[Congressional Record Volume 144, Number 127 (Tuesday, September 22, 1998)]
[Senate]
[Pages S10716-S10719]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE OMNIBUS PATENT ACT OF 1998

  Mr. LEAHY. Mr. President, I have been working diligently along with 
Senators Daschle, Bingaman, Cleland, Boxer, Harkin, and Lieberman to 
get this measure considered and passed by the Senate. It an important 
measure to America's future.
  Along with all the Democratic cosponsors of the bill, I signed on to 
offering our patent bill as an amendment to this bankruptcy bill. I 
helped provide an opportunity for this amendment in the unanimous 
consent agreement accepted by the Senate on Friday September, 11th. It 
is long past time for the Senate to consider this patent reform 
legislation.
  Unfortunately, Republican opposition to the bill has prevented Senate 
consideration for more than a year. This is another example of how 
secret, anonymous holds on the Republican side are preventing important 
legislation from being considered by the Senate. I deeply regret that 
those same Republican objections have now succeeded in preventing our 
Republican cosponsor, the Chairman of the Senate Judiciary Committee, 
from even offering this amendment to the bill in the amendment spot 
that we had reserved for that purpose. I believe that there is strong 
support for this measure. I cannot guarantee that all 45 Democratic 
Senators will vote for it, but I do know that no Democrat has prevented 
or is now preventing its consideration.

[[Page S10717]]

  I want to thank Secretary Daley and the Administration for their 
unflagging support of effective patent reform. Our patent bill would be 
good for Vermont, good for American innovators of all sizes, and good 
for America. Unfortunately, the Republican majority or some secret 
minority of that Republican majority will not allow patent reform to 
proceed.


                      Overview of the Patent Bill

  The Patent Bill would reform the U.S. patent system in important 
ways. It would: reduce legal fees that are paid by inventors and 
companies; eliminate duplication of research efforts and accelerate 
research into new areas; increase the value of patents to inventors and 
companies; and facilitate U.S. inventors and companies' research, 
development, and commercialization of inventions.
  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 as well as the larger companies in Vermont like 
IBM. So I talked to independent inventors and representatives of 
smaller companies to see what reforms they recommended. I have tried to 
make sure that their recommendations were incorporated into the Patent 
Bill as the legislation has advanced through Congress.


                          legislative history

  The reforms that would be implemented with the passage of this 
legislation have been subject to careful and deliberate consideration 
by Congress. In fact, over the past several years, Congress has held 
eight Congressional hearings with over 80 witnesses testifying about 
the various proposals incorporated in the Patent Bill.
  Republican and Democratic Administrations alike, reaching back to the 
Johnson Administration, have supported these reforms. Last year, five 
former Patent Commissioners sent a letter to the President and to the 
members of the Senate supporting the Patent Bill.
  In addition to the thorough consideration that has been given these 
reforms over the years, the Senate has given close scrutiny this 
Congress to the bill before us today. The Senate Judiciary Committee 
held a hearing on this legislation on May 7, 1997. The Committee heard 
testimony of Senator Frank Lautenberg, Representative Henry Hyde; 
Representative Howard Coble; Representative Dana Rohrabacher; 
Representative Marcy Kaptur; the Assistant Secretary of Commerce and 
Commissioner of Patents and Trademarks; the Executive Director of the 
American Intellectual Property Law Association; the Vice President of 
the International Trademark Association; the President and CEO of a 
small business in Utah; and Bill Parker, President of the Vermont 
Inventors Association.
  After the hearing, Senator Hatch and I worked to address the concerns 
of independent inventors, small businesses, universities, the 
Administration, and other Senators. We made several changes to the 
legislation, which I think significantly improved the Patent Bill. Let 
me give you some examples of the changes that we made to the 
legislation: (1) any applicant who does not apply for a patent overseas 
can elect NOT to have early publication of their patent (2) any 
applicant who diligently prosecutes a patent application will receive a 
full 17 years of patent protection; (3) non-profit research 
laboratories or other nonprofit entities such as universities, research 
centers, or hospitals can petition the Commissioner of Patents and 
Trademarks for additional patent protection; and (4) the United States 
Patent and Trademark Office (PTO) must develop statewide computer 
networks with remote library sites to enhance access to information in 
state patent and trademark depository libraries for independent 
inventors and small businesses in rural states.
  On May 22, Senator Hatch and I offered a substitute amendment with 
these changes. Every member of the Committee, save one, voted in favor 
of the Hatch/Leahy substitute amendment.
  After the markup, the White House Conference on Small Businesses, 
which consists of over 2000 delegates elected from hundreds of 
thousands of active small businesses nationwide, made additional 
suggestions on how to improve the bill. Senator Hatch and I agreed to 
incorporate their suggested changes into a substitute amendment to the 
Patent Bill, and I am pleased to report that as a result, the White 
House Conference on Small Businesses, the National Association of Women 
Business Owners, the National Venture Capital Association, National 
Small Business United, and the Small Business Technology Coalition has 
concluded that, if enacted, this bill would be of great benefit to 
small businesses.


