[Congressional Record Volume 142, Number 95 (Tuesday, June 25, 1996)]
[House]
[Pages H6718-H6720]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    STEAL AMERICAN TECHNOLOGIES ACT

  The SPEAKER pro tempore (Mr. Foley). Under the Speaker's announced 
policy of May 12, 1995, the gentleman from California [Mr. Rohrabacher] 
is recognized during morning business for 5 minutes.
  Mr. ROHRABACHER. Mr. Speaker, I would like to associate myself with 
the remarks that we just heard from my colleague from Washington, DC. I 
thought they were articulate. I thought they were from the heart. I 
think they speak to every American that we should be standing together 
for those principles of decency and honor and love that should be the 
basis of the relationship between free people. Let us hope that there 
will not be racists that need to be protected and that we do not have 
to protect ourselves from church burnings and crowds because that will 
be exorcised from the hearts of every American. That should not be 
there in the first place. I thought those remarks were something to 
touch the hearts of all of us and help that process and make for all of 
us a better country.
  Today we need to stand together as never before as Americans, whether 
it is black or white or yellow or whatever race or ethnic background, 
because America is under attack as never before. We went through the 
cold war and we stood together. Now we are facing a world of economic 
competition. Our national well-being and the rights of the American 
people are under attack in a more insidious way.
  There will be a bill that will reach this floor shortly after the 4th 
of July called H.R. 3460. It is the Moorhead-Schroeder Act. I like to 
call it the Steal American Technologies Act because it will, if passed, 
result in the greatest rip-off of American technology in the history of 
this country and leave our people with a declining standard of living. 
They will never know what hit them because the fundamental rules that 
have provided us our technological superiority over our economic 
adversaries and, yes, over our military adversaries is being changed to 
the detriment of the United States.
  Again, most Americans will not understand what hit them. Even today 
it

[[Page H6719]]

is hard to understand this piece of legislation. But let us remember, 
if people want to understand what this bill is all about, all the 
changes to date proposed in the patent law and the changes proposed in 
H.R. 3460, the Steal American Technologies Act, are part of an effort 
to enact into law a hushed agreement that was made between the head of 
the United States Patent Office and the Japanese patent office. I have 
a copy of that back in January 1994. I am now submitting this agreement 
that almost no American knows about between the head of our Patent 
Office and the head of the Japanese patent office to harmonize American 
law with that of Japan, meaning trashing the constitutional protections 
we have had on patent rights since the founding of our country and 
harmonizing our law with theirs, bringing down the rights of the 
American people in the name of harmonizing Japanese-American law.
  I will also submit a copy of a 1993 Japanese patent association 
recommendation list for the United States Patent Office. Here it is. I 
submit that for the Record as well.
  Guess what? Everything included in these recommendations are the 
things, are the provisions of H.R. 3460, which we are proposing, which 
this body will be voting on in the name of improving our patent law, 
making it exactly like Japan's. We are being told that these changes 
that are being proposed in our law are to prevent submarine patenting.
  They say that is the driving force behind H.R. 3460. How come then, 
if that is the driving force, it is the Japanese that are demanding 
that we make those changes in our law? These changes will put a 
stranglehold on American innovation and help bring down the American 
leadership in technology that has protected the well-being of our own 
people. What does it do?
  What are these recommendations? How is our law going to be changed? 
An American inventor who applies for a patent from this moment on after 
this law passes, up until now it has been secret what his patent 
application is until that patent is granted to that inventor. Now 
because of the Japanese request, we are going to publish every detail 
of every American patent, whether or not the patent has been issued to 
the inventor. That means every inventor, the details of every 
invention, every creative idea will be made public to every thief, 
every pirate, every Asian copycat in the world to use against us to 
bring our standard of living down.
  Proponents of the publication say, well, 75 percent of all the 
patents are already patented overseas anyway. That is an inaccurate 
figure that has been given to this body, and we will soon be giving the 
Small Business Administration and GAO figures on that. But what is more 
important is that overseas patent applications, unlike American patent 
applications, are only small in detail. What they want to do is publish 
every one of our secrets so that we can be destroyed economically.
  We must oppose H.R. 3460 and support the Rohrabacher substitute.
  Mr. Speaker, I include for the Record the following information:

            [From the Japan Patent Association, Sept. 1993]

The United States Patent System and Practices Viewed From Japan: Nobody 
                               is Perfect


                 background for preparing this document

       Intellectual property is drawing attention world-wide in 
     recent years, and there are a number of developments in 
     various countries including revision of their patent 
     legislation, in parallel with the progress in the discussions 
     on harmonization of patent systems proposed by the World 
     Intellectual Property Organization (WIPO) which is in the 
     center of these developments.
       The U.S., where the trend for protection of intellectual 
     property intensified during the 80's, amended her IP related 
     legislation and at the same time has been demanding the 
     countries of the world, taking every opportunity and arena 
     available to review their legislation towards strengthened IP 
     protection. The United States expressed her very strong 
     dissatisfaction especially against Japanese patent system, 
     combined with the issue of trade imbalance between the two 
     countries. The U.S. perception is expressed, for example, in 
     the recent report from U.S.G.A.O. entitled ``Intellectual 
     Property Rights. U.S. Companies' Patent Experiences in 
     Japan''.
       On the other hand, U.S. patent system which has a number of 
     marked differences from the patent systems in other 
     industrialized countries of the world, embraces numerous 
     problems both in its statute and practices which are found of 
     concern from the point of view of Japanese IP practitioners. 
     In this document you will find the major points the members 
     of IPA, who are users of U.S. IP system have found 
     unsatisfactory in the U.S. legislation and practices through 
     their daily involvement with that system, and which they 
     would like to see changed.

                           1. First-to-invent

       (1) The point at issue and general comments--Under first-
     to-invent system, the date of invention is established by 
     means of interference process. But because the proof of date 
     of invention made in a foreign country is not legally 
     recognized even when the date of filing in the U.S. of the 
     U.S. party is later than the date of filing in the country of 
     the foreign party which is the basis of priority for the 
     foreign party, the foreign parties in many cases give up 
     their claim for their patent right, the cost factor involved 
     also being a reason to do so. United States is now the only 
     country in the world adopting first-to-invent system, and her 
     early transition to first-to-file system is desired.
       (2) Specific problems--
       A. 35 U.S.C. Sec. 104--Establishment of invention date made 
     in a foreign country is not recognized except for the case 
     with convention priority right. This article provides de 
     facto for discrimination against foreigners.
       B. Interference--Interference requires a long and 
     complicated process before the decision. Apart from the issue 
     of time consumed in the process, the delay in patent grant 
     caused by interference inflicts a serious inconvenience to 
     the public in relation to patent term as explained in the 
     following item 2. An applicant can intentionally modify the 
     pending claim after looking at an issued patent, and apply 
     for interference. A large amount of money is involved in 
     interference leading to cases where the poorer party give up.

                          2. Submarine patents

       (1) The point at issue and general comments--Because there 
     is no provision of public disclosure of applications, there 
     is no way to know about a patent application currently 
     pending, no matter how long time ago the application may have 
     been filed. This creates a situation whereby it is never 
     predictable when or what kind of patent should suddenly come 
     up to the surface.
       Also because there is substantially unlimited patent term 
     from the filing date, it is possible that those patents 
     emerging from the oblivion of twenty or thirty years ago can 
     exist for seventeen years from the date of grant causing, 
     depending on the content of the patent, serious damages to 
     the industry as well as to the public interest because of the 
     characteristics of patent which can exclude uses of the 
     invention by a third party.
       Industrialized countries in the world all have the systems 
     for public disclosure of patent applications and ceiling for 
     patent term from the filing date. The U.S. is urged to adopt 
     these systems as soon as possible.
       (2) Specific problems--
       A. The lack of the public disclosure system of 
     applications--It causes inefficient double investments and 
     disrupts effective employment of capital investments.
       B. The lack of ceiling for patent term from the filing 
     date--As the delay in examination has no effect on the patent 
     term, sometimes applicants intentionally delay examination 
     inducing de facto extension of patent term, and effect 
     substantial modification to the claims watching the trend in 
     the industry.
       C. The lack of limits on the number of times or for the 
     time-frame for division, continuation, or continuation in 
     part of patent applications. This facilitates intentional 
     prolongation of examination.
       D. On top of above item C, addition of a new manner which 
     was not disclosed in the original specification is allowed 
     with continuation-in-part application. No judgement is passed 
     on what is a new matter or which claims are relevant to the 
     added new matter during examination process. This in turn 
     makes establishment of reference dates for novelty and non-
     obviousness difficult, causing the determination on the 
     effectiveness of patent extremely difficult. (This problem 
     raises major difficulty in practice as mentioned in item 4, 
     below, in connection with the determination of patent 
     effectiveness.)

