[Congressional Record Volume 142, Number 138 (Monday, September 30, 1996)]
[Senate]
[Pages S11845-S11848]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          SUBSTANTIVE CONCERNS

       Administration Opposition: The Commissioner of Patents and 
     Trademarks, Bruce Lehman, testified before the Senate 
     Judiciary Committee on September 18, 1996, and stated that 
     the Administration opposes both the Ganske Amendment and the 
     latest Ganske/Frist compromise. Commissioner Lehman noted 
     that the area of medical technology is particularly patent-
     dependent and expressed his concern that we not overreact in 
     a fashion that jeopardizes ``the goose that lays the golden 
     egg''.
       Impact on Medical Research: The supporters of the Ganske/
     Frist compromise can provide no assurance that enactment of 
     this legislation would not impede timely future development 
     of critical ``pure'' medical procedures. As Commissioner 
     Lehman has testified, patents are often useful in attracting 
     investment capital. It is impossible to state categorically 
     today, as the Ganske/Frist legislation seems to presume, that 
     tomorrow's advances in ``pure'' medical procedures will take 
     place as expeditiously as possible absent patent protection. 
     As Commissioner Lehman told the Judiciary Committee: ``It 
     would be really quite tragic if we were to find that a very 
     large loophole were to be opened in the patent system that 
     would cause investment in some of the most important 
     technology--not just from an economic point of view but from 
     a life-saving point of view, to cause that investment to dry 
     up.''
       Biomedical researchers, physicians, and other health care 
     professionals are to be saluted for their rich tradition of 
     public disclosure and free exchange of ideas. That this long-
     standing iterative educational process often acts to preclude 
     compliance with the strict legal requirements of the patent 
     system does necessarily lead to the conclusion that all 
     medical processes should not be patentable. In no other field 
     would one suggest that the incentives of the patent system be 
     eliminated in the hope that technical progress would proceed 
     unabated.
       Patent Protection Available to All: For these reasons, the 
     Administration is joined in opposing this legislation by the 
     Section of Intellectual Property Law of the American Bar 
     Association which believes the proposals:
       `` . . . violate a fundamental principle of our law under 
     which patent protection is available without discrimination 
     as to field of invention or technology. The Frist/Coalition 
     approach is doubly discriminatory in that it would achieve 
     this result by discriminatory treatment based on the identity 
     or profession of the infringer. . . The Section of 
     Intellectual Property Law believes that it would be both 
     unfair and counterproductive to single out one area of 
     creativity--the creation of new and improved medical 
     procedures--and deny rewards to those creators while 
     providing them to all others.''
       The Case for Changing the Law Has Not Been Made: Section 
     101 of the patent code--which broadly defines the subject 
     matter eligible for patenting--has been essentially unchanged 
     for over 200 years. The Ganske/Frist initiative reverses this 
     long history of statutory and case law and, without adequate 
     justification, precludes the patenting of an extremely 
     important field of endeavor--medical processes. The patent 
     code should not be changed on the basis of anecdotal 
     evidence.
       It is particularly perplexing that in the case that 
     precipitated the current controversy, the Pallin suture-less 
     cataract operation, the system worked, and the patent has not 
     been enforced by the courts.
       Moreover, to the extent that the Ganske/Frist compromise is 
     designed to reduce litigation costs, it is difficult to see 
     how it accomplishes this goal. Where a medical process 
     involves any type of instrument, a motion for summary 
     judgment could likely involve contested issues of fact that 
     would subject physicians to the expenses of litigation, even 
     where they would ultimately not be subject to remedies.
       A Right Without a Remedy: The latest Ganske/Frist 
     compromise provides the right to patent medical procedure 
     without a remedy against the most likely class of infringers 
     (medical practitioners). This violates one of the most 
     fundamental benefits of the United States patent system--the 
     right to exclusive use. Severely limiting the remedies 
     available under section 287 of the patent code is tantamount 
     to amending what is patentable under the 200 year old 
     language of section 101. A patent without a meaningful remedy 
     against infringement is like no patent at all.
       Individual Inventors vs. Multi-Million Dollar Corporations: 
     By extending protection to organizations that employ 
     physicians such as health maintenance organizations, the 
     Ganske/Frist legislation raises equity questions concerning 
     the proper balancing of rights of individual inventors versus 
     large corporations. We must think carefully before we take 
     away the rights of individual inventors by not allowing 
     enforcement against patent infringement by multi-million 
     dollar corporations.
       Trade Implications: The House-passed Ganske amendment to 
     limit the authority to expend funds to issue medical 
     procedure patents undercuts the hard fought gains of the GATT 
     Treaty TRIPS provisions (Trade-Related Intellectual Property 
     Rights). The House language invites, however unintentionally, 
     our trading partners to adopt intellectual property 
     protections that comply with TRIPS but, at the same time, 
     functionally nullifies these apparent gains by simply not 
     appropriating administrative funds. If this technique were 
     used by our foreign trading partners not to enforce American-
     owned patents on, for example, pharmaceuticals or automobile 
     parts, Congress and the public would demand action.
       Not Reviewed by Finance Committee: This latest Ganske/Frist 
     compromise raises novel, complicated, and sensitive issues of 
     far-ranging precedential significance relating to Articles 
     27, 28, and 30 of TRIPS. These issues need to be thoroughly 
     examined and merit careful consideration and debate by the 
     Judiciary Committee, the Finance Committee, and the full 
     Senate. There is no consensus on these issues. We have not 
     had an opportunity to hear from the United States Trade 
     Representative or the Secretary of Commerce on these matters. 
     For example, the American Intellectual Property Law 
     Association has noted that this amendment:
       ``. . . would be very deleterious to the patent law and 
     raises serious questions regarding the compliance by the 
     United States with its obligations under TRIPS. This 
     amendment . . . should be rejected. The proponents have 
     failed to demonstrate a need for this amendment. The 
     amendment would proclaim an open season for exceptions to 
     patent protection to address other alleged problems. 
     Moreover, it would clearly be inimical to the interests of 
     American industry for the United States to take the lead in 
     weakening the patent protection required under Articles 28 
     and 30 of the TRIPS.''


