[Congressional Record Volume 143, Number 160 (Thursday, November 13, 1997)]
[Senate]
[Pages S12637-S12640]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       OMNIBUS PATENT ACT OF 1997

 Mr. BOND. Mr President, Congress has the ``power to promote 
the progress of Science and useful Arts, by securing for limited times 
to Authors and Inventors the exclusive Right to their respective 
Writings and Discoveries.'' If that phrase sounds familiar to my 
colleagues, it is because I lifted it straight from the Constitution. 
Article 1, section 8, known to many as the inventors clause.
  This section of the Constitution is the result of the foresight that 
our Founding Fathers had to cut a deal with the creative minds of a 
fledgling country. The deal was rather simple, in exchange for sharing 
their ingenuity and their creations with the citizens of this new 
country, the Congress would grant these inventors temporary monopolies 
on their products and permit them to enjoy the proceeds of their 
invention for a period of time, with the weight of the law of the land 
to ensure those rights were protected.
  This was a carefully thought out concept by rather brilliant 
individuals with unquestioned foresight. In my opinion, this compromise 
has been a smashing success. In the past 220 years,

[[Page S12638]]

the United States has become an economic, industrial, and intellectual 
superpower. The creative product of the U.S. is unmatched the world 
over and I believe that the United States patent system has played a 
central role in this success.
  Why am I sharing these thoughts with my colleagues, because it is 
just like the Federal Government to take a good idea and turn it on its 
head. There is legislation pending on the Senate Calender, with the 
strong backing of the Clinton administration, that would gut the 
protection and the incentives offered inventors by our patent and 
trademark laws. This country's inventors have been an indispensable 
force in the success of which I have spoken. But this legislation would 
tip the balance of protection offered by patent laws away from these 
inventors and thinkers and open them to the hostile environment of 
intellectual property piracy and idea predators--commonplace in other 
parts of the world. Our inventors will be jerked from a protective 
environment, known for nurturing creativity and advancing practical 
knowledge, and be cast into a far harsher arena where it will be 
eminently more difficult for inventors to secure their rights and enjoy 
the rewards of their creativity and entrepreneurship--and possibly be 
driven from their work all together.
  I am hear to speak out on behalf of the inventors and the small guys 
of this country. People with ideas. I would suspect that scattered 
throughout the bill there may be some good ideas that may improve the 
efficiency of the Patent and Trademark Office, but taken as a whole the 
changes proposed would stifle rather than promote the sciences and the 
useful arts. I believe the legislation is ill-conceived and I will 
fight it should it see Senate debate.
  The past couple of weeks, the Senate has been debating the state of 
manufacturing in the United States. Many of my colleagues have 
registered their concern that much of our manufacturing base has left 
the country and they fear that this trend will continue. I believe that 
there is a future for manufacturing and industry in this country. I am 
very encouraged by the number of small businesses and startup companies 
presently thriving in the United States. Much of our future lies with 
these startup businesses and small business people that are creating 
new technology, starting companies, and expanding employment 
opportunities. But I believe we need to seize the opportunity and 
continue to encourage it.
  This is where the patent comes into the equation. A great idea can 
come to anyone, regardless of his or her capital or financial 
resources. This is the point at which the magnificence of our system 
becomes clear to me. Should a person be the first with an idea and 
successfully document that idea, that person can be granted a patent. 
The patent secures a monopoly and if it is a good idea it can be 
shopped around the venture capital markets. Should the financial 
assistance be secured, the inventor can build a prototype, start a 
business, hire people, and perhaps even build a successful company and 
make money.
  I believe that strong patent protection is central to that equation. 
First, those with capital are not inclined to fork over some money 
because it is the nice thing to do, they want assurances of return. The 
legally protected monopoly provides that assurance. The fact that our 
patent laws offer the strongest possible protection also contributes to 
that assurance. The inventor's idea is held in secret at the patent 