                        TITLE BY TITLE ANALYSIS

  Unfortunately, because of Republican opposition to this bipartisan 
bill, the Senate will have no opportunity to consider this legislation 
to assist U.S. inventors small and large. I find this particularly 
unfortunate since our Patent Bill was geared toward improving the 
operational efficiency at the PTO and making government smaller and 
leaner. I would like to provide a title-by-title overview of the 
substitute amendment to the Patent Bill that Senator Hatch and I were 
prepared to offer as an amendment to the bankruptcy bill.
     Title I of the amendment: PTO reforms
  Title I of the amendment would have made some modest, albeit 
important, reforms to the PTO. It provides that the PTO shall not be 
subject to any administratively or statutorily imposed limitation on 
positions or personnel. This should allow the PTO to hire the necessary 
number of examiners to review the increasing number of applications 
received by the office. Title I also creates a Patent Management 
Advisory Board and a Trademark Management Advisory Board. Of the five 
members of the Patent Management Advisory Board, not more than three 
shall be members of the same political party, at least one member shall 
be an independent inventor, and the members shall include individuals 
who represent small and large entity patent applicants located in the 
United States in proportion to the number of applications files by such 
members.
     Title II of the amendment: Publication of Patent Applications
  Title II of the amendment responds to the concerns of independent 
inventors and small businesses regarding the matter of 18-month 
publication. These concerns were articulated at the Senate Judiciary 
Committee hearing by the President of the Vermont Inventors 
Association, Bill Parker. Mr. Parker suggested giving applicants who 
only file in the United States a choice whether or not to publish 
early. He also recommended that we enhance the protections granted to 
those who choose 18-month publication if we wish to encourage them to 
take that course.
  Title II does both of these things. In particular, it allows any 
applicant to avoid publication before the granting of the patent simply 
by making such a request upon filing the application and by certifying 
that their application has not--and will not--be published abroad. The 
substitute also provides for the issuance of patents on individual 
claims in published applications as they are approved, rather than 
waiting for the disposition of all claims contained in such an 
application, as now occurs. This allows applicants to gain full patent 
protection--including reasonable royalties, damages, and attorneys fees 
when appropriate--for some of their component inventions earlier than 
they would have under the original draft of the bill.
  This new Title II in our substitute amendment will benefit U.S. 
researchers and manufacturers who will have early English language 
access to the applications filed with the PTO that are of foreign 
origin. This bill measures the 18-month publication period from the 
earliest patent application date anywhere in the world. Since foreign-
origin applications typically are filed abroad 12 months before they 
are filed here, those applications will be published 6 months after 
they are filed in the U.S.; that is a year earlier than domestic-origin 
applications. This will level the playing field with foreign countries 
that already are publishing our applications in their languages within 
6 months after our applications are filed abroad.
     Title III of the amendment: Patent Term Restoration
  In 1995, GATT changed the U.S. patent term from 17 years from 
issuance to 20 years from filing. On average, this new term does not 
result in loss of patent term. It is still possible, however, that an 
individual patentee would have

[[Page S10718]]

less patent term under the post-GATT term than under the pre-GATT term. 
To remedy this situation, Title II of the substitute amendment restores 
patent term lost to ``unusual administrative delay'' by the PTO and 
guarantees all diligent applicants a minimum 17-year term.
  More specifically, the 1995 law authorizes patent extensions for only 
5 years, and authorizes extensions only for PTO delays occurring in 
three specific situations: interference proceedings, imposition of 
secrecy orders, and appellate review. Title II of the substitute 
amendment makes extensions available to compensate for any type of 
delay by the PTO--extensions up to 10 years in the case of appellate 
review or unusual administrative delay, and unlimited extensions for 
delays caused by secrecy orders and interference proceedings.
     Title IV of the amendment: Prior Domestic Commercial Use
  Title IV of the amendment will provide protection against an 
infringement suit for anyone who has commercially used an invention for 
more than a year before another person files for a patent on an 
invention. In raising this defense, the burden of proof will be on the 
person claiming the defense, not the patent holder. This provision will 
protect the unsophisticated entrepreneur from being ruined. Under 
current law, an independent entrepreneur who has invested perhaps his 
or her entire life savings to produce and market an invention can be 
shut down completely by someone else who comes along much later and 
gets a patent on the same invention. A prior use right will protect 
independent entrepreneurs from this financial disaster.