                   OPPOSE THE GANSKE/FRIST AMENDMENT

       Oppose the Ganske/Frist Amendment: In sum, the laws that 
     allow the patenting of the broadest possible range of subject 
     matter coupled with the three basic legal requirements of 
     novelty, utility, and nonobviousness have proven effective 
     over the long run. Our current statutory framework has met 
     the Constitutional charge ``to promote science and useful 
     arts'' and has helped make the United States the world's 
     leader in medical technology. We should not change these 
     laws absent a demonstration of a compelling need, and we 
     should not use the omnibus appropriations vehicle for such 
     a controversial change in substantive patent law.
           Sincerely,
                                                   Orrin G. Hatch,
     Chairman.
                                                                    ____

                                               September 27, 1996.

        Substantial Opposition Voiced to Ganske/Frist Amendment

       Dear Colleague: In view of the upcoming debate on the 
     omnibus appropriations bill, I thought you would want to be 
     aware of several compelling arguments raised in opposition to 
     proposed language barring medical procedure patents or their 
     enforcement. I continue to oppose this proposal on both 
     procedural and substantive grounds. Here's what some top 
     intellectual property authorities are saying:
       The Clinton Administration: The Clinton Administration 
     opposes the Ganske/Frist amendment both as it passed the 
     House and in its more recent version. In a July 17, 1996 
     letter to the House Appropriations Subcommittee, the Commerce 
     Department stated,
       ``We continue to oppose enactment of H.R. 1127 (the Ganske 
     bill) and any amendment that contains the substance of it. We 
     still believe that it is premature to adopt such drastic 
     steps when we have the opportunity to adopt administrative 
     measures to mitigate the problem.''
       Moreover, in September 18, 1996 testimony before the Senate 
     Judiciary Committee, PTO Commissioner Bruce Lehman expressed 
     opposition to the latest compromise and the unprecedented 
     loophole it would establish. PTO Commissioner Lehman said,
       ``I, personally, the Office, and the Administration are 
     against the Ganske amendment, and we would be against a 
     variation of that, too, and let me tell you why.''
       Commissioner Lehman's major points in opposition were:
       This could be a case of overreaction to a specific 
     circumstance. Even though that situation may be 
     controversial, it is important not to kill the ``goose that 
     lays the golden egg,'' that is, the incentive for medical 
     research;
       There is no requirement that patent applications be filed. 
     Historically, surgical procedures are not patented. When they 
     are, it is usually because it is required as part of a 
     business plan to attract the necessary capital for research 
     and development;
       We would not have the wonderful therapies we have right now 
     in this country--we wouldn't have the medical and 
     pharmaceutical industry that leads the world, that provides a 
     level of health care second to none, if it weren't for the 
     patent system. It