                           3. Patent practice

       (1) The point at issue and general comments--Generally 
     speaking, the level of examination on patentability could be 
     improved, and the standards for judgement on non-obviousness 
     vary widely. This is possibly due to budgetary problem. Many 
     specifications demonstrate a large gap between the essence of 
     invention and the expression of claims. In the practical area 
     of examination process, improvements are due for requirement 
     for selection of invention and the lack of clear definition 
     for the extent of duty of prior art disclosure.
       (2) Specific problems--
       A. The standards for judgement on non-obviousness vary 
     widely, and there are noticeable cases where the level of 
     judgement is extremely inconsistent. Many patents have been 
     granted for inventions with doubtful non-obviousness, such as 
     those for sheer numerical limitations without criticality, 
     etc.
       B. Unclear patentability judgement on software related 
     inventions. There are many patents that seem to claim 
     practically algorithm per se.
       C. Restriction requirement to applications which are 
     essentially contained in the unity of invention. Standard for 
     issuing restriction

[[Page H6720]]

     requirement is unclear, causing financial and administrative 
     burdens to the applicant.
       D. Unclear stipulation for duty of prior art disclosure. To 
     try to construe on the safe side results in heavy 
     administrative burden. It is especially true financially, 
     when examination of corresponding foreign application, for 
     instance, revealed prior art at approximately the same time 
     for the U.S. patent grant, forcing the applicant to apply for 
     continuation or to request for reexamination.

                      4. Review of patent validity

       (1) the point at Issue and general comments--Because there 
     is variation in the quality of examination, many patents are 
     granted with questionable patentability. It is difficult to 
     confirm patentability (or non-patentability) of these patents 
     without recourse to litigations. Although reexamination 
     system has been introduced as a means of reviewing 
     patentability of patents after grant, the system is not 
     structured to function sufficiently. Aan improvement is 
     promptly needed off reexamination system. Although it is 
     possible to review validity of patents in court, there are 
     various practical problems as described in item 5, litigation 
     and patent infringement below.
       (2) Specific problems--
       A. Imperfection in the system of request for 
     reexamination--Under the current legislation, there are 
     imperfections such as, only prior patents or publications can 
     trigger a request for reexamination, the requesting person 
     can only be partially involved in the reexamination, or no 
     request for appeal is allowed in case of an unfavorable 
     decision. Under these circumstances, an action with the 
     objective of invalidating certain patents may end up in 
     fortifying the patents in question, if the request for 
     reexamination is rejected, of if the patentability is 
     confirmed.

                 5. Litigation and patent infringement

       (1) The point at issue and general comments--It is said 
     that U.S. society is a litigation society and patent disputes 
     are also brought relatively easily to court. From our point 
     of view, there are many disadvantageous aspects and problems 
     including excessive discovery and the jury system. We will 
     not elaborate on this however, and concentrate on patent 
     litigation and patent infringement issues.
       The pressure for reconciliation, instead of going all the 
     way seeking a just decision, is so strong because of the 
     complexity of litigation processes, expensive lawyers' fee, 
     unpredictable results due to the jury system, a very wide 
     margin in the estimated damages in case of a lost case, etc. 
     Also, it is difficult to predict a decision on patentability 
     or infringement, especially a judgement on infringement based 
     on doctrine of equivalents. Improvements in all these areas 
     are desired.
       (2) Specific problems--
       A. Discovery system--The coverage for discovery demanded by 
     the opponent party is often too broad causing gross burden in 
     manpower, time and money.
       B. Jury system--In case of trials highly technical in 
     content as parent disputes, there are often instances where 
     responsible results are hard to be achieved.
       C. Scope of infringement of process patent ill-defined--The 
     acts constituting process patent infringement as described in 
     the text introduced by the Omnibus Trade and Competitiveness 
     Act of 1988 are ill-defined, facilitating an excessive demand 
     for damages from the patent holder.
       D. Inappropriate determination of damages--There is no 
     clear principle to base the calculation of damages. In case 
     of willful infringement, 35 USC Sec. 284 rules that damages 
     may be increased up to three times. The criteria for judging 
     willfulness are not clear.
       E. Excessive patent marking obligations--It is stipulated 
     that a patent holder who has not been marking patented 
     products cannot demand damages to the infringing party on 
     infringements occurred prior to issuance of a warning.
       According to precedents, patent markings must be applied 
     promptly after the patent is granted, and a license must also 
     adhere to this rule and the markings must be directly applied 
     to product as much as possible. Such interpretations make the 
     requirements extremely severe ones from the view point of 
     business practice.

