[Congressional Record Volume 144, Number 91 (Friday, July 10, 1998)]
[Senate]
[Pages S7934-S7937]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   OMNIBUS PATENT REFORM ACT OF 1997

  Mr. LEAHY. Mr. President, I hope that the Senate will celebrate 
America's independence by focusing its energy on issues that create 
American jobs, protect American ingenuity, and improve the lives of the 
American people.
  One such issue that I would like to talk about today is as American 
as fireworks on the 4th of July. This is our nation's patent system. 
Patents are the life's blood of America's industry and economic 
strength.
  America's patent system was established in the Constitution itself. 
It is no coincidence that some of those who framed our government were 
inventors. Both Benjamin Franklin and Thomas Jefferson were avid 
inventors. Indeed,

[[Page S7935]]

Jefferson invented a cryptographic system that was used by the United 
States during World War II.
  The Founders included in our enduring Constitution as an enumerated 
power of the Congress, 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.'' 
(United States Constitution, Article I, Section 8.) This Constitutional 
provision was carefully drafted to reflect a recognition by the 
Founders that our patent system would have to evolve in order to serve 
its intended purposes.
  Congress, from its early days, implemented this constitutional 
prerogative. The First Congress, in its second session, passed an ``Act 
to Promote the Progress of Useful Arts.'' President Washington signed 
that law on April 10, 1790, and the United States Patent Office was 
thereby created.
  Since that time, Congress has updated the patent laws of this country 
to make sure that the fuel of American genius was well stoked. Indeed, 
on an Independence Day more than 150 years ago, on July 4, 1836, 
Congress reorganized the patent system, created the office of 
``Commissioner of Patents'' and reinstated the requirement that patent 
applications be examined. The Act provided that if the Commissioner 
deemed an invention ``to be sufficiently useful and important, it shall 
be his duty to issue a patent therefor.''
  Abraham Lincoln, the only President to be issued a patent, declared 
that ``patents add the fuel of interest to the fire of genius.'' The 
patent system has continued to evolve over the last century and one-
half as we have adapted to changing times and advances in technology. 
All the while American innovators have remained at the forefront of 
useful invention.
  I, for one, would like to keep American innovators in the lead. Our 
jobs and our economic security depend on it. As we enter a new 
millennium, however, fewer and fewer of America's innovators feel 
confident that our patent system is keeping pace.
  According to the Commissioner of the Patent and Trademark Office 
(PTO), in the last fiscal year, the PTO received 237,045 patent 
applications--a 14.9 percent increase over the previous year. Inventors 
are rightly demanding that the PTO conduct quicker and more careful 
searches. After all, in today's digital world, an innovator cannot 
afford to wait two years for his or her patent application to be 
processed. And once that application has been processed, an applicant 
wants to know that the patent will hold up and that the patent holder 
will not be caught up in litigation for years attempting to defend it.
  It is for this reason that American inventors of all shapes and 
sizes, large and small, independent inventors and large corporations, 
have been pleading with Congress to improve our current patent system. 
They are asking us to help cut the red tape at the PTO, provide our 
inventors with stronger patent applications, reduce the cost of 
resolving patent disputes, and put an end to rules that favor foreign 
applicants over American applicants. What they have been asking us to 
do is to pass the Omnibus Patent Reform Act of 1997, S. 507.
  Who wants this bill? American innovators and businesses large and 
small.
  The White House Conference on Small Business Technology Chairs wrote 
to me on May 7, 1998 urging passage of S. 507 because, and I am quoting 
from their letter:

       We believe that S. 507, as amended, will lower the 
     litigation costs for small businesses, 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.

  The Chief Executives of 48 of America's largest companies wrote the 
Senate Majority Leader, asking him to schedule a vote on the bill 
before the Senate adjourns in the fall because ``S. 507 makes several 
major improvements in U.S. patent law that will greatly benefit 
American companies and inventors.''
  So what has been stopping this bill? Well, one of the most outspoken 
opponents of the bill has been the Eagle Forum. The Senate Republican 
leadership should not clip the wings of technology for the benefit of 
the Eagle Forum. That would be no way to honor America's independence 
and no way to honor America's proud tradition of innovation.
  Instead, let us celebrate America's independence by helping out the 
millions of Americans who owe their jobs and prosperity to industries 
created by America's innovators and creators. The Senate should take up 
and pass S.507.
  I inserted into the Congressional Record on June 23, letters of 
support from the 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, and the 21 Century Patent Coalition.
  I ask that additional letters of support for S. 507 be included in 
the Record following the conclusion of my statement. These letters are 
from The Chamber of Commerce of the United States of America; the 
Pharmaceutical Research and Manufacturers of America, PhRMA; the 
American Automobile Manufacturers Association; the Software Publishers 
Association; the Semiconductor Industry Association; the Business 
Software Alliance; the American Electronics Association; and the 
Institute of Electrical and Electronics Engineers, Inc. and Industry 
Corporation.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                        Chamber of Commerce of the


