[Congressional Record Volume 153, Number 131 (Thursday, September 6, 2007)]
[House]
[Pages H10217-H10224]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           PATENT REFORM ACT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from California (Mr. Rohrabacher) is 
recognized for 60 minutes.
  Mr. ROHRABACHER. Mr. Speaker, tomorrow is a critical day for America. 
Tomorrow, the House will consider legislation that will dramatically 
diminish a constitutionally protected right that has served this Nation 
well. We are talking about fundamentally altering the laws governing 
the ownership of technology in our country. America's patent system is 
on the line.
  In short, if H.R. 1908, the bill in question, passes, there will be a 
tremendous negative, long-term consequence not just for America's 
inventors but for our country as a whole.
  It is American technology that has made all the difference in our 
country's security and our people's way of life. Those patriots who 
laid the foundation for our country wrote into the Constitution a 
provision they firmly believed as a prerequisite to progress and 
freedom.
  Article I, section 8 of the Constitution states in part that, quote, 
Congress shall have the power to promote the progress of science and 
useful arts by securing for limited times to authors and inventors the 
exclusive right to their respective writings and discoveries, end of 
quote.
  Our Founding Fathers obviously held the right of owning one's ideas, 
creations and inventions as equal to the rights of speech, religion and 
assembly. In fact, in the body of the Constitution, the word ``right'' 
is only used in reference to patents and copyrights. The Bill of Rights 
was added later.
  In short, we have had since our country's founding the strongest 
patent protection in the world, and that is why in the history of 
mankind there has never been a more innovative and creative people. It 
has been no accident that Americans have been the world's great 
inventors, scientists, and technologists. Black Americans, in 
particular, have excelled in the creation of new technologies. This was 
no accident. It was a result of the protections that we put into our 
law to secure for all people the right of ownership for their 
inventions and their creations.
  Americans were the inventors of technology that produced more wealth, 
with less labor, and thus elevated the standard of living of all people 
which, in turn, opened the doors of opportunity for all people.
  Let us understand that it was not raw muscle, nor was it the hard 
work of our people that built this country. There are people who work 
hard all over the world. They work hard and they use their muscles and 
they struggle; yet, they live in abject poverty. So it's not just the 
use of one's physical strength that will change the world and make it a 
better place. It was not our vast territory and our natural resources 
that gave us a standard of living of which we are so proud. No, it was 
not these things. It was our ingenuity, our intelligence and, yes, the 
legal system that was established to protect ingenuity and creativity 
that brought us the joys of freedom and the benefits of freedom.
  We treated intellectual property rights, the creation of new 
technologies, as we treated property, personal and other political 
rights, and that is what America has been all about. Every person's 
rights were to be respected and protected; and as I have just 
demonstrated, the idea of the right to own one's creation was 
fundamental to this concept of the American Dream that was laid in the 
constitutional foundation of our country by our Founding Fathers.
  Today, we face a great historic challenge, and this challenge comes 
exactly at the time when our country faces economic threats from abroad 
as never

[[Page H10218]]

