[Congressional Record Volume 144, Number 83 (Tuesday, June 23, 1998)]
[Senate]
[Pages S6877-S6879]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       OMNIBUS PATENT ACT OF 1997

  Mr. LEAHY. Mr. President, now that we have passed legislation to 
implement the WIPO copyright treaties, it is time for the Senate to 
consider another bill of critical importance to America's businesses: 
The Omnibus Patent Act of 1997, S. 507.
  The patent bill has been stalled by Republican holds for over a year. 
It is time that the Senate turn to it and reform our patent laws. The 
patent bill was based on a proposal submitted by the Clinton 
Administration several years ago. It was reported out of the Senate 
Judiciary Committee on May 22, 1997, with a favorable vote of 17-1 and 
has the support of every Democrat on the Committee. Its co-sponsors, in 
addition to myself, include Senators Daschle, Bingaman, Cleland, Boxer, 
Harkin and Lieberman.
  The patent bill would reform the U.S. patent system in important 
ways. It would slash red tape in the Patent and Trademark Office (PTO); 
ensure that American inventors are not disadvantaged as compared to 
foreign inventors by requiring patent applications to be published in 
the U.S. at the same time they are published abroad; reduce legal fees 
that are paid by inventors and companies; and require the PTO to 
develop statewide computer networks with remote library sites to 
enhance access to electronic patent information for independent 
inventors and small businesses in rural states.
  In Vermont, we have a number of independent inventors and small 
companies. It is, therefore, especially important to me that this bill 
be one that helps them just as much as it helps the larger companies. I 
talked to independent inventors and representatives of smaller 
companies to see what reforms they recommended. I invited the President 
of the Vermont Inventors Association to testify before the Senate 
Judiciary Committee on this bill, and I have tried to make sure that 
the sound recommendations of small businesses and independent inventors 
were incorporated in the Hatch-Leahy substitute that the Judiciary 
Committee reported to the Senate over one year ago.
  The White House Conference on Small Businesses, which consists of 
over 2,000 delegates elected from hundreds of thousands of active small 
businesses nationwide; the National Association of Women Business 
Owners; the Small Business Technology Coalition; National Small 
Business United; the National Venture Capital Association; and the 
American Small Business Coalition for Patent Reform have concluded 
that, if enacted, this bill will be of great benefit to small 
businesses.
  What is holding up floor consideration of the bill? I think it is 
time to debate this bill on the merits. The Senate Republican 
leadership should schedule prompt action on this important measure.
  Our nation's economic prosperity in the coming years will depend on 
our abilities to invent and protect those inventions through our 
intellectual property laws. American innovators face global 
competition, and they need updated laws to continue to lead the world. 
This modernization of our patent laws is an important component of that 
essential effort. Along with the legislation the Senate recently 
approved to implement the WIPO copyright treaties, this bill goes a 
long way to protecting American ingenuity in the next century. 
Democrats have been ready to proceed to consider this measure for over 
a year. With less than 53 legislative days left in this session, I urge 
the Republican leadership to work with us to schedule action on this 
important bill.
  I ask unanimous consent that a list of letters of support for the 
patent bill and a few examples from those letters be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  List of Letters of Support of the Omnibus Patent Act of 1997, S. 507

       White House Conference on Small Businesses.
       The National Association of Women Business Owners.
       The Small Business Technology Coalition.
       National Small Business United.
       The National Venture Capital Association.
       21 Century Patent Coalition--signed by CEOs of 48 American 
     companies.
       The Chamber of Commerce of the United States of America.
       Pharmaceutical Research and Manufacturers of America, 
     PhRMA.
       American Automobile Manufacturers Association.
       The Software Publishers Association.
       Semiconductor Industry Association.
       3M.
       IBM.
       Intel Corporation.
       Caterpillar.
       AMP Incorporated.
                                  ____

