[Congressional Record Volume 141, Number 105 (Monday, June 26, 1995)]
[House]
[Pages H6304-H6307]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE BIGGEST RIPOFF IN AMERICAN HISTORY

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from California [Mr. Rohrabacher] is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. ROHRABACHER. Mr. Speaker, yesterday I had a telephone call from 
an old friend who was concerned about American trade policy, and he was 
opposed to NAFTA, the free-trade agreement that we passed with Mexico, 
and that we will soon will be considering including Chile in the NAFTA 
agreement, and he was also concerned about GATT, the world trade 
agreement that we reached and we voted on late last year.
  His question to me was: ``How can the United States possibly compete 
with Third World countries? How can we compete when our labor force is 
paid $10 an hour, and their labor force is paid 15 cents, 25 cents, 75 
cents an hour? Doesn't trade with overseas countries, especially those 
in the developing world, mean that the American people will lose in the 
long run and that our own working people will have a lower standard of 
living?''
  Well, my answer to my friend was an answer that really has been the 
answer that the American people have given to this very same question 
for many, many years. This is not a new fear that the American people 
have, because the American people have had a higher standard of living 
and a better way of life throughout our history as compared to the 
working men and women of other countries.
  Mr. Speaker, how did we do it? How did we out-compete? How did the 
American worker out-compete those workers in Third World countries that 
were willing to work for such lower wages? The answer is we have done 
that because our working people and our businessmen have had the 
technology that is necessary to out-compete the competition, even when 
the labor costs are much lower.
  Mr. Speaker, after World War II, we experienced a major jump in our 
standard of living in the United States of America. Were the wages 
around the world, were they any higher after the end of World War II 
than they are today, as compared to the price of the American worker? 
No. Yet at the same time we experienced a major increase in our 
standard of living, and America was out-competing everyone throughout 
the planet.
  In fact in the 1950's and 1960's, Mr. Speaker, America was looked to 
throughout the entire planet as a source of goods and materials to be 
purchased by people for consumer items all over the world. Yet their 
own people were working for much lower wages. That is because after 
World War II, as in the time period before World War II, Americans had 
a technological lead on the world. It is technology and knowledge that 
have given us the competitive edge throughout our Nation's history. It 
was not the fact that our people were necessarily willing to work 
harder, because many people around the world work harder. Many, many 
people throughout the world work as hard, if not harder, than 
Americans, yet the American worker, coupled with technology, that work 
ethic that our people have coupled with technology, have made America 
the prosperous country that it is today and the prosperous country that 
it was in years past. We have had the technological edge.

  This did not just happen, and it did not just happen after World War 
II. I say to my colleagues, ``If you look back in our history, the 
United States was the country that developed the reaper which magnified 
the amount of crops that could be harvested. We were the ones that took 
the steam engine, which was originally developed by the ancient Greeks, 
and turned it into an engine for progress and prosperity, an engine for 
the creation of new wealth. We were the ones who developed the 
telegraph and the telephone.''
  The list goes on, and on, and on. In fact, technological development 
was seen by our Founding Fathers as the means for which the United 
States would become that shinning city on the hill that all of our 
Founding Fathers wanted her to be. No other country in the world put 
patent protections of technological innovation into its constitution. 
There is no other country. Yet, if we look in our Constitution, our 
Founding Fathers insisted that there be a Patent Office. It is written 
into the Constitution.
  Why is that? I say to my colleagues, ``If you look back at the men 
who created this great democracy of ours, you will see that they had 
two things that they believed in. There was--well, they had many things 
they believed in, but the two important things they believed in in 
terms of government was they believed in freedom of the individual, 
which included peoples' religious freedom, and their rights to speak, 
and their rights to gather together, their rights to petition their 
government and to control their own destiny; they believed in that 
freedom, and they also believed in technology.''
  Mr. Speaker, with technology and freedom, America would become an 
example for all the world to see, that the common man can live in 
decency, and can control his or her own destiny, and that our country 
could be an example to the world, and that instead of vast military 
might, that our country would have the allegiance of free people all 
over the world or those people all over the world who long to be free.
  Yes, Thomas Jefferson himself was a technologist. Those of you who 
visit Monticello might be impressed to see the many inventions that he 
himself developed to help life around that 19th century agricultural 
compound be more easy for the people of this compound. But Benjamin 
Franklin, also one of the great Founding Fathers of our country, is 
reowned even today for his exploration of ideas and his development of 
technology.
  These men made sure that American investors and American inventors 
would have the incentive to develop the technology that would be 
necessary to make America the example of progress and freedom that they 
foresaw. One of the things that they put into the Constitution, as I 
say, was the Patent Office, and Americans have,

