[Congressional Record Volume 143, Number 46 (Thursday, April 17, 1997)]
[House]
[Pages H1643-H1684]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]





                         Parliamentary Inquiry

  Mr. ROHRABACHER. Parliamentary inquiry, Mr. Chairman. If a Member is 
referred to by name on the floor and a question is asked, is it out of 
order for the Member then to ask if the person wants an answer to the 
point?
  The CHAIRMAN pro tempore. The Member who controls the time decides if 
he wants to relinquish the time.
  Ms. KAPTUR. Mr. Chairman, I yield myself the balance of my time.
  The CHAIRMAN pro tempore. The gentlewoman from Ohio [Ms. Kaptur] is 
recognized for 1\1/4\ minutes.
  Ms. KAPTUR. Mr. Chairman, I say to the Members, if they have not read 
H.R. 400, I say vote ``no.'' No one will have been able to read it 
because it has been changed so much, there is no final bill for Members 
to review.
  Support the substitute. Remember, the United States leads the world 
in intellectual property breakthroughs by 10 times. Why change a system 
that is working, for a bill which Members have no final copy of to 
review? Why support a bill that takes away the guaranty of secrecy our 
patent applicants receive until their patent is granted? Why do that to 
them?
  Why support H.R. 400, when it puts a greater burden of proof on our 
inventors to defend themselves, forcing them to sue, forcing them to 
greater re-examination procedures? Why do this to them?
  Why support a bill that undermines the objectivity of our patent 
examiners, and changes our Patent Office?
  This is a battle that goes to the heart of the constitutional rights 
of our citizens to invent opportunity in the 21st century. Vote ``no'' 
on H.R. 400. Support the substitute.
  Mr. COBLE. Mr. Chairman, I yield the balance of my time to the 
gentleman from Illinois [Mr. Hyde], the distinguished chairman of the 
Committee on the Judiciary.
  The CHAIRMAN pro tempore. The gentleman from Illinois [Mr. Hyde] is 
recognized for 5 minutes.
  (Mr. HYDE asked and was given permission to revise and extend his 
remarks.)
  Mr. HYDE. Mr. Chairman, this is about submarine patenting, and lest 
anyone be confused, a submarine patent is an application made by 
somebody who does not really want a quick and speedy issuance or grant 
of a patent. He wants to keep his application alive below the surface, 
hoping that somebody else will come along and start marketing, start 
manufacturing, start using an idea which is a part of his application. 
Then he surfaces suddenly, periscope up, and sues.
  That may sound convoluted, but there are people making millions and 
millions of dollars, and the only way to effectively dispel that gaming 
of the system is to expose the applicant to publication after a 
reasonable length of time. Eighteen months has been determined by the 
world and us to be a reasonable length of time.

[[Page H1644]]

  The gentleman from California [Mr. Rohrabacher], claims that his 
substitute effectively dispels the submarine problem. That is, forgive 
me, nonsense. Here is how he dispels the submarine problem.
  His amendment provides for publication no sooner than 5 years after 
the filing date, but not even then, if the submariner files an appeal, 
which may or may not be legitimate.

                              {time}  1430

  That is a way to stretch this thing out. So under his curative 
amendment, submarines must surface after 5 years. That is a lifetime in 
the computer business. That is a lifetime in the pharmaceutical 
business. That is a lifetime in the biotech industry.
  It is just no cure. I just think it is a convoluted way to continue 
gaming the system.
  We have heard about stealing secrets. My God, we Americans are so 
brilliant and we invent these things and we clutch them to our bosom 
and nobody is going to steal them. Well, the problem is, if you want to 
be protected in Japan, if you want to be protected in France or 
Germany, you have to file over there. And if you file over there, you 
are going to be published in 18 months. On the other hand, 45 percent 
of the applications for patents in our country are from foreign 
countries, foreign inventors, rather, and they are not published under 
our present law, so we cannot see what they are doing; but, boy, they 
can see what we are doing.
  Now, after publication, which is a healthy, good thing, not a 
poisonous thing, publication gives rise to what are called provisional 
rights, which means after your idea has been published but before you 
get a patent, you have rights which are enforceable in damages should 
somebody steal your idea and infringe your patent. So those things have 
to be taken into consideration.
  This patent law is esoteric. It is difficult. But it is darned 
important to our economy and it is critical to our international 
competitiveness. I have heard language I expect to hear in the early 
1940s about this country can go it alone, we are not involved in an 
international trade situation. Oh, yes we are. And this committee, the 
Committee on the Judiciary, has been involved in hearings and the study 
of this legislation for 3 years. There have been full and open hearings 
on this issue, and we have heard from scores of witnesses.
  Mr. Chairman, the committee has marked up the bill twice, and both 
times key improvements were made to address the reasonable concerns of 
the parties involved. I ask that Members consider the fact that the 
Committee on the Judiciary has produced a bill that has twice been 
unanimously approved by voice vote.
  Yes, the United States is the world's largest producer of 
intellectual property, but this success is dependent on a rational and 
sound and modern system of protection. To stay on top of an ever-
changing technology and ever-changing economy, we have to make a number 
of changes in our patent code over the years. And we cannot ignore what 
is going on overseas.
  First, in an era of unprecedented competition, the intellectual 
property industries have emerged as an area of American strength; and, 
second, technological innovations, especially in the areas of 
biotechnology and computer science, have increased substantially.
  Today there are more than 1,300 companies employing more than 100,000 
Americans in the biotech industry. That is just one industry that would 
not exist if we did not have strong patent protection.
  Mr. WELDON of Florida. Mr. Chairman, I rise to express my concerns 
about H.R. 400, patent reform legislation. As the bill is currently 
drafted, I cannot support this legislation. While I appreciate the 
concerns by Members on both sides of this issue, I believe that H.R. 
400 has some flaws that I cannot overlook.
  For the past 200 years, the U.S. patent system has been the envy of 
the world. I believe that H.R. 400 as brought to the House floor would 
significantly alter this system which has done so much throughout our 
history to make the United States the world's leading source of 
innovation. We must carefully guard against any changes that might 
adversely impact the United States.
  If major issues are not addressed during the debate on this bill, I 
will cast a no vote when we take a final vote on H.R. 400.
  I thank the chairman for giving me this opportunity to speak on this 
matter.
  Mr. SPENCE. Mr. Chairman, I rise in support of the manager's 
amendment to H.R. 400, the 21st Century Patent System Improvement Act.
  Section 202 of this act would require the publication of patent 
applications 18 months after they are filed with the Patent and 
Trademark Office. This is a significant departure from the current 
practice, whereby this information is not published until after the 
patent is granted. There is a national security issue here. Under the 
current process, before a patent is issued a review of the patent 
application is conducted to determine if it contains technical 
information that is sensitive from a national security standpoint. If, 
after a review by the Department of Defense and the Department of 
Energy it is determined that the public release of the information in 
the patent application would be detrimental to national security, the 
patent application is put under a secrecy order prohibiting its public 
release.
  In reviewing the original draft of H.R. 400, I was concerned that it 
would require the publication of the patent application before the 
Defense Department had completed its security review. A historical 
review determined that during fiscal years 1994 and 1995 eight of the 
patent applications that were eventually placed under secrecy orders 
did not have security review completed within 18 months. While that 
number is small, in 2 years there would have been eight instances in 
which classified technical information would have been publicly 
released under the procedures proposed by H.R. 400.
  To address this problem, I submitted an amendment on behalf of the 
National Security Committee to the Judiciary Committee that would 
prevent the publication of patent applications until the secrecy 
reviews have been completed and it is found that their publication 
would not be detrimental to national security. I am pleased to report 
that the chairman of the Courts and Intellectual Property Subcommittee, 
Mr. Coble, has agreed to accept this change and thereby fix this 
problem.
  I want to thank the Judiciary Committee and its staff for their 
assistance and for working with us to ensure that sensitive national 
security information is not inadvertently released as a consequence of 
reforming the patent system.
  Mrs. KELLY. Mr. Chairman, I rise in strong support of H.R. 400, the 
21st Century Patent System Improvement Act, legislation which might be 
more aptly titled the Keep America Competitive Act.
  H.R. 400 makes a number of commonsense improvements to our patent 
system, but I want to focus on one particular problem inherent in the 
current system that this legislation will correct.
  I'm talking about the problem of so-called submarine patents, 
situations where a patent applicant intentionally delays the issuance 
of a patent, sometimes for a decade or more, through repeated 
refilings, which has the effect of submerging their original 
application from public view.
  At the same time, other individuals or companies, without knowledge 
of that pending application, develop and market the same new 
technology. The original filer then allows his pending application to 
issue as a patent--the submarine surfaces--and then proceeds to hit 
unknowing businesses with costly royalty claims.
  Mr. Chairman, this is not how our patent system was intended to work. 
We need a system which encourages innovation and protects legitimate 
inventors who develop new ideas with the intention of bringing those 
ideas to market--not a system which encourages sham artists who file 
patent applications with no intention of developing a product, but 
every intention of hitting unsuspecting companies with huge royalties.
  This is a very real problem for one of the major employers in my 
district--IBM. Time and time again, IBM is hit with royalty claims from 
patents that were filed as much as 20 years ago, but only recently 
surface as the patent issues. This is not rhetoric, Mr. Chairman, this 
is real; it costs the company millions of dollars and it hurts their 
ability to compete.
  Now let me share with you some additional facts. The information 
technology industry is characterized by very short product cycles. A 
technology that is developed and goes to market today could be obsolete 
less than a year from now. Our patent system has not kept up with the 
pace of technology development in today's economy. We need a patent 
system that will take us into the 21st century, and yet forcing 
companies like IBM to wait 5 years or more before a patent application 
is published is totally out of step with the realities of the 
information age.
  A 5-year publication requirement will accomplish one of two things: 
You will either inhibit new technologies from coming to market or you 
will ensure that submarine patents remain a problem, or both.
  An 18-month publication requirement, as included in H.R. 400, gets 
the technology to the

[[Page H1645]]

marketplace quicker and, most importantly, ensures that the inventor 
enjoys the royalty proceeds from their invention sooner.
  I urge my colleagues to join me in supporting this important 
legislation to keep America competitive in the 21st century. Vote for 
H.R. 400. Thank you, Mr. Chairman.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill, modified as specified in section 2 of 
House Resolution 116, shall be considered as an original bill for the 
purpose of amendment under the 5-minute rule and shall be considered 
read.
  The text of the committee amendment in the nature of a substitute, as 
modified, is as follows:

                                H.R. 400

       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 ``21st Century Patent System 
     Improvement Act''.

     SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.

           TITLE I--PATENT AND TRADEMARK OFFICE MODERNIZATION

Sec. 101. Short title.

         Subtitle A--United States Patent and Trademark Office

Sec. 111. Establishment of Patent and Trademark Office as a Government 
              corporation.
Sec. 112. Powers and duties.
Sec. 113. Organization and management.
Sec. 114. Management Advisory Board.
Sec. 115. Conforming amendments.
Sec. 116. Trademark Trial and Appeal Board.
Sec. 117. Board of Patent Appeals and Interferences.
Sec. 118. Suits by and against the Office.
Sec. 119. Annual report of Director.
Sec. 120. Suspension or exclusion from practice.
Sec. 121. Funding.
Sec. 122. Extension of surcharges on patent fees.
Sec. 123. Transfers.
Sec. 124. GAO study and report.

            Subtitle B--Effective Date; Technical Amendments

Sec. 131. Effective date.
Sec. 132. Technical and conforming amendments.

                  Subtitle C--Miscellaneous Provisions

Sec. 141. References.
Sec. 142. Exercise of authorities.
Sec. 143. Savings provisions.
Sec. 144. Transfer of assets.
Sec. 145. Delegation and assignment.
Sec. 146. Authority of Director of the Office of Management and Budget 
              with respect to functions transferred.
Sec. 147. Certain vesting of functions considered transfers.
Sec. 148. Availability of existing funds.
Sec. 149. Definitions.

     TITLE II--EXAMINING PROCEDURE IMPROVEMENTS: PUBLICATION WITH 
      PROVISIONAL ROYALTIES; TERM EXTENSIONS; FURTHER EXAMINATION

Sec. 201. Short title.
Sec. 202. Publication.
Sec. 203. Time for claiming benefit of earlier filing date.
Sec. 204. Provisional rights.
Sec. 205. Prior art effect of published applications.
Sec. 206. Cost recovery for publication.
Sec. 207. Conforming changes.
Sec. 208. Patent term extension authority.
Sec. 209. Further examination of patent applications.
Sec. 210. Last day of pendency of provisional application.
Sec. 211. Reporting requirement.
Sec. 212. Effective date.

TITLE III--PROTECTION FOR PRIOR DOMESTIC USERS OF PATENTED TECHNOLOGIES

Sec. 301. Short title.
Sec. 302. Defense to patent infringement based on prior domestic 
              commercial or research use.
Sec. 303. Effective date and applicability.

           TITLE IV--ENHANCED PROTECTION OF INVENTORS' RIGHTS

Sec. 401. Short title.
Sec. 402. Invention development services.
Sec. 403. Technical and conforming amendment.
Sec. 404. Effective date.

               TITLE V--IMPROVED REEXAMINATION PROCEDURES

Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Reexamination procedures.
Sec. 504. Conforming amendments.
Sec. 505. Effective date.

                  TITLE VI--MISCELLANEOUS IMPROVEMENTS

Sec. 601. Provisional applications.
Sec. 602. International applications.
Sec. 603. Plant patents.
Sec. 604. Electronic filing.
Sec. 605. Divisional applications.
           TITLE I--PATENT AND TRADEMARK OFFICE MODERNIZATION

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Patent and Trademark 
     Office Modernization Act''.
         Subtitle A--United States Patent and Trademark Office

     SEC. 111. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE AS A 
                   GOVERNMENT CORPORATION.

       Section 1 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 1. Establishment

       ``(a) Establishment.--The United States Patent and 
     Trademark Office is established as a wholly owned Government 
     corporation subject to chapter 91 of title 31, separate from 
     any department of the United States, and shall be an agency 
     of the United States under the policy direction of the 
     Secretary of Commerce. For purposes of internal management, 
     the United States Patent and Trademark Office shall be a 
     corporate body not subject to direction or supervision by any 
     department of the United States, except as otherwise provided 
     in this title.
       ``(b) Offices.--The United States Patent and Trademark 
     Office shall maintain its principal office in the 
     metropolitan Washington, D.C. area, for the service of 
     process and papers and for the purpose of carrying out its 
     functions. The United States Patent and Trademark Office 
     shall be deemed, for purposes of venue in civil actions, to 
     be a resident of the district in which its principal office 
     is located, except where jurisdiction is otherwise provided 
     by law. The United States Patent and Trademark Office may 
     establish satellite offices in such other places as it 
     considers necessary and appropriate in the conduct of its 
     business.
       ``(c) Reference.--For purposes of this title, the United 
     States Patent and Trademark Office shall also be referred to 
     as the `Office' and the `Patent and Trademark Office'.''.

     SEC. 112. POWERS AND DUTIES.

       Section 2 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 2. Powers and duties

       ``(a) In General.--The United States Patent and Trademark 
     Office, under the policy direction of the Secretary of 
     Commerce--
       ``(1) shall be responsible for the granting and issuing of 
     patents and the registration of trademarks;
       ``(2) may conduct studies, programs, or exchanges of items 
     or services regarding domestic and international law of 
     patents, trademarks, and other matters, the administration of 
     the Office, or any function vested in the Office by law, 
     including programs to recognize, identify, assess, and 
     forecast the technology of patented inventions and their 
     utility to industry;
       ``(3)(A) may authorize or conduct studies and programs 
     cooperatively with foreign patent and trademark offices and 
     international organizations, in connection with patents, 
     trademarks, and other matters; and
       ``(B) with the concurrence of the Secretary of State, may 
     authorize the transfer of not to exceed $100,000 in any year 
     to the Department of State for the purpose of making special 
     payments to international intergovernmental organizations for 
     studies and programs for advancing international cooperation 
     concerning patents, trademarks, and other matters; and
       ``(4) shall be responsible for disseminating to the public 
     information with respect to patents and trademarks.

     The special payments under paragraph (3)(B) shall be in 
     addition to any other payments or contributions to 
     international organizations described in paragraph (3)(B) and 
     shall not be subject to any limitations imposed by law on the 
     amounts of such other payments or contributions by the United 
     States Government.
       ``(b) Specific Powers.--The Office--
       ``(1) shall have perpetual succession;
       ``(2) shall adopt and use a corporate seal, which shall be 
     judicially noticed and with which letters patent, 
     certificates of trademark registrations, and papers issued by 
     the Office shall be authenticated;
       ``(3) may sue and be sued in its corporate name and be 
     represented by its own attorneys in all judicial and 
     administrative proceedings, subject to the provisions of 
     section 7;
       ``(4) may indemnify the Director, and other officers, 
     attorneys, agents, and employees (including members of the 
     Management Advisory Board established in section 5) of the 
     Office for liabilities and expenses incurred within the 
     scope of their employment;
       ``(5) may adopt, amend, and repeal bylaws, rules, 
     regulations, and determinations, which--
       ``(A) shall govern the manner in which its business will be 
     conducted and the powers granted to it by law will be 
     exercised;
       ``(B) shall be made after notice and opportunity for full 
     participation by interested public and private parties;
       ``(C) shall facilitate and expedite the processing of 
     patent applications, particularly those which can be filed, 
     stored, processed, searched, and retrieved electronically, 
     subject to the provisions of section 122 relating to the 
     confidential status of applications;
       ``(D) may govern the recognition and conduct of agents, 
     attorneys, or other persons representing applicants or other 
     parties before the Office, and may require them, before being 
     recognized as representatives of applicants or other persons, 
     to show that they are of good moral character and reputation 
     and are possessed of the necessary qualifications to render 
     to applicants or other persons valuable service, advice, and 
     assistance in the presentation or prosecution of their 
     applications or other business before the Office; and
       ``(E) recognize the public interest in continuing to 
     safeguard broad access to the United States patent system 
     through the reduced fee structure for small entities under 
     section 41(h)(1) of this title;
       ``(6) may acquire, construct, purchase, lease, hold, 
     manage, operate, improve, alter, and renovate any real, 
     personal, or mixed property, or any interest therein, as it 
     considers necessary to carry out its functions;

[[Page H1646]]

       ``(7)(A) may make such purchases, contracts for the 
     construction, maintenance, or management and operation of 
     facilities, and contracts for supplies or services, without 
     regard to the provisions of the Federal Property and 
     Administrative Services Act of 1949 (40 U.S.C. 471 and 
     following), the Public Buildings Act (40 U.S.C. 601 and 
     following), and the Stewart B. McKinney Homeless Assistance 
     Act (42 U.S.C. 11301 and following); and
       ``(B) may enter into and perform such purchases and 
     contracts for printing services, including the process of 
     composition, platemaking, presswork, silk screen processes, 
     binding, microform, and the products of such processes, as it 
     considers necessary to carry out the functions of the Office, 
     without regard to sections 501 through 517 and 1101 through 
     1123 of title 44;
       ``(8) may use, with their consent, services, equipment, 
     personnel, and facilities of other departments, agencies, and 
     instrumentalities of the Federal Government, on a 
     reimbursable basis, and cooperate with such other 
     departments, agencies, and instrumentalities in the 
     establishment and use of services, equipment, and facilities 
     of the Office;
       ``(9) may obtain from the Administrator of General Services 
     such services as the Administrator is authorized to provide 
     to other agencies of the United States, on the same basis as 
     those services are provided to other agencies of the United 
     States;
       ``(10) may, when the Director determines that it is 
     practicable, efficient, and cost-effective to do so, use, 
     with the consent of the United States and the agency, 
     government, or international organization concerned, the 
     services, records, facilities, or personnel of any State or 
     local government agency or instrumentality or foreign 
     government or international organization to perform functions 
     on its behalf;
       ``(11) may determine the character of and the necessity for 
     its obligations and expenditures and the manner in which they 
     shall be incurred, allowed, and paid, subject to the 
     provisions of this title and the Act of July 5, 1946 
     (commonly referred to as the `Trademark Act of 1946');
       ``(12) may retain and use all of its revenues and receipts, 
     including revenues from the sale, lease, or disposal of any 
     real, personal, or mixed property, or any interest therein, 
     of the Office, including for research and development and 
     capital investment, subject to the provisions of section 
     10101 of the Omnibus Budget Reconciliation Act of 1990 (35 
     U.S.C. 41 note);
       ``(13) shall have the priority of the United States with 
     respect to the payment of debts from bankrupt, insolvent, and 
     decedents' estates;
       ``(14) may accept monetary gifts or donations of services, 
     or of real, personal, or mixed property, in order to carry 
     out the functions of the Office;
       ``(15) may execute, in accordance with its bylaws, rules, 
     and regulations, all instruments necessary and appropriate in 
     the exercise of any of its powers; and
       ``(16) may provide for liability insurance and insurance 
     against any loss in connection with its property, other 
     assets, or operations either by contract or by self-
     insurance.
       ``(c) Construction.--Nothing in this section shall be 
     construed to nullify, void, cancel, or interrupt any pending 
     request-for-proposal let or contract issued by the General 
     Services Administration for the specific purpose of 
     relocating or leasing space to the United States Patent and 
     Trademark Office.''.

     SEC. 113. ORGANIZATION AND MANAGEMENT.

       Section 3 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 3. Officers and employees

       ``(a) Director.--
       ``(1) In general.--The management of the United States 
     Patent and Trademark Office shall be vested in a Director of 
     the United States Patent and Trademark Office (in this title 
     referred to as the `Director'), who shall be a citizen of the 
     United States and who shall be appointed by the President, by 
     and with the advice and consent of the Senate. The Director 
     shall be a person who, by reason of professional background 
     and experience in patent or trademark law, is especially 
     qualified to manage the Office.
       ``(2) Duties.--
       ``(A) In general.--The Director shall be responsible for 
     the management and direction of the Office, including the 
     issuance of patents and the registration of trademarks, and 
     shall perform these duties in a fair, impartial, and 
     equitable manner.
       ``(B) Advising the president.--The Director shall advise 
     the President, through the Secretary of Commerce, of all 
     activities of the Office undertaken in response to 
     obligations of the United States under treaties and executive 
     agreements, or which relate to cooperative programs with 
     those authorities of foreign governments that are responsible 
     for granting patents or registering trademarks. The Director 
     shall also recommend to the President, through the Secretary 
     of Commerce, changes in law or policy which may improve the 
     ability of United States citizens to secure and enforce 
     patent rights or trademark rights in the United States or in 
     foreign countries.
       ``(C) Consulting with the management advisory board.--The 
     Director shall consult with the Management Advisory Board 
     established in section 5 on a regular basis on matters 
     relating to the operation of the Office, and shall consult 
     with the Advisory Board before submitting budgetary proposals 
     to the Office of Management and Budget or changing or 
     proposing to change patent or trademark user fees or patent 
     or trademark regulations.
       ``(D) Security clearances.--The Director, in consultation 
     with the Director of the Office of Personnel Management, 
     shall maintain a program for identifying national security 
     positions and providing for appropriate security clearances.
       ``(3) Term.--The Director shall serve a term of 5 years, 
     and may continue to serve after the expiration of the 
     Director's term until a successor is appointed and assumes 
     office. The Director may be reappointed to subsequent terms.
       ``(4) Oath.--The Director shall, before taking office, take 
     an oath to discharge faithfully the duties of the Office.
       ``(5) Compensation.--The Director shall receive 
     compensation at a rate not to exceed the rate of pay in 
     effect for level III of the Executive Schedule under section 
     5314 of title 5 and, in addition, may receive as a bonus, an 
     amount which would raise the Director's total compensation to 
     not more than the equivalent of the level of the rate of pay 
     in effect for level I of the Executive Schedule under section 
     5312 of title 5, based upon an evaluation by the Secretary 
     of Commerce of the Director's performance as defined in an 
     annual performance agreement between the Director and the 
     Secretary. The annual performance agreement shall 
     incorporate measurable goals as delineated in an annual 
     performance plan agreed to by the Director and the 
     Secretary.
       ``(6) Removal.--The Director may be removed from office by 
     the President. The President shall provide notification of 
     any such removal to both Houses of Congress.
       ``(7) Designee of director.--The Director shall designate 
     an officer of the Office who shall be vested with the 
     authority to act in the capacity of the Director in the event 
     of the absence or incapacity of the Director.
       ``(b) Officers and Employees of the Office.--
       ``(1) Commissioners.--The Director shall appoint a 
     Commissioner for Patents and a Commissioner for Trademarks 
     for terms that shall expire on the date on which the 
     Director's term expires. The Commissioner for Patents shall 
     be a person with demonstrated experience in patent law and 
     the Commissioner for Trademarks shall be a person with 
     demonstrated experience in trademark law. The Commissioner 
     for Patents and the Commissioner for Trademarks shall be the 
     principal policy and management advisers to the Director on 
     all aspects of the activities of the Office that affect the 
     administration of patent and trademark operations, 
     respectively.
       ``(2) Other officers and employees.--The Director shall--
       ``(A) appoint such officers, employees (including 
     attorneys), and agents of the Office as the Director 
     considers necessary to carry out the functions of the 
     Office; and
       ``(B) define the authority and duties of such officers and 
     employees and delegate to them such of the powers vested in 
     the Office as the Director may determine.

     The Office shall not be subject to any administratively or 
     statutorily imposed limitation on positions or personnel, and 
     no positions or personnel of the Office shall be taken into 
     account for purposes of applying any such limitation.
       ``(c) Continued Applicability of Title 5.--Officers and 
     employees of the Office shall be subject to the provisions of 
     title 5 relating to Federal employees. Section 2302 of title 
     5 applies to the Office, notwithstanding subsection 
     (a)(2)(B)(i) of such section.
       ``(d) Adoption of Existing Labor Agreements.--The Office 
     shall adopt all labor agreements which are in effect, as of 
     the day before the effective date of the Patent and Trademark 
     Office Modernization Act, with respect to such Office (as 
     then in effect).
       ``(e) Carryover of Personnel.--
       ``(1) From pto.--Effective as of the effective date of the 
     Patent and Trademark Office Modernization Act, all officers 
     and employees of the Patent and Trademark Office on the day 
     before such effective date shall become officers and 
     employees of the Office, without a break in service.
       ``(2) Other personnel.--Any individual who, on the day 
     before the effective date of the Patent and Trademark Office 
     Modernization Act, is an officer or employee of the 
     Department of Commerce (other than an officer or employee 
     under paragraph (1)) shall be transferred to the Office if--
       ``(A) such individual serves in a position for which a 
     major function is the performance of work reimbursed by the 
     Patent and Trademark Office, as determined by the Secretary 
     of Commerce;
       ``(B) such individual serves in a position that performed 
     work in support of the Patent and Trademark Office during at 
     least half of the incumbent's work time, as determined by the 
     Secretary of Commerce; or
       ``(C) such transfer would be in the interest of the Office, 
     as determined by the Secretary of Commerce in consultation 
     with the Director.

     Any transfer under this paragraph shall be effective as of 
     the same effective date as referred to in paragraph (1), and 
     shall be made without a break in service.
       ``(3) Accumulated leave.--The amount of sick and annual 
     leave and compensatory time accumulated under title 5 before 
     the effective date described in paragraph (1), by those 
     becoming officers or employees of the Office pursuant to this 
     subsection, are obligations of the Office.
       ``(f) Transition Provisions.--
       ``(1) Interim appointment of director.--On or after the 
     effective date of the Patent and Trademark Office 
     Modernization Act, the President shall appoint an individual 
     to serve as the Director until the date on which a Director 
     qualifies under subsection (a). The President shall not make 
     more than one such appointment under this subsection.
       ``(2) Continuation in office of certain officers.--(A) The 
     individual serving as the Assistant Commissioner for Patents 
     on the day before the effective date of the Patent and 
     Trademark Office Modernization Act may serve as the 
     Commissioner for Patents until the date on

[[Page H1647]]

     which a Commissioner for Patents is appointed under 
     subsection (b).
       ``(B) The individual serving as the Assistant Commissioner 
     for Trademarks on the day before the effective date of the 
     Patent and Trademark Office Modernization Act may serve as 
     the Commissioner for Trademarks until the date on which a 
     Commissioner for Trademarks is appointed under subsection 
     (b).''.

      SEC. 114. MANAGEMENT ADVISORY BOARD.

       Chapter 1 of part I of title 35, United States Code, is 
     amended by inserting after section 4 the following:

     ``Sec. 5. Patent and Trademark Office Management Advisory 
       Board

       ``(a) Establishment of Management Advisory Board.--
       ``(1) Appointment.--The United States Patent and Trademark 
     Office shall have a Management Advisory Board (hereafter in 
     this title referred to as the `Advisory Board') of 12 
     members, 4 of whom shall be appointed by the President, 4 of 
     whom shall be appointed by the Speaker of the House of 
     Representatives, and 4 of whom shall be appointed by the 
     majority leader of the Senate. Not more than 3 of the 4 
     members appointed by each appointing authority shall be 
     members of the same political party.
       ``(2) Terms.--Members of the Advisory Board shall be 
     appointed for a term of 4 years each, except that of the 
     members first appointed by each appointing authority, 1 shall 
     be for a term of 1 year, 1 shall be for a term of 2 years, 
     and 1 shall be for a term of 3 years. No member may serve 
     more than 1 term.
       ``(3) Chair.--The President shall designate the chair of 
     the Advisory Board, whose term as chair shall be for 3 years.
       ``(4) Timing of appointments.--Initial appointments to the 
     Advisory Board shall be made within 3 months after the 
     effective date of the Patent and Trademark Office 
     Modernization Act, and vacancies shall be filled within 3 
     months after they occur.
       ``(5) Vacancies.--Vacancies shall be filled in the manner 
     in which the original appointment was made under this 
     subsection. Members appointed to fill a vacancy occurring 
     before the expiration of the term for which the member's 
     predecessor was appointed shall be appointed only for the 
     remainder of that term. A member may serve after the 
     expiration of that member's term until a successor is 
     appointed.
       ``(6) Committees.--The Chair shall designate members of the 
     Advisory Board to serve on a committee on patent operations 
     and on a committee on trademark operations to perform the 
     duties set forth in subsection (e) as they relate 
     specifically to the Office's patent operations, and the 
     Office's trademark operations, respectively.
       ``(b) Basis for Appointments.--Members of the Advisory 
     Board shall be citizens of the United States who shall be 
     chosen so as to represent the interests of diverse users of 
     the United States Patent and Trademark Office, and shall 
     include individuals with substantial background and 
     achievement in corporate finance and management.
       ``(c) Applicability of Certain Ethics Laws.--Members of the 
     Advisory Board shall be special Government employees within 
     the meaning of section 202 of title 18.
       ``(d) Meetings.--The Advisory Board shall meet at the call 
     of the chair to consider an agenda set by the chair.
       ``(e) Duties.--The Advisory Board shall--
       ``(1) review the policies, goals, performance, budget, and 
     user fees of the United States Patent and Trademark Office, 
     and advise the Director on these matters; and
       ``(2) within 60 days after the end of each fiscal year, 
     prepare an annual report on the matters referred to in 
     paragraph (1), transmit the report to the President and the 
     Committees on the Judiciary of the Senate and the House of 
     Representatives, and publish the report in the Patent and 
     Trademark Office Official Gazette.
       ``(f) Compensation.--Members of the Advisory Board shall be 
     compensated for each day (including travel time) during which 
     they are attending meetings or conferences of the Advisory 
     Board or otherwise engaged in the business of the Advisory 
     Board, at the rate which is the daily equivalent of the 
     annual rate of basic pay in effect for level III of the 
     Executive Schedule under section 5314 of title 5, and while 
     away from their homes or regular places of business they may 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, as authorized by section 5703 of title 5.
       ``(g) Access to Information.--Members of the Advisory Board 
     shall be provided access to records and information in the 
     United States Patent and Trademark Office, except for 
     personnel or other privileged information and information 
     concerning patent applications required to be kept in 
     confidence by section 122.''.

     SEC. 115. CONFORMING AMENDMENTS.

       (a) Duties.--Chapter 1 of title 35, United States Code, is 
     amended by striking section 6.
       (b) Regulations for Agents and Attorneys.--Section 31 of 
     title 35, United States Code, and the item relating to such 
     section in the table of sections for chapter 3 of title 35, 
     United States Code, are repealed.

     SEC. 116. TRADEMARK TRIAL AND APPEAL BOARD.

       Section 17 of the Act of July 5, 1946 (commonly referred to 
     as the ``Trademark Act of 1946'') (15 U.S.C. 1067) is amended 
     to read as follows:
       ``Sec. 17. (a) In every case of interference, opposition to 
     registration, application to register as a lawful concurrent 
     user, or application to cancel the registration of a mark, 
     the Director shall give notice to all parties and shall 
     direct a Trademark Trial and Appeal Board to determine and 
     decide the respective rights of registration.
       ``(b) The Trademark Trial and Appeal Board shall include 
     the Director, the Commissioner for Patents, the Commissioner 
     for Trademarks, and administrative trademark judges who are 
     appointed by the Director.''.

     SEC. 117. BOARD OF PATENT APPEALS AND INTERFERENCES.

       Chapter 1 of title 35, United States Code, is amended by 
     striking section 7 and inserting after section 5 the 
     following:

     ``Sec. 6. Board of Patent Appeals and Interferences

       ``(a) Establishment and Composition.--There shall be in the 
     United States Patent and Trademark Office a Board of Patent 
     Appeals and Interferences. The Director, the Commissioner for 
     Patents, the Commissioner for Trademarks, and the 
     administrative patent judges shall constitute the Board. The 
     administrative patent judges shall be persons of competent 
     legal knowledge and scientific ability who are appointed 
     by the Director.
       ``(b) Duties.--The Board of Patent Appeals and 
     Interferences shall, on written appeal of an applicant, 
     review adverse decisions of examiners upon applications for 
     patents and shall determine priority and patentability of 
     invention in interferences declared under section 135(a). 
     Each appeal and interference shall be heard by at least 3 
     members of the Board, who shall be designated by the 
     Director. Only the Board of Patent Appeals and Interferences 
     may grant rehearings.''.

     SEC. 118. SUITS BY AND AGAINST THE OFFICE.

       Chapter 1 of part I of title 35, United States Code, is 
     amended by inserting after section 6 the following new 
     section:

     ``Sec. 7. Suits by and against the Office

       ``(a) Actions Under United States Law.--Any civil action or 
     proceeding to which the United States Patent and Trademark 
     Office is a party is deemed to arise under the laws of the 
     United States. The Federal courts shall have exclusive 
     jurisdiction over all civil actions by or against the Office.
       ``(b) Representation by the Department of Justice.--The 
     United States Patent and Trademark Office shall be deemed an 
     agency of the United States for purposes of section 516 of 
     title 28.
       ``(c) Prohibition on Attachment, Liens, Etc.--No 
     attachment, garnishment, lien, or similar process, 
     intermediate or final, in law or equity, may be issued 
     against property of the Office.''.

     SEC. 119. ANNUAL REPORT OF DIRECTOR.

       Section 14 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 14. Annual report to Congress

       ``The Director shall report to the Congress, not later than 
     180 days after the end of each fiscal year, the moneys 
     received and expended by the Office, the purposes for which 
     the moneys were spent, the quality and quantity of the work 
     of the Office, and other information relating to the Office. 
     The report under this section shall also meet the 
     requirements of section 9106 of title 31, to the extent that 
     such requirements are not inconsistent with the preceding 
     sentence. The report required under this section shall not be 
     deemed to be the report of the United States Patent and 
     Trademark Office under section 9106 of title 31, and the 
     Director shall file a separate report under such section.''.

     SEC. 120. SUSPENSION OR EXCLUSION FROM PRACTICE.

       Section 32 of title 35, United States Code, is amended by 
     inserting before the last sentence the following: ``The 
     Director shall have the discretion to designate any attorney 
     who is an officer or employee of the United States Patent and 
     Trademark Office to conduct the hearing required by this 
     section.''.

     SEC. 121. FUNDING.

       Section 42 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 42. Patent and Trademark Office funding

       ``(a) Fees Payable to the Office.--All fees for services 
     performed by or materials furnished by the United States 
     Patent and Trademark Office shall be payable to the Office.
       ``(b) Use of Moneys.--Moneys from fees shall be available 
     to the United States Patent and Trademark Office to carry 
     out, to the extent provided in appropriations Acts, the 
     functions of the Office. Moneys of the Office not otherwise 
     used to carry out the functions of the Office shall be kept 
     in cash on hand or on deposit, or invested in obligations of 
     the United States or guaranteed by the United States, or in 
     obligations or other instruments which are lawful investments 
     for fiduciary, trust, or public funds. Fees available to the 
     Office under this title shall be used for the processing of 
     patent applications and for other services and materials 
     relating to patents. Fees available to the Office under 
     section 31 of the Act of July 5, 1946 (commonly referred to 
     as the `Trademark Act of 1946'; 15 U.S.C. 1113), shall be 
     used only for the processing of trademark registrations and 
     for other services and materials relating to trademarks.
       ``(c) Borrowing Authority.--The United States Patent and 
     Trademark Office is authorized to issue from time to time for 
     purchase by the Secretary of the Treasury its debentures, 
     bonds, notes, and other evidences of indebtedness (hereafter 
     in this subsection referred to as `obligations') to assist in 
     financing its activities. Borrowing under this subsection 
     shall be subject to prior approval in appropriations Acts. 
     Such borrowing shall not exceed amounts approved in 
     appropriations Acts. Any borrowing under this subsection 
     shall be repaid only from fees paid to the Office and 
     surcharges appropriated by the Congress. Such obligations 
     shall be redeemable at the option of the Office before 
     maturity in the manner stipulated in such obligations and 
     shall have such maturity as is determined by the Office 
     with the approval of the Secretary of the Treasury. Each 
     such obligation issued to the Treasury shall bear interest 
     at a rate not less than the current yield on outstanding 
     marketable obligations of the United States of comparable 
     maturity during the month preceding

[[Page H1648]]

     the issuance of the obligation as determined by the 
     Secretary of the Treasury. The Secretary of the Treasury 
     shall purchase any obligations of the Office issued under 
     this subsection and for such purpose the Secretary of the 
     Treasury is authorized to use as a public-debt transaction 
     the proceeds of any securities issued under chapter 31 of 
     title 31, and the purposes for which securities may be 
     issued under that chapter are extended to include such 
     purpose. Payment under this subsection of the purchase 
     price of such obligations of the United States Patent and 
     Trademark Office shall be treated as public debt 
     transactions of the United States.''.

     SEC. 122. EXTENSION OF SURCHARGES ON PATENT FEES.

       (a) In General.--Section 10101 of the Omnibus Budget 
     Reconciliation Act of 1990 (35 U.S.C. 41 note) is amended to 
     read as follows:

     ``SEC. 10101. PATENT AND TRADEMARK OFFICE USER FEES.

       ``(a) Surcharges.--There shall be a surcharge on all fees 
     authorized by subsections (a) and (b) of section 41 of title 
     35, United States Code, in order to ensure that the amounts 
     specified in subsection (c) are collected.
       ``(b) Use of Surcharges.--Notwithstanding section 3302 of 
     title 31, United States Code, all surcharges collected by the 
     Patent and Trademark Office--
       ``(1) shall be credited to a separate account established 
     in the Treasury and ascribed to the activities of the United 
     States Patent and Trademark Office as offsetting collections,
       ``(2) shall be collected by and available to the United 
     States Patent and Trademark Office for all authorized 
     activities and operations of the Office, including all direct 
     and indirect costs of services provided by the office, and
       ``(3) shall remain available until expended.
       ``(c) Establishment of Surcharges.--The Director of the 
     United States Patent and Trademark Office shall establish 
     surcharges under subsection (a), subject to the provisions of 
     section 553 of title 5, United States Code, in order to 
     ensure that $119,000,000, but not more than $119,000,000, are 
     collected in fiscal year 1999 and each fiscal year 
     thereafter.
       ``(d) Appropriations Act Required.--Notwithstanding 
     subsections (a) through (c), no fee established by subsection 
     (a) shall be collected nor shall be available for spending 
     without prior authorization in appropriations Acts.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 1998.

     SEC. 123. TRANSFERS.

