[Congressional Record Volume 142, Number 11 (Friday, January 26, 1996)]
[Senate]
[Pages S510-S512]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

       By Mr. HATCH:

  S. 1540. A bill to amend chapter 14 of title 35, United States Code, 
to preserve the full term of patents; to the Committee on the 
Judiciary.


             THE FULL PATENT TERM PRESERVATION ACT OF 1996

  Mr. HATCH. Mr. President, I am pleased to rise today to introduce S. 
1540, the Full Patent Term Preservation Act of 1996. Very simply 
stated, this legislation will allow the Patent and Trademark Office 
[PTO] to restore patent term in cases in which patent life has been 
shortened due to unusual and unavoidable administrative delay.
  I wish to commend the majority leader, my good friend from Kansas, 
for first bringing this matter to my attention. I share Senator Dole's 
concern that patent term not be eroded due to unusual delays in 
evaluating patent applications by the PTO. The recent adoption of the 
new 20 year from time of filing patent term has created a need for 
legislation to address the issues giving rise to the Dole/Rohrabacher 
measure.
  As my colleagues are aware, the legislation implementing the General 
Agreement on Tariffs and Trade [GATT] passed by the Congress and signed 
by the President in December, 1994, contained a provision designed to 
achieve harmonization of patent standards in the international 
community. This was accomplished by changing our old system, which 
allowed for a patent term equal to 17 years from the date the patent 
was issued, to a new system in which patents are valid for 20 years 
from the date of application.
  There has been some concern expressed that the transition under GATT 
from a ``17-year from issuance'' to a ``20-year from filing'' patent 
term will cause some inventors to lose valuable patent term. This can 
occur when patent applications are under review at PTO for unusually 
long periods of time. To remedy this potential loss of patent term, the 
bill I am introducing today will allow the PTO to restore patent term 
for up to 10 years if such term are lost because of unusual and 
unavoidable administrative delay. The bill also provides an opportunity 
for an independent review of the Commissioner's determination.
  At present, the patent code does not allow for patent term 
restoration on the basis of ``unusual administrative delay.'' Such a 
provision was not included in previous legislation because it was 
believed that there were too few cases to warrant its inclusion. 
Nevertheless, the changes made by the GATT implementing legislation and 
several cited cases in which patent applications have taken up to 10 
years to be 

[[Page S511]]
processed have heightened an awareness of the need to address the 
potential diminution of patent life. If enacted, the Full Patent Term 
Preservation Act of 1996 will allow inventors to regain patent term 
lost due to unusual administrative delay.
  S. 1540 addresses the same general issue expressed by the 
distinguished majority leader, Senator Dole, and by Congressman 
Rohrabacher in their legislation this Congress. I am very sympathetic 
to the problem which led them to introduce their legislation and I want 
to work closely with them to resolve the matter. At the same time I 
must note my concern that previous legislative proposals pose at least 
two problems. First, a provision that allows each applicant to select 
the way in which the patent term will be measured could pose 
significant administrative problems. And second, I am still concerned 
that we have not done enough to address the problem of so-called 
submarine patents which was one of the motivating factors behind 
adopting the GATT change.
  As with the Dole/Rohrabacher legislation, the Full Patent Term 
Preservation Act of 1996 attempts to preserve a full term of patent 
protection for American inventors, thereby promoting creativity and 
investment and maintaining U.S. competitiveness in the rapidly growing 
high-tech global marketplace. However, by retaining the basic principle 
of measuring the patent term from the earliest filing date, my proposed 
legislation preserves the necessary incentives for patent applicants to 
diligently and expeditiously pursue the issuance of their patent.
  As chairman of the Judiciary Committee, it is my intention to hold 
hearings on these issues in the near future. I want to make clear to my 
colleagues that the measure I introduce today is an effort to start the 
process of finding a middle ground which will accommodate the interests 
of all parties. I intend for the Judiciary Committee to examine this 
issue very closely over the next few months and I look forward to 
working with Senator Dole and all other interested parties to make any 
necessary modifications.
  Before closing, I want to mention my interest in soliciting input on 
one particular provision of this legislation. Section 2 grants the PTO 
the authority to determine the circumstances under which a patent 
adjustment can be made. Some have questioned whether providing this 
authority to the very agency which caused the delay would be the most 
appropriate way to address the adjustment issue.
  Mr. President, I believe that S. 1540, the Full Patent Term 
Preservation Act of 1996 is a balanced legislative response to the 
problem of potential loss of patent term. It will protect the 
legitimate patent rights of American inventors, uphold our 
international treaty obligations under GATT, and provide the necessary 
incentives to ensure the responsible and timely pursuance of patent 
applications. I urge my colleagues to support this legislation and look 
forward to its timely consideration.
  I ask unanimous consent that the text and a section-by-section 
analysis of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1540

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Full Patent Term 
     Preservation Act of 1996''.

     SEC. 2. PATENT TERM DETERMINATION AUTHORITY.