office until it is granted, which by the way prevents theft. The law 
also grants a legal right upon which an inventor can bring a civil 
action for damages should that idea be infringed upon. Strong patent 
protection lends value and certainty to this temporary monopoly.
  Without the patent protection, ideas that are not backed by financial 
resources may never see the light of day or else they may be gobbled up 
by a large company for pennies on the dollar. If one does not hold a 
realistic belief that they can make a go of it with their own idea, I 
believe that stifles important incentives present in America to pursue 
an idea or invent. But even more so, I do not believe this is the 
American way. This is a great country because anyone with an idea and 
the fortitude to pursue that idea can make a go it. This country is 
full of companies that began under just such circumstances.
  This country needs its entrepreneurs, they are essential if we are to 
continue to enjoy economic growth. Think about the role of 
entrepreneurs and startup companies in our economy. They come up with 
new ideas, they promote competition, they shake up old establishments, 
they force competitors to be smart and competitive, they inject vigor 
and dynamism into our capitalistic system. They create manufacturing 
jobs right here in the United States. They create secure and well-
paying jobs for Americans. And they give you, me, and our children new 
technology and news ideas for all our use. This force is essential to 
our strength and continued growth and the patent laws are essential to 
allowing these start-ups to begin and then thrive.
  Many of those that are pushing for this bill are large companies with 
vast financial resources. Before they put forward their arguments in 
favor of the legislation, I must challenge them to ask themselves some 
important questions. Did not their companies begin with a single person 
with an idea? Did they not seize the opportunities offered in this 
country to grow and flourish? Did not the patent offer protection 
needed to pursuing that idea? Pulling the ladder up once you have made 
it to the top is not the American way, but that agenda is underlying 
much of this legislation.
  I support the inventors who are fighting these changes. I believe 
they are correct and courageous in their stance. Unfortunately, they 
have been ridiculed and vilified in the press by the Commissioner of 
the PTO, the individual running the agency responsible for licensing 
billions of dollars in intellectual property rights here in the United 
States. In fact, I read that he said that the opponents of this bill, 
that would include myself, reside on the lunatic fringe. He also 
compared our sanity to that of Timothy McVeigh--on behalf of the 
hardworking inventors of this country, I find such comments outrageous 
and demeaning. But rather than dignifying those ridiculous comments by 
responding on the merits, I will share with my colleagues a sampling of 
those that Mr. Lehman is saying reside on the lunatic fringe.
  First, I have been contacted by countless inventors registering their 
opposition, their creations include medical devices, drugs, machinery, 
electronic technology, computer technology, and agricultural products--
to mention a few. They share a fear that this will open them up to 
litigation, theft, and harassment while closing down their 
opportunities to continue their work. I have also been contacted by men 
and women of science, economists, doctors, and professors. The most 
notable group of objectors is a group of over 20 Nobel Laureates in 
science and economics who have signed an open letter to the U.S. Senate 
opposing the bill. These great minds all agree that this legislation 
could result in ``lasting harm to the United States and to the world.'' 
They also concur with the concerns I am advancing today that this bill 
will be very harmful to small inventors and ``discourage the flow of 
new inventions that have contributed so much to America's superior 
performance in the advancement of science and technology.'' Finally, 
these great scientists and economists have expressed concern that this 
bill will create a disincentive to rely on the limited life of a patent 
to share their creations with the public, an occurrence which will sap 
the spirit of the inventors clause.
  I think that opposition should be enough to convince just about 
anyone. But respected others, including the New York Times, have spoken 
out. The Times editorial page has concluded that this bill will 
``dampen the innovative spirit that helps sustain the American 
economy.'' The Times also correctly notes that the American patent 
system generates more and better patent applications than any other 
country's, but that this bill terribly threatens the incentives present 
in our system that stimulates that creativity.

