[Congressional Record Volume 141, Number 160 (Tuesday, October 17, 1995)]
[House]
[Pages H10095-H10098]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      BIOTECHNICAL PROCESS PATENTS

  Mr. MOORHEAD. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 587) to amend title 35, United States Code, with respect to 
patents on biotechnological processes.
  The Clerk read as follows:

                                H.R. 587

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


                    biotechnological process patents

     SEC. 101. CONDITIONS FOR PATENTABILITY; NONOBVIOUS SUBJECT 
                   MATTER.

       Section 103 of title 35, United States Code, is amended--
       (1) by designating the first paragraph as subsection (a);
       (2) by designating the second paragraph as subsection (c); 
     and
       (3) by inserting after the first paragraph the following:
       ``(b)(1) Notwithstanding subsection (a), and upon timely 
     election by the applicant for patent to proceed under this 
     subsection, a `biotechnological process' using or resulting 
     in a composition of matter that is novel under section 102 
     and nonobvious under subsection (a) of this section shall be 
     considered nonobvious if--
       ``(A) claims to the process and the composition of matter 
     are contained in either the same application for patent or in 
     separate applications having the same effective filing date; 
     and
       ``(B) the composition of matter, and the process at the 
     time it was invented, were owned by the same person or 
     subject to an obligation of assignment to the same person.
       ``(2) A patent issued on a process under paragraph (1)--
       ``(A) shall also contain the claims to the composition of 
     matter used in or made by that process; or
       ``(B) shall, if such composition of matter is claimed in 
     another patent, be set to expire on the same date as such 
     other patent, notwithstanding section 154.
       ``(3) For purposes of paragraph (1), the term 
     `biotechnological process' means--
       ``(A) a process of genetically altering or otherwise 
     inducing a single- or multi-celled organism to--
       ``(i) express an exogenous nucleotide sequence,
       ``(ii) inhibit, eliminate, augment, or alter expression of 
     an endorgenous nucleotide sequence, or
       ``(iii) express a specific physiological characteristic not 
     naturally associated with said organism;
       ``(B) cell fusion procedures yielding a cell line that 
     expresses a specific a specific protein, such as a monoclonal 
     antibody; and
       ``(C) a method of using a product produced by a process 
     defined by (A) or (B), or a combination of (A) and (B).''.

     SEC. 102. PRESUMPTION OF VALIDITY; DEFENSES.

       Section 282 of title 35, United States Code, is amended by 
     inserting after the second sentence of the first paragraph 
     the following: ``Notwithstanding the preceding sentence, if a 
     claim to a composition of matter is held invalid and that 
     claim was the basis of a determination of nonobviousness 
     under section 103(b)(1), the process shall no longer be 
     considered nonobvious solely on the basis of section 
     103(b)(1).''.

     SEC. 103. EFFECTIVE DATE.

       The amendments made by section 101 shall apply to any 
     application for patent filed on or after the date of 
     enactment of this Act and to any application for patent 
     pending on such date of enactment, including (in either case) 
     an application for the reissuance of a patent.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California [Mr. Moorhead] will be recognized for 20 minutes, and the 
gentlewoman from Colorado [Mrs. Schroeder] will be recognized for 20 
minutes.
  The Chair recognizes the gentleman from California [Mr. Moorhead].
  (Mr. MOORHEAD asked and was given permission to revise and extend his 
remarks.)
  Mr. MOORHEAD. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 587, the Biotech Process 
Patent Protection Act of 1995. I would like to commend the gentleman 
from Virginia [Mr. Boucher] and thank him for working so hard with us 
over the past 5 years to make this legislation possible. I also want to 
thank the gentlewoman from Colorado [Mrs. Schroder] for her support and 
cooperation.
  From an economic point of view, the U.S. biotech industry has gone 
from zero revenues and zero jobs 15 years ago to $8 billion and 103,000 
jobs today. The White House Council on Competitiveness projects a $30 
to $50 billion market for biotech products by the year 2000, and many 
in the industry believe this estimate to be conservative.
  Companies that depend heavily on research and development are 
especially vulnerable to foreign competitors who copy and sell their 
products without permission. The reason that high-technology companies 
are so vulnerable is that for them the cost of innovation, rather than 
the cost of production, is the key cost incurred in bringing a product 
to market. The award of patient protection ensures a greater degree of 
protection for businesses in the United States who make major 
investment in innovation.
  The House Judiciary Committee took the first step in protecting 
innovation in 1988 when the Congress enacted two bills which I 
introduced relating to process patents and reform of the International 
Trade Commission. However, our work will not be complete until we enact 
this legislation. This bill modifies the test for obtaining a process 
patent, a problem that was created by In Re Durden (1985), a case 
frequently criticized and cited by the Patent Office as grounds for 
denial of biotech patents. The legislation impacts only one element of 
patentability of biotech processes and that is the element of 
nonobviousness. The process must still satisfy all other requirements 
of patentability.
  Because so many of the biotech inventions are protected by patents, 
the future of that industry depends greatly on what Congress does to 
protect U.S. patents from unfair foreign competition. America's foreign 
competitors, most of whom have invested comparatively little in 
biotechnology research, 