       (a) In General.--Section 154(b) of title 35, United States 
     Code, is amended to read as follows:
       ``(b) Determination of Patent Term.--
       ``(1) Basis for patent term adjustment.--
       ``(A) In general.--Subject to paragraph (2), the term of a 
     patent shall be adjusted to include the period of time for 
     which the issue of the original patent was delayed due to--
       ``(i) a proceeding under section 135(a) of this title;
       ``(ii) the imposition of an order pursuant to section 181 
     of this title;
       ``(iii) appellate review by the Board of Patent Appeals and 
     Interferences or by a Federal court where the patent was 
     issued pursuant to a decision in the review reversing an 
     adverse determination of patentability; or
       ``(iv) an unusual administrative delay by the Office in 
     issuing the patent.
       ``(B) Regulations.--The Commissioner shall prescribe 
     regulations to govern the determination of the period of 
     delay, including the particular circumstances determined to 
     be an unusual administrative delay under subparagraph (A).
       ``(2) Limitations.--
       ``(A) Maximum period of adjustment.--The total duration of 
     all adjustments of a patent term under this subsection shall 
     not exceed 10 years. No patent term may be adjusted by a 
     period greater than the actual period of time that the 
     issue of a patent was delayed as determined by the 
     Commissioner. To the extent that periods of delay 
     attributable to grounds specified in paragraph (1) 
     overlap, the period of any adjustment granted under this 
     subsection shall not exceed the actual number of days the 
     issuance of the patent was delayed.
       ``(B) Due diligence.--The period of adjustment of the term 
     of a patent under this subsection shall be reduced by a 
     period equal to the time during the processing or examination 
     of the application leading to the patent in which the 
     applicant did not act with due diligence to conclude 
     processing or examination of the application. The 
     Commissioner shall prescribe regulations establishing the 
     circumstances that constitute a failure of an applicant to 
     act with due diligence to conclude processing or examination 
     of an application.
       ``(C) Terminal disclaimer.--No patent, the term of which 
     has been disclaimed beyond a specified date, may be adjusted 
     under this section beyond the expiration date specified in 
     the disclaimer.
       ``(3) Notice to commissioner.--In a case in which a patent 
     term is adjusted under this subsection, the Commissioner 
     shall determine the period of any patent term adjustment 
     available under this section and shall include a copy of that 
     determination with the final notice. The Commissioner shall 
     prescribe regulations establishing procedures for the 
     application for, and notification of, patent term adjustments 
     granted by the Commissioner under this subsection.
       ``(4) Judicial review.--Any applicant dissatisfied with a 
     determination by the Commissioner under paragraph (3) may 
     have remedy by civil action in the United States Court of 
     Federal Claims if commenced within 60 days after the mailing 
     of the notice of allowance as the Commissioner appoints. The 
     initiation of a civil action under this section shall not 
     delay the issuance of a patent.''.
       (c) Technical Clarification.--Section 156(a) of title 35, 
     United States Code, is amended--
       (1) in the matter preceding paragraph (1) by inserting ``, 
     which shall include any patent term adjustment granted under 
     section 154(b),'' after ``the original expiration date of the 
     patent''; and
       (2) in paragraph (2) by inserting before the semicolon ``, 
     except as provided under section 154(b)''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by section 2 shall take effect on the 
     date of the enactment of this Act and shall apply to any 
     application filed on or after June 8, 1995.

     Full Patent Term Preservation Act Section-by-Section Analysis

       Section 1. Short Title.--This section titles the bill the 
     ``Full Patent Term Preservation Act of 1996.''
       Section 2. Patent Term Determination Authority.--This 
     section makes certain that the term of a patent will be 
     adjusted to include time attributable to certain delays in 
     review of patent applications.
       Specifically, section 2(b)(1) mandates that adjustments 
     will be made for time elapsed due to: proceedings designed to 
     determine the priority of invention (``interference'' under 
     section 135(a) Title 35 U.S.C.); orders pertaining to a 
     determination that the patent would be detrimental to the 
     national security (section 181 of Title 35); and cases in 
     which the Board of Patent Appeals and Interferences or a 
     Federal court reverses an adverse finding of patentability. 
     In addition, the Commissioner shall make adjustments due to 
     unusual administrative delay by the Patent and Trademark 
     Office (PTO) in issuing the patent.
       The PTO Commissioner is authorized to promulgate 
     regulations to govern how the period of delay is to be 
     determined, including the circumstances that constitute 
     ``unusual administrative delay.''
       Section 2(b) also establishes a 10 year limitation for 
     adjustments in patent terms under this section and precludes 
     adjustments in patent term beyond the actual number of days 
     that a patent was delayed. No adjustment in patent term may 
     be granted for time periods when the applicant did not act 
     with ``due diligence.'' The Commissioner is authorized to 
     promulgate regulations to define the application of the ``due 
     diligence'' provisions.
       Section 2(b) also instructs the Commissioner to notify the 
     applicant, on the day the patent issues, of any patent term 
     restoration the applicant is entitled to under this section. 
     Finally, section 2(b) provides the right to judicial review 
     in the United States Court of Federal Claims for those patent 
     applicants 

[[Page S512]]
     dissatisfied with the determination of the Commissioner with respect to 
     patent term adjustments.
       Section 2(c) makes certain technical conforming changes 
     between sections 154 and 156 of the patent provisions of 
     Title 35, U.S.C. Section 2(c) allows the patent term 
     adjustments provided in section 156 to restore patent term 
     lost due to Food and Drug Administration regulatory review to 
     be additive to any patent term restoration granted under 
     section 154 to compensate for patent term unavoidably lost in 
     the patent prosection process.
       Section 3. Effective Date.--This section makes the new 
     provisions contained in section 2 effective for any patent 
     application filed on or after June 8, 1995.
                                 ______