  I have also been contacted by Ross Perot, who has expressed in no 
uncertain terms his absolute objection to this legislation. As Mr. 
Perot reminded me, patents are a constitutionally guaranteed right 
which have been essential to countless Americans in their

[[Page S12639]]

fulfillment of the American dream. But rather than celebrate this 
success story unique to America, we are proposing selling our inventors 
down the river. Mr. Perot has called upon the Members of Congress to 
ask themselves a simple question when considering this bill, is it 
right or is it wrong? We both agree it is wrong. And we are ready for a 
fight. Mr. Perot, whose dedication to America and success as a 
businessman cannot be questioned, has said, in the words of Isaac Hull, 
``If that fellow wants a fight, we won't disappoint him.''
  There are other well-respected groups, small business groups and 
groups of concerned citizens that believe this legislation is bad 
policy and are lining up for a fight.
  I will take the collective contribution of those that oppose this 
bill and stack them up against Mr. Lehman's arguments any day. The 
inventors of this country should derive confidence because they have 
the Constitution and many great minds of science on their side and 
rhetoric on the other.
  For those reviewing the bill, I would like to point out some issues.
  First, the proponents of the bill want to create an infringement 
defense, known as a prior user right. The prior user right is a bad 
idea for many reasons. Foremost, it starts down a road that changes our 
``first to invent'' system and overturns 200 years of U.S. patent 
policy. The defense would not only permit inventors to keep their ideas 
secret, but it encourages them to keep them secret. Our first to invent 
system protects small inventors. If they document their invention, they 
will not have to engage in a race to the patent office. They will have 
time to tinker and perfect their inventions without being forced to 
file early and then file for all perfections, a costly process for a 
small inventor.
  The defense will hurt small inventors in the capital markets because 
it will undermine the certainty of the patent. As I said this certainty 
is important to attracting capital and the capital is important for 
underfunded inventors to take their products to market. Should one have 
an invention that requires expensive testing, the idea can not be 
perfected without finances. Capital is essential for inventors to role 
out their own ideas. This section poses many problems about which I 
could speak for quite some time, but I will refrain. The reasons will 
be aired fully in time.
  Many proponents want to force all inventors to publish their ideas 
after 18 months, regardless of whether the patent review process is 
completed. Some changes have been made to scale this back, but many are 
laying in wait to see this implemented. I believe this would open our 
inventors to theft. Small inventors would have to go to court to recoup 
their just rewards and would have to depend on costly litigation. Many 
say, ``We won't steal ideas,'' I hope not, but this is the business 
world. I am unwilling to put small inventors at this sort of a risk.
  Proponents are looking for changes in the system for challenges to 
patents, this may open small inventors to unnecessary expense and 
litigation. Taken as a whole, there are profound changes proposed. The 
collective weight, I believe, will hurt our small inventors.
  A quick word about an argument forwarded by the bill's proponents. 
They will come to your office saying that this bill is necessary 
because there is a pariah lurking in the world of intellectual 
property. He uses what is called a submarine patent to manipulate the 
patent review process to reap unjustified rewards from honest, hard-
working men and women. His greed and treachery could potentially 
destroy thousands of businesses and deal a crushing blow to our 
economy.
  To that I respond--hogwash. Let's engage in an honest debate. When we 
in Congress agreed to the implementing language in the GATT agreement, 
we agreed to change the U.S. patent term from a guaranteed 17 years to 
20 years from the date of filing. Supposedly, that was done to get at 
submarine patents. It does take away most if not all of the incentive 
for an inventor to game the system and should drive a stake into the 
heart of wrongdoers.
  In the process we made a tremendous sacrifice that will cost many of 
our inventors patent protection. Today, for each day beyond 3 years 
that a patent lingers in the patent office, our inventors will lose a 
day of patent protection. Should someone invent a better potato peeler 
or candy wrapper, it probable won't be in the office today. But the 