     Title V of the amendment: Patent Reexamination Reform
  Although the goal of the original re-examination provisions--reducing 
legal bills for patent applicants--was laudable, I was concerned that 
the legislation protect against harassment by third parties. Title V of 
the amendment now requires that everyone who requests reexamination of 
a patent to identify the real party in interest that they represent. It 
continues to limit the grounds for patent invalidity that can be raised 
during a reexamination proceeding to earlier patents and publications. 
Grounds that require evaluation of live testimony cannot be raised. 
Parties are prohibited from requesting a second reexamination until the 
first reexamination is completed. Parties cannot raise issues during 
reexamination that they raised or could have raised in earlier court 
litigation. Neither can they raise issues in court litigation that they 
raised or could have raised in an earlier examination. Furthermore, no 
reexamination proceeding can ever be started unless the Commissioner 
makes a determination that a substantial new question of patentability 
is raised. The Commissioner's determination not to start a 
reexamination is unappealable. In all of these ways, the re-examination 
provisions in the substitute amendment will provide an alternative to 
the current costly and time-consuming process of Federal litigation and 
at the same time, protect patent applicants against undue harassment.
     Title VI of the amendment: Miscellaneous Provisions
  The final title of the amendment contains several lower-profile, but 
nonetheless important and needed changes to American patent law. A 
matter of special interest to me is the section I suggested be added in 
this Title to enhance access to patent information. I have long thought 
that electronic access should be more widespread and want to work with 
the PTO to ensure the effective implementation of statewide electronic 
accessibility of patent information in rural states and eventually in 
all areas to make it easier for inventors to study prior art and make 
further advances. This should be of particular benefit to Vermont, 
which just recently established a patent and trademark depository 
library.
  Also important is the section that clarifies the authority of the 
Copyright Office. It is intended to codify the traditional role of the 
Copyright Office and to confirm the Register's existing areas of 
jurisdiction. The new subsection 701(b)(1) reflects the Copyright 
Office's longstanding role as advisor to Congress on matters within its 
competence. This includes copyright and all matters within the scope of 
title 17 of the U.S. Code. The new subsection (b)(2) reflects the 
Copyright Office's longstanding role in advising federal agencies on 
matters within its competence. For example, the Copyright Office 
advises the U.S. Trade Representative and the State Department on an 
ongoing basis on the adequacy of foreign copyright laws, and serves as 
a technical consultant to those agencies in bilateral, regional and 
multilateral consultations or negotiations with other countries on 
copyright-related issues. The new subsection (b)(3) reflects the 
Copyright Office's longstanding role as a key participant in 
international meetings of various kinds, including as part of U.S. 
delegations as authorized by the Executive Branch, serving as 
substantive experts on matters within the Copyright Office's 
competence. Recent examples of the Copyright Office acting in the 
capacity include its central role on the U.S. delegation that 
negotiated the two new WIPO treaties at the 1996 Diplomatic Conference 
in Geneva, and its ongoing contributions of technical assistance in the 
TRIPS Council of the World Trade Organization and the Register's role 
as a featured speaker at numerous WIPO conferences. The new subsection 
(b)(4) describes the studies and programs that the Copyright Office has 
long carried out as the agency responsible for administering the 
copyright law and other chapters of title 17. Among the most important 
of these studies historically was a series of comprehensive reports on 
various issues produced in the 1960's as the foundation of the last 
general revision of U.S. copyright law, enacted as the 1976 Copyright 
Act. Most recently the Copyright Office has completed reports on the 
cable and satellite compulsory licences, legal protection for 
databases, and the economic and policy implications of term extension. 
The reference to ``programs'' includes such projects as the conferences 
the Copyright Office co-sponsored in 1996-97 on the subject of 
technology-based intellectual property management, and the 
International Copyright Institutes that the Copyright Office has 
conducted for foreign government officials at least annually over the 
past decade, often in cooperation with WIPO. The new subsection (b)(5) 
makes clear that the functions and duties set forth in this subsection 
are illustrative, not exhaustive. The Register of Copyrights would 
continue to be able to carry out other functions under her general 
authority under subsection 701(a), or as Congress may direct.
  Today's inventors and creators can be much like those of Thomas 
Jefferson's day--individuals in a shop, garage or home lab. They can 
also be teams of scientists working in our largest corporations or at 
our colleges and universities. Our nation's patent laws should be fair 
to American innovators of all kinds--independent inventors, small 
businesses, venture capitalists and larger corporations. To maintain 
America's preeminence in the realm of technology, which dates back to 
the birth of this republic, we need to modernize our patent system and 
patent office. Our inventors know this and that is why they support 
this legislation.
  I have received letters of endorsements of S. 507, which I placed 
into the Congressional Record on June 23, July 10 and July 16, from the 
following coalitions and companies: 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, the 21st Century Patent 
Coalition, the Chamber of Commerce of the United States of America; the 
Pharmaceutical Research and Manufactures of American (Parma), the 
American Automobile Manufacturers Association, the Software Publishers 
Association, the Semiconductor Industry Association, the Business 
Software Alliance, the American Electronics Association, the Institute 
of Electrical and Electronics Engineers, Inc., the Biotechnology 
Industry Organization, the International Trademark Association, IBM, 
3M, Intel, Caterpillar, AMP, and Hewlett-Packard.
  In addition, I have letters of support of the Patent Bill from the 
National Association of Manufacturers, TSM/Rockwell International, 
Obsidian, and Allied Signal.

[[Page S10719]]

  I am deeply disappointed that the Senate is being prevented from 
considering this important legislation by Republican recalcitrance. 
American inventors deserve better and America's future is being short 
changed.

                          ____________________