
waivers and associated penalties for trying to abuse said waivers, we 
neglected to consider that applicants can make honest mistakes in their 
applications.
  If innovators are too afraid to apply for financial exemptions 
because penalties for honest mistakes can lose them a chance at a 
patent, then all of our improvements may as well simply not exist.

  S. 3960 would correct this minor error. Under this legislative fix, a 
USPTO director would no longer be forced to fine a good-faith actor who 
erroneously asserts that they are entitled to a fee reduction for 
small- or micro-entity status. By allowing for honest mistakes in the 
application process, this technical fix will ensure that everyone has a 
seat at the table.
  I thank the chairman of the Courts, Intellectual Property, and the 
Internet Subcommittee, Mr. Issa, for introducing the House version of 
this legislation, which I was proud to join along with Congresswoman 
Ross. I thank Ms. Ross for leading the Unleashing American Innovators 
Act.
  This legislation has already passed the Senate, and I encourage all 
Members to support it so that we can send it to the President's desk.
  Madam Speaker, in closing, failing to account for good-faith mistakes 
harms the exact same people the Unleashing American Innovators Act 
sought to help. Individuals and entities that can barely afford filing 
fees certainly do not have the financial resources to weather a hefty 
fine.
  Moreover, unlike large entities, the prospect of losing a patent 
associated with an erroneous application could very well mean losing 
everything. Smaller entities, therefore, are the most likely to avoid 
the risk of applying for the very programs that exist to help them.
  This legislation will ensure that the USPTO director will no longer 
be forced to fine inventors who make honest mistakes when they apply 
for a patent, ensuring that the people we were trying to help in 
creating the program are not chilled from participation.
  Again, I support this legislation, I encourage my colleagues to do 
the same, and I yield back the balance of my time.

                              {time}  1430

  Mr. ISSA. Madam Speaker, I yield myself the balance of my time for 
the purposes of closing.
  Madam Speaker, we often get chastised in the House for not admitting 
our mistakes, but when a technical error could potentially lead to 
damages to the private sector, it is one of those areas I am proud to 
say that the Judiciary Committee is bipartisan and quick to recognize. 
In concert with the Senate, we have done so today.
  Madam Speaker, I urge all Members to vote for the bill, and I yield 
back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Issa) that the House suspend the rules 
and pass the bill, H.R. 3960.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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