[Congressional Record Volume 147, Number 114 (Wednesday, September 5, 2001)]
[House]
[Pages H5359-H5362]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVIDING FOR APPEALS BY THIRD PARTIES IN CERTAIN PATENT REEXAMINATION
PROCEEDINGS
Mr. SENSENBRENNER. Madam Speaker, I move to suspend the rules and
pass the bill (H.R. 1886) to amend title 35, United States Code, to
provide for appeals by third parties in certain patent reexamination
proceedings.
The Clerk read as follows:
H.R. 1886
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. APPEALS IN INTER PARTES REEXAMINATION PROCEEDINGS.
(a) Appeals by Third-Party Requester in Proceedings.--
Section 315(b) of title 35, United States Code, is amended to
read as follows:
``(b) Third-Party Requester.--A third-party requester--
[[Page H5360]]
``(1) may appeal under the provisions of section 134, and
may appeal under the provisions of sections 141 through 144,
with respect to any final decision favorable to the
patentability of any original or proposed amended or new
claim of the patent; and
``(2) may, subject to subsection (c), be a party to any
appeal taken by the patent owner under the provisions of
section 134 or sections 141 through 144.''.
(b) Appeal to Board of Patent Appeals and Interferences.--
Section 134(c) of title 35, United States Code, is amended by
striking the last sentence.
(c) Appeal to Court of Appeals for the Federal Circuit.--
Section 141 of title 35, United States Code, is amended in
the third sentence by inserting ``, or a third-party
requester in an inter partes reexamination proceeding, who
is'' after ``patent owner''.
SEC. 2. EFFECTIVE DATE.
The amendments made by this Act apply with respect to any
reexamination proceeding commenced on or after the date of
the enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Wisconsin (Mr. Sensenbrenner) and the gentleman from California (Mr.
Berman) each will control 20 minutes.
The Chair recognizes the gentleman from Wisconsin (Mr.
Sensenbrenner).
General Leave
Mr. SENSENBRENNER. Madam Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks on H.R. 1886, the bill presently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Mr. SENSENBRENNER. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, this bill also attempts to improve the patent
reexamination system. It aims at closing an unfortunate administrative
loophole and bridging a legal gap in the working of our patent system.
The reform also comes out of two hearings that the Subcommittee on
Courts, the Internet and Intellectual Property held earlier this year.
While I strongly endorse the professionalism of the Patent and
Trademark Office, I believe it is necessary to place a check on the
PTO's actions by affording all participants judicial review before a
Federal appeals court.
{time} 1545
This check by a higher independent authority is an important
safeguard and adds transparency to the process. Rest assured this
appellate review will not impose additional burdens on patent-holders
arising from Federal trials.
This is an important and necessary amendment that is an overdue
change to our intellectual property laws. I urge Members to support
H.R. 1886.
Madam Speaker, I reserve the balance of my time.
Mr. BERMAN. Madam Speaker, I yield myself such time as I may consume.
(Mr. BERMAN asked and was given permission to revise and extend his
remarks.)
Mr. BERMAN. Madam Speaker, I rise in support of H.R. 1886 and urge my
colleagues to vote for it. It is largely noncontroversial. The
Committee on the Judiciary's Subcommittee on Courts, the Internet, and
Intellectual Property passed it by a voice vote on May 22, and the full
committee reported it favorably by voice vote on June 20.
The bill represents a good, if small, step in improving the
usefulness of the inter partes reexamination procedure for patents.
Currently, the inter partes reexamination procedure places so many
constraints on third-party requesters of such reexamination that, as
some patent attorneys have stated, ``It would be legal malpractice to
recommend a client initiate an inter partes reexamination.''
Among those constraints is the prohibition against a third party
appealing an adverse reexamination decision to Federal court or
participating in an appeal brought by the patentee.
H.R. 1886 would allow an authority requester to appeal a
reexamination decision to Federal court and to participate in an appeal
by an applicant. By doing so, H.R. 1886 may make inter partes
reexamination a somewhat more attractive option for challenging a
patent. A third party will, at the least, now feel comfortable that the
courts can be accessed to rectify a mistaken reexamination decision.