[[Page H6305]]

over our 100 year history, enjoyed some of the most extensive and 
strongest patent protection of any people on this planet.
  Now patent protection is a dull and uninteresting subject. Just like 
in many cases when we talk about our other freedoms, people just take 
them for granted. In fact it has been said ``Freedom is very much like 
the air, and that is the air is--you can't see it, you can't touch it, 
and it is very easy to take air for granted.''
  That is the same way it is for freedom. Freedom is the fact that 
there is no someone who comes to your church every Sunday and has to 
approve the sermon of your minister. Freedom is that the school 
teachers and our university professors do not have to have their 
subject matter approved, because that sensor is not there. Freedom is 
when a person can open a book store or someone can quit his job without 
asking for government approval. This is what freedom is. It is the 
absence of the Government coming down and destroying freedom.
  Well, you can take freedom for granted, just like the air. But when 
the air is cut off, when your air is cut off for even one millisecond, 
you begin realizing how important air is to you, and that is the same 
with freedom. Once you cut it off, even for a short period of time, 
those people who have enjoyed it understand the importance of air and 
understand the importance of freedom. They go together because they can 
be taken for granted. But when you are denied your freedom or denied 
air, you understand how important they are. They are important to the 
life of mankind, and they are essential, freedom has been essential, to 
what Americans have felt our country is all about.
  Well, that is the same with one of our rights, one of our very 
fundamental rights that people have always taken for granted, and that 
is the right of patent protection. That means, if you come up with an 
idea, and you get an investor to invest in your development of that 
idea, you own that idea for a given period of time. In fact, you 
register it like a piece of property with the Government, and, when you 
file for your registration, the Government will peruse that, and after 
perusing your application, provide you what is basically a deed. It is 
a patent for your creation so that you and the investors in your idea 
can reap some profit, some benefit, from that.
  That is the secret of the American miracle. We provided an incentive 
for investors and investors throughout our history to invent the new 
machines, the new technology, that catapulted the standard of living of 
the common man. Our people were able to live decent lives and have good 
jobs, and they could provide for their families, and we had enough 
wealth in our society so we had education and an infrastructure for our 
people because the investors and the inventors were given the incentive 
to come up with the ideas that changed the condition of humankind.
  This has been going on throughout our history. Over the last 100 
years our inventors and our investors have had the protection 
guaranteed that, if they would file an invention with the Patent Office 
seeking a patent, that no matter how long it took them to be issued 
that patent, once it was issued, they would be given 17 years of 
protection, at which time anyone using that technology would have to 
pay them for the right to do so. It is called royalties.

  Well, this has just changed. Unbeknownst to the American people and 
unbeknownst to most Members of Congress, there has been a dramatic 
change in the patent rights, and believe me, when the effect of this 
begins being felt by the American people, it will be as if someone is 
strangling them and denying them what they have taken for granted, 
their air, because this will have a dramatic impact, in the long run, 
on the standard of living of our people. We have changed the 
fundamental rules that have provided the prosperity and the jobs and 
the economic well-being that our people have learned to take for 
granted.
  Mr. Speaker, that change was put into the GATT implementation 
legislation. The GATT, as you are aware, is an agreement among the 
nations. It is a trading agreement that said these are a set of rules 
which will guide us, and any nation that signs onto this set of rules 
will be part of this global trading structure.
  The fundamental idea is a sound idea, and we were promised that, if 
we would vote for fast track--now that is a term that means we in 
Congress gave the right to the President to negotiate any of this 
agreement with GATT, and when he brought the treaty to us, we would 
have 60 days to look it over, and that he also agreed not to put 
anything into that treaty, or into that implementation legislation of 
the treaty, that was not required by the treaty.
  What happened was, a provision was snuck into the GATT implementation 
legislation last year that was not required by the treaty itself, and 
although it is very difficult for the American people to understand the 
ramifications of this very small part and this very complicated issue 
of patent protection, they will feel the consequences unless we correct 
this misdeed that has taken place in this body. What happened was that 
in the implementing legislation we changed the rules so that now, when 
an American inventor applies for a patent, he applies. In the past, no 
matter how long it took him to get his patent, he would have 17 years 
as soon as the patent was issued. He would have 17 years of protection. 
Now what will happen after the GATT implementation legislation is put 
into effect, is that when the patent applicant files, the clock starts 
ticking. Those people who put this change into the law thought, ``Well, 
gee, we are going to make it sound like we are actually expanding the 
patent rights of the American people,'' and so the clock starts ticking 
and it is all over in 20 years.

