[Congressional Record Volume 140, Number 146 (Saturday, October 8, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
      PATENT LAW CHANGES SHOULD NOT BE PART OF THE GATT LEGISLATION

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                         HON. DANA ROHRABACHER

                             of california

                    in the house of representatives

                        Friday, October 7, 1994

  Mr. ROHRABACHER. Mr. Speaker, recently there appeared in the New York 
Times an excellent article by Skip Kaltenheuser and Donald Banner that 
delineates the problems that the patent law changes buried in the GATT 
implementing legislation would create for small inventors and 
entrepreneurs. The future of our economy depends in large measure to 
the certainty provided by the present U.S. patent law protections. I 
commend this article to my colleagues.

                [From the New York Times, Aug. 28, 1994]

                  Don't Sneak Patent Changes Into GATT

              (By Donald W. Banner and Skip Kaltenheuser)

       The General Agreement on Tariffs and Trade, soon to be 
     before Congress for implementation, has many virtues. But 
     those good points are tainted by a major change to American 
     patent law that the Administration plans to include in the 
     bill. This change has not been fully debated, it may work 
     grave economic harm on the nation, and to top it off, it is 
     not even required by GATT.
       The issue is how long patents run. Now, they last for 17 
     years from time of grant. Under the proposal, they would run 
     20 years from time of filing.
       The difference may seem trivial, but it is not. Much time 
     can elapse between the filing of a patent and the grant 
     decision; if so, under a time-from-filing system the 
     effective lifespan of a patent can be greatly shortened. Some 
     patents, in fact, take 14 years or more to issue. And, 
     whether the time to grant is long or not, applicants must 
     live with the uncertainty that it may be.
       These prospects raise great alarm. Inventors worry that a 
     well-heeled competitor will develop strategies to delay their 
     patents. And funding may become scarce. For small companies, 
     ``there's a strong connection between secure, definite patent 
     terms and the ability to gain financing from banks and 
     venture capital,'' said Robert Rines, a patents lawyer and 
     holder of 60 patents.
       An iffy patent term carriers another risk: that the patent 
     will run out before it has yielded a marketable product. 
     Universities, which file more then 3,000 patents a year, may 
     be very hard hit. The average interval between a school's 
     grant of a patent license and a marketable product is eight 
     years--longer for biotech. The more advanced an invention is, 
     the longer the likely time to commercial viability--and the 
     more severe the penalty under a time-from-filing approach.
       The Administration vigorously defends its position. Bruce 
     A. Lehman, the Commissioner of Patents, says the average 
     patent is issued 19 months after filing--and thus many 
     patents would last longer than the current 17 years under the 
     change. But the 19-month average understates the reality; it 
     includes many ``follow-on'' patent applications, all 
     dependent on an initial one. In any case, the focus should be 
     on the commercially critical, leading-edge patents--which 
     often take longer.
       Mr. Lehman also says the proposal will ward off 
     ``submarine'' patent filings. With these filings, applicants 
     allegedly delay decisions so that the patent can surface 
     years later in infringement claims against the unwary. But 
     despite great worry, the data show this practice to be rare.
       Moreover, on Aug. 16, the United States and Japan signed a 
     broad patent pact which included an American promise to 
     publish patent applications 18 months after filing. Because 
     submarines are impossible if applications are public, the 
     accord, if approved by both countries' legislatures, will 
     stop the practice.
       Is the proposed change intended to speed the patent 
     process? Then it puts the cart before the horse. Most delays 
     are controlled by the Federal patents office, not by 
     applicants. Also, the change hands the office a ``timer'' 
     with which it could pressure applicants with valid 
     disagreements.
       Nor can the Administration say GATT demands this risky 
     change. The treaty only requires signatories to adopt a 
     minimum term of 20 years from time of filing. Thus, Congress 
     need only adopt a simple either-or formula: 17 years from 
     grant or 20 years from filing, whichever is longer.
       Finally, the changed patent term is part of the broad 
     patent pact the Administration recently reached with Japan. 
     But, ill-advised though the change seems, no proper 
     assessment is possible without full debate of all these 
     issues.
       Such an airing is impossible, however, if the time-from-
     filing idea remains folded into the GATT bill--especially 
     when, under the applicable ``fast track'' rules, Congress 
     must vote yes or no on the whole package, with no changes.
       In the GATT bill, the Administration should confine itself 
     to the GATT legislation. To do otherwise is dangerous sleight 
     of hand.

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