[Congressional Record Volume 150, Number 30 (Wednesday, March 10, 2004)]
[House]
[Pages H944-H946]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COOPERATIVE RESEARCH AND TECHNOLOGY ENHANCEMENT (CREATE) ACT OF 2004
Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 2391) to amend title 35, United States Code, to promote
research among universities, the public sector, and private enterprise,
as amended.
The Clerk read as follows:
H.R. 2391
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Cooperative Research and
Technology Enhancement (CREATE) Act of 2004''.
SEC. 2. COLLABORATIVE EFFORTS ON CLAIMED INVENTIONS.
Section 103(c) of title 35, United States Code, is amended
to read as follows:
``(c)(1) Subject matter developed by another person, which
qualifies as prior art only under one or more of subsections
(e), (f), and (g) of section 102 of this title, shall not
preclude patentability under this section where the subject
matter and the claimed invention were, at the time the
claimed invention was made, owned by the same person or
subject to an obligation of assignment to the same person.
``(2) For purposes of this subsection, subject matter
developed by another person and a claimed invention shall be
deemed to have been owned by the same person or subject to an
obligation of assignment to the same person if--
``(A) the claimed invention was made by or on behalf of
parties to a joint research agreement that was in effect on
or before the date the claimed invention was made;
``(B) the claimed invention was made as a result of
activities undertaken within the scope of the joint research
agreement; and
``(C) the application for patent for the claimed invention
discloses or is amended to disclose the names of the parties
to the joint research agreement.
``(3) For purposes of paragraph (2), the term `joint
research agreement' means a written contract, grant, or
cooperative agreement entered into by two or more persons or
entities for the performance of experimental, developmental,
or research work in the field of the claimed invention.''.
SEC. 3. EFFECTIVE DATE.
(a) In General.--The amendments made by this Act shall
apply to any patent granted on or after the date of the
enactment of this Act.
(b) Special Rule.--The amendments made by this Act shall
not affect any final decision of a court or the United States
Patent and Trademark Office rendered before the date of the
enactment of this Act, and shall not affect the right of any
party in any action pending before the United States Patent
and Trademark Office or a court on the date of the enactment
of this Act to have that party's rights determined on the
basis of the provisions of title 35, United States Code, in
effect on the day before 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. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks and include extraneous material on H.R. 2391, the bill
currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, H.R. 2391 will help spur the development of new
technologies by making it easier for collaborative inventors who
represent more than one organization to obtain the protection of the
U.S. patent system for their inventions.
The bill achieves this goal by limiting the circumstances in which
confidential information which is voluntarily exchanged by individual
research team members may be asserted to bar the patenting of the
team's new inventions.
Today, intellectual property-reliant industries, such as
pharmaceuticals, biotechnology and nanotechnology, serve as key
catalysts to the U.S. economy, employing tens of thousands of
Americans. More often than not, the innovations they develop are not
done solely by researchers in-house, but rather, in concert with other
researchers who may be located at universities, nonprofit institutions,
and other private enterprises.
Carl E. Gulbrandsen, the managing director of the Wisconsin Research
Alumni Research Foundation, provided an assessment of the value of
university research contributions when he testified before the
Subcommittee on Intellectual Property last Congress that, ``In 2000,
nonprofits and universities spent a record of $28.1 billion on research
and development, much of which involved collaborations among private,
public, and nonprofit entities.''
Sales of products developed from inventions transferred from those
research centers resulted in revenues that approached $42 billion that
year, a portion of which was then reinvested into additional research.
As significant as this research activity is, the tangible benefits of
its application are also worth noting. Inventions such as the MRI and
the sequencing of human genome technology were both made possible
through collaborative research.
In 1984, Congress acted to incentivize innovation by encouraging
researchers within organizations to share information. That year,
Congress amended the patent law to restrict the use of background
scientific or technical information shared among researchers in an
effort to deny a patent in instances where the subject matter and the
claimed invention were under common ownership or control.