[[Page S11846]]

     is one of the most patent-dependent industries that there is, 
     and so we have to be extremely careful in tampering with that 
     system.
       PTO Commissioner Lehman concluded, ``It would be really 
     quite tragic if we were to find that a very large loophole 
     were to be opened in the patent system that would cause 
     investment in some of the most important technology--not from 
     an economic point of view, but from a life-saving point of 
     view--to cause that investment to dry up.''
       ABA Section of Intellectual Property Law: In the attached 
     letter, the ABA's Intellectual Property Section strongly 
     opposes the original Ganske and Frist bills (H.R. 1127/S. 
     1134), as well as the Ganske amendment adopted in the House 
     as part of the Commerce Department appropriations bill and a 
     more recent variation advanced by the Medical Procedures 
     Patents Coalition. The ABA Intellectual Property Law Section 
     says:
       ``All the proposals violate a fundamental principle of our 
     law under which patent protection is available without 
     discrimination as to field of invention of technology. The 
     Frist/Coalition approach is doubly discriminatory in that it 
     would achieve this result by discriminatory treatment based 
     on the identity or profession of the infringer.''
       The Intellectual Property Law Section raises several 
     concerns about the latest proposal, concerns which have not 
     been examined by any committee of Congress. These concerns 
     include: the negative impact on the America's world 
     leadership in scientific and technological development by 
     singling out one area of creativity and denying rewards to 
     those creators while providing them to all others; the 
     international impact of making this change to accommodate 
     narrow domestic interests; and the unworkability and 
     ineffectiveness of the proposals.
       The American Intellectual Property Law Association: In a 
     September 16, 1996, letter, the American Intellectual 
     Property Law Association said,
       ``This amendment, which would limit the remedies available 
     against physicians and health care organizations for 
     infringing medical procedure patents, should be rejected. The 
     proponents have failed to demonstrate a need for this 
     amendment. The amendment would proclaim an open season for 
     exceptions to patent protection to address other alleged 
     problems.
       ``Moreover, it would clearly be inimical to the interests 
     of American industry for the United States to take the lead 
     in weakening the patent protection required under Articles 28 
     and 30 of TRIPs.''
       The Intellectual Property Owners: The Intellectual Property 
     Owners' Association represents companies and inventors who 
     own patents, copyrights and trademarks in all fields of 
     endeavor. In a letter expressing strong opposition to the 
     Ganske amendment, the IPO has said,
       ``The amendment will harm members of our association who 
     are investing in medical research. Moreover, the amendment 
     amounts to a full employment law for attorneys. Attorneys and 
     the U.S. Patent and Trademark Office will spend huge amounts 
     of money litigating the scope of the amendment, adding to the 
     already too high cost of obtaining and enforcing patents.''
       Further, in a separate letter commenting on a more recent 
     version of the amendment, the IPO says,
       `` The proposal made by the American Medical Association 
     and pharmaceutical and biotechnology trade associations to 
     limit remedies for patent infringement by physicians and 
     medical organizations is a dangerous precedent. It could 
     undercut the efforts of the United States to strengthen 
     patent rights in countries throughout the world in all fields 
     of technology. We hope Congress will not rush to judgement 
     with legislation that will cause expensive litigation or 
     diminish the strong incentives that the United States has 
     traditionally provided for medical research.''
       Accordingly, I urge you to join these leaders in the field 
     of intellectual property in opposing inclusion of this 
     unstudied proposal in the end-of-the-year appropriations 
     bill.
           Sincerely,
                                                   Orrin G. Hatch,
     Chairman.
                                                                    ____