                                                   The White House


                                 Conference on Small Business,

                                                      May 7, 1998.
     Hon. Patrick Leahy,
     U.S. Senate, Washington, DC.
       Dear Senator Leahy: The White House Conference on Small 
     Business consists of over 2000 delegates elected from 
     hundreds of thousands of active small businesses nationwide. 
     We are the elected technology chairs of the WHCSB and we are 
     charged with, among other things, representing the interests 
     of small business on matters of intellectual property 
     protection.
       The issue of patent reform is one of great concern to small 
     manufacturers and technology enterprises. Over the past two 
     years, we have been working to make modifications to the 
     patent reform bills in both Houses so that they are small-
     business friendly.
       We are pleased to hear that an amendment has been offered 
     addressing our concerns with S. 507. We believe that S. 507, 
     as amended, will lower the litigation costs for small 
     business, make it easier to know what areas of technology are 
     open for innovation, and will go a long way towards giving us 
     a more level playing field vis-a-vis our foreign competitors. 
     We wholeheartedly support passage of the bill and appreciate 
     the attention and support you have given to small business.
           Sincerely,
         The White House Conference on Small Business Technology 
           Chairs: Pat McDonnell, Region I; Ed Wenger, Region II; 
           Jim Woo, Region II; Bill Budinger, Region III; Wanda 
           Gozdz, Region IV; Rob Risser, Region V; Wayne Barlow, 
           Region VIII; Marianne Hamm, Region IX; Chuck Harlowe, 
           Region X.
                                  ____

                                           National Association of


                                        Women Business Owners,

                                     Silver Spring, June 23, 1998.
     Hon. Patrick J. Leahy,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Leahy: Attached please find a copy of the 
     April 28 letter sent to Senator Orrin Hatch by NAWBO 
     leadership. This letter expresses the position of NAWBO, on 
     behalf of our membership, regarding S.507 and its impact on 
     small business. The letter contains a series of proposed 
     amendments that NAWBO feels are in the best interest of small 
     business owners and for which we would greatly appreciate 
     your support in the upcoming debate on this legislation.
       On behalf of NAWBO members and other small business owners, 
     thank you for your time and efforts regarding this issue. If 
     we may be of further assistance please feel free to contact 
     Debra Hickerson in our national office at (301) 608-2590.
           Sincerely,
                                      Diahann W. Lassus, CPA, CFP,
                                                        President.

[[Page S6878]]

     
                                  ____
                                           National Association of


                                        Women Business Owners,

                                Silver Spring, MD, April 28, 1998.
     Hon. Orrin Hatch,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Hatch: The National Association of Women 
     Business Owners (NAWBO) and its alliance The Small Business 
     Technology Coalition (SBTC) met with the White House 
     Conference on Small Business (WHCSB) Technology Chairs to 
     review S. 507 and its impact on small business. NAWBO 
     supported intellectual property protection as one of the 
     issues at the White House Conference.
       The issue of patent reform is one of great concern to small 
     manufacturers and technology enterprises and to all small 
     businesses in general. When a new patent is filed it provides 
     the potential for a new product to come to market. This in 
     turn gives small and medium size businesses the opportunity 
     to be awarded contracts that generate and provide jobs that 
     stimulate our economy.
       America's 8 million women business owners are primarily 
     small and medium size companies that generate $2.3 trillion 
     dollars in sales and employ 18.5 million people in the United 
     States. Therefore, in order to insure the growth of the 
     American economy we need to protect our inventors.
       It is, therefore, our belief that the proposed series of 
     amendments to S. 507 which if enacted, would make this bill 
     of great benefit to small businesses.
       There are three amendments:
       1. Title IV--Prior Domestic Commercial Use. We offer an 
     amendment in the form of a substitution. The amendment 
     reorganizes, clarifies and simplifies the wording. The 
     substantive difference is that the amendment removes the 
     opportunity which is presently in S. 507 to use a PDCU 
     defense when the prior user has only made ``effective and 
     serious preparation'' to commercialize the invention. With 
     this section removed, the prior use defense only applies to 
     technology that was actually reduced to practice at least one 
     year prior to the patent priority date and in commercial use 
     before the patent's priority date. With this amendment, PDCU 
     performs its important function of preventing patents from 
     being mis-used to take the property of others.
       2. A new title adding language to 102(g)--Section 104 of 
     the existing U.S. patent law arguably allows a foreign 
     inventor to dodge the restrictions that 102(g) places on a 
     U.S. inventor. The suggested change to 102(g) will make it 
     clear that foreign inventors are also subject to the 
     restriction of 102(g) so that they cannot claim priority 
     dates to inventions that they have abandoned, suppressed or 
     concealed.
       3. Title I--The make-up of the Management Advisory Board. 
     We add language to ensure that the proportion of 
     representatives on the board from small and large entities 
     reflects their respective proportion of patent applications 
     filed.
       With these changes, we believe that S. 507 will lower the 
     litigation costs for small business, make it easier to know 
     what areas of technology are open for innovation, and will go 
     a long way toward giving us a more level playing field vis-a-
     vis our foreign competitors.
       With these changes, we will enthusiastically support S. 
     507.
           Sincerely,
         Barbara Kasoff, VP, Public Policy Council; Carol Barrows, 
           Secretary, Public Policy Council; Janie Emerson, 
           Director, Public Policy Council; Joan W. Frentz, 
           Director, Public Policy Council; Terry Neese, NAWBO 
           Corporate and Public Policy Consultant; Judith F. 
           Framan, Director, Public Policy Council; Wanda E. 
           Gozdz, Director, Public Policy Council; E. Jill 
           Pollack, Director, Public Policy Council.
                                  ____