       (a) Transfer of Functions.--Except to the extent that such 
     functions, powers, and duties relate to the direction of 
     patent or trademark policy, there are transferred to, and 
     vested in, the United States Patent and Trademark Office all 
     functions, powers, and duties vested by law in the Secretary 
     of Commerce or the Department of Commerce or in the officers 
     or components in the Department of Commerce with respect to 
     the authority to grant patents and register trademarks, and 
     in the Patent and Trademark Office, as in effect on the day 
     before the effective date of this title, and in the officers 
     and components of such Office.
       (b) Transfer of Funds and Property.--The Secretary of 
     Commerce shall transfer to the United States Patent and 
     Trademark Office, on the effective date of this title, so 
     much of the assets, liabilities, contracts, property, 
     records, and unexpended and unobligated balances of 
     appropriations, authorizations, allocations, and other funds 
     employed, held, used, arising from, available to, or to be 
     made available to the Department of Commerce, including funds 
     set aside for accounts receivable, which are related to 
     functions, powers, and duties which are vested in the Patent 
     and Trademark Office by this title.

     SEC. 124. GAO STUDY AND REPORT.

       The Comptroller General shall conduct a study of and, not 
     later than the date that is 2 years after the effective date 
     of this title, submit to the Committee on the Judiciary of 
     the House of Representatives and the Committee on the 
     Judiciary of the Senate a report on--
       (1) the operations of the Patent and Trademark Office as a 
     Government corporation; and
       (2) the feasibility and desirability of making the 
     trademark operations of the Patent and Trademark Office a 
     separate Government corporation or agency.
            Subtitle B--Effective Date; Technical Amendments

      SEC. 131. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect 4 months after the date of the enactment of this Act.

     SEC. 132. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Amendments to Title 35.--
       (1) The item relating to part I in the table of parts for 
     chapter 35, United States Code, is amended to read as 
     follows:

  ``I. United States Patent and Trademark Office...................1''.

       (2) The heading for part I of title 35, United States Code, 
     is amended to read as follows:

         ``PART I--UNITED STATES PATENT AND TRADEMARK OFFICE''.

       (3) The table of chapters for part I of title 35, United 
     States Code, is amended by amending the item relating to 
     chapter 1 to read as follows:

``1. Establishment, Officers and Employees, Functions..........1''.....

       (4) The table of sections for chapter 1 of title 35, United 
     States Code, is amended to read as follows:

     ``CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS

``Sec.
``1.  Establishment.
``2.  Powers and duties.
``3.  Officers and employees.
``4.  Restrictions on officers and employees as to interest in patents.
``5.  Patent and Trademark Office Management Advisory Board.
``6.  Board of Patent Appeals and Interferences.
``7.  Suits by and against the Office.
``8.  Library.
``9.  Classification of patents.
``10. Certified copies of records.
``11. Publications.
``12. Exchange of copies of patents with foreign countries.
``13. Copies of patents for public libraries.
``14. Annual report to Congress.''.

       (5) Section 155 of title 35, United States Code, is amended 
     by striking ``Commissioner of Patents and Trademarks'' and 
     inserting ``Director''.
       (6) Section 155A(c) of title 35, United States Code, is 
     amended by striking ``Commissioner of Patents and 
     Trademarks'' and inserting ``Director''.
       (7) Section 302 of title 35, United States Code, is amended 
     by striking ``Commissioner of Patents'' and inserting 
     ``Director''.
       (8) Section 303(b) of title 35, United States Code, is 
     amended by striking ``Commissioner's'' and inserting 
     ``Director's''.
       (9) Title 35, United States Code, is amended by striking 
     ``Commissioner'' each place it appears and inserting 
     ``Director''.
       (10) Section 41(a)(8)(A) of title 35, United States Code, 
     is amended by striking ``On'' and inserting ``on''.
       (b) Other Provisions of Law.--
       (1)(A) Section 45 of the Act of July 5, 1946 (commonly 
     referred to as the ``Trademark Act of 1946''; 15 U.S.C. 
     1127), is amended by striking ``The term `Commissioner' means 
     the Commissioner of Patents and Trademarks.'' and inserting 
     ``The term `Director' means the Director of the United States 
     Patent and Trademark Office.''.
       (B) The Act of July 5, 1946 (commonly referred to as the 
     ``Trademark Act of 1946''; 15 U.S.C. 1051 and following), 
     except for section 17, as amended by section 116 of this Act, 
     is amended by striking ``Commissioner'' each place it appears 
     and inserting ``Director''.
       (2) Section 9101(3) of title 31, United States Code, is 
     amended by adding at the end the following:
       ``(R) the United States Patent and Trademark Office.''.
       (3) Section 500(e) of title 5, United States Code, is 
     amended by striking ``Patent Office'' and inserting ``United 
     States Patent and Trademark Office''.
       (4) Section 5102(c)(23) of title 5, United States Code, is 
     amended to read as follows:
       ``(23) administrative patent judges and designated 
     administrative patent judges in the United States Patent and 
     Trademark Office;''.
       (5) Section 5316 of title 5, United States Code (5 U.S.C. 
     5316) is amended by striking ``Commissioner of Patents, 
     Department of Commerce.'', ``Deputy Commissioner of Patents 
     and Trademarks.'', ``Assistant Commissioner for Patents.'', 
     and ``Assistant Commissioner for Trademarks.''.
       (6) Section 9(p)(1)(B) of the Small Business Act (15 U.S.C. 
     638(p)(1)(B)) is amended to read as follows:
       ``(B) the Director of the United States Patent and 
     Trademark Office; and''.
       (7) Section 12 of the Act of February 14, 1903 (15 U.S.C. 
     1511) is amended by striking ``(d) Patent and Trademark 
     Office;'' and redesignating subsections (a) through (g) as 
     paragraphs (1) through (6), respectively.
       (8) Section 19 of the Tennessee Valley Authority Act of 
     1933 (16 U.S.C. 831r) is amended--
       (A) by striking ``Patent Office of the United States'' and 
     inserting ``United States Patent and Trademark Office''; and
       (B) by striking ``Commissioner of Patents'' and inserting 
     ``Director of the United States Patent and Trademark 
     Office''.
       (9) Section 182(b)(2)(A) of the Trade Act of 1974 (19 
     U.S.C. 2242(b)(2)(A)) is amended by striking ``Commissioner 
     of Patents and Trademarks'' and inserting ``Director of the 
     United States Patent and Trademark Office''.
       (10) Section 302(b)(2)(D) of the Trade Act of 1974 (19 
     U.S.C. 2412(b)(2)(D)) is amended by striking ``Commissioner 
     of Patents and Trademarks'' and inserting ``Director of the 
     United States Patent and Trademark Office''.
       (11) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) 
     is amended by striking ``Patent Office'' and inserting 
     ``United States Patent and Trademark Office''.
       (12) Sections 505(m) and 512(o) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each 
     amended by striking ``Patent and Trademark Office of the 
     Department of Commerce'' and inserting ``United States 
     Patent and Trademark Office''.
       (13) Section 702(d) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 372(d)) is amended by striking ``Commissioner 
     of Patents'' and inserting ``Director of the United States 
     Patent and Trademark Office''.
       (14) Section 105(e) of the Federal Alcohol Administration 
     Act (27 U.S.C. 205(e)) is amended by striking ``United States 
     Patent Office'' and inserting ``United States Patent and 
     Trademark Office''.
       (15) Section 1295(a)(4) of title 28, United States Code, is 
     amended--
       (A) in subparagraph (A) by inserting ``United States'' 
     before ``Patent and Trademark''; and
       (B) in subparagraph (B) by striking ``Commissioner of 
     Patents and Trademarks'' and inserting ``Director of the 
     United States Patent and Trademark Office''.
       (16) Section 1744 of title 28, United States Code is 
     amended--
       (A) by striking ``Patent Office'' each place it appears in 
     the text and section heading and inserting ``United States 
     Patent and Trademark Office'';

[[Page H1649]]

       (B) by striking ``Commissioner of Patents'' and inserting 
     ``Director of the United States Patent and Trademark 
     Office''; and
       (C) by striking ``Commissioner'' and inserting 
     ``Director''.
       (17) Section 1745 of title 28, United States Code, is 
     amended by striking ``United States Patent Office'' and 
     inserting ``United States Patent and Trademark Office''.
       (18) Section 1928 of title 28, United States Code, is 
     amended by striking ``Patent Office'' and inserting ``United 
     States Patent and Trademark Office''.
       (19) Section 151 of the Atomic Energy Act of 1954 (42 
     U.S.C. 2181) is amended in subsections c. and d. by striking 
     ``Commissioner of Patents'' and inserting ``Director of the 
     United States Patent and Trademark Office''.
       (20) Section 152 of the Atomic Energy Act of 1954 (42 
     U.S.C. 2182) is amended by striking ``Commissioner of 
     Patents'' each place it appears and inserting ``Director of 
     the United States Patent and Trademark Office''.
       (21) Section 305 of the National Aeronautics and Space Act 
     of 1958 (42 U.S.C. 2457) is amended--
       (A) in subsection (c) by striking ``Commissioner of 
     Patents'' and inserting ``Director of the United States 
     Patent and Trademark Office (hereafter in this section 
     referred to as the `Director')''; and
       (B) by striking ``Commissioner'' each subsequent place it 
     appears and inserting ``Director''.
       (22) Section 12(a) of the Solar Heating and Cooling 
     Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by 
     striking ``Commissioner of the Patent Office'' and inserting 
     ``Director of the United States Patent and Trademark 
     Office''.
       (23) Section 1111 of title 44, United States Code, is 
     amended by striking ``the Commissioner of Patents,''.
       (24) Section 1114 of title 44, United States Code, is 
     amended by striking ``the Commissioner of Patents,''.
       (25) Section 1123 of title 44, United States Code, is 
     amended by striking ``the Patent Office,''.
       (26) Sections 1337 and 1338 of title 44, United States 
     Code, and the items relating to those sections in the table 
     of contents for chapter 13 of such title, are repealed.
       (27) Section 10(i) of the Trading With the Enemy Act (50 
     U.S.C. App. 10(i)) is amended by striking ``Commissioner of 
     Patents'' and inserting ``Director of the United States 
     Patent and Trademark Office''.
       (28) Section 11 of the Inspector General Act of 1978 (5 
     U.S.C. App.) is amended--
       (A) in paragraph (1)--
       (i) by striking ``and'' before ``the chief executive 
     officer of the Resolution Trust Corporation;'';
       (ii) by striking ``and'' before ``the Chairperson of the 
     Federal Deposit Insurance Corporation;'';
       (iii) by striking ``or'' before ``the Commissioner of 
     Social Security,''; and
       (iv) by inserting ``or the Director of the United States 
     Patent and Trademark Office;'' after ``Social Security 
     Administration;''; and
       (B) in paragraph (2)--
       (i) by striking ``or'' before ``the Veterans' 
     Administration,''; and
       (ii) by striking ``or the Social Security Administration'' 
     and inserting ``the Social Security Administration, or the 
     United States Patent and Trademark Office''.
                  Subtitle C--Miscellaneous Provisions

     SEC. 141. REFERENCES.

       (a) In General.--Any reference in any other Federal law, 
     Executive order, rule, regulation, or delegation of 
     authority, or any document of or pertaining to a department 
     or office from which a function is transferred by this 
     title--
       (1) to the head of such department or office is deemed to 
     refer to the head of the department or office to which such 
     function is transferred; or
       (2) to such department or office is deemed to refer to the 
     department or office to which such function is transferred.
       (b) Specific References.--Any reference in any other 
     Federal law, Executive order, rule, regulation, or delegation 
     of authority, or any document of or pertaining to the Patent 
     and Trademark Office--
       (1) to the Commissioner of Patents and Trademarks is deemed 
     to refer to the Director of the United States Patent and 
     Trademark Office;
       (2) to the Assistant Commissioner for Patents is deemed to 
     refer to the Commissioner for Patents; or
       (3) to the Assistant Commissioner for Trademarks is deemed 
     to refer to the Commissioner for Trademarks.

     SEC. 142. EXERCISE OF AUTHORITIES.

       Except as otherwise provided by law, a Federal official to 
     whom a function is transferred by this title may, for 
     purposes of performing the function, exercise all authorities 
     under any other provision of law that were available with 
     respect to the performance of that function to the official 
     responsible for the performance of the function immediately 
     before the effective date of the transfer of the function 
     under this title.

     SEC. 143. SAVINGS PROVISIONS.

       (a) Legal Documents.--All orders, determinations, rules, 
     regulations, permits, grants, loans, contracts, agreements, 
     certificates, licenses, and privileges--
       (1) that have been issued, made, granted, or allowed to 
     become effective by the President, the Secretary of Commerce, 
     any officer or employee of any office transferred by this 
     title, or any other Government official, or by a court of 
     competent jurisdiction, in the performance of any function 
     that is transferred by this title, and
       (2) that are in effect on the effective date of such 
     transfer (or become effective after such date pursuant to 
     their terms as in effect on such effective date),

     shall continue in effect according to their terms until 
     modified, terminated, superseded, set aside, or revoked in 
     accordance with law by the President, any other authorized 
     official, a court of competent jurisdiction, or operation of 
     law.
       (b) Proceedings.--This title shall not affect any 
     proceedings or any application for any benefits, service, 
     license, permit, certificate, or financial assistance pending 
     on the effective date of this title before an office 
     transferred by this title, but such proceedings and 
     applications shall be continued. Orders shall be issued in 
     such proceedings, appeals shall be taken therefrom, and 
     payments shall be made pursuant to such orders, as if this 
     title had not been enacted, and orders issued in any such 
     proceeding shall continue in effect until modified, 
     terminated, superseded, or revoked by a duly authorized 
     official, by a court of competent jurisdiction, or by 
     operation of law. Nothing in this subsection shall be 
     considered to prohibit the discontinuance or modification of 
     any such proceeding under the same terms and conditions and 
     to the same extent that such proceeding could have been 
     discontinued or modified if this title had not been enacted.
       (c) Suits.--This title shall not affect suits commenced 
     before the effective date of this title, and in all such 
     suits, proceedings shall be had, appeals taken, and judgments 
     rendered in the same manner and with the same effect as if 
     this title had not been enacted.
       (d) Nonabatement of Actions.--No suit, action, or other 
     proceeding commenced by or against the Department of Commerce 
     or the Secretary of Commerce, or by or against any individual 
     in the official capacity of such individual as an officer or 
     employee of an office transferred by this title, shall abate 
     by reason of the enactment of this title.
       (e) Continuance of Suits.--If any Government officer in the 
     official capacity of such officer is party to a suit with 
     respect to a function of the officer, and under this title 
     such function is transferred to any other officer or office, 
     then such suit shall be continued with the other officer or 
     the head of such other office, as applicable, substituted or 
     added as a party.
       (f) Administrative Procedure and Judicial Review.--Except 
     as otherwise provided by this title, any statutory 
     requirements relating to notice, hearings, action upon the 
     record, or administrative or judicial review that apply to 
     any function transferred by this title shall apply to the 
     exercise of such function by the head of the Federal 
     agency, and other officers of the agency, to which such 
     function is transferred by this title.

     SEC. 144. TRANSFER OF ASSETS.

       Except as otherwise provided in this title, so much of the 
     personnel, property, records, and unexpended balances of 
     appropriations, allocations, and other funds employed, used, 
     held, available, or to be made available in connection with a 
     function transferred to an official or agency by this title 
     shall be available to the official or the head of that 
     agency, respectively, at such time or times as the Director 
     of the Office of Management and Budget directs for use in 
     connection with the functions transferred.

     SEC. 145. DELEGATION AND ASSIGNMENT.

       Except as otherwise expressly prohibited by law or 
     otherwise provided in this title, an official to whom 
     functions are transferred under this title (including the 
     head of any office to which functions are transferred under 
     this title) may delegate any of the functions so transferred 
     to such officers and employees of the office of the official 
     as the official may designate, and may authorize successive 
     redelegations of such functions as may be necessary or 
     appropriate. No delegation of functions under this section or 
     under any other provision of this title shall relieve the 
     official to whom a function is transferred under this title 
     of responsibility for the administration of the function.

     SEC. 146. AUTHORITY OF DIRECTOR OF THE OFFICE OF MANAGEMENT 
                   AND BUDGET WITH RESPECT TO FUNCTIONS 
                   TRANSFERRED.

       (a) Determinations.--If necessary, the Director of the 
     Office of Management and Budget shall make any determination 
     of the functions that are transferred under this title.
       (b) Incidental Transfers.--The Director of the Office of 
     Management and Budget, at such time or times as the Director 
     shall provide, may make such determinations as may be 
     necessary with regard to the functions transferred by this 
     title, and to make such additional incidental dispositions of 
     personnel, assets, liabilities, grants, contracts, property, 
     records, and unexpended balances of appropriations, 
     authorizations, allocations, and other funds held, used, 
     arising from, available to, or to be made available in 
     connection with such functions, as may be necessary to carry 
     out the provisions of this title. The Director shall provide 
     for the termination of the affairs of all entities terminated 
     by this title and for such further measures and dispositions 
     as may be necessary to effectuate the purposes of this title.

     SEC. 147. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.

       For purposes of this title, the vesting of a function in a 
     department or office pursuant to reestablishment of an office 
     shall be considered to be the transfer of the function.

     SEC. 148. AVAILABILITY OF EXISTING FUNDS.

       Existing appropriations and funds available for the 
     performance of functions, programs, and activities terminated 
     pursuant to this title shall remain available, for the 
     duration of their period of availability, for necessary 
     expenses in connection with the termination and resolution of 
     such functions, programs, and activities, subject to the 
     submission of a plan to the Committees on Appropriations of 
     the House and Senate in accordance with the procedures set 
     forth in section 605 of the Departments of Commerce,

[[Page H1650]]

     Justice, and State, the Judiciary, and Related Agencies 
     Appropriations Act 1997.

     SEC. 149. DEFINITIONS.

       For purposes of this title--
       (1) the term ``function'' includes any duty, obligation, 
     power, authority, responsibility, right, privilege, activity, 
     or program; and
       (2) the term ``office'' includes any office, 
     administration, agency, bureau, institute, council, unit, 
     organizational entity, or component thereof.
     TITLE II--EXAMINING PROCEDURE IMPROVEMENTS: PUBLICATION WITH 
      PROVISIONAL ROYALTIES; TERM EXTENSIONS; FURTHER EXAMINATION

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Examining Procedure 
     Improvements Act''.

     SEC. 202. PUBLICATION.

       Section 122 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 122. Confidential status of applications; publication 
       of patent applications

       ``(a) Confidentiality.--Except as provided in subsection 
     (b), applications for patents shall be kept in confidence by 
     the Patent and Trademark Office and no information concerning 
     applications for patents shall be given without authority of 
     the applicant or owner unless necessary to carry out the 
     provisions of an Act of Congress or in such special 
     circumstances as may be determined by the Director.
       ``(b) Publication.--
       ``(1) In general.--(A) Subject to paragraph (2), each 
     application for patent, except applications for design 
     patents filed under chapter 16 of this title and 
     provisional applications filed under section 111(b) of 
     this title, shall be published, in accordance with 
     procedures determined by the Director, promptly after the 
     expiration of a period of 18 months from the earliest 
     filing date for which a benefit is sought under this 
     title. At the request of the applicant, an application may 
     be published earlier than the end of such 18-month period.
       ``(B) No information concerning published patent 
     applications shall be made available to the public except as 
     the Director determines.
       ``(C) Notwithstanding any other provision of law, a 
     determination by the Director to release or not to release 
     information concerning a published patent application shall 
     be final and nonreviewable.
       ``(2) Exceptions.--(A) An application that is no longer 
     pending shall not be published.
       ``(B) An application that is subject to a secrecy order 
     pursuant to section 181 of this title shall not be published.
       ``(C)(i) Upon the request of the applicant at the time of 
     filing, the application shall not be published in accordance 
     with paragraph (1) until 3 months after the Director makes a 
     notification to the applicant under section 132 of this 
     title.
       ``(ii) Applications filed pursuant to section 363 of this 
     title, applications asserting priority under section 119 or 
     365(a) of this title, and applications asserting the benefit 
     of an earlier application under section 120, 121, or 365(c) 
     of this title shall not be eligible for a request pursuant to 
     this subparagraph.
       ``(iii) In a request under this subparagraph, the applicant 
     shall certify that the invention disclosed in the application 
     was not and will not be the subject of an application filed 
     in a foreign country.
       ``(iv) The Director may establish appropriate procedures 
     and fees for making a request under this subparagraph.
       ``(D)(i) In a case in which an applicant, after making a 
     request under subparagraph (C)(i), determines to file an 
     application in a foreign country, the applicant shall notify 
     the Director promptly. The application shall then be 
     published in accordance with the provisions of paragraph (1).
       ``(ii) The Director may establish appropriate fees to cover 
     the costs of processing notifications under clause (i), 
     including the costs of any special handling of applications 
     resulting from the initial request under subparagraph (C)(i).
       ``(c) Pre-Issuance Opposition.--The provisions of this 
     section shall not operate to create any new opportunity for 
     pre-issuance opposition. The Director may establish 
     appropriate procedures to ensure that this section does not 
     create any new opportunity for pre-issuance opposition.''.

     SEC. 203. TIME FOR CLAIMING BENEFIT OF EARLIER FILING DATE.

       (a) In a Foreign Country.--Section 119(b) of title 35, 
     United States Code, is amended to read as follows:
       ``(b)(1) No application for patent shall be entitled to 
     this right of priority unless a claim is filed in the Patent 
     and Trademark Office, at such time during the pendency of the 
     application as is required by the Director, that identifies 
     the foreign application by specifying its application number, 
     the country in or for which the application was filed, and 
     the date of its filing.
       ``(2) The Director may consider the failure of the 
     applicant to file a timely claim for priority as a waiver of 
     any such claim, and may require the payment of a surcharge as 
     a condition of accepting an untimely claim during the 
     pendency of the application.
       ``(3) The Director may require a certified copy of the 
     original foreign application, specification, and 
     drawings upon which it is based, a translation if not in 
     the English language, and such other information as the 
     Director considers necessary. Any such certification shall 
     be made by the intellectual property authority in the 
     foreign country in which the foreign application was filed 
     and show the date of the application and of the filing of 
     the specification and other papers.''.
       (b) In the United States.--Section 120 of title 35, United 
     States Code, is amended by adding at the end the following: 
     ``No application shall be entitled to the benefit of an 
     earlier filed application under this section unless an 
     amendment containing the specific reference to the earlier 
     filed application is submitted at such time during the 
     pendency of the application as is required by the 
     Commissioner. The Director may consider the failure to submit 
     such an amendment within that time period as a waiver of any 
     benefit under this section. The Director may establish 
     procedures, including the payment of a surcharge, to accept 
     unavoidably late submissions of amendments under this 
     section.''.

     SEC. 204. PROVISIONAL RIGHTS.

       Section 154 of title 35, United States Code, is amended--
       (1) in the section caption by inserting ``; provisional 
     rights'' after ``patent''; and
       (2) by adding at the end the following new subsection:
       ``(d) Provisional Rights.--
       ``(1) In general.--In addition to other rights provided by 
     this section, a patent shall include the right to obtain a 
     reasonable royalty from any person who, during the period 
     beginning on the date of publication of the application for 
     such patent pursuant to section 122(b) of this title, or in 
     the case of an international application filed under the 
     treaty defined in section 351(a) of this title designating 
     the United States under Article 21(2)(a) of such treaty, the 
     date of publication of the application, and ending on the 
     date the patent is issued--
       ``(A)(i) makes, uses, offers for sale, or sells in the 
     United States the invention as claimed in the published 
     patent application or imports such an invention into the 
     United States; or
       ``(ii) if the invention as claimed in the published patent 
     application is a process, uses, offers for sale, or sells in 
     the United States or imports into the United States products 
     made by that process as claimed in the published patent 
     application; and
       ``(B) had actual notice of the published patent application 
     and, where the right arising under this paragraph is based 
     upon an international application designating the United 
     States that is published in a language other than English, a 
     translation of the international application into the English 
     language.
       ``(2) Right based on substantially identical inventions.--
     The right under paragraph (1) to obtain a reasonable royalty 
     shall not be available under this subsection unless the 
     invention as claimed in the patent is substantially identical 
     to the invention as claimed in the published patent 
     application.
       ``(3) Time limitation on obtaining a reasonable royalty.--
     The right under paragraph (1) to obtain a reasonable royalty 
     shall be available only in an action brought not later than 6 
     years after the patent is issued. The right under paragraph 
     (1) to obtain a reasonable royalty shall not be affected by 
     the duration of the period described in paragraph (1).
       ``(4) Requirements for international applications.--The 
     right under paragraph (1) to obtain a reasonable royalty 
     based upon the publication under the treaty defined in 
     section 351(a) of this title of an international application 
     designating the United States shall commence from the date 
     that the Patent and Trademark Office receives a copy of the 
     publication under such treaty of the international 
     application, or, if the publication under the treaty of the 
     international application is in a language other than 
     English, from the date that the Patent and Trademark Office 
     receives a translation of the international application in 
     the English language. The Director may require the applicant 
     to provide a copy of the international publication of the 
     international application and a translation thereof.''.

     SEC. 205. PRIOR ART EFFECT OF PUBLISHED APPLICATIONS.

       Section 102(e) of title 35, United States Code, is amended 
     to read as follows:
       ``(e) the invention was described in--
       ``(1) an application for patent, published pursuant to 
     section 122(b) of this title, by another filed in the United 
     States before the invention by the applicant for patent, 
     except that an international application filed under the 
     treaty defined in section 351(a) of this title shall have the 
     effect under this subsection of a national application 
     published under section 122(b) of this title only if the 
     international application designating the United States was 
     published under Article 21(2)(a) of such treaty in the 
     English language, or
       ``(2) a patent granted on an application for patent by 
     another filed in the United States before the invention by 
     the applicant for patent, or''.

     SEC. 206. COST RECOVERY FOR PUBLICATION.

       The Director of the United States Patent and Trademark 
     Office shall recover the cost of early publication required 
     by the amendment made by section 202 by adjusting the filing, 
     issue, and maintenance fees under title 35, United States 
     Code, by charging a separate publication fee, or by any 
     combination of these methods.

     SEC. 207. CONFORMING CHANGES.

       The following provisions of title 35, United States Code, 
     are amended:
       (1) Section 11 is amended in paragraph 1 of subsection (a) 
     by inserting ``and published applications for patents'' after 
     ``Patents''.
       (2) Section 12 is amended--
       (A) in the section caption by inserting ``and 
     applications'' after ``patents''; and
       (B) by inserting ``and published applications for patents'' 
     after ``patents''.
       (3) Section 13 is amended--
       (A) in the section caption by inserting ``and 
     applications'' after ``patents''; and
       (B) by inserting ``and published applications for patents'' 
     after ``patents''.
       (4) The items relating to sections 12 and 13 in the table 
     of sections for chapter 1, as amended

[[Page H1651]]

     by section 132(a)(4) of this Act, are each amended by 
     inserting ``and applications'' after ``patents''.
       (5) The item relating to section 122 in the table of 
     sections for chapter 11 is amended by inserting ``; 
     publication of patent applications'' after ``applications''.
       (6) The item relating to section 154 in the table of 
     sections for chapter 14 is amended by inserting ``; 
     provisional rights'' after ``patent''.
       (7) Section 181 is amended--
       (A) in the first paragraph--
       (i) by inserting ``by the publication of an application 
     or'' after ``disclosure''; and
       (ii) by inserting ``the publication of the application or'' 
     after ``withhold'';
       (B) in the second paragraph by inserting ``by the 
     publication of an application or'' after ``disclosure of an 
     invention'';
       (C) in the third paragraph--
       (i) by inserting ``by the publication of the application 
     or'' after ``disclosure of the invention''; and
       (ii) by inserting ``the publication of the application or'' 
     after ``withhold''; and
       (D) in the fourth paragraph by inserting ``the publication 
     of an application or'' after ``and'' in the first sentence.
       (8) Section 252 is amended in the first paragraph by 
     inserting ``substantially'' before ``identical'' each place 
     it appears.
       (9) Section 284 is amended by adding at the end of the 
     second paragraph the following: ``Increased damages under 
     this paragraph shall not apply to provisional rights under 
     section 154(d) of this title.''.
       (10) Section 374 is amended to read as follows:

     ``Sec. 374. Publication of international application: Effect

       ``The publication under the treaty defined in section 
     351(a) of this title of an international application 
     designating the United States shall confer the same rights 
     and shall have the same effect under this title as an 
     application for patent published under section 122(b), except 
     as provided in sections 102(e) and 154(d) of this title.''.
       (11) Section 135(b) of title 35, United States Code, is 
     amended--
       (A) by inserting ``(1)'' after ``(b)'';
       (B) by striking ``from the date on which the patent was 
     granted'' and inserting ``after the date on which the patent 
     is granted and the applicant makes a prima facie showing of 
     prior invention''; and
       (C) by adding at the end the following:
       ``(2) A claim which is the same as, or for the same or 
     substantially the same subject matter as, a claim of a 
     published application may be made in an application filed 
     after the published application is published only if the 
     claim is made prior to one year after the date on which the 
     published application is published and the applicant of the 
     later filed application makes a prime facie showing of prior 
     invention.''.

     SEC. 208. PATENT TERM EXTENSION AUTHORITY.

       Section 154(b) of title 35, United States Code, is amended 
     to read as follows:
       ``(b) Term Extension.--
       ``(1) Basis for patent term extension.--
       ``(A) Delay.--Subject to the limitations set forth in 
     paragraph (2), if the issue of an original patent is delayed 
     due to--
       ``(i) a proceeding under section 135(a) of this title, 
     including any appeal under section 141, or any civil action 
     under section 146, 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 in a case in which 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 Patent and 
     Trademark Office in issuing the patent,

     the term of the patent shall be extended for the period of 
     delay.
       ``(B) Administrative delay.--For purposes of subparagraph 
     (A)(iv), an unusual administrative delay by the Patent and 
     Trademark office is the failure to--
       ``(i) make a notification of the rejection of any claim for 
     a patent or any objection or argument under section 132 of 
     this title or give or mail a written notice of allowance 
     under section 151 of this title not later than 14 months 
     after the date on which the application was filed;
       ``(ii) respond to a reply under section 132 of this title 
     or to an appeal taken under section 134 of this title not 
     later than 4 months after the date on which the reply was 
     filed or the appeal was taken;
       ``(iii) act on an application not later than 4 months after 
     the date of a decision by the Board of Patent Appeals and 
     Interferences under section 134 or 135 of this title or a 
     decision by a Federal court under section 141, 145, or 146 of 
     this title in a case in which allowable claims remain in an 
     application;
       ``(iv) issue a patent not later than 4 months after the 
     date on which the issue fee was paid under section 151 of 
     this title and all outstanding requirements were satisfied; 
     or
       ``(v) issue a patent within 3 years after the filing date 
     of the application in the United States, if the applicant--

       ``(I) has not obtained further limited examination of the 
     application under section 209 of the Examining Procedure 
     Improvements Act;
       ``(II) has responded to all rejections, objections, 
     arguments, or other requests of the Patent and Trademark 
     Office within 3 months after the date on which they are made;
       ``(III) has not benefitted from an extension of patent term 
     under clause (i), (ii) or (iii) of paragraph (1)(A);
       ``(IV) has not sought or obtained appellate review by the 
     Board of Patent Appeals and Interferences or by a Federal 
     Court other than in a case in which the patent was issued 
     pursuant to a decision in the review reversing an adverse 
     determination of patentability; and
       ``(V) has not requested any delay in the processing of the 
     application by the Patent and Trademark Office.

       ``(2) Limitations.--(A) The total duration of any 
     extensions granted pursuant to either clause (iii) or (iv) of 
     paragraph (1)(A) or both such clauses shall not exceed 10 
     years. To the extent that periods of delay attributable to 
     grounds specified in paragraph (1) overlap, the period of 
     any extension granted under this subsection shall not 
     exceed the actual number of days the issuance of the 
     patent was delayed.
       ``(B) The period of extension of the term of a patent under 
     this subsection shall be reduced by a period equal to the 
     time in which the applicant failed to engage in reasonable 
     efforts to conclude prosecution of the application. The 
     Director shall prescribe regulations establishing the 
     circumstances that constitute a failure of an applicant to 
     engage in reasonable efforts to conclude processing or 
     examination of an application in order to ensure that 
     applicants are appropriately compensated for any delays by 
     the Patent and Trademark Office in excess of the time periods 
     specified in paragraph (1)(B).
       ``(C) No patent the term of which has been disclaimed 
     beyond a specified date may be extended under this section 
     beyond the expiration date specified in the disclaimer.
       ``(3) Procedures.--The Director shall prescribe regulations 
     establishing procedures for the notification of patent term 
     extensions under this subsection and procedures for 
     contesting patent term extensions under this subsection.''.

     SEC. 209. FURTHER EXAMINATION OF PATENT APPLICATIONS.

       The Director of the United States Patent and Trademark 
     Office shall prescribe regulations to provide for the further 
     limited reexamination of applications for patent. The 
     Director may establish appropriate fees for such further 
     limited reexamination and shall be authorized to provide a 50 
     percent reduction on such fees for small entities that 
     qualify for reduced fees under section 41(h)(1) of title 35, 
     United States Code.

     SEC. 210. LAST DAY OF PENDENCY OF PROVISIONAL APPLICATION.

       Section 119(e) of title 35, United States Code, is amended 
     by adding at the end the following:
       ``(3) If the day that is 12 months after the filing date of 
     a provisional application falls on a Saturday, Sunday, or 
     Federal holiday within the District of Columbia, the period 
     of pendency of the provisional application shall be extended 
     to the next succeeding business day.''.

     SEC. 211. REPORTING REQUIREMENT.

       The Director of the United States Patent and Trademark 
     Office shall report to the Congress not later than April 1, 
     2001, and not later than April 1 of each year thereafter, 
     regarding the impact of publication on the patent 
     applications filed by an applicant who has been accorded the 
     status of independent inventor under section 41(h) of title 
     35, United States Code. The report shall include information 
     concerning the frequency and number of initial and continuing 
     patent applications, pendency, interferences, reexaminations, 
     rejection, abandonment rates, fees, other expenses, and other 
     relevant information related to the prosecution of patent 
     applications.

     SEC. 212. EFFECTIVE DATE.

       (a) Sections 202 Through 207.--Sections 202 through 207, 
     and the amendments made by such sections, shall take effect 
     on April 1, 1998, and shall apply to all applications filed 
     under section 111 of title 35, United States Code, on or 
     after that date, and all international applications 
     designating the United States that are filed on or after that 
     date.
       (b) Sections 208 Through 210.--The amendments made by 
     sections 208 through 210 shall take effect on the date of the 
     enactment of this Act and, except for a design patent 
     application filed under chapter 16 of title 35, United States 
     Code, shall apply to any application filed on or after June 
     8, 1995.
TITLE III--PROTECTION FOR PRIOR DOMESTIC USERS OF PATENTED TECHNOLOGIES

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Protection for Prior 
     Domestic Commercial and Research Users of Patented 
     Technologies Act''.

     SEC. 302. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR 
                   DOMESTIC COMMERCIAL OR RESEARCH USE.

       (a) Defense.--Chapter 28 of title 35, United States Code, 
     is amended by adding at the end the following new section:

     ``Sec. 273. Prior domestic commercial or research use; 
       defense to infringement

       ``(a) Definitions.--For purposes of this section--
       ``(1) the terms `commercially used', `commercially use', 
     and `commercial use' mean the use in the United States in 
     commerce or the use in the design, testing, or production in 
     the United States of a product or service which is used in 
     commerce, whether or not the subject matter at issue is 
     accessible to or otherwise known to the public;
       ``(2) in the case of activities performed by a nonprofit 
     research laboratory, or nonprofit entity such as a 
     university, research center, or hospital, a use for which the 
     public is the intended beneficiary shall be considered to be 
     a use described in paragraph (1) if the use is limited to 
     activity that occurred within the laboratory or nonprofit 
     entity or by persons in privity with that laboratory or 
     nonprofit entity before the effective filing date of the 
     application for patent at issue, except that the use--
       ``(A) may be asserted as a defense under this section only 
     by the laboratory or nonprofit entity; and
       ``(B) may not be asserted as a defense with respect to any 
     subsequent use by any entity other

[[Page H1652]]

     than such laboratory, nonprofit entity, or persons in 
     privity;
       ``(3) the terms `used in commerce', and `use in commerce' 
     mean that there has been an actual sale or other arm's-length 
     commercial transfer of the subject matter at issue or that 
     there has been an actual sale or other arm's-length 
     commercial transfer of a product or service resulting from 
     the use of the subject matter at issue; and
       ``(4) the `effective filing date' of a patent is the 
     earlier of the actual filing date of the application for the 
     patent or the filing date of any earlier United States, 
     foreign, or international application to which the subject 
     matter at issue is entitled under section 119, 120, or 365 of 
     this title.
       ``(b) Defense to Infringement.--(1) A person shall not be 
     liable as an infringer under section 271 of this title with 
     respect to any subject matter that would otherwise infringe 
     one or more claims in the patent being asserted against such 
     person, if such person had, acting in good faith, 
     commercially used the subject matter before the effective 
     filing date of such patent.
       ``(2) The sale or other disposition of the subject matter 
     of a patent by a person entitled to assert a defense under 
     this section with respect to that subject matter shall 
     exhaust the patent owner's rights under the patent to the 
     extent such rights would have been exhausted had such sale or 
     other disposition been made by the patent owner.
       ``(c) Limitations and Qualifications of Defense.--The 
     defense to infringement under this section is subject to the 
     following:
       ``(1) Derivation.--A person may not assert the defense 
     under this section if the subject matter on which the defense 
     is based was derived from the patentee or persons in privity 
     with the patentee.
       ``(2) Not a general license.--The defense asserted by a 
     person under this section is not a general license under all 
     claims of the patent at issue, but extends only to the 
     subject matter claimed in the patent with respect to which 
     the person can assert a defense under this chapter, except 
     that the defense shall also extend to variations in the 
     quantity or volume of use of the claimed subject matter, and 
     to improvements in the claimed subject matter that do not 
     infringe additional specifically claimed subject matter of 
     the patent.
       ``(3) Effective and serious preparation.--With respect to 
     subject matter that cannot be commercialized without a 
     significant investment of time, money, and effort, a person 
     shall be deemed to have commercially used the subject matter 
     if--
       ``(A) before the effective filing date of the patent, the 
     person actually reduced the subject matter to practice in the 
     United States, completed a significant portion of the 
     total investment necessary to commercially use the subject 
     matter, and made an arm's-length commercial transaction in 
     the United States in connection with the preparation to 
     use the subject matter; and
       ``(B) thereafter the person diligently completed the 
     remainder of the activities and investments necessary to 
     commercially use the subject matter, and promptly began 
     commercial use of the subject matter, even if such activities 
     were conducted after the effective filing date of the patent.
       ``(4) Burden of proof.--A person asserting the defense 
     under this section shall have the burden of establishing the 
     defense.
       ``(5) Abandonment of use.--A person who has abandoned 
     commercial use of subject matter may not rely on activities 
     performed before the date of such abandonment in establishing 
     a defense under subsection (b) with respect to actions taken 
     after the date of such abandonment.
       ``(6) Personal defense.--The defense under this section may 
     only be asserted by the person who performed the acts 
     necessary to establish the defense and, except for any 
     transfer to the patent owner, the right to assert the defense 
     shall not be licensed or assigned or transferred to another 
     person except in connection with the good faith assignment or 
     transfer of the entire enterprise or line of business to 
     which the defense relates.
       ``(7) One-year limitation.--A person may not assert a 
     defense under this section unless the subject matter on which 
     the defense is based had been commercially used or 
     actually reduced to practice more than one year prior to 
     the effective filing date of the patent by the person 
     asserting the defense or someone in privity with that 
     person.
       ``(d) Unsuccessful Assertion of Defense.--If the defense 
     under this section is pleaded by a person who is found to 
     infringe the patent and who subsequently fails to demonstrate 
     a reasonable basis for asserting the defense, the court shall 
     find the case exceptional for the purpose of awarding 
     attorney's fees under section 285 of this title.
       ``(e) Invalidity.--A patent shall not be deemed to be 
     invalid under section 102 or 103 of this title solely because 
     a defense is established under this section.''.
       (b) Conforming Amendment.--The table of sections at the 
     beginning of chapter 28 of title 35, United States Code, is 
     amended by adding at the end the following new item:

``273. Prior domestic commercial or research use; defense to 
              infringement.''.