                                     American Bar Association,

                                  Chicago, IL, September 11, 1996.
     Hon. Orrin G. Hatch,
     Chairman, Committee on the Judiciary, United States Senate, 
         Washington, DC.
       Dear Mr. Chairman: I am writing to express the opposition 
     of the Section of Intellectual Property Law of the American 
     Bar Association to S. 1134, the ``Medical Procedures 
     Innovation and Affordability Act'', and to a similar proposal 
     recently advanced by the Medical Procedures Coalition 
     (hereafter referred to as ``the Coalition proposal''). These 
     views have not been considered or approved by the House of 
     Delegates or Board of Governors of the American Bar 
     Association.
       S. 1134 and the Coalition proposal are two of four 
     proposals currently pending in Congress, or which Congress 
     has been asked to consider, to curtail patent rights for 
     medical and surgical procedures. H.R. 1127, the ``Medical 
     Procedures Innovation and Affordability Act,'' introduced in 
     the House on March 3, 1995 by Mr. Ganske, would prohibit 
     patenting of inventions relating to certain medical and 
     surgical procedures. On July 24 of this year, an amendment by 
     Mr. Ganske relating to these issues was adopted in the House 
     during consideration of H.R. 3814, the FY97 Commerce, 
     Justice, State Appropriations Act. The Ganske amendment would 
     achieve a ban on patenting of medical procedures similar to 
     that called for in H.R. 1127 by a restriction on use of 
     appropriated funds. H.R. 3814, including the Ganske 
     amendment, is pending in the Senate.
       The Ganske bill and the Ganske amendment attempt to 
     insulate medical practitioners from liability for 
     infringement of patents on medical procedures by denying 
     patent protection to such procedures. Senator Frist's bill, 
     S. 1134, and the Coalition proposal attempt to achieve the 
     same result by denying legal remedies to owners of patents on 
     these procedures when their patents are infringed by medical 
     practitioners. We oppose both approaches and we oppose all 
     four proposals. All the proposals violate a fundamental 
     principle of our law under which patent protection is 
     available without discrimination as to field of invention or 
     technology. The Frist/Coalition approach is doubly 
     discriminatory in that it would achieve this result by 
     discriminatory treatment based on the identity or profession 
     of the infringer.
       The Section of Intellectual Property Law believes that it 
     would be both unfair and counterproductive to single out one 
     area of creativity--the creation of new and improved medical 
     proceures--and deny rewards to those creators while providing 
     them to all others. Our world leadership in scientific and 
     technological development, a leadership which most 
     particularly includes leadership in development of improved 
     medical technology and procedures, has been achieved in large 
     part because of, not in spite of, the controls and rewards 
     which our system gives to our innovators.
       For decades the United States has urged all nations to 
     adopt laws protecting intellectual property fully and without 
     discrimination. These efforts have been largely successful, 
     but are by no means over. In the ongoing talks regarding a 
     Diplomatic Conference on Certain Copyright and Neighboring 
     Rights Questions, critical issues regarding legal protection 
     for emerging new areas of innovations are being addressed. 
     The United States would be sending a dangerous message to 
     these efforts by carving out a glaring exception to our 
     system of uniform protection in order to accommodate narrow 
     domestic interests which can be addressed, and are already 
     being addressed, with far less radical measures.
       S. 1134 and the Coalition proposal are apparently designed 
     to address earlier criticism of H.R. 1127. However, they 
     attempt to fix a fundamentally unsound and conceptually 
     flawed proposal by narrowing its exclusionary provisions so 
     that patent protection is not denied in areas where that 
     denial presents policy or political impediments to enactment 
     of the legislation. We believe that our legal framework for 
     the promotion and protection of intellectual creativity, the 
     finest and most successful that the world has known, would 
     not be strengthened by such short-sighted statutory 
     gerrymandering.
       We also believe that the proposals based on restrictions on 
     remedies are unworkable and would not achieve the intended 
     results. As we understand it, the objective of these 
     proposals is to provide a legal framework in which to prevent 
     successful lawsuits against medical practitioners for the 
     practice of certain medical procedures. Ideally this would be 
     achieved by such suits never being filed. However, since 
     plaintiffs control the filing of lawsuits, a more realistic 
     objective seems to be to provide for early identification and 
     expedited procedures for the dismissal or other disposition 
     of such cases. If such a ``gatekeeper'' system is not 
     functioning, the legislation would be of little utility. For 
     example, if lengthy and costly discovery proceedings are 
     required or permitted before a case can be weeded out, the 
     legislation will provide little if any relief of the nature 
     sought by medical practitioners and their supporters. In 
     fact, such legislation might very well increase litigation 
     and litigation costs, through a combination of failure to 
     reduce existing litigation and additional litigation over the 
     meaning and effort of the legislation itself.
       We believe these are precisely the results which would flow 
     from the enactment of these proposals. In this regard, we 
     note that the Coalition proposal provides a number of 
     exceptions to the general rule that legal remedies are not 
     available for infringement arising out of the performance of 
     medical or surgical procedures by medical practitioners, as 
     well as an even broader, over-arching exclusion of coverage 
     of certain activities relating to commercial development and 
     distribution and the provision of pharmacy or clinical 
     laboratory services.
       One key exception in the proposal, relating to patented use 
     of a composition of matter, provides that the exception does 
     not apply to such use unless the use ``directly contribute(s) 
     to achievement of the objective of the claimed method.'' This 
     is clearly an issue which is fact bound to a high degree, and 
     not one that is likely to be resolved at the pleadings or 
     motion stages of litigation. Proponents of the Coalition 
     proposal suggest that legislative history can be treated to 
     establish legislative intent that these fact intensive 
     questions can be decided by motion to dismiss or summary 
     judgment. However, legislative history accompanying 
     amendments to title 35 are unlikely to be found to be 
     controlling legislative intent regarding application of Rules 
     of Civil Procedure which are unchanged by the legislation, 
     particularly when the intent expressed is in conflict