                                                    Small Business


                                         Technology Coalition,

                                      Washington, DC, May 7, 1998.
     Hon. Patrick J. Leahy,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Leahy: The Small Business Technology Coalition 
     is made up of research-intensive, technology-based small 
     business leaders. We serve as a voice for the interests of 
     small high-technology firms both in Washington, DC and 
     throughout the United States.
       The issue of patent reform is one of great concern to our 
     members. Since our formation 2 years ago, we have spent a 
     great deal of time examining the various patent bills in both 
     Houses. We have met with several groups including the IPO, 
     21st Century Patent Coalition, NAM and AIPLA and have come to 
     consensus on issues surrounding the bill.
       We understand that an amendment has been offered and 
     believe that S. 507, as amended, will lower the litigation 
     costs for small business, make it easier to know what areas 
     of technology are open for innovation, and will go a long way 
     towards giving us a more level playing field vis-a-vis our 
     foreign competitors. We wholeheartedly support passage of the 
     bill and appreciate the attention and support you have given 
     to small business.
           Sincerely,
                                                     James T. Woo,
     Chairman.
                                  ____



                               National Small Business United,

                                     Washington, DC, May 21, 1998.
     Hon. Patrick J. Leahy,
     U.S. Senate, Dirksen Senate Office Building, Washington, DC.
       Dear Senator Leahy: National Small Business United is 
     America's oldest, bipartisan, advocacy association and 
     represents the interests of 65,000 small businesses. Many of 
     our member companies are in the high-technology sector. The 
     issue of patent reform is one of great concern to small 
     manufacturers and technology enterprises. We have worked 
     closely with both the White House Conference on Small 
     Business (WHCSB) Technology Chairs and the Small Business 
     Technology Coalition, and share their views on pending patent 
     reform legislation.
       We are pleased to hear that an amendment, incorporating the 
     changes requested by the WHCSB Technology Chairs, has been 
     offered addressing small business concerns with S. 507. We 
     believe that S. 507, as amended, will lower the litigation 
     costs for small business, make it easier to know what areas 
     of technology are open for innovation, and will go a long way 
     towards giving American small business a more level playing 
     field vis-a-vis our foreign competitors.
       Again, as a representative of small business who rely on 
     the patent system, NSBU wholeheartedly supports and urges the 
     passage of the bill and appreciates the attention and support 
     you have given to small business.
           Sincerely,
                                                   Todd McCracken,
     President.
                                  ____