     SEC. 303. EFFECTIVE DATE AND APPLICABILITY.

       This title and the amendments made by this title shall take 
     effect on the date of the enactment of this Act, but shall 
     not apply to any action for infringement that is pending on 
     such date of enactment or with respect to any subject matter 
     for which an adjudication of infringement, including a 
     consent judgment, has been made before such date of 
     enactment.
           TITLE IV--ENHANCED PROTECTION OF INVENTORS' RIGHTS

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Enhanced Protection of 
     Inventors' Rights Act''.

     SEC. 402. INVENTION DEVELOPMENT SERVICES.

       Part I of title 35, United States Code, is amended by 
     adding after chapter 4 the following new chapter:

              ``CHAPTER 5--INVENTION DEVELOPMENT SERVICES

``Sec.
``51. Definitions.
``52. Contracting requirements.
``53. Standard provisions for cover notice.
``54. Reports to customer required.
``55. Mandatory contract terms.
``56. Remedies.
``57. Records of complaints.
``58. Fraudulent representation by an invention developer.
``59. Rule of construction.

     ``Sec. 51. Definitions

       ``For purposes of this chapter--
       ``(1) the term `contract for invention development 
     services' means a contract by which an invention developer 
     undertakes invention development services for a customer;
       ``(2) the term `customer' means any person, firm, 
     partnership, corporation, or other entity who is solicited 
     by, seeks the services of, or enters into a contract with an 
     invention promoter for invention promotion services;
       ``(3) the term `invention promoter' means any person, firm, 
     partnership, corporation, or other entity who offers to 
     perform or performs for, or on behalf of, a customer any act 
     described under paragraph (4), but does not include--
       ``(A) any department or agency of the Federal Government or 
     of a State or local government;
       ``(B) any nonprofit, charitable, scientific, or educational 
     organization, qualified under applicable State law or 
     described under section 170(b)(1)(A) of the Internal Revenue 
     Code of 1986; or
       ``(C) any person duly registered with, and in good standing 
     before, the United States Patent and Trademark Office acting 
     within the scope of that person's registration to practice 
     before the Patent and Trademark Office; and
       ``(4) the term `invention development services' means, with 
     respect to an invention by a customer, any act involved in--
       ``(A) evaluating the invention to determine its 
     protectability as some form of intellectual property, other 
     than evaluation by a person licensed by a State to practice 
     law who is acting solely within the scope of that person's 
     professional license;
       ``(B) evaluating the invention to determine its commercial 
     potential by any person for purposes other than providing 
     venture capital; or
       ``(C) marketing, brokering, licensing, selling, or 
     promoting the invention or a product or service in which the 
     invention is incorporated or used, except that the display 
     only of an invention at a trade show or exhibit shall not be 
     considered to be invention development services.

     ``Sec. 52. Contracting requirements

       ``(a) In General.--(1) Every contract for invention 
     development services shall be in writing and shall be subject 
     to the provisions of this chapter. A copy of the signed 
     written contract shall be given to the customer at the time 
     the customer enters into the contract.
       ``(2) If a contract is entered into for the benefit of a 
     third party, such party shall be considered a customer for 
     purposes of this chapter.
       ``(b) Requirements of Invention Developer.--The invention 
     developer shall--
       ``(1) state in a written document, at the time a customer 
     enters into a contract for invention development services, 
     whether the usual business practice of the invention 
     developer is to--
       ``(A) seek more than 1 contract in connection with an 
     invention; or
       ``(B) seek to perform services in connection with an 
     invention in 1 or more phases, with the performance of each 
     phase covered in 1 or more subsequent contracts; and
       ``(2) supply to the customer a copy of the written document 
     together with a written summary of the usual business 
     practices of the invention developer, including--
       ``(A) the usual business terms of contracts; and
       ``(B) the approximate amount of the usual fees or other 
     consideration that may be required from the customer for each 
     of the services provided by the developer.
       ``(c) Right of Customer To Cancel Contract.--(1) 
     Notwithstanding any contractual provision to the contrary, a 
     customer shall have the right to terminate a contract for 
     invention development services by sending a written letter to 
     the invention developer stating the customer's intent to 
     cancel the contract. The letter of termination must be 
     deposited with the United States Postal Service on or before 
     5 business days after the date upon which the customer or the 
     invention developer executes the contract, whichever is 
     later.
       ``(2) Delivery of a promissory note, check, bill of 
     exchange, or negotiable instrument of any kind to the 
     invention developer or to a third party for the benefit of 
     the invention developer, without regard to the date or dates 
     appearing in such instrument, shall be deemed payment 
     received by the invention developer on the date received for 
     purposes of this section.

     ``Sec. 53. Standard provisions for cover notice

       ``(a) Contents.--Every contract for invention development 
     services shall have a conspicuous and legible cover sheet 
     attached with the following notice imprinted in boldface type 
     of not less than 12-point size:
       `` `YOU HAVE THE RIGHT TO TERMINATE THIS CONTRACT. TO 
     TERMINATE THIS CONTRACT, YOU MUST SEND A WRITTEN LETTER TO 
     THE COMPANY STATING YOUR INTENT TO CANCEL THIS CONTRACT. THE

[[Page H1653]]

     LETTER OF TERMINATION MUST BE DEPOSITED WITH THE UNITED 
     STATES POSTAL SERVICE ON OR BEFORE FIVE (5) BUSINESS DAYS 
     AFTER THE DATE ON WHICH YOU OR THE COMPANY EXECUTE THE 
     CONTRACT, WHICHEVER IS LATER.
       `` `THE TOTAL NUMBER OF INVENTIONS EVALUATED BY THE 
     INVENTION DEVELOPER FOR COMMERCIAL POTENTIAL IN THE PAST FIVE 
     (5) YEARS IS __________. OF THAT NUMBER, __________ RECEIVED 
     POSITIVE EVALUATIONS AND __________ RECEIVED NEGATIVE 
     EVALUATIONS.
       `` `IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION 
     TO THE INVENTION DEVELOPER, THE INVENTION DEVELOPER MAY HAVE 
     THE RIGHT TO SELL OR DISPOSE OF THE INVENTION WITHOUT YOUR 
     CONSENT AND MAY NOT HAVE TO SHARE THE PROFITS WITH YOU.
       `` `THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH 
     THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS IS 
     __________. THE TOTAL NUMBER OF CUSTOMERS KNOWN BY THIS 
     INVENTION DEVELOPER TO HAVE RECEIVED, BY VIRTUE OF THIS 
     INVENTION DEVELOPER'S PERFORMANCE, AN AMOUNT OF MONEY IN 
     EXCESS OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION 
     DEVELOPER IS ______________.
       `` `THE OFFICERS OF THIS INVENTION DEVELOPER HAVE 
     COLLECTIVELY OR INDIVIDUALLY BEEN AFFILIATED IN THE LAST TEN 
     (10) YEARS WITH THE FOLLOWING INVENTION DEVELOPMENT 
     COMPANIES: (LIST THE NAMES AND ADDRESSES OF ALL PREVIOUS 
     INVENTION DEVELOPMENT COMPANIES WITH WHICH THE PRINCIPAL 
     OFFICERS HAVE BEEN AFFILIATED AS OWNERS, AGENTS, OR 
     EMPLOYEES). YOU ARE ENCOURAGED TO CHECK WITH THE UNITED 
     STATES PATENT AND TRADEMARK OFFICE, THE FEDERAL TRADE 
     COMMISSION, YOUR STATE ATTORNEY GENERAL'S OFFICE, AND THE 
     BETTER BUSINESS BUREAU FOR ANY COMPLAINTS FILED AGAINST ANY 
     OF THESE COMPANIES.
       `` `YOU ARE ENCOURAGED TO CONSULT WITH AN ATTORNEY OF YOUR 
     OWN CHOOSING BEFORE SIGNING THIS CONTRACT. BY PROCEEDING 
     WITHOUT THE ADVICE OF AN ATTORNEY REGISTERED TO PRACTICE 
     BEFORE THE UNITED STATES PATENT AND TRADEMARK OFFICE, YOU 
     COULD LOSE ANY RIGHTS YOU MIGHT HAVE IN YOUR IDEA OR 
     INVENTION.'.
       ``(b) Other Requirements for Cover Notice.--The cover 
     notice shall contain the items required under subsection (a) 
     and the name, primary office address, and local office 
     address of the invention developer, and may contain no other 
     matter.
       ``(c) Disclosure of Certain Customers Not Required.--The 
     requirement in the notice set forth in subsection (a) to 
     include the `TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED 
     WITH THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS' need 
     not include information with respect to customers who have 
     purchased trade show services, research, advertising, or 
     other nonmarketing services from the invention developer, nor 
     with respect to customers who have defaulted in their 
     payments to the invention developer.

     ``Sec. 54. Reports to customer required

       ``With respect to every contract for invention development 
     services, the invention developer shall deliver to the 
     customer at the address specified in the contract, at least 
     once every 3 months throughout the term of the contract, a 
     written report that identifies the contract and includes--
       ``(1) a full, clear, and concise description of the 
     services performed to the date of the report and of the 
     services yet to be performed and names of all persons who it 
     is known will perform the services; and
       ``(2) the name and address of each person, firm, 
     corporation, or other entity to whom the subject matter of 
     the contract has been disclosed, the reason for each such 
     disclosure, the nature of the disclosure, and complete and 
     accurate summaries of all responses received as a result of 
     those disclosures.

     ``Sec. 55. Mandatory contract terms

       ``(a) Mandatory Terms.--Each contract for invention 
     development services shall include in boldface type of not 
     less than 12-point size--
       ``(1) the terms and conditions of payment and contract 
     termination rights required under section 52;
       ``(2) a statement that the customer may avoid entering into 
     the contract by not making a payment to the invention 
     developer;
       ``(3) a full, clear, and concise description of the 
     specific acts or services that the invention developer 
     undertakes to perform for the customer;
       ``(4) a statement as to whether the invention developer 
     undertakes to construct, sell, or distribute one or more 
     prototypes, models, or devices embodying the invention of the 
     customer;
       ``(5) the full name and principal place of business of the 
     invention developer and the name and principal place of 
     business of any parent, subsidiary, agent, independent 
     contractor, and any affiliated company or person who it is 
     known will perform any of the services or acts that the 
     invention developer undertakes to perform for the customer;
       ``(6) if any oral or written representation of estimated or 
     projected customer earnings is given by the invention 
     developer (or any agent, employee, officer, director, 
     partner, or independent contractor of such invention 
     developer), a statement of that estimation or projection and 
     a description of the data upon which such representation is 
     based;
       ``(7) the name and address of the custodian of all records 
     and correspondence relating to the contracted for invention 
     development services, and a statement that the invention 
     developer is required to maintain all records and 
     correspondence relating to performance of the invention 
     development services for such customer for a period of not 
     less than 2 years after expiration of the term of such 
     contract; and
       ``(8) a statement setting forth a time schedule for 
     performance of the invention development services, including 
     an estimated date in which such performance is expected to be 
     completed.
       ``(b) Invention Developer as Fiduciary.--To the extent that 
     the description of the specific acts or services affords 
     discretion to the invention developer with respect to what 
     specific acts or services shall be performed, the invention 
     developer shall be deemed a fiduciary.
       ``(c) Availability of Information.--Records and 
     correspondence described under subsection (a)(7) shall be 
     made available after 7 days written notice to the customer or 
     the representative of the customer to review and copy at a 
     reasonable cost on the invention developer's premises during 
     normal business hours.

     ``Sec. 56. Remedies

       ``(a) In General.--(1) Any contract for invention 
     development services that does not comply with the applicable 
     provisions of this chapter shall be voidable at the option of 
     the customer.
       ``(2) Any contract for invention development services 
     entered into in reliance upon any material false, fraudulent, 
     or misleading information, representation, notice, 
     or advertisement of the invention developer (or any agent, 
     employee, officer, director, partner, or independent 
     contractor of such invention developer) shall be voidable 
     at the option of the customer.
       ``(3) Any waiver by the customer of any provision of this 
     chapter shall be deemed contrary to public policy and shall 
     be void and unenforceable.
       ``(4) Any contract for invention development services which 
     provides for filing for and obtaining utility, design, or 
     plant patent protection shall be voidable at the option of 
     the customer unless the invention developer offers to perform 
     or performs such act through a person duly registered to 
     practice before, and in good standing with, the Patent and 
     Trademark Office.
       ``(b) Civil Action.--(1) Any customer who is injured by a 
     violation of this chapter by an invention developer or by any 
     material false or fraudulent statement or representation, or 
     any omission of material fact, by an invention developer (or 
     any agent, employee, director, officer, partner, or 
     independent contractor of such invention developer) or by 
     failure of an invention developer to make all the disclosures 
     required under this chapter, may recover in a civil action 
     against the invention developer (or the officers, directors, 
     or partners of such invention developer) in addition to 
     reasonable costs and attorneys' fees, the greater of--
       ``(A) $5,000; or
       ``(B) the amount of actual damages sustained by the 
     customer.
       ``(2) Notwithstanding paragraph (1), the court may increase 
     damages to not more than 3 times the amount awarded.
       ``(c) Rebuttable Presumption of Injury.--For purposes of 
     this section, substantial violation of any provision of this 
     chapter by an invention developer or execution by the 
     customer of a contract for invention development services in 
     reliance on any material false or fraudulent statements or 
     representations or omissions of material fact shall 
     establish a rebuttable presumption of injury.

     ``Sec. 57. Records of complaints

       ``(a) Release of Complaints.--The Director shall make all 
     complaints received by the United States Patent and Trademark 
     Office involving invention developers publicly available, 
     together with any response of the invention developers.
       ``(b) Request for Complaints.--The Director may request 
     complaints relating to invention development services from 
     any Federal or State agency and include such complaints in 
     the records maintained under subsection (a), together with 
     any response of the invention developers.

     ``Sec. 58. Fraudulent representation by an invention 
       developer

       ``Whoever, in providing invention development services, 
     knowingly provides any false or misleading statement, 
     representation, or omission of material fact to a customer or 
     fails to make all the disclosures required under this 
     chapter, shall be guilty of a misdemeanor and fined not more 
     than $10,000 for each offense.

     ``Sec. 59. Rule of construction

       ``Except as expressly provided in this chapter, no 
     provision of this chapter shall be construed to affect any 
     obligation, right, or remedy provided under any other Federal 
     or State law.''.

     SEC. 403. TECHNICAL AND CONFORMING AMENDMENT.

       The table of chapters for part I of title 35, United States 
     Code, is amended by adding after the item relating to chapter 
     4 the following:

``5. Invention Development Services...........................51''.....

     SEC. 404. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect 60 days after the date of the enactment of this Act.
               TITLE V--IMPROVED REEXAMINATION PROCEDURES

     SEC. 501. SHORT TITLE.

       This title may be cited as the ``Improved Reexamination 
     Procedures Act''.

     SEC. 502. DEFINITIONS.

       Section 100 of title 35, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(e) The term `third-party requester' means a person 
     requesting reexamination under section 302 of this title who 
     is not the patent owner.''.

[[Page H1654]]

     SEC. 503. REEXAMINATION PROCEDURES.

       (a) Request for Reexamination.--Section 302 of title 35, 
     United States Code, is amended to read as follows:

     ``Sec. 302. Request for reexamination

       ``Any person at any time may file a request for 
     reexamination by the Office of a patent on the basis of any 
     prior art cited under the provisions of section 301 of this 
     title or on the basis of the requirements of section 112 of 
     this title other than the requirement to set forth the best 
     mode of carrying out the invention. The request must be in 
     writing, must include the identity of the real party in 
     interest, and must be accompanied by payment of a 
     reexamination fee established by the Director pursuant to the 
     provisions of section 41 of this title. The request must set 
     forth the pertinency and manner of applying cited prior art 
     to every claim for which reexamination is requested or the 
     manner in which the patent specification or claims fail to 
     comply with the requirements of section 112 of this title. 
     Unless the requesting person is the owner of the patent, 
     the Director promptly shall send a copy of the request to 
     the owner of record of the patent.''.
       (b) Determination of Issue by Director.--Section 303 of 
     title 35, United States Code, is amended to read as follows:

     ``Sec. 303. Determination of issue by Director

       ``(a) Reexamination.--Not later than 3 months after the 
     filing of a request for reexamination under the provisions of 
     section 302 of this title, the Director shall determine 
     whether a substantial new question of patentability affecting 
     any claim of the patent concerned is raised by the request, 
     with or without consideration of other patents or printed 
     publications. On the Director's initiative, at any time, the 
     Director may determine whether a substantial new question of 
     patentability is raised by any other patent or publication or 
     by the failure of the patent specification or claims of a 
     patent to comply with the requirements of section 112 of this 
     title other than the best mode requirement described in 
     section 302.
       ``(b) Record.--A record of the Director's determination 
     under subsection (a) shall be placed in the official file of 
     the patent, and a copy shall be promptly given or mailed to 
     the owner of record of the patent and to the third-party 
     requester, if any.
       ``(c) Final Decision.--A determination by the Director 
     pursuant to subsection (a) shall be final and nonappealable. 
     Upon a determination that no substantial new question of 
     patentability has been raised, the Director may refund a 
     portion of the reexamination fee required under section 302 
     of this title.''.
       (c) Reexamination Order by Director.--Section 304 of title 
     35, United States Code, is amended to read as follows:

     ``Sec. 304. Reexamination order by Director

       ``If, in a determination made under the provisions of 
     section 303(a) of this title, the Director finds that a 
     substantial new question of patentability affecting a claim 
     of a patent is raised, the determination shall include an 
     order for reexamination of the patent for resolution of the 
     question. The order may be accompanied by the initial action 
     of the Patent and Trademark Office on the merits of the 
     reexamination conducted in accordance with section 305 of 
     this title.''.
       (d) Conduct of Reexamination Proceedings.--Section 305 of 
     title 35, United States Code, is amended to read as follows:

     ``Sec. 305. Conduct of reexamination proceedings

       ``(a) In General.--Subject to subsection (b), reexamination 
     shall be conducted according to the procedures established 
     for initial examination under the provisions of sections 132 
     and 133 of this title. In any reexamination proceeding under 
     this chapter, the patent owner shall be permitted to propose 
     any amendment to the patent and a new claim or claims, except 
     that no proposed amended or new claim enlarging the scope of 
     the claims of the patent shall be permitted.
       ``(b) Response.--(1) This subsection shall apply to any 
     reexamination proceeding in which the order for reexamination 
     is based upon a request by a third-party requester.
       ``(2) With the exception of the reexamination request, any 
     document filed by either the patent owner or the third-party 
     requester shall be served on the other party.
       ``(3) If the patent owner files a response to any action on 
     the merits by the Patent and Trademark Office, the third-
     party requester shall have 1 opportunity to file written 
     comments within a reasonable period not less than 1 month 
     after the date of service of the patent owner's response. 
     Written comments provided under this paragraph shall be 
     limited to issues covered by action of the Patent and 
     Trademark Office or the patent owner's response.
       ``(c) Special Dispatch.--Unless otherwise provided by the 
     Director for good cause, all reexamination proceedings under 
     this section, including any appeal to the Board of Patent 
     Appeals and Interferences, shall be conducted with special 
     dispatch within the Office.''.
       (e) Appeal.--Section 306 of title 35, United States Code, 
     is amended to read as follows:

     ``Sec. 306. Appeal

       ``(a) Patent Owner.--The patent owner involved in a 
     reexamination proceeding under this chapter--
       ``(1) may appeal under the provisions of section 134 of 
     this title, and may appeal under the provisions of sections 
     141 through 144 of this title, with respect to any decision 
     adverse to the patentability of any original or proposed 
     amended or new claim of the patent; and
       ``(2) may be a party to any appeal taken by a third-party 
     requester pursuant to subsection (b) of this section.
       ``(b) Third-Party Requester.--A third-party requester in a 
     reexamination proceeding--
       ``(1) may appeal under the provisions of section 134 of 
     this title, and may appeal under the provisions of sections 
     141 through 144 of this title, with respect to any final 
     decision in the reexamination proceeding that is favorable to 
     the patentability of any original or proposed amended or new 
     claim of the patent; and
       ``(2) may be a party to any appeal taken by the patent 
     owner with respect to a decision in the reexamination 
     proceeding, subject to subsection (c) of this section.
       ``(c) Participation as Party.--(1) A third-party requester 
     who, under the provisions of sections 141 through 144 of this 
     title, files a notice of appeal, or who participates as a 
     party to an appeal by the patent owner, with respect to a 
     reexamination proceeding, is estopped from asserting at a 
     later time, in any forum, the invalidity of any claim 
     determined to be patentable on that appeal on any ground 
     which the third-party requester raised or could have raised 
     during the reexamination proceeding. This subsection does not 
     prevent the assertion of invalidity based on newly discovered 
     prior art unavailable to the third-party requester and the 
     Patent and Trademark Office at the time of the reexamination 
     proceeding.
       ``(2) For purposes of paragraph (1), a third-party 
     requester is deemed not to have participated as a party to an 
     appeal by the patent owner unless, not later than 20 days 
     after the patent owner has filed a notice of appeal, the 
     third-party requester files notice with the Commissioner 
     electing to participate.''.
       (f) Reexamination Prohibited.--(1) Chapter 30 of title 35, 
     United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 308. Reexamination prohibited

       ``(a) Order for Reexamination.--Notwithstanding any 
     provision of this chapter, once an order for reexamination of 
     a patent has been issued under section 304 of this title, 
     neither the patent owner nor the third-party requester, if 
     any, nor privies of either, may, unless authorized by the 
     Director, file a subsequent request for reexamination of the 
     patent until a certificate relating to that reexamination 
     proceeding is issued and published under section 307 of this 
     title.
       ``(b) Final Decision.--Once a final decision has been 
     entered against a party in a civil action arising in whole or 
     in part under section 1338 of title 28 that the party has not 
     sustained its burden of proving the invalidity of any patent 
     claim in suit, or if a final decision in a reexamination 
     proceeding instituted by a third-party requester is favorable 
     to the patentability or any original or proposed amended or 
     new claim of the patent and such decision is not appealed by 
     the third-party requester under section 306(b), then neither 
     that party nor its privies may thereafter request 
     reexamination of any such patent claim on the basis of issues 
     which that party or its privies raised or could have raised 
     in such civil action or reexamination proceeding. This 
     subsection does not prevent the assertion of invalidity based 
     on newly discovered prior art unavailable to the party or 
     privies and the Office at the time of the civil action or 
     reexamination proceeding, as the case may be.''.
       (2) The table of sections for chapter 30 of title 35, 
     United States Code, is amended by adding at the end the 
     following:

``308. Reexamination prohibited.''.

       (g) Report to Congress.--Within 4 years after the effective 
     date of this title, the Director of the United States Patent 
     and Trademark Office shall submit to the Congress a report 
     evaluating whether the reexamination proceedings established 
     under the amendments made by this title are inequitable to 
     any of the parties in interest and, if so, the report shall 
     contain recommendations for changes to the amendments made by 
     this title to remove such inequity.

     SEC. 504. CONFORMING AMENDMENTS.

       (a) Board of Patent Appeals and Interferences.--The first 
     sentence of section 6(b) of title 35, United States Code, as 
     amended by section 117 of this Act, is amended to read as 
     follows: ``The Board of Patent Appeals and Interferences 
     shall, on written appeal of an applicant, or a patent owner 
     or a third-party requester in a reexamination proceeding, 
     review adverse decisions of examiners upon applications 
     for patents and decisions of examiners in reexamination 
     proceedings, and shall determine priority and 
     patentability of invention in interferences declared under 
     section 135(a) of this title.''.
       (b) Patent Fees; Patent and Trademark Search Systems.--
     Section 41(a)(7) of title 35, United States Code, is amended 
     to read as follows:
       ``(7) On filing each petition for the revival of an 
     unintentionally abandoned application for a patent, for the 
     unintentionally delayed payment of the fee for issuing each 
     patent, or for an unintentionally delayed response by the 
     patent owner in a reexamination proceeding, $1,250, unless 
     the petition is filed under section 133 or 151 of this title, 
     in which case the fee shall be $110.''.
       (c) Appeal to the Board of Patent Appeals and 
     Interferences.--Section 134 of title 35, United States Code, 
     is amended to read as follows:

     ``Sec. 134. Appeal to the Board of Patent Appeals and 
       Interferences

       ``(a) Patent Applicant.--An applicant for a patent, any of 
     whose claims has been twice rejected, may appeal from the 
     decision of the primary examiner to the Board of Patent 
     Appeals and Interferences, having once paid the fee for such 
     appeal.
       ``(b) Patent Owner.--A patent owner in a reexamination 
     proceeding may appeal from the final rejection of any claim 
     by the primary examiner to the Board of Patent Appeals and

[[Page H1655]]

     Interferences, having once paid the fee for such appeal.
       ``(c) Third-Party.--A third-party requester may appeal to 
     the Board of Patent Appeals and Interferences from the final 
     decision of the primary examiner favorable to the 
     patentability of any original or proposed amended or new 
     claim of a patent, having once paid the fee for such 
     appeal.''.
       (d) Appeal to Court of Appeals for the Federal Circuit.--
     Section 141 of title 35, United States Code, is amended by 
     amending the first sentence to read as follows: ``An 
     applicant, a patent owner, or a third-party requester, 
     dissatisfied with the final decision in an appeal to the 
     Board of Patent Appeals and Interferences under section 134 
     of this title, may appeal the decision to the United States 
     Court of Appeals for the Federal Circuit.''.
       (e) Proceedings on Appeal.--Section 143 of title 35, United 
     States Code, is amended by amending the third sentence to 
     read as follows: ``In ex parte and reexamination cases, the 
     Director shall submit to the court in writing the grounds for 
     the decision of the United States Patent and Trademark 
     Office, addressing all the issues involved in the appeal.''.
       (f) Civil Action To Obtain Patent.--Section 145 of title 
     35, United States Code, is amended in the first sentence by 
     inserting ``(a)'' after ``section 134''.

     SEC. 505. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect on the date that is 6 months after the date of the 
     enactment of this Act and shall apply to all reexamination 
     requests filed on or after such date.
                  TITLE VI--MISCELLANEOUS IMPROVEMENTS

     SEC. 601. PROVISIONAL APPLICATIONS.

       (a) Abandonment.--Section 111(b)(5) of title 35, United 
     States Code, is amended to read as follows:
       ``(5) Abandonment.--Notwithstanding the absence of a claim, 
     upon timely request and as prescribed by the Director, a 
     provisional application may be treated as an application 
     filed under subsection (a). If no such request is made, the 
     provisional application shall be regarded as abandoned 12 
     months after the filing date of such application and shall 
     not be subject to revival thereafter.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     applies to any provisional application filed on or after June 
     8, 1995.

     SEC. 602. INTERNATIONAL APPLICATIONS.

       Section 119 of title 35, United States Code, is amended--
       (1) in subsection (a), by inserting ``or in a WTO member 
     country,'' after ``or to citizens of the United States,''; 
     and
       (2) by adding at the end the following new subsections:
       ``(f) Applications for Plant Breeder's Rights.--
     Applications for plant breeder's rights filed in a WTO member 
     country (or in a UPOV Contracting Party) shall have the same 
     effect for the purpose of the right of priority under 
     subsections (a) through (c) of this section as applications 
     for patents, subject to the same conditions and requirements 
     of this section as apply to applications for patents.
       ``(g) Definitions.--As used in this section--
       ``(1) the term `WTO member country' has the same meaning as 
     the term is defined in section 104(b)(2) of this title; and
       ``(2) the term `UPOV Contracting Party' means a member of 
     the International Convention for the Protection of New 
     Varieties of Plants.''.

     SEC. 603. PLANT PATENTS.

       (a) Tuber Propagated Plants.--Section 161 of title 35, 
     United States Code, is amended by striking ``a tuber 
     propagated plant or''.
       (b) Rights in Plant Patents.--The text of section 163 of 
     title 35, United States Code, is amended to read as follows: 
     ``In the case of a plant patent, the grant shall include the 
     right to exclude others from asexually reproducing the plant, 
     and from using, offering for sale, or selling the plant so 
     reproduced, or any of its parts, throughout the United 
     States, or from importing the plant so reproduced, or any 
     parts thereof, into the United States.''.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply on the date of the enactment of this Act. The 
     amendment made by subsection (b) shall apply to any plant 
     patent issued on or after the date of the enactment of this 
     Act.

     SEC. 604. ELECTRONIC FILING.

       Section 22 of title 35, United States Code, is amended by 
     striking ``printed or typewritten'' and inserting ``printed, 
     typewritten, or on an electronic medium''.

     SEC. 605. DIVISIONAL APPLICATIONS.

       Section 121 of title 35, United States Code, is amended--
       (1) in the first sentence by striking ``If'' and inserting 
     ``(a) If''; and
       (2) by adding at the end the following new subsections:
       ``(b) In a case in which restriction is required on the 
     ground that two or more independent and distinct inventions 
     are claimed in an application, the applicant shall be 
     entitled to submit an examination fee and request examination 
     for each independent and distinct invention in excess of one. 
     The examination fee shall be equal to the filing fee, 
     including excess claims fees, that would have applied had the 
     claims corresponding to the asserted independent and distinct 
     inventions been presented in a separate application for 
     patent. For each of the independent and distinct inventions 
     in excess of one for which the applicant pays an examination 
     fee within two months after the requirement for restriction, 
     the Director shall cause an examination to be made and a 
     notification of rejection or written notice of allowance 
     provided to the applicant within the time period specified in 
     section 154(b)(1)(B)(i) of this title for the original 
     application. Failure to meet this or any other time limit set 
     forth in section 154(b)(1)(B) of this title shall be treated 
     as an unusual administrative delay under section 
     154(b)(1)(A)(iv) of this title.
       ``(c) An applicant who requests reconsideration of a 
     requirement for restriction under this section and submits 
     examination fees pursuant to such requirement shall, if the 
     requirement is determined to be improper, be entitled to a 
     refund of any examination fees determined to have been paid 
     pursuant to the requirement.''.

  The CHAIRMAN. During consideration of the bill for amendment, the 
Chair may accord priority in recognition to a Member offering an 
amendment that he has printed in the designated place in the 
Congressional Record. Those amendments will be considered as read.
  The Chairman of the Committee of the Whole may postpone until a time 
during further consideration in the Committee of the Whole a request 
for a recorded vote on any amendment and may reduce to not less than 5 
minutes the time for voting by electronic device on any postponed 
question that immediately follows another vote by electronic device, 
without intervening business, provided that the time for voting by 
electronic device on the first in a series of questions shall not be 
less than 15 minutes.
  Are there any amendments?


                     Amendment Offered by Mr. Coble

  Mr. COBLE. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment offered by Mr. Coble:
       Page 3, insert in the table of contents after the item 
     relating to section 149 the following:

   Subtitle D--Under Secretary of Commerce for Intellectual Property 
                                 Policy

Sec. 151. Under Secretary of Commerce for Intellectual Property Policy.
Sec. 152. Relationship with existing authorities.

       Page 3, in the item relating to section 402, strike 
     ``development'' and insert ``promotion''.
       Page 5, line 12, insert ``(1)'' before ``For purposes''.
       Page 5, insert after line 15 the following:
       ``(2) As used in this title, the term `Under Secretary' 
     means the Under Secretary of Commerce for Intellectual 
     Property Policy.
       Page 5, line 21, strike ``under'' and insert ``subject 
     to''.
       Page 6, line 1, strike ``conduct'' and insert ``, in 
     support of the Under Secretary, assist with''.
       Page 6, line 4, strike ``, the administration'' and all 
     that follows through line 8 and insert a semicolon.
       Page 6, line 9, strike ``authorize or conduct studies and 
     programs cooperatively'' and insert ``, in support of the 
     Under Secretary, assist with studies and programs conducted 
     cooperatively''.
       Page 7, strike line 23 and all that follows through page 8, 
     line 3, and insert the following:
       ``(5) may establish regulations, not inconsistent with law, 
     which--
       ``(A) shall govern the conduct of proceedings in the 
     Office;
       Page 9, line 1, insert ``shall'' after ``(E)''.
       Page 9, after line 6, insert the following:
       ``(F) provide for the development of a performance-based 
     process that includes quantitative and qualitative measures 
     and standards for evaluating cost-effectiveness and is 
     consistent with the principles of impartiality and 
     competitiveness;
       Page 11, strike lines 15 through 17 and redesignate the 
     succeeding paragraphs accordingly.
       Page 11, add the following after line 25:

     ``In exercising the Director's powers under paragraphs (6) 
     and (7)(A), the Director shall consult with the Administrator 
     of General Services when the Director determines that it is 
     practicable, efficient, and cost-effective to do so.''.
       Page 13, strike lines 4 through 18 and redesignate the 
     succeeding subparagraphs accordingly.
       Page 14, strike line 18 and all that follows through page 
     15, line 7, and insert the following:
       ``(5) Compensation.--The Director shall be paid an annual 
     rate of basic pay not to exceed the maximum rate of basic pay 
     of the Senior Executive Service established under section 
     5382 of title 5, including any applicable locality-based 
     comparability payment that may be authorized under section 
     5304(h)(2)(C) of title 5. In addition, the Director may 
     receive a bonus in an amount up to, but not in excess of, 50 
     percent of such annual rate of basic pay, based upon an 
     evaluation by the Secretary of Commerce of the Director's 
     performance as defined in an annual performance agreement 
     between the Director and the Secretary. The annual 
     performance agreement shall incorporate measurable 
     organization and individual goals in key operational areas as 
     delineated in an annual performance plan agreed to by the 
     Director

[[Page H1656]]

     and the Secretary. Payment of a bonus under this paragraph 
     may be made to the Director only to the extent that such 
     payment does not cause the Director's total aggregate 
     compensation in a calendar year to equal or exceed the amount 
     of the salary of the President under section 102 of title 3.
       Page 16, line 2, strike ``policy and''.
       Page 16, insert the following after line 20:
       ``(3) Training of examiners.--The Patent and Trademark 
     Office shall develop an incentive program to retain as 
     employees patent and trademark examiners of the primary 
     examiner grade or higher who are eligible for retirement, for 
     the sole purpose of training patent and trademark 
     examiners.''.
       Page 21, line 13, insert ``including inventors,'' after 
     ``Office,''.
       Page 21, line 20, insert after ``call of the chair'' the 
     following: ``, not less than every 6 months,''.
       Page 27, line 9, insert after the period close quotation 
     marks and a second period.
       Page 27, strike line 10 and all that follows through page 
     28, line 14.
       Page 32, insert the following immediately before line 10 
     and redesignate the succeeding paragraphs accordingly:
       (5) Section 41(h) of title 35, United States Code, is 
     amended by striking ``Commissioner of Patents and 
     Trademarks'' and inserting ``Director''.
       Page 33, line 7, strike ``Title'' and insert ``(A) Except 
     as provided in subparagraph (B), title''.
       Page 33, insert the following after line 9:
       (B) Chapter 17 of title 35, United States Code, is amended 
     by striking ``Commissioner'' each place it appears and 
     inserting ``Commissioner of Patents''.
       Page 33, insert the following after line 12:
       (12) Section 157(d) of title 35, United States Code, is 
     amended by striking ``Secretary of Commerce'' and inserting 
     ``Director''.
       (13) Section 181 of title 35, United States Code, is 
     amended in the third paragraph by striking ``Secretary of 
     Commerce under rules prescribed by him'' and inserting 
     ``Director under rules prescribed by the Patent and Trademark 
     Office''.
       (14) Section 188 of title 35, United States Code, is 
     amended by striking ``Secretary of Commerce'' and inserting 
     ``Patent and Trademark Office''.
       (15) Section 202(a) of title 35, United States Code, is 
     amended by striking ``iv)'' and inserting ``(iv)''.
       Page 46, add the following after line 23:
   Subtitle D--Under Secretary of Commerce for Intellectual Property 
                                 Policy

     SEC. 151. UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL 
                   PROPERTY POLICY.

       (a) Appointment.--There shall be within the Department of 
     Commerce an Under Secretary of Commerce for Intellectual 
     Property Policy, who shall be appointed by the President, by 
     and with the advice and consent of the Senate. On or after 
     the effective date of this title, the President may appoint 
     an individual to serve as the Under Secretary until the date 
     on which an Under Secretary qualifies under this subsection. 
     The President shall not make more than 1 appointment under 
     the preceding sentence.
       (b) Duties.--The Under Secretary of Commerce for 
     Intellectual Property Policy, under the direction of the 
     Secretary of Commerce, shall perform the following functions 
     with respect to intellectual property policy:
       (1) In coordination with the Under Secretary of Commerce 
     for International Trade, promote exports of goods and 
     services of the United States industries that rely on 
     intellectual property.
       (2) Advise the President, through the Secretary of 
     Commerce, on national and international intellectual property 
     policy issues.
       (3) Advise Federal departments and agencies on matters of 
     intellectual property protection in other countries.
       (4) Provide guidance, as appropriate, with respect to 
     proposals by agencies to assist foreign governments and 
     international intergovernmental organizations on matters of 
     intellectual property protection.
       (5) Conduct programs and studies related to the 
     effectiveness of intellectual property protection throughout 
     the world.
       (6) Advise the Secretary of Commerce on programs and 
     studies relating to intellectual property policy that are 
     conducted, or authorized to be conducted, cooperatively with 
     foreign patent and trademark offices and international 
     intergovernmental organizations.
       (7) In coordination with the Department of State, conduct 
     programs and studies cooperatively with foreign intellectual 
     property offices and international intergovernmental 
     organizations.
       (c) Deputy Under Secretaries.--To assist the Under 
     Secretary of Commerce for Intellectual Property Policy, the 
     Secretary of Commerce shall appoint a Deputy Under Secretary 
     for Patent Policy and a Deputy Under Secretary for Trademark 
     Policy as members of the Senior Executive Service in 
     accordance with the provisions of title 5, United States 
     Code. The Deputy Under Secretaries shall perform such duties 
     and functions as the Under Secretary for Intellectual 
     Property Policy shall prescribe.
       (d) Compensation.--Section 5314 of title 5, United States 
     Code, is amended by adding at the end the following:
       ``Under Secretary of Commerce for Intellectual Property 
     Policy.''.
       (e) Funding.--Funds available to the United States Patent 
     and Trademark Office shall be made available for all expenses 
     of the office of the Under Secretary for Intellectual 
     Property Policy, subject to prior approval in appropriations 
     Acts. Amounts made available under this subsection shall not 
     exceed 2 percent of the projected annual revenues of the 
     Patent and Trademark Office from fees for services and goods 
     of that Office. The Secretary of Commerce shall determine the 
     budget requirements of the office of the Under Secretary for 
     Intellectual Property Policy.

     SEC. 152. RELATIONSHIP WITH EXISTING AUTHORITIES.