change could have a significant affect on those attempting to get a 
patent on breakthrough technology. Such technology can often stay under 
review in the office for years and subsequently our inventors have lost 
years of protection compared with what they enjoyed before the change. 
Our inventors have made a great sacrifice to root out the wrongdoers in 
the system. But the proponents of this bill want more.
  They do have more. The PTO has a computer system designed to track 
patent applications that appear to be those of one attempting to game 
the system. The Commissioner also has the power to order that the 
application of one attempting to game the system is published, further 
curtailing the possibility of the submarine patents. Finally, the 
Commissioner himself has said that only 1 percent of 1 percent of 
patent applications could be considered submarine patents.
  The Commissioner has plenty of tools at his disposal to curb this 
problem if it in fact exists. If the problem is out of control, then I 
believe the problem lies with the Commissioner and those with 
complaints would be better served leveling their concerns at the other 
end of Pennsylvania Avenue.
  I will conclude by saying that brilliant minds have been drawn to 
this country and the brilliant minds native to this country have 
flourished. I do not believe it is an accident. We in America have 
chosen our own path. The goal of our patent system is to protect and 
reward entrepreneurs and innovative businesses, to encourage invention 
and advancement of practical knowledge. The goal of many of our 
competitor systems is to share technology immediately, not to protect 
it. That results in preserving the corporate hierarchy without giving 
innovators the opportunity to compete.
  In other countries thoughts and ideas do not receive the level of 
reward that they do here. The system works, let us not destroy it. If 
we want to improve the Patent Office, let's get on with it. But let us 
not organize a systematic assault on the very system that has 
contributed so much to this country becoming the greatest Nation on 
Earth.
  I ask that two letters and an op-ed be printed in the Record.
                                               September 11, 1997.
     An Open Letter To the U.S. Senate:
       We urge the Senate to oppose the passage of the pending 
     U.S. Senate Bill S. 507. We hold that Congress, before 
     embarking on a revision of our time tested patent system, 
     should hold extensive hearings on whether there are serious 
     flaws in the present system that need to be addressed and if 
     so, how best to deal with them. This is especially important 
     considering that a delicate structure such as the patent 
     system, with all its ramifications, should not be subject to 
     frequent modifications. We believe that S. 507 could result 
     in lasting harm to the United States and the world.
       First, it will prove very damaging to American small 
     inventors and thereby discourage the flow of new inventions 
     that have contributed so much to America's superior 
     performance in the advancement of Science and technology. It 
     will do so by curtailing the protection they obtain through 
     patents relative to the large multi-national corporations.
       Second, the principle of prior user rights saps the very 
     spirit of that wonderful institution that is represented by 
     the American patent system established in the Constitution in 
     1787, which is based on the principle that the inventor is 
     given complete protection but for a limited length of time, 
     after which the patent, fully disclosed in the application 
     and published at the time of issue, becomes in the public 
     domain, and can be used by anyone, under competitive 
     conditions for the benefit of all final users. It will do so 
     by giving further protection to trade secrets which can be 
     kept secret forever, while reducing the incentive to rely on 
     limited life patents.
     Nobel Laureates in support of the letter to congress, re: 
         Senate Bill 507
       Franco Modigliani, (1985, Economics) MIT.
       Robert Solow, (1987, Economics) MIT.
       Mario Molina, (1995, Chemistry) MIT.
       Roald Hoffman, (1981, Chemistry) Cornell.
       Milton Friedman, (1976, Economics) University of Chicago.
       Richard Smalley, (1996, Chemistry) Rice.
       Clifford Shull, (1994, Physics) MIT.
       Herbert A. Simon, (1978, Economics) Carnegie-Mellon.
       Douglass North, (1993, Economics) Washington University.
       Dudley Herschbach, (1986, Chemistry) Harvard.
       Herbert C. Brown, (1979, Chemistry) Purdue.
       David M. Lee, (1996, Physics) Cornell.

