[Congressional Record Volume 144, Number 95 (Thursday, July 16, 1998)]
[Senate]
[Pages S8377-S8379]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       OMNIBUS PATENT ACT OF 1997

  Mr. LEAHY. Mr. President, I am here once again to talk about S. 507, 
the Omnibus Patent Act of 1997. On this date back in 1878, a gentleman 
named Thaddeus Hyatt was granted a patent for reinforced concrete. Now, 
120 years later, the Senate is refusing to reinforce American 
innovation by failing to take concrete action to reform our nation's 
patent laws.
  We are presented with an opportunity that will not soon repeat 
itself--an opportunity to pass S. 507 and give U.S. inventors longer 
patent terms, put more royalties in their pockets, save them money in 
costly patent litigation, and avoid wasting their development resources 
on duplicative research. At the same time, we can get our new 
technology more rapidly into the marketplace and make U.S. companies 
more competitive globally.
  Remaining globally competitive is not an idle concern. The failure of 
this body to enact the reforms of our patent system contained in S. 507 
has given foreign entities applying for and receiving patents in the 
U.S. unfair advantages over U.S. firms--advantages that U.S. persons 
filing and doing business abroad do not have. This ability to keep U.S. 
inventors in the dark about the latest technological developments does 
not work to our economic advantage. Why are we turning our backs on our 
businesses, small and large, by not voting on this bill?
  I have made recent speeches citing the strong support this 
legislation has around the country. This legislation has more than just 
Vermont or any state in mind. It has the entire country in its best 
interest. Our 200 year old patent system has provided protections to 
many of our inventions that have led to our global economic leadership 
position in the world marketplace. However, that leadership position is 
being threatened. Litigation has increased. Small inventors have been 
taken advantage of. Inventors and businesses are asking for our help 
and requesting that we pass S. 507.
  The Senate Judiciary Committee reported this bill out over a year ago 
by an overwhelmingly bipartisan vote of 17-1, and this bill has yet to 
see the light of day on the floor. No longer can we turn the other 
cheek when American business lets out such a cry for help. We need to 
bring this bill to the floor now and to pass it. We must not squander 
this opportunity to not only update our patent system but to come to 
America's defense.
  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 21st Century Patent Coalition.
  On July 10, I inserted into the Congressional Record  additional 
letters of support from The Chamber of Commerce of the United States of 
America; the Pharmaceutical Research and Manufactures 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.
  I now ask that additional letters of support for S. 507 be printed in 
the Record. These letters are from IBM; the Biotechnology Industry 
Organization; the International Trademark Association; 3M; Intel 
Corporation; Caterpillar; AMP Incorporated; and Hewlett-Packard 
Company.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                     IBM Internet Media Group,

                                 Essex Junction, VT, June 6, 1998.
     Hon. Patrick Leahy,
     U.S. Senate, Washington, DC.
       Dear Senator Leahy: As an inventor I rely on the strength 
     of the U.S. patent system to legally protect my invention(s). 
     I am also the chairman of an ANSI standardization committee 
     (NCITS L3.1) which represents the United States in an 
     International Standardization Forum (ISO/IEC JTC 1/SC 29/WG 
     11). Our committee has developed the Emmy Award winning 
     standard called MPEG-2, a standard which may have never come 
     to pass had it not been for strong International parent 
     protection. We are currently working on the future of 
     International

[[Page S8378]]

     Multimedia (MPEG-4), a standard which promises to be as 
     popular and widely used as MPEG-2 will be. The strength of 
     the patent laws is essential to promoting participation and 
     the development of International Standards. However, the 
     system which for years has effectively encouraged innovation 
     and protected inventors, is no longer effective. A 
     significant number of ways have been found to abuse it, such 
     as people and/or companies obtaining inappropriate patents 
     and in some cases pilfering others' hard-earned invention. 
     This threatens to undermine America's position as the global 
     leader in technology innovation. I am proud that my work as 
     an inventor has contributed to IBM's patent portfolio.
       There is no legislation pending before you that will help 
     restore leadership and integrity to the U.S. patent system. 
     It is responsive to today's fast paced, highly competitive 
     environment, and it will protect inventors like me. I am 
     writing to ask you to urge Majority Leader Lott (R-MS) to 
     bring S. 507, the Omnibus Patent Act of 1997, to the Senate 
     floor as soon as possible and for you to support its final 
     passage.
       The bipartisan Omnibus Patent Act of 1997, S. 507, was 
     passed out of the Senate Judiciary Committee 17-1 and has not 
     yet been brought up for a floor vote. The House of 
     Representatives also passed a similar bill in May 1997. Five 
     former Commissioners of the Patent and Trademark Office (PTO) 
     support this bill. A Senate floor vote is the only way to 
     continue the process to enact this legislation that would 
     help protect inventors and companies from patent system 
     abuse.
       Please help protect America's intellectual property and 
     urge Majority Leader Lott (R-MS) to bring this bill to the 
     floor for a vote. Thank you for your attention to this 
     matter, and as a concerned constituent, I request your 
     support of this legislation.
           Sincerely,
                                               Peter P. Schirling,
     IBM Senior Engineer.
                                  ____