  Now if the average patent does take only 19 months, which some people 
are claiming, then that would be a good deal for the American people. 
But what has happened is that the American people, and even the people 
who passed the laws, have been given misinformation about the patent 
process itself. Significant patents, whether it is the laser, or 
whether it is plastic bottles, or whether it is technology that will 
make us more competitive with the rest of the world, breakthrough 
technologies, take not just 19 months, not just 3 years, not just 5 
years. Most of the major technologies that have given us our 
competitive edge in world competition, most of these have taken 10 to 
15 years and often longer to have a patent issued.
  Now what does that mean? That means we have, in reality, dramatically 
reduced, if not eliminated, the patent protection of America's 
inventors and investors. If someone comes up with a breakthrough 
technology and it takes them 15 years in order to get that patent 
issued, he is at the mercy of the bureaucrats at the Patent Office. He 
is at the mercy of international, multinational, and foreign 
corporations who might try to put legal hindrances in the way of 
issuing that patent. He is at the mercy of those people because the 
clock is ticking and it is on his time. That person, who could develop 
the technology that would make us competitive with mainland China or 
make us competitive with Asia or Europe in the future, that technology 
will not have anywhere near, if any, of the protection that past 
inventors and investors had in the United States of America.
  What we have seen in this body is a change of law which was difficult 
to understand, but it will have major ramifications. What will that 
mean? What will this change of law in the patent law mean? And, by the 
way, it was not required by GATT, and they wanted to give us only a few 
days to consider the whole GATT implementation legislation. So they 
broke their word to us by putting something into this treaty that was 
not required for us to vote on, but yet it was put in because they knew 
that this was the way they could sneak it past this body, and what does 
it mean?
  It means that billions of dollars that should be going into the 
pockets of American inventors in the form of royalties for 
multinational and foreign corporations now will stay in the pockets of 
those multinational and foreign corporations because we have so 
dramatically reduced the patent protection for significant 
technological developments. We are talking about billions and billions 
of dollars that should be going to Americans, that will now stay 
overseas.

[[Page H6306]]

  Worse than that, we are reducing the time in which our inventors and 
investors can control the technology that they have created. Thus 
foreign interests, multinational corporations and foreign corporations 
can now use the technology after a few short years that would have had 
17 years of protection, and what will they be using it for? They will 
be using it to out-compete the American people.
  Mr. Speaker, what we have done is, as we are entering this new era of 
technological development in the world, this new era when genius will 
be so important and creativity will give us the edge, we have disarmed 
our own people. We have basically put ourselves at the worst 
competitive advantage, because what we have done is taken our greatest 
asset, our creative people and our investors in new creative ideas, and 
we have taken away their incentive and taken away their protection.
  This will result in foreign corporations not paying royalties and 
foreign corporations using our technology against itself. It is the 
biggest ripoff in American history. Yet it continues to this day.
  I have submitted a piece of legislation, H.R. 359, which has 177 
cosponsors. That is 177 of my colleagues; I managed to speak with them, 
and talk to them personally, and to get their attention, because there 
are many, many issues of importance here on the floor of the House that 
divert peoples' attention. This is only a small issue to most people, 
and it is hard to understand. Yet 177 of my colleagues have signed on 
as cosponsors to my bill, H.R. 359, to restore the American patent 
rights to what they were before the GATT ripoff was implemented late 
last year--177. In the Senate, Senator Dole has cosponsored a similar 
bill that, if passed, will do the same thing, which will restore 
American patent rights. That is S. 284.
  Senator Dole and I, all we want is basically not to see a diminishing 
of the patent rights that Americans have enjoyed for many, many years.