       Nothing in section 151 shall derogate from the duties of 
     the United States Trade Representative as set forth in 
     section 141 of the Trade Act of 1974 (19 U.S.C. 2171).
       Page 48, insert the following after line 18:
       ``(B) An application that is in the process of being 
     reviewed by the Atomic Energy Commission, the Department of 
     Defense, or a defense agency pursuant to section 181 of this 
     title shall not be published until the Director has been 
     notified by the Atomic Energy Commission, the Secretary of 
     Defense, or the chief officer of the defense agency, as the 
     case may be, that in the opinion of the Atomic Energy 
     Commission, the Secretary of Defense, or such chief officer, 
     as the case may be, publication or disclosure of the 
     invention by the granting of a patent would not be 
     detrimental to the national security of the United States.''.
       Page 48, line 19, strike ``(B)'' and insert ``(C)''.
       Page 48, strike line 22 and all that follows through page 
     49, line 2, and insert the following:
       ``(D)(i) Upon the request at the time of filing by an 
     applicant that is a small business concern or an independent 
     inventor entitled to reduced fees under section 41(h)(1) of 
     this title, the application shall not be published in 
     accordance with paragraph (1) until 3 months after the 
     Director makes a second notification to such applicant on the 
     merits of the application under section 132 of this title. 
     The Director may require applicants that no longer have the 
     status of a small business concern or an independent inventor 
     to so notify the Director not later than 15 months after the 
     earliest filing date for which a benefit is sought under this 
     title.
       Page 49, line 7, strike ``, 121,''.
       Page 49, insert after line 8 the following:
       ``(iii) Applications asserting the benefit of an earlier 
     application under section 121 shall not be eligible for a 
     request pursuant to this subparagraph unless filed within 2 
     months after the date on which the Director required the 
     earlier application to be restricted to 1 of 2 or more 
     inventions in the earlier application.
       Page 49, line 9, strike ``(iii)'' and insert ``(iv)''.
       Page 49, line 13, strike ``(iv)'' and insert ``(v)''.
       Page 49, line 14, insert ``nominal'' before ``fees''.
       Page 49, line 16, strike ``(D)'' and insert ``(E)''.
       Page 49, line 17, strike ``(C)'' and insert ``(D)''.
       Page 50, line 2, strike ``(C)'' and insert ``(D)''.
       Page 50, after line 2, insert the following:
       ``(F) No fee established under this section shall be 
     collected nor shall be available for spending without prior 
     authorization in appropriations Acts.''.
       Page 58, strike lines 1 through 17 and insert the 
     following:
       (11) Section 135(b) of title 35, United States Code, is 
     amended to read as follows:
       ``(b)(1) A claim which is the same as, or for the same or 
     substantially the same subject matter as, a claim of an 
     issued patent may only be made in an application if--
       ``(A) such a claim is made prior to 1 year after the date 
     on which the patent was granted; and
       ``(B) the applicant files evidence which demonstrates that 
     the applicant is prima facie entitled to a judgment relative 
     to the patent.
       ``(2)(A) A claim which is the same as, or for the same or 
     substantially the same subject matter as, a claim of a 
     published application may only be made in an application 
     filed after the date of publication of the published 
     application if, except in a case to which subparagraph (B) 
     applies--
       ``(i) such a claim is made prior to 1 year after the date 
     of publication of the published application; and
       ``(ii) the applicant of the application filed after the 
     date of publication of the published application files 
     evidence that demonstrates that the applicant is prima facie 
     entitled to a judgment relative to the published application.
       ``(B) If the applicant of the application filed after the 
     date of publication of the published application alleges that 
     the invention claimed in the published application was 
     derived from that applicant, such a claim may only be made if 
     that applicant files evidence which demonstrates that the 
     applicant is prima facie entitled to a judgment relative to 
     the published application.''.
       Page 59, line 7, strike ``appellate''.
       Page 61, strike lines 5 through 9 and redesignate 
     subclauses (III) through (V) as subclauses (II) through (IV), 
     respectively.
       Page 62, insert the following after line 6:
       ``(B) The period of extension of the term of a patent under 
     clause (iv) of paragraph (1)(A), which is based on the 
     failure of the Patent and Trademark Office to meet the 
     criteria set forth in clause (v) of paragraph (1)(B), shall 
     be reduced by the cumulative total of any periods of time 
     that an applicant takes to respond in excess of 3 months

[[Page H1657]]

     after the date on which the Patent and Trademark Office makes 
     any rejection, objection, argument, or other request.
       Page 62, line 7, strike ``(B)'' and insert ``(C)''.
       Page 62, line 19, strike ``(C)'' and insert ``(D)''.
       Page 63, insert the following after line 4:
       Section 132 of title 35, United States Code, is amended--
       (1) in the first sentence by striking ``Whenever'' and 
     inserting ``(a) Whenever''; and
       (2) by adding at the end the following:
       Page 63, strike lines 5 through 7 and insert the following:
       ``(b) The Director shall prescribe regulations to provide 
     for the further limited examination of applications for 
     patent at the request of the applicant.
       Page 63, line 9, strike ``reexamination'' and insert 
     ``examination''.
       Page 63, strike lines 11 and 12 and insert the following:

     qualify for reduced fees under section 41(h)(1) of this 
     title.''
       Page 63, line 21, insert ``secular or'' after 
     ``succeeding''.
       Page 64, lines 2 and 3, strike ``an applicant who has been 
     accorded the status of independent inventor under section 
     41(h)'' and insert ``applicants who are independent inventors 
     entitled to reduced fees under section 41(h)(1)''.
       Page 71, line 8, strike ``DEVELOPMENT'' and insert 
     ``PROMOTION''.
       Page 71, line 11, strike ``DEVELOPMENT'' and insert 
     ``PROMOTION''.
       Page 71, in the item relating to section 58 in the matter 
     after line 12, strike ``developer'' and insert ``promoter''.
       Page 71, line 15, strike ``development'' and insert 
     ``promotion''.
       Page 71, lines 16 and 17, strike ``developer'' and insert 
     ``promoter''.
       Page 71, line 17, strike ``development'' and inserting 
     ``promotion''.
       Page 71, strike line 20 and all that follows through page 
     72, line 1, and insert the following: ``partnership, 
     corporation, or other entity who enters into a financial 
     relationship or a contract''.
       Page 72, line 22, strike ``development'' and insert 
     ``promotion''.
       Pages 73 through 84, strike ``invention developer'' and 
     ``INVENTION DEVELOPER'' each place it appears and insert 
     ``invention promoter'' and ``INVENTION PROMOTER'', 
     respectively.
       Pages 73 through 84, strike ``invention development'' and 
     ``INVENTION DEVELOPMENT'' each place it appears and insert 
     ``invention promotion'' and ``INVENTION PROMOTION'', 
     respectively.
       Page 74, line 1, strike ``Developer'' and insert 
     ``Promoter''.
       Page 74, line 22, strike ``developer'' and insert 
     ``invention promoter''.
       Page 77, line 1, strike ``DEVELOPER'S'' and insert 
     ``PROMOTER'S''.
       Page 81, line 7, strike ``Developer'' and insert 
     ``Promoter''.
       Page 81, line 16, strike ``developer's'' and insert 
     ``promoter's.
       Page 83, lines 19 and 21, and page 84, line 2, strike 
     ``developers'' and insert ``promoters''.
       Page 84, lines 3 and 4, strike ``developer'' and insert 
     ``promoter''.
       Page 84, in the matter after line 19, strike 
     ``Development'' and insert ``Promotion''.
       Page 85, line 16, strike ``Any'' and insert ``(a) Request 
     for Reexamination.--''.
       Page 85, line 19, strike ``or on the basis of'' and all 
     that follows through ``invention'' on line 21.
       Page 86, line 2, strike ``or the'' and all that follows 
     through line 4 and insert a period.
       Page 86, line 7, strike the quotation marks and second 
     period and insert the following: ``If multiple requests for 
     reexamination of a patent are filed, they shall be 
     consolidated by the Office into a single reexamination, if a 
     reexamination is ordered.
       ``(b) Collection and Availability of Fees.--No fee for 
     reexamination shall be collected nor shall be available for 
     spending without prior authorization in appropriations 
     Acts.''.
       Page 86, line 21, strike ``or by the failure'' and all that 
     follows through line 24 and insert a period.
       Page 89, line 8, insert before the quotation marks the 
     following: ``Special dispatch shall not be construed to limit 
     the patent owner's ability to extend the time for taking 
     action by payment of the fees set forth in section 41(a)(8) 
     of this title.''.
       Page 95, line 13, strike ``6 months'' and insert ``1 
     year''.
       Page 95, line 15, insert ``effective'' after ``such''.
       Page 95, line 25, strike ``If'' and insert ``Subject to 
     section 119(e)(3) of this title, if''.
       Page 98, line 2, strike ``Section'' and insert ``(a) In 
     General.--Section''.
       Page 99, add the following after line 8:
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date that is 2 years after the date 
     of the enactment of this Act and shall apply to applications 
     for patent filed on or after such effective date.

     SEC. 606. PUBLICATIONS.

       Section 11 of title 35, United States Code, is amended by 
     adding at the end the following:
       ``(c) The Patent and Trademark Office shall make available 
     for public inspection during regular business hours all 
     solicitations issued by the Office for contracts for goods or 
     services, and all contracts entered into by the Office for 
     goods or services.''.
       Amend the table of contents accordingly.

  Mr. COBLE. Mr. Chairman, generally on this Hill the Committee on the 
Judiciary is not known as the most bipartisan committee here, but there 
is an exception which has been struck to that belief on this bill. I 
would be remiss prior to putting my oars into the water and commencing 
this voyage if I did not recognize a few of my colleagues. Start naming 
Members and I will inevitably omit someone who should have been named, 
but I want to mention the gentleman from Michigan [Mr. Conyers], the 
gentleman from Massachusetts [Mr. Frank], the gentleman from 
Massachusetts [Mr. Delahunt], the gentlewoman from California [Ms. 
Lofgren], of course, our chairman, the gentleman from Illinois [Mr. 
Hyde], the gentleman from Roanoke Valley, VA [Mr. Goodlatte], the 
gentleman from Indiana [Mr. Pease] has been helpful, the gentleman from 
Utah [Mr. Cannon]; others I am sure, as well. But we have done this in 
a bipartisan manner, Mr. Chairman. I think we have crafted a bill, 
perfect; no, there is not much perfect done around this town or in this 
world, but a good, solid bill that will serve Americans well.
  I rise in support of the manager's amendment to H.R. 400, Mr. 
Chairman. Some of these amendments are technical. Most of them have 
been created for the benefits of small businesses defined as those who 
employ under 500 workers, and independent inventors, who are deserving 
of some extra protection in our patent system. The manager's amendment 
took an extremely long time to develop, and it strikes some very 
crucial compromises by granting additional protection while still 
preventing abuse.
  Inventors have complained that the Patent and Trademark Office has 
not been able to spend its valuable resources on the most important 
function of the office, that is, granting patents and registering 
trademarks with quality review in the shortest time possible. The 
manager's amendment separates completely policy functions from 
operational functions. Policy functions are left to the Department of 
Commerce, giving patent and trademark policy a necessary representative 
at the President's table, while management and operational functions, 
day to day, if you will, are vested completely in the PTO. This will 
allow the PTO to be led by a director who will have only one mission: 
to process and adjudicate efficiently and fairly the important 
Government functions of granting and issuing patents and registering 
trademarks.
  As we know, Mr. Chairman, the Committee on the Judiciary has been 
working with several groups to reach a compromise on special 
protections for small businesses and independent inventors from 
publication. We are offering a compromise which will grant protection 
while still preventing the practice of submarine patenting. While 
publication has many benefits for both independent inventors and small 
businesses, the manager's amendment gives these groups a choice over 
whether or not they wish to be published. It will effectively exempt 
independent inventors and small businesses from publication by 
deferring publication until 3 months after the inventor has received at 
least two determinations on the merits of each invention claimed, on 
whether or not their patent will issue.
  At this stage, the applicant knows whether or not he or she will 
receive a patent, in which case the patent would be published upon 
grant anyway under today's law. If it will not be granted, the 
applicant then may withdraw his application and avoid publication and 
protect the invention by another means.
  Mr. Chairman, this is not a perfect exemption for opponents of this 
bill, nor is it a perfect exemption for supporters; rather, it is a 
compromise. If the applicant purposely tries to delay an application 
between the first and second office action, he or she will, 
unfortunately, succeed. If the PTO is slow and does not issue a second 
office action within 18 months, publication will still not occur until 
3 months after that second action. The PTO has indicated that after two 
office actions of those who wish to proceed, 97 percent are granted in 
short order and, therefore, published. This should move the date of 
publication to almost exactly the time when publication would occur 
today.

[[Page H1658]]

  However, those who want to purposely procrastinate for long periods 
of time and frustrate the prosecution of their patent applications will 
be published and, therefore, ultimately unable to submarine.
  Another provision concerned the so-called gift provision contained in 
the bill. While the provisions contained in the bill did not grant the 
PTO any authority it does not already possess, we have deleted it from 
the bill. The PTO can accept a gift today.
  The CHAIRMAN. The time of the gentleman from North Carolina [Mr. 
Coble] has expired.
  (By unanimous consent, Mr. Coble was allowed to proceed for 3 
additional minutes.)
  Mr. COBLE. Mr. Chairman, the manager's amendment also adopts two 
measures included in the bill introduced by the gentleman from 
California [Mr. Hunter] which provide for an incentive program to 
better train examiners. While the current bill ensures that the 
advisory board for the new PTO should be composed of diverse users of 
the office in order to help Congress conduct more effective oversight, 
the manager's amendment expressly requires that inventors be included 
as members.
  The Committee on Appropriations has expressed concern over the 
borrowing authority in the bill, as have some critics, although many 
misunderstood how the authority works under the control of Congress. 
Much ado has been made about a procedure which would offer a small 
possibility for the new PTO to borrow money instead of having to raise 
fees on inventors to pay for any high-technology future products. 
Accordingly, our amendment strikes the borrowing authority.
  In further guaranteeing diligent inventors at least 17 years of 
patent term from the time of issuance, the manager's amendment allows 
inventors adequate time to respond to inquiries from the PTO regarding 
their applications.
  Small businesses and independent inventors have been concerned that 
the new PTO may not recognize the longstanding reduction in fees 
applicable to these constituencies. The manager's amendment requires 
that the agency continue to provide that small businesses and 
independent inventors pay half price for their patent applications.
  Independent inventors have claimed that the scope of the 
reexamination provisions contained in H.R. 400 is too broad. This has 
been amended to extend greater due process. As we can tell, Mr. 
Chairman, the committee has worked hard to accommodate the interests of 
our small business community, not just in this amendment but in the 
many amendments adopted throughout the process, while maintaining 
strong protection for U.S. interests against our foreign competitors. I 
strongly urge all of my colleagues to vote ``yes'' on the manager's 
amendment.
  Mr. CAMPBELL. Mr. Chairman, I move to strike the last word.
  Mr. Chairman, I wonder if I could engage my colleague and friend from 
North Carolina in a colloquy regarding the manager's amendment.
  Mr. Chairman, I will state what I believe is true, and I just want to 
know if I have it correct or not. I believe that, even with the 
manager's amendment, every filer for a patent in the United States 
under the gentleman's bill would have to make public that application 
even if the patent has not yet been granted; is that correct?
  Mr. COBLE. Mr. Chairman, will the gentleman yield?
  Mr. CAMPBELL. I yield to the gentleman from North Carolina.
  Mr. COBLE. Mr. Chairman, the applicant can, of course, withdraw if it 
is not to be granted.
  Mr. CAMPBELL. Mr. Chairman, every applicant for a patent in the 
United States who intends to continue in the application process for a 
patent, even if he has not yet gotten that patent, must eventually 
disclose under the bill; is that correct?
  Mr. COBLE. The purpose for that, Mr. Chairman, if I may say so, is to 
direct attention to the submariner.
  Mr. CAMPBELL. Mr. Chairman, I appreciate the gentleman's 
understanding. But I believe his answer is yes; am I correct?
  Mr. COBLE. Yes, sir.
  Mr. CAMPBELL. I thank the gentleman.
  Mr. Chairman, we have, I think, very clearly identified what is wrong 
with H.R. 400 and that it is not solved by the manager's amendment.
  Every applicant for a patent who wishes to get that patent, even 
before they get the patent, is obliged to disclose. Goodbye to the 
strategy that you say, ``Well I am trying for a patent but if I do not 
get it, I want to keep it secret and try the trade secret route.''
  One of the aspects that American patent law has right now is a 
tremendous incentive to the inventor because it allows just that 
opportunity. I will try for the patent, but if I do not get it, if it 
does not look like I am going to, then I am going to try the trade 
secret route.
  Ms. KAPTUR. Mr. Chairman, will the gentleman yield?
  Mr. CAMPBELL. I yield to the gentlewoman from Ohio.
  Ms. KAPTUR. Mr. Chairman, I just wanted to ask a question. Assuming 
that happened to an inventor and he or she were published and that 
information were taken by some other interest in another nation, 
knowing some of the inventors that I know, if they had to sue, many of 
them do not have deep enough pockets. In fact, 80 percent of the 
inventors are small inventors and, if they had to take a case, would it 
not be extremely difficult for many inventors to try to protect their 
property rights internationally?
  Mr. CAMPBELL. Mr. Chairman, my colleague from Ohio is quite right, 
but even more right than one might think; because what is the lawsuit 
about? Under H.R. 400, it is permitted to disclose. It is required to 
disclose. So if a foreigner takes that and uses that, what are you 
going to be hiring an attorney for?
  Here is a question, Mr. Chairman, if I might instruct my colleagues 
to allow me to continue.

                              {time}  1445

  Mr. CAMPBELL. Mr. Chairman, why are we messing with the U.S. patent 
system? Why are we messing with it?
  We saw the chart of my colleague from California, Mr. Hunter. We have 
Nobel prize winners. We have technology advancement second to none in 
the world. Why are we messing with it? Do my colleagues not think we 
should have a good reason before we change such a system as this that 
has produced such success for our country?
  What answers have we heard today? We have heard one, submarine 
patents. This is what the Congressional Research Service says about the 
Rohrabacher substitute and House Resolution 400. It says the patent 
disclosure provisions of the Rohrabacher substitute, House Resolution 
811, should substantially curtail the practice of submarine patenting. 
Both bills seek to curtail submarine patenting and would likely end the 
practice. That is on pages 12 and 13 of the CRS report.
  Let me repeat that. Both bills seek to curtail submarine patenting 
and would likely end the practice.
  If we are messing with the U.S. patent system because of the abuse of 
the submarine patent, for heaven sakes, let us not go as broad and do 
the additional damage as House Resolution 400 would do when we can 
solve it with a much narrower solution, which is in the Rohrabacher 
substitute.
  But let us ask one further question. How large, how deep, how 
profound is this problem of the submarine patent? Commissioner Lehman, 
in GATT hearings, was reported in the Washington Times of April 15 of 
this year to have said that the submarine patent constitutes 
approximately 1 percent of 1 percent of all patent filings. The numbers 
that he gave worked out to thirteen one-thousandths of 1 percent of all 
patent filings.
  For that we are going to compel all patent filings, after 18 months, 
to be made public, whether or not there has been the patent granted? It 
simply is unnecessary for the small problem and it does a tremendous 
amount of collateral damage.
  Mr. Chairman, I wish to conclude by pointing out that there has been 
no other case made for changing this present system that has worked so 
well, no other compelling case. If at the very least we do no harm, we 
have served our constituents well.
  Mr. Chairman, I ask unanimous consent, as my colleague did, for 2 
additional minutes.
  Mr. GOODLATTE. Mr. Chairman, reserving the right to object, and I 
will

[[Page H1659]]

not object, but I would ask that the gentleman from California, if we 
are going to conduct this debate under the 5-minute rule, recognize 
that he can make unanimous-consent requests for additional time.
  No one here wants to do it, but if the gentleman is only going to 
recognize folks who agree with his opinion, he is not entering into a 
genuine debate, and I think we should have that.
  So I will not object, but I would make the point to the gentleman.
  The CHAIRMAN. The gentleman withdraws his objection and the gentleman 
from California is recognized for 2 additional minutes.
  Mr. CAMPBELL. Mr. Chairman, since my colleague from North Carolina 
had 3, I would ask unanimous consent for 3 additional minutes.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
California?
  There was no objection.
  Mr. CAMPBELL. Mr. Chairman, I will reserve one of those minutes for a 
colloquy with my good friend, the gentleman from Virginia [Mr. 
Goodlatte].
  So we have the submarine patent as rationale for messing with the 
system, a small problem and one which is equally solved by the 
Rohrabacher substitute.
  We have heard that research institutions are holding off. They are. 
Is it not troubling to my colleagues that we are going to be changing 
the U.S. patent system in a way that the major research universities of 
our country have chosen not to embrace?
  Let me be very clear. They do not embrace the Rohrabacher substitute; 
they do not embrace the bill introduced by the gentleman from North 
Carolina. It seems they do not want a change. And I cannot blame them 
for that attitude. If we are going to change such a successful system, 
does it not cause us concern that the research universities are not 
here asking us to do it?
  Oh, the commercializers are. And I do not put any negative spin on 
that phrase, a commercializer is important, as well as an inventor, but 
they are different, and the motive of the commercializer is to get 
available as quickly as possible the information and to use it for 
commercial purpose as quickly as possible. The inventor loses under 
House Resolution 400 in order to achieve that objective.
  Last, we have heard the reference to a need to level the playing 
field. Well, I do not think we need to rush to equalize when we see the 
comparison in the numbers of inventions and Nobel prizes as a signal 
measure of the state of our country and others.
  I repeat, in closing, reserving the last minute for our colloquy, no 
one responded to my point about a prior commercial user. Under the 
Coble bill, House Resolution 400, somebody who did not file, but has 
made use of this idea, can expand that use, can take what was making 
$10 a month and make it $1 million a month, totally eviscerating the 
value of the patent and destroying the incentive to invent in the first 
place.
  Mr. GOODLATTE. Mr. Chairman, will the gentleman yield?
  Mr. CAMPBELL. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. Mr. Chairman, I thank the gentleman for yielding, and 
I wanted to join in the conversation he had with the gentlewoman from 
Ohio, and point out the concern expressed by the two of them about 
situations in which foreign businesses might steal patent ideas 
published after 18 months presumes some important facts:
  First, that that inventor did not file for a patent in a number of 
other foreign countries. If they do not file for the patent when the 
patent is issued, and the average patent is issued in 19 months in this 
country, there is nothing to stop that same thing from happening upon 
issuance of the patent all over the world.
  Mr. CAMPBELL. Mr. Chairman, if I can reclaim my time to respond, the 
gentleman's point is quite right. If we file overseas, we put ourselves 
into the overseas system. If we file overseas, we put ourselves into 
the European system. And if we choose not to, because we prefer the 
American system, and for good reason we prefer it, because it has more 
incentives for invention and more protections for the inventor, we 
should be allowed to proceed under the American system.
  The CHAIRMAN. The time of the gentleman from California [Mr. 
Campbell] has expired.
  The Chair would advise all Members that we will go back and forth and 
we will give priority to members of the committee.
  Mr. FRANK of Massachusetts. Mr. Chairman, I move to strike the last 
word, although I might want to put it back by the time I am through.
  I rise in support of the manager's amendment of the bill. I am the 
ranking minority member of the relevant subcommittee, so I have 
immersed myself to some extent in this. I have had some of my 
colleagues say to me that they do not quite understand why there is all 
this passion about the bill, and I will say to those who are looking to 
me for enlightenment on this that they will go unenlightened.
  I think there is a dynamic of rhetoric that keeps arguments going 
even when they are not necessarily there anymore. There has been some 
convergence here. Originally, I was a cosponsor with the gentleman from 
California [Mr. Rohrabacher]. I had heard from the biotechnology people 
that they did not like the alternative. That was several years ago.
  In the interim, the bills have become less different. I do not expect 
the entrenched partisans on either side to acknowledge that, but it 
does seem to me we may want to look at it. In fact, the manager's 
amendment that came forward further bridges the difference, further 
reduces the problem of publication.
  One point that should be made clear, and I say this because not every 
Member is fully familiar with it, and some Members were puzzled by 
publication, people should understand that we do not lose any legal 
right by publication.
  There are some people who think it will be published before I have my 
patent and then I am not protected. No, that is not true. There is 
absolutely no diminution of legal right. What people are arguing is 
that the practical situation in which we are put to defend our legal 
right might be more difficult. But understand that there is no 
diminution of our legal right.
  Mr. GOODLATTE. Mr. Chairman, will the gentleman yield?
  Mr. FRANK of Massachusetts. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. Mr. Chairman, the gentleman is correct, and not only 
that, but because we improve the patent pending protections, then we 
can come back and get royalties during that patent pending term after 
we have been published that we cannot get under current law.
  And, in addition, we found that the Europeans get that capital 
financing. One of the problems they have is the gap between the 18-
month publication, when the patent is actually issued, saying, I am 
going to be exposed during that time. But, actually, the capital comes 
sooner because they know that since we have been published and no one 
else has been published ahead of us, we are the one that has that idea; 
and if they want to invest in it, they can do it now rather than wait 
until the patent is issued.
  Mr. FRANK of Massachusetts. Mr. Chairman, reclaiming my time, I think 
the general rule is sentence-yield, sentence-yield. So now it is time 
for a sentence, and then I will yield again after I get to say a 
sentence.
  The sentence is, and it is actually a couple: We made another change 
in this. Under prior law, if two people both filed a similar patent, 
they were on equal terms before the law and had an equal burden in 
terms of proving who had invented first, not who filed first, which is 
not relevant.
  We added to the bill after the bill was filed and added language that 
says, if we have published and someone files subsequent to our 
publication, we are no longer on an equal footing. We are now in a 
super-legal position. The person who filed subsequent to us has the 
burden of proof.
  We will indeed, in fact, almost assume that the person copied our 
patent from the publication. And that is a very important difference.
  It is true under old law we could file, somebody else could file, we 
would publish, someone else would file, and we would be at greater 
risk. We have further strengthened the hand of the person who files and 
is subject to publication.
  Ms. KAPTUR. Mr. Chairman, will the gentleman yield?

[[Page H1660]]

  Mr. FRANK of Massachusetts. I yield to the gentlewoman from Ohio.
  Ms. KAPTUR. Mr. Chairman, I thank the gentleman, because I know he 
approaches all these issues with complete objectivity and he tries to 
do what is best for the country.
  Mr. FRANK of Massachusetts. On these issues. I get worked up on some 
others.
  Ms. KAPTUR. In this case we disagree. I think that one of my greatest 
misgivings about the H.R. 400, and the reason I am supporting the 
substitute is because, having met many inventors, in a State like Ohio, 
what this bill does is it, and the gentleman says, well, they can 
defend their rights, and the gentleman from the other side was saying 
the same thing, but this is a real lawyers' field day because the small 
inventor, maybe the person who is working on their first patent, will 
be forced to take money that many of them do not have.
  People can defend themselves if they are representatives of a large 
corporation that has a patent or is filing for a patent. They do not 
have as much trouble. But the average small inventor under this bill is 
seriously compromised by the system the gentleman is setting up where 
we publish after 18 months.
  Mr. FRANK of Massachusetts. Mr. Chairman, reclaiming my time, I say 
to the gentlewoman she has made her point and I want both to affirm it 
and then respond to it.
  That is what I meant before. The legal right is not diminished. The 
gentlewoman is not contesting that. We have the same legal right 
whether or not there has been publication. The argument has been that 
those who want to intrude on our patent will do so, and if we are not a 
person with a lawyer, then we are at a disadvantage.
  The CHAIRMAN. The time of the gentleman from Massachusetts [Mr. 
Frank] has expired.
  (By unanimous consent, Mr. Frank of Massachusetts was allowed to 
proceed for 2 additional minutes.)
  Mr. FRANK of Massachusetts. That is also true once we have gotten a 
patent, Mr. Chairman.
  In other words, if there are people out there who are determined to 
use their superior resources and their access to lawyers to infringe on 
and chip away at and take the benefit from our patent, they can do that 
whether it has been published or not once it is patented.
  Yes, anybody in this society, I guess, who might be in difficulty is 
at more of a disadvantage if they do not have a lawyer handy than if 
they do. There might be other cases when people might consider it a 
disadvantage to be too near a lawyer, but in the case of a dispute, it 
is probably helpful. But that is true whether the patent is issued or 
not, whether or not there are people out there after us.
  The point I would make is that publication, particularly with the 
safeguards we have, does not weaken either our legal position nor the 
disadvantage we might be at because of a lack of access to attorneys.
  Mr. CAMPBELL. Mr. Chairman, will the gentleman yield?
  Mr. FRANK of Massachusetts. I yield to the gentleman from California.
  Mr. CAMPBELL. Mr. Chairman, it was for exactly that reason I never 
made the argument about the burdensome lawyers. My argument was 
different. I wonder what the gentleman's response might be to that.
  I understand our legal rights are not changed by H.R. 400 in this 
regard, but as a practical matter, publication does destroy the 
applicant's opportunity to go the trade secret route and existing 
patent law does not. Would the gentleman agree?
  Mr. FRANK of Massachusetts. Well, Mr. Chairman, first of all, let me 
say I welcome the support of the gentleman from California of my 
argument against the gentlewoman from Ohio. Because he just said he did 
not like her argument, and I appreciate that. I know they are friends 
in general, but I should like to point out that the gentleman from 
California----
  Ms. KAPTUR. They are both attorneys. It is so interesting the way 
this debate goes.
  Mr. FRANK of Massachusetts. Yes, but I have never practiced.
  I did want to point out that my friend from California has just 
joined me in opposing the argument of the gentlewoman from Ohio, and I 
would say there may be an argument of his that she may not like, and I 
would be glad to have her join in on that one, too.
  The next point is that that is true, that we are not forced, except 
for this thing. There is an inconsistency in the gentleman's question.
  The CHAIRMAN. The time of the gentleman from Massachusetts [Mr. 
Frank] has expired.
  (By unanimous consent, Mr. Frank of Massachusetts was allowed to 
proceed for 2 additional minutes.)
  Mr. FRANK of Massachusetts. Mr. Chairman, my understanding is that 
the trade secret is what we invoke as an alternative to patent.
  The gentleman said if we file and are published, we lose our right to 
go for trade secrets. But my understanding is if we go the patent 
route, that is the alternative to trade secrets. So, therefore, yes, if 
we decide to get a patent, then we have given up our right to go the 
trade secret route.
  Mr. CAMPBELL. Mr. Chairman, will the gentleman yield?
  Mr. FRANK of Massachusetts. I yield to the gentleman from California.
  Mr. CAMPBELL. Mr. Chairman, here is the question I was asking, and I 
did take the gentleman's answer to my previous question to be ``yes,'' 
for which I am grateful.
  Mr. FRANK of Massachusetts. Mr. Chairman, reclaiming my time, maybe 
the gentleman misunderstood me, and I will clarify it.
  The question was, if we are published, do we give up our ability to 
use trade secrets. My answer was, if that was the question, the answer 
is that any time we go for a patent, we give up the right to go trade 
secrets.

                              {time}  1500

  I want to finish the one question which was, is there a conflict 
between trade secrets and publication? My understanding, as I said, is 
that applying for a patent is an alternative to trade secret. If that 
was not the question, rather than claiming I answered ``Yes,'' the 
gentleman ought to rephrase the question.
  Mr. CAMPBELL. It was the question, if the gentleman will yield.
  Mr. FRANK of Massachusetts. I tried to respond to the gentleman. He 
then frankly, it seemed to me, somewhat distorted what I said. I am not 
going to simply allow that to happen, so I want to restate it.
  If the question was, does publication take away your right to do 
trade secret, I would have to say I am surprised at the question, 
because any patent takes away your chance to use trade secret. 
Publication is not the operational problem there, it is the desire to 
ask for a patent.
  Mr. CAMPBELL. Mr. Chairman, will the gentleman yield?
  Mr. FRANK of Massachusetts. I yield again to the gentleman from 
California.
  Mr. CAMPBELL. I thank the gentleman. If somebody under present law 
wants to try for a patent and wants to keep that going until they are 
fairly sure they will not get it, they can still go the trade secret 
route, but under House Resolution 400, come 18 months, they cannot. 
That is a difference, is it not?
  Mr. FRANK of Massachusetts. I would say this to the gentleman. That 
is a circumstance I had not previously thought about. In other words, 
what the gentleman is saying is you decide you are not going to get the 
patent and you withdraw it. I would be prepared to work on an 
amendment, which I suspect would make no difference to the gentleman 
overall.
  The CHAIRMAN. The time of the gentleman from Massachusetts [Mr. 
Frank] has again expired.
  Mr. FRANK of Massachusetts. Mr. Chairman, I ask unanimous consent to 
proceed for 2 additional minutes.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Massachusetts?
  Mr. CAMPBELL. Mr. Chairman, I object.
  The CHAIRMAN. Objection is heard.
  Mr. FRANK of Massachusetts. Mr. Chairman, I ask unanimous consent to 
proceed for an additional 30 seconds.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Massachusetts?
  Mr. CAMPBELL. Mr. Chairman, reserving the right to object, if the 
gentleman would split the time with me.

[[Page H1661]]

  Mr. FRANK of Massachusetts. No. I do not think the gentleman is 
interested in the conversation.
  Mr. CAMPBELL. Mr. Chairman, I object.
  The CHAIRMAN. Objection is heard.
  Mr. GOODLATTE. Mr. Chairman, I move to strike the requisite number of 
words,, and I yield to the gentleman from Massachusetts [Mr. Frank].
  Mr. FRANK of Massachusetts. I thank my friend from Virginia for 
yielding.
  Mr. Chairman, the point is this. We are talking about a very, very 
limited circumstance. I think to some extent what we may be patenting--
and maybe you cannot patent this, maybe we would copyright it--examples 
of horrible and extremist that we can come up with that might possibly 
under certain circumstances create a problem. The gentleman from 
California has had one. Here is what I think he is positing.
  You apply for a patent. Your patent application is published. You 
subsequently decide that you are not going to get the patent, so you 
withdraw it and have you then lost your right to protect it under trade 
secrets?
  I do not think it would do any violence to the bill in that 
circumstance where no one had previously suggested to say that no, you 
would not lose that. I would be glad to do that. I would be glad to 
support an amendment in a subsequent part of the process that said if 
in fact the only thing that happened was that you were published and 
you were not going to get a patent, that that would not destroy your 
limited right of trade secrets. That one does not bother me at all. It 
is the first I had heard of it in all my conversations with the 
gentleman.
  Mr. GOODLATTE. Reclaiming my time, I would point out to the gentleman 
that there is a provision in the bill already that preserves the right 
of anybody to withdraw their patent application prior to the 18-month 
publication date and preserve their right to go the trade secret route. 
The problem we have here is there is an inherent difference between 
trade secrets and patents. Trade secrets are protected by keeping them 
secret. The formula for Coca-Cola, that is not patented, that is a 
recipe. They keep it locked up in a safe.
  On the other hand, if you want to protect something by use of the 
patent system, the way we do that is the U.S. Government tells the 
whole world that that individual is the first person to come forward 
with that patent and they have that protection and that right, and all 
publication does is give them that right sooner. It does not in any way 
harm them or take away that right. If they want to go the trade secret 
route, they can still do it by withdrawing that application.
  I would also point out that the average patent in this country takes 
19 months, 1 month longer than the 18-month provision. So the fact of 
the matter is that we are doing very little to harm people and in fact 
publication is a positive thing.
  Ms. LOFGREN. Mr. Chairman, will the gentleman yield?
  Mr. GOODLATTE. I yield to the gentlewoman from California.
  Ms. LOFGREN. Is it not the case that in the bill if you are only 
filing in the United States and not abroad and are a small inventor or 
small businessperson, you have the ability to delay publication until 
after the second Office action, which is an up or down, and then have 
the ability to withdraw? So, the issue being raised is really not a 
problem because it has been dealt with in the bill.
  Mr. GOODLATTE. The gentlewoman is correct.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. GOODLATTE. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. I would also say I was a little bit 
surprised to hear my friend from California worried so much about the 
rights of people under trade secrets because I had previously in my 
conversations with him and in his amendment understood him to be 
somewhat critical of the trade secrets doctrine and to be interested in 
narrowing it substantially.
  Mr. KIM. Mr. Chairman, will the gentleman yield?
  Mr. GOODLATTE. I yield to the gentleman from California.
  Mr. KIM. I thank the gentleman for yielding. Mr. Chairman, I would 
like to have a colloquy with the gentleman from North Carolina [Mr. 
Coble].
  I would like to talk about a totally new subject, real estate.
  Under section 112 of H.R. 400, the new Government corporation is not 
subject to the provisions of the Property Act of 1949, nor the Public 
Buildings Act of 1959. The bill would grant to each new corporation the 
ability to sign a lease and buy and sell property, construct a facility 
without regard to this law that I mentioned.
  Indeed, the Patent and Trademark Office [PTO] is currently in the 
midst of having a new headquarters acquired by GSA, the landlord of the 
Federal Government. The PTO has requested acquisition of 2.3 million 
square feet of office space that could cost over $57 million annually, 
or even $1 billion over the next 20 years.
  In fact, section 112 recognizes this action by stating that the land 
does not nullify, void, cancel or interrupt any pending request for 
proposal or acquisition by GSA for the express purpose of relocating or 
leasing space for the Patent and Trademark Office.
  Is that the gentleman's understanding?
  Mr. COBLE. If the gentleman will yield, that is my understanding, and 
I will be happy and any of the rest of us on the committee will be 
happy to work with the gentleman from California [Mr. Kim] on his 
committee of jurisdiction with Federal buildings, and I presume that is 
what prompts his question.
  Mr. CAMPBELL. Mr. Chairman, will the gentleman yield?
  Mr. GOODLATTE. I yield to the gentleman from California.
  Mr. CAMPBELL. I thank the gentleman for yielding.
  Mr. Chairman, I simply wanted to point out this distinction and then 
get the benefit of the gentleman's response to it. Many people go into 
the patent system hoping to get the patent and they are disappointed, 
but they get indications of that disappointment.
  The CHAIRMAN. The time of the gentleman from Virginia [Mr. Goodlatte] 
has expired.
  (By unanimous consent, Mr. Goodlatte was allowed to proceed for 1 
additional minute.)
  Mr. GOODLATTE. Mr. Chairman, I continue to yield to the gentleman 
from California.
  Mr. CAMPBELL. So disappointed, they then choose to go the trade 
secret route. So that the choice is not only at the beginning but along 
the path when it does not look like you are going to get a patent. In 
that context the average time of a patent being 19 months means that a 
substantial number, more than half, will see the present right held by 
a patent applicant being taken away. That is my point. I would be 
grateful to hear the gentleman's response.
  Mr. GOODLATTE. I would be happy to respond.
  The individual who is in the process and is having a lengthier time 
processing the patent application than the 19-month average would be 
concerned about that. Under those circumstances, they would withdraw 
the patent application and if they wanted to try for the patent again, 
they are not in any way deprived from having the opportunity to 
resubmit the patent application which will then pick up with a lot of 
the work already having been done previously and process the patent 
through. I doubt there will be very much time lost.
  Against that, I want to weigh the benefit of publication. No inventor 
wants to spend years of their life working on something to find out 
that somebody else had previously already filed, whether they are a 
deliberate submarine patenter like some who have kept them submerged 
for 30 years or others.
  The CHAIRMAN. The time of the gentleman from Virginia [Mr. Goodlatte] 
has again expired.
  (By unanimous consent, Mr. Goodlatte was allowed to proceed for 1 
additional minute.)
  Mr. GOODLATTE. Therefore, publication has a number of benefits to 
inventors, including knowing that you are not wasting your time doing 
something that somebody else is already ahead of you on, and getting 
capital investment in your invention sooner because they know that you 
are the first out there because you are the first published and 
therefore they can invest in you sooner than they can if they have

[[Page H1662]]

to wait until they are sure you are going to get the patent because 
they do not know under our current secret process whether or not 
somebody else got in there ahead of you. This is a benefit to the small 
investor, not a harm.
  I yield to the gentleman again.
  Mr. CAMPBELL. Mr. Chairman, I would just conclude, and I sure do 
appreciate the gentleman yielding, that overwhelmingly the 
commercializers are with the gentleman from North Carolina [Mr. Coble], 
but overwhelmingly the inventors are with the gentleman from California 
[Mr. Rohrabacher].
  Mr. GOODLATTE. I have not found that to be the case.
  Mr. CAMPBELL. That has been my observation, though I appreciate the 
gentleman might have a different one. I think that distinction speaks 
volumes to what the inventor sees as a hurt to his or her 
entrepreneurial activity.
  Mr. GOODLATTE. That has not been the experience in Europe where this 
process has been used, and I would suggest that this is very much the 
type of change that we need in this country. This committee has 
improved the patent system for 200 years. I urge the support of this 
bill.
  Mr. CONYERS. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I rise in support of the manager's amendment offered by 
the gentleman from North Carolina [Mr. Coble], the subcommittee 
chairman.
  Mr. Chairman, I would point out that the two major items in this 
amendment is, one, to completely separate the operational function of 
the Patent and Trademark Office from the policy responsibilities of the 
Patent and Trademark Office, thereby making it most efficient.
  I presume that most everybody is for that. I do not recall much 
objection to it.
  Mr. COBLE. I would say to the gentleman from Michigan, not unlike 
many other features about this bill, a lot of it was misunderstood, but 
I have heard virtually no complaints about that.
  Mr. CONYERS. I did not think so.
  I thank the gentleman.
  The second most important part of the manager's amendment, from my 
point of view, is the exemption of the small inventor from the 
necessity of publication if he chooses to do so. And so, here this 
exemption from publication for the small inventor is that they do not 
have to publish until 3 months after the second patent and trademark 
action, which is usually the final decision regarding a patent.
  That has great merit because it gives the protection to the small 
inventor. Ladies and gentlemen, those who are against GATT and NAFTA, 
listen up. This is precisely why I am supporting the bill and the 
manager's amendment because we provide additional protection to the 
small inventor, we give him the option of publishing 3 months after 
what is called the second PTO action, which is almost always the final 
decision regarding the issuance of a patent.
  There are a number of technical amendments to the Coble manager's 
amendment. It is 18 pages long. The provision that I am referring to 
that exempts small inventors starts at page 10, line 1. Please read it. 
It is not complicated language.
  It is not any more complex than anything we handle every day in the 
making of laws for the United States of America. It is pretty 
straightforward. It should not create any problem to anybody that is 
interested in protecting American inventors who are not corporations to 
give them the option that they require that they have never had before 
which does not subvert the patent process, it makes it stronger and is 
why we are here on the floor with this bill after several years.
  Mr. TIAHRT. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I just went through the manager's amendment, and it is 
a little difficult to sort through. I am not a lawyer, and I kind of 
think this ought to be approached in more of a pragmatic way. And so, 
in weighing this bill, I went back to those who are concerned with it 
and I talked to some of the people that deal with patents on a daily 
basis and in trying to improve themselves and our lives by taking their 
ideas into the patent system.
  And I just want to tell my colleagues about a guy in Wichita, KS. His 
name is Jay Hajeer. He works for Sol Gate, and he has a very simple 
idea. This simple idea was to increase the size of a memory for most 
computer models even beyond the amount of design capacity that the 
computer already has in it.
  Jay was able to keep his simple idea quiet enough as it went through 
the patent process until he did a little planning as far as production, 
a little planning as far as a way of marketing his product; and he was 
able to acquire the patent and go ahead and produce this simple 
product.
  And now that it is out and available on the market, I would like to 
explain it. It is simply a clip. You take the memory board out of your 
computer, slip this clip in place and slide your memory board in plus 
an additional memory board, thereby, in this case, doubling the size of 
the memory.
  You can do it for additional memory boards, also. But it is just a 
very simple idea, just a little plastic clip with a couple of 
connectors on it. And so, when he had this idea, he did not have to lay 
it out in front of other people.