before. We must prevail over our economic competitors who are at war 
with the well-being of the American people. We must win or our country 
and our people will lose. If we lose this battle, our people will 
suffer. It is as simple as that.
  Future generations could well see their standard of living decline, 
and there is evidence of that already. We can see their standard of 
living decline, and they may well see the safety and the strength of 
our country compromised, to which the security of their families will 
be in jeopardy, which all leads us to the legislation that we will 
consider tomorrow.
  Let's be clear and specific. The legislation in question, H.R. 1908, 
will dramatically weaken the patent rights of ordinary Americans and 
make us even more vulnerable to outright theft of American-created 
technology and innovative ideas. This legislation represents a slow-
motion destruction of our patent system.
  And, yes, there are some real problems that need to be solved with 
our patent system. We need patent legislation that speeds up the 
examination process and the issuance process and makes it more 
accurate. We need patent legislation that provides training and 
compensation for our patent examiners. Patent examiners are overworked; 
they're undertrained. They need to have higher pay to make sure we keep 
the good patent examiners on the job.
  We need patent legislation that helps us protect our inventors 
against theft, especially from foreign theft. We need legislation aimed 
at fixing these problems, and it would be justified and it would be 
welcome, but the legislation on the floor tomorrow does not fix the 
system. It simply weakens the protection of American inventors using 
these festering problems as a cover.
  Some people might even suggest that the reason that these problems 
with our patent system have been permitted to fester was so that people 
could use them as an excuse to undermine the very basis of the patent 
system itself. Unfortunately, what we are witnessing is a replay of the 
strategy used in the illegal immigration debate of just a few months 
ago.
  The American people have been crying out for protection against a 
huge invasion of illegal immigrants into our country, one that is 
affecting their standard of living, their safety as a people, and their 
economic well-being. Special interests who benefited by this flood of 
illegals tried to push through a bill that would have made the 
situation worse. That's right, a bill in the name of stopping the 
illegal immigration flood that would have actually made it worse.
  To confuse the public, they kept calling it a comprehensive bill, as 
if it was designed to fix the problem. Instead, the purpose of that 
comprehensive bill, as we all are aware, was to give amnesty to all 
those who are in our country illegally, and that of course, would have 
attracted tens of millions of more illegals. It would have made a bad 
situation worse, and its only intent was amnesty. Yet, with a straight 
face, they kept using the phrase comprehensive reform, implying there 
was a fix.
  Well, that same strategy seems to be used by those behind this effort 
to undermine or destroy America's patent system as it has worked since 
the founding of our country over 200 years ago. Instead of arguing 
their case that we need to move away from the patent protection-type 
situation, they are simply calling their legislation a comprehensive 
bill. Instead of attacking the small inventor, instead of saying we're 
going to have a bill that actually restricts the rights of our citizens 
in this area because we believe that the small inventors are abusing 
the system, instead, they're calling it a comprehensive bill to make it 
sound like they are fixing some problems within the system.
  This bill, let's remember, H.R. 1908, is not new. This is very 
similar to legislation that we barely beat back 10 years ago. I called 
that the Steal American Technologies Act; and guess what, we beat them 
but they're back.
  So this could be called, and it would be accurate to call H.R. 1908, 
the Steal American Technology Act Part 2. By the way, those of us who 
mobilized opposition to the 1997 patent legislation negotiated a 
compromise that passed in 1999 and then became law in the year 2000. 
This legislation on the floor tomorrow represents a negation of all the 
compromises that we worked out in 1999.
  So those of us, Mr. Manzullo who will be with us in a moment, Marcy 
Kaptur and myself and others who insisted on certain things for that 
patent bill in 1999 and were given compromises in that legislation, we 
now face a bill that negates all of those compromises. I don't know if 
that's meaningful to those people who are examining this process, but 
it suggests the level of the attack on our patent system that we are 
experiencing.
  Even at this late moment, we are not certain what will be exactly in 
that bill because, at this moment, as we speak, there are changes being 
made in that bill that we are being told about, and we don't know 
exactly what those changes will be until tomorrow when it hits the 
floor because deals are being made as we speak.
  So first and foremost, no matter what the details, because we 
probably won't have a chance to look at all the details, let it be 
noted that H.R. 1908, which will be on the floor tomorrow, was 
specifically designed to weaken the patent protection of the American 
inventor. This was the purpose of the bill.
  We supported and will support any real reforms of the patent system, 
but those proposed in H.R. 1908 will cause the collapse of the patent 
system that has sustained America's wealth, our prosperity and, yes, 
our national security for over 200 years.
  The negative impact of the totality of this bill is reflected in the 
wide spectrum who are in opposition who have mobilized against it.
  For the record, I would submit, Mr. Speaker, the list of those 
companies and those organizations and those individuals, prominent 
individuals and companies and universities who are now fervently 
opposed to H.R. 1908 and begging us not to pass this legislation, and I 
would place it in the Record at this point.

