[Congressional Record Volume 140, Number 95 (Wednesday, July 20, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 20, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       DON'T ADD BAGGAGE TO GATT

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                         HON. DANA ROHRABACHER

                             of california

                    in the house of representatives

                        Wednesday, July 20, 1994

  Mr. ROHRABACHER. Mr. Speaker, there is much discussion that the GATT 
implementing legislation, when it is formally submitted to Congress, 
will include a provision that will change U.S. patent law to the 
detriment of small inventors in the United States.
  The GATT agreement requires the signatories to provide patent 
protection to inventors for a minimum of 20 years from the date filing 
for the patent. The current U.S. patent law provides patent protection 
for 17 years from the grant of the patent. Reportedly the GATT 
implementing legislation will change U.S. patent protection to 20 years 
from filing. This will hurt small inventors and U.S. competitiveness 
because many complicated and contested patents take 14 or more years 
from filing to the actual grant of the patent. The change proposed in 
the GATT legislation would reduce the effective value of the patent to 
the inventor. This will reduce the incentive to U.S. inventors and 
thereby damage U.S. competitiveness.
  The GATT goals can be met by increasing the length of the patent term 
to 20 years from the date of grant. Alternatively, the law could also 
be changed so that it protects the inventor for 20 years from filing or 
17 years from grant, whichever is longer. Either of these would be 
consistent with the GATT agreement and provide true protection to 
inventors from delays by patent examiners or by special interests with 
deep pockets who wish to, for economic reasons, contest or delay patent 
applications.
  Mr. Speaker, the Biotechnology Industry Organization whose members 
are dependent upon fair and secure patent protection, has recognized 
the danger of the GATT proposal with respect to patent law protection. 
I commend to my colleagues the following letter from the biotech 
industry. If, after reading this letter, you agree that U.S. patent law 
should not be effectively shortened to 20 years from filing you may 
contact my office or Congresswoman Bentley to sign a letter to 
President Clinton to make U.S. patent terms 20 years from the time of 
the grant.

                                            Biotechnology Industry


                                                 Organization,

                                    Washington, DC, June 27, 1994.
     Ambassador Mickey Kantor,
     U.S. Trade Representative,
     Washington, DC.
     Re GATT-TRIPS/S. 1854/H.R. 4505.
       Dear Ambassador Kantor: We are writing on behalf of the 
     Biotechnology Industry Organization (BIO), the trade 
     association which represents the interests of 525 members 
     active in biotechnology, concerning the General Agreement on 
     Tariff and Trade (GATT) Agreement and legislation to 
     implement the agreement.
       As an industry with a positive balance of trade we support 
     full and fair international trade. Therefore, we welcome many 
     features of the GATT Agreement, including elimination of 
     tariffs and the stronger intellectual property protection 
     provided under the Agreement on Trade Related Aspects of 
     Intellectual Property Rights (TRIPS) which forms part of the 
     GATT Agreement.
       We do, however, have serious concerns relating to draft 
     legislation to implement the agreement. Specifically, we 
     believe that limiting the patent term to 20 years from 
     filing, without adopting either a package of safeguards or 
     other reforms, will seriously disadvantage our industry, 
     which is particularly prone to lengthy delays between the 
     filing of a patent application and subsequent issuance of the 
     patent.
       This threat to our industry can be avoided, while at the 
     same time complying with GATT, by leaving the present patent 
     terms of 17 years from issue unchanged other than to insert 
     language stating that the term will not be less than 20 years 
     from filing, extending 35 USC 104 to all GATT (WTO) countries 
     and, incidental to this, but apparently overlooked when 
     implementing NAFTA, amending 35 USC 102(g) in a similar 
     manner. We attach two proposals for such amendment to 35 USC 
     154. This proposal would not only be in full compliance with 
     GATT but would greatly simplify the implementing legislation 
     by completely avoiding all additional provisions currently 
     proposed in connection with patent term extension for 
     interference delays, provisional protection and the like.
       In the event that despite our suggestions above, change to 
     a patent term of 20 years from filing remains in the proposed 
     legislation, we urge the following three steps be taken:
       The extension provisions should also apply to cases 
     involved in protracted appeals. The Administration's attempt 
     to deal with the potential inequities of moving to a patent 
     term of 20 years from filing by permitting patent term 
     extension for patents involved in interferences, while 
     welcome, does not go far enough and should apply to 
     protracted appeals. Without this change the effect in many 
     cases of a 20 year term would be to cut back on the current 
     effective length of the patent terms available to 
     biotechnology inventors.
       The amendments should not apply to inventions which were 
     filed on or prior to the effective date even if refiled 
     thereafter.
       The Administration should commit in a Statement of 
     Administrative Policy to shorten the processing time of 
     Patent Applications through the following: (i) increased 
     staffing at the Patent and Trademark Office; (ii) support for 
     ameliorative legislation such as the Biotechnology Patent 
     Protection Act; and (iii) strict guidance to Patent Examiners 
     on questions of utility particularly in the biotechnology 
     area. This latter issue is discussed in the attached outline 
     of our concerns regarding the utility issue.
       Finally, we are concerned with the fact that the TRIPS 
     Agreement contains provisions which are subject to abuse, 
     namely exclusion of certain inventions in the biotech area 
     from protection and lengthy delays in implementation because 
     of which we need to maintain options for bilateral action. 
     We, therefore, support efforts to preserve the vitality and 
     viability of special section 301 to address these two 
     deficiencies.
       We have analyzed the two bills which have been introduced 
     to implement the Agreement. This letter is accompanied by a 
     detailed commentary regarding S. 1854, which sets out the 
     problems with this particular bill. Similar concerns arise 
     with regard to H.R. 4505, which we understand to be virtually 
     identical to the Administration's draft GATT implementing 
     proposal on this issue.
       Our concern about these bills is based on our experience 
     with the patent law as it applies to the biotechnology 
     industry, which is outlined here.