This bill will provide a similar statutory ``safe harbor'' for
inventions that result from collaborative activities of private, public
and nonprofit entities. In doing so, the bill responds to the 1997
OddzON Products, Inc. v. Just Toys, Inc., decision of the Federal
Circuit Court of Appeals by clarifying that prior inventions of team
members will not serve as an absolute bar of the patenting of the
team's new invention when the parties conduct themselves in accordance
with the terms of the bill.
In the future, research collaborations between academia and industry
will be even more critical to the efforts of U.S. industry to maintain
our technological preeminence. By enacting this bill, Congress will
help foster improved communication between researchers, provide
additional certainty and structure for those who engage in
collaborative research, reduce patent litigation incentives, and
facilitate innovation and investment.
Mr. Speaker, the Committee on the Judiciary unanimously approved H.R.
2391 on January 21, 2004. I understand that the Congressional Budget
Office considers the bill to have an insignificant effect on the U.S.
Patent and Trademark Office's spending, and has found that the bill
contains no intergovernmental or private sector mandates.
The bill itself is a product of the collaborative efforts of a number
of individuals and leading professional patent and research
organizations. Among those who contributed substantially to the
development of the bill are the USPTO, the Wisconsin Alumni Research
Foundation, the American Council on Education, the American University
Technology Managers, the Biotechnology Industry Organization,
[[Page H945]]
and the American Intellectual Property Law Association.
Mr. Speaker, the bill is necessary to ensure that tomorrow's
collaborative researchers enjoy a full measure of the benefits of the
patent law. I urge Members to support the bill.
Mr. Speaker, I reserve the balance of my time.
Mr. BERMAN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 2391, the CREATE Act, and ask
my colleagues to support it as well. The CREATE Act is a rare
legislative achievement: It is a truly noncontroversial patent bill. It
has achieved this unique status because it is the product of exhaustive
discussion, negotiation, and redrafting at both the intellectual
property subcommittee and the full Committee on the Judiciary levels.
The CREATE Act effectively overturns the Federal court's decision in
OddzON Products v. Just Toys. The OddzON decision held that certain
prior art can be used to dismiss a patent application as obvious, one
cannot patent the obvious, even if that prior art was confidential,
shared among consenting parties or undocumented.
In layman's terms, the OddzON decision means that research
collaborations between different institutions may preclude patents
arising from that joint research. As a result of its holding, the
OddzON decision threatens to chill informal inter-institutional
research collaborations. These are just the sort of research
collaborations that are increasingly important in today's complex
resource constrained research environment. Even more troubling, these
sorts of research collaborations disproportionately involve research
universities and nonprofit institutions which do not have the same
flexibility as private institutions to engage in other research
arrangements.
Research collaborations contribute greatly to the U.S. economy. More
importantly, they may be the key to curing many life-threatening
diseases. Research collaborations are an important part of the
technology transfer between universities, nonprofit institutions, and
private companies that result in an estimated $40 billion of economic
activity each year and support some 270,000 jobs.
Similarly collaborations between Federal laboratories and other
entities have resulted in an estimated 5,000 research agreements signed
since 1986.
There is no question that Congress should foster an environment in
which researchers have the freedom, opportunity and incentive to
collaboratively develop inventions and new ideas. By overturning the
OddzON decision, the CREATE Act will remove a substantial roadblock to
achieving this goal.
The CREATE Act underwent substantial revisions to adjust relevant
concerns. The version before us today constitutes a real improvement
over H.R. 2391 as introduced. It has the support of the university
community, the patent bar, the biotech industry, patent holders, and
all other interested parties of which I am aware, and I want to express
my appreciation to the gentleman from Texas (Chairman Smith) for
working so closely with us in drafting and redrafting the CREATE Act. I
ask my colleagues to vote in favor of this important bill.
Mr. Speaker, I reserve the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I yield such time as he may consume
to the gentleman from Texas (Mr. Smith).