  Organizations and Companies Which Have Raised Objections to Patent 
                        Legislation (H.R. 1908)

       Organizations and Companies Raising Objections to H.R. 
     1908, the Patent Reform Act of 2007: 3M, Abbott, Accelerated 
     Technologies, Inc., Acorn Cardiovascular Inc., Adams Capital 
     Management, Adroit Medical Systems, Inc., AdvaMed, Advanced 
     Diamond Technologies, Inc., Advanced Medical Optics, Inc., 
     Advanced Neuromodulation Systems, Inc., Aero-Marine Company, 
     AFL-CIO, African American Republican Leadership Council.
       Air Liquide, Air Products, ALD NanoSolutions, Inc., ALIO 
     Industries, Allergan, Inc., Almyra, Inc., AmberWave Systems 
     Corporation, American Conservative Union, American 
     Intellectual Property Law Association (AIPLA), American Seed 
     Trade, Americans for Sovereignty.
       Americans for the Preservation of Liberty, Amylin 
     Pharmaceuticals, AngioDynamics, Inc., Applied Medical, 
     Applied Nanotech, Inc., Argentis Pharmaceuticals, LLC, 
     Arizona BioIndustry Association, ARYx Therapeutics, Ascenta 
     Therapeutics, Inc., Association of University Technology 
     Managers (AUTM).
       Asthmatx, Inc., AstraZeneca, Aware, Inc., Baxa Corporation, 
     Baxter Healthcare Corporation, BayBio, Beckman Coulter, BIO--
     Biotechnology Industry Organization, BioCardia, Inc., BIOCOM, 
     Biogen Idec, Biomedical Association, BioOhio, Bioscience 
     Institute, Biotechnology Council of New Jersey.
       Blacks for Economic Security Trust Fund, BlazeTech 
     Corporation, Boston Scientific, Bridgestone Americas Holding, 
     Inc., Bristol-Myers Squibb, BuzzLogic, California Healthcare 
     Institute, California Healthcare Institute (The), Canopy 
     Ventures, Carbide Derivative Technologies, Cardiac Concepts, 
     Inc., CardioDynamics, Cargill, Inc., Cassie-Shipherd Group, 
     Caterpillar, Celgene Corporation, Cell Genesys, Inc., Center 
     7, Inc., Center for Small Business and the Environment, 
     Centre for Security Policy, Cephalon, CheckFree, Christian 
     Coalition of America.
       Cincinnati Sub-Zero Products, Coalition for 21st Century 
     Patent Reform, Coalitions for America, CogniTek Management 
     Systems, Inc., Colorado Bioscience Association, Conceptus, 
     Inc., CONNECT, Connecticut United for Research Excellence, 
     Cornell University, Corning, Coronis Medical Ventures, 
     Council for America, CropLife America, Cryptography Research, 
     Cummins Inc., Cummins-Allison Corporation.
       CVRx Inc., Dais Analytic Corporation, Dartmouth Regional 
     Technology Center, Inc., Declaration Alliance, Deltanoid 
     Pharmaceuticals, Digimarc Corporation, DirectPointe, Dow 
     Chemical Company, Dupont, Dura-Line Corporation, Dynatronics 
     Co., Eagle Forum, Eastman Chemical Company, Economic 
     Development Center, Edwards Lifesciences, Elan 
     Pharmaceuticals, Inc., Electronics for Imaging, Eli Lilly and

[[Page H10219]]