                              {time}  1515

  I think that having to publish these ideas before they get a patent 
on it is kind of like playing cards with a mirror at your back. The 
opponent on the other side of the table is able to read your cards, and 
he can see what is in your hand. And so in that respect it becomes a 
level playing field for your opponent, and I do not think we want to 
make a level playing field for our opponents, especially for other 
countries.
  So let me go back to this simple design. Not only did Jay have time 
to develop the concept, get the drawings done, also develop a 
manufacturing plan and a marketing plan by the time he got his patent, 
once that was achieved, he was able to go right into the marketplace. 
Now if he had to publish this and there was a delay in his plans, it 
would have made it easier, especially for the companies in Southeast 
Asia, to capture this idea and go ahead with manufacturing and push 
them out of the market. He is a small investor, does not have a big 
company; he just has good ideas. So this open publishing of the idea, I 
think, would have made him vulnerable to larger manufacturers even in 
foreign governments.
  So I am a little concerned about this level playing field concept, I 
am a little concerned about forcing someone to lay their cards on the 
table, letting them play cards with a mirror to their back. I think 
that we want to protect ideas and provide incentives for individuals.
  And I guess the second point I would like to make is I am not very 
concerned about these alleged submariners, and perhaps I do not quite 
have a good grasp of the idea, but what we are trying to do is protect 
people who have ideas. That is why we have so many Nobel laureates, and 
that is why we have so many people who come up with ideas in America, 
is we give them incentives to sit around and dream up ideas.
  I rode back to Wichita one time with a guy on the airplane who came 
up with an idea of mixing naphtha and water together, and one can burn 
it in a gasoline engine; and he has a license with Caterpillar to do 
just that. It is an idea that he has come up with that we can use water 
as a portion of the fuel. It cuts down emissions, it is a great idea. 
But he has to have a way of protecting his ideas so that he cannot lay 
his cards on the table and allow someone else to run with the ball 
until he gets the capital or gets the needs that he has.
  So I guess I am not as concerned about the submariners as everybody 
else is because I think it is good to have a bank of ideas, to have 
them protected so that you can go on to the next idea while somebody 
develops a manufacturing process.
  So those are my concerns on H.R. 400 and also in the manager's 
amendment, and that is why I will be voting against it, because it 
levels the playing field when I do not think it should; it levels it 
for the opponents.
  Mr. HYDE. Mr. Chairman, I have a unanimous consent request that I 
would like to present to the House, but I would like just to say about 
those

[[Page H1663]]

Nobel Prize winners, a lot of them have foreign accents, the ones I 
have met anyway.
  Mr. Chairman, I ask unanimous consent that, when we finish with this 
manager's amendment, which I pray will be soon, I pray it is imminent, 
that debate on the Rohrabacher amendment and all amendments thereto be 
limited to 2 hours equally divided between proponents and opponents, 
the time to be controlled by the gentleman from California [Mr. 
Rohrabacher] and the gentleman from North Carolina [Mr. Coble] and that 
they be permitted to yield blocks of time.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Illinois?
  Mr. ROHRABACHER. Reserving my right to object, Mr. Chairman, is his 
unanimous consent request saying that there would be 2 hours of debate 
for my substitute?
  Mr. HYDE. Yes, Mr. Chairman.
  Mr. ROHRABACHER. Mr. Chairman, but not for my substitute coupled with 
all the other amendments?
  Mr. HYDE. No, Mr. Chairman. No, the other amendments will stand on 
their own, and we will probably get to them next week. It is simply 
trying to get the important amendment, if the other offerers will 
forgive me for downgrading their amendments, and get it out of the way 
and have an idea when we can secure because people would like to leave.
  Mr. ROHRABACHER. Mr. Chairman, I withdraw my reservation of 
objection.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Illinois?
  There was no objection.
  Mr. FORBES. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, in all due respect, I have not had a chance, but 1 
minute, to speak at various times here, so I would like to make a 
couple of points. I know the dialogue has gone on, and I will not try 
not to indulge the House too much longer.
  I think it is very, very important though in this critical debate to 
understand that, while we have spent a lot of time on the submarine 
patent idea-- you know, the notion that somebody hides this kind of 
prospective patent and it rears its ugly head to challenge somebody 
else later in the future, I appreciate that. And I think it has been 
well established here in this body this afternoon that either the main 
bill, H.R. 400, or the Rohrabacher substitute does deal with the 
submarine patent issue.
  I think it is important again to stress that of the 2.3 million 
patents that were issued from 1971 to 1993, 2.3 million patents, 627 of 
those patents were deemed submarine, and almost half of those were by 
the U.S. Government. So the problem is not necessarily foreign 
interests bearing these submarine, these patents. So I think that is an 
important point to understand here, but we have dealt with the 
submarine issue, so I will not prolong that.
  I think we get back to the essence here, and the essence of all of 
this really is again that we have American inventors who have defined 
this Nation as a place where somebody with a good American idea could 
come to Washington, DC, with that idea and protect that idea and it 
would not be made available to the whole world to steal.
  I understand the distinction if one files overseas. I am today 
talking specifically about our American citizens who come up with good 
ideas and want to protect those ideas on American soil. That is what I 
am talking about, and I think we need to protect them.
  That is why I am asking in a most aggressive manner through my 
amendment that we do protect the entrepreneur, the people who are 
working extra jobs to protect this idea that they have been working on, 
the small business people.
  Look, the corporations, the multinational corporations, are well 
protected. They will be well protected in this legislation, they will 
have the battery of lawyers they need, but the little guys out there 
with no resources who have wonderful ideas that have made America great 
who have made us the superior Nation on the face of the earth because 
of our ideas and our technology, we are going to compromise that away. 
We will no longer have Alexander Graham Bells, we will no longer have 
first generation Americans coming up with a great ideas like Thomas 
Edison, and we will no longer have the Eli Whitneys or all the other 
people who have come through generations that have made this country 
the greatest Nation because of our people that go out there, come up 
with a great idea, send it to Washington and protect it. Now we are 
saying, ``Sorry, individuals; sorry, small business people; you are not 
going to have the protections because you'll have to share your idea 
with the whole world after 18 months or some few months after that 
based on the manager's amendment which says, well, we will make a 
little alteration there.''
  If we are really caring about the individual in this country and not 
the corporate interests, we will make an exception for individuals, 
small business people, who do not have the resources that this bill 
will mandate.
  Mr. Chairman, my colleague from Ohio was exactly correct. This will 
be a lawyer's field day because we will turn it over to the courts, and 
even the presumption that the patent holder is protected will be put in 
jeopardy under these changes.
  Mr. CONYERS. Mr. Chairman, will the gentleman yield?
  Mr. FORBES. I yield to the gentleman from Michigan.
  Mr. CONYERS. Mr. Chairman, is the gentleman aware of page 10 of the 
Coble manager's amendment starting at line one that exempts the small 
independent inventor from publication?
  Mr. FORBES. Only if that inventor withdraws their patent application. 
It is not exemption.
  Mr. CONYERS. It is optional with the small inventor; and if I might 
just read the sentence, it might change the gentleman's entire speech, 
and here is what it says. Just hear this.
  The small, the independent, inventor in small businesses have 
expressed concern, and so the manager's amendment will give them a 
choice over whether or not they wish to be published. It will 
effectively exempt independent inventors by deferring until 3 months.
  Mr. FORBES. Reclaiming my time, with all due respect I say to the 
gentleman I read it myself. And what it says is if someone is an 
individual in this country or a small business, and they do not have 
the resources, and they do not want their patent protected; I mean 
published, excuse me; then what they can do is they can opt out of 
participating in the patent protection system because then they will 
not get published.
  Mr. CAMPBELL. Mr. Chairman, will the gentleman yield?
  Mr. FORBES. I yield to the gentleman from California.
  Mr. CAMPBELL. Mr. Chairman, the gentleman is reading from the summary 
and not from the actual text. I note that point. But the summary is 
correct, and so was my colleague from New York. One can always get out 
of the mandatory publication rule.
  The CHAIRMAN. The time of the gentleman from New York [Mr. Forbes] 
has expired.
  (By unanimous consent, Mr. Forbes was allowed to proceed for 2 
additional minutes.)
  Mr. FORBES. Mr. Chairman, I yield to the gentleman from California 
[Mr. Campbell].
  Mr. CAMPBELL. Mr. Chairman, I appreciate the gentleman yielding 
continuously.
  All that speaks to, Mr. Chairman, the gentleman from Michigan's 
point, all it speaks to, if one chooses to opt out of the patent 
system, then they do not have to disclose. But that is always the case. 
One can opt out of the patent system.
  Mr. FORBES. Reclaiming my time, if I might, and in my remaining 
minute here I think it is just important to stress to my colleagues who 
have real problems understanding the technicalities of this issue, and 
I can appreciate it, this is very, very important. I am talking about 
the little people in this country, the small inventors, the people who 
do not have vast sums of money who have made this country great and 
changed the face of the economy of this Nation over the last 200 years. 
They will be hurt by this change.
  Mr. Chairman, this is a harmful piece of legislation. In all due 
respect to the folks who have drafted it, this is not

[[Page H1664]]

good for the little people in America, it is not good for small 
businesses, and I urge the defeat of H.R. 400.
  Ms. LOFGREN. Mr. Chairman, I move to strike the last word.
  Mr. Chairman, I doubt that I will use the entire 5 minutes. I just 
think it is important to point out a few things. There is an accuracy 
deficit here.
  Mr. Chairman, in the bill with the exemptions provided for in the 
manager's amendment, which I support, publication is at 18 months, and 
the inventor is protected from that time forward. So it is not as if we 
are asking people to publish their invention without protection.
  Mr. Chairman, I would like to complete my sentence. There has been a 
lot of discussion that the little guy will not be protected because he 
or she does not have access to the fancy lawyers and the legal system 
that is necessary to protect themselves. Let me point this out:
  If someone obtains a patent--they have an invention, they file for 
their patent and their patent is issued--that patent is only as good as 
their ability to enforce it. Enforcing the patent requires them to 
oftentimes come into contact with the legal profession and to actually 
expend fees in pursuit of protecting their patent. And I would point 
out that there are many lawyers, if they have a good case, who will 
take the case on a contingent fee if the patent holder is being 
attacked by a foreign corporation in a patent infringement action.
  It is important to talk about the issue of submarine patents. I have 
heard a lot about statistics. I do not hear those same sorts of 
arguments when we stand here and talk about, for example, product 
liability law. It is not our problem because it is only a percentage. 
If it is 500 million, it does not matter because it is only one case.
  Let me talk about the case of Jerome Lemelson who filed in America 
for a bar code and robotic technologies who delayed his patent for 35 
years. He collected $500 million in royalties from manufacturers from 
the late 1980's until the early 1990's. His patent attorney made $150 
million in 1 year, and then later the Federal district court found that 
he did not have an enforceable patent.
  I do not know Mr. Lemelson, I have nothing against him personally. I 
would just say that is nothing to advance the economic interests of 
America or of working people or of countries or of innovation. That is 
important; do not tell me about percentages. We need to prevent it.
  Mr. GOODLATTE. Mr. Chairman, will the gentlewoman yield?
  Ms. LOFGREN. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. Mr. Chairman, I ask do we know how many hundreds of 
millions of dollars the attorney for Mr. Lemelson received in fees thus 
far for his submarine patenting?
  Ms. LOFGREN. I do not know and I certainly never fault an attorney 
for earning an honest living. I would just point out that this issue is 
a big deal to those companies that paid those fees and the attorney 
fees.
  I will tell the gentleman something else, and I do not want to quote 
the entire letter, but some of my colleagues have heard of Charles 
Trimble, the president and CEO of Trimble Navigation, a brilliant 
physicist and an individual who owns many patents and who was a leader 
in global positioning systems. Were it not for Dr. Trimble, we may not 
have that technology at all. I had the opportunity to talk to Dr. 
Trimble just a few short weeks ago. He followed our conversation with a 
letter to me. He is the owner of the patents. He is the one who has 
designed this system. He is fighting off submarine patents right and 
left.

                              {time}  1530

  It is not the right thing for our country to allow.
  Mr. GOODLATTE. Mr. Chairman, if the gentlewoman will continue to 
yield, I think the point is that this patent reform bill fights against 
abuse of and gaming of the current system, which is a great playground 
for some lawyers to make huge fees at the expense of the American 
consumers and taxpayers, and we are correcting that with this 
legislation today, quite to the contrary of those who would allege that 
the new laws will help lawyers, quite to the contrary.
  Ms. LOFGREN. Mr. Chairman, reclaiming my time, that is correct. The 
main point I wanted to make is to have rights that are enforceable one 
must seek access to courts, which requires lawyers, whether your rights 
attach at publication, whether the rights attach, as used to be the 
case, at issuance or the like. Your rights are only as good as what you 
stand up for.
  Mr. DICKS. Mr. Chairman, will the gentlewoman yield?
  Ms. LOFGREN. I yield to the gentleman from Washington.
  (Mr. DICKS asked and was given permission to revise and extend his 
remarks.)
  Mr. DICKS. Mr. Chairman, I rise today to speak in strong support of 
H.R. 400, a package of patent reforms that will have significant 
positive impact in several key industries in the State of Washington, 
namely the information technology, biotech, aerospace, and defense 
industries. I believe that this legislation will result in tangible 
improvements in our Nation's patent system, and that it strikes a 
balance between the need to assure strong patent protection for 
inventors while allowing for the free flow of information regarding new 
technologies. In this regard, I believe that H.R. 400 will foster the 
best of American ingenuity and serve as an important mechanism for 
spurring U.S. economic growth and competitiveness.
  I regret, Mr. Chairman, that opponents of this legislation have 
sought to portray this patent debate as a David versus Goliath fight 
when, in fact, the reforms contained in the bill will benefit large and 
small companies alike. The committee bill protects the work and 
intellectual capital of thousands of Americans, whether working in 
basement laboratories or in teams at major U.S. corporations. By 
cutting bureaucratic red tape, reducing the operating costs, and 
promoting self-funded PTO, all patent filers stand to gain from a more 
predictable, efficient, inexpensive, and equitable patent system. H.R. 
400 also contains several safeguards to protect independent inventors, 
and in this regard I note that nationwide associations representing 
30,000 small business members are in support of the legislation we are 
debating today.

  I also rise in strong opposition today to the amendment offered by 
the gentleman from California [Mr. Rohrabacher] who seeks to substitute 
his legislation which, in my judgment, will reverse the positive patent 
reforms that were achieved through the GATT and would encourage abuse 
and manipulation of the patent system. The gentleman from California 
has maintained that the issue of the so-called submarine patents 
represent only a miniscule problem for our system. But I believe it has 
been shown that this gaming of the system has cost inventors, U.S. 
companies, and consumers billions of dollars and it would only continue 
under the language Mr. Rohrabacher is asking us to adopt.
  As a member of the National Security Appropriations Subcommittee and 
the House Intelligence Committee, and as a Representative of a State 
that depends upon the best of human and intellectual creativity, I can 
assure you I would never endorse a proposal that undermines our 
national security or undercuts our global competitiveness. In the 2 
years prior to the passage of the 1995 GATT law, 300 foreign companies 
manipulated the patent system to their advantage, at the expense of 
American inventors and consumers. Despite Mr. Rohrabacher's 
disingenuous label of H.R. 400 as the ``Steal American Technology 
Act,'' I am afraid that the bill he is offering as a substitute would 
only worsen that draining of intellectual capital from the United 
States.
  This is a major issue for all high-technology areas of the United 
States, and particularly for the Pacific Northwest, which has become an 
intellectual center for software development and biotechnology--two 
areas in which the United States leads the rest of the world. The 
foundation of the information technology industry in my region and 
nationwide is its intellectual capital, and as such, intellectual 
property protection is critical to the continued growth and success of 
this industry. In 1975, Microsoft was founded on the ideas and hard 
work of a handful of people; in just over 20 years, it now has almost 
20,000 employees. Hundreds of startup companies have been launched 
following Microsoft's success, further contributing to the thriving 
high-technology industry in the area. The software industry as a whole 
provides high-wage, high-skilled jobs for more than 500,000 American 
workers and currently enjoys 70 percent of the world market--a share 
that will rapidly diminish if intellectual property protection is 
minimized. As R&D spending continues to increase, and while product 
cycles are condensing into timeframes of 9 to 12 months, predictability 
and full disclosure of existing patent applications becomes

[[Page H1665]]

ever more critical. Due to the complexity of software patents, and a 
lack of prior art and expertise in the field, the average patent 
pendency for software is 36 months, double the PTO's average processing 
time. For this reason, an efficient PTO with highly trained and 
experienced examiners is becoming increasingly important.

  Passage of the Rohrabacher substitute, H.R. 811, and a return to the 
previous system enabling the practice of submarine patents, also 
threatens the biotechnology industry which is thriving in the State of 
Washington. Patents are critical to the research of the biotechnology 
industry into cures and therapies for deadly and costly diseases like 
cancer, AIDS, Alzheimer's, cystic fibrosis, multiple selerosis, heart 
disease, and 5,000 genetic diseases. Any law which undermines the 
ability of biotechnology companies to secure patents with a full term 
undermines funding for research on deadly, disabling and costly 
diseases. Capital will not be invested in biotechnology companies if 
they are not able to secure intellectual property protection ensuring 
that they have a full term for a patent in which to recoup the 
substantial investments they must make in developing a product for 
market. Today, the United States remains preeminent in the field of 
biotechnology but has become a target of other country's industrial 
policies. Only by maintaining strong intellectual property protection, 
and preventing the gaming of the patent systems by foreign companies 
can the U.S. biotech industry continue to remain dominant.
  I am convinced Mr. Chairman, that intellectual property is rapidly 
becoming the critical national resource of the next century's world 
economies, and I urge my colleagues to move forward with the 
improvements to our current patent system contained in the H.R. 400, 
which I have cosponsored, not backward with the substitute offered by 
Mr. Rohrabacher. An efficient and predictable patent system encourages 
both job creation and the research and development activities that have 
made the United States the global leader in many high-technology 
sectors. This is precisely what H.R. 400 seeks to do.
  Mr. HUNTER. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I want to reiterate what I said at the start of this 
good, robust debate, and that is that I have great respect for the 
gentleman from Illinois [Mr. Hyde], the chairman of the full committee 
and my great friend, and the gentleman from North Carolina [Mr. Coble], 
the chairman of the subcommittee, my other great friend. I want to 
thank both of them for all of the great work that they have done.
  I think one thing that we have proved to the world over the last 
several hours is that this is a fairly complex subject. I think that 
the area that the gentlewoman from California [Ms. Lofgren] just spoke 
to is a huge area. It is an area of great importance, because we keep 
getting up on our side and saying that there is publication after 18 
months, that all of these inventors have their secrecy ripped away from 
them, and then people can come in and unscrupulously flood around them 
with patents, which the practice of flooding is used in Europe and 
Japan where that 18-month publication system exists, and then the other 
side gets up and says, no, we have fixed that, there is an exception 
for small inventors. They do not have to publish.
  Let us walk through that. Right now you do not have to publish until 
some 20 years after you have applied for your patent, and that gives 
you a long time, especially if you have a very complex piece of 
technology, to go out and get the money, get the running room that 
these Nobel laureates who support the Rohrabacher bill apparently want 
to keep. They do not like the new bill. But under the new bill, you 
jerk that veil of privacy away from them after 18 months.
  Now, they do have a choice under the committee bill, but the choice 
for small businesses is not to be published. They do not have that 
choice. They either have to publish after 18 months or get out. They 
have to get out of the patent system and give up their attempt to get a 
patent and give up forever the chance to get that very important 
protection.
  Now, it is true, and I want to hold up this list of people, very 
bright people who do not want this protection that the committee wants 
to give them. The gentleman, Nobel laureate, Franco Modigliani who 
developed management systems; Kary Mullis, Nobel laureate, polymerase 
chain reactor; Gertrude Elion, Nobel laureate, transplant anti-
rejection drugs; the guy who invented the neonatal respirator; the guy 
who invented the MRI machine. Lots of these very bright people do not 
want to be published early under the system that exists in Japan.
  Now, this chart tells you maybe why they do not want to be published. 
Why are there so few Nobel laureates in the sciences in Japan? Only 
five. There are 175 in the United States. The reason is very clear. 
These people get their privacy ripped away after 18 months. That means 
they do not have the running room to go out and get capital, to get a 
start-up company, to go out and line up the support that it takes to 
get a technology into production.
  In the United States we have a ton of Nobel laureates because we give 
them protection, we give them some running room. So let us get this 
straight once and for all. The committee bill says that after you have 
had two office actions in the Patent Office, that at least a third of 
the patents go way beyond two office actions, but after you have two 
office actions, you have 3 months to decide whether to publish to the 
world or get out of the patent system.
  Now, let us go to submarine patents for just 1 minute. Submarine 
patents have been the subject of almost three-quarters of the argument 
time spent by the proponents of this bill. I am told by the testimony 
that I read, or the summary of the testimony, by the Patent 
Commissioner was that over the last 20 years of 2.3 million patents 
issued, 370 of those patents were submarine patents. That is less than 
one-tenth of 1 percent.
  So a lot of these Nobel laureates would probably say, you know what 
we would go along with? We are not a bunch of phoney submariners, we 
have good stuff, we just want to protect it. What we would go along 
with is a provision from the bill that would say, if you do not use due 
diligence, then the Patent Office should publish you.
  That will take care of that problem. That takes care of those 370 
submariners. That is in the Rohrabacher bill. If you do not use due 
diligence, you get published. So the guy that hides for years and years 
and years gets brought out into the open and published.
  I think one reason these Nobel laureates do not like this is they are 
saying why do you expose 2.3 million patent holders early, early in the 
game and let people take advantage of them because of what 370 guys 
did? It does not make sense.
  So once again, I want to thank the chairman of the subcommittee, the 
gentleman from North Carolina [Mr. Coble], and the full committee 
chairman, the gentleman from Illinois [Mr. Hyde], for bringing this 
very important bill forward, but I go back to the beginning of the 
debate when the gentleman from Florida [Mr. Goss] said first do no 
harm. Folks, we are doing harm with this bill.
  Mr. KENNEDY of Massachusetts. Mr. Chairman, I move to strike the 
requisite number of words.
  First of all, I want to acknowledge the leadership that my good 
friend from California, [Mr. Rohrabacher], has shown on this issue, and 
I think that the gentleman has taken up the interests of how we are 
going to be able to compete in the high-technology environment and in a 
global economy in a way that I was very supportive of in the last 
Congress. I commend the gentleman from California [Mr. Rohrabacher] for 
the initiative that he has shown on this issue.
  My feeling, after having listened to this debate and recognizing that 
I come from a district that represents universities such as 
Massachusetts Institute of Technology and Harvard University, I have 
more universities than any other Member of Congress, over 48 different 
universities come from the eighth district of Massachusetts. There is 
more research and development money spent in my congressional district 
than any other congressional district in the United States of America. 
I should not tell my colleagues all this because they will cut it all.
  So anyway, I have to skip that part of the speech and get into the 
fact that what we have is an enormous concern over patent law and 
patent law deficiencies that have occurred during the course of the 
last few years. We have seen this most particularly with regard to the 
last few years in direct result of some of the GATT agreement that 
ended up as a result of a long negotiation providing protections for 
some of

[[Page H1666]]

our inventors and some of our patent applicants here in the United 
States, but only after a very difficult set of negotiations. As a 
result of my involvement in that issue, I was happy to support the 
efforts of the gentleman from California [Mr. Rohrabacher] in the last 
Congress.
  My understanding, and I would be open to hearing from the gentleman 
from California [Mr. Rohrabacher], is that the gentleman from North 
Carolina [Mr. Coble] has, in fact, tried to take up some of the 
concerns.
  We just heard the gentleman from California [Mr. Hunter] talk about 
the fact that there is an issue pertaining to the small businessman or 
the small inventor that comes up with a particular idea and the fact 
that, as I understand it, in the legislation of the gentleman from 
North Carolina [Mr. Coble], there would be, in fact, an 18-month 
protection, that there would be an opt-in for a total trade secret 
protection.
  Now, that might not be fully protective of all of the interests of 
the small inventor, because at some point someone might go around him 
and try to steal the patent and then he is into a big lawsuit with a 
larger company. But it does seem to me that the gentleman from North 
Carolina [Mr. Coble] has tried to come up with a reasonable compromise 
for us to be able to support.
  So I would like to entertain just a discussion with the gentleman 
from California [Mr. Rohrabacher], who, as I say, I did support in the 
last Congress. My inclination was to support the gentleman from North 
Carolina [Mr. Coble] today. So I would like to hear what the 
gentleman's concern is.
  Mr. ROHRABACHER. Mr. Chairman, will the gentleman yield?
  Mr. KENNEDY of Massachusetts. I yield to the gentleman from 
California.
  Mr. ROHRABACHER. Mr. Chairman, no. I would say the efforts of the 
gentleman from North Carolina [Mr. Coble] have not in any way met my 
concerns and, in fact, have raised more concerns the more I look into 
the legislation.
  In fact, if the gentleman will notice from the universities that are 
in his district, none of them, none of them support H.R. 400. Had the 
gentleman from North Carolina [Mr. Coble] actually gone and moved 
forward, trying to take those concerns that we all had last year into 
consideration, they would be here. Instead, the central issue, and the 
central issue which remains, as everyone can see, is whether or not our 
information that we have developed during a research and development 
process, so important to our colleges and universities, whether or not 
that information is going to be forcibly published so that everyone 
else in the world will be able to steal it.
  Mr. KENNEDY of Massachusetts. Mr. Chairman, reclaiming my time 
briefly, I have been in touch with the universities of my district. 
While they are not perhaps as actively supportive as the gentleman from 
North Carolina [Mr. Coble] would like, they do not oppose this 
amendment.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. KENNEDY of Massachusetts. I yield to the gentleman from 
Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, I would think we could 
state this very clearly. No, the universities are not supporting the 
committee bill, they are not supporting the bill of the gentleman from 
California. He is being unusually reticent. My friend from California 
is being unusually reticent in leaving his own bill out of this 
conversation. He is not ordinarily so modest about it.
  I have worked with the universities, with Harvard, and MIT and some 
others. My understanding of their position is that while they were 
originally opposed to H.R. 400, the changes we have made have brought 
them to a position of neutrality as between the two bills. I do believe 
they want to see a bill passed, but the fact is it seems rather odd for 
the proponents of one bill to be citing the universities' neutrality 
when the universities are neutral as between the two bills.
  Mr. CAMPBELL. Mr. Chairman, will the gentleman yield?
  Mr. KENNEDY of Massachusetts. I yield to the gentleman from 
California.
  Mr. CAMPBELL. Mr. Chairman, I think the correct point is that the 
universities have chosen to stay on the sidelines, and my colleague 
from Massachusetts, and I have both been in contact with them.
  I believe this is very significant, because if one asks them, and 
this is my guess, I am not saying anyone told me precisely, though one 
actually did, they would prefer neither. They would prefer we do not 
mess with the system.
  So the burden of proof should be on somebody who is proposing a major 
change in the patent bill. Research universities prefer no change, and 
that is what I think we should do.
  The CHAIRMAN. The time of the gentleman from Massachusetts [Mr. 
Kennedy] has expired.
  (By unanimous consent, Mr. Kennedy of Massachusetts was allowed to 
proceed for 2 additional minutes.)
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. KENNEDY of Massachusetts. I yield to the gentleman from 
Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, that is the oddest 
invocation of the burden of proof I have heard. The burden of proof is 
somehow on those who would support one bill, but not on those who would 
support one equally important.
  The gentleman said the burden of proof is on one. As a matter of 
fact, what is clear to me from working with the universities is this: 
They had some objections. We have improved the bill from their 
standpoint to the point where they do not now object to it. They are 
not choosing between the two bills. But I would differ. At least with 
the universities I have talked to, there are elements in this bill, 
including, for instance, blocking the diversion of patent fees from the 
Patent Office, which makes them want some bill, and there are others 
who believe that some action in light of what is going on 
internationally is important.
  The key point is this: People who are the proponents of one position 
versus another should not come in and simply say, oh, the universities 
do not like your position, when they have a neutral position. I think 
some Members got the impression that they have taken sides.
  Mr. KENNEDY of Massachusetts. Mr. Chairman, reclaiming my time, let 
me yield to the gentleman from California. If the Chairman would just 
let me know when I have about 30 seconds left so I might close.
  Mr. CAMPBELL. Mr. Chairman, there were things in the bill, however, 
that the universities do not like, like the reexamination procedure. 
They think they have a patent and then suddenly under this bill it can 
be opened up for reexamination in ways and in processes not under 
existing law.
  I agree with my colleague, the gentleman from Massachusetts [Mr. 
Frank]. The burden of proof is on anyone who wants to change the status 
quo, and that is true of the gentleman from California [Mr. 
Rohrabacher] and it is true of the gentleman from North Carolina [Mr. 
Coble]. But if you ask the universities, their bottom line is leave it 
alone, and that is what we should do today.
  Mr. KENNEDY of Massachusetts. Mr. Chairman, I would just like to 
close.
  I have come into this debate with an open mind. My sense is that 
there has been, in fact, significant advancements made on where the 
Moorhead bill was 2 years ago to where the Coble bill is today.
  My inclination, after having talked with the various universities and 
a lot of the small businesses, as well as other companies within my own 
district, that I think the gentleman from North Carolina [Mr. Coble] is 
making a significant effort forward, and I look forward to supporting 
his bill.

                              {time}  1545

  Mr. PEASE. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I just wish to follow up the comments of my colleague, 
the gentleman from Massachusetts [Mr. Frank], who has been in personal 
conversation with a number of the universities in the Northeast. Our 
staff, at the request of the chairman, the gentleman from North 
Carolina [Mr. Coble], together with his staff have spent a lot of time 
in conversation with associations which represent universities of all 
sizes, both public and private, across the country.
  My assessment of those conversations is that the representation of 
the

[[Page H1667]]

gentleman from Massachusetts [Mr. Frank] is in fact accurate; that 
while there were concerns about some portions of the initial 
legislation, those concerns have been addressed, and while no piece of 
legislation may be perfect, that what we have before us with the 
manager's amendment does meet the great majority of those concerns from 
what is a very diverse audience that includes public and private 
schools, small and large schools, individual professors working alone, 
and professors working together and in cooperation with major 
corporations.
  I think it would be as difficult to get consensus in higher education 
on this subject as it would be in this body to get consensus. But my 
assessment of the view of the associations with which we have worked is 
that the bill that we will have before us, after the manager's 
amendment, does address their major concerns.
  Mr. CAMPBELL. Mr. Chairman, will the gentleman yield?
  Mr. PEASE. I yield to the gentleman from California.
  Mr. CAMPBELL. I am grateful for the gentleman's yielding.
  Mr. Chairman, it is my understanding that there are four universities 
who have expressed an opinion, and if this is wrong I am asking the 
gentleman to correct it.
  It is my understanding that the State University of New York at Stony 
Brook supports Rohrabacher; that Louisiana State University supports 
Rohrabacher; that the University of Delaware supports Coble; that Rice 
University supports Coble; and that every other university has chosen 
not to take sides in this debate.
  If that is incorrect, I would most welcome the correction. But if it 
is correct, I would suggest that the burden of my remarks that I made, 
that the universities would really prefer that we not mess with this 
system, is more accurate.
  Mr. PEASE. Mr. Chairman, I cannot speak for the four universities 
individually to which the gentleman has made reference because we spoke 
only with associations, those who represent groups of universities, and 
not with individual universities. We did have conversations with 
individual universities, a number of them in the Midwest. In each case 
they referred us to the associations of which they were members.
  Mr. CAMPBELL. If the gentleman will continue to yield, Mr. Chairman, 
does the gentleman know, since he has been in touch with the university 
associations, does any association of universities support either of 
these two bills, to the gentleman's knowledge?
  Mr. PEASE. To my knowledge, none of the major associations has taken 
a position on either bill.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. PEASE. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, I think we may be back in 
the Subcommittee on the Constitution of the Committee on the Judiciary, 
apparently. It sounds like some of my friends are about to create a 
third house of Congress, which is the universities, and only if they 
vote positively can we pass a bill.
  Mr. Chairman, I differ with the implicit imputation of great 
inarticulateness to the university sector. The gentleman from 
California says it is true they have said they do not support or oppose 
either bill. They do not oppose it. But the gentleman says that he 
infers from the fact that they do not support or oppose either bill the 
fact that they oppose any bill at all.
  In my experience, universities are not reticent. When universities 
have positions, they tell us. The fact that the universities have not 
said they were opposed to this would lead me to the conclusion, perhaps 
it is going out on a limb, but when the universities tell me they are 
not opposed to a bill, I infer they are not opposed to a bill. Perhaps 
there are subtleties unbeknownst to me.
  I worked with universities when they were opposed, and when they were 
they have said so. So we have made some changes, and they are not now 
opposed to this, they are neutral. It does not seem to me we have to 
absolutely do whatever they say, anyway. But neutrality is not 
opposition.
  Mr. CAMPBELL. Mr. Chairman, if the gentleman will yield further, I 
believe that the gentleman from Massachusetts and I agree that there is 
a burden of proof in debate, there is a burden of proof in those who 
would change the status quo, and the university community is not a 
third house of Congress, nor have I set it up to be so.
  But they are important. And they are not reticent in letting us know 
things they want, like major assistance with research, particularly in 
the times of a shrinking budget. That they have not done so is to me a 
very important point. That they have chosen to be silent regarding this 
bill is to me quite significant, if we start from the premise that 
there is a burden of proof on anyone who wants to change the status 
quo.
  What we are left with, and I appreciate the gentleman's yielding, is 
that there are those who commercialize, like the Coble bill, those who 
invent, like the Rohrabacher bill, and universities have one foot in 
each camp, they both commercialize and invent, and it seems to me for 
that reason they are staying out.
  Ms. KAPTUR. Mr. Chairman, I move to strike the requisite number of 
words.
  (Ms. KAPTUR asked and was given permission to revise and extend her 
remarks.)
  Ms. KAPTUR. Mr. Chairman, I rise in support of the Rohrabacher 
substitute and against H.R. 400. Mr. Chairman, I wanted to read into 
the Record some of the organizations that are opposing H.R. 400 and 
supporting the Rohrabacher substitute, organizations like the Alliance 
for American Innovation, the American College of Physician Inventors, 
the American Small Business Association, the National Association for 
the Self-employed, the National Association of Women Business Owners, 
the National Congress of Inventor Organizations, the National Patent 
Association, the National Small Business United. These are not 
insignificant organizations.
  The Patent Office Professional Association, the Ohio State Bar 
Association, from my home State. This is a very small, partial list. 
The Small Business Legislative Council, the Small Business Technology 
Coalition, the Small Entity Patent Owners Association, United Inventors 
of America. One of the great scholars of our time, Franklin Modigliani 
at MIT, a Nobel laureate.
  These are not insignificant organizations, nor individuals; inventors 
like Dr. Paul Burstein, the inventor of rocket motor inspection 
systems, or Gertrude Elion, the inventor of leukemia-fighting and 
transplant rejection drugs.
  There are people here who recognize what is being proposed in the 
base bill is in fact a significant departure from current practice. 
They are not satisfied with the so-called changes that are being made 
actually every moment, from what I can tell from this position here, in 
order to accommodate the flaws that exist in the base bill.
  So I would say to the Members, Mr. Chairman, that it is very 
important to recognize that we not tamper with a system that is 
working, that has worked for centuries, and certainly for the last 
several decades as the United States in this century became the 
preeminent industrial and agricultural leader of the world.
  H.R. 400, in contrast to the substitute, is actually taking us back, 
not forward. Why we would want to subject our inventors to divulge the 
contents of their patent application before it is granted is beyond me. 
I do not know why we want to take that secret protection away and 
involve them in litigation. Why would we want to do that? Why would we 
want to do that domestically, and certainly why would we want to 
subject them to cases internationally, which are so expensive that most 
of the smaller inventors cannot even afford to defend their interests?
  The average American knows it is hard for them to go to court and pay 
the court costs in this country. Can Members imagine what it is going 
to be like to deal with international infringements on their patent 
applications if they have to function under this proposed base bill?
  Mr. ROHRABACHER. Mr. Chairman, will the gentlewoman yield?
  Ms. KAPTUR. I yield to the gentleman from California.
  Mr. ROHRABACHER. Mr. Chairman, this is, after all, the ultimate 
bipartisan issue that we have been discussing

[[Page H1668]]

today, and who supports the little guy. That is what we are trying to 
do with the Rohrabacher substitute.
  Most people know there are a lot of conservative Republicans who have 
spoken today, and the gentlewoman has been here as well. Are there not 
many people on the gentlewoman's side of the aisle who are very 
concerned about this? Perhaps the gentlewoman would like to talk about 
some of the others who are supporting the Rohrabacher substitute, 
because I am proud to have many, many, liberal Democrats on our side 
protecting the little guy.
  Ms. KAPTUR. Mr. Chairman, that is right. Actually, the gentlewoman 
from California, Ms. Maxine Waters, was down here earlier and had to go 
back to a markup. She is supporting this legislation.
  The gentleman from Missouri, Mr. Dick Gephardt, our minority leader, 
will be supporting the Rohrabacher substitute.
  The gentleman from Michigan, Mr. David Bonior, on our side of the 
aisle will be supporting the substitute. So frankly, I think this issue 
goes down to the point of who has actually read the legislation and who 
has not, and most Members do not serve on the Subcommittee on Courts 
and Intellectual Property of the Committee on the Judiciary. Therefore, 
they have not had an opportunity to follow some of the machinations.
  I respect the gentlewoman's work on this measure. I know how hard she 
has worked on it, I know she has been accommodating to many of the 
changes we have been trying to make.
  Mr. Chairman, the bill is not where we would like it to be yet, and 
therefore I remain supporting the Rohrabacher substitute, but we have 
broad bipartisan support on our side of the issue, and I look forward 
to the vote.
  Ms. LOFGREN. Mr. Chairman, will the gentlewoman yield?
  Ms. KAPTUR. I yield to the gentlewoman from California.
  Ms. LOFGREN. Mr. Chairman, I just wanted to point out that that 
leaves only right-wing Democrats such as the gentleman from 
Massachusetts [Mr. Frank] and myself in support of the manager's 
amendment.
  Mr. ROHRABACHER. Mr. Chairman, I move to strike the requisite number 
of words.
  Mr. Chairman, it seems that the debate on submarine patenting has 
calmed down a bit, seeing the fact that we have stated over and over 
and over again, and used the Congressional Research Service finding, to 
prove beyond anyone's reasonable doubt that we have taken care of any 
potential submarine patenting problem.
  I have with me the Congressional Research Service report that says 
that our alternative, basically the Rohrabacher substitute, will end 
the practice of submarine patenting. So that is the only substantial 
argument that the other side has to say that we should fundamentally 
change our patent system. They are proposing, in the name of stopping 
submarine patenting, because it is the only way to stop it is to change 
the fundamental law that has protected American technology for 225 
years.
  No, I have an alternative. The alternative was found by an 
independent reading by the Congressional Research Service to end 
submarine patenting. So what do we have? We have a proposal here to gut 
fundamental protections for American inventors, giving our technology 
away in order to end the submarine patenting problem, which we say we 
found another way to solve.
  No, we do not have to cut our leg off in order to cure a hangnail or 
an infected toe. We do not have to destroy all freedom of speech 
because someone wants to publish Hustler magazine. In this particular 
case, people are moving forward to change the fundamentals, the 
fundamentals in our system that have served our country well, that have 
made us the leader in technology and ensured our people the highest 
standard of living, ensured our country the security we have because we 
have had the technological edge.
  We have had the technological edge because the fundamentals have been 
right. This bill would change those fundamentals. One fundamental is a 
guaranteed patent term of 17 years. Their bill would go along with the 
elimination of that which took place 3 years ago when someone, in an 
underhanded maneuver, snuck that change into the GATT implementation 
legislation, although it was not required by GATT; the most underhanded 
move that I have seen since I have been here in Congress. Our bill 
would restore that guaranteed 17-year patent term that has served 
America well for 225 years.
  The second element that my substitute restores and guarantees, the 
confidentiality; the right of our citizens, that when they apply for a 
patent, that until that patent is issued it is going to be secret. We 
are not going to give away all the secrets to foreign multinational 
corporations to steal until the patent is issued.
  What do we hear here? We have effectively exempted small business. We 
can put that argument to rest, too. What does ``effectively'' mean? We 
know what that means. That is a weasel word. The public knows what it 
means, too. It means that someone is trying to project that a change 
has happened and the change has not happened. That is what effectively 
means.
  No, small business has not been exempt, individuals have not been 
exempt. As the gentleman from California, Mr. Tom Campbell, brought out 
with his colloquy, no; they are not. They are still going to be 
published. The whole world will see every one of our secrets.
  Please do not tell us that the Chinese Liberation Army is going to be 
deterred from using our secrets, going into manufacturing, making 
profit from those secrets, using those secrets in their technology 
against us, and then 5 years later or 10 years later, when the inventor 
is finally issued the patent, he gets to sue the Peoples Liberation 
Army?
  They have taken care of the problem? That is a joke, and it is a sick 
joke that opens up all of our people to the worst kind of theft. Yes, 
the Chinese Army, I can hear them now, or Mitsubishi Corp: ``I am using 
your technology? So, sue me.'' Yes, great. That is going to really 
protect our people and protect our country. This is an escalator down 
for our leadership in American technology.
  By the way, something else I have heard today, yes, we have heard 
today that they have taken the provision out that permits this new 
corporatized Patent Office, where the Patent Office is part of the 
Government, making it a corporate entity; but they did manage to take 
out that part that says this corporate organization can accept gifts.
  Why? Because the gentleman from North Carolina [Mr. Coble] has 
explained, because they were permitted to accept gifts anyway. But what 
was not explained was that yes, they are able to accept gifts like 
anybody else, but this bill waives restrictions, because now it is a 
corporate entity, and they will not have the same restrictions that 
other Government agencies have when they accept gifts.