                            6. Other points

       (1) The point at issue and general comments--Patent 
     legislation in the U.S. is markedly heterogeneous from the 
     legislation in other industrialized countries of the world. 
     Numerous resultant obstacles are observed in addition to 
     those mentioned in the above items 1 to 5, obstructing 
     effective patent activities in the United States in the daily 
     patent management and application works carried out as a 
     matter of course by average career patent staffs. There are 
     also de facto discriminatory handlings of foreign applicants, 
     and numerous regulations that are against the spirit of the 
     Paris Convention. It is desired that the U.S. will promptly 
     amend these points and have her patent legislation harmonized 
     with that of the rest of the world.
       (2) Specific problems--
       A. Discrimination of foreign nationals regarding 
     determination of priority--An application filed in the U.S. 
     with the application for right of priority in foreign 
     countries may not guaranty the convention right, as it may 
     not be possible to eliminate an application filed by a third 
     party in the U.S. between the date of that foreign 
     application and the date of U.S. patent filing.
       B. Assignee application not permitted--This restriction is 
     causing major inconvenience in practice. Prior use should be 
     recognized as a means of refutation in infringement dispute.
       C. Prior use not recognized--Prior use should be recognized 
     as a means of refutation in infringement dispute.
       D. Complicated payments of post-issuance fee--Payment terms 
     of post-issuance fees is too complicated. For example they 
     become due by 3.5 years, 7.5 years, and 11.5 years after the 
     original grant. If post-issuance fee becomes payable yearly 
     as in the case of other countries, management on the patent 
     holder's side will become much easier, and besides, reduction 
     in the sum payable should become feasible.
                                                                    ____


Mutual Understanding Between the Japanese Patent Office and the United 
                   States Patent and Trademark Office


                      Actions to be taken by Japan

       1. By July 1, 1995, the Japanese Patent Office (JPO) will 
     permit foreign nationals to file patent applications in the 
     English language, with a translation into Japanese to follow 
     within two months.
       2. Prior to the grant of a patent, the JPO will permit the 
     correction of translation errors up to the time allowed for 
     the reply to the first substantive communication from the 
     JPO.
       3. After the grant of a patent, the JPO will permit the 
     correction of translation errors to the extent that the 
     correction does not substantially extend the scope of 
     protection.
       4. Appropriate fees may be charged by the JPO for the above 
     procedures.


                    Actions to be taken by the U.S.

       1. By June 1, 1994, the United States Patent and Trademark 
     Office (USPTO) will introduce legislation to amend U.S. 
     patent law to change the term of patents from 17 years from 
     the date of grant of a patent for an invention to 20 years 
     from the date of filing of the first complete application.
       2. The legislation that the USPTO will introduce shall take 
     effect six months from the date of enactment and shall apply 
     to all applications filed in the United States thereafter.
       3. Paragraph 2 requires that the term of all continuing 
     applications (continuations, continuations-in-part and 
     divisionals), filed six months after enactment of the above 
     legislation, be counted from the filing date of the earliest-
     filed of any applications invoked under 35 U.S.C. 120.
     Wataru Asou,
       Commissioner Japanese Patent Office.
     Bruce A. Lehman,
       Assistant Secretary of Commerce and Commissioner of Patents 
     and Trademarks, United States Patent and Trademark Office.

                          ____________________