While H.R. 1886 may not cure all the defects of inter partes
reexamination, I believe it is a good start, and I urge my colleagues
to vote for it.
Madam Speaker, I reserve the balance of my time.
Mr. SENSENBRENNER. Madam Speaker, I yield 3 minutes to the gentleman
from California (Mr. Rohrabacher).
Mr. ROHRABACHER. Madam Speaker, I rise with a strong sense of
concern, if not opposition, to what is being proposed here today.
Two years ago, there was a compromise that was made on this very
important matter. I, in fact, supported legislation with this wording
in it; but only because it was part of a compromise that I felt was
necessary to get the rest of the bill through. I thought the bill that
we had come up with, and the gentleman from North Carolina (Mr. Coble)
and I and Jim and others had worked so long and hard for, that it was
worthy of that compromise.
However, this piece of legislation undoes a compromise that was made
with the gentleman from Illinois (Mr. Manzullo) to take this very
language out of that bill, so we are, in effect, going back on a
compromise made with the gentleman from Illinois (Mr. Manzullo).
I might add that I was willing to support the legislation with this
concept in it, even though I had reservations about it, if it was part
of a bigger bill that was, I thought, a good bill that we had come up
with.
But now that we are bringing it up standing alone as part of an
effort to basically go back on the compromise of the gentleman from
Illinois (Mr. Manzullo), which he insisted on for his support of the
legislation, I do not think that it stands alone and can stand on its
own.
We passed a sensible reform law 2 years ago, as I say, the American
Inventors Protection Act of 1999. It has provided some very solid
reform, which included, again, language that was inconsistent with what
they are trying to accomplish here today.
Many Members, including the gentleman from Illinois (Mr. Manzullo)
and myself, have been very concerned about the ability of corporations
and of foreign nationals to use the legal process to drag small
entrepreneurs and inventors into very costly legal battles.
What we are talking about today is, instead of letting the patent
office make the decision, and we have granted judicial authority to
patent examiners; that is why they have a very special place in this
system, so we expect them to act responsibly.
But what we are doing here is permitting a third party, we are
expanding the ability of third parties to use the court system as a way
to interfere with rights that have been granted to inventors by patent
examiners.
We want the patent system to work, and we want these patent
examiners, who have proven themselves to be people of responsibility,
that is why we give them this responsibility, to be honorable people
and people of great talent, and we hope they will be paid more money in
the future, in fact. But then to suggest that, after the Patent Office
has made its decision with these experts in technology, that we are
going to permit a third party to come in and use the court system to
negate that, I think that is a reason we have to think about this.
I would suggest that we hold off on this amendment and give the
Congress a little chance to figure out what the effect of this will
actually be on inventions in America.
Mr. SENSENBRENNER. Madam Speaker, I yield 4 minutes to the gentleman
from North Carolina (Mr. Coble), the distinguished subcommittee
chairman.
Mr. COBLE. Madam Speaker, I thank the chairman for yielding time to
me.
Madam Speaker, I say to my good friend, the gentleman from California
(Mr. Rohrabacher), with whom I have had disagreements and agreements,
the gentleman says that this undoes what was previously agreed to. I
think that is clearly subject to interpretation. We are going to have
to disagree agreeably on that, and we can do that at another time.
I say, Madam Speaker, that, and pardon my incorrect grammar, but I am
a pretty easy dog to hunt with. I am surprised that no one has come
forward prior to today. We had a hearing April 4, the second hearing on
May 10, a subcommittee markup on May 22, a full committee markup on
June 20, a report
[[Page H5361]]
filed on June 28. Now, one would think if concerns were being felt or
if anxiety was the order of the day, that someone would have rattled my
door. No knock.
The gentleman from Wisconsin has already indicated this, and I will
be brief. But as he said, H.R. 1886 consists of noncontroversial, in my
opinion noncontroversial, amendments to the patent reexamination
system. It is not a new idea, but one whose time has finally come.
Fairness demands that inventors deserve their day in court should a
controversy arise, but we should spare them the expense and the burdens
of Federal litigation when we can. This bill achieves that important
and equitable balance.
Again, I want to thank the gentleman from California (Mr. Berman);
and I want to thank my chairman, the gentleman from Wisconsin (Mr.
