[Congressional Record Volume 141, Number 197 (Tuesday, December 12, 1995)]
[House]
[Pages H14318-H14319]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




ENHANCING FAIRNESS IN COMPENSATING OWNERS OF PATENTS USED BY THE UNITED 
                                 STATES

  Mr. MOORHEAD. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 632) to enhance fairness in compensating owners of patents 
used by the United States, as amended.
  The Clerk read as follows:

                                H.R. 632

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

     SECTION 1. JUST COMPENSATION.

       (a) Amendment.--Section 1498(a) of title 28, United States 
     Code, is amended by adding at the end of the first paragraph 
     the following: ``Reasonable and entire compensation shall 
     include the owner's reasonable costs, including reasonable 
     fees for expert witnesses and attorneys, in pursuing the 
     action if the owner is an independent inventor, a nonprofit 
     organization, or an entity that had no more than 500 
     employees at any time during the 5-year period preceding the 
     use or manufacture of the patented invention by or for the 
     United States. Reasonable and entire compensation described 
     in the preceding sentence shall not be paid from amounts 
     available under section 1304 of title 31, but shall be 
     payable subject to such extent or in such amounts as are 
     provided in annual appropriations Acts.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to actions under section 1498(a) of title 28, 
     United States Code, that are pending on, or brought on or 
     after, January 1, 1995.

  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. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 632, a bill to enhance 
fairness in compensating owners of patents used by the United States. I 
ask unanimous consent to revise and extend my remarks and yield myself 
as much time as I may consume. An amended version of this bill is 
presented for passage under suspension of the rules. The amendment to 
the reported bill reflects technical changes which conform to 
suggestions given after consideration of the bill by the Committee on 
the Budget.
  I would like to thank the ranking member of the Subcommittee on 
Courts and Intellectual Property, the gentlewoman from Colorado [Mrs. 
Schroeder], for her efforts in bringing this bill before the 
subcommittee and for her work on the important issue of 

[[Page H14319]]
attorney's fees in patent cases brought against the United States. I 
would also like to thank the gentleman from Texas [Mr. Frost] for 
introducing this bill. It was brought to light by one of his 
constituents, Standard Manufacturing Co. His and Mrs. Schroeder's 
willingness to work on a bipartisan basis to bring this bill to the 
floor has resulted in a careful and narrow bill specifically addressing 
the problem at hand. So I congratulate the gentleman from Texas [Mr. 
Frost] and gentlewoman from Colorado [Mrs. Schroeder] for their effort 
and cooperation.
  H.R. 632 is an effort to help small businesses recover some of the 
legal costs associated with defending their patents when the Federal 
Government takes and uses them, since small businesses many times 
cannot afford expensive legal defense fees associated with defending 
their patents against Government expropriation. The bill applies to 
patent owners who are independent inventors, nonprofit organizations, 
or entities with less than 500 employees.
  As the law stands, damages do not include attorney's fees and costs. 
H.R. 632 is a fee-shifting statute that will reimburse a plaintiff's 
reasonable cost of bringing suit when the Government takes its patent. 
Congress has already provided for fee-shifting in other property 
takings cases. This bill extends that concept to patent cases, where a 
plaintiff's intellectual property has been taken.
  This bill is consistent with the legal reform provisions of the 
Contract With America by extending the loser pays rule to cases where a 
patent owner is forced to litigate to recover for the infringement of 
his or her patent. It complements legislation I introduced, H.R. 988, 
which passed the House last spring, in extending the rule of fairness 
to cases where the Government is held liable. An identical bill, S. 
880, has been introduced in the Senate by Senator Kay Bailey Hutchison.
  I urge my colleagues to vote in favor of this bipartisan bill.
  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 join the subcommittee chairman in supporting H.R. 632. 
This bill is critical to the protection of the property rights of the 
independent inventor, nonprofit organizations, and small businesses.
  Current law provides for a patent owner to receive ``reasonable and 
entire compensation'' whenever an invention covered by a patent is used 
or manufactured by or for the United States without license of the 
owner or without lawful right. But if the patent owner has to bear the 
costs of litigation to recover compensation for the Government's use of 
its patent, the owner really isn't getting entire compensation. That is 
the gap that this legislation will fill.
  This bill doesn't just serve to protect the property rights of the 
private property owner, however; it also ultimately serves the 
interests of the U.S. Government. Without this bill, companies have 
little incentive to spend their intellectual resources to help the 
Government solve its technical problems. As a member of the National 
Security Committee, I am well aware of some of the circumstances where 
companies can help us solve technical problems and thus add to our 
military capabilities, and this bill will be of great help in that 
regard.
  I thank the subcommittee chairman, the gentleman from California, for 
his efforts on behalf of this bill. I urge my colleagues to support 
this important bill protecting the property rights of patent owners.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Texas [Mr. Frost].
  Mr. Speaker, the gentleman is the primary sponsor of this bill, and 
he has been absolutely dogged in pursuing this. I congratulate him for 
persevering and I congratulate him on what I think will soon be a 
victory on this bill. I think all Members will be very happy to have 
this behind us.
  Mr. FROST. Mr. Speaker, first of all, I would like to thank the 
gentleman from California [Mr. Moorhead] and the gentlewoman from 
Colorado [Mrs. Schroeder] for bringing this bill to the floor and for 
moving it forward at this time. I sincerely appreciate their efforts on 
behalf of this piece of legislation.
  Mr. Speaker, I rise in support of H.R. 632, a bill long overdue for 
inventors and small businesses in this country. H.R. 632 will enhance 
fairness in compensating owners of patents that were used by the U.S. 
Government.
  Inventors whose patents are taken for use by the Federal Government 
have only one way to obtain payment--they are compelled by statute to 
bring a lawsuit against the Government to recover their fair 
compensation. Because of the lack of explicit language in the current 
statute, they are forced to bear all the costs of the lawsuit even when 
they win their case. Many small inventors and businesses have been 
unfairly hurt by this situation. H.R. 632 will permit such inventors to 
be reimbursed for their reasonable costs.
  This bill would expressly authorize the recovery of reasonable costs 
by a small business or inventor who is forced by statute to litigate 
against the Government in order to obtain compensation. In each case, 
though, the costs would be scrutinized by the Claims Court to assure 
that they were reasonable, but to the extent they were reasonable, they 
could be recovered.
  This problem should have been corrected long ago--when it first 
became apparent that court interpretations would not permit inventors 
to obtain a complete recovery. To continue this inequity would be a 
serious disservice to some of our most productive inventors in 
fundamentally important industries. We need to be fair with those 
inventors in order to encourage innovation and make our country more 
competitive. H.R. 632 would help assure the necessary fairness.
  I urge my colleagues to join me today fixing this inequity and 
support H.R. 632.

                              {time}  1715

  Mr. MOORHEAD. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mrs. SCHROEDER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Ewing). 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. 632, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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