                                                  National Venture


                                          Capital Association,

                                                     May 29, 1998.
     Hon. Richard C. Shelby,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Shelby: Over the past several years the 
     National Venture Capital Association has actively worked to 
     enhance the existing patent term in a manner that would 
     permit biomedical companies to enjoy full 20 year patent 
     protection. In this regard, NVCA has long supported S. 507, 
     the patent reform bill which, in part, would give biomedical 
     companies a greater opportunity to fall within the full 20 
     year patent protection granted under the GATT/TRIPS law 
     enacted in 1994.
       A significant portion of venture capital investments in the 
     United States are made in the biopharmaceutical and medical 
     device fields. In fact, almost one-quarter of the $12 billion 
     invested by venture capitalists last year in emerging 
     companies went into these fields. These companies are the 
     cutting edge of biotechnology and medical innovation. They 
     are giving new and renewed hope for people across virtually 
     the entire spectrum of diseases and afflictions.
       To venture capitalists, patents play a fundamental and 
     critical role in the availability of capital and our 
     willingness to invest in biotechnology and medical devices. 
     The reason for such dependency upon patents is that they 
     provide the favorable economics required to justify 
     substantial capital investment for successful product 
     development. The lack of, or the shorter the term of, a 
     patent decreases the attractiveness of a company from the 
     investors' perspective.
       S. 507, voted out of the Senate Judiciary Committee on a 
     17-1 vote, gives the NVCA members the confidence to invest in 
     medical-based companies. The bill is vital to biotechnology 
     patents. NVCA, as well as many in the high technology and 
     inventor communities believe that the few remaining issues 
     can be quickly resolved. Questions regarding contentious 
     matters such as prior user rights can be addressed and 
     debated on the Senate floor through a carefully planned time 
     agreement. Moreover, the prior user rights provision could be 
     modified on the Senate floor to address the concerns of those 
     who still have questions about the provision. However, none 
     of this can be accomplished without an agreement to bring S. 
     507 to the Senate floor for debate and a vote.
       It was unfortunate that S. 507 could not have been part of 
     the highly successful Senate ``Technology Week'' that 
     Majority Leader Lott orchestrated several weeks ago, as S. 
     507 truly is of concern to the high technology community. 
     Moreover, the overwhelming support witnessed in the House 
     combined with the clear mandate the Senate Judiciary 
     Committee voiced in approving this patent legislation 
     demonstrates the wide and bi-partisan support for patent 
     reform.
       On behalf of emerging growth companies, we urge you to 
     support S. 507 and work to see that it can be brought to the 
     Senate floor for debate and a vote as soon as possible.
           Sincerely,
                                              M. Kathleen Behrens,
     President.
                                  ____

                                                      21st Century


                                             Patent Coalition,

                                 Washington, DC, October 22, 1997.
     Hon. Trent Lott,
     Senate Majority Leader, Capitol Building, Washington, DC.
       Dear Senator Lott: We, the chief executives of 48 American 
     companies, are writing to express our strong support for S. 
     507 (Hatch/Leahy), the ``Omnibus Patent Act of 1997'', and to 
     urge you to schedule a vote before the Senate adjourns this 
     fall.
       S. 507 makes several major improvements in U.S. patent law 
     that will greatly benefit American companies and inventors. 
     The bill (1) insures at least 17 years of exclusive rights to 
     diligent patent owners, (2) eliminates wasteful duplication 
     of R&D by requiring early publication of patent applications

[[Page S6879]]