     Company, Ellman Innovations LLC, Enterprise Partners Venture 
     Capital, Evalve, Inc.
       Exxon Mobile Corporation, Fallbrook Technologies Inc., 
     FarSounder, Inc. Footnote.com.
       Gambro BCT, General Electric, Genomic Health, Inc., Gen-
     Probe Incorporated, Genzyme, Georgia Biomedical Partnership, 
     Glacier Cross, Inc., GlaxoSmithKline, Glenview State Bank, 
     Hawaii Science & Technology Council, HealthCare Institute of 
     New Jersey, HeartWare, Inc., Helius, Inc., Henkel 
     Corporation, Hoffman-LaRoche, Inc.
       iBIO, Imago Scientific Instruments, Impulse Dynamics (USA), 
     Inc., Indiana Health Industry Forum, Indiana University, 
     Innovation Alliance, Institute of Electrical and Electronics 
     Engineers (IEEE)-USA, InterDigital Communications 
     Corporation, Intermolecular, Inc., International Association 
     of Professional and Technical Engineers (IFPTE), Invitrogen 
     Corporation, Iowa Biotechnology Association, ISTA 
     Pharmaceuticals, Jazz Pharmaceuticals, Inc., Johnson & 
     Johnson, KansasBio, Leadership Institute, Let Freedom Ring, 
     Life Science Alley, LITMUS, LLC.
       LSI Corporation, Lux Capital Management, Luxul Corporation, 
     Maryland Taxpayers' Association.
       Masimo Corporation, Massachusetts Biotechnology Council, 
     Massachusetts Medical Device Industry Council (MassMEDIC), 
     Maxygen Inc., MDMA--Medical Device Manufacturer's 
     Association, Medical College of Wisconsin, MedImmune, Inc., 
     Medtronic, Merck, Metabasis Therapeutics, Inc., Metabolex, 
     Inc., Metacure (USA), Inc., MGI Pharma Inc., MichBio, 
     Michigan Small Tech Association, Michigan State University, 
     Millennium Pharmaceuticals, Inc., Milliken & Company, Mohr, 
     Davidow Ventures, Monsanto Company.
       NAM--National Association of Manufacturers, 
     NanoBioMagnetics, Inc. (NBMI), NanoBusiness Alliance, 
     NanoInk, Inc., NanoIntegris, Inc., Nanomix, Inc., Nanophase 
     Technologies, NanoProducts Corporation, Nanosys, Inc., 
     Nantero, Inc., National Center for Public Policy Research, 
     Nektar Therapeutics, Neoconix, Inc., Neuro Resource Group 
     (NRG), Neuronetics, Inc., NeuroPace, New England Innovation 
     Alliance, New Hampshire Biotechnology Council, New Hampshire 
     Department of Economic Development, New Mexico Biotechnical 
     and Biomedical Association, New York Biotechnology 
     Association.
       Norseman Group, North Carolina Biosciences Organization, 
     North Carolina State University, North Dakota State 
     University, Northrop Grumman Corporation, Northwestern 
     University, Novartis, Novartis Corporation, Novasys Medical 
     Inc., NovoNordisk, NUCRYST Pharmaceuticals, Inc. NuVasive, 
     Inc., Nuvelo, Inc., Ohio State University, OpenCEL, LLC.
       Palmetto Biotechnology Alliance, Patent Cafe.com, Inc., 
     Patent Office Professional Association, Pennsylvania Bio, 
     Pennsylvania State University, PepsiCo, Inc., Pfizer, PhRMA--
     Pharmaceutical Research and Manufacturers of America, 
     Physical Sciences Inc., PointeCast Corporation, Power 
     Innovations International, PowerMetal Technologies, Inc., 
     Preformed Line Products, Procter & Gamble, Professional 
     Inventors' Alliance, ProRhythm, Inc., Purdue University, Pure 
     Plushy Inc., QUALCOMM Inc.
       QuantumSphere, Inc., QuesTek Innovations LLC, Radiant 
     Medical, Inc., Rensselaer Polytechnic Institute, Research 
     Triangle Park, NC, Retractable Technologies, Inc., 
     RightMarch.com, S & C Electric Company, Salix 
     Pharmaceuticals, Inc., SanDisk Corporation, Sangamo 
     Biosciences, Inc., Semprius, Inc., Small Business Association 
     of Michigan--Economic Development Center, Small Business 
     Exporters Association of the United States.
       Small Business Technology Council, Smart Bomb Interactive, 
     Smile Reminder, SmoothShapes, Inc., Solera Networks, South 
     Dakota Biotech Association, Southern California Biomedical 
     Council, Spiration, Inc., Standup Bed Company, State of New 
     Hampshire Department of Resources and Economic Development, 
     Stella Group, Ltd., StemCells, SurgiQuest, Inc.
       Symyx Technologies, Inc., Tech Council of Maryland/MdBio, 
     Technology Patents & Licensing, Tennessee Biotechnology 
     Association, Tessera, Inc., Texas A&M, Texas Healthcare, 
     Texas Instruments, Three Arch Partners.
       United Technologies, University of California System, 
     University of Illinois, University of Iowa, University of 
     Maryland, University of Michigan, University of Minnesota, 
     University of New Hampshire, University of North Carolina 
     System, University of Rochester, University of Utah, 
     University of Wisconsin-Madison, US Business and Industry 
     Council, US Council for International Business.
       USGI Medical, USW--United Steelworkers, Vanderbilt 
     University and Medical Center, Virent Energy Systems, Inc., 
     Virginia Biotechnology Association, Visidyne, Inc., 
     VisionCare Opthamalogic Technologies, Inc., Washington 
     Biotechnology & Biomedical Association, Washington 
     University, WaveRx, Inc.
       Wayne State University, Wescor, Inc., Weyerhaeuser, Wilson 
     Sonsini Goodrich & Rosati, Wisconsin Alumni Research 
     Foundation (WARF), Wisconsin Biotechnology and Medical Device 
     Association, Wyeth.