                              {time}  1600

  The GSA, the Commerce Department are no longer going to be in control 
of how those gifts are used. So what we have got is a Patent Office 
that can accept foreign gifts, and the controls over how those gifts 
are used are being taken away.
  The CHAIRMAN. The time of the gentleman from California [Mr. 
Rohrabacher] has expired.
  (By unanimous consent, Mr. ROHRABACHER was allowed to proceed for 2 
additional minutes.)
  Mr. ROHRABACHER. Mr. Chairman, the patent examiners who work so hard 
in this country, these are people who make decisions that are worth 
billions and billions of dollars and whether our country will enjoy 
them, who will benefit from them, these patent examiners work hard and 
they have been totally insulated from outside influences because they 
have been part of the U.S. Government. They are opposed to H.R. 400. 
They are pleading with us, do not do this to us, because they have no 
idea what outside influences will come to play. No one knows.
  We change something so fundamentally as making it a corporate 
structure rather than part of our Government, who knows what pressures 
will be put on these stalwart Government employees who are trying to do 
their job.
  Finally let me say, my substitute has taken everything that has been 
done

[[Page H1669]]

that is of benefit, that is a good thing for America out of the work of 
the gentleman from North Carolina [Mr. Coble] and out of H.R. 400, and 
we have incorporated it into the substitute.
  What we do not have is the publication that will make available to 
everyone to steal our technology after 18 months. We do not have the 
corporatization that will open up our patent examiners to outside 
influences, and what we do is we protect the fundamental system of 
American patent law that has made America the greatest country in the 
world. That is why we have so many Nobel laureates and all the Nobel 
laureates are on our side.
  Do not be fooled with the idea that you to have cut your leg off to 
cure the hangnail of submarine patenting. We need to protect this 
American system that has done so much wonder for our people and created 
such a wondrous land. Those people in the small businesses, those Nobel 
laureates, those inventors, they are on our side. The big corporations 
are on the other side, and they put a lot of pressure on the 
universities and a lot of pressure on other people.
  But we still have a democracy. The people still rule here. This bill 
protects the fundamental rights of Americans. That is why we do not 
want to harmonize with Japan. We do not want to harmonize with Europe. 
We want to have a better system where the individual rights of our 
citizens are protected.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from North Carolina [Mr. Coble].
  The amendment was agreed to.


   Amendment in the Nature of a Substitute Offered by Mr. Rohrabacher

  Mr. ROHRABACHER. Mr. Speaker, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. The Clerk will designate the amendment in the nature of 
a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment in the nature of a substitute offered by Mr. 
     Rohrabacher:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Patent Rights and 
     Sovereignty Act of 1997''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) the right of an inventor to secure a patent is assured 
     through the authorization powers of the Congress contained in 
     Article I, section 8 of the Constitution, has been 
     consistently upheld by the Congress, and has been the 
     stimulus to the unique technological innovativeness of the 
     United States;
       (2) the right must be assured for a guaranteed length of 
     time in the term of the issued patent and be further secured 
     by maintaining absolute confidentiality of all patent 
     application data until the patent is granted if the applicant 
     is timely prosecuting the patent;
       (3) the quality of United States patents is also an 
     essential stimulus for preserving the technological lead and 
     economic well-being of the United States in the next century;
       (4) the process of examining and issuing patents is an 
     inherently governmental function that must be performed by 
     Federal employees acting in their quasi-judicial roles under 
     regular executive and legislative oversight; and
       (5) the quality of United States patents is inextricably 
     linked to the professionalism of patent examiners and the 
     quality of the training of patent examiners as well as to the 
     resources supplied to the Patent and Trademark Office in the 
     way of adequate manpower, appropriately maintained search 
     files, and other needed professional tools.

     SEC. 3. SECURE PATENT EXAMINATION.

       Section 3 of title 35, United States Code, is amended by 
     adding at the end thereof the following:
       ``(f) All examination and search duties for the grant of 
     United States patents are sovereign functions which shall be 
     performed within the United States by United States citizens 
     who are employees of the United States Government.''.

     SEC. 4. MAINTENANCE OF EXAMINERS' SEARCH FILES.

       Section 9 of title 35, United States Code, is amended--
       (1) by striking ``may revise and maintain'' and inserting 
     ``shall maintain and revise''; and
       (2) by adding at the end thereof the following: ``United 
     States patents, and all such other patents and printed 
     publications shall be maintained in the examiners' search 
     files under the United States Patent Classification 
     System.''.

     SEC. 5. PATENT EXAMINER TRAINING.

       (a) In General.--Chapter 1 of title 35, United States Code, 
     is amended by adding at the end the following new section:

     ``Sec. 15. Patent examiner training

       ``(a) In General.--All patent examiners shall spend at 
     least 5 percent of their duty time per annum in training to 
     maintain and develop the legal and technological skills 
     useful for patent examination.
       ``(b) Trainers of Examiners.--The Patent and Trademark 
     Office shall develop an incentive program to retain as 
     employees patent examiners of the primary examiner grade or 
     higher who are eligible for retirement, for the sole purpose 
     of training patent examiners who have not achieved the grade 
     of primary examiner.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 1 is amended by adding at the end the following:

``15. Patent examiner training.''

     SEC. 6. ADMINISTRATIVE MATTERS.

       (a) Limitations on Personnel.--Section 3(a) of title 35, 
     United States Code, is amended by adding at the end thereof 
     the following: ``The Office shall not be subject to any 
     administratively or statutorily imposed limitation on 
     positions or personnel, and no positions or personnel of the 
     Office shall be taken into account for purposes of applying 
     any such limitation.''.
       (b) Retention of Fees.--(1) Section 255(g)(1)(A) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 (2 
     U.S.C. 905(g)(1)(A)) is amended by inserting after the item 
     relating to the National Credit Union Administration, credit 
     union share insurance fund, the following new item:
       ``Patent and Trademark Office''.
       (2) Section 10101(b)(2)(B) of the Omnibus Budget 
     Reconciliation Act of 1990 (35 U.S.C. 41 note) is amended by 
     striking ``, to the extent provided in appropriation Acts,'' 
     and inserting ``without appropriation''.
       (3) Section 42(c) of title 35, United States Code, is 
     amended by striking the first sentence and inserting the 
     following: ``Revenues from fees shall be available to the 
     Commissioner to carry out the activities of the Patent and 
     Trademark Office, in such allocations as are approved by Act 
     of Congress. Such revenues shall not be made available for 
     any purpose other than that authorized for the Patent and 
     Trademark Office.''.
       (c) Use of Fees.--Section 42(c) of title 35, United States 
     Code, is amended by adding at the end thereof the following: 
     ``All patent application fees collected under paragraphs (1), 
     (3)(A), (3)(B), and (4) through (8) of section 41(a), and all 
     other fees collected under section 41 for services or the 
     extension of services to be provided by patent examiners 
     shall be used only for the pay and training of patent 
     examiners.''.
       (d) Publications.--Section 11 of title 35, United States 
     Code, is amended by adding at the end thereof the following:
       ``(c) The Patent and Trademark Office shall make available 
     for public inspection during regular business hours all 
     solicitations issued by the Office for contracts for goods or 
     services and all contracts for goods or services entered into 
     by the Office.
       ``(d) Notice of a proposal to change United States patent 
     law that will be made on behalf of the United States to a 
     foreign country or international body shall be published in 
     the Federal Register before, or at the same time as, the 
     proposal is transmitted.''.

     SEC. 7. GAO STUDY AND REPORT.

       (a) In General.--The Comptroller General shall conduct a 
     study of--
       (1) the total number of patents applied for, issued, 
     abandoned, and pending in the period of the study;
       (2) the classification of the applicants for patents in 
     terms of the country they are a citizen of and whether they 
     are an individual inventor, small entity, or other:
       (3) the pendency time for applications for patents and such 
     other time and tracking data as may indicate the 
     effectiveness of the amendments made by this Act;
       (4) the number of applicants for patents who also file for 
     a patent in a foreign country, the number of foreign 
     countries in which such filings occur and which publish data 
     from patent applications in English and make it available to 
     citizens of the United States through governmental or 
     commercial sources;
       (5) a summary of the fees collected by the Patent and 
     Trademark Office for services related to patents and a 
     comparison of such fees with the fully allocated costs of 
     providing such services; and
       (6) recommendations regarding--
       (A) a revision of the organization of the Patent and 
     Trademark Office with respect to its patent functions, and
       (B) improved operating procedures in carrying out such 
     functions,

     and a cost analysis of the fees for such procedures and the 
     impact of the fees.
       (b) Additional Study Matter.--The Committees on 
     Appropriations, Judiciary, and Small Business of the House of 
     Representatives and the Senate may, no later than 12 months 
     after the beginning of the study under subsection (a), direct 
     the Comptroller General to include other matters relating to 
     patents and the Patent and Trademark Office in the study 
     conducted under subsection (a).
       (c) Report.--Upon the expiration of 36 months after the 
     beginning of the study under subsection (a), the Comptroller 
     General shall report the results of the study to the 
     Congress.

     SEC. 8. PATENT TERMS.

       (a) Amendment of Title.--Effective on the date of the 
     enactment of this Act, section 154 of title 35, United States 
     Code, as amended by the Uruguay Round Agreements Act, is 
     amended--

[[Page H1670]]

       (1) in paragraph (2) of subsection (a), by striking ``and 
     ending'' and all that follows in that paragraph and inserting 
     ``and ending--
       ``(A) 17 years from the date of the grant of the patent, or
       ``(B) 20 years from the date on which the application for 
     the patent was filed in the United States, except that if the 
     application contains a specific reference to an earlier filed 
     application or applications under section 120, 121, or 365(c) 
     of this title, 20 years from the date on which the earliest 
     such patent application was filed,

     whichever is later.''.
       (2) in subsection (c)(1), by striking ``shall be the 
     greater of the 20-year term as provided in subsection (a), or 
     17 years from grant'' and inserting ``shall be the term 
     provided in subsection (a)''.
       (b) Technical Amendment.--Section 534(b) of the Uruguay 
     Round Agreements Act is amended by striking paragraph (3).

     SEC. 9. DEFINITION OF SPECIAL CIRCUMSTANCES TO PROTECT THE 
                   CONFIDENTIALITY STATUS OF APPLICATIONS.

       Section 122 of title 35, United States Code, is amended by 
     striking ``as may be determined by the Commissioner'' and 
     inserting ``as in any of the following:
       ``(1) In the case of an application under section 111(a) 
     for a patent for an invention for which the applicant intends 
     to file or has filed an application for a patent in a foreign 
     country, the Commissioner may publish, at the discretion of 
     the Commissioner and by means determined suitable for the 
     purpose, no more than that data from such application under 
     section 111(a) which will be made or has been made public in 
     such foreign country. Such a publication shall be made only 
     after the date of the publication in such foreign country and 
     shall be made only if the data is not available, or cannot be 
     made readily available, in the English language through 
     commercial services.
       ``(2)(A) If the Commissioner determines that a patent 
     application which is filed after the date of the enactment of 
     this paragraph--
       ``(i) has been pending more than 5 years from the effective 
     filing date of the application,
       ``(ii) has not been previously published by the Patent and 
     Trademark Office,
       ``(iii) is not under any appellate review by the Board of 
     Patent Appeals and Interferences,
       ``(iv) is not under interference proceedings in accordance 
     with section 135(a),
       ``(v) is not under any secrecy order pursuant to section 
     181,
       ``(vi) is not being diligently pursued by the applicant in 
     accordance with this title, and
       ``(vii) is not in abandonment,

     the Commissioner shall notify the applicant of such 
     determination.
       ``(B) An applicant which received notice of a determination 
     described in subparagraph (A) may, within 30 days of 
     receiving such notice, petition the Commissioner to review 
     the determination to verify that subclauses (i) through (vii) 
     are all applicable to the applicant's application. If the 
     applicant makes such a petition, the Commissioner shall not 
     publish the applicant's application before the Commissioner's 
     review of the petition is completed. If the applicant does 
     not submit a petition, the Commissioner may publish the 
     applicant's application no earlier than 90 days after giving 
     such a notice.
       ``(3) If after the date of the enactment of this paragraph 
     a continuing application has been filed more than 6 months 
     after the date of the initial filing of an application, the 
     Commissioner shall notify the applicant under such 
     application. The Commissioner shall establish a procedure for 
     an applicant which receives such a notice to demonstrate that 
     the purpose of the continuing application was for reasons 
     other than to achieve a delay in the time of publication of 
     the application. If the Commissioner agrees with such a 
     demonstration by the applicant, the Commissioner shall not 
     publish the applicant's application. If the Commissioner does 
     not agree with such a demonstration by the applicant or if 
     the applicant does not make an attempt at such a 
     demonstration within a reasonable period of time as 
     determined by the Commissioner, the Commissioner shall 
     publish the applicant's application.

     The Commissioner shall ensure that publications under 
     paragraph (1), (2), or (3) will not result in third-party 
     pre-issuance oppositions which will delay or interfere with 
     the issuance of the patents whose applications' data will be 
     published.''.

     SEC. 10. INVENTION DEVELOPMENT SERVICES.

       (a) Invention Development Services.--Part I of title 35, 
     United States Code, is amended by adding after chapter 4 the 
     following new chapter:

              ``CHAPTER 5--INVENTION DEVELOPMENT SERVICES

``Sec.
``51. Definitions.
``52. Contracting requirements.
``53. Standard provisions for cover notice.
``54. Reports to customer required.
``55. Mandatory contract terms.
``56. Remedies.
``57. Records of complaints.
``58. Fraudulent representation by an invention developer.
``59. Rule of construction.

     ``Sec. 51. Definitions

       ``For purposes of this chapter--
       ``(1) the term `contract for invention development 
     services' means a contract by which an invention developer 
     undertakes invention development services for a customer;
       ``(2) the term `customer' means any person, firm, 
     partnership, corporation, or other entity who is solicited 
     by, seeks the services of, or enters into a contract with an 
     invention promoter for invention promotion services;
       ``(3) the term `invention promoter' means any person, firm, 
     partnership, corporation, or other entity who offers to 
     perform or performs for, or on behalf of, a customer any act 
     described under paragraph (4), but does not include--
       ``(A) any department or agency of the Federal Government or 
     of a State or local government;
       ``(B) any nonprofit, charitable, scientific, or educational 
     organization, qualified under applicable State law or 
     described under section 170(b)(1)(A) of the Internal Revenue 
     Code of 1986; or
       ``(C) any person duly registered with, and in good standing 
     before, the United States Patent and Trademark Office acting 
     within the scope of that person's registration to practice 
     before the Patent and Trademark Office; and
       ``(4) the term `invention development services' means, with 
     respect to an invention by a customer, any act involved in--
       ``(A) evaluating the invention to determine its 
     protectability as some form of intellectual property, other 
     than evaluation by a person licensed by a State to practice 
     law who is acting solely within the scope of that person's 
     professional license;
       ``(B) evaluating the invention to determine its commercial 
     potential by any person for purposes other than providing 
     venture capital; or
       ``(C) marketing, brokering, licensing, selling, or 
     promoting the invention or a product or service in which the 
     invention is incorporated or used, except that the display 
     only of an invention at a trade show or exhibit shall not be 
     considered to be invention development services.

     ``Sec. 52. Contracting requirements

       ``(a) In General.--(1) Every contract for invention 
     development services shall be in writing and shall be subject 
     to the provisions of this chapter. A copy of the signed 
     written contract shall be given to the customer at the time 
     the customer enters into the contract.
       ``(2) If a contract is entered into for the benefit of a 
     third party, such party shall be considered a customer for 
     purposes of this chapter.
       ``(b) Requirements of Invention Developer.--The invention 
     developer shall--
       ``(1) state in a written document, at the time a customer 
     enters into a contract for invention development services, 
     whether the usual business practice of the invention 
     developer is to--
       ``(A) seek more than 1 contract in connection with an 
     invention; or
       ``(B) seek to perform services in connection with an 
     invention in 1 or more phases, with the performance of each 
     phase covered in 1 or more subsequent contracts; and
       ``(2) supply to the customer a copy of the written document 
     together with a written summary of the usual business 
     practices of the invention developer, including--
       ``(A) the usual business terms of contracts; and
       ``(B) the approximate amount of the usual fees or other 
     consideration that may be required from the customer for each 
     of the services provided by the developer.
       ``(c) Right of Customer To Cancel Contract.--(1) 
     Notwithstanding any contractual provision to the contrary, a 
     customer shall have the right to terminate a contract for 
     invention development services by sending a written letter to 
     the invention developer stating the customer's intent to 
     cancel the contract. The letter of termination must be 
     deposited with the United States Postal Service on or before 
     5 business days after the date upon which the customer or the 
     invention developer executes the contract, whichever is 
     later.
       ``(2) Delivery of a promissory note, check, bill of 
     exchange, or negotiable instrument of any kind to the 
     invention developer or to a third party for the benefit of 
     the invention developer, without regard to the date or dates 
     appearing in such instrument, shall be deemed payment 
     received by the invention developer on the date received for 
     purposes of this section.

     ``Sec. 53. Standard provisions for cover notice

       ``(a) Contents.--Every contract for invention development 
     services shall have a conspicuous and legible cover sheet 
     attached with the following notice imprinted in boldface type 
     of not less than 12-point size:
       `` `YOU HAVE THE RIGHT TO TERMINATE THIS CONTRACT. TO 
     TERMINATE THIS CONTRACT, YOU MUST SEND A WRITTEN LETTER TO 
     THE COMPANY STATING YOUR INTENT TO CANCEL THIS CONTRACT. THE 
     LETTER OF TERMINATION MUST BE DEPOSITED WITH THE UNITED 
     STATES POSTAL SERVICE ON OR BEFORE FIVE (5) BUSINESS DAYS 
     AFTER THE DATE ON WHICH YOU OR THE COMPANY EXECUTE THE 
     CONTRACT, WHICHEVER IS LATER.
       `` `THE TOTAL NUMBER OF INVENTIONS EVALUATED BY THE 
     INVENTION DEVELOPER FOR COMMERCIAL POTENTIAL IN THE PAST FIVE 
     (5) YEARS IS __________. OF THAT NUMBER, __________ RECEIVED 
     POSITIVE EVALUATIONS AND __________ RECEIVED NEGATIVE 
     EVALUATIONS.

[[Page H1671]]

       `` `IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION 
     TO THE INVENTION DEVELOPER, THE INVENTION DEVELOPER MAY HAVE 
     THE RIGHT TO SELL OR DISPOSE OF THE INVENTION WITHOUT YOUR 
     CONSENT AND MAY NOT HAVE TO SHARE THE PROFITS WITH YOU.
       `` `THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH 
     THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS IS 
     __________. THE TOTAL NUMBER OF CUSTOMERS KNOWN BY THIS 
     INVENTION DEVELOPER TO HAVE RECEIVED, BY VIRTUE OF THIS 
     INVENTION DEVELOPER'S PERFORMANCE, AN AMOUNT OF MONEY IN 
     EXCESS OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION 
     DEVELOPER IS ______________.
       `` `THE OFFICERS OF THIS INVENTION DEVELOPER HAVE 
     COLLECTIVELY OR INDIVIDUALLY BEEN AFFILIATED IN THE LAST TEN 
     (10) YEARS WITH THE FOLLOWING INVENTION DEVELOPMENT 
     COMPANIES: (LIST THE NAMES AND ADDRESSES OF ALL PREVIOUS 
     INVENTION DEVELOPMENT COMPANIES WITH WHICH THE PRINCIPAL 
     OFFICERS HAVE BEEN AFFILIATED AS OWNERS, AGENTS, OR 
     EMPLOYEES). YOU ARE ENCOURAGED TO CHECK WITH THE UNITED 
     STATES PATENT AND TRADEMARK OFFICE, THE FEDERAL TRADE 
     COMMISSION, YOUR STATE ATTORNEY GENERAL'S OFFICE, AND THE 
     BETTER BUSINESS BUREAU FOR ANY COMPLAINTS FILED AGAINST ANY 
     OF THESE COMPANIES.
       `` `YOU ARE ENCOURAGED TO CONSULT WITH AN ATTORNEY OF YOUR 
     OWN CHOOSING BEFORE SIGNING THIS CONTRACT. BY PROCEEDING 
     WITHOUT THE ADVICE OF AN ATTORNEY REGISTERED TO PRACTICE 
     BEFORE THE UNITED STATES PATENT AND TRADEMARK OFFICE, YOU 
     COULD LOSE ANY RIGHTS YOU MIGHT HAVE IN YOUR IDEA OR 
     INVENTION.'.
       ``(b) Other Requirements for Cover Notice.--The cover 
     notice shall contain the items required under subsection (a) 
     and the name, primary office address, and local office 
     address of the invention developer, and may contain no other 
     matter.
       ``(c) Disclosure of Certain Customers Not Required.--The 
     requirement in the notice set forth in subsection (a) to 
     include the `TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED 
     WITH THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS' need 
     not include information with respect to customers who have 
     purchased trade show services, research, advertising, or 
     other nonmarketing services from the invention developer, nor 
     with respect to customers who have defaulted in their 
     payments to the invention developer.

     ``Sec. 54. Reports to customer required

       ``With respect to every contract for invention development 
     services, the invention developer shall deliver to the 
     customer at the address specified in the contract, at least 
     once every 3 months throughout the term of the contract, a 
     written report that identifies the contract and includes--
       ``(1) a full, clear, and concise description of the 
     services performed to the date of the report and of the 
     services yet to be performed and names of all persons who it 
     is known will perform the services; and
       ``(2) the name and address of each person, firm, 
     corporation, or other entity to whom the subject matter of 
     the contract has been disclosed, the reason for each such 
     disclosure, the nature of the disclosure, and complete and 
     accurate summaries of all responses received as a result of 
     those disclosures.

     ``Sec. 55. Mandatory contract terms

       ``(a) Mandatory Terms.--Each contract for invention 
     development services shall include in boldface type of not 
     less than 12-point size--
       ``(1) the terms and conditions of payment and contract 
     termination rights required under section 52;
       ``(2) a statement that the customer may avoid entering into 
     the contract by not making a payment to the invention 
     developer;
       ``(3) a full, clear, and concise description of the 
     specific acts or services that the invention developer 
     undertakes to perform for the customer;
       ``(4) a statement as to whether the invention developer 
     undertakes to construct, sell, or distribute one or more 
     prototypes, models, or devices embodying the invention of the 
     customer;
       ``(5) the full name and principal place of business of the 
     invention developer and the name and principal place of 
     business of any parent, subsidiary, agent, independent 
     contractor, and any affiliated company or person who it is 
     known will perform any of the services or acts that the 
     invention developer undertakes to perform for the customer;
       ``(6) if any oral or written representation of estimated or 
     projected customer earnings is given by the invention 
     developer (or any agent, employee, officer, director, 
     partner, or independent contractor of such invention 
     developer), a statement of that estimation or projection and 
     a description of the data upon which such representation is 
     based;
       ``(7) the name and address of the custodian of all records 
     and correspondence relating to the contracted for invention 
     development services, and a statement that the invention 
     developer is required to maintain all records and 
     correspondence relating to performance of the invention 
     development services for such customer for a period of not 
     less than 2 years after expiration of the term of such 
     contract; and
       ``(8) a statement setting forth a time schedule for 
     performance of the invention development services, including 
     an estimated date in which such performance is expected to be 
     completed.
       ``(b) Invention Developer as Fiduciary.--To the extent that 
     the description of the specific acts or services affords 
     discretion to the invention developer with respect to what 
     specific acts or services shall be performed, the invention 
     developer shall be deemed a fiduciary.
       ``(c) Availability of Information.--Records and 
     correspondence described under subsection (a)(7) shall be 
     made available after 7 days written notice to the customer or 
     the representative of the customer to review and copy at a 
     reasonable cost on the invention developer's premises during 
     normal business hours.

     ``Sec. 56. Remedies

       ``(a) In General.--
       ``(1) Voidable contract.--Any contract for invention 
     development services that does not comply with the applicable 
     provisions of this chapter shall be voidable at the option of 
     the customer.
       ``(2) Reliance on false, fraudulent, or misleading 
     information.--Any contract for invention development services 
     entered into in reliance upon any material false, fraudulent, 
     or misleading information, representation, notice, or 
     advertisement of the invention developer (or any agent, 
     employee, officer, director, partner, or independent 
     contractor of such invention developer) shall be voidable at 
     the option of the customer.
       ``(3) Waiver.--Any waiver by the customer of any provision 
     of this chapter shall be deemed contrary to public policy and 
     shall be void and unenforceable.
       ``(4) Action by developer.--Any contract for invention 
     development services which provides for filing for and 
     obtaining utility, design, or plant patent protection shall 
     be voidable at the option of the customer unless the 
     invention developer offers to perform or performs such act 
     through a person duly registered to practice before, and in 
     good standing with, the Patent and Trademark Office.
       ``(b) Civil Action.--
       ``(1) In general.--Any customer who is injured by a 
     violation of this chapter by an invention developer or by any 
     material false or fraudulent statement or representation, or 
     any omission of material fact, by an invention developer (or 
     any agent, employee, director, officer, partner, or 
     independent contractor of such invention developer) or by 
     failure of an invention developer to make all the disclosures 
     required under this chapter, may recover in a civil action 
     against the invention developer (or the officers, directors, 
     or partners of such invention developer) in addition to 
     reasonable costs and attorneys' fees, the greater of--
       ``(A) $5,000; or
       ``(B) the amount of actual damages sustained by the 
     customer.
       ``(2) Damage increase.--Notwithstanding paragraph (1), the 
     court may increase damages to not more than 3 times the 
     amount awarded.
       ``(c) Rebuttable Presumption of Injury.--For purposes of 
     this section, substantial violation of any provision of this 
     chapter by an invention developer or execution by the 
     customer of a contract for invention development services in 
     reliance on any material false or fraudulent statements or 
     representations or omissions of material fact shall establish 
     a rebuttable presumption of injury.

     ``Sec. 57. Records of complaints

       ``(a) Release of Complaints.--The Director shall make all 
     complaints received by the United States Patent and Trademark 
     Office involving invention developers publicly available, 
     together with any response of the invention developers.
       ``(b) Request for Complaints.--The Director may request 
     complaints relating to invention development services from 
     any Federal or State agency and include such complaints in 
     the records maintained under subsection (a), together with 
     any response of the invention developers.

     ``Sec. 58. Fraudulent representation by an invention 
       developer

       ``Whoever, in providing invention development services, 
     knowingly provides any false or misleading statement, 
     representation, or omission of material fact to a customer or 
     fails to make all the disclosures required under this 
     chapter, shall be guilty of a misdemeanor and fined not more 
     than $10,000 for each offense.

     ``Sec. 59. Rule of construction

       ``Except as expressly provided in this chapter, no 
     provision of this chapter shall be construed to affect any 
     obligation, right, or remedy provided under any other Federal 
     or State law.''.
       (b) Technical and Conforming Amendment.--The table of 
     chapters for part I of title 35, United States Code, is 
     amended by adding after the item relating to chapter 4 the 
     following:

``5. Invention Development Services...........................51''.....

     SEC. 11. PROVISIONAL APPLICATIONS, PLANT BREEDER'S RIGHTS, 
                   DIVISIONAL APPLICATIONS.

       (a) Abandonment.--Section 111(b)(5) of title 35, United 
     States Code, is amended to read as follows:
       ``(5) Abandonment.--Notwithstanding the absence of a claim, 
     upon timely request and

[[Page H1672]]

     as prescribed by the Director, a provisional application may 
     be treated as an application filed under subsection (a). If 
     no such request is made, the provisional application shall be 
     regarded as abandoned 12 months after the filing date of such 
     application and shall not be subject to revival 
     thereafter.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     applies to any provisional application filed on or after June 
     8, 1995.
       (c) International Applications.--Section 119 of title 35, 
     United States Code, is amended--
       (1) in subsection (a), by inserting ``or in a WTO member 
     country'' after ``the United States'' the first place it 
     appears; and
       (2) by adding at the end the following new subsections:
       ``(f) Applications for Plant Breeder's Rights.--
     Applications for plant breeder's rights filed in a WTO member 
     country (or in a UPOV Contracting Party) shall have the same 
     effect for the purpose of the right of priority under 
     subsections (a) through (c) of this section as applications 
     for patents, subject to the same conditions and requirements 
     of this section as apply to applications for patents.
       ``(g) Definitions.--As used in this section--
       ``(1) the term `WTO member country' has the same meaning as 
     the term is defined in section 104(b)(2) of this title; and
       ``(2) the term `UPOV Contracting Party' means a member of 
     the International Convention for the Protection of New 
     Varieties of Plants.''.
       (d) Plant Patents.--
       (1) Tuber propagated plants.--Section 161 of title 35, 
     United States Code, is amended by striking ``a tuber 
     propagated plant or''.
       (2) Rights in plant patents.--The text of section 163 of 
     title 35, United States Code, is amended to read as follows: 
     ``In the case of a plant patent, the grant shall include the 
     right to exclude others from asexually reproducing the plant, 
     and from using, offering for sale, or selling the plant so 
     reproduced, or any of its parts, throughout the United 
     States, or from importing the plant so reproduced, or any 
     parts thereof, into the United States.''.
       (3) Effective date.--The amendment made by paragraph (1) 
     shall apply on the date of the enactment of this Act. The 
     amendment made by paragraph (2) shall apply to any plant 
     patent issued on or after the date of the enactment of this 
     Act.
       (e) Electronic Filing.--Section 22 of title 35, United 
     States Code, is amended by striking ``printed or 
     typewritten'' and inserting ``printed, typewritten, or on an 
     electronic medium''.
       (f) Divisional Applications.--Section 121 of title 35, 
     United States Code, is amended--
       (1) in the first sentence by striking ``If'' and inserting 
     ``(a) If''; and
       (2) by adding at the end the following new subsections:
       ``(b) In a case in which restriction is required on the 
     ground that two or more independent and distinct inventions 
     are claimed in an application, the applicant shall be 
     entitled to submit an examination fee and request examination 
     for each independent and distinct invention in excess of one. 
     The examination fee shall be equal to the filing fee, 
     including excess claims fees, that would have applied had the 
     claims corresponding to the asserted independent and distinct 
     inventions been presented in a separate application for 
     patent. For each of the independent and distinct inventions 
     in excess of one for which the applicant pays an examination 
     fee within two months after the requirement for restriction, 
     the Director shall cause an examination to be made and a 
     notification of rejection or written notice of allowance 
     provided to the applicant within the time period specified in 
     section 154(b)(1)(B)(i) of this title for the original 
     application. Failure to meet this or any other time limit set 
     forth in section 154(b)(1)(B) of this title shall be treated 
     as an unusual administrative delay under section 
     154(b)(1)(A)(iv) of this title.
       ``(c) An applicant who requests reconsideration of a 
     requirement for restriction under this section and submits 
     examination fees pursuant to such requirement shall, if the 
     requirement is determined to be improper, be entitled to a 
     refund of any examination fees determined to have been paid 
     pursuant to the requirement.''.

     SEC. 12. PROVISIONAL RIGHTS.

       Section 154 of title 35, United States Code, is amended--
       (1) in the section caption by inserting ``; provisional 
     rights'' after ``patent''; and
       (2) by adding at the end the following new subsection:
       ``(d) Provisional Rights.--
       ``(1) In general.--In addition to other rights provided by 
     this section, a patent shall include the right to obtain a 
     reasonable royalty from any person who, during the period 
     beginning on the date of publication of the application for 
     such patent pursuant to the voluntary disclosure provisions 
     of section 122 or the publication provisions of section 
     122(1) or 122(2) of this title, or in the case of an 
     international application filed under the treaty defined in 
     section 351(a) of this title designating the United States 
     under Article 21(2)(a) of such treaty, the date of 
     publication of the application, and ending on the date the 
     patent is issued--
       ``(A)(i) makes, uses, offers for sale, or sells in the 
     United States the invention as claimed in the published 
     patent application or imports such an invention into the 
     United States; or
       ``(ii) if the invention as claimed in the published patent 
     application is a process, uses, offers for sale, or sells in 
     the United States or imports into the United States products 
     made by that process as claimed in the published patent 
     application; and
       ``(B) had actual notice of the published patent application 
     and, where the right arising under this paragraph is based 
     upon an international application designating the United 
     States that is published in a language other than English, a 
     translation of the international application into the English 
     language.
       ``(2) Right based on substantially identical inventions.--
     The right under paragraph (1) to obtain a reasonable royalty 
     shall not be available under this subsection unless the 
     invention as claimed in the patent is substantially identical 
     to the invention as claimed in the published patent 
     application.
       ``(3) Time limitation on obtaining a reasonable royalty.--
     The right under paragraph (1) to obtain a reasonable royalty 
     shall be available only in an action brought not later than 6 
     years after the patent is issued. The right under paragraph 
     (1) to obtain a reasonable royalty shall not be affected by 
     the duration of the period described in paragraph (1).
       ``(4) Requirements for international applications.--The 
     right under paragraph (1) to obtain a reasonable royalty 
     based upon the publication under the treaty defined in 
     section 351(a) of this title of an international application 
     designating the United States shall commence from the date 
     that the Patent and Trademark Office receives a copy of the 
     publication under such treaty of the international 
     application, or, if the publication under the treaty of the 
     international application is in a language other than 
     English, from the date that the Patent and Trademark Office 
     receives a translation of the international application in 
     the English language. The Director may require the applicant 
     to provide a copy of the international publication of the 
     international application and a translation thereof.''.

     SEC. 13. EFFECTIVE DATE.