[[Page H 10096]]
have targeted the biotech industry for major and concerted action.
  In conclusion, Mr. Speaker, this is important legislation. The 
biotech industry is an immensely important industry started in the 
United States with many labs housed in California. In the decade ahead, 
biotechnology research will improve the lives and health of virtually 
every American family. It will put people to work and it will save 
people's lives. Identical legislation has already passed the other 
body, S. 1111.
  I urge a favorable vote on H.R. 587.

                              {time}  1500

  Mr. Speaker, I reserve the balance of my time.
  Mrs. SCHROEDER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in support of H.R. 587.
  One of the most important tasks faced by the Intellectual Property 
Subcommittee is to make sure that our patent law keeps pace with 
technological change. The importance of this task is nowhere more 
evident than in the area of biotechnology, where industry has 
encountered difficulty in obtaining timely and adequate process patent 
protection because of conflicting case law and inconsistency in PTO 
examination practices resulting from the conflicting holdings of 
relevant court cases.
  It is critical to our economy and to our quality of life that 
biotechnology research and development can take place on a level 
playing vis-a-vis foreign competitors, and without excessive 
uncertainty or delay in patent protection.
  This bill will achieve those goals: It will mitigate the uncertainty 
in the patent examination process, and it will bring about a more level 
playing field for U.S. biotechnology companies and their overseas 
competitors.
  The bill before us today is supported by the administration, and it 
has bipartisan support from the Judiciary Committee. The roadblocks 
faced by predecessor bills have been removed by making the bill 
biotechnology industry-specific. I believe, through this bill, that we 
have fashioned a fair and effective means of addressing the 
uncertainties and inadequacies in patent law as it applies to 
biotechnology, and I urge my colleagues to support it.
  I also want to acknowledge the hard work on both sides of the aisle 
over a number of years to resolve this problem. Our subcommittee 
chairman, the gentleman from California, the gentleman from 
Massachusetts [Mr. Frank], and the gentleman from Virginia [Mr. 
Boucher], have all worked diligently to address this problem, and I 
congratulate them for their efforts.
  Mr. Speaker, it looks like this is the year it will really happen. I 
congratulate them.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MOORHEAD. Mr. Speaker, I yield 5 minutes to the gentleman from 
California [Mr. Rohrabacher].
  Mr. ROHRABACHER. Mr. Speaker, I rise to support this bill, which will 
establish an objective standard to determine if biotechnology patent 
applications involve nonobvious material.
  This standard is necessary to clarify patent law for one of our 
Nation's most important growth industries, the biotechnology industry, 
and I congratulate Chairman Moorhead for his leadership in bringing 
this bill to the floor.
  We need, however, to deal with the fundamental problem, the lack of a 
minimum guaranteed patent term. For over 100 years, this country had a 
patent term of 17 years from grant. That term acted to encourage and 
reward innovation. Unfortunately, the GATT implementing legislation 
established an uncertain term of 20 years from filing. Many biotech 
patents take years to be issued, which under the new rules results in a 
vastly reduced patent term biotech companies and anyone else whose 
breakthrough technology takes longer than usual to get through the 
Patent Office are victimized. I have introduced legislation, H.R. 359, 
which will establish a term of 20 years from filing or 17 years from 
grant, whichever is longer. That's consistent with the GATT agreement 
and with our Nation's tradition of strong intellectual property rights. 
That tradition has fueled the growth of new, dynamic industries in 
America and will continue to do so as long as this Congress continues 
to respect the creativity and hard work of the Nation's independent 
inventors.