[[Page S11847]]

     with the express language of the Rules themselves. (The 
     Coalition suggests that a movant for summary judgment under 
     Rule 56 may prevail by showing by a ``preponderance of 
     evidence'' that certain essential facts exist. However, Rule 
     56 states that such a motion may be rendered only if ``there 
     is no genuine issue as to any material fact'').
       We strongly urge you to oppose all four versions of this 
     legislative proposal.
           Sincerely,
                                                 John R. Kirk, Jr.
     Chair.
                                                                    ____

                                               September 28, 1996.
       Dear Colleague: I am writing to urge you to reject the 
     Frist/Ganske proposal that would effectively prohibit medical 
     procedure patents.
       If you were in a car crash and ended up in the emergency 
     room would you care whether your life was saved with a drug, 
     or with a medical device, or with a surgical procedure? No, 
     all you would care about is that the your life was saved 
     through the most appropriate, up-to-date medical technology.
       Why, then, should we adopt the untested Frist/Ganske 
     amendment and suddenly reverse 200 years of patent law by 
     rendering patents on life-saving medical procedures 
     meaningless? Do you really want to take the chance that your 
     doctor or the emergency room will be stuck with yesterday's 
     technology because we hastily amended the patent law today?
       My good friend, Senator Frist, recently posed the question: 
     ``Should the Heimlich maneuver be patentable? Imagine someone 
     collecting a dollar every time someone used this or any other 
     `pure' medical procedure!'' The fact is that many people 
     would pay a dollar rather than take the risk of choking to 
     death before they could get to the hospital. If you had a 
     choice between the Heimlich Maneuver and an emergency 
     tracheotomy, which would you choose? And, given the costs of 
     emergency room visits, I am sure that the insurance company 
     would opt for the simple, cost-effective procedure.
       But, of course, the Heimlich maneuver, like most medical 
     procedures, is not patented. We owe a debt of gratitude to 
     Dr. Heimlich and all the other pioneers in medicine and 
     health care practitioners, including Senator Frist and 
     Representative Ganske, who are primarily motivated not to 
     make money, but to save lives. We should also salute the 
     tradition in the medical sciences of sharing information and 
     freely exchanging ideas concerning the latest advances in 
     medicine.
       There is often an iterative educational dialogue that takes 
     place during the medical research process. These interactions 
     can act to defeat patentability because the strict legal 
     requirements of demonstrating novelty and nonobviousness can 
     not be satisfied by incremental or publicly discussed 
     scientific achievements.
       For example, in his recent Roll Call article, 
     Representative Ganske criticized a patent issued in the area 
     of breast reconstructive surgery. If, as Dr. Ganske states, 
     ``[this particular type of] breast reconstructive surgery had 
     been in widespread use for at least 15 years. . .'', then 
     this patent should not have been issued in the first place 
     and will not withstand court challenge.
       The case that has fueled the current debate involved a 
     patent issued to Dr. Samuel Pallin for a ``no-stitch'' 
     cataract procedure. In a suit to enforce this patent against 
     another surgeon, Dr. Jack Singer, a consent decree 
     invalidating the patent was sanctioned by a court on grounds 
     that the technique was already in use. In other words, the 
     result feared by Senator Frist and Representative Ganske did 
     not occur; the procedure failed the test for patent 
     protection.
       Senator Frist contends that ``health care costs would 
     explode if doctors charged licensing fees for every new 
     surgical or medical technique. . .'' And, on the issue of 
     finding ways to reduce health care costs, I appreciate and 
     generally agree with my colleague's suggestions. But the 
     facts of the Pallin case reveal that--even with the requested 
     $4 per operation fee--appreciable cost savings are achieved 
     when it is taken into account that each stitch not needed 
     saves an estimated $17.
       Senator Frist takes the position that the basic rationale 
     behind the American patent system--the encouragement of 
     innovation--``does not apply to innovations in pure medical 
     and surgical procedures because such innovations will occur 
     without the benefit of patent law.''
       Many leading experts in intellectual property law take 
     exception with this viewpoint. For example, the Commissioner 
     of Patents and Trademarks, Bruce Lehman, expressed the 
     Clinton Administration's opposition to the Frist/Ganske 
     amendment by cautioning Congress not to overreact to the 
     controversial Pallin case. As Commissioner Lehman recently 