(a) delays in the prosecution to allowance and issuance of applications

                            (a) Prosecution

       (i) Utility Current patent office practice places demands 
     upon Applicants to provide clinical data in support of 
     inventions claiming therapeutic activity which form the major 
     part of inventions in the biotechnology area. Whether or not 
     this requirement is correct, and we believe it is not as 
     outlined in the attached paper, generation of these data 
     is inordinately time consuming because of regulatory and 
     safety requirements and requires a major commitment of 
     resources.
       (ii) Scope In a new field such as biotechnology where there 
     is scant binding legal precedent both the Patent Office and 
     Applicants require much to and fro communications as well as 
     guidance from higher authorities to determine patentable 
     claim breadth.
       (iii) Appeals Because of the requirements of (i) and (ii) 
     Appeals to the Board of Patent Appeals and Interferences 
     (BOPAI) and higher yet to the Court of Appeals of the Federal 
     Circuit (CAFC) are frequently inevitable and all the more 
     likely for more significant or important inventions. In such 
     cases delays of 10 years from filing are not uncommon (see 
     attached examples).
       (iv) Interferences The relative incidence of interferences 
     in the area of biotechnology inventions is exceptionally 
     high, and the interferences themselves are frequently 
     unusually complicated and/or adversarial (=little willingness 
     to settle), requiring 8 to 10 years to final resolution (see 
     attached examples). Additionally, these protracted 
     interferences typically involve pioneer inventions and it 
     would be demonstrably unfair to penalize an inventor with a 
     shorter effective patent term because of the dilatory tactics 
     of a competitor.
       Each of these four factors, especially if combined, would 
     lead to excessively lengthy patent prosecution and shortened 
     effective patent life if a 20 year from filing term is 
     introduced.


             (b) continuing applications and retroactivity

       The proportion of applications refiled as continuing 
     applications is disproportionately high in the biotechnology 
     area. This is usually the result of either a need to generate 
     clinical data and/or the oft-encountered practice of patent 
     examiners finally rejecting applications but indicating they 
     will allow cases if they are refiled with restricted scope. 
     This latter is a temptation which is economically hard to 
     resist for many of our members who rely on patent portfolios 
     to attract investments.
       As currently worded these bills could rob inventions made 
     and prosecuted under law and practice prevailing prior to its 
     enactment of a significant period of patent life even if 
     Applicants were forced to file a continuation application 
     after the effective date of the legislation to preserve their 
     rights. We have attached data on the length of appeals for 
     biotechnology patents and examples of interferences.
       In proposing a de minimis approach to the implementing 
     legislation BIO is not reversing its position on 
     harmonization issues where we favor a patent term of 20 years 
     from filing and early publication as part of a balanced 
     package. BIO is also sympathetic to the problem of submarine 
     patents apparently encountered by some other industries. We 
     have doubts, however, whether a patent term of 20 years from 
     filing effectively eliminates submarine patents other than 
     those issuing on applications having pendencies of 20 years 
     or more. Finally, our proposal would not in anyway compromise 
     the recent understanding between the USPTO and the JPO.
       We urge that these measures be considered, of all their 
     ramifications and careful fine tuning to avoid dealing an 
     unnecessary blow to at least one sector of US industry which 
     relies heavily on effective patent protection for its 
     competitiveness and ultimately, survival.
       We will be happy to meet, discuss and work with you and 
     your staff to implement GATT/TRIPS in a way which minimizes 
     the risk of unintended effect and at the same time to work 
     expeditiously towards other desirable reforms. We also would 
     be interested in proposing an agenda of administrative 
     actions which could be taken by the Administration.
       We very much appreciate this opportunity to offer BIO's 
     view on this legislation and look forward to working with you 
     on this critical issue.
           Sincerely,
     Charles E. Ludlam,
       Vice President for Government Relations.
     Carl B. Feldbaum,
       President.

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