  The subcommittee chairman and I continue to have honest differences 
on this and other issues, such as unconditional publication of all 
patent applications 18 months after filing. Such publication will allow 
unscrupulous people to copy and infringe on the inventions of biotech 
companies and other innovative industries. I am encouraged that we will 
have a hearing on November 1 to examine these problems, just as I am 
encouraged that the chairman has shown concern for the biotechnology 
industry with H.R. 587. I look forward to the day when the Congress 
will decide, on this floor, up or down, on whether to restore the 
fundamental patent rights of all of America's inventors.
  Mrs. SCHROEDER. Mr. Speaker, I yield such time as he may consume to 
the gentleman from Michigan [Mr. Conyers], the distinguished ranking 
member.
  Mr. CONYERS. Mr. Speaker, first of all, congratulations to the 
gentleman from California [Mr. Moorhead], the subcommittee chairman, 
and the gentlewoman from Colorado [Mrs. Schroeder], who has worked with 
him across the years.
  I am a cosponsor and strong supporter of H.R. 587 which resolves the 
confusion created by two conflicting appellate court decisions on the 
standards for granting process patents to biotechnology companies.
  Though this is a matter that could have been resolved by the courts, 
the matter has been pending since November 1992 without any resolution. 
Further delays could be costly to American biotech companies.
  The legislation prohibits the Patent and Trademark Office from 
rejecting applications for process patents using or resulting in a 
composition of matter that is novel and nonobvious.
  This legislation serves the important purpose of protecting the 
rights of American companies to bring patent infringement claims 
against importers who are able to evade the law by processing cells 
outside the United States and importing the finished products into the 
United States on the technicality that there has been no use of 
patented host cells in the United States. Without a process patent, the 
importation of the final product cannot be challenged. I urge passage 
of this worthy bill.
  Mrs. SCHROEDER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Massachusetts [Mr. Frank] who has been working on this bill forever and 
ever, and I am sure is glad to see it on the floor.
  Mr. FRANK of Massachusetts. Mr. Speaker, I thank the ranking minority 
member of the subcommittee for yielding.
  The chairman has been congratulated and deservedly. This is an 
important issue that has more complexity than one might think, as we 
explain it, I think the reaction is, well, gee, this is just so 
straightforward. But people should understand that there were issues to 
be resolved, whether this was going to be a change in patent law in 
general or whether it was better to make it specific to an industry.
  There were traditional practitioners of patent law who had objections 
to this. What we are doing today and, as I understand the parliamentary 
situation since we are taking up the Senate bill, we are sending this 
right to the President. One of the striking things about the current 
situation people should understand is that on those occasions, and I 
say this is clearly in order because it explains why we are doing what 
we are doing and why we are taking the Senate bill. On those occasions 
when the U.S. Senate can be persuaded to do anything at all, one then 
grabs it and takes it and does not take the chance of sending it back.
  So this will now go right to the President for signature. It is a 
mark of the successful chairmanship of the gentleman from California 
that this important piece of legislation will within a few weeks be 
law. We are not simply passing a bill through the House today, but we 
are sending it to the President who we know is going to sign it. I can 
simply say I am not an expert on this as are few of my colleagues but, 
talking to the people in the biotechnology industry in Massachusetts, 
this was 

