[Congressional Record Volume 142, Number 86 (Wednesday, June 12, 1996)]
[House]
[Pages H6279-H6282]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              DAMAGING CHANGES PROPOSED TO U.S. PATENT LAW

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from California (Mr. Rohrabacher) is recognized 
for 30 minutes as the designee of the majority leader.
  Mr. ROHRABACHER. Mr. Speaker, I am here tonight to discuss a bill 
that will be coming to this body next week or the week thereafter. A 
bill that will dramatically--dramatically--change the patent laws of 
this country.
  Mr. Speaker, it is a bill that I believe is part of an insidious 
attack on the well-being of the American people. They will not even 
realize how horrible it is and the impact that it will have on their 
way of life until many years after. Only when it has long since been 
passed will the American people wonder what it was that hit them, why 
their standard of living is going down, why America is no longer able 
to compete.
  Mr. Speaker, the American people are used to being the leaders on 
this planet. We have been, and this has been called the American 
Century. But let us never forget that America used to be the most 
underdeveloped country in the world. We were a desolate frontier, and 
now the American people have turned a desolate frontier into a house of 
freedom and opportunity in which the common man in the United States of 
America lives a decent life and knows that his children have an 
opportunity to improve their well-being as well through a system that 
encourages innovation.
  Yet there are those who seek to change some of the fundamental 
underpinnings of American prosperity, and at times they are not always 
up front with their goals. Today, I believe the incredible attack that 
we see coming on the patent system of the United States of America is 
part of this type of approach where people are seeking a change in 
America, but we are not certain exactly where they are coming from.

                              {time}  2330

  One thing is for certain. Bill Clinton, shortly after becoming 
President, sent Bruce Lehman, his appointee to head America's patent 
office, to Japan. There Bruce Lehman, now the head of the American 
Patent Office, concluded a hushed agreement to harmonize America's 
patent laws with those of Japan.
  It may surprise those who are hearing this speech tonight that an 
unelected official--the head of our Patent Office, Bruce Lehman--signed 
an agreement and that an agreement has been reached. It is in writing: 
to harmonize American law, change our law so that it is in harmony with 
Japanese law in terms of the patent law.
  What we got, by the way, for agreeing that our law would change and 
harmonize with Japan, is almost no change in the Japanese law in 
return, except for an anemic restriction on corporate Japan's 
interferences with the patent process. But like Japan's promise to open 
its markets decades ago--I remember this 25 years ago when they were 
talking about opening their markets--no one has any idea when their 
weak concessions will actually be put into effect or whether those weak 
concessions are simply scribblings on pieces of paper until they are 
forced, decades from now, to actually pull back from the things that 
they agreed to if we would change our law.
  In the meantime, however, Bruce Lehman and the multinational 
corporations are doing their god-awful best to change our fundamental 
patent law, to harmonize it to make it look exactly like the law of 
Japan over these many years. They have tried to do this as quickly as 
possible and as quietly as possible.
  Step No. 1 was eliminating the guaranteed patent term of 17 years 
which has been a right that Americans have enjoyed--American inventors 
and investors have had as a right--for 134 years. Before that, there 
was a guaranteed patent term of 14 years, from the time of the founding 
of our country until 134 years ago. This guaranteed patent term has 
been part of our rights and part of something that has actually been 
written into the Constitution. Trying to keep this downgrading of the 
American patent rights quiet--instead of coming to Congress with 
legislation changing our patent laws--a provision was snuck into the 
implementation legislation for the General Agreement on Trade and 
Tariffs [GATT]. That may sound odd, but Congress could only vote up or 
down on this one omnibus bill that came before us, the GATT 
implementation legislation. No amendments were allowed.
  Thus, a Member of Congress would be forced to vote against the entire 
world trading system in order to vote against this insidious change of 
our patent law. This tactic was a total betrayal of those of us who 
voted for the fast track process of GATT, because we knew that we would 
only get an up or down vote. That is what the fast track was all about. 
But we were told if we would vote for fast track, then nothing would be 
included in the GATT implementation legislation except for that which 
was absolutely necessary and required by the GATT agreement itself.
  That is not what happened because this change was not required by 
GATT. This insidious, absolutely underhanded way of passing this change 
in our patent law, should tip off our citizens and should have tipped 
off Members of Congress that there is something that has gone afoul.
  GATT did not require eliminating this patent change so it should 
never have been in the legislation implementing GATT.
  I created a stir when GATT came to a vote. That was over 1\1/2\ years 
ago. I was promised a chance to correct this part of the implementing 
legislation. We can take it out of the implementing legislation. We can 
change the law and still be GATT consistent, because this was never 
required by GATT in the first place.
  Changes in the patent term, of course, are not easy to understand. 
Most people do not understand the importance of them. They know it is 
important for America to be the No. 1 technological power in the world. 
But patent term: That is kind of confusing. That is exactly the area 
where America's enemies know they can strike and know they can get away 
with this type of effort--a blow to the well-being of the American 
people--because the American people will not realized what is 
happening.
  Traditionally, when an American inventor or investor filed or a 
patent, no matter how long it took that patent to be issued by the 
Patent Office, once it was issued, the owners had a guaranteed patent 
term of 17 years to reap the benefits of their new technology. They 
actually owned the technology for 17 years. Anyone who would use it 
would have to give them some sort of a fee for using it, a royalty, it 
is called. They created the technology. It would not exist without 
them. This was a wonderful way to promote innovation in our society. It 
was, again, their right to a guaranteed patent term that was the basis 
of our system. We had the strongest patent protection of any country in 
the world.
  I will say it worked so well for the United States, almost all of the 
major inventions of our age and of the last century came from America, 
which was a very small and weak country at the time. The light bulb, 
the telephone, the reaper, the steamboat, of course, the airplane, all 
of these things came from Americans because we had a strong patent 
system.

