[Congressional Record Volume 150, Number 90 (Friday, June 25, 2004)]
[Senate]
[Pages S7520-S7522]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      COOPERATIVE RESEARCH AND TECHNOLOGY ENHANCEMENT ACT OF 2004

  Mr. FRIST. Madam President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of Calendar No. 484, S. 2192.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (S. 2192) to amend title 35, United States Code, to 
     promote cooperative research involving universities, the 
     public sector, and private enterprises.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. HATCH. Madam President, I rise today to support passage of S. 
2192, the Cooperative Research and Technology Enhancement Act of 2004 
or CREATE Act. I am pleased that the Senate is considering this 
important patent legislation. I would like to thank Senators Leahy, 
Kohl, Grassley, Feingold and Schumer, for their work on, and 
cosponsorship of, this bill.
  The CREATE Act responds to an important need of our inventive 
community. This act will encourage greater cooperation among 
universities, public research institutions and the private sector. It 
does so by enabling these parties to share freely information among 
researchers that are working under a joint research agreement to 
develop new technology. It also allows these entities, particularly 
universities, to structure their relationships with other research 
collaborators in a more flexible manner.
  The CREATE Act has benefited significantly from the commendable work 
of our colleagues in the House. In particular, we take note of the 
House Report, H. Rep. 108-425, which accompanied passage of H.R. 2391, 
the House counterpart of S. 2192. The committee notes that the House 
report addresses a number of important issues related to the 
implementation of the act, and provides necessary guidance to the 
Patent and Trademark Office as to its responsibilities under the 
legislation.
  In the interest of further transparency and guidance, and importantly 
to prevent the public from being subject to separate enforcement 
actions by owners of patentably indistinct patents, we offer the 
following guidance on some key aspects of this legislation. We believe 
that this guidance is entirely consistent with the policy objectives of 
the House Report, but explicate some of the most critical and complex 
aspects of the intended operation of the CREATE Act where multiple 
patents issue on the patentably indistinct inventions.
  As the House report correctly notes, the CREATE Act will enable 
different parties to obtain and separately own patents with claims that 
are not patentably distinct--in other words, where the claim in one 
patent would be ``obvious'' in view of a claim in the other patent. The 
courts and the U.S. Patent and Trademark Office term this 
``nonstatutory'' and ``obviousness-type'' double patenting. This is not 
the first time that Congress has amended the patent laws in a manner 
that has expanded opportunities for double patenting. The Patent Law 
Amendments Act of 1984 first created the opportunity for double 
patenting for patents issued to different inventors that were owned by 
one entity or which were commonly assigned. In the legislative history 
for the Patent Law Amendments Act of 1984, Congress indicated its 
expectation that any newly created opportunities for double patenting 
would be treated no differently than double patenting for patents 
issued to the same inventor. We do the same today with respect to the 
remedial provision in the CREATE Act, but discuss

[[Page S7521]]