       Except as otherwise provided, this Act and the amendments 
     made by this Act shall take effect 60 days after the date of 
     the enactment of this Act.
  The CHAIRMAN. Under the previous unanimous consent agreement, the 
gentleman from California [Mr. Rohrabacher] will be recognized for 1 
hour, and a Member opposed will also be recognized for 1 hour.
  Mr. COBLE. Mr. Chairman, I rise in opposition to the amendment.
  The CHAIRMAN. The gentleman from North Carolina [Mr. Coble] will be 
recognized for 1 hour.
  Mr. ROHRABACHER. Mr. Chairman, I yield 30 minutes to the gentlewoman 
from Ohio [Ms. Kaptur], and I ask unanimous consent that she be allowed 
to control the time.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
California?
  There was no objection.
  The CHAIRMAN. The gentlewoman from Ohio [Ms. Kaptur] will be 
recognized for 30 minutes.
  Mr. COBLE. Mr. Chairman, I yield 30 minutes to the gentlewoman from 
California [Ms. Lofgren], and I ask unanimous consent that she be 
allowed to control the time.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
North Carolina?
  There was no objection.
  The CHAIRMAN. The gentlewoman from California [Ms. Lofgren] will be 
recognized for 30 minutes.
  The Chair recognizes the gentleman from California [Mr. Rohrabacher].
  Mr. ROHRABACHER. Mr. Chairman, I yield myself 5 minutes.
  Mr. Chairman, what the House is now considering is the Rohrabacher 
substitute. The Rohrabacher substitute has taken on many shapes and 
designs over these last few weeks, because we have tried our best to 
incorporate the very best aspects of H.R. 400 into our substitute. All 
of the good reforms that have been worked out by the gentleman from 
North Carolina [Mr. Coble] and others on the committee have been 
incorporated into my substitute.
  In fact, where we keep the fees of the Patent Office right there at 
the Patent Office so that people can make that Office more effective, 
we have done that. And we have made sure that all the hard work of this 
committee has not gone for naught.
  In fact, I would like to compliment Mr. Coble and I would like to say 
at this time that I have nothing but respect for the opposition here. 
Mr. Coble and the gentleman from Virginia [Mr. Goodlatte] and the 
gentleman from Illinois [Mr. Hyde] and others who, right now, we have 
such a heated debate going on, we have a great deal of mutual respect 
for one another. I have no doubt that their motives are good. It is 
just that we have

[[Page H1673]]

a really fundamental disagreement on this piece of legislation, and we 
will likely be the best of allies 1 week from now on another piece of 
legislation.
  So with that said, let me go into the fundamentals of how we differ 
on this. It comes down to three or four basic points. Unfortunately, 
those basic points are right at the heart of what America's patent 
system is all about.
  What has differentiated us from other patent systems of the world, 
why we have had some economic progress here, why has our military been 
secure and actually one step ahead of our adversaries when we went into 
conflicts? Because we have a strong patent system that nurtured the 
creative genius of our people.
  The two elements of that patent system that differentiated us from 
the Japanese and from the Europeans was a guaranteed 17-year patent 
term, which means no matter how long it takes you to get your patent 
issued, you are going to have that 17 years of a guaranteed protection 
time to earn that money back and to make a profit from it. That is why 
we have so many people willing to invest here in the United States in 
the creation of new technology. Otherwise, the Government would have to 
do it because there would be no guaranteed time that we could have a 
return on our investment.
  The second end of it, the second part of our system was that when 
someone applied for a patent, it was absolutely confidential, the right 
of confidentiality until that patent was issued. What that did is it 
prevented the big guys from stealing from the little guys.
  In Japan, where they have the system that I am afraid H.R. 400 is 
trying to impose on us, that system has worked to create a class of 
economic shoguns that beat down the average person, that over in Japan, 
where it may be a democracy but it is not a free country like ours in 
the sense that people have a right to challenge the economic elite, the 
economic elite in those countries can beat down any inventor who wants 
to create something.
  In Japan that system permits, where you have, after 18 months, you 
have publication, the reason why the economic powers that be have 
sufficient leverage, they come immediately into the process when they 
find out that someone is developing a new technology, something that 
will create new wealth, and they have what they call patent flooding. 
They will form a circle around the little inventor and the little guy, 
the small businessman, and beat him down until he has agreed to give up 
all of his rights.
  That is what will happen right here if we change our law. They can 
come right over to our system and do exactly the same thing. What makes 
us think they will not do that? That is what has happened there.
  In fact, that is one of probably the worst flaws of H.R. 400, because 
now we are publishing. What are the consequences of that publishing? 
Very wealthy and powerful interests will get involved in the process 
where they have not done it before to try to thwart the issuance of 
that person's patent until he would agree to give up certain rights.
  This is not the formula for a strong America. This is an escalator 
clause for America going downhill. Twenty years from now Americans will 
not know what hit them. It is Pearl Harbor in slow motion.
  I will say, I have a copy and I have held it up several times. The 
reason why we are pushing on this, and you have heard it in the debate, 
we have to be like those other countries, we should not be like other 
countries, but yet we signed an agreement, a subterranean agreement 5 
years ago to harmonize our law with Japan. Now they are seeking to try 
to push it through the system like when they tried to sneak that change 
through in the GATT implementation legislation.
  We are going to thwart this power grab. We are going to thwart it, 
and we are going to make sure in doing so we protect America's future. 
If we lose our technological edge, if the individual inventor loses his 
rights and becomes vulnerable to these outside influences, if our 
patent examiners become vulnerable to all sorts of interferences and 
outside influences, America will cease to be a great country in decades 
ahead, and they will never know what hit them. It will be Pearl Harbor 
in slow motion, and we are going to stop that.
  Ms. KAPTUR. Mr. Chairman, I yield myself such time as I may consume.
  (Ms. KAPTUR asked and was given permission to revise and extend her 
remarks.)
  Ms. KAPTUR. Mr. Chairman, the base bill that this substitute would 
replace essentially, as Mr. Rohrabacher, who has led such a good fight 
on this and so many Members who have supported him, calls for a massive 
change in the way that we protect the secrecy of those who file patents 
in our country.
  Now, to me, to move from a system that basically says when you file a 
patent your ideas can be protected for up to 17 years, up to the point 
that that patent is granted, and if the review office takes longer than 
2 years, if it takes 4 years or 5 years for whatever reason, that your 
ideas are protected, why would we want to take away the property rights 
of our inventors by saying after 18 months, and where did the 18-month 
magic come from anyway, that after that point their ideas could be made 
available to whomever might want them?
  To go from 17 years to 18 months to me is a massive change in the way 
the current system functions. I have never had an inventor in my 
district come up to me and ask for this change, so I wonder who it is 
that is proposing the change that is in the base bill.
  I want to compliment Mr. Rohrabacher for helping to expose this issue 
in detail so that we can better protect our inventors' technologies in 
this country.
  From the inventors I have talked to, they have some pretty big 
problems, once they involve themselves in this whole idea of patenting 
their inventions. Number one is the cost. The fact that a really small 
person does have to put a lot forward in the first place just to patent 
their idea.
  If you are a big company, that does not affect you as much. You have 
great wholeness in the system. You have the ability to float. But for 
the small people that are out there in their garages and their 
basements where wonderful ideas have come from, it is much more 
difficult for them to do that even in the existing system.
  Once they do, one of the challenges they have as an inventor is that 
big companies, if they try to commercialize the technology, often try 
to buy their idea out before it is even applied in the manufacturing 
sector, because an inventor does not control the manufacturing process. 
They are not into the commercialization side. Under the current system, 
it is even difficult for many of these inventors to get someone to buy 
their idea.
  Also we have a situation under the current system where inventors 
find that their ideas are counterfeited. In fact, we have had dumping 
of computer terminals that have come over from China and other places.
  I wish the committee would have given a little more attention to the 
real problems that inventors are having out there, trying to work in 
this current system. But they have never complained to me about the 
protections they receive in this country for their property rights. 
They have never complained about the time period.
  They are complaining to me now. The Ohio State Bar Association is 
very aware of what this bill does and has made its views known to us. 
And many, many other inventors throughout the State of Ohio.
  But I say to myself, what could have propelled this committee into 
proposing this kind of change? I looked down the list of multinational 
corporations that want this particular right. They already function on 
the international front. They are the very same firms that try to buy 
out these small inventors and do not permit them to commercialize their 
technology, if they do not have deep pockets. They are the very same 
interests that are able to float in their little boats in international 
waters when the average inventor is not. They are the very ones that 
have no problems with existing fees. And it just seems to me that they 
got the red carpet rolled out for them when they went before the 
respective institutions of this House.
  On the other hand, the small inventors of my community have not been 
afforded the opportunity to come before the committee. The small 
inventors of my community have not been allowed to come before the 
Committee on Small Business.

[[Page H1674]]

  I heard one of the Members, the gentleman from Maryland [Mr. 
Bartlett], say that the hearings would be held next week. My friends, 
the horse is already out of the barn. Next week? This bill is being 
heard today. So it seems to me that we have a responsibility to 
represent the majority of inventors in this country, most of whom do 
not have deep pockets.
  Our job is not just to represent the multinationals who have lots of 
good ideas and they have a great ability to float their boats, but they 
are not the only ones out there in the ocean.
  I would certainly say to those who would want to bend over backwards 
to other countries who do not give us market access, we have a $50 to 
$60 billion trade deficit with Japan, a $40 billion trade deficit with 
China, and it is growing. The situation we have with Mexico is 
abominable post-NAFTA. A lot of these other countries are going to be 
advantaged through this agreement. Why?

                              {time}  1615

  Why are we doing this to our inventors when in fact our country has 
10 times more intellectual property breakthrough technologies than any 
other country in the world? We protect these property rights. It is 
inherent in the Constitution of this Nation. Why would we want to do 
this to the people of our Nation?
  Now, let us take a look at the burden of proof and the fact that 
people say here, well, they can sue. If people do not like this new 
bill, H.R. 400, and they fail to vote for the Rohrabacher substitute, 
well, gosh, we will give them a chance to go to court.
  A lot of these inventors out there do not have the money. They worry 
about paying their maintenance fees under the existing system, under 
the existing system. So why force them into cases where the burden is 
on them to prove that what they are doing in OK? Under the current 
system, it is.
  Why place that burden on them? Why force them to go into these 
reexamination procedures? Why would we want to do that to our own 
people?
  Frankly, for a lot of these nations or companies that function 
offshore, my own view is unless they give us market access, why give 
them anything? Why give them any advantage into this Nation's most 
precious seed corn, which is our patented inventors' property rights?
  The whole idea of corporatizing the patent office, it is interesting 
that the people who work over there do not want this to happen. They 
are civil servants. They objectively can review, regardless of what 
type of inventor comes in there with an invention.
  None of us really understand the gentleman's proposal of what this 
guasi-government corporation or new entity, this PTO, what that is 
going to be. We have not had a chance to fully digest what that means 
down the road. How objective will these examiners be allowed to be? 
What will the CEO of that corporation, what rights will that individual 
have over those individual decisions? How objective and judiciallike 
will those decisions be able to be?
  It seems to me there are a lot of issues in H.R. 400 that no Member 
here, including the people on the committee, can fully appreciate. Why 
do we not have an opportunity to clean this bill up? Let us adopt the 
Rohrabacher substitute, let us keep the system clean, the way it is, 
and then work through some of the issues that are of deep concern to 
Members here who want to represent not just those with deep pockets, 
but small inventors around our country who are really creating the 
future of us.
  It was mentioned earlier there are some people concerned about jobs 
in our country and our trade policy who have engaged in this debate. 
Certainly we have, because we understand what it is like to negotiate 
against a country that uses every kind of barrier to disallow our 
product into their market.
  But the inventions, the ideas, the intellectual property is the heart 
of our system. To allow them into the door when we have all sorts of 
other problems out there and we do not fully appreciate the long-term 
consequences of what is being proposed here, is a very dangerous 
position in which to place our country for the next century.
  There is no question that patents are the primary source of job 
creation in this country. It goes to the heart of how we develop as an 
economy. When I see people like Nobel Laureates opposing the changes in 
H.R. 400, and I see the gentleman from California [Mr. Rohrabacher] and 
our own minority leader, the gentleman from Missouri [Mr. Gephardt], 
and the gentleman from Maryland [Mr. Hoyer], and others in this body, 
the gentleman from California [Mr. Hunter], people on both sides of the 
aisle who have respect for members of the committee, but feel that we 
have not had our concerns solved, we have no choice but to 
wholeheartedly support the Rohrabacher substitute.
  So I want to urge the membership, please, that if they have not read 
the bill, if they have not followed this debate, to support the 
Rohrabacher substitute. Do not fix a system that is not broken. Let us 
work hard, as this Congress progresses, in order to fix the current 
system if there are problems, but do not completely turn it upside down 
and take away the property rights of our inventors, especially the 
small inventors whose canoes are very small to row in the oceans of the 
international marketplace.
  Mr. Chairman, I reserve the balance of my time.
  Mr. COBLE. Mr. Chairman, I yield 7 minutes to the gentleman from 
Utah, [Mr. Cannon].
  (Mr. CANNON asked and was given permission to revise and extend his 
remarks.)
  Mr. CANNON. Mr. Chairman, I take the podium at the far right, the 
farthest right we can go here in the room as a Republican and a 
conservative.
  And may I be the first Republican to welcome my colleague, the 
gentlewoman from California, [Ms. Lofgren], and at her suggestion, also 
our colleague from Massachusetts, [Mr. Frank], into the conservative 
wing of the party of the House.
  Ms. LOFGREN. Mr. Chairman, will the gentleman yield?
  Mr. CANNON. I yield to the gentlewoman from California.
  Ms. LOFGREN. Mr. Chairman, I want to thank the gentleman for the 
compliment, and acknowledge that it was certainly made in jest. I had 
to do that for my district, to clarify that.
  Mr. CANNON. Mr. Chairman, reclaiming my time, I say to the 
gentlewoman she is always welcome over here.
  I do want to speak to those conservatives in the House, Mr. Chairman, 
about why I support H.R. 400. Before I do so, I want to establish my 
credentials on this issue.
  I am a businessman and have invested in numerous companies, some 
large, mostly small. I have also funded several high-tech new ventures 
and my district is a high-tech center. We have biomedical companies, 
software companies, computer hardware companies and a host of 
innovative start-ups, start-ups based on innovative ideas, some of 
which have been patented, some which have not. Many of them have been 
commercial successes and many of those people who have been successful 
have, in fact, helped out in the commercialization of other 
technologies. But I do not know, in my district at least, of a 
distinction between commercializers and inventors.
  The heart of my district, Utah County, has been compared to Silicon 
Valley, with Route 128 in Boston, with North Carolina's Research 
Triangle. The small town of Provo always shows up on these maps of 
where the technological centers in America are.
  I am also a member of the Subcommittee on Courts and Intellectual 
Property. As many know, in the last Congress there was vigorous debate 
on patent reform, and as a new member, my staff and I took time 
carefully to review the arguments. After that review, I chose to 
cosponsor H.R. 400, and I want to detail why.
  First, we conservatives support the use of a reasoned, thoughtful 
process of public policy. The development of H.R. 400 easily passes 
that test. Over the past couple of years the provisions of H.R. 400 
have been subject to 8 full hearings over 10 days, involving 80 
witnesses. The gentleman from California, [Mr. Rohrabacher], has 
testified four times. Every side of every view has had the chance to be 
heard, not once but many times on this issue.
  Second, conservatives, in particular Republican conservatives, hate 
bureaucracy. H.R. 400 takes the Patent Office out of the Commerce 
Department and gives it the flexibility to

[[Page H1675]]

serve those seeking patent and trademark protection.
  Third, conservatives support property rights. H.R. 400 expands the 
scope of protection afforded patent seekers. H.R. 400 guarantees 
diligent patent owners at least, let me emphasize at least, 17 years of 
patent term. But that is not all. In many cases, under H.R. 400, patent 
owners will receive even more than 17 years of patent term, in many 
cases about 18\1/2\ years of patent protection. This is both more 
protection than is available currently and more than available under 
Mr. Rohrabacher's alternative.
  Fourth, conservatives oppose giving individuals, corporations or 
foreign interests the ability to play games with our legal system. We 
believe in a system of laws. H.R. 400 is the only bill that drives a 
stake in the heart of submarine patents, an expensive, manipulative 
patent-seeking technique. While there is some debate over the number of 
submarine patents, the evidence is clear that submarine patents hurt 
both American industry and consumers. Submarine patents deserve to be 
permanently sunk, and H.R. 400 does the job.
  Fifth, conservatives want U.S. companies to have a level playing 
field with their foreign competitors. That brings me to one of the most 
controversial provisions of the bill, the concept of publication. 
Frankly, this is a provision that is little understood and is easily 
misunderstood.
  Let me provide some context by talking about what happens today to 
U.S. inventors who seek patent protection around the world.
  The three primary places most inventors seek protection are Japan, 
the United States and Europe. A U.S. inventor who files in all three 
areas is published in 18 months in Japan and in Europe in a variety of 
European languages and in Japanese. Of course, that makes it easy for 
U.S. inventors' foreign competitors to read the American inventors' 
patent application in their own language and in their own country.
  The U.S. inventor lacks the same advantage. Because the United States 
does not publish patent applications, an American inventor must go to 
Japan or Europe to find out about the activities of his or her foreign 
competitors. This hurts small American businesses which cannot afford 
travel or translation. Publication in the United States simply helps 
our own people keep an eye on their oversees competitors.
  Some have argued that publication is great for big U.S. companies, 
but it might hurt small U.S. inventors. That brings me to my sixth 
point. Conservatives should argue about real issues. The fact is, the 
current version of H.R. 400, based upon concerns previously raised by 
small inventors, effectively exempts small inventors from publication.
  My last point is that conservatives should respect fellow 
conservatives. The driving forces behind this bill are conservatives, 
particularly the gentleman from North Carolina, [Mr. Coble], and the 
gentleman from Illinois, [Mr. Hyde]. These are men of great integrity, 
great thoughtfulness and great judgment and should be accorded due 
deference.
  Mr. Chairman, I encourage Members to pause before they vote today. I 
know patent law seems like a black art, but our decisions today are 
important. As a conservative, my considered opinion is that H.R. 400 is 
a balanced, rational package that strengthens our patent system, 
encourages high-tech innovation, and protects U.S. economic interests, 
including my favorite sector, the small business sector.
  Ms. LOFGREN. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, a number of the speakers, and especially the last 
speaker, have addressed important issues for Members examining this 
whole issue. But I do want to address the matter that has been raised 
by a number of speakers, and that is the position of employees of the 
Patent Office regarding the bill, H.R. 400, as well as the Rohrabacher 
substitute.
  I have here in my hand, and I include for the Record, dated April 16, 
a letter from the National Treasury Employees Union.

                                             The National Treasury


                                              Employees Union,

                                   Washington, DC, April 16, 1997.
     Hon. Zoe Lofgren,
     U.S. House of Representatives,
     Washington, DC.
       Dear Representative Lofgren: As the full House of 
     Representatives prepares to consider important intellectual 
     property reform legislation later this week, I am writing to 
     bring your attention to an issue of great importance to 
     members of the National Treasury Employees Union.
       H.R. 400, the ``21st Century Patent System Improvement 
     Act'' is scheduled for floor consideration on April 17, 1997. 
     It has come to my attention that Rep. Dana Rohrabacher (R-CA) 
     is expected to offer H.R. 811 and H.R. 812--two patent bills 
     introduced earlier this year--as a substitute to this 
     legislation.
       While H.R. 811 deals primarily with patent term and 
     publication issues, H.R. 812 includes a number of provisions 
     that would exclusively benefit the PTO's patent examiners. 
     NTEU supports improving the training and benefits of all of 
     the PTO's employees, and we therefore believe that it would 
     be grossly unfair for such benefits to accrue only to patent 
     examiners and not to their counterparts in the Trademark 
     Office.
       For this reason, I urge you to oppose the Rohrabacher 
     substitute if it includes these provisions when intellectual 
     property reform is considered by the full House.
       H.R. 400 includes several important elements of H.R. 811 
     and H.R. 812, including a provision allowing for the above 
     referenced training and benefits for patent examiners and 
     trademark examiners. Although NTEU has remaining concerns 
     about the labor-relations provisions in H.R. 400, and would 
     prefer to see the labor-relations language approved last year 
     by the House Judiciary Committee adopted as this issue goes 
     forward, this bill is a better alternative to the proposed 
     Rohrabacher substitute.
           Sincerely,
                                                 Robert M. Tobias,
                                               National President.

  Mr. Chairman, I will not read it all, but I will say, and this is a 
quote, ``I urge you to oppose the Rohrabacher substitute.''
  And the final paragraph says, and this is again from Mr. Robert 
Tobias, the national president of the National Treasury Employees 
Union, ``H.R. 400 includes several important elements. Although NTEU 
does have remaining concerns about the labor relations provisions in 
H.R. 400, and would prefer to see the labor relations language approved 
last year by the House Committee on the Judiciary adopted as this issue 
goes forward, this bill is a better alternative to the proposed 
Rohrabacher substitute.''
  I think it is important to note, and perhaps the Chairman and ranking 
member can address the issue raised as to the remaining labor-
management relations issue that the Treasury Employees Union wants 
addressed, and I, for one, would pledge to work with them on that 
issue, but it is important to note that even without that issue being 
resolved, the Treasury Union employees prefer H.R. 400 and they oppose 
the Rohrabacher substitute. I think that is an important issue for 
Members to know.
  Second, I have heard a lot of discussion in this Chamber today, and 
people discussing it at large, about a variety of issues that have 
absolutely nothing to do with the issues before us. We have heard about 
GATT, we have heard about NAFTA, we have heard about the Red Chinese 
Army, we have heard about multinational businesses. That is not what 
this bill is about. It has nothing to do with the patent bill.
  What this bill is about is not deferring foreign countries or 
conforming our law to theirs. What H.R. 400 is about is to advantage 
Americans who are presently being disadvantaged by our patent law.
  I have heard people say, well, why would we want to dumb down our 
patent law? Why would we expect the rest of the world to change, to 
conform with us? My response is because they are taking advantage of us 
right now.

                              {time}  1630

  Why should they change when they are taking advantage of us? Why 
should we expect them to willingly give up the advantage that they 
currently have? It is up to this Congress to stand up for America by 
rejecting the Rohrabacher substitute and supporting H.R. 400.
  Finally, I would like to thank the gentleman from Utah [Mr. Cannon] 
for his eloquent comments about why a conservative would support H.R. 
400 and oppose the Rohrabacher amendment. I think it is also important 
to note that the high-techology sector has accounted for 40 percent of 
the growth in the gross domestic product in the last several years.
  These companies are not all multinational corporations. Some of them

[[Page H1676]]

are. I am not opposed to that. In fact, I think Intel Corp. is a great 
citizen. They just made a decision to give stock options to every 
single employee in their company down to the janitor. They do a great 
business. They have many patents, they are innovative, they are 
successful, and they support H.R. 400. I am proud that they do.
  But I would like to point out that the Biotechnology Industry 
Organization also supports H.R. 400, and also opposes the Rohrabacher 
substitute, and 95 percent of the membership of the Biotechnology 
Industry Organization is made up of companies with 500 employees or 
less.
   Mr. Chairman, I reserve the balance of my time.
  Mr. ROHRABACHER. Mr. Chairman, I yield 5 minutes to the gentleman 
from the Silicon Valley area of California [Mr. Campbell].
  (Mr. CAMPBELL asked and was given permission to revise and extend his 
remarks.)
  Mr. CAMPBELL. Mr. Chairman, what is a compelling need to change the 
patent system of the United States that has served us so well? The case 
has not been made on the floor today.
  I have one additional reason to suggest that H.R. 400 actually does 
more harm than has previously been brought forward in this debate, but 
before I do that I do wish to identify and draw some very clear focus 
on the fact that the only argument that has been made for the need to 
change is the submarine patent. That issue is taken off the table once 
we realize that the Rohrabacher bill also deals with the submarine 
patent. I believe that issue is no longer in debate. For those who are 
in doubt, those Members perhaps who are watching the debate, do check 
the Congressional Research Service, page 12 and 13, the quotation that 
I gave before. Both bills seek to curtail submarine patenting and would 
likely end the practice.
  So what is the compelling need? Does it make sense that there is some 
benefit to be gained by those large firms who wish to have earlier and 
more ready access to information that would otherwise be patented? Yes, 
it is in their interest. But insofar as it enhances their interest, it 
takes from the inventor. The inventor cannot be substituted for. There 
can be commercializers, there can be developers. Japan of course is the 
key commercializer probably in the world of somebody else's ideas. But 
America is unique as being the key inventor. So in the absence of a 
compelling need, I would think the logic would be, let us let it be, 
let us not change this system that has worked so well.
  But let me now draw attention to the one additional problem that I 
believe H.R. 400 introduces that is of great seriousness. Do my 
colleagues realize that under H.R. 400, but not under the Rohrabacher 
substitute, anybody who was using the subject matter that eventually 
gets patented, who is using that subject matter commercially, before 
the grant of the patent, is exempted. That such a person can continue 
commercialization of that idea without ever having to pay a royalty to 
the person who invented and filed, followed the rules, in other words, 
of our patent system? And this is not in the existing law.
  So what H.R. 400 does is to say, ``Inventor, today you know that you 
have the right to your invention and if anybody else has been using it, 
they have got to pay you royalties.'' That is a whale of an incentive 
to go through the sweat and the hard work to invent. But after H.R. 
400, if it becomes law, that right is substantially cut back. Any prior 
commercial user can continue that use, and not just in the scope of 
maybe a ma and pa who might have had one or two units made.
  Let me read from the bill itself, from title 3:

       The defense, the prior commercial user defense, shall also 
     extend to variations in the quantity or volume of use of the 
     claimed subject matter.

  This is remarkable. We have spent a lot of time on the floor this 
afternoon speaking about the requirement of early disclosure, but look 
what this does. Any prior commercial user can expand the use and 
utterly undermine the commercial value of the invention that was filed 
and that was patented. The harm is not even done there. Because if it 
is in the financial interest of this firm, this commercializer that has 
used the idea before the inventor patented it, if that commercializer 
wishes to sell it, well, so long as it is part of the sale of a general 
company, he or she may do so.
  And I quote from the bill:

       The defense under this section may only be asserted by the 
     person who performed the acts necessary to establish the 
     defense . . . except in connection with the good faith 
     assignment or transfer of the entire enterprise or line of 
     business to which the defense relates.

  So here is the situation. Today a person who does the hard work to 
get an idea has the protection of 17 years from the grant of that 
patent. After H.R. 400 it will not be 17 years from the grant of the 
patent. It will be something that could very well be less because it is 
20 years from the date you applied. And if the Patent Office takes 3 
years or longer, that is your risk, the time of your protection is 
less.
  No. 2, today you are allowed to keep your idea as you are going 
toward a patent. After H.R. 400, you cannot, you have to disclose it, 
after 18 months.
  No. 3, today if you are the first person to go into the patent system 
and to get your patent, no prior user can take that away from you. 
Under H.R. 400, it can be.
  Ms. LOFGREN. Mr. Chairman, I yield myself such time as I may consume, 
just to simply say I do not want to address every single issue raised 
by the gentleman from California [Mr. Campbell] because Members are 
getting restive. I just would point out that in H.R. 400, if the patent 
issuance is delayed through no fault of the applicant, the term is 
extended and added on to remainder of the 20-year term.
  Mr. CAMPBELL. Mr. Chairman, will the gentlewoman yield?
  Ms. LOFGREN. I yield to the gentleman from California.
  Mr. CAMPBELL. I understand that, but the burden is to show by the 
patent applicant that the fault was the Patent Office's. If that burden 
has not been met, if things just chug along in their dear sweet time 
and it takes longer than 3 years, it is the patent applicant who 
suffers.
  Ms. LOFGREN. Mr. Chairman, reclaiming my time, if the applicant does 
not take action to delay it, the term is extended and added on to the 
20-year term.
  Mr. CAMPBELL. And if the gentlewoman will continue to yield, but the 
burden of proving that is upon the applicant. So in order to get the 
benefit of the tacked-on time, I have to show that it was not my fault.
  Ms. LOFGREN. You have to show that you did not continually amend your 
application.
  Mr. CAMPBELL. Then our understanding is the same.
  Ms. LOFGREN. Reclaiming my time, not an enormous burden, I might add.
  Mr. Chairman, I reserve the balance of my time.


                         Parliamentary Inquiry

  Mr. COBLE. Mr. Chairman, I have a parliamentary inquiry.
  The CHAIRMAN. The gentleman will state it.
  Mr. COBLE. Mr. Chairman, am I correct in concluding that we have the 
right to close?
  The CHAIRMAN. The gentleman from North Carolina is correct.
  Mr. COBLE. Mr. Chairman, I yield myself such time as I may consume.
  We have heard a lot of talk this afternoon about secrecy, how 
important secrecy is. Mr. Chairman, if I may paraphrase the 
Constitution, what the Constitution conveyed to all of us Americans and 
patent applicants in particular is this: You get a limited monopoly 
with protection in exchange for society being able to see your secret. 
Illumination, light on the subject. I am told, Mr. Chairman, that 
mushrooms thrive in dark cellars. Submariners thrive in high weeds and 
below the water.
  We have been told today, the gentleman from Illinois [Mr. Hyde] 
mentioned as have others, and the answer was, oh, this is not about 
submarine patenting. Mr. Chairman, to say that is not unlike saying 
that war is not about killing. I was born in the morning, but not 
yesterday morning. You all sell that submarine story to somebody else.
  Let me review that with my colleagues.
  Under the Rohrabacher substitute, applications filed in the United 
States only may not be published sooner than 5 years after they are 
filed, and then

[[Page H1677]]

not if the application is under appellate review. One of the many ways 
a submariner delays its own application is to file spurious appeals.
  In addition, and most importantly, under the Rohrabacher substitute, 
the director of the Patent and Trademark Office must find that the 
application is not being diligently pursued by an applicant before 
publication can occur.
  As my colleagues can imagine, it is virtually impossible to identify 
maneuvers by patent lawyers to delay the processing of their 
applications. This is a sham provision that is impossible to enforce.
  Can you imagine telling a judge that he or she can only allow the 
public to see court documents relating to a case when a finding was 
made as to whether the merits were diligently pursued?
  All judges, including patent judges, must give the benefit of the 
doubt to the filers that they are proceeding in good faith and they are 
pursuing their claims legitimately or our whole system would collapse.
  The Rohrabacher substitute demands a presumption of guilt in order to 
require publishing. This presumption probably could never be 
established. The Rohrabacher substitute further provides for 
publication of any amendment to an application, called a continuing 
application, which is filed more than 6 months after the application it 
amends, unless the applicant can demonstrate that the amendment was 
filed for any reason other than to achieve a delay in the time of 
publication.
  What does this mean? Any lawyer wanting to delay can claim that the 
amendment is necessary to reflect the full richness of further 
developments of the invention in the application. While this may be 
totally spurious, it would be virtually impossible to prove. This is 
the way it works in real patent law practice.
  Here is another way to gain the system under the Rohrabacher 
substitute: An applicant can file appeals to the Board of Patent 
Appeals, which, while unlikely to succeed, are not so frivolous as to 
draw sanctions. There are many ways to delay which simply cannot be 
uncovered.
  Submarine patenting, my colleague, is serious. And the Rohrabacher 
substitute, in my opinion, goes out of its way to create smoking 
mirrors around this burgeoning business of litigation.
  The real question is: Why does the Rohrabacher substitute go out of 
its way to protect submariners? I want someone to answer that question 
for me before the end of this session.
  The claim of the gentleman from California [Mr. Rohrabacher] that his 
bill puts a stop to the practice of submarining in the real world is 
false. Just ask one of the lawyers mentioned on the front page of the 
Wall Street Journal last week who are joining the new, currently legal, 
cottage industry of suing those who invest in our economy.
  I ask my colleagues to vote no on the Rohrabacher substitute and to 
support the bipartisan Judiciary Committee bill, H.R. 400.
  I reserve the balance of my time, Mr. Chairman.
  Mr. ROHRABACHER. Mr. Chairman, I yield myself 5 minutes.
  We knew we would hear a lot of talk about submarine patenting because 
there has to be some excuse that people would use in order to justify 
gutting the American patent system that has been in place for 225 
years, there has to be some excuse for these fundamental changes.
  What we got is what is called in debate school as the scarecrow 
argument. We just create a scarecrow there and we fill it full of hay 
and we claim that that is a real big threat.
  Submarine patents, there is some problem. It is a minor problem I 
believe. The opposition claims it is a major problem.
  In fact, however, my colleagues have not used one example of any 
submarine patent since the late 1970's. And I might add, in the 1970's, 
there was a system established in the Patent Office called the palm 
system; and it was established specifically to prevent people from 
delaying their patent intentionally, in other words, to deal with the 
submarine patent system issue.
  Since that time there has not been any example, and that has been 
instituted already, there has not been one example of any submarine 
patent since the palm system was instituted in the Patent Office.

                              {time}  1645

  Now we are being told submarine patents are so bad that we have to 
destroy the current patent system, we have got to corporatize our 
patent office, taking patent examiners that are basically insulated 
from outside influences, and we got to corporatize that office, and who 
knows what type of outside influences are going to be brought to bear 
in this new system? We do not know. All we have got is the word of our 
friends. It does not say in our bill that they are going to be able to 
be any outside influences. Well, thanks. There are a lot of unintended 
consequences when one makes such radical changes as this. But, of 
course, the radical change is really necessary. It is the only way to 
deal with a submarine patent issue.
  Well that is just not the case, my colleagues. The only way to deal 
with a hangnail is not to amputate the leg. The way to deal with 
magazines, obscene magazines, is not to destroy freedom of speech or 
freedom to publish and freedom of the press for everybody in the 
country. There are ways we deal with it legally that can bring the law 
to bear. My bill did that, and for 2 years I have been begging all of 
my colleagues and begging every organization that came to see me about 
patent law, give me the language of how we can stop submarine patenting 
and I will put it in my bill as long as it does not destroy the 
guaranteed patent term. And do my colleagues know what? We put the very 
strongest language we could.
  Now we can read portions of anything and try to make it sound like it 
does not cover it, but the fact is we put in the strongest language we 
could. I in fact had the No. 1, one of the No. 1, legal minds in the 
House of Representatives, the gentleman from California [Tom Campbell] 
who represents Silicon Valley, to consult with me and say, come up with 
the language that we can once and for all end submarine patenting but 
does not destroy the guaranteed patent term. We put that into my 
substitute, and guess what? It is not a sham. It may be a sham to the 
opposition who wants to destroy the patent system as we know it today, 
but it is not a sham to people who have an independent look at what we 
put in the substitute, the people independently who have no axe to 
grind who looked at my bill said that my bill and their bill would 
effectively end submarine patenting, say that Congressional Research 
Service has basically decided that that day they did their very best 
job to analyze it. They do not have an axe to grind. We are going to 
end submarine patenting.
  Oh, no. Now we cannot accept that. That is just a sham. It is a sham 
when somebody who is independent makes that analysis. Why is that a 
sham? Because that is the only excuse people have for the radical 
changes that they are proposing for the Patent Office. They are 
proposing that we make fundamental changes in the technological legal 
system that protected technological development in the United States of 
America. In the past that system provided the United States of America 
with the highest standard of living, with a technological edge that 
kept us prosperous, kept us free, kept us secure, and of course these 
multinational corporations which they have lists of many, and many of 
them have been active out in hither and yon, trying to support 
proposition--H.R. 400 I should say--that these corporations do have an 
axe to grind as well. They are going to make a big profit if they can 
get all the secrets from the little guy after 18 months.
  My job was to try to put together a bill that ended submarine 
patenting because I knew it would come up as an issue. We did our very 
best. Tom Campbell and I did our very, very best. The Congressional 
Research Service said we succeeded. So that issue should be out of the 
way. So what excuse do my colleagues have of having this radical 
reform? What excuse do my colleagues have?
  Mr. Chairman, what other excuse is there for exposing? As my 
colleagues know, it is very easy for the American people to understand 
what is happening here. As my colleagues know, the fog that comes off 
the Potomac may blind some of the Members who come here to vote on the 
floor of the House of Representatives but it certainly does not blind 
the people back at home. The

[[Page H1678]]

fundamental issue we are deciding today, I put all of the good stuff 
that is in H.R. 400, all the real reforms into my substitute, we have 
ended submarine patenting.
  The real issue is what? There are two fundamenatal issues--
publication, publication--and that issue is very easy for people to 
understand. The American people know that before--throughout our 
country's history, if someone applied for a patent, that Goddard from 
the Goddard Rocket Center who developed rocket fuel, that was secret, 
and the Germans then could not get ahold of it, see, because it was 
secret and our competitors cannot get ahold of things. People who hate 
America cannot get that information because it has been secret. They 
want to change that. They want our worst enemies to have all of our 
secrets and to be able to use them against us.
  They say, ``Ah, but we have taken care so that if somebody does steal 
that, we'll show you a way to deal with that. We're going to let you 
sue them.'' My colleagues, 10 years later or 5 years later when the 
patent is issued, they now are given the right by this H.R. 400 to sue 
the People's Liberation Army in China if they decide to manufacture 
things and use them against us that violate our patent laws. Mitsubishi 
Corp., Sony, name it, all these huge corporations overseas, even our 
own corporations, do my colleagues think that really is going to deter 
anybody from stealing--any of these gangsters from stealing--our 
technology and using it against us?
  This is an invitation, it is an invitation to steal American 
technology. I have heard nothing in this debate, nothing in this debate 
that has changed my mind, nor have I heard nothing in this debate that 
has convinced me that my rhetoric has been out of line, and I think the 
American people are listening really hard, and when they see these 
maneuvers like saying it virtually exempts small business, and then 
during colloquies understand that, well, no they really are not exempt, 
people understand that there is a power play going on in Washington, 
DC. It is a power play that will not work to the benefit of the people 
of the United States. It changes the fundamental rules and rights and 
freedoms that we have had for 225 years that have served us well.
  The patent owners, the people who have--the inventors, the Nobel 
laureates, the great creators of our society, are against H.R. 400 and 
for the Rohrabacher substitute. There is a reason for that. The big 
corporations, the multinational corporations that use technology and 
also have all sorts of connections overseas, I might add; yes, they are 
opposed to the Rohrabacher substitute and support H.R. 400. There is a 
reason for that too.
  So it comes down to corporatization; do we want to change the 
fundamental system that has been set up that makes these decisions as 
to who owns what, making our patent examiners, as my colleagues know, 
open to who knows what kind of pressures? And do we want to publish all 
of our secrets in exchange for the right of our citizens to sue some 
huge multinational corporation years later, years later once they get 
their patent? No, that is not a good deal. I do not think the American 
people think it is a good deal, and I do not think the American people 
are fooled by the argument that we got to cut our leg off in order to 
cure the submarine patent infected toe. They are not buying that, they 
are not buying that at all, and I would suggest that we have a system 
that served us well, we should not rush into these dramatic changes to 
harmonize our law with Japan.
  What is pushing this all along is an agreement that was made with 
Japan, and I have held it up several times right here, to harmonize 
American patent law with Japan. We do not want to be like them. We want 
to have rights that are protected.
  Ms. LOFGREN. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I just want to make a couple of clarifications 
statements for those Members who are listening to this debate.
  First, I think it is important to emphasize that any matter that is 
sensitive from a national security point of view that is a secure 
matter may be held confidentially under the past law before it was 
changed last year under current law, under H.R. 400 and under the 
Rohrabacher substitute. So there is no question that none of the 
alternatives would allow national security matters to be published, and 
I think that is important.
  Second, I want to address the issue of the Congressional Research 
Service. Now I am a relatively new Member but I have found CRS to be a 
useful office here, and I from time to time get their publications and 
read them, and I do not know the author of the report that has been 
quoted here. I will say, however, that in my experience in reading 
through Congressional Research Service publications, they are not 
always the only person with a viewpoint nor are they always the most 
expert person in the world with a viewpoint. And I think it is worth 
pointing out that the intellectual property section of the American Bar 
Association, lawyers of whom represent both patent defenders and those 
who might attack patents who do not have--they are not for one side or 
the other. The intellectual property section of the California Bar 
Association where most of the high-tech industry in the country is 
located and most of the patents issued in the country I believe emanate 
from California, as well as the American Intellectual Property Law 
Association, as well as the Intellectual Property Owners Association, 
all oppose the Rohrabacher substitute, all support H.R. 400.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CAMPBELL. Mr. Chairman, will the gentlewoman yield?
  Ms. LOFGREN. I yield to the gentleman from California.
  Mr. CAMPBELL. Mr. Chairman, I am so grateful to the gentlewoman.
  I do just wish to clarify that whereas the CRS said that both 
Chairman Coble and Congressman Rohrabacher's bill reflected in fixing 
the submarine patent, the additional sources the gentlewoman cited did 
not speak to that issue. They favored Chairman Coble's bill or she 
would not have been citing them, but they were not rebutting CRS's 
conclusion that--is that correct?
  Ms. LOFGREN. Actually that is incorrect. In fact, the President of 
the American Intellectual Property Law Association, and I have spoken 
as recently as 2 days ago indicating it was his judgment the 
Rohrabacher substitute does not solve the submarine patent association, 
and, if I may conclude this, does not resolve the submarine patent 
issue, whereas H.R. 400 in his judgment would.
  Mr. CAMPBELL. If the gentlewoman will yield further on that point, I 
would be very interested in having that reduced to writing so that I 
could look at it. I do have the CRS report reduced to writing.
  Ms. LOFGREN. Reclaiming my time, I will see if I can get that done.
  Mr. CAMPBELL. I have one additional point which I might put to the 
gentlewoman if she continues to yield.
  Ms. LOFGREN. I will.
  Mr. CAMPBELL. As to the lawyers' associations which support H.R. 400, 
could one not interpret that that is a natural response to the fact 
that the bill will create much more opportunity for their employment?
  Ms. LOFGREN. I do not believe that is correct and the gentleman and I 
are both from California, we both taught law and we are both--I think 
the gentleman was formerly on the Committee on the Judiciary, and 
perhaps I am wrong on that. I am currently serving on the Subcommittee 
on Courts and Intellectual Property. Certainly people can have 
divergences of opinion. But I do not believe that and I doubt very much 
that that would be the motivation for the intellectual property 
section.
  Mr. CAMPBELL. Would the gentlewoman find it shocking if a group of 
lawyers in finding a bill beneficial saw some opportunity for 
enhanced--call upon their own services. That is all.
  Mr. GOODLATTE. Mr. Chairman, will the gentlewoman yield?
  Ms. LOFGREN. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. The lawyers that the gentleman suggests will benefit 
by this work for the many, many, many American businesses who strongly 
support this legislation. And would the gentleman suggest, and I am 
sure the gentlewoman would not suggest, that those businesses are 
interested in legislation because it will give them the opportunity to 
pay more in legal fees? Of

[[Page H1679]]

course not. They are interested in this legislation because it stops 
submarine patenting where one lawyer, one lawyer got $150 million in 
contingent fees. And do my colleagues know where that money came from? 
It came from American business. And do my colleagues know what it gets 
paid for? American business passes their costs on to the consumers and 
taxpayers in this country, and that is what this legislation is all 
about. It is not to help lawyers.
  Ms. LOFGREN. Reclaiming my time, I would concur with the gentleman's 
comments, noting that the National Association of Manufacturers, the 
Pharmaceutical Research and Manufacturers of America, the Semiconductor 
Industry Association, the Software Publishers Association and the like 
have rarely been in favor of more litigation.
  Mr. Chairman, I reserve the balance of my time.
  Mr. COBLE. Mr. Chairman, I yield 5 minutes to the gentleman from the 
Roanoke Valley in Virginia [Mr. Goodlatte].
  Mr. GOODLATTE. Mr. Chairman, I thank the gentleman for yielding this 
time to me, and I rise in strong opposition to the Rohrabacher 
substitute which would be a disastrous turn to take in American patent 
law.
  First I want to address some of the comments being made by some of 
the supporters of this substitute and the opponents of the bill. The 
gentlewoman from Ohio [Ms. Kaptur] said that we had not been fair and 
open in this process; and by the way, I will not yield to the 
gentlewoman because she refused to yield to me earlier, but I want to 
make this point.
  This bill has been more carefully studied and worked in this Congress 
in very public open hearings than any other legislation considered in 
this Congress this year. Hearings have been held in the Committee on 
Science, hearings have been held in the Committee on Small Business, 
hearings have been held in the Committee on International Relations, 
and eight public hearings have been held in the Committee on the 
Judiciary on this legislation. So there is absolutely no possibility 
that this legislation is not something that has been very fairly and 
openly debated throughout the process.