[[Page H6280]]

  During the time before the patent was issued, Americans knew, under 
the old system, that they were secure, that even though it would take a 
long time for them to get issued that patent, that they would have a 
full 17 years to benefit. So people knew they would invest in something 
and they would expect a reward. That is why we invented all those 
wonderful things that changed our lives and uplifted the standard of 
living of our people.
  This system not only encouraged inventors but also investors. Private 
dollars by the billions have been allocated in our society for 
developing new technologies. We did not rely on government bureaucracy 
or taxes or government interference. We relied on freedom and the 
profit motive. It worked for the United States.
  The new system, which is being foisted on us, is nothing more than 
the Japanese system superimposed on us. Again, it is very difficult to 
understand this and understand the significance of the changes, these 
changes in our system and what it will mean in changes in our lives.
  Under the new code, meaning the old, the Japanese code superimposed 
on us, the day an inventor files for a patent, 20 years later his time 
is up. If it took 20 years, if it took 10 years for a patent to be 
issued in the past, the investor still knew he had 17 years because 
when it was issued, he had 17 hears to reap the benefit. Under this new 
system, meaning the Japanese system, after 10 years one-half of the 
inventor's patent term is gone. It is eaten up. He or she only has 10 
years left. The clock, in other words, is always ticking against the 
inventor and not the bureaucracy.
  Anyone who has studied the process knows that it is not abnormal for 
breakthrough technologies, meaning technologies that will change our 
lives and change the world, innovations that will create tens of 
billions of dollars of new wealth, it is not odd for them to take 5, 
10, or 15 years to go through the patent process. There are many, many 
examples of this. Yet these people under this system now, with their 
patent terms eaten away, would have no time to benefit from it. What 
kind of incentive does that give for investors who invest in people's 
breakthrough technology in their ideas?
  Now, what else does it mean? What does it mean for the clock to be 
ticking against the inventor? It means the bureaucracy and special 
interests now have leverage on the inventor that they never had before. 
During negotiations which are part of the patent granting process, the 
inventor can be ground down because he or she is now vulnerable. And a 
patent can be delayed and the time shortened. And what does that mean? 
It means that all of those royalties, if now you only get 10 years of 
patent protection, really, that is left on your clock because it has 
taken that much time to get the patent issued and you only have 10 
years left, what does that mean?
  It means that royalties that were once going into the bank account of 
American inventors are now rerouted into the bank accounts of huge 
foreign and domestic and multinational corporations. These people who 
used to have to pay royalties the whole time now will end up having to 
pay royalties only part of the time, if any of the time, because there 
might not be enough time for the inventor to recoup the money necessary 
to fight in court the big corporations who are ripping off his product.
  To claim stolen royalties, an individual American must pay lawyers 
then and legal specialists and go to court. Under the old system, the 
Americans were protected. Under the new system that is being installed, 
the Japanese system, Americans are at risk. The little guy gets ground 
down.
  Under the old system, the Wright Brothers invented airplanes and 
lifted mankind into the heavens. Under this system, the Wright Brothers 
would have been ground down by Mitsubishi who would have probably ended 
up controlling their technology. And we would have gone to airports 
filled with Japanese airplanes reaping the benefits for that society.
  This system, which our patent commissioner wants America to emulate, 
has ill-served the Japanese people because what has happened, although 
they have been able to grasp technology from others, there has been 
almost no innovation and creativity in Japan. The fact is, the Japanese 
are rightfully known as copiers and improvers, not innovators and 
inventors. This is because new inventions basically benefit a very 
small elite in Japan.