[[Page H 10097]]
very high on their list of things that will help. It is one of these 
things that does good in a multiplicity of ways.
  In the first place, it will help produce the products, and this is of 
greatest importance, that cure people, that alleviate illnesses. We are 
here doing something that will facilitate better health care for 
people, and that is of course fundamental.
  It will also promote jobs in the State that I represent and in other 
States because it will help the biotechnology industry improve its 
market. It will help exports. It will help the American economy.
  So this is something which has all positive and no negative. But, 
despite that, given the world we live in, it was not an easy thing to 
bring it here. As I said, this may look to people like kind of a ho-hum 
thing. It is to the credit of the gentleman from California and his 
management of this issue that something that had a lot of pitfalls and 
a lot of potential controversies does come forward in this guise.
  I also wanted to express my appreciation to the gentleman who spoke 
just before me, the other Member from California, he has his own very 
strong interests in patent issues, some of which I agree with him on, 
and his willingness to collaborate with us in getting this bill through 
is something I very much appreciate, thanks to the ranking member for 
her leadership, to the chairman. I think we have shown today that we 
are able to function in a very positive way to advance a number of 
goals.
  Mrs. SCHROEDER. Mr. Speaker, I yield such time as he may consume to 
the gentleman from Virginia [Mr. Boucher]. He has worked so hard on 
this bill. I am sure for his sake he is very happy to have this happen.
  (Mr. BOUCHER asked and was given permission to revise and extend his 
remarks.)
  Mr. BOUCHER. Mr. Speaker, for the last several years, I have been 
involved in a very productive partnership with my friend and colleague, 
the gentleman from California [Mr. Moorhead], in an effort to extend 
better patent protection to the biotechnology industry. Today I am 
pleased to be here on the floor joining with him as we culminate that 
effort and as we send to the President legislation that will enact this 
much needed reform.
  The biotechnology industry is a bright promise for our Nation's 
success in the international market of the future. The industry was 
originated and developed in the United States. This uniquely American 
enterprise is expected to confer an annual benefit of approximately $50 
billion on the American economy by the year 2000. And even today, it 
has created more than 100,000 new highly paid, highly skilled jobs in 
this economy.
  But more important than its economic contributions are the benefits 
biotechnology is bringing to the fields of medicine and agriculture. 
Through biotechnology, new strains of plants are being produced that 
are resistant to disease, that can thrive in hostile terrain, and can 
survive adverse climatic conditions.
  Through biotechnology, new human drugs are on the market today that, 
when administered to heart attack victims, save lives by dissolving 
dangerous blood clots.
  Other drugs treat anemia, reducing need for blood transfusions in 
patients who are suffering from chronic kidney failure. And human 
growth hormone is today enriching the lives of children throughout the 
world.
  American companies are now developing treatments or even potential 
cures for a variety of hard to treat diseases, including AIDS, 
Alzheimer's disease, cystic fibrosis, and Lou Gehrig's disease.
  And yet the promise of biotechnology is seriously challenged today by 
a simple and obvious inadequacy in America's patent law. That 
inadequacy opens the door for foreign firms to expropriate American 
inventions and compete in this country directly with the inventing 
firm. In essence, the patent law confers and advantage on foreign 
companies not enjoyed by the American inventing firm and actually 
encourages a pilfering of United States creativity. We have examples 
today of that very practice occurring.
  It is that defect in the patent law that H.R. 587 is designed to 
address. In most cases, biotechnology products are genetically 
engineered forms of chemicals which naturally occur. The goal of 
biotechnology is to create the chemicals in larger and commercially 
viable quantities. To do that, the company engineers a host cell to 
produce the product. The firm then treats the host cell with a 
frequently straightforward and well-known process to create the 
naturally occurring chemical in commercially viable quantities.
  The company cannot patent the end product because it occurs in 
nature. All the company is doing is creating that product in larger 
quantities. The company can patent the host cell but, under current 
law, the use of a patented host cell abroad to manufacture a product 
for importation into the United States is not an infringement of the 
American host cell patent.
  Under a series of court decisions, most prominently In Re Durden, the 
inventor has great difficulty in obtaining a patent on the process that 
is used to produce the product. The legislation that the gentleman from 
California [Mr. Moorhead] has brought to the House today and which I 
have been pleased to work with him on over the last several years will 
open the door to a more certain award of process patents.

                              {time}  1515

  In turn the biotechnology firms that have the assurance of receiving 
those process patents will exhibit a greater willingness to make 
research investments totaling hundreds of millions of dollars on an 
annual basis, the very research investments that are essential to 
sustain and advance this highly important American industry.
  Mr. Speaker, I am pleased to urge support for this measure and 
passage of it by the House, and I join with our colleague, the 
gentleman from Massachusetts [Mr. Frank], in commending the gentleman 
from California for his legislative skill which has brought the measure 
to this point which, when added to the Senate bill already passed by 
that body, can then send this measure directly to the President for his 
signature and for enactment into law. It is a positive measure. It will 
advance a very important industry, and I join with the gentleman from 
California [Mr. Moorhead] in strongly urging its passage.
  Mrs. SCHROEDER. Mr. Speaker, I have no further speakers, and I yield 
back the balance of my time.
  Mr. MOORHEAD. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I wish the congratulate each member of our subcommittee 
for the hard work they have done on this legislation over a long period 
of time. This is a fine moment today as we get this bill adopted, and 
every single Member of both sides of the aisle have worked hard, put 
their effort in. I know that the gentleman from Virginia [Mr. Boucher] 
has really put his heart and soul into it over a period of years, and 
we had Bill Hughes, who was the chairman of our subcommittee, who 
worked hard on it. We have the gentleman from Colorado [Mrs. Schroeder] 
and the ranking member of the full committee. Everyone in our committee 
has really worked on this: The gentleman from Virginia [Mr. Boucher], 
the gentleman from Massachusetts [Mr. Frank], the gentleman from 
Oklahoma [Mr. Coburn], the gentleman from Wisconsin [Mr. 
Sensenbrenner], and I want to thank each and every one of them for the 
product that we are presenting.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  The SPEAKER pro tempore. (Mr. Riggs). The question is on the motion 
offered by the gentleman from California [Mr. Moorhead] that the House 
suspend the rules and pass the bill, H.R. 587.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended, and the bill was passed.
  A motion to reconsider was laid on the table.
  Mr. MOORHEAD. Mr. Speaker, I ask unanimous consent to take from the 
Speaker's table the Senate bill (S. 1111) to amend title 35, United 
States Code, with respect to patents on biotechnological processes, and 
ask for its immediate consideration in the House.
  The Clerk read the title of the Senate bill.

