[Congressional Record Volume 150, Number 30 (Wednesday, March 10, 2004)]
[Senate]
[Pages S2558-S2559]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. Leahy, Mr. Kohl, and Mr. 
        Feingold):
  S. 2192. A bill to amend title 35, United States Code, to promote 
cooperative research involving universities, the public sector, and 
private enterprises; to the Committee on the Judiciary.
  Mr. HATCH. Mr. President, I rise to introduce the Cooperative 
Research and Technology Enhancement Act of 2004 (the CREATE Act). This 
bill makes a narrow, but important change in our patent laws to ensure 
that the American public will benefit from the results of collaborative 
research efforts that combine the erudition of great public 
universities with the entrepreneurial savvy of private enterprises.

[[Page S2559]]

  Together, our universities and private enterprises have created a 
culture of innovation that has become America's greatest asset in an 
increasingly global economy. This culture of innovation encourages 
fundamental research--knowledge for its own sake. It also encourages 
the hard work needed to incorporate new advances in technology into 
actual products that reach the market and benefit consumers.
  While universities and private entrepreneurs can play complementary 
roles in our innovation economy, new opportunities to innovate arise 
when public institutions and private entrepreneurs combine their 
respective forms of expertise in collaborative, joint research efforts. 
President Lincoln would surely agree that this type of joint private-
public research effort is well-suited to add ``the fuel of interest to 
the fire of genius in the production of new and useful things.''
  As a result, we have long realized the enormous value of these joint 
research efforts, and we have long realized that their potential cannot 
be realized unless their participants can benefit from the intellectual 
property rights generated by such research. Unfortunately, the literal 
language of Section 102(g) of the Patent Act suggests that non-public 
information known to some members of a private-public research team can 
constitute ``prior art'' that may make the final results of the team 
research obvious, and thus not patentable. Because non-public 
information does not usually constitute ``prior art'' under the Patent 
Act, the potentially disparate treatment of such information crates a 
disincentive for entrepreneurs and public institutions to collaborate 
in joint research efforts.
  I believe that we must encourage--not discourage--public institutions 
and private entrepreneurs to combine their respective talents in joint 
research efforts. Indeed, Congress committed itself to this principle 
when it passed the Bayh-Dole Amendments to the Patent Act. The CREATE 
Act will simply conform the present language of the Patent Act to the 
intent that has always animated it.
  For the above reasons, I urge my colleagues to support the 
Cooperative Research and Technology Enhancement Act of 2004. I also 
thank my colleagues in the House Committee on the Judiciary, 
particularly Subcommittee Chairman Lamar Smith and Chairman James 
Sensenbrenner, for their groundbreaking work on this important issue.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 2192

       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.
  Mr. LEAHY. Madam President, the United States has from its inception 
recognized the importance of intellectual property laws in fostering 
innovation, and vested in Congress the responsibility of crafting laws 
that ensure that those who produce inventions are able to reap economic 
rewards for their efforts. Today, Senator Hatch, Senator Kohl, Senator 
Feingold, and I introduce the ``Cooperative Research and Technology 
Enhancement, CREATE, Act of 2004,'' legislation that will provide a 
needed remedy to one aspect of our nation's patent laws.
  When Congress passed the Bayh-Dole Act in 1980, the law encouraged 
private entities and not-for-profits such as universities to form 
collaborative partnerships in order to spur innovation. Prior to the 
enactment of this law, universities were issued fewer than 250 patents 
each year. That this number has in recent years surpassed two thousand 
is owed in large measure to the Bayh-Dole Act. The innovation this law 
encouraged has contributed billions of dollars annually to the United 
States economy and has produced hundreds of thousands of jobs.
  However, one component of the Bayh-Dole Act, when read literally, 
runs contrary to the intent of that legislation. In 1999, the United 
States Court of Appeal for the Federal Circuit ruled, in Oddzon 
Products, Inc. v. Just Toys, Inc., that non-public information may in 
certain cases be considered ``prior art'' a standard which generally 
prevents an inventor from obtaining a patent. Thus some collaborative 
teams that the Bayh-Dole Act was intended to encourage have been unable 
to obtain patents for their efforts. The result is a disincentive to 
form this type of partnership, which could have a negative impact on 
the U.S. economy and hamper the development of new creations.
  However, the Federal circuit in its ruling invited Congress to better 
conform the language of the Bayh-Dole Act to the intent of the 
legislation. The ``CREATE Act'' does exactly that by ensuring that non-
public information is not considered ``prior art'' when the information 
is used in a collaborative partnership under the Bayh-Dole Act. The 
bill that my colleagues and I are today offering also includes strict 
evidentiary burdens to ensure that the legislation is tailored narrowly 
in order to solely fulfill the intent of the Bayh-Dole Act. I ask that 
my colleagues support the ``Cooperative Research and Technology 
Enhancement Act of 2004.''
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