  Their laws, which Bruce Lehman wants America to emulate, would have 
permitted and has permitted in Japan powerful business conglomerates to 
run roughshod over the people. They have been beaten down, when anyone 
raises his head. And those very same interests now will be able to come 
to the United States of America and run roughshod over our inventors.
  As far as technological development, as I say, Japan basically has 
shown very little, very little, very little example of innovation in 
their own society because once an innovator does step forward, once an 
inventor does produce some sort of significant invention and tries to 
patent it in Japan, all of a sudden that inventor experiences 
pressures, official and unofficial, that are applied to beat him down. 
And so his rewards are limited.
  However, the rewards of the big guys, the giant corporations, are 
very great there because they can envelope new innovation and pay very 
little in royalties as compared to their counterparts in the United 
States.
  Unfortunately, we now are having that system superimposed on us. It 
is the difference between a society that is based on individual freedom 
versus collectivism and egalitarianism.
  During the patent debate, Mr. Lehman constantly claimed the purpose 
of strong patent laws is to facilitate dissemination of information to 
the society as a whole. That is the ultimate in antifreedom 
collectivist thinking and has nothing to do with what our Founding 
Fathers had in mind. In our country the rights of the individual are 
paramount.
  These patent laws were meant to protect individual property rights 
over those supposed needs of the society because we understood that 
protecting the rights, the property rights of the small farmer and the 
individual, the individual businessman, that this will indeed benefit 
all of us in the long run because individuals will then put out the 
maximum of effort. And they will have more personal responsibility, and 
it will create a prosperous citizenry.

  This is what creates a prosperous country. Mr. Lehman's approach 
treats the individual as secondary, ants in a collective hole who, if 
they insist on their rights, must be smashed by the boots of those in 
power.
  Of course, those trying to challenge our system will never admit 
this. Those trying to superimpose this Japanese system on us. The 
change is coming not as part of a democratic process, of course, so 
they do not have to tell us about it. It is coming by subterfuge, 
sneaking provisions into a treaty legislation or an omnibus bill so 
that basically this evil will be obscured from view.
  When one can force the advocates into a debate, what they say is the 
reason why they are pushing all of these things is the fact that there 
is a submarine patent threat out there. Well, a submarine patentor is 
someone who has tried to elongate the system here. They have gamed the 
system. Thus, the date for a patent being issued to them is put off and 
they have a few more years in the outyears to collect some royalties. 
That is what a submarine patentor is.

                              {time}  2145

  Now, there have been some examples of that, and the fact is that that 
is a problem that can easily be corrected administratively, but this 
problem has been put up as a straw man to excuse this incredible 
fundamental change in our society and the diminishing of American 
patents rights.
  Basically, they could have corrected the problem. It is like someone 
with a sore toe and someone telling them, ``In order to get rid of your 
sore toe we are going to cut your leg off.'' ``No, no, no. Please. I 
can correct the sore toe. I will put something on it that will make it 
better.'' ``No, no. We are going to cut your leg off to get rid of your 
sore toe.''
  Now, when someone tells you that, maybe you have to question they do 
not have your best interests at heart, and that is what is happening 
with the submarine patent issue.
  You see, the vast majority of all patent applicants, 95 percent and 
up if not

[[Page H6281]]

99 percent, do everything in their power to get their patent issued. 
You know, please issue it now, right away, because that is when they 
will start to benefit, when their patent is issued. They know that if 
they hold off, they may be left behind by other innovations, and let us 
note this:

  Those people claiming that the submarine patent is, in fact, the 
reason why we have to change the patent law, do they not realize these 
are part of the very same forces that were trying to change the patent 
law before anyone ever talked about submarine patents, before anyone 
ever knew what that meant.
  No, the fact is the real motive behind most of those people who want 
to change, the real motive is they want to harmonize our system with 
Japan because it will create a more global trading system.
  Well, history will judge what happens by, you know, what they 
accomplish, by what they are trying to do and what happens to the 
American people.
  Let us note that this is the first step in harmonizing our trade with 
Japan, and I will have to say that Mr. Lehman has used the bogeyman of 
submarine patents to get some Members of Congress to believe that that 
is a reason for this terrible change in our system that will have such 
a horrible impact on our society.
  But again, if a submarine patent is a problem, we could work together 
and get it cured and get it corrected with just administrative changes 
within the system.
  I, in fact, had a bill, H.R. 359, which would reinstate the 17 years 
of a guaranteed patent, but at the same time we included a provision 
that would basically stop the manipulation of the system. Yet when I 
put the provision in when it was suggested by others, that was not 
enough, and then again I said, well, let us put more things into this 
bill, let us put more things into this bill which will guarantee you 
cannot have a submarine patent just so long as you do not eliminate the 
guaranteed patentor, just as long as you do not cut your leg off in 
order to cure the sore toe. But, no, no one was ever willing to offer 
that as an alternative. No one ever came up with suggestions for me 
with that, because the real purpose was to eliminate the guaranteed 
patent term.
  Now, we face another piece of legislation. The fact is the guaranteed 
patent term was eliminated by the GATT implementation legislation. 
Well, I will be trying to restore that as a substitute for a bill which 
will come to the floor next week, H.R. 3460. It is a patent bill that 
is basically designed, their patent bill, H.R. 3460 which will come to 
the floor, and I have a substitute which I want to substitute for that 
bill, but their bill basically is designed to complete the destruction 
of our patent system, and basically it is the next step from what they 
did when they snuck this first provision into GATT which will then 
totally harmonize us with Japan.

  H.R. 3460, which I call the Steal American Technologies Act, is being 
put forward. Now, the official title is the Moorhead-Schroeder Patent 
Act. Well, better than anything else it demonstrates what is going on. 
It is very understandable to see what some of the provisions do, and it 
is very understandable to see the powerful international interests that 
are at work in this legislation.
  H.R. 3460 is a package that obscures some of the mind-boggling 
provisions, but if you look closely you will be able to see it. One of 
the provisions was introduced last year in a bill entitled the Patent 
Publication Act. See, they had to change that now. They had to make it 
the Moorhead-Schroeder Act because the Patent Publication Act is too 
blatant a description. The title was too self-explanatory, in other 
words. That provision, which is part of this bill, H.R. 3460, mandates 
that after 18 months every American patent application, whether or not 
it has been issued, will be published for the world to see.
  Please try to understand what I am telling you today. We have a bill 
that is insisting that every new idea of American technology will be 
made public, will be public, and thus every thief and brigand and 
pirate and multinational corporation and Asian copycat in the world 
will be handed the details of every idea that we have got. They will be 
standing in line. The Xerox machines will be running, the fax machines 
will be running, and our ideas will be overseas, and they will be in 
production of our new technology to use against us before our own 
people are issued the patents.
  It is incredible, but of course that is part of the Japanese system, 
so we have to have it here too. That is part of the Japanese system. 
Everything is public, and thus they can beat down the individuals who 
are creating new technologies. Our newest and creative ideas, as I say, 
will be out before the public and out before our adversaries even 
before our own people can go into production, and H.R. 3460, as I say, 
is entitled to Moorhead-Schroeder Patent Act, and this provision, as I 
say again, it is almost too mind-boggling for the public to believe, 
but please believe it. That is part of the bill, that is the purpose of 
the bill, and basically this bill is passed, has already passed 
subcommittee and full committee.

  When it was going through the subcommittee, I will never forget it. I 
was in my office, and there was a man from a medium-sized solar energy 
company from Ohio in my office, a president of his company. He had 
helped start that company and built it on his own creative ideas. they 
had lots of patents, and I told him what the provision of this bill was 
as it was going through subcommittee at the moment that I talked to 
him. I said, what if you have to publish your patent application before 
the patent is issued, and he said, ``My gosh, our Asian competitors 
will have it in production, they will be making profit on my 
technology. It I try to go to court, what they will do is they will 
used the money, the profit they receive from my technology, to beat me 
down and destroy my company.''
  He was right. That is what will happen if we let them get away with 
it, and this is something we cannot let happen.
  Now, when full committee, which this bill has already passed through 
full committee, when someone was asked, when an advocate of this bill 
was asked, is that true? Everyone will have to publish their patent 
application? They were told, ``Oh, no.'' That has been taken care of. 
Yeah, do you know how that has been taken care of? In order not to get 
it published, a patent applicant has to withdraw his patent. That is 
all. You just have to withdraw your application, meaning you have to 
give up on getting a patent.
  That was an untruth. That was an untruth. That was something that was 
wrong information that the people had in the full committee. They were 
told that it was taken care of, but that was not what they consider 
being taken care of, that unless you withdraw and do not push forward 
for a patent that your patent will be published.