Mr. SMITH of Texas. Mr. Speaker, the CREATE Act, which I introduced
along with the gentleman from California (Mr. Berman), allows
researchers and inventors who work for different organizations and
collaborate on inventions to share information without losing the
ability to file for a patent.
This legislation removes roadblocks to the patenting of collaborative
inventions. It empowers researchers to choose to collaborate when it is
in their interest, and to compete for inventions when it is not.
Under current law, individuals who did not work on an invention or
project can challenge patent applications. This leads to invalidated
patents which harms our economy and the inventors, researchers and
entrepreneurs who want to create new products.
Today's biotech, pharmaceutical, and nanotechnology companies conduct
much of their research with partners such as universities and other
public or private organizations.
In fact, the University of Texas ranks fourth on the list of
universities that receive the most patents. Many of these patents
result from working with the private sector on research.
America's universities, private companies, public organizations and
nonprofit institutions all have a stake in ensuring the U.S. patent
system rewards rather than inhibits their innovations, from life-saving
therapies to fuel cells.
Yesterday, my subcommittee received a letter from the Biotechnology
Industry Organization, which supports this legislation. The
organization stated, ``The majority of our members routinely engage in
collaborative research. We believe that encouraging this type of
research will greatly enhance the ability of the biotechnology industry
to develop life-saving and life-enhancing products.''
The CREATE Act: (1) Promotes communication among team researchers
located at multiple organizations; (2) discourages those who would use
the discovery process to impede coinventors who voluntarily
collaborated on research resulting in patentable inventions; (3)
increases public knowledge; and (4) accelerates the commercial
availability of new inventions.
The CREATE Act benefits all industries that engage in collaborative
and cooperative research involving more than one organization. The
classic example is biotechnology, since it has a culture and a business
model that is multi-disciplinary.
When a biotechnology company decides to partner with a university, we
want to prevent that partnership from being harassed by a third party.
Biotech investment dollars dedicated to research should and must be
used in an effective way without the possibility of a lawsuit or a
grievance filed against it.
The CREATE Act was inspired by two principles essential to a
democracy: The protection of intellectual property rights and the
freedom to exchange goods and services.
Research collaborations are essential to the discovery of new
inventions, the creation of new jobs, and the health of the U.S.
economy. Protecting them will provide greater incentives to develop new
technologies.
Mr. BERMAN. Mr. Speaker, I yield such time as she may consume to the
gentlewoman from California (Ms. Lofgren).
Ms. LOFGREN. Mr. Speaker, cooperative research among private, public,
and nonprofit entities has become a common feature of modern research
and development. Many technology start-ups in my home in Silicon Valley
rely on university-based researchers to support their basic R&D
programs, and the result of these collaborations benefit both the
economy and consumers.
However, as has been mentioned by other Members, since the Federal
Circuit decision in OddzON Products v. Just Toys, collaboration has
become too risky. The OddzON decision created an environment where an
otherwise patentable invention can be rendered nonpatentable on the
basis of information routinely exchanged between research partners.
Collaborative research is absolutely vital to our economy. A 1988
report by the National Science Foundation found that nonprofits and
universities spent a record $23.8 billion on research and development,
the majority of which came from collaborations. Congress needs to act
to ensure that our patent laws provide the proper incentives for
private, public, and nonprofit entities to work together to make all
our futures brighter, and I am happy to say that the CREATE Act that is
before us today does that.
Mr. Speaker, I would like to thank the gentleman from Texas (Mr.
Smith) and the gentleman from California (Mr. Berman), the ranking
member, for their hard work on this bill. I support it, and I urge all
Members to support it as well.
{time} 1215
We often come on the House floor and engage in debates on things that
divide us which, when all is said and done, will not necessarily be
very important to the American economy or the American public.