  Mr. Speaker, as of yet we have not been permitted, my legislation has 
not been permitted, to come to this floor for a vote. Now what is 
Congress all about if you have 177 cosponsors, and by the way, for 
those of you who do not understand this, this is an enormous number of 
colleagues to join together, both Republicans and Democrats, on one 
piece of legislation saying we want this to be passed. I have not been 
on a bill that had so many cosponsors before. Yet it is being hindered; 
there are roadblocks being put in the way of the bill which prevent the 
legislation from coming to a vote on the floor.
  Now why would this happen? Why would someone be so arrogant enough to 
say, ``Well, you may have 177 co-sponsors, but you're not going to get 
your vote on the floor because my point of view is more important than 
177 of my colleagues''?
  Well, what has happened is one Congressman, one Congressman who is 
the chairman of an obscure subcommittee, which my piece of legislation 
must go through before it comes to the floor, the one person, the 
chairman, is opposed to it. His name is Carlos Moorhead, Carlos 
Moorhead of Glendale, CA. Mr. Moorhead refuses. He will not be 
satisfied with voting against my legislation. Instead, Mr. Moorhead is 
holding it up in subcommittee, refusing all of his colleagues the right 
to make the decision.
  Now you might ask what is his motivation. We in the House of 
Representatives always take for granted that the motives of our 
colleagues are good motives, and let us examine what is the possible 
good motive for someone wanting to--what I believe to support is a 
dramatic reduction in American patent rights. Why would someone do 
this?
  Well, it is the belief that some people have that American patent 
rights have been too strong because we are out of sync with the rest of 
the world, and thus we are out of sync with the rest of the world. This 
is an attempt by the head of the Patent Office, Bruce Lehman, and Mr. 
Moorhead, and several others in this town, who believe that our rights, 
in terms of our economic rights and our patent rights, should be 
harmonized with the rights of other people in the world.
  In other words, they are seeking to implement an agreement that Mr. 
Bruce Lehman, head of our Patent Office, made with the head of the 
Japanese patent office.

  I ask, ``You understand what's happening here?'' They are harmonizing 
America's economic rights, our fundamental patent rights of our 
citizens, harmonizing it with the Japanese by what? By lowering the 
standard that our people have enjoyed, the rights of our people.
  If we are going to harmonize our rights, our economic rights, 
especially our patent rights, with other countries, especially 
countries like Japan who have no love for individual freedom 
whatsoever, we should be harmonizing them upward toward us, rather than 
them bringing our system down toward them. But these people believe 
that, if you have a harmonization, and our patent rights are similar to 
the Japanese patent rights, that it will be better for a world trading 
system.
  Mr. Speaker, that is absolute nonsense. This is the equivalent of 
someone telling us, as Americans, that we have too many human rights, 
and in fact the Bill of Rights is way out of sync with all of the other 
democracies. Thus, what we are going to do is harmonize our individual 
rights by diminishing the Bill of Rights by two or three amendments.
  What would the American people think about that? What would they 
think about it? They would reject it out of hand if they were given the 
choice.
  What has happened here is an issue of vital importance to our 
prosperity and the well-being of our people. A very complicated issue 
has been determined by some power brokers behind the scenes, and they 
are preventing this house from voting on a piece of legislation that 
would negate a back-room deal that they made with the Japanese.
  In the long run, what will this do? Well, I can tell you that in the 
short run it has already had a horrible impact on our society. What has 
happened is that American investors now, unlike last year and the year 
before and the hundred years before that, American investors now are 
not certain that they will have the 17 years that they used to have to 
recoup their investment.
  Already American investors in the venture capital industry are 
hesitating about investing in new capital because--our investing new 
capital in new technology because they realize it might take, the 
process of getting a patent might take 15 years or 20 years for new 
technology to get through, and they would have no time to recoup their 
investment.
  This makes--I will tell you, when Americans do not invest in new 
technology, we are at the mercy of other countries like the Chinese and 
the Japanese who are willing to put money into their--from their 
government into government-created technology.