Sensenbrenner), and all members of the subcommittee who worked very
arduously in addressing this matter.
Finally, and I say to my friend, the gentleman from California (Mr.
Rohrabacher), and to my friend, the gentleman from Illinois (Mr.
Manzullo), I have had several small independent inventors come to me
thanking me for the work that the subcommittee has done. These small,
independent inventors say, ``Now some folks claim they are on Capitol
Hill representing the small inventors. We do not need anybody
representing us. We are happy with what is being done at the
subcommittee and full committee level.''
So, Madam Speaker, I believe that the concerns that have been
expressed thus far, I say to my friend from Wisconsin (Mr.
Sensenbrenner), I believe they can be assuaged and resolved.
Mr. BERMAN. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I would like to take a moment to try and address the
arguments made by my friend, the gentleman from California (Mr.
Rohrabacher), because I think that the thrust of his argument is
actually served and met by our bill, not opposed.
He is concerned, legitimately, about the likelihood that poorly
financed independent inventors will have their patents challenged in
expensive re-examinations requested by big corporations with deep
pockets. The problem is, the way the law is now, those corporations do
not go to reexamination. They ignore reexamination, because if they go
to reexamination, their ability then to challenge in court on the
issues they brought up in reexamination is eliminated.
So they, instead of challenging the small, independent inventor in a
relatively cheap, relatively quick, somewhat informal or more informal
reexamination process, that is ignored and, instead, they wait until
the patent is granted. Then they go into Federal court on lengthy,
incredibly expensive litigation which can take years and years at
enormous expense, which these corporations can afford if it is
justified in the context of their own business plans, and grind that
patent holder down in court.
What we are trying to do, and it is really a small change, is to take
away the roadblock that causes people who want to challenge the
validity of a patent to ignore the reexamination procedure and go to
court instead. That is to say that if they win in reexamination and the
patent holder appeals to court to reestablish the validity of the
patent and to throw out the reexamination decision to reverse the
granting of the patent, that the person who filed for a reexamination
or the third party who brought the reexamination request can
participate in that appeal. If they cannot, they are not going to go to
reexamination, they are just going to challenge the patent in court.
H.R. 1886 in no way affects or enhances a challenger's ability to
initiate a reexamination. It does not broaden the basis for doing this.
The gentleman from Virginia (Mr. Boucher) and I have some legislation
that would do that and provide actually a more fulsome kind of a
hearing. But we have not been able to persuade a majority of the
subcommittee at this point that that is a good idea.
All this bill does is leave the substantive law exactly the same, and
maintain the requirement that the PTO director still find that a
substantial new question of patentability has been raised before
ordering a reexamination. It in no way lowers the barrier for
requesting an inter partes reexamination; it just makes it a marginally
more attractive option because they are no longer prejudiced from
raising an issue in court, and are perhaps persuaded by the
reexamination decision.
Everyone in the patent world recognizes that a patent which has
survived reexamination is a much stronger patent, much more likely to
be upheld in court. I would contend that the small, independent
inventor has an interest in a vital reexamination process, not one that
just exists on the books and is never utilized because the person who
wants to challenge that patent is afraid they are going to be estopped
from ever going to court; if they lose or if they win, that they will
not be able to participate in an appeal of the decision, of the PTO
Office.
So I understand where the gentleman is coming from, but I think if we
look through this bill, it is really very, very modest. This was not at
the heart of the negotiation that enabled the original patent reform
bill to go through several years ago, and I think it is a bill worthy
of support.
Madam Speaker, I reserve the balance of my time.
Mr. SENSENBRENNER. Madam Speaker, I yield 3 minutes to the gentleman
from Illinois (Mr. Manzullo), the chairman of the Committee on Small
Business.
Mr. MANZULLO. Madam Speaker, I rise to address my concerns with this
bill, H.R. 1886, which would alter the current process for third
parties in a patent reexamination request.
As the chairman of the Committee on Small Business, I have concerns
that small inventors may be hurt under the proposed process allowed
under this bill.
I am grateful to the gentleman from Wisconsin (Mr. Sensenbrenner) of
the Committee on the Judiciary and to the gentleman from North Carolina
(Mr. Coble). The gentleman from Wisconsin met with me today, albeit at
the 11th hour, to discuss my concerns. He very graciously agreed to
hold a hearing this year on how the bill may affect the interests of
the small inventor.