                                     United States of America,

                                 Washington, DC, October 24, 1997.
     Hon. Trent Lott,
     Majority Leader, U.S. Senate,
     Washington, DC.
       Dear Trent: As you know, this time of year brings a flurry 
     of bills to the fore, each with its own strengths and 
     argument why it deserves floor time prior to adjournment. One 
     bill that clearly merits your consideration for debate is S. 
     507, the Omnibus Patent Act of 1997.
       In the chamber's view, the Hatch/Leahy bill has 
     successfully bridged the debate between proponents of 
     modernizing the patent system (the Chamber has long supported 
     this) and a relatively small group of independent inventors 
     who feared their patent rights might be abridged. The 
     resulting compromise will help strengthen our competitiveness 
     and create jobs while encouraging the inventiveness that 
     always has been an American hallmark. We urge your support 
     for this important legislation.
       The House has already passed their corresponding bill. S. 
     507 was reported from the Judiciary Committee earlier this 
     year by a bipartisan vote of 17 to 1. We believe the time is 
     right now to move these needed reforms, adding another solid 
     accomplishment to this session.
       Thank you again for your support.
           Sincerely,
     R. Bruce Josten.
                                  ____

                                       Pharmaceutical Research and


                                     Manufacturers of America,

                                     Washington, DC, June 2, 1998.
     Hon. Trent Lott,
     Majority Leader, U.S. Senate,
     U.S. Capitol, Washington, DC.
       Dear Senator Lott: On behalf of the research-based 
     pharmaceutical industry, we urge you to schedule a vote on S. 
     507, The Omnibus Patent Act of 1997. This bill, which passed 
     out of the Senate Judiciary Committee on May 22, 1997 by 
     voice-vote, will strengthen U.S. patent law, advance 
     innovation, and increase our global competitiveness.
       We appreciate your interest in moving legislation that will 
     not result in undue delay in the Senate. We question, 
     however, whether opposition can ultimately be sustained on 
     the Senate floor against S. 507 given its importance to 
     American industry and innovation. Of particular interest to 
     the pharmaceutical industry are provisions that would: 
     Strengthen the Patent and Trademark Office (PTO) by making it 
     a government corporation ``with resulting operational and 
     fiscal flexibility;'' restore patent life lost as a result of 
     unusual administrative delays at PTO; and provide for 
     publication of patent applications 18 months after their 
     filing to allow U.S. companies to have access to applications 
     filed in the U.S. by foreign applicants.
       Our industry, which in 1998 will spend over $20 billion in 
     research and development, depends on strong patent protection 
     to ensure that pharmaceutical companies are able to maximize 
     their efforts to discover new medicines that prevent, cure, 
     and treat disease. S. 507 will foster that and deserves floor 
     consideration soon.
       Thank you for you attention to this important legislation.
           Sincerely,
         Raymond Gilmartin, Chairman President and CEO, Merck & 
           Co., Inc., PhRMA Chairman; David R. Ebsworth, Ph.D., 
           Executive Vice President and President, Pharmaceutical 
           Division, Bayer Corp.; Robert A. Ingram, Chairman, CEO 
           and President, Glaxo Wellcome Inc.; Arthur D. Levinson, 
           Ph.D., President and CEO, Genentech, Inc.; William

[[Page S7936]]

           C. Steere, Jr., Chairman and CEO, Pfizer Inc.; Wayne P. 
           Yetter, President and CEO, Novartis Pharmaceuticals; 
           Gordon M. Binder, Chairman and CEO, Amgen; Charles A. 
           Heimbold, Jr., Chairman and CEO, Bristol Myers Squibb 
           Co.; Jan Leschly, Chief Executive, SmithKline Beecham; 
           Richard J. Markham, CEO, Hoechst Marion Roussel Inc.; 
           Sidney Taurel, President and CEO, Eli Lilly and Co.
                                  ____