                              {time}  1700

  Second, the gentlewoman made the point, which is totally inaccurate, 
that we were going from a 17-year protection for inventors down to 18 
months. Well, that is hardly the case at all.
  Under our bill, any inventor gets a minimum of 17 years' protection, 
provided that they themselves do not cause a delay in the issuance of 
the patent. So they are going to get an increase.
  Ms. KAPTUR. Mr. Chairman, will the gentleman yield on that point?
  Mr. GOODLATTE. Mr. Chairman, no, I will not yield.
  Ms. KAPTUR. Just to clarify, Mr. Chairman.
  Mr. GOODLATTE. Mr. Chairman, I would ask for order.
  The CHAIRMAN. The House will be in order, and the gentleman from 
Virginia [Mr. Goodlatte] may proceed.
  Mr. GOODLATTE. I thank the Chairman.
  The fact of the matter is the gentlewoman had 30 minutes of time, I 
have much less, and unfortunately, we have not had the opportunity to 
have that colloquy.
  But the fact of the matter is, under our legislation, they have that 
same amount of time, they have that time under the new legislation, and 
they will have, in most cases, more time than they have under current 
law.
  Furthermore, the average patent in this country today is issued after 
19 months. This calls for publication after 18 months. So most patents 
are not going to experience any significant difference in how quickly 
they are published. But here is the important fact about this, and this 
is what is wrong about this entire debate by the opponents.
  We are not talking about trade secrets here, we are talking about 
publication of patents. Patents have always been protected in this 
country by publication. That is how we say to the world that an 
American inventor has put forward an idea that is entitled to be 
protected under our laws.
  We do not tell them to hide it under a rock. We do not tell them to 
lock it up in a safe. We tell them that the U.S. Government will 
publish their patent and say they were the first with that idea and 
they are entitled to 17-years-plus protection.
  That is what they get under this bill as well, only they get it 
better, because now they are going to be published sooner. When they 
are published sooner the world knows sooner that they were the first 
with that idea, and the capitalists who wanted to invest in that small 
inventor's opportunity to bring that unique idea that is so uniquely 
American, as the opponents have pointed out, that we lead the world in 
developing ideas, but we do not lead the world in getting those ideas 
to market, and one of the reasons why is because we do not get the 
capital to the inventor quickly enough.
  If we change the law so that we have the opportunity to publish after 
18 months, and not yours published after 18 months, but anybody who 
might be competing with you, that is important, because if you do not 
know that somebody else is in the patent system with something hidden, 
something called a submarine patent, ready to surface up and take your 
claim and try to get royalties from you, what you wind up with is a 
system where the capitalist does not know when to put the money in 
until you get the patent.
  Under this change in the law, which has worked so well in Europe and 
other places, the money gets to the inventor from the entrepreneurial 
investor sooner because they know sooner that that person has the idea, 
and that is the one that is going to have the protection for 17 years.
  Now, the gentleman from California claims that submarine patents are 
eliminated by his substitute. Nothing could be further from the truth. 
While I have great respect for the CRS, they say both bills seek to 
curtail submarine patenting. But there is often ``many a slip twixt the 
wrist and the lip,'' and that is exactly what is true of the 
gentleman's substitute. It may seek to eliminate submarine patenting, 
but it certainly does not succeed, because it eliminates one form of 
delaying the patent process, and that is amending the application.
  But there are hundreds of ways that a good patent lawyer, who under 
the current laws makes a very good living with abusing our current 
system, there are hundreds of ways that one can delay the processing of 
a patent application that will not be covered by the gentleman's 
substitute.
  As a result, what we have is a situation where the only way to cure 
this very serious problem that costs American consumers and taxpayers 
hundreds of millions of dollars a year is to have publication, which, 
as I indicated earlier, is not bad, it is not detrimental to the small 
inventor, it is good for the small inventor, because publication is 
what tells the world that that small inventor was the first one out of 
the box.
  We also protect them by giving patent pending, a protection that it 
does not have now. That small inventor who has that idea that he turns 
into a product and puts on the shelf in the store and says patent 
pending, under the new law, they can get protection during the time 
that the patent is pending. If somebody wants to steal it and rip it 
off, they can get royalties for the entire time. Under the current law, 
they get no royalties except for the time that the patent is actually 
issued.
  The result of all of this is a vast improvement of our patent system. 
As we have on numerous occasions over the 200-plus years of our 
history, this committee and this Congress is what has created the 
wonderful patent system we have in this country, and no one should ever 
suggest that it has never been changed in the 200 years since we 
originally wrote our Constitution recognizing that patent system.
  We have to constantly look at it and improve it. When you do not, 
that is when you fall behind. If you want to look for examples of 
people who have said in the past that we are the best in the world and 
we do not have to worry about anybody outside, go talk to the big-three 
automobile makers and ask them what they thought back in the 1960's and 
1970's about their superiority over the Japanese. They learned very 
quickly that if they did not change the way they do things to keep up 
with the times, they would fall behind.
  If you want to look for a place where there is strong, strong support 
for these patent reforms to protect American business, American jobs, 
and

[[Page H1680]]

American technology, go to the big-three automakers, because all three 
of them support H.R. 400 because they want to make sure that our patent 
system remains the best in the world, and that is what this legislation 
does.
  Oppose Rohrabacher, support H.R. 400.
  Mr. ROHRABACHER. Mr. Chairman, I yield myself 1 minute.
  Just so my friend from Virginia, Mr. Goodlatte, will understand, if I 
could quote from the report here, the Congressional Research Service, 
it says, yes, it does, as he stated, both bills seek, and it did, said 
seek to curtail, but you did not finish the sentence, and would likely 
end the practice.
  So I mean this is very similar to what we have heard in other parts 
of the debate where something will effectively permit small business 
and the little guy to be exempted, but ``effectively'' is not really an 
accurate description.
  The Congressional Research Service, which is an independent body, and 
people who do not have an ax to grind, have determined, and I have gone 
out of my way, and my colleague, the gentleman from California [Mr. 
Campbell] has gone out of his way, to put the strongest language we 
could in, and an independent body is agreeing with us, that we would 
likely end the practice. We have done our very best. This fig leaf 
could not be used to justify radical changes in our system.
  Mr. Chairman, I reserve the balance of my time.
  The CHAIRMAN. The Chair would advise all Members that the gentleman 
from California [Mr. Rohrabacher] has 10 minutes remaining; the 
gentleman from North Carolina [Mr. Coble] has 12\1/2\ minutes 
remaining; the gentlewoman from Ohio [Ms. Kaptur] has 20 minutes 
remaining; and the gentlewoman from California [Ms. Lofgren] has 19 
minutes remaining.
  The Chair recognizes the gentlewoman from Ohio [Ms. KAPTUR].
  Ms. KAPTUR. Mr. Chairman, I yield myself such time as I may consume. 
I will yield time to the gentleman from Maryland [Mr. Hoyer] in just a 
second, but I wanted to answer the gentleman from Virginia [Mr. 
Goodlatte], since he referenced me at least three times in his remarks.
  Mr. Chairman, I see a big difference between 18 months, 17 years, and 
20 years. Under the bill the gentleman supports, the gentleman requires 
that there be publishing of all patent applications 18 months after 
they have been filed, whether or not the patent has been issued. 
Eighteen months is less than 2 years.
  The GAO says it takes at least 4 years, the Patent Office says it 
takes 2 years, average application time, but whatever the time is, some 
patents take 10 years, 12 years. The gentleman is saying 18 months. 
That information is made available under the gentleman's radical 
proposal. It is a radical departure from the current system which says 
that once a patent is issued, an inventor has protection for 17 years, 
almost 2 decades.
  The gentleman said, oh, but I give you 20 years, 20 years is better 
than 17 years. No, your 20 years does not begin when the patent is 
issued, it begins when the patent is filed. I was courteous to the 
gentleman when he was talking to me. I would certainly appreciate a 
little eye contact here while I am talking to him.
  So there is a big difference, numerical difference to the protection 
of the inventors of this country. I feel bad the gentleman from 
Virginia [Mr. Goodlatte] did not yield to me, but I wanted to clarify 
for the Record, there is a whole lot at stake. Every single day of a 
patenter's life of his invention is important. They have a lot on the 
line. Some of them have their whole future on the line. For America, we 
have America's future on the line.
  So the difference between 17 years of guaranteed covered and 18 
months when you have to divulge the secrecy of your information is a 
pretty big difference.
  Mr. Chairman, I yield 8 minutes to the distinguished gentleman from 
Maryland [Mr. Hoyer].
  Mr. HOYER. Mr. Chairman, I thank the gentlewoman for yielding me this 
time, and I thank my friend from California for letting me proceed.
  I want to say that those of us who are not expert in the field of 
patents, and I dare say that is probably 100 percent of us, some of us 
know more than others, that is for sure, but I would presume, unless 
there is a patent lawyer among us, obviously Mr. Campbell, a law 
professor, a distinguished law professor, has done a lot of work on 
this. I am a lawyer, but I want to have a disclaimer at the front that 
I do not know a lot about this issue from a technical standpoint.
  So like most Members, I come from the standpoint of what is best for 
the people I represent? What is best for the country? What is best for 
competitiveness, both domestically and internationally, and what best 
protects the people that I represent?
  Now, very frankly, I have heard from numerous people, individuals who 
are very concerned about this bill. I have read in The New York Times, 
for instance, articles of inventors, small business, associations who 
are very concerned at the exposure that this bill brings. The 
gentlewoman from Ohio [Ms. Kaptur] referred to the time of 18 months or 
17 years or 20 years or whatever the time frame might be.
  I have heard the debate back and forth. I would say to my friends 
that, at the outset, I do accept the premise of the CRS report, that 
both bills not only seek, as has been pointed out, but do, in fact, 
accomplish the objective of getting at the problem, to the extent it 
exists, of the submarine patents.
  The gentleman from California [Mr. Hunter] who spoke earlier pointed 
out that there were some 300 submarine patents that could be described 
out of the millions of patents. So the percentage of submarine patents, 
if they exist, and obviously they do, is as the gentleman from 
California [Mr. Hunter] pointed out, incredibly small.
  In pursuit of that objective, we are placing at risk the 99.9 percent 
of inventors, innovators, entrepreneurs who have an idea that they want 
to protect so that they can justifiably profit in a free enterprise 
system from the integrity and protection of that idea.
  It is for that reason, my friends, that I rise, convinced not of the 
technical merits one way or the other, because as I said at the outset, 
I am not an expert, but that there is so much concern in the small 
business community.
  I believe this bill would harm small business and independent 
inventors. We must remember that small business, as all of us know, 
represents the fastest growing sector of the economy and are truly 
America's greatest source of job creation and technology development.
  I am not opposed to everything in H.R. 400, as I am sure most are 
not. In fact, I know my friend [Mr. Rohrabacher], the principal sponsor 
of the alternative, which I support, is not an opponent of all. I 
support the inventor protection electronic filing sections of the bill. 
However, despite the rhetoric surrounding the manager's amendment, the 
publication time still poses a threat to America's small business.
  Too many small business organizations have voiced their concerns and 
opposition to H.R. 400. I am not going to go through the list, but my 
colleagues have seen, I think most of our colleagues have seen, the 
list of 2 or 3 pages, small-type, of small inventors, small investors, 
small businessmen and entrepreneurs who are concerned and have said, do 
not move on this bill.

                              {time}  1715

  In fact, the Chamber of Commerce itself has held itself aloof from 
this bill. The Chamber of Commerce itself has held itself aloof from 
this bill because they believe there is a risk.
  Mr. Chairman, it is a strange alliance that we see on this floor on 
this bill, on both sides, perhaps because some come from a more 
involved process with this bill and some a less involved, and are, 
frankly, looking not so much at the technical aspects of this bill but 
at the risks that it will pose to the people from whom we are hearing.
  Mr. Chairman, the U.S. Chamber of Commerce, as I said, has been 
conspicuously silent on this bill, and the National Association for the 
Self-Employed, an organization of 325,000 members, is not only silent, 
they are strongly opposed to H.R. 400, because they believe it places 
their small business people at risk. This is a very important issue. We 
must not rush to judgment. In fact, we are not rushing to judgment, as 
the gentleman from Alabama is pointing out to me.
  The proponents of H.R. 400 claim that there are remedies and 
processes set up

[[Page H1681]]

to protect small business. If that is the case, why have the Chamber 
and the NFIB and small business and small inventors not come forward 
and said that they have achieved protection? They have not. In fact, 
they have done the opposite, as I said. Three hundred twenty-five 
thousand strong have said, we are strongly opposed to this bill.
  We all know that small businesses have neither the attorneys nor the 
resources. The gentleman from California [Mr. Campbell] has spoken to 
this, the gentleman from California [Mr. Rohrabacher], the gentlewoman 
from Ohio [Ms. Kaptur] have all spoken to it. It is fine to say, yes, 
if they learn your information very early on you get protection, 
because you were published. That is great.
  That is great, and if you have $1 million or $5 million, like some of 
the egregious people, I understand, and let us not hoist on the petard 
of one or two or three multimillionaires who are gaming the system, 
thousands of folks who are not only not gaming the system but it is the 
only protection that they have.
  Mr. Chairman, in closing, because my time is coming to a close, let 
me say that I am also concerned, as someone who is deeply involved in 
governmental organization issues, deeply involved in Federal employee 
issues, I understand that my friends in the NTU believe that H.R. 400, 
my good friend, the gentlewoman from California [Ms. Lofgren] who has 
fought so fervently for this bill, she and I disagree on the substance, 
but she is an able advocate of this bill, and they have talked about 
the NTU.
  Let me say, as so many have said on this floor, I am concerned about 
this critically important process, which must be insulated from outside 
influence, being altered in the way that H.R. 400 alters it; that it is 
not a Federal employee, insulated from outside pressure and influence 
and involvement, who will make decisions critical to the economic 
welfare not only of small business and inventors and innovators, but 
also of this country.
  So I would ask my colleagues to vote for the amendment offered by the 
gentleman from California [Mr. Rohrabacher], incorporating the 
amendment of the gentleman from California [Mr. Hunter] as well, and to 
vote against H.R. 400.
  Ms. LOFGREN. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I would say there has been much discussion of the 
Congressional Research Service. I would like to note that the 
commissioner of patents and trademarks, who actually is an expert in 
this whole subject area, has noted that the Rohrabacher amendment, in 
his words, would allow the patent system to continue to be misused by 
those who are not interested in obtaining patent protection early, and 
goes on to further detail the submarine patent provisions that would 
remain.
  Mr. Chairman, I yield 2 minutes to the gentleman from California [Mr. 
Dooley].
  (Mr. DOOLEY of California asked and was given permission to revise 
and extend his remarks.)
  Mr. DOOLEY of California. Mr. Chairman, like the gentleman from 
Maryland [Mr. Hoyer], I do not come to the well of the House as an 
expert on patent law either. But unlike the gentleman from Maryland, I 
come to complete disagreement in terms of what is the proper policy 
that we should institute in order to create a fiscal and financial 
environment that is going to ensure that our economy and in fact small 
businesses will prosper.
  When we look at what has happened in just the last decade when we 
have seen 40 percent of the growth in our economy has occurred 
primarily in the high-technology industry, we have to ask ourselves, 
how did that happen? It happened in a large way because we had a lot of 
small businesses that were able to attract capital, that were able to 
make the appropriate investments. That created jobs, it created 
products, it allowed us to become the leader in the information 
services and computer services and software services and the 
biotechnology industry throughout the world today.
  The changes we are considering making in our patent laws I am 
convinced are even going to do more to enhance that regulatory 
environment to ensure that a lot of our inventors that are out seeking 
capital will have greater access to it, because we will be able to find 
the investment community, and they will be much more willing to take a 
risk, to make a gamble on investing on the person who has an idea or an 
invention, if they have greater assurances that there is not somebody 
that is holding back a secret patent that could create financial 
jeopardy down the road.
  I guess that is where it comes to the fundamental disagreement in the 
discussion that we have had on the floor today, was whether or not the 
Rohrabacher amendment provides a level of protection on the submarine 
patents as does H.R. 400 offered by the gentleman from North Carolina 
[Mr. Coble]. I have come to the conclusion that it does not.
  Part of that is based just strictly on the language, in that you can 
have an extension of the publication of a patent, if the office of 
director of patents and trademarks does not make a determination that 
there was not an effort being engaged by the individual that could 
demonstrate that they were diligently pursuing the publication of their 
patent.
  They furthermore go on to say that if you can have an amendment, and 
again, you have to have a determination made by the regulatory body 
that this amendment was not done so simply to prevent the publication 
of the patent. These are determinations that have to be made that are 
going to be very difficult.
  I am concerned that with those provisions in, we will not deal with 
the fundamental issue of dealing with the submarine patents, and that 
is what is impeding, I think, the flow of capital which is so important 
to U.S. inventors, people that have a good idea that can build products 
in this country, that can create jobs and be such a benefit to our 
economy.
  Mr. Chairman, I urge people to vote no on the Rohrabacher substitute, 
and support the bill offered by the gentleman from North Carolina [Mr. 
Coble].
  Mr. ROHRABACHER. Mr. Chairman, I yield 3 minutes to the gentleman 
from Maryland, Mr. Roscoe Bartlett, one of the only inventors in the 
U.S. Congress, who is also a professor, a technologist, who shares the 
Committee on Science with me.
  Mr. BARTLETT of Maryland. Mr. Chairman, I would just like to speak to 
the Members for a few moments from the heart. I am not an expert in 
patents, but maybe I have some credibility. I hold 20 patents. I was in 
the academic world for 24 years, and during a part of that I was an 
inventor. I was a small business man with an R&D company, and my 
intellectual creations were the basis of that small business.
  Mr. Chairman, there is just no reason, no defensible justification 
for publishing these patents 18 months after they are filed. The only 
possible reason could be to prevent submarine patents, but CRS has 
said, and we can see it here by me, both bills seek to curtail 
submarine patenting and would likely end the practice.
  If the Rohrabacher bill is not perfect, let us make it perfect. But 
let us not undermine the protection that countless thousands of small 
inventors like myself have with the present system. We do not need to 
change this system.
  I have had a lot of mail on this. I have not had a single telephone 
call, a single fax, or a single letter that said ``Support H.R. 400;'' 
not a one of them, and not all of these small people out there can be 
wrong. I had the notion when I came to Congress that maybe the great 
wisdom of the country was not inside the Beltway. The longer I am here, 
the surer I am that that is true. These people from outside the Beltway 
have called me and faxed me and written letters to me, and every one of 
them who have done it, and there have been a large number, have said, 
please do not vote for H.R. 400, vote for the Rohrabacher bill.
  We do not need to bring down our patent system to the level of the 
Japanese, to harmonize under our GATT agreement. Let them come up to 
our level of excellence. If we pass H.R. 400, it will cost us jobs. It 
will cost us jobs because of the lack of protection that our 
entrepreneurs now have. We are the greatest economic force this world 
has seen. It is largely because of the protection of our entrepreneur 
system.
  It is true that to at least some degree, America's future is on the 
line in

[[Page H1682]]

this vote. Please do the right thing for the little guy that I 
represented so many years out there. Do not vote to give away our 
secrets to every copycat around the world. Protect our entrepreneurs. 
Vote for the Rohrabacher amendment.
  Ms. KAPTUR. Mr. Chairman, I yield 2 minutes to the gentlewoman from 
Texas [Ms. Jackson-Lee].
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I do not want to leave anyone 
behind on this issue. I, too, though a member of the Committee on the 
Judiciary, am not going to pretend to be a longstanding expert on this 
issue.
  But I want to raise two points. I hope that maybe we will be able to 
respond to the concerns. First, this substitute addresses the question 
that I have heard throughout my district, and that is on small 
businesses, and how they are protected. I do not think we can go 
forward without acknowledging and responding to those concerns. We have 
the time.
  Second, I would like to speak to the issue that now I am told is not 
outsourcing the patent staff, but corporatizing. I would simply say 
that the concern is that if you have had an independent civil body, 
then that civil body needs to be and remain independent. The substitute 
addresses that question.
  I would imagine that even in spite of having just met with members of 
the European Commission who have asked that we have a patent system 
which they can relate to, even with trying to relate on the 
international system, there does not seem a reason why we cannot 
protect small businesses and why we cannot protect the civil servants 
who are part of the Patent Office who have for years been able to 
provide good service to our inventors, our scientists, those who have 
knowledge, and bring knowledge to this country.
  This substitute responds to those concerns. If there is reason to 
repair the substitute and the larger bill, then I would offer to say 
that we should stand in support of small businesses and, of course, 
those longstanding civil servants who have done the job in the Patent 
Office for years and years and years.
  Ms. LOFGREN. Mr. Chairman, I yield 2\1/2\ minutes to the 
distinguished gentlewoman from California [Mrs. Tauscher].

                              {time}  1730

  Mrs. TAUSCHER. Mr. Chairman, I rise today in strong support of H.R. 
400, because I am the granddaughter of one of the little guys.
  My mother, who I talked to on the phone just a few minutes ago, has 
been confused about the debate she has watched today. But I strongly 
support H.R. 400 because I also strongly support our Nation's 
businesses and the small and independent inventors. I believe this 
important and needed legislation will improve our competitiveness, 
reduce the loss of wasted and precious R&D dollars and eliminate the 
real and dangerous scourge of submarine patents.
  Many have valid concerns about the publication of patent information 
18 months after filing. But H.R. 400 contains an exemption for all 
small businesses and independent inventors, allowing them to withhold 
publication until 3 months after the second meritorious PTO action. 
Furthermore, upon publication, inventors receive the constitutional 
monopoly over their invention.
  Others mention that the patent term will now be cut below the 
traditional 17-year term. Nothing could be further from the truth. The 
fact is that H.R. 400 allows a diligent patent applicant to receive 
extensions of term for many reasons, including appellate review, 
administrative delays caused by PTO actions or inactions, the 
imposition of a secrecy order, or in the case of interference from a 
competing claim or infringement. Many of these extensions are unlimited 
to ensure that inventors will not lose any patent term.
  Mr. Chairman, nearly 45 percent of all patent applications filed with 
the PTO are from foreign companies and inventors who have manipulated 
our patent system to their advantage while U.S. inventors filing abroad 
are subjected to open examination. H.R. 400 levels the playing field in 
favor of U.S. businesses while providing additional protection for 
American inventors. I urge my colleagues to oppose the Rohrabacher 
amendment and support H.R. 400.
  Mr. ROHRABACHER. Mr. Chairman, I yield myself 2 minutes.
  Mr. Chairman, these are my concluding remarks. I would like first of 
all to thank the gentleman from North Carolina [Mr. Coble], the 
gentleman from Illinois [Mr. Hyde] and the other Members who have put 
up with me for the last months in my opposition, and I happen to have 
very strong beliefs about this. I appreciate the gentleman from 
Michigan [Mr. Conyers] for putting up with me.
  The bottom line is, when you have strong disagreements in this 
democratic body, sometimes people get mad at one another, but the fact 
is we are all friends. We will be working on other issues and working 
together, and we are all people of integrity.
  Mr. Chairman, I also wanted to thank the gentlewoman from Ohio [Ms. 
Kaptur] and the gentleman from Maryland [Mr. Hoyer] and the gentleman 
from California [Mr. Campbell], the gentleman from Maryland [Mr. 
Bartlett], and of course, the gentleman from New York [Mr. Forbes], who 
has been so articulate as well.
  A lot of Members have put a lot of time and effort into this because 
this is a really important issue. It is something that will make the 
difference in the future of our country. We all believe that. Twenty 
years from now America will be a different kind of place because of the 
decision we are making today.
  We are trying today to make a decision as to whether or not we will 
fundamentally veer from the system that has protected the technological 
development of the United States of America for 225 years, a system 
that has assured the American people of the highest standard of living, 
the greatest degree of freedom and security for our country of any 
system in the world.
  We do not want to be like the Japanese. We do not want to harmonize 
our law to a Japanese model. We do not want the European model. People 
came here because this is where people's individual rights were 
protected. Again, what has been our rights, our rights have been we can 
invent and it will be kept confidential, our patent application, until 
that patent is issued and we own that technology. It has protected us. 
That has been such an important part of the development of technology 
in our country. Now it is just being cast away saying, we will exchange 
it for a system where you can sue somebody if they steel it from you. 
That somebody may be a huge corporation in Japan or China, but then 
that will replace it with that system. That is no protection at all.
  I ask my colleagues to support my substitute. We have included the 
good stuff and left out the bad stuff.
  Ms. LOFGREN. Mr. Chairman, I yield myself such time as I may consume.
  I wanted to make just a few remarks before the gentleman from 
Illinois [Mr. Hyde] concludes, I believe, the debate for today. As a 
relatively new Member, I have found this entire process to be a 
fascinating one, unfortunately, I think sometimes a confused one.
  We have heard and I have heard debates, late-hour radio talk show 
discussions about patents for the first time in my life. We have heard 
about patents on talk shows, people thinking it had something to do 
with foreign governments or trade agreements or the Red Army. In fact, 
as Mr. Hyde knows, and the gentleman from Michigan, Mr. Conyers, knows, 
it does not. And then people becoming concerned and alarmed and afraid 
and communicating to their Members of Congress, including myself, that 
they do not want the wrong thing for their country. Of course not. None 
of us do. None of us do.
  Then we get here today with, unfortunately and not unusually, most 
people in the country, I would venture and it has been said here today, 
most Members of the House not being experts in patent law, not having 
had a chance to take the courses in patent law or to practice patent 
law and to really familiarize themselves with it and then doubt and 
concern.
  Mr. Chairman, it is my hope that Members have found this debated 
useful so that they can sort through the conflicting and occasionally 
extravagant claims to do what is right for our

[[Page H1683]]

country because this is not a freebie vote. This is an enormously 
important vote for America. When I think about the companies and the 
inventors and the innovators in Silicon Valley and the role that they 
now play and will play in making sure our country advances 
technologically and has a wonderful quality of life, that we have high 
employment, that we have a bright future, that is dependent on this 
body going beyond its confusion and doing the right thing by defeating 
the Rohrabacher substitute and supporting H.R. 400. The bill that was 
crafted by Chairman Hyde and Ranking Member Conyers, that was supported 
and nurtured by the gentleman from North Carolina, Mr. Coble, the 
chairman, and the gentleman from Massachusetts, Mr. Frank, the ranking 
member, these are unlikely allies who have come together in the best 
interest of the Nation on a bipartisan basis.
  I will close simply by saying this. The White House conference on 
small business technology chairs have analyzed the debate, analyzed the 
talk show allegations and have found that the misinformation, they say 
misinformation, is part of an intense campaign of fear and xenophobia. 
They say the information being promulgated is simply wrong. They point 
out that legislation based on bad data is bad legislation. They urge 
defeat of the Rohrabacher amendment and they urge support of H.R. 400.
  Mr. COBLE. Mr. Chairman, I want to express appreciation to all who 
participated in today's debate and to thank the Chair as well.
  Mr. Chairman, I yield the balance of my time to the gentleman from 
Illinois [Mr. Hyde], chairman of the House Committee on the Judiciary.
  Mr. HYDE. Mr. Chairman, I thank the gentleman for yielding me the 
time. I will not spend time congratulating everybody, but I do in a 
blanket way because everybody connected with this issue and this debate 
on both sides, even the gentleman from California [Mr. Campbell], 
Professor Campbell, I congratulate.
  If my colleagues do not think submarine patenting is a serious 
problem, and it has been diminuendo by some on the other side, let me 
quote from a witness before the subcommittee of the gentleman from 
California [Mr. Rohrabacher], a gentleman named Bill Budinger, an 
independent single inventor who had his own little company, Rodel 
Company, and here is what he said to Mr. Rohrabacher's committee:
  ``I have heard people say there is no such thing as submarine 
patents, and to borrow a phrase from earlier, I think the folks that 
say that are either naive or disingenuous. Here is a list of 300 
patents that were issued in the 2-year period before the law changed,'' 
that is 1994. ``Each of these patents will monopolize a segment of 
American technology for a period of 25 years or more. They are going to 
provide a minimum of 25-year monopolies and some of the monopolies here 
are 40 years. Every one of these patents is issued to and owned by a 
foreign corporation. So these folks learned how to game the system.''
  Now, submarine patents are not the only reason we are here with this 
bill. Do you not understand that we need access to foreign inventors' 
ideas? They come over and register and file their applications in our 
Patent Office, and we do not get to read them. We do not get to see 
them in English. Whereas our patents, our applications are filed in 
Japan, filed in France, filed in Germany, and after 18 months, they are 
published there. So we ought to have parity with foreign inventors; 45 
percent of the applications for patents are filed by foreigners in this 
country.
  We saw a rather embarrassing list of Nobel Prize winners but they may 
not have the technologists. They have the inventors, 45 percent of 
them. Small business is protected. Small business can opt out. Small 
business cannot be published until after two office actions. That means 
you are going to get your patent. Then you have 3 more months when you 
are not published. That is a different treatment from a so-called big 
business.
  Let us dispel the notion that publication is a betrayal of our 
secrets. Publication is protection.
  There is an animal called provisional rights that arises as soon as 
your publication occurs. It is the same as though you had a patent and, 
once your idea has been published, it is yours. It is notice to the 
world, I thought of it. I thought of it first, do not tread on me. And 
not only that, but if anybody tries it, they are liable in damages for 
infringement. So there are provisional rights. Do not tread on me, and 
it also is an advertisement to investors who might say, hey, this guy 
has got an idea. I might want to invest in this.
  Every patent commissioner except one who is working for the other 
side has come out for H.R. 400. The Nixon, Ford, Reagan, Bush have all 
signed a letter saying we like 400. The Clinton administration says, we 
like 400. And so if it is good enough for them, it ought to give us 
pause if we do not think we want to support it.
  The gentleman from California, [Mr. Rohrabacher], God love him, says 
his bill, and he has a CRS report. If I were the teacher, I would give 
that about a D minus because it misses the mark horribly, horribly. The 
gentleman from California, Mr. Tom Campbell, a fine lawyer, I just want 
to ask if he really thinks this eliminates the submarine patent. Under 
the Rohrabacher amendment, you cannot publish for 5 years. Let me put 
the question this way: Have you ever spent 5 years in a submarine?
  Mr. CAMPBELL. Mr. Chairman, will the gentleman yield?
  Mr. HYDE. I yield to the gentleman from California.
  Mr. CAMPBELL. Mr. Chairman, under the Rohrabacher amendment, you must 
publish, there is no 5-year delay if you are a gamester, if you are a 
submariner as determined and applied for a continuation. No 5-year 
delay.
  Mr. HYDE. Mr. Chairman, the gentleman is asking that the patent 
examiner have an astrological gift to be able to tell whether or not 
what one is doing is gaming the system.
  There is much more to say, I sense an impatience in the Chamber. And 
not wishing to dull my antennae any more than they are, I hope my 
colleagues will support 400. I hope my colleagues will tell the 
gentleman from California, [Mr. Rohrabacher], he is a swell guy but has 
a lousy bill.
  The CHAIRMAN. The question is on the amendment in the nature of a 
substitute offered by the gentleman from California [Mr. Rohrabacher].
  The question was taken; and the Chairman announced that the noes 
appeared to have it.


                             Recorded Vote

  Mr. ROHRABACHER. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 178, 
noes 227, not voting 28, as follows:

                             [Roll No. 85]

                               AYES--178

     Abercrombie
     Bachus
     Baldacci
     Ballenger
     Barcia
     Barr
     Barrett (WI)
     Bartlett
     Bereuter
     Bilirakis
     Bonilla
     Bonior
     Bono
     Brown (OH)
     Burton
     Calvert
     Campbell
     Cardin
     Chambliss
     Chenoweth
     Christensen
     Clayton
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cox
     Coyne
     Cramer
     Crapo
     Cubin
     Cunningham
     Danner
     Deal
     DeFazio
     Dellums
     Diaz-Balart
     Dixon
     Doolittle
     Doyle
     Duncan
     Emerson
     English
     Ensign
     Everett
     Filner
     Foley
     Forbes
     Fowler
     Gallegly
     Gephardt
     Gibbons
     Gillmor
     Goode
     Goodling
     Goss
     Graham
     Hansen
     Hastings (WA)
     Hayworth
     Hefley
     Herger
     Hill
     Hilleary
     Hostettler
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jones
     Kaptur
     Kildee
     Kim
     King (NY)
     Kingston
     Kleczka
     Klink
     Kucinich
     LaHood
     Largent
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Lipinski
     Livingston
     LoBiondo
     Lucas
     Maloney (CT)
     Manzullo
     Martinez
     Mascara
     McCarthy (NY)
     McDade
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     McKinney
     McNulty
     Menendez
     Metcalf
     Mica
     Miller (CA)
     Miller (FL)
     Mink
     Molinari
     Moran (KS)
     Murtha
     Myrick
     Neumann
     Ney
     Norwood
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pappas
     Parker
     Pascrell
     Paul
     Payne
     Petri
     Pickering
     Pombo
     Poshard
     Radanovich
     Regula
     Riggs
     Riley
     Rivers
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryun
     Salmon
     Sanders
     Sanford
     Saxton
     Scarborough
     Schaffer, Bob
     Sessions
     Shadegg
     Sherman
     Smith (MI)
     Smith (NJ)
     Smith, Linda
     Snowbarger
     Snyder
     Solomon
     Souder
     Spence
     Stearns
     Strickland
     Stump
     Sununu
     Talent
     Taylor (NC)
     Thomas

[[Page H1684]]


     Thornberry
     Thune
     Tiahrt
     Traficant
     Walsh
     Wamp
     Waters
     Watts (OK)
     Weygand
     Whitfield
     Young (AK)

                               NOES--227

     Ackerman
     Aderholt
     Allen
     Archer
     Armey
     Baesler
     Bass
     Bateman
     Becerra
     Bentsen
     Berman
     Berry
     Bilbray
     Bishop
     Blagojevich
     Bliley
     Blunt
     Boehlert
     Boehner
     Boswell
     Boucher
     Boyd
     Brady
     Brown (CA)
     Brown (FL)
     Bryant
     Burr
     Buyer
     Camp
     Canady
     Cannon
     Capps
     Carson
     Castle
     Chabot
     Clement
     Clyburn
     Coble
     Conyers
     Cummings
     Davis (FL)
     Davis (IL)
     Davis (VA)
     Delahunt
     DeLauro
     DeLay
     Deutsch
     Dickey
     Dingell
     Doggett
     Dooley
     Edwards
     Ehlers
     Ehrlich
     Engel
     Eshoo
     Evans
     Ewing
     Farr
     Fattah
     Fawell
     Fazio
     Ford
     Fox
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Furse
     Ganske
     Gejdenson
     Gekas
     Gilchrest
     Gilman
     Gonzalez
     Goodlatte
     Gordon
     Granger
     Green
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hamilton
     Hastert
     Hastings (FL)
     Hefner
     Hilliard
     Hinojosa
     Hobson
     Hoekstra
     Holden
     Hooley
     Horn
     Houghton
     Hyde
     Inglis
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson (WI)
     Johnson, E. B.
     Kanjorski
     Kasich
     Kelly
     Kennedy (MA)
     Kennedy (RI)
     Kennelly
     Kilpatrick
     Kind (WI)
     Knollenberg
     Kolbe
     LaFalce
     Lampson
     Lantos
     Latham
     Levin
     Lewis (GA)
     Linder
     Lofgren
     Lowey
     Luther
     Maloney (NY)
     Manton
     Markey
     Matsui
     McCarthy (MO)
     McCollum
     McDermott
     McGovern
     McHale
     Meehan
     Meek
     Minge
     Moakley
     Mollohan
     Moran (VA)
     Morella
     Nadler
     Neal
     Nethercutt
     Northup
     Nussle
     Owens
     Oxley
     Packard
     Pastor
     Paxon
     Pease
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Pickett
     Pitts
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Rahall
     Ramstad
     Rangel
     Reyes
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rothman
     Roukema
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sandlin
     Sawyer
     Schumer
     Scott
     Serrano
     Shaw
     Shays
     Shimkus
     Shuster
     Sisisky
     Skaggs
     Skeen
     Skelton
     Slaughter
     Smith (OR)
     Smith (TX)
     Smith, Adam
     Spratt
     Stabenow
     Stark
     Stenholm
     Stokes
     Stupak
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Thompson
     Thurman
     Tierney
     Torres
     Turner
     Upton
     Velazquez
     Vento
     Visclosky
     Watkins
     Watt (NC)
     Waxman
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     White
     Wicker
     Wise
     Wolf
     Woolsey
     Wynn
     Yates
     Young (FL)

                             NOT VOTING--28

     Andrews
     Baker
     Barrett (NE)
     Barton
     Blumenauer
     Borski
     Bunning
     Callahan
     Clay
     Costello
     Crane
     DeGette
     Dicks
     Dreier
     Dunn
     Etheridge
     Flake
     Foglietta
     Harman
     Hinchey
     Johnson, Sam
     Klug
     McCrery
     Millender-McDonald
     Schaefer, Dan
     Schiff
     Sensenbrenner
     Towns

                              {time}  1804

  The Clerk announced the following pair:
  On this vote:

       Mr. Dan Schaefer of Colorado, for with Ms. Dunn against.

  Ms. EDDIE BERNICE JOHNSON of Texas and Messrs. DAVIS of Illinois, 
FAWELL, SERRANO, EDWARDS, and GUTIERREZ changed their vote from ``aye'' 
to ``no.''
  Mr. PAYNE changed his vote from ``no'' to ``aye.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.


                          personal explanation

  Mr. BARRETT of Nebraska. Mr. Chairman, I was unable to be present for 
the vote on the Rohrabacher substitute amendment to H.R. 400. Had I 
been present, I would have voted ``no.''
  Mr. COBLE. Mr. Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly the Committee rose; and the Speaker pro tempore (Mr. 
Upton) having assumed the chair, Mr. LaHood, Chairman of the Committee 
of the Whole House on the State of the Union, reported that that 
Committee, having had under consideration the bill (H.R. 400) to amend 
title 35, United States Code, with respect to patents, and for other 
purposes, had come to no resolution thereon.

                          ____________________