This is an item that may be a little bit of a sleeper. I do not see a
cast of
[[Page H946]]
thousands here on the House floor, and yet passing this bill will be
very important for the economy of our Nation and for the advance of
science, and it is something we can do together proudly and serve our
country quite well. I am happy to be involved in this effort.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of H.R.
2391, the Cooperative Research and Technology Enhancement (CREATE) Act
introduced on June 9, 2003. We held a markup hearing for this
legislation in January of this year, and I offered my support at that
time. To spur innovation and accelerate new technologies, this bill
encourages cooperative research efforts that involve the private
sector, universities, non-profit institutions and public entities. In a
recent decision (Oddzon Products, Inc., v. Just Toys, Inc., et al., 122
F.3d 1396, 43 U.S.P.Q.2d 1641 (Fed. Cir. 1997), or Oddzon), the Federal
Circuit Court of Appeals narrowed the scope of a 1984 law that promoted
collaborative research. I support H.R. 2391 because it will only result
in the overall improvement of the quality of research that is done by
collaborating members of the academic community in the areas of
science, art and information resourcing.
In Oddzon, the Federal Circuit found that in the case of an inventive
collaboration involving researchers from multiple organization, the
novelty (Sec. 102) and non-obvious (Sec. 103) requirements of the
Patent Act could be read to cover prior art so as to invalidate a
patent. The court wrote:
The statutory language provides a clear statement that
subject matter that qualifies as prior art under subsection
(f) or (g) cannot be combined with other prior art to render
a claimed invention obvious and hence inpatentable when the
relevant prior art is commonly owned with the claimed
invention at the time the invention was made. While the
statute does not expressly state . . . that Sec. 102(f)
creates a type of prior art for purposes of Sec. 103,
nonetheless that conclusion is inescapable; the language that
states that Sec. 102(f) subject matter is not prior art under
limited circumstances clearly implies that it is prior art
otherwise.
In making this ruling, the court states ``[t]here is no clearly
apparent purpose in Congress's inclusion of Sec. 102(f) in the
amendment other than an attempt to ameliorate the problems of patenting
the results of team research.'' Finally, the court added ``while there
is a basis for an opposite conclusion, principally based on the fact
that Sec. 102(f) does not refer to public activity, as do the other
provisions that clearly define prior art, nonetheless we cannot escape
the import of the 1984 amendment.'' The holding creates a significant
problem due to the way that most public-private sector research and
development projects are structured. Since the early 1980s,
universities, States and the Federal Government have become much more
adept at generating licensing revenue from intellectual property
developed by their faculty, staff and students. Many States and the
Federal Government now operate under laws and practices under which
they cannot or will not assign their rights to inventions to a private-
sector collaborative partner. Typically, the university, State or
Federal Government retains sole ownership of the invention, while the
invention is licensed for commercial exploitation to their research
partner.
The Oddzon decision has created a situation where an otherwise
patentable invention may be rendered nonpatentable on the basis of
information routinely exchanged between research partners. Thus,
parties who enter into a clearly defined and structured research
relationship, but who do not or cannot elect to define a common
ownership interest in or a common assignment of the inventions they
jointly develop, can create obstacles to obtaining patent protection by
simply exchanging information among them. There is no requirement that
the information be publicly disclosed or commonly known; all that is
required is that the collaborators exchange the information.
The CREATE Act's purposes are to promote communication among team
researchers from multiple organizations, to discourage those who would
use the discovery process to harass co-inventors who voluntarily
collaborated on research, to increase public knowledge and to
accelerate the commercial availability of new inventions. Overall, this
bill will serve to create a more technology-friendly environment and
encourage continued collaboration and innovation.
Mr. Speaker, I support this bill and hope that my colleagues will do
the same.
Mr. BERMAN. Mr. Speaker, I yield back the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Culberson). 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. 2391, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
The title of the bill was amended so as to read: ``A bill to amend
title 35, United States Code, to promote cooperative research involving
universities, the public sector, and private enterprises.''.
A motion to reconsider was laid on the table.
____________________