the form of disclaimer that is required of the patent owner whenever 
double patenting exists.
  At its core, the double patenting doctrine addresses the situation 
where multiple patents have issued with respective claims in the 
different patents that meet one or more of the relationship tests set 
out by the courts. Double patenting can arise when the two involved 
patents are determined not to relate to independent and distinct 
inventions. It can also arise if a claim in a later-issued patent would 
not be novel with respect to a claim in a first-issued patent. A third 
type of double patenting--and perhaps the most common--is where a claim 
in a later-issued patent is obvious in view of a claim in a first-
issued patent. Whatever the relationship that forms the basis for the 
double patenting, the current principles governing double patenting 
should be applied to all such situations involving the issuance of 
double patents where the provisions of the CREATE Act apply.
  The double patenting doctrine exists as a matter of policy to prevent 
a multiplicity of patents claiming patentably indistinct inventions 
from becoming separately owned and enforced. Thus, it applies to 
situations where multiple patents have issued, even if the patents are 
filed on the same day, issue on the same day and expire on the same 
day. All that is required for double patenting to arise is that one or 
more claims in each of the involved patents is determined to represent 
double patenting under established principles of law. The double 
patenting doctrine can invalidate claims in any later or concurrently 
issued patent if those claims are determined to represent double 
patenting with respect to any of the claims in a first-issued patent. 
For clarity, any later or concurrently issued patent that creates 
double patenting can simply be termed a ``patentably indistinct 
patent'' with respect to the first-issued patent.
  Invalidity of the patentably indistinct claims under the doctrine of 
double patenting can be avoided, however, if an appropriate disclaimer 
is filed in the patent containing those claims. Under existing practice 
in the U.S. Patent and Trademark Office, the disclaimer must be filed 
in the patent with the patentably indistinct claims and must reference 
the first-issued patent against which the disclaimer applies. Thus, the 
disclaimer only affects the ability to enforce the disclaimed patent, 
and historically has not affected the enforceability of the first-
issued patent against which the disclaimer has been made. Accordingly, 
under existing double patenting principles, if the indistinct patent 
becomes separately owned, i.e., such that it can be separately 
enforced, the disclaimed patent is rendered invalid in accordance with 
the terms of the required disclaimer, while the first-issued patent's 
enforceability is unaffected.
  Patents issued after enactment of the CREATE Act will be enforceable 
in the same manner and to the same extent as when patents are issued to 
a common owner or are subject to common assignment. One modification of 
existing disclaimer practice, however, is needed for double patenting 
to achieve its policy objectives where the CREATE Act applies. The 
CREATE Act will now permit patents with patentably indistinct claims to 
be separately owned, but remain valid. Heretofore, this separate 
ownership would have rendered the indistinct patent invalid. To protect 
the public interest, these separately owned patents must be subjected 
to a new form of disclaimer that will protect the public against 
separate actions for enforcement of both the first-issued patent and 
any patents with claims that are not patentably distinct over the 
claims of the first-issued patent.
  Accordingly, in every situation where double patenting is created 
based upon revised section 103(c), the patentably indistinct patent 
must include a disclaimer that will require the owner of that patent to 
waive the right to enforce that patent separately from the first-issued 
patent. The disclaimer also must limit, as is required for all 
disclaimers related to double patenting, the disclaimed patent such 
that it can be enforced only during the term of the first-issued 
patent.
  Additionally, the disclaimer required for the valid issuance of a 
patentably indistinct patent pursuant to the CREATE Act must apply to 
all owners of all involved patents, i.e., the owner of the patentably 
indistinct patents as well as any owners of any first-issued patents 
against which the disclaimer is made. In order for this to be the case, 
the CREATE Act effectively requires parties that separately own patents 
subject to the CREATE Act to enter into agreements not to separately 
enforce patents where double patenting exists and to join in any 
required disclaimer if the parties intend to preserve the validity of 
any patentably indistinct patent for which a disclaimer is required.
  To give effect to this requirement, the disclaimer in the patentably 
indistinct patent must be executed by all involved patent owners, as 
the right to separately enforce the first-issued patent apart from the 
patentably indistinct patent cannot be avoided unless the owner of the 
first-issued patent has disclaimed its right to do so. If an 
enforcement action is brought with respect to a patentably indistinct 
patent, but the owner of the first-issued patent was not a party to the 
disclaimer, and had not disclaimed separate enforceability of the 
first-issued patent once an enforcement action had been commenced on 
the indistinct patent, the owner of the first-issued patent could not 
legally be prevented from bringing a later action for infringement 
against the same party absent disclaiming the right to do so. Thus, the 
disclaimer of the separate enforceability of an indistinct patent 
cannot be assured unless the owner of a second indistinct patent has an 
agreement with the owner of the first-owned patent prohibiting the 
right of separate enforcement. The CREATE Act will not require the 
owner of a first-issued patent or an indistinct patent to enforce any 
such patent. Rather, the prohibition against separate enforcement 
described above is necessary to address the sole policy objective of 
preventing different patent owners from separately enforcing a first-
issued patent and a related indistinct patent.
  Also as indicated in the House report, we expect the U.S. Patent and 
Trademark Office to take such steps as are necessary to implement the 
requirements of this act in the manner we have described. In 
particular, the Patent and Trademark Office should exercise its 
responsibility for determining the necessity for, and for requiring the 
submission and recording of, disclaimers in patent applications and to 
promulgate such regulations as are necessary including, inter alia, 
rules analogous to 37 CFR Sec. 1.321, that requires disclaimers in 
patent applications where double patenting exists. To meet the 
requirements of the act, the parties to the joint research agreement 
must agree to accept the conditions concerning common term and the 
prohibition against separate patent enforcement and all involved 
parties must agree to be signatories to any required terminal 
disclaimer. I do not believe any particular form need be followed to 
give effect to this requirement, and that the Office will address these 
issues pursuant to its implementation of the act.
  The House indicated in its committee report that a joint research 
agreement may be evidenced by one or more writings. I note that 
evidence of a joint research agreement may take the form of cooperative 
research and development agreements, CRADAs, material transfer 
agreements MTAs, or other written contracts or multiple written 
documents or contracts covering various parties or aspects of the 
written agreement. As the House Committee indicated in its report, such 
writing or writings must demonstrate that a qualifying ``joint research 
agreement'' existed prior to the time the claimed invention was made 
and that the claimed invention was derived from activities performed by 
or on behalf of parties that acted within the scope of the agreement. 
Also, parties to a joint research agreement who seek to benefit from 
the Act must be identified in the application for a patent or an 
amendment thereto so the public will have full notice of those patents 
that have issued pursuant to the provisions of this Act.
  As the House Judiciary Committee also noted in its report, the act, 
pursuant to section 3 of the act, pending patent applications could 
claim the benefit of the provisions of the act. Thus, an existing joint 
research agreement