     explained his reasoning to the Senate Judiciary Committee:
       ``Historically, in the area of surgical procedures, people 
     oftentimes don't file patent applications. When people file 
     for patents, it is usually because they have to file a patent 
     in order to get the financing to make that technology a 
     reality * * *
       ``It would be really quite tragic if we were to find that a 
     very large loophole were to be opened in the patent system 
     that would cause investment in some of the most important 
     technology--not from an economic point of view but from a 
     life-saving point of view, to cause that investment to dry 
     up.''
       In contrast to the view that ``these innovations would 
     occur anyway,'' consider the assessment made by William D. 
     Noonan, M.D., J.D., concerning the importance of patent 
     protection for attracting private investment into the 
     research that resulted in the surrogate embyro transfer (SET) 
     procedure:
       ``The research that developed the SET procedure was 
     financed with $500,000 of venture capital because the 
     National Institutes of Health (NIH) would not fund the 
     research. It seems unlikely that the inventor of the SET 
     process would have gotten this private funding if the process 
     was not patentable subject matter.''\1\
---------------------------------------------------------------------------
     \1\ William D. Noonan, M.D., J.D., ``Patenting of Medical and 
     Surgical Procedures,'' Journal of the Patent and Trademark 
     Office Society, August, 1995, at 656-57.
---------------------------------------------------------------------------
       Moreover, Dr. Noonan points out that, ``it is a 
     questionable generalization to condemn all the therapeutic 
     procedure patents merely because * * * [of the Pallin `no 
     stitch' suture patent]'' and that ``there are instances in 
     which medical advances may not be made if patent protection 
     for a therapeutic method is not available.''
       At this point in time, there are simply too many unanswered 
     questions about the Frist/Ganske amendment to justify 
     sweeping this provision into the ``end-of-the-session'' 
     omnibus appropriations legislation. Among these questions 
     are:
       Since there is no purported ``emergency'' need for the 
     legislation (e.g., the Pallin cataract patent has not been 
     enforced), and there has never been a hearing or mark-up in 
     either the House or Senate on the language of the Frist/
     Ganske amendment, would it not be prudent for the respective 
     Judiciary Committees' of each chamber to consider this 
     legislation?
       Given the precedent setting nature of this legislation for 
     U.S. trade policy, particularly with respect to the proper 
     interpretation and application of Articles 27, 28, and 30 of 
     the GATT Treaty TRIPs provisions, would it not be preferable 
     for the Senate Finance Committee and House Ways and Means 
     Committee to examine this issue in close consultation with 
     the United States Trade Representative?
       In a September 27, 1996 letter, the Office of the United 
     States Trade Representative stated, ``USTR has serious 
     concerns about the consistency of the provision with the 
     TRIPs Agreement. Moreover, we believe that the proposal sets 
     a damaging precedent that other TRIPs Members might apply to 
     other technologies.'' Why should we act in such haste in a 
     way that may run afoul of the TRIPs agreement, and provide a 
     roadmap for our trading partners who may use this example to 
     justify the creation of broad exceptions for other 
     technologies?
       How can we be certain that costly and risky research will 
     continue on tomorrow's seminal ``pure'' medical procedures in 
     the absence of patent protection?
       Why should the incentives associated with the patent system 
     for research into medical procedures be any less or different 
     than the incentives for research into drugs and medical 
     devices?
       As overall federal budgetary pressures constrain the growth 
     of NIH funding, is this the time to decrease private sector 
     incentives to invest in certain types of biomedical research?
       What policy objectives are advanced by the Frist/Ganske 
     amendment that prefers the rights of large corporate 
     entities, such as HMOs, over the interests of individual 
     inventors?
       What are the implications of the provisions of the Frist/
     Ganske amendment that nominally allow medical procedure 
     patents but then do not permit these patents to be enforced 
     against the most likely infringers?
       Until we know more about the answers to these and other 
     questions, and we are able to get the answers on the record 
     for all senators to consider, I urge my colleagues to oppose 
     inclusion of the Frist/Ganske amendment on medical procedure 
     patents in the omnibus appropriations bill.
           Sincerely,
                                                   Orrin G. Hatch,
     Chairman.
                                                                    ____