     that are also published in foreign countries, (3) protects 
     investments in processes and factory equipment of American 
     manufacturers by creating a prior user defense, (4) provides 
     a low-cost, speedy alternative to district court litigation 
     by strengthening the Patent and Trademark Office's 
     reexamination procedure, and (5) improves efficiency of the 
     Patent and Trademark Office.
       The substance of this bill has been debated in many 
     Congressional hearings since the beginning of the 104th 
     Congress. The House passed a companion bill earlier this year 
     and S. 507 was favorably reported by the Senate Judiciary 
     Committee by a vote of 17 to 1.
       S. 507 enjoys strong bipartisan support, despite the 
     substantial misinformation that has surrounded it. It is time 
     for the Senate to vote on this bill, which will strengthen 
     the U.S. economy and keep jobs in America.
           Sincerely,
         Grant Saviers, Chairman, CEO and President, Adaptec, 
           Inc.; H.A. Wagner, Chairman of the Board, President, 
           and Chief Executive Officer, Air Products and 
           Chemicals, Inc.; John R. Stafford, Chairman, President 
           and Chief Executive Officer, American Home Products 
           Corp.; John I. Shipp, President, Apollo Camera, L.L.C.; 
           Carol Bartz, Chairman, President and CEO, Autodesk, 
           Inc.; Clateo Castellini, Chairman of the Board, 
           President and CEO, Becton, Dickinson and Co.; Donald V. 
           Fites, Chairman and CEO, Caterpillar Inc.; William J. 
           Hudson, President and Chief Executive Officer, AMP 
           Inc.; James C. Morgan, Chairman and Chief Executive 
           Officer, Applied Materials, Inc.; William H. Williams, 
           President and Chief Executive Officer, Bear Creek 
           Corp.; Gregory Bentley, President, Bentley Systems, 
           Inc.; Frank Baldino, Jr., Ph.D., President and CEO, 
           Cephalon, Inc.; Dominique Goupil, President, Claris 
           Corp.; Hans W. Becherer, Chairman and Chief Executive 
           Officer, Deere & Co.; John A. Krol, Chairman and Chief 
           Executive Officer, E. I. du Pont de Nemours and Co.; 
           George M. C. Fisher, Chairman, President, and Chief 
           Executive Officer, Eastman Kadak Co.; Alex Trotman, 
           Chairman of the Board, Ford Motor Co.; Eckhard 
           Pfeiffer, President and CEO, Compaq Computer Corp.; 
           William S. Stavropoulos, President and Chief Executive 
           Officer, The Dow Chemical Co.; Earnest W. Deavenport, 
           Jr., Chairman and Chief Executive Officer, Eastman 
           Chemical Co.; Robert N. Burt, Chairman of the Board and 
           Chief Executive Officer, FMC Corp.; John D. Opie, Vice 
           Chairman, General Electric Co.; Phillip W. Farmer, 
           Chairman and Chief Executive Officer, Harris Corp.; 
           Thomas F. Kennedy, President and Chief Executive 
           Officer, Hoechst Celanese Corp.; Gordon E. Moore, 
           Chairman, Intel Corp.; Richard A. McGinn, President and 
           Chief Executive Officer, Lucent Technologies; William 
           H. Gates, Chairman and Chief Executive Officer, 
           Microsoft Corp.; Lewis E. Platt, Chairman, President, 
           and Chief Executive Officer, Hewlett-Packard Co.; Louis 
           V. Gerstener, Jr., Chairman and Chief Executive 
           Officer, IBM Corp.; Jeff Papows, President, Lotus 
           Development Corp.; William W. George, Chairman and 
           Chief Executive Officer, Medtronic, Inc.; L. D. 
           DeSimone, Chairman of the Board and Chief Executive 
           Officer, Minnesota Mining and Manufacturing Co.; Edward 
           J. Mooney, Chairman and CEO, Nalco Chemical Co.; 
           William C. Steere, Jr., Chairman of the Board and CEO, 
           Pfizer, Inc.; Charles S. Johnson, Chairman, President 
           and CEO, Pioneer Hi-Bred International, Inc.; H.W. 
           Lichtenberger, Chief Executive Officer, Praxair, Inc.; 
           Jeremiah J. Sheehan, Chairman and Chief Executive 
           Officer, Reynolds Metals Co.; Eric Schmidt, Chairman 
           and CEO, Novell, Inc.; W.W. Allen, Chairman of the 
           Board and Chief Executive Officer, Phillips Petroleum 
           Co.; Gary DiGamillo, Chief Executive Officer, Polaroid 
           Corp.; John E. Pepper, Chairman and CEO, Procter & 
           Gamble; Bill Budinger, Chairman and Chief Executive 
           Officer, Rodel, Inc.; Larry Wilson, Chairman and Chief 
           Executive Officer, Rohm and Haas Co.; Scott McNealy, 
           Chairman of the Board of Directors, President and Chief 
           Executive Officer, Sun Microsystems, Inc.; Melvin R. 
           Goodes, Chief Executive Director, Warner-Lambert Co.; 
           Alan F. Shugart, Chairman, Chief Executive Officer, and 
           President, Seagate Technology; William H. Joyce, 
           Chairman and Chief Executive Officer, Union Carbide 
           Corp.; Ernest H. Drew, Chief Executive Officer, 
           Industries and Technology Group, Westinghouse Electric 
           Corp.

                          ____________________