                                               American Automobile


                                    Manufacturers Association,

                                                 November 7, 1997.
     Hon. Patrick J. Leahy,
     U.S. Senate,
     Washington, DC.
       Dear Senator Leahy: The American Automobile Manufacturers 
     Association and its members, Chrysler Corporation, Ford Motor 
     Company and General Motors Corporation, urge you to support 
     S. 507, the ``Omnibus Patent Act of 1997,'' co-sponsored by 
     Senators Hatch and Leahy. The House passed patent reform 
     earlier this year, and the Senate Judiciary Committee 
     favorably reported S. 507 by a vote of 17 to 1. The bill has 
     been modified in numerous ways to accommodate the concerns of 
     small inventors, universities, and other interested groups.
       We believe S. 507 is a fair and balanced bill that will 
     significantly improve the U.S. patent system. Modernization 
     of the Patent and Trademark Office will permit it to offer 
     improved services to patent applicants and owners. The 
     publication provisions will help avoid duplicative research 
     efforts and will accelerate the development of technology by 
     speeding the dissemination of research advances. Those who 
     file only in the U.S. can avoid early publication if they 
     desire, and new provisional royalty rights will ensure that 
     no inventor is deprived of the economic value of his or her 
     invention between the date of publication and patent 
     approval. The bill also provides a safe harbor for domestic 
     users of new manufacturing processes through the provision of 
     prior user-rights. And, an improve patent reexamination 
     process will provide a low-cost, speedy alternative to 
     expensive litigation for determining the validity of any 
     challenged patent.
       The provisions of S. 507 will substantially improve our 
     nation's patent system. This will serve the interests of 
     inventors and technology users alike. More importantly, it 
     will benefit the entire American public by further 
     encouraging technological advances and the products such 
     advances bring. We urge you to vote for S. 507.
           Sincerely,
                                              Andrew H. Card, Jr.,
     President and CEO.
                                  ____



                              Software Publishers Association,

                                    Washington, DC, June 11, 1998.
     Hon. Patrick Leahy,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Leahy: On behalf of the Software Publishers 
     Association (SPA), I am writing to ask you to urge Senate 
     Majority Leader Trent Lott to schedule a floor vote on S. 
     507, the Omnibus Patent Act, early this summer, and call on 
     you to vote to enact its important patent reforms into law.
       SPA has more than 1,200 member companies, ranging from 
     large well-known companies to hundreds of smaller companies 
     and Internet start-ups, that develop and market software for 
     business, education, entertainment and the Internet. Patents 
     represent an increasingly important means for these companies 
     to protect the intellectual property in their software-
     related inventions. In fact, a 1997 survey of over 800 
     software companies found that over 20 percent either owned or 
     had applied for a patent.
       As the collective voice of one of the fastest growing, most 
     competitive industries in the world, SPA supports S. 507 
     because it would enact patent reforms that would encourage 
     investment and innovation in the software industry and other 
     industries that will create more high-paying jobs in America. 
     This legislation would make significant improvements in U.S. 
     patent law, including early publication of pending patents, 
     expanded reexamination, and a provisional right to a 
     reasonable royalty.
       Leading members of SPA long ago came out in favor of S. 
     507, and Eric Ruff, CEO of Utah-based PowerQuest Corp., 
     testified in support of the bill before the Senate Judiciary 
     Committee (his statement is enclosed). In May 1997, the 
     Judiciary Committee favorably reported S. 507 by a vote of 17 
     to one. S. 507 continues to enjoy strong bipartisan support.
       In closing, I urge you to support S. 507 without amendments 
     that would undermine its objective--a patent system that 
     produces high quality, carefully and examined patents. The 
     House has already passed a similar bill, but time is running 
     out for the Senate to ensure that these important patent 
     reforms become law this year.
           Sincerely yours,
                                                        Ken Wasch,
     President.
                                  ____

                                            Semiconductor Industry


                                                  Association,

                                      San Jose, CA, July 24, 1997.
     Hon. Dianne Feinstein,
     U.S. Senate,
     Hart Senate Office Building,
     Washington, DC.
     Re Omnibus Patent Act of 1997.

       Dear Senator: The Semiconductor Industry Association urges 
     you to support S. 507, the ``Omnibus Patent Act of 1997'', by 
     Senators Orrin Hatch, and Patrick Leahy.
       The U.S. semiconductor industry employs over 235,000 
     Americans, including in California. Semiconductors are the 
     enabling technology for the nearly $400 billion U.S. 
     electronics industry, an industry that provides jobs for 2.5 
     million Americans.
       The U.S. semiconductor industry invests over 11% of sales 
     on R&D, $7 billion in 1996 and leads the world in microchip 
     technology. A strong and efficient U.S. patent system is 
     essential for the U.S. to maintain this technology 
     leadership. S. 507 will create a Patent and Trademark Office 
     that is more efficient and responsive to the needs of U.S. 
     investors, mandate the speedy issuance for patents, and 
     reduce lawsuits and legal bills paid by American inventors 
     and companies. American companies will become more 
     competitive by speeding up research and development and 
     brining new products to market faster.
       S. 507 is a carefully crafted measure that will encourage 
     new inventions and protect American innovators and 
     corporations while at the same time addressing the special 
     concerns of small inventors, small business and universities. 
     S. 507 cleared the Senate Judiciary Committee in May and a 
     similar measure, H.R. 400, already passed the House.
       Please vote for S 507 when it comes to the Senate floor. If 
     you or your staff would like to discuss this legislation and 
     its importance to the semiconductor industry, please do not 
     hesitate to call.
           Sincerely,
                                                   George Scalise,
     President.
                                  ____