[[Page S12640]]

       Daniel Nathans, (1978, Medicine) Johns Hopkins.
       Doug Osheroff, (1996, Physics) Stanford.
       Har Gobind Khorana, (1968, Medicine) MIT.
       Herbert Hauptman, (1985, Chemistry) Hauptman-Woodward 
     Medical Research Institute.
       John C. Harsanyi, (1994, Economics) UC Berkeley.
       Paul Berg, (1980, Chemistry) Stanford.
       Henry Kendall, (1990, Physics) MIT.
       Paul Samuelson, (1970, Economics) MIT.
       James Tobin, (1981, Economics) Yale.
       Jerome Friedman, (1990, Physics) MIT.
       Sidney Altman, (1989, Chemistry) Yale.
       Robert F. Curl, (1996, Chemistry) Rice.
       William Sharpe, (1990, Economics) Stanford.
       Merton Miller, (1990, Economics) U. of Chicago.
                                  ____

                                                      Reform Party


                                         of the United States,

                                     Dallas, TX, November 4, 1997.
     Hon. Christopher S. Bond,
     Russell Building, Senate Office Building, U.S. Senate, 
         Washington, DC.
       Dear Senator Bond: I want to thank you personally for 
     having the courage and integrity to oppose the Patent Bill 
     now pending before Congress--Senate Bill 507. This Bill will 
     destroy our patent system and remove all incentives for 
     people to create revolutionary new products.
       In addition, I would like to thank Senate Majority Leader 
     Trent Lott for standing on principle and refusing to allow 
     this bill to be sneaked through the Senate without hearings 
     or debate.
       Obviously, some members of the Senate feel that the owners 
     of the country--the people--have no right to know what 
     Congress is doing.
       Under this law, inventors' new products still pending 
     approval, will be made available to all nations, with many 
     countries shamelessly mass-producing these products and 
     ignoring the inventors' rights.
       The only recourse for the inventor is to petition the newly 
     created World Trade Organization, where our country only has 
     one unweighted--and believe it or not, the inventor has no 
     recourse in the United States court system. Does anybody 
     really think that this complies with our Constitution?
       Granting patent rights to inventors is a Constitutional 
     right--clearly spelled out in our Constitution in Article I, 
     Section 8.
       Please remind every member of Congress that it is illegal 
     to amend the Constitution by passing laws.
       The only way the Constitution can be amended is through the 
     amendment process. Isn't this a whole lot better than leaving 
     it up to the lobbyists, foreign governments, and 
     corporations? The framers of the Constitution knew what they 
     were doing. Let's follow the rules.
       Congress has no business even thinking about circumventing 
     the Constitution with a combination of federal law and 
     international trade agreements.
       What would our country and the world be like today if 
     Robert Fulton has not invented the steam engine, Thomas 
     Edison had not invented the electric light, Alexander Graham 
     Bell had not invented the telephone and made instant 
     worldwide communication possible, The Wright brothers had not 
     invented the airplane, Edwin Armstrong had not harnessed the 
     airways and made radio and television possible, Jack Kilby 
     and Robert Noyce had not invented the integrated circuit, 
     just to mention a few.
       A few years ago two young men, Ralph Lagergren and Mark 
     Underwood, from Kansas had revolutionary ideas about how to 
     improve the combine used to harvest grain. They had great 
     ideas, but no money.
       Using their brains, wits, and creativity as a substitute 
     for money, they successfully created this new product and now 
     hold over 25 patents.
       John Deere purchased the technologies and patent rights for 
     several million dollars.
       I had the privilege of showing 4,000 Future Farmers of 
     America a videotape of their great work. These teenagers were 
     electrified, because Ralph's and Mark's success made these 
     young people realize that it is still possible to dream great 
     dreams in America and make those dreams come true.
       Can't we agree that inventors should not have their 
     Constitutional rights violated and they should be paid for 
     their creative ideas and inventions?
       Patent rights and the creativity and ingenuity of United 
     States inventors have been instrumental in giving the United 
     States our world leadership.
       Why is this happening? Because our large corporations, 
     foreign governments, and foreign companies who contributed 
     millions of dollars to the 1996 political campaigns want to 
     steal our inventors' new patents. If you question this 
     statement, get a list of the companies working to lobby this 
     change through Congress.
       Patents are property rights under U.S. Law. It is immoral 
     and inexcusable for large corporations to band together and 
     spend a fortune trying to lobby this Bill secretly through 
     Congress, so that the creative ideas of United States 
     inventors can literally be stolen.
       Why don't these people admit that what they are trying to 
     get done is no better than robbing a bank. In fact, it is 
     even worse to steal an individual's inventions so that 
     companies can increase corporate profits.
       If this is such a good idea, why has this whole process 
     been carried out behind closed doors in Congress, with people 
     supporting this Bill doing everything they can to avoid 
     public debates on the floor of the House and Senate?
       The answer it is cannot stand the harsh light of public 
     scrutiny.
       I want to thank you and every member of the House and 
     Senate who have stood up to the tremendous pressure you are 
     subjected to. I know that many of you have been threatened 
     about what the special interests will do to you in the next 
     election. You are living Commodore Maury's words--``When 
     principle is involved, be deaf to expediency.''
       Just let these people know that all the special interest 
     money in the world is not worth one penny unless it will buy 
     the votes of the American people. I, and millions of other 
     Americans who share your concerns over Constitutional rights 
     and protecting our inventors' great new ideas, will be 
     working night and day to see that people who have the 
     character and integrity to stand up to this tremendous 
     pressure are overwhelmingly re-elected.
       I challenge the people supporting this Bill to come out of 
     the closet, face the American people, and have an open debate 
     on this issue, but I won't hold my breath waiting for them to 
     do it. That is not the way they operate, and they will all be 
     embarrassed if they attempt to do it.
       I will pay for the television time to allow a national 
     debate on this issue. The only problem we will have is that 
     the people who are for this Bill will not show up, because it 
     cannot withstand the light of public scrutiny, and they will 
     pressure the television networks not to sell the time.
       If this Bill passes, A Constitutional lawsuit will be filed 
     immediately. Foreign nations and corporations will know that 
     the 21st Century pirates for hire reside in the U.S. 
     Congress. Those who vote for it will be paid off handsomely. 
     The people who voted for it will be forced to defend their 
     actions in their 1998 campaigns. It will be a major 
     Constitutional violation issue in the 2000 campaigns.
       Isn't it time for our elected officials to stop debating 
     whether their actions are legal or illegal, and ask only one 
     question, ``Is it right or wrong?''
       Finally, before voting for this Bill, ask every member of 
     the House and Senate who plan to vote for this Bill, to read 
     the words of Isaac Hull, Captain of the U.S.S. Constitution, 
     Old Ironsides--``If that fellow wants a fight, we won't 
     disappoint him.''
       Again, thank you for your leadership--thank you for your 
     courage--thank you for standing on principle.
           Sincerely,
     Ross Perot.
                                  ____