                              {time}  1230

  What is happening is if we permit this change in the patent law to 
continue, MITI, which is an organization in Japan which directs their 
investment, will be directing their investment in technologies to 
destroy our economic competitiveness, and at the same time, on our 
side, we have eliminated the incentive for American investors and 
inventors to invest in new technology. This is total insanity. It is a 
formula for disaster for the American people, and, on the face of it, 
it is a ripoff of American patent rights.
  I am hoping that my colleagues, and I have 177 already as cosponsors, 
will join with me and insist that we have a direct vote on the floor, 
and that if Carlos Moorhead, the chairman of the subcommittee that is 
holding this up, does not want a vote on the floor, then he can express 
that. If he opposes the vote, that is fine, but he should not have the 
power to stop a vote on the floor. A chairman of a subcommittee who 
prevents a bill, even if he disagrees with it, from coming to a vote, 
is doing a great disservice to the American people and the cause of 
democracy in a situation like this.
  I would hope that Mr. Moorhead understands that in good faith, if he 
disagrees with the idea that we should maintain our level of patent 
protection, that he can vote against that. He can vote against my piece 
of legislation that would restore patent protection. But he should not 
prevent the rest of us from voting.
  Adding insult to injury, recently something just happened that might 
indicate even worse things about the

[[Page H6307]]

plans that these people have for American patent protection. While my 
legislation has not been permitted to come to the floor for a vote, 
there is another piece of legislation that went through Mr. Moorhead's 
committee. It was a piece of legislation that only had two cosponsors. 
It was H.R. 1733. The American people should know what was in this 
piece of patent legislation.
  This piece of patent legislation, which Mr. Moorhead already had 
hearings on in his subcommittee, states the following: That if someone 
files for a patent, an American inventor files for a patent, even if it 
is not issued, after 18 months that patent will be published for the 
world to see.
  Is there anyone who cannot see the implications for this? This is the 
equivalent of erecting a huge neon sign over the American Patent Office 
saying to the rest of the world, ``Come and steal America's 
technological secrets.'' Because even before the patent is issued, it 
will be published, and I can tell you the Japanese and the Chinese and 
everybody else who want to copy American technology, will be in line at 
the Xerox machine in order to get their copies, and then running back 
to their offices to use the fax machine in order to get those plans to 
their own industrial leaders to copy America's technological genius. We 
are talking more than a ripoff here. We are talking about wholesale 
robbery of America's inventions. We are talking about an invitation by 
our Government to do so.
  What will this mean to the American people? What it will mean is that 
American workers, who have always enjoyed the competitive edge because 
we have had the machines that permitted us to work better and to 
produce more than the competition who might have had workers that would 
work for lower wages, slowly but surely you will see our competitive 
edge erode, and the standard of living of our people, now in decline, 
will turn into a tailspin.
  I say to you today that we owe it to the American people to see that 
our country remains the No. 1 technological power in the world. What 
that means is we owe it to our inventors and our investors to provide 
them an incentive to invest their time and their resources in the 
technologies we will need to maintain the standard of living of our 
people.
  This is a difficult issue to understand. But what should not be 
difficult for people to understand is there are forces in this world 
today that not only do not care about the standard of living of the 
American people, but see it as a negative, because the standard of 
living of the American people gives high hopes to their own people. The 
other people, people in other countries, want to live at higher 
standards of living because the American people do.
  We should not be destroying the American dream for the citizens of 
the United States. We should be extending the American dream so that 
people everywhere, in every country, know that they too, with freedom 
and technology, can improve their lot and provide for their families.
  We stand at a crossroads because we are in a new era of human 
history. The cold war is over. We are now entering an era of global 
competition. It is imperative that we restore the patent rights of the 
American people, because in this new era of global competition, our 
very lives and our standard of living depend upon it.
  I would ask my colleagues to join me in supporting 359, and would ask 
that the subcommittee chairman who is holding this bill up permit it to 
come to the floor; and if he opposes it, to honestly state his 
opposition, but to let the rest of the Members of Congress have a say 
and let them express themselves as well, and give the Members of 
Congress a chance to vote up or down in front of the American people on 
this issue, that may be complicated, but is so vital to the standard of 
living and maintaining the well-being of our citizens throughout this 
country.

                          ____________________