[[Page H 10098]]

  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  Mrs. SCHROEDER. Mr. Speaker, reserving the right to object, I do so 
to yield to the gentleman from California [Mr. Moorhead] to explain the 
purpose of the request.
  Mr. MOORHEAD. Mr. Speaker, will the gentlewoman yield?
  Mrs. Schroeder. I yield to the gentleman from California.
  Mr. MOORHEAD. Mr. Speaker, this is the companion Senate bill. This 
action will enable the bill to go immediately to the President. The 
Senate bill is identical to the recent House-passed legislation.
  Mrs. SCHROEDER. Mr. Speaker, I salute the gentleman for this very 
adept explanation. That is exactly what we hope to do, get this right 
to the President. I thank the gentleman for being so expeditious.
  Mr. Speaker, I withdraw my reservation of objection.
  The Speaker pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  The Clerk read the Senate bill, as follows:

                                S. 1111

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

     SECTION 1. BIOTECHNOLOGICAL PROCESS PATENTS; CONDITIONS FOR 
                   PATENTABILITY; NONOBVIOUS SUBJECT MATTER.

       Section 103 of title 35, United States code is amended--
       (1) by designating the first paragraph as subsection (a);
       (2) by designating the second paragraph as subsection (c); 
     and
       (3) by inserting after the first paragraph the following:
       ``(b)(1) Notwithstanding subsection (a), and upon timely 
     election by the applicant for patent to proceed under this 
     subsection, a biotechnological process using or resulting in 
     a composition of matter that is novel under section 102 and 
     nonobvious under subsection (a) of this section shall be 
     considered nonobvious if--
       ``(A) claims to the process and the composition of matter 
     are contained in either the same application for patent or in 
     separate applications having the same effective filing date; 
     and
       ``(B) the composition of matter, and the process at the 
     time it was invented, were owned by the same person or 
     subject to an obligation of assignment to the same person.
       ``(2) A patent issued on a process under paragraph (1)--
       ``(A) shall also contain the claims to the composition of 
     matter used in or made by that process, or
       ``(B) shall, if such composition of matter is claimed in 
     another patent, be set to expire on the dame date as such 
     other patent, notwithstanding section 154.
       ``(3) For purposes of paragraph (1), the term 
     `biotechnological process' means--
       ``(A) a process of genetically altering or otherwise 
     inducing a single- or multi-celled organism to--
       ``(i) express an exogenous nucleotide sequence,
       ``(ii) inhibit, eliminate, augment, or alter expression of 
     an endogenous nucleotide sequence, or
       ``(iii) express a specific physiological characteristic not 
     naturally associated with said organism;
       ``(B) cell fusion procedures yielding a cell line that 
     expresses a specific protein, such as a monoclonal antibody; 
     and
       ``(C) a method of using a product produced by a process 
     defined by (A) or (B), or a combination of (A) and (B).''.

     SEC. 2. PRESUMPTION OF VALIDITY; DEFENSES.

       Section 282 of title 35, United States code, is amended by 
     inserting after the second sentence of the first paragraph 
     the following: ``Notwithstanding the preceding sentence, if a 
     claim to a composition of matter is held invalid and that 
     claim was the basis of a determination of nonobviousness 
     under section 103(b)(1), the process shall no longer be 
     considered nonobvious solely on the basis of section 
     103(b)(1).''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by section 1 shall apply to any 
     application for patent filed on or after the date of 
     enactment of this Act and to any application for patent 
     pending on such date of enactment, including (in either case) 
     an application for the reissuance of a patent.

  The Senate bill was ordered to be read a third time, was read the 
third time, and passed, and a motion to reconsider was laid on the 
table.

                          ____________________