[Congressional Record Volume 140, Number 145 (Friday, October 7, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 7, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                         PRIOR USER RIGHTS ACT

  Mr. DeCONCINI. Mr. President, the substitute I am offering today to 
S. 2272, the Patent Prior User Rights Act makes some significant 
changes to the bill. In particular, it clarifies that good faith 
purchasers of products resulting from a prior user would not be liable 
as an infringer--see section 273(b)(2). In addition, the substitute 
provides that the defense of prior use does not apply to acts of 
infringement already litigated or to pending litigation for 
infringement. In any action for infringement in which the defense of 
prior user is found to be valid, the court is provided discretionary 
authority to award equitable compensation.
  In the context of subsection (a), the definition of commercially 
used, the bill eliminates ``design or testing'' and limits the 
definition to ``used in the production of commercial products''. This 
does not mean that the use of test equipment or design equipment, with 
respect to the use of the equipment itself, is precluded from meeting 
the definition of commercial use. The commercial use of test equipment 
or design equipment prior to the effective filing date of the 
application for patent would provide prior user rights as to the 
continued use of such equipment itself to the extent provided for in 
the statute.
  Furthermore, ``use in the production of a commercial product'' has 
different implications in different commercial contexts. For example, 
in the context of expensive and time consuming commercial operations 
such as pharmaceuticals or biotechnology, the term means the use of a 
pharmaceutical/biotechnological product or process in the production of 
a product used in commerce in a commercial context under applicable 
Federal law.
  As to the definition of effective and serious preparation, language 
relating to ``serious plans'' and ``substantial investment'' have been 
deleted to narrow the scope of conduct that would qualify as a prior 
use right. The term ``* * * a substantial portion of the total 
investment'' is intended to mean that a majority of the investment 
necessary in producing a commercial product has been expended. For 
example, in the pharmaceutical and biotechnology industry this would 
mean that an average investment of something in excess of $100 million. 
This is so because according to the Congressional Office of Technology 
Assessment [OTA] it takes, on average, over $350 million and 10 to 12 
years to get a commercial product to market in the pharmaceutical or 
biotechnology area.
  To the extent that the language of the bill before us today differs 
form the bill reported earlier by the Committee on the Judiciary, the 
explanations offered here are controlling.
  Mr. President, this is an important piece of legislation and I hope 
that it will be enacted this year.

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