                                                    June 18, 1998.
     Re Scheduling Debate on Patent Reform Legislation, S. 507 
         (Hatch/Leahy).
     United States Senator,
     Washington, DC.
       Dear Senator: We are writing to urge you to support 
     scheduling of the patent reform legislation, S. 507, on the 
     Senate floor before the August recess. This legislation is 
     supported by an overwhelming majority of the Senators and the 
     few Senators who have amendments to offer can easily be 
     accommodated in a time agreement.
       BIO has been working on this critical legislation for four 
     years, the House passed the bill by a lopsided and bipartisan 
     margin, and it emerged from the Senate Judiciary Committee on 
     a near-unanimous vote. There are very few issues for the 
     Senate debate or conference with the House. It should be easy 
     to complete action on this bill and enact it into law this 
     session. Doing so will be a major victory for biomedical and 
     other research.
       This bill answers the concerns raised by the biotechnology 
     industry and other high technology industries regarding the 
     erosion of patents caused by the adoption of the GATT 20 
     year-from-filing regime. We need to enact this bill to 
     provide vital protection to biotechnology firms conducting 
     research on cures and therapies for cancer, AIDS, 
     Alzheimer's, and other deadly and disabling diseases.
       The Biotechnology Industry Organization (BIO) represents 
     almost 800 companies and organizations that use or support 
     biotechnology research. Our companies are finding the next 
     generation of medicines and cures for endemic diseases that 
     diminish the quality of life for all Americans. On a per 
     capita basis, our companies invest more in research and 
     development than any other industry--almost ten times the 
     national average--or about $100,000 per employee per year. 
     This industries investment (almost 10 billion dollars in 
     1998) is protected primarily through the patent system.
       Patents as an incentive for this critical research. Without 
     patents this research would stop because no investor will 
     fund this research without patents. This is why the patent 
     term protections in this bill are so important. The Hatch-
     Leahy patent term bill provides complete and unequivocal 
     protections to ensure that diligent patent applicants will 
     not lose patent term under the new GATT 20 year patent law.
       There is no industry which has lost more in patent 
     protection under the new GATT 20 year patent term than the 
     biotechnology industry. Our industry has been working for 
     three years to secure protections so that diligent patent 
     applicants cannot, and will not, lose patent protection under 
     this new law. It is imperative that the GATT law be amended 
     to protect diligent patent applicants this year.
       Diligent patent applicants cannot lose patent term under 
     the patent provisions of Hatch-Leahy bill. If there are any 
     delays in the grant of a patent by the Patent and Trademark 
     Office (PTO) which are beyond the applicant's control, the 
     applicant is given extra patent term--day-for-day 
     compensation. This is a similar system which now applies when 
     a patent holder loses patent term due to delays in the 
     approval of a product by the Food and Drug Administration. 
     So, the solution provided by the Hatch-Leahy bill is tried 
     and tested and it works.
       In addition to these patent term provisions, the Hatch-
     Leahy bill also provides for publication of internationally 
     filed patent applications 18 months after filing and BIO 
     supports this provision as well. Our companies file for 
     patents in Europe and Japan where all applications are 
     published after 18 months. Therefore 18 month publication in 
     the United States will place U.S. companies on equal footing 
     to their European and Asian competitors.
       We enthusiastically support the patent term and publication 
     provisions of the Hatch-Leahy bill, know that it solves the 
     patent term problem, urge you to support scheduling of this 
     bill and support final passage. The current GATT/TRIPS law is 
     very problematic for the biotechnology industry and enactment 
     of S. 507 is needed to eliminate the disincentive for 
     biomedical research,
       Please contact us with any questions about this critical 
     issue; we would be pleased to meet with you to discuss them.
           Sincerely,
                                                Charles E. Ludlam,
                          Vice President for Government Relations.
                                                   Dave Schmickel,
     Patent and Legal Counsel.
                                  ____