                                               September 18, 1996.
     Hon. Judd Gregg,
     Chairman, Subcommittee on Commerce, Justice, State and 
         Judiciary, U.S. Senate, Washington, DC.
       Dear Judd: I have significant concern about an amendment 
     which was adopted during House consideration of H.R. 3418, 
     the House Commerce, Justice, State appropriations bill. That 
     amendment, authored by Rep. Greg Ganske, would limit the use 
     of funds to approve patents for surgical or medical 
     procedures or diagnoses. I want to express my appreciation to 
     you and your staff for your efforts to defer consideration of 
     this contentious issue pending review by the Judiciary 
     Committee.
       I understand the concerns which motivate the amendment and 
     I am sympathetic to the issues which have been raised. 
     However, I believe myriad questions can be raised about this 
     proposal and its impact. The effect of this amendment would 
     be to bar process patents for a certain industry, an 
     exception never before made to our 200-year old patent law. A 
     more recent version of the bill would allow the patents, but 
     bar enforcement rendering the patent but an empty shell. Both 
     of these would create tremendous precedents in patent law, 
     precedents which are not supported by the intellectual 
     property community. At a Judiciary Committee hearing today, 
     Patent Commissioner Bruce Lehman

[[Page S11848]]

     also indicated that the Administration could not support 
     either the Ganske provision or the recent variation.
       In sum, I think that this issue needs to be more fully 
     considered by the Congress, and in particular, by the Senate 
     Judiciary Committee. I believe that passage of the Ganske 
     provision, or the recent Frist modification, without adequate 
     consideration of its long-term implications for intellectual 
     property rights would be extremely unwise.
       Let me hasten to add that I understand your special 
     interest in this issue, and I am sympathetic to the need to 
     examine further the impact of medical process patents. My 
     study of the Singer case, in which the patent was overturned, 
     leads me to believe that the Patent and Trademark Office's 
     procedures could be improved in the area of medical patents. 
     This is something that I will be pursuing, and I welcome your 
     input into this process.
           Sincerely,
                                                   Orrin G. Hatch,
                                                         Chairman.

  Mr. HATCH. Mr. President, in closing, I must reiterate my profound 
disappointment and my objections to including this medical process 
patents provision in the omnibus appropriations bill. This is a serious 
matter and a serious precedent. We will have to look very carefully at 
its implications in the months to come.

                          ____________________