The chairman and the chairman of the subcommittee are extremely fair
people. They are very reasonable. They are the first ones that want to
make sure that this bill would do no harm to the small inventor. I
appreciate their concern on it.
But I would like to put into the Record as I see it how the small
inventor may be hurt. Patents are intellectual property rights. Patents
allow inventors to keep others from using for monetary gain inventions
they have created.
The reexamination process brings a patent back through the process,
essentially opening up the procedures that bring about a patent.
Third-party reexamination allows any party, an individual, a company,
or even a foreign Nation, the ability to officially request a reexam of
a patent in the U.S. Patent and Trademark Office. If a third party
requester does not succeed in convincing the experts of the PTO, they
do not have the right to go into the Court of Appeals. That is
important for the small inventor.
I am of the opinion that this bill may open a whole host of problems,
particularly for the small inventor. Let me explain. Under current law,
a patent can be challenged as to its validity in a Federal district
court only upon a party being charged with infringement or being sued
for infringement by a patent owner.
In the first case, the alleged infringer may file a declaratory
judgment action to settle a dispute, thereby allowing them to go to
court. In the latter case, the sued party, the alleged infringer, can
challenge patent validity in an affirmative defense claim before the
Federal appeals court.
H.R. 1886 would allow any third party to question the validity of a
patent without first being charged for infringement. This is critical
because a bad actor, again, anyone from an individual company,
corporation, or foreign Nation, could essentially bottle up a truly
valid patent with frivolous claims, hurting the true inventor's ability
to develop his ideas.
There are concerns that this bill could cause a domino effect in the
marketplace for these small inventors seeking financing to get a
finished product, idea, concept, to the market.
[[Page H5362]]
A legitimate inventor of a significant concept would be dramatically
hindered from seeking venture capital for something that is tied up in
the courts by a third party reexamination, as is allowed and envisioned
under H.R. 1886.
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It enables a third-party requester to challenge as many patents in
the courts as it deems necessary at a much-reduced cost to them so as
to gain or maintain a stronghold in any particular industry. Therefore,
I am heartened that the chairman of the Committee on the Judiciary
through his graciousness saw me today, expressed a willingness to work
with the small inventor to make sure that the small inventor was
protected and the fact that he is open to holding a hearing on this
issue.
Mr. SENSENBRENNER. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, I want to thank the gentleman from Illinois (Mr.
Manzullo), the chairman of the Committee on Small Business. I want him
to know how much I appreciate knowing of his concerns regarding the
important role of our country's patent system, and I am prepared to
work with him on this subject. In fact, I share his appreciation of the
entrepreneurial spirit of America, whereby inventors apply their
creativity and ingenuity to technology every day in this country.
I want to reassure the gentleman from Illinois (Mr. Manzullo) that
since this issue is squarely in the jurisdiction of the Committee on
the Judiciary, it will fully get the proper attention it deserves.
The bill we consider today, H.R. 1886, will not prejudice inventors,
small businesses or anyone else connected with inventive activity. In
fact, it will help level the playing field in this area regarding the
patent code procedures. This will help us achieve our goals beyond
patent reexamination, which include giving investors confidence in a
patented invention so that doubts can be cast aside and that capital
may be raised to help in the financing of entrepreneurial concern.
Second, this bill does not create new tools for litigation to harass
or abuse inventors. In the past I have opposed such legislation and
will continue to do so in the future.
Finally, I appreciate the concerns that the gentleman has raised. The
Subcommittee on Courts, the Internet and Intellectual Property held two
hearings on this subject earlier this year. In an effort to continue
exploring this vital subject, I am directing my staff to schedule a
third hearing on this subject and other issues of importance to
inventors.
I thank the gentleman and look forward to working with him on his
issue.
Mr. BERMAN. Madam Speaker, I have no further requests for time, and I
yield back the balance of my time.
Mr. SENSENBRENNER. Madam Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore (Mrs. Biggert). The question is on the motion
offered by the gentleman from Wisconsin (Mr. Sensenbrenner) that the
House suspend the rules and pass the bill, H.R. 1886.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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