                                           International Trademark


                                                  Association,

                                      Washington, DC, May 8, 1998.
     Hon. Patrick J. Leahy,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Leahy: You already know of our association's 
     strong support for S. 507, the Omnibus Patent Reform Act. Our 
     members are trademark owners located in every state of the 
     union. This bipartisan bill makes important changes to the 
     U.S. Patent and Trademark Office (USPTO) that are necessary 
     to enable the USPTO to respond efficiently and effectively to 
     the tremendous growth in trademark applications generated by 
     our robust economy.
       With next week designated as ``High Tech Week'' in the 
     Senate, where legislation dealing with new technology will be 
     considered, there is no bill that is more deserving of 
     attention and support at this time than S. 507. By converting 
     the USPTO into a government corporation that is 100% user-fee 
     funded, S. 507 will free the agency from constraints which 
     have long hampered efficient operations. Passage of this 
     important legislation will ensure that new products and 
     inventions receive the protection they need both here at home 
     and in global markets.
       S. 507 provides great value to intellectual property owners 
     and should be allowed to proceed to the Senate floor. We ask 
     for your help in gaining passage of S. 507.
           Sincerely,
                                                    David Stimson,
     President.
                                  ____

                                                     3M, Office of


                                Intellectual Property Counsel,

                                       St. Paul, MN, June 9, 1998.
     Hon. Patrick Leahy,
     United States Senate,
     Washington, DC.
       Dear Senator Leahy: I am writing to express the strong 
     support of the 3M Company for the reforms contained in S. 
     507, the Hatch/Leahy Omnibus Patent Reform Act, and to 
     request that you ask Senator Lott to schedule it for a Senate 
     vote as soon as possible. S. 507 is critically important to 
     U.S. industry. Its reforms will strengthen and improve the 
     United States patent system, allowing American industry to 
     compete more effectively with its foreign competition.
       S. 507 will give the U.S. Patent and Trademark Office the 
     administrative flexibility to operate at peak efficiency, 
     save inventors money, and accelerate patent processing. It 
     will allow American inventors and companies to see foreign 
     technology contained in U.S. patent applications more than a 
     year earlier than today, while ensuring that domestic 
     inventors who choose not to take advantage of publication 
     before patent grant may continue to do so if they do not file 
     outside of the U.S. The legislation will guarantee diligent 
     applications a patent term of at least 17 years from grant 
     and most will receive an even longer term of exclusivity. S. 
     507 would also make existing reexamination procedures more 
     effective by allowing greater third party participation, 
     while adding numerous safeguards to protect against abuse.
       One specific reform of S. 507 which 3M most strongly 
     supports is that of creating a prior domestic commercial use 
     defense. This long overdue reform will protect manufacturing 
     jobs in American companies like 3M by ensuring that a late 
     filed patent--nearly one-half of U.S. patents are foreign 
     owned--will not disrupt domestic manufacturing operations. 
     Important technology underlying our successful Post-
     it' Notes such as those attached to this letter--
     and the jobs of the American workers who produce them--will 
     be made safer against foreign attack by the passage of S. 
     507.
       The reforms in S. 507 are designed to improve the 
     functioning of the patent system for all users, large and 
     small. In fact, Senators Hatch and Leahy have recently agreed 
     to amend their bill on the Senate floor in response to 
     requests from small businesses. With these changes, key small 
     business constituencies such as the Technology Chairs of the 
     White House Conference on Small Business, the National 
     Association of Women Business Owners, and the Small Business 
     Technology Coalition have expressed their enthusiastic 
     support for S. 507.

[[Page S8379]]

       U.S. industry needs these patent reforms now. Support S. 
     507 and urge Senator Lott to bring it to a vote promptly.
           Sincerely,

                                   Gary L. Griswold,          

                                          Staff Vice President and
                                            Chief Intellectual    
     Property Counsel.
                                  ____



                                             Intel Corporation

                                   Santa Clara, CA, June 12, 1998.
     Hon. Patrick J. Leahy,
     U.S. Senate,
     433 Russell Senate Office Building.
       Dear Senator Leahy: For the past four years, Intel has been 
     an active participant in the 21st Century Patent Coalition, 
     which supports the enactment of patent reform legislation (S. 
     507). S. 507 would accomplish three broad goals of vital 
     importance to our industry: modernizing patent 
     administration, improving and simplifying dispute resolution 
     procedures in the Patent and Trademark Office, and 
     strengthening inventors' rights in a number of ways, most 
     importantly by protecting them from loss of term due to 
     Patent Office delays. Our coalition has the support of over 
     80 major American industrial companies and 22 industry 
     associations that are composed, primarily, of small 
     businesses.
       Now, S. 507--which passed the House on a voice vote last 
     year, and was approved in the Senate Judiciary by a vote of 
     17-1--is ready for floor action in the Senate. Our coalition 
     has worked hard to address any and all legitimate concerns 
     about the text of the bill and its impact upon small business 
     entities and independent inventors, and we believe that it 
     would, if enacted, create the most pro-inventor patent system 
     in the world. It has recently received the enthusiastic 
     support of the White House Conference on Small Business 
     Technology Chairs, the National Association of Women Business 
     Owners, and the Small Business Technology Coalition.
       The patent system we have today will be ill equipped to 
     serve the needs of inventors in the next century if the 
     improvements provided for in S. 507 are not made. We ask for 
     your help in scheduling S. 507 for a floor vote, and for your 
     support for the Committee bill on final passage.
       Your support will help preserve America's role as the 
     world's technology leader.
           Sincerely,
                                                   Carl Silverman,
     Director of Intellectual Property.
                                  ____