                                   Business Software Alliance,

                                    Washington, DC, June 29, 1998.
     Hon. Patrick Leahy,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Leahy: On behalf of the members of the 
     Business Software Alliance (``BSA''), I want to thank you for 
     your leadership on the Omnibus Patent Act of 1997, S. 507. 
     This legislation will make many significant improvements to 
     the U.S. patent system that will greatly benefit the U.S. 
     software industry and other users of the U.S. Patent Office.
       We appreciate your efforts on this important issue and look 
     forward to working with you to seek its enactment before the 
     end of the session. Again, thank you for your hard work on 
     behalf of our nation's high technology industries.
           Sincerely,
                                          Robert W. Holleyman, II,
     President & CEO.
                                  ____



                             American Electronics Association,

                                    Santa Clara, CA, June 1, 1998.
       Dear Senator: I am writing on behalf of the more than 3,000 
     member companies of the American Electronics Association 
     (AEA) to urge you to support S. 507, the ``Omnibus Patent 
     Act,'' and respectfully request that you contact the Senate 
     Leadership and urge them to schedule debate and a floor vote 
     on S. 507 in the near future.
       The AEA's member companies span the spectrum of electronics 
     and information technology companies, from semiconductors and 
     software to mainframe computers and communications systems. 
     For over 50 years, AEA has helped its members compete 
     successfully in the global marketplace and has been the 
     accepted voice of the American electronics and information 
     technology industry.
       According to AEA's Cyberstates Update report, the high-tech 
     industry added some 200,000 new jobs in the U.S. between 1996 
     and 1997, for a total of nearly 4.5 million U.S. high-tech 
     workers earning salaries 73 percent higher than the average 
     private sector wage. AEA believes that modernizing the U.S. 
     patent system is critical to sustain the innovation that has 
     resulted in this tremendous job growth and the global 
     competitiveness of U.S. high technology companies.
       S. 507, which was introduced by Senators Orrin Hatch (R-UT) 
     and Patrick Leahy  (D-VT), contains critical reforms that 
     will protect the interests of American inventors and 
     innovators while preparing the U.S. Patent and Trademark 
     Office (PTO) to meet the needs of our nation's high 
     technology firms as we enter the 21st Century. The reforms 
     contained in S. 507 will increase the value of patents to 
     inventors and companies, slash red tape in the PTO, and make 
     it easier for U.S. inventors and companies to research, 
     develop, and commercialize inventions.
       AEA urges you to support this critical legislation to 
     further advance American technology and strengthen our 
     nation's global competitiveness. If you or your staff have 
     any questions regarding S. 507 or patent reform, please 
     contact Stephanie Stitzer of AEA at (202) 682-4431.
           Sincerely,
                                                William T. Archey,
     President and CEO.
                                  ____

                                       Institute of Electrical and


                                        Electronics Engineers,

                                                  October 9, 1997.
     Hon. Trent Lott,
     Senate Majority Leader, Russell Senate Office Building, 
         Washington, DC.
       Dear Senator Lott: On behalf of the Institute of Electrical 
     and Electronics Engineers United States Activities Board 
     (IEEE-USA) and its 220,000 electrical, electronics and 
     computer engineers who are U.S. members of IEEE, we urge you 
     to place the Omnibus Patent Act of 1997 (S. 507) on the 
     legislative calendar during this session of Congress.

[[Page S7937]]

       The Omnibus Patent Act and its various provisions have 
     already had extensive analysis, numerous public hearings and 
     full consideration of a wide range of perspectives. We 
     believe that it is now time to call for a vote on this 
     important legislation before the end of the first session of 
     this Congress.
       IEEE-USA supports the Omnibus Patent Act of 1997 (S. 507) 
     and its publication provisions. Many important compromises 
     have been made and we are now confident that the bill will 
     strengthen the U.S. patent system. S. 507 takes into account 
     many of our members' concerns regarding the disclosure of 
     their technology prior to receiving patent protection. The 
     Omnibus Patent Act provides inventors with the option of 
     delaying the publication of their application until the 
     patent is awarded--as long as they choose to file solely in 
     the United States.
       The bill provides our 220,000 U.S. members with a 
     strengthened patent system and arrives as a reasonable 
     balance between inventor protection and public disclosure of 
     technology. We believe that his balance will assist in 
     promoting U.S. innovation and competitiveness,
       If you or your staff would like to discuss this with us 
     further please contact Scott Grayson in our Washington, D.C. 
     office at (202) 785-0017.
           Sincerely,

                                                Daniel Fisher,

                                                   Chair, IEEE-USA
     Intellectual Property Committee.

                          ____________________