[[Page S7522]]

existing prior to the date of enactment can be used to qualify an 
application to claim the benefits of the act. Such applications, i.e., 
those pending on the date of enactment of the act, however, must comply 
with all of the requirements of the Act, including not only the 
requirements for disclosure among the parties to the agreement, but 
also the applicable requirement for a terminal disclaimer. The terminal 
disclaimer obligations, i.e., that all parties to the joint research 
agreement consent to having any related patents the first-issued patent 
and patentably indistinct patents, be bound by the requirements of the 
Act and the disclaimer be executed by all the owners of such patents, 
shall provide a means for the U.S. Patent and Trademark Office to 
confirm that each party to an otherwise eligible joint research 
agreement that is cited to claim the benefits for an application 
pending as of the date of enactment of the act has consented to have 
the act so apply to that application. Thus, associated with any patent 
application pending on the date of enactment of the act, there will be 
written evidence of an agreement of the parties to the joint research 
agreement to affirmatively claim the benefits of, and to be bound by 
the requirements of, the CREATE Act, by the act of the parties to the 
joint research agreement recording evidence of their agreement in the 
same manner as evidence of documents that affect some interest in an 
application or patent are now recorded with the Patent and Trademark 
Office.
  Before I yield, I would like to thank the cosponsors and their 
respective staffs for their work on this legislation. In particular, I 
commend Susan Davies, Jeff Miller, Dan Fine, Dave Jones, and Tom Sydnor 
for their hard work on this issue. Also, I extend my heartfelt 
gratitude to Katie Stahl for her hard work on this, and numerous other 
issues. I was informed today that she will be leaving the Judiciary 
Committee staff in a couple of weeks, and I want to take this 
opportunity to acknowledge publicly how sorely she will be missed.
  Mr. LEAHY. I am pleased that today the Senate will pass the 
Cooperative Research and Technology Enhancement Act, the CREATE Act of 
2004. As I have noted before, the United States Congress has a long 
history of strong intellectual property laws, and the Constitution 
charges us with the responsibility of crafting laws that foster 
innovation and ensure that creative works are guaranteed their rightful 
protections. This past March, I joined with Senator Hatch, Senator 
Kohl, and Senator Feingold in introducing the CREATE Act, which will 
provide a needed remedy to one aspect of our nation's patent laws.
  Our bill is a narrow one that promises to protect American jobs and 
encourage additional growth in America's information economy.
  In 1980, Congress passed the Bayh-Dole Act, which encouraged private 
entities and not-for-profits such as universities to form collaborative 
partnerships that aid innovation. Prior to the enactment of this law, 
universities were issued fewer than 250 patents each year. Thanks to 
the Bayh-Dole Act, the number of patents universities have been issued 
in more recent years has surpassed two thousand--adding billions of 
dollars annually to the US economy.
  The CREATE Act corrects for a provision in the Bayh-Dole Act which, 
when read literally, runs counter to the intent of that legislation. In 
1997, the United States Court of Appeals 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. 
The Oddzon ruling was certainly sound law, but it was not sound public 
policy, and as a result some collaborative teams have been unable to 
receive patents for their work. As a consequence, there is a deterrent 
from forming this type of partnership, which has proved so beneficial 
to universities, the private sector, the American worker, and the U.S. 
economy.
  Recognizing Congress' intended purpose in passing the Bayh-Dole Act, 
the Federal Circuit invited Congress to better conform the language of 
the 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 the Senate is passing today also 
includes strict evidentiary burdens to ensure that the legislation is 
tailored narrowly so as only to achieve this goal that--although 
narrow--is vitally important.
  I also wish to draw attention to Senator Hatch's thoughtful 
explication of some of the more complex issues surrounding the CREATE 
Act. I agree entirely with his comments, which I believe will prove 
useful for those seeking a background understanding of this 
legislation.
  I wish to thank my colleagues for their support of this bill, and to 
thank in particular Senator Hatch, Senator Kohl, Senator Feingold, 
Senator Grassley, and Senator Schumer for their hard work in gaining 
this bill's passage.
  Mr. FRIST. I further ask consent that the bill be read the third time 
and passed, the motion to reconsider be laid upon the table with no 
intervening action or debate, and any statements relating to this 
measure be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 2192) was read the third time and passed, 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.

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