                                             Caterpillar Inc.,

                                         Peoria, IL, June 3, 1998.
     Hon. Patrick J. Leahy,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator Leahy: I am writing to express Caterpillar's 
     strong support for S. 507 (Hatch/Leahy), The Omnibus Patent 
     Act of 1997. As you know, S. 507 was reported from the Senate 
     Judiciary Committee on a vote of 17-1 and is awaiting Senate 
     floor action. A companion bill passed the House last year.
       S. 507 would modernize the U.S. patent system through major 
     improvements in our patent laws that will greatly benefit 
     America's large and small businesses, inventors and 
     entrepreneurs. For Caterpillar, this legislation will mean 
     reduced costs, reduced risk, reduced bureaucracy, fewer 
     lawsuits, more certainty regarding property rights, and 
     generally a faster, more responsive patent system.
       Equally significant, key small business groups now agree 
     that S. 507 will streamline the patent process and help 
     America's inventors who currently suffer from delays in the 
     patent office that are not their fault.
       It's time for the Senate to vote on this bill to help 
     strengthen the U.S. economy and keep jobs in America.
       I urge you to contact Majority Leader Lott in support of 
     early scheduling of S. 507 for floor debate, and support the 
     efforts of its sponsors to adopt a bill without weakening 
     amendments.
           Sincerely,
                                                William B. Heming,
     General Patent Counsel.
                                  ____

                                                 AMP Incorporated,
                                     Washington, DC, June 3, 1998.
     Hon. Patrick J. Leahy,
     U.S. Senate,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator Leahy: Please ask Senator Lott to bring S. 
     507, the Hatch-Leahy Omnibus Patent Act, to the floor as soon 
     as possible. This patent reform is important to AMP, our 
     employees, and the hundreds of inventors in our company who 
     think up new ideas to produce better products, to keep our 
     company competitive, and to create new jobs.
       It's time to bring this bill up for a vote. The technology 
     chairs of the White House Conference on Small Business have 
     approved S. 507 because, ``(it) 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.'' AMP and the dozens of other companies 
     and associations in the 21st Century Patent Coalition agree.
       This bill has undergone months and months of scrutiny and 
     compromise and is now ready for a vote. I hope you'll 
     encourage the Majority Leader to schedule floor time for this 
     reasonable reform measure.
       If you need any more information about S. 507, please let 
     me know.
           Sincerely,
                                                  John Palafoutas,
     Director, Federal Relations.
                                  ____



                                      Hewlett-Packard Company,

                                     Palo Alto, CA, June 22, 1998.
     Hon. Patrick J. Leahy,
     U.S. Senate,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator Leahy: S. 507, the Omnibus Patent Act, has 
     been reported out of the Judiciary Committee, but is appears 
     that Majority Leader Lott needs some encouragement to 
     schedule the bill for floor action. Hewlett-Packard Company 
     strongly supports enactment of S. 507 and would appreciate 
     your support in urging Senator Lott to put the bill on the 
     calendar.
       Enactment of S. 507 would assure that inventors can receive 
     a full 17 years--or more--of patent protection if they pursue 
     their patent claims in a timely manner. It would also 
     streamline patent operations to expedite processing and 
     accelerate the dissemination of new technologies for 
     continuing advancement in products and services.
       Significantly, S. 507 achieves these important goals 
     without threatening a return to the ``submarine patent'' 
     system that existed before the 1995 reform. Under the old 
     policy, an inventor could manipulate the patent system to 
     stretch the term even while withholding the new knowledge 
     from society. Prior to 1995, inventors could wait until the 
     technology had ripened, and then essentially extort license 
     fees form another inventor who had independently, in good 
     faith, created the same or a similar invention.
       While ``submarine patents'' are infrequent, when they 
     strike, they are egregious. In an HP cases, for example, the 
     company has paid millions of dollars in royatlieis to a 
     Swedish inventor whose patent has expired in every other 
     country except the United States. This inventor contributed 
     nothing to the technology that is in use, in fact, he did not 
     offer to work with the consortium that was developing the 
     technology in an open-systems environment. A more thorough 
     explanation of that case is attached for your review.
       Senator Hatch and other supporters of S. 507 have worked 
     diligently with small business and independent inventors to 
     resolve concerns about the bill. It is a good compromise for 
     a more effective patent system as we head into the 21st 
     century. HP urges your support for S. 507 without weakening 
     amendments that would revive the submarine patent system.
           Sincerely,

                                                    Lew Platt,

                                           Chairman, President and
     Chief Executive Officer.

                          ____________________