                [From the New York Times, Oct. 17, 1997]

                           A Bad Patent Bill

       The Senate is considering a misguided bill to recast the 
     patent laws in ways that would threaten small inventors and 
     dampen the innovative spirit that helps sustain America's 
     economy. The bill is so mischievous that it has attracted an 
     unusual coalition of opponents--including the icon of of 
     liberal economists, Paul Samuelson, the icon of conservative 
     economists, Milton Friedman, and 26 other Nobel Prize-winning 
     scientists and economists.
       Patent laws currently require inventors to disclose their 
     secrets in return for the exclusive right to market their 
     product for up to 20 years. Early disclosure helps the 
     economy by putting new ideas immediately into the hands of 
     people who, for a fee to the patent holder, find novel and 
     commercially applicable uses for these ideas. Extended 
     protection, meanwhile, provides a huge incentive for 
     inventors to keep inventing. The American system generates 
     more and better patent applications than any other country's.
       The Senate bill would weaken patent protection for small 
     inventors by requiring inventors who file for both American 
     and foreign patents to publish their secrets 18 months after 
     filing rather than when the patent is issued. Small inventors 
     say that premature publication gives away their secret if 
     their application fails. It would also allow large 
     corporations with the financial muscle to fend off subsequent 
     legal challenges to maneuver around the patent even if it is 
     later issued.
       Worse, the bills would encourage corporations to avoid the 
     patent process altogether. Under current law, companies that 
     rely on unpatented trade secrets run the risk that someone 
     else will patent their invention and charge them royalties. 
     The Senate bill would permit companies whose trade secrets 
     are later patented by someone else to continue to market 
     their products without paying royalties. Encouraging 
     corporations to hide secrets is the opposite of what an 
     economy that relies on information needs.
       Pesky patent holders do in fact get in the way of large 
     corporations. But the economy thrives on independent 
     initiative. Small inventors need ironclad patent protection 
     so that they are not forced into a legal scrum with financial 
     giants. The House of Representatives and the Senate Judiciary 
     Committee approved the patent bill without hearing the 
     country's leading economists and scientists make their case. 
     Senate sponsors now say they will try. Congress needs to hear 
     the critics out before proceeding to any more votes.

                          ____________________