                              {time}  2355

  This is the nightmare that will face every small-and medium-size 
company, that they will have their own technologies used against them 
by foreigners and they will be put out of business. Anyone who cannot 
afford a stable of expensive lawyers will be at the mercy of the worst 
thieves in the world, and the big guys are the ones, of course, our big 
companies have the contacts overseas. They can defend themselves. In 
fact, they would not mind stealing some of the technology from the 
little guys here themselves. It will be open season in our country on 
the little guy.
  Of course, Mr. Speaker, we are told we have to do this to prevent 
this evil, the submarine patents. There are a few people who are 
elongating their patents by a few years, and that is very evil. Thus, 
we have to do all this other stuff and permit this other vulnerability 
for everybody in our country in order to solve that problem. We have to 
cut your leg off in order to correct that hangnail that you have on 
your toe.
  Another major provision of H.R. 3460 is now basically, hold onto your 
hats, is the abolition of the U.S. Patent Office. They are advocating 
we eliminate the U.S. Patent Office, which has been part of our 
Government since the founding of our country in 1790. Yes, under H.R. 
3460, basically our Government will eliminate the patent office, which 
eliminates congressional oversight, by the way, because they are going 
to set up a new patent corporation, sort of a quasi-independent 
government corporation like the Post Office.

[[Page H6282]]

  Members know I am in favor of privatization. I am a conservative 
Republican. But this corporatization of a Government function, of a 
core Government function, it is the Government's job to protect our 
individual rights. It has been part of our system since the founding of 
our country. This is not the way to privatize Government. We cannot do 
that, because that is the job of the Government.
  Mr. Speaker, basically the patent examiners, and by the way, by 
making it a quasi-corporate structure, congressional oversight is taken 
back, but what also happens is that the patent examiners, these men and 
women who have dedicated themselves to a fair adjudication of American 
applications for patents, these people work hard and they struggle, and 
it is a tough job, but it is a judicial function, because they are 
making decisions as to who owns billions of dollars of technology.

  These people are going to be stripped, they will be stripped of their 
civil service protection. This opens up everything to corruption. It 
opens it up to outside influences. Why are we doing this? Why are we 
doing this? If the patent office is corporatized, Bruce Lehman, the 
minister of harmonization with our laws with Japan, he is going to head 
the patent office, and he will be a virtual dictator of that office 
compared to what now it is, when we basically have it being part of the 
Government rather than a semi-private operation.
  These changes are destructive. They will work against the best 
interests of the United States. It is transparent, the corruption that 
will be created, and the special interests from all over the world who 
will be trying to interfere with a system, a system which has served us 
so well and kept America ahead of the pack, ensured that the United 
States of America had a middle class, people who had decent lives 
because we had technology that permitted us to outcompete our 
adversaries economically and defeat our military adversaries when our 
country was in trouble.
  H.R. 3460, the Steal American Technologies Act, that is the Moorhead-
Schroeder bill, patent act, it must be defeated. The Rohrabacher 
substitute, which I will offer on the floor, which restores American 
patent rights, must be passed. It is something we have to do to protect 
the well-being of our citizens.
  Huge companies have been opposed to this proposal. It is up to the 
American people. The American people have to weigh in, or huge 
corporations, multinational corporations, will have their way. So far 
we have the support of small business, the little guys, every small 
inventors organization in the country, even American universities. But 
the big corporations of the United States of America have weighed in 
because they have a vision of a global market, and who cares about the 
rights of the American people or the standard of living of the American 
people. It is this global marketplace which is more important.
  Mr. Speaker, we can make democracy work here. We can defeat the big 
guys if the little guys get together and make sure that they are 
contacting their Representatives in Washington and demanding that a 
piece of legislation so detrimental to our country's well-being, the 
Steal American Technologies Act, is defeated, H.R. 3460, and that the 
substitute that I am proposing, the Rohrabacher substitute, is placed 
in its stead.
  Now is the time for us as Americans to stand together and tell the 
elites of the world we will never see our rights diminished by any kind 
of global vision. We will make sure that our children have a better 
life, because we are all the children, and all of Americans will always 
be the children, of Ben Franklin and Thomas Jefferson. We will never 
give up the rights that they gave us as their legacy.

                          ____________________