                              {time}  1645

  I would submit for the Record a letter dated September 5, 2007, from 
the Communication Workers of America, who are coming out against and 
are very, very specific in their opposition to H.R. 1908, and there is 
a rumor going around right now that the unions have now decided not to 
be opposed to H.R. 1908, but, instead, are neutral on the issue of H.R. 
1908.

                                            Communications Workers


                                                   of America,

                                Washington, DC, September 5, 2007.
     Hon. Patrick Leahy, Chairman,
     Hon. Arlen Specter,
     Ranking Member, Senate Judiciary Committee,
     Hon. John Conyers, Chairman,
     Hon. Lamar Smith,
     Ranking Member, House Judiciary Committee, Washington, DC.
       Dear Chairman Leahy, Ranking Member Specter, Chairman 
     Conyers, and Ranking Member Smith: We are writing you to 
     express our concerns regarding the current U.S. patent system 
     and the potential negative impact of H.R. 1908 and S. 1145 on 
     this system.
       The American economy relies on the ingenuity and 
     imagination of inventors who help drive our economy and job 
     creation. Without a fair patent system that rewards 
     inventors, both job creation and ingenuity will suffer. Our 
     union members work in the technology and manufacturing 
     sectors, both of which will be affected by these pieces of 
     legislation. We want to see a system that solidifies our 
     leadership in innovation and helps the American economy 
     produce the jobs and products of the future.
       The National Academies of Sciences (NAS) have suggested a 
     set of improvements for the patent system. However, the 
     Patent Reform Act of 2007, while offering some needed 
     changes, does not reflect the body of improvements suggested 
     by NAS. We are concerned that two sections of the proposed 
     legislation, the post-patent review process and apportionment 
     of damages, will have a negative impact on innovation and 
     research.
       The courts already follow a multipoint system for the 
     appropriate consideration for damages. This should remain 
     intact rather than constricted so as to limit damage 
     settlements. The post-patent review process adds a third step 
     to the two existing review processes available. This third 
     one opens the process to serial patent challenges. For some, 
     this can become a business strategy of continual reviews 
     designed to elicit settlement. For the firms facing 
     challenges, they can decide it is easier to outsource their 
     products to a vendor rather than deal with the legal process. 
     In a system that is already overwhelmed meeting the review 
     needs of current patent filings, this is an unnecessary step.
       At a time when the rampant piracy of intellectual property 
     by our global competitors is being continuously challenged, 
     Congress should not give these competitors yet another 
     advantage over American workers. We hope to work with you in 
     your effort to improve the current patent system without 
     disadvantaging American workers and stifling American 
     innovation. We appreciate your leadership on this issue and 
     we look forward to hearing your thoughts.
           Sincerely,
                                                  Jeff Rechenbach,
                                         Executive Vice President.

  Let me note that only one union has changed its position and become 
neutral on 1908, but, instead, all the other unions, the wide swath of 
unions in this country, are just heavily opposed to H.R. 1908. So why 
are all these people, unions, universities, the biotech industry, 
pharmaceuticals, and, of course, especially small business, why are 
these people so opposed to this bill, H.R. 1908, which I call the Steal 
America's Technology Act No. 2.
  Number one, let's look at some of the requirements of the bill. What 
will it do? Number one, it will require that all patent applications be 
published 18 months after the application is filed.
  By the way, we negotiated this. We are joined right now by Mr. 
Manzullo, who is beside us. Mr. Manzullo and I fought hard in 1999 to 
ensure that the average right of the American inventor, to keep 
confidential his patent applications until that patent was issued, 
would be maintained.
  In that legislation, they said, if an American inventor does not want 
to have his patent published for the whole world to see, his patent 
application, even before the patent is issued, he can opt out of a 
requirement that would require him to have his patent application 
disclosed.
  This opting-out feature was a compromise. Now, those who negotiated 
with us, and long hard negotiations, have negated their compromise. 
That's the type of integrity that we are up against here, negating 
someone after you have actually made honest compromises? How can we 
trust what's in this bill if that is the basis of the organization of 
the structure of the bill?
  H.R. 1908 removes the opt-out provision that was put into the law by 
our negotiations back in 1999. Now, let's

[[Page H10220]]

note that last year 20,000 inventors, three-quarters of all the small 
businesses who applied for patents, chose to keep their inventions 
secret and to opt out of the provision that once you apply for a 
patent, that after 18 months, whether or not you have the patent, it 
will be put on the Internet for every thief in the world to see. No 
wonder why these 20,000 inventors decided to opt out of that.
  The thieves and infringers overseas are licking their chops, waiting 
to pounce on their new ability to get the details about American 
technology. Just look at this quote that Mr. Manzullo showed me from 
the Economic Times of India, dated July 23, 2007. ``A crucial bill 
making its way through the U.S. Congress is set to give a new 
inexpensive option for Indian drug makers to attack the patents that 
give monopoly rights to the top-selling MNC [multinational 
corporations] brands in the largest pharmaceutical market.''
  What that means is the Indian people who are involved with stealing 
our technology and copying it, especially those technologies in the 
pharmaceutical area, are getting ready for the changes that will be 
brought about by this legislation so that by the time our 
pharmaceutical companies are ready to go on the market with their 
goods, the Indian copiers will have already stolen the product of all 
of their research and development and turned it in to the market in 
India and elsewhere.
  This is horrendous. This is right up front, they are telling us. We 
are getting ready to steal hundreds of millions of dollars, if not 
billions of dollars, worth of information that was based on the 
research, the investment that we made in research in the United States 
of America, to benefit their companies.
  Well, it has been estimated that the U.S. economy loses $250 billion 
a year at this time from global intellectual property theft. If this 
bill passes, that number will triple or quadruple as a result of the 
passage of this legislation.
  Number 2, this bill opens up new avenues of attack before and after a 
patent has been issued. New attacks are now available in the pre-grant 
to the opposition, to someone who would like to try to make it more 
difficult for an inventor to get his patent in the first place and to 
hold up the issuance of his patent. Section 9, part B of H.R. 1908 says 
any person may submit for consideration an inclusion in the record of a 
patent application any patent, published patent application or other 
publication of potential relevance to the examination of the 
application.
  This means we are opening up the process so people can argue against 
the issuance of the patent, where before that was kept very 
confidential, and confidential for a purpose. Because if you have 
people arguing at that level, what happens is the patent is delayed. 
What do they want to do if it's delayed? They want to publish it for 
the whole world to see.
  Pre-grant opposition allows for outside folks like China or other 
countries who may have people they have hired here, people, I might add 
even domestic corporate scavengers, to look at applications and then 
dig up damaging concepts and, perhaps, ideas that would cloud the 
issues at hand and submit it to the patent examiners in order to defeat 
or to delay an application. Not only the examiner, but the whole world 
will be looking at these applications if those who wrote H.R. 1908 have 
their way. So China can steal our technology and defeat our patent 
applicants even before they get their patents.
  Another thing this bill does, of course, is afterwards it gives a 
post-grant review, a new system to post-grant review, to challengers to 
prove that the patent is not valid, and it changes the standards of 
validity and how that validity is to be determined.
  The standard is being changed from a preponderance of evidence, and 
this will be replaced, and that a preponderance of evidence will 
replace the current clear and convincing evidence, which is the current 
standard.
  Now, why are they changing these standards? They are not changing the 
standards to make it more difficult for people to challenge someone who 
owns a piece of technology, to make it easier for our inventors to 
defend themselves. It makes it more difficult for our defenders, for 
our inventors to defend themselves.
  Why are they changing that criteria? It's not aimed at helping the 
inventors, the innovators. It's aimed at helping the scavengers.
  Number 3, and in one moment I am going to ask Mr. Manzullo to join 
me, H.R. 1908 constricts the options available to rightful patent 
owners. So there are restrictions on what the actual patent owners, the 
people who have been issued the patents can do, especially in the area 
of which courts will be deciding their issues; limits on, as I say, 
limits on court venue, where either party resides, and where the 
Defendant has committed an alleged act of infringement, has established 
this, of course, will place incredible new challenges for our 
inventors. These are, again, aimed at trying to put restrictions on the 
inventors and give leverage to those who would steal that technology.
  It requires the court to break down the value of individual 
components of a product and calculate the damages based on the value. 
That's not the way right now it works. If someone infringes on 
someone's patent, that person who owns that property who has been 
wronged can sue that company.
  But it's not just based on how much that one component is worth. It 
is how much that person who owns that technology would have charged 
that company if it had been an honest contract and an honest 
negotiation.
  Again, what we are doing is restricting and making it more difficult 
for the inventor to protect his interest.
  In the end, this change alone will mean that the large corporations 
will be able to steal from the little guy and the foreign corporations 
will be able to steal from the other guy and just say, well, come at 
me. It's going to cost you more money to actually attack us in court 
and to fight us in court than you will be able to get out of it if you 
attack us in court.
  That change alone is going to undermine the rights of the inventors 
to control their inventions and creativity. That's the purpose of the 
bill.
  Patents would be awarded, again, and this is one of the more dramatic 
changes. In our country's history, we have always had a system that 
patents were awarded not to those who would have been the first to file 
for a patent, but, instead, to those who actually invented and could 
prove that they had invented a piece of technology. That has worked 
well for our country, and it is different in other countries.
  Japan and Europe have had different systems. This system is aimed at 
helping the big business rather than the small inventor, because big 
business can issue, can apply and pay for patent after patent 
application after patent application. Make one little step forward, and 
then you apply for a patent based on that step forward, rather than on 
a completed invention or a completed project.
  That change is fundamental to our system. We have always been 
recognizing the person who has invented the technology, not the company 
who can pay the lawyer to arrive at the patent office first.
  Well, number seven, and, finally, this bill creates a new proceeding 
to determine the inventor with the right to file an application on a 
claimed invention. The patent trial and appeal board would be 
established in this case, which, again, would so complicate this 
system. This is a whole new addition that will so complicate this 
process. It is not aimed at simplifying and making our system more 
effective. It's aimed at undermining the validity of this system.
  This change would flood the patent system, making it more expensive 
to get a patent. In short, every promise in H.R. 1908 is anti-inventor. 
Every single one of the provisions of 1908 that have been added are 
aimed there to undercut the inventor. Every provision weakens the 
rights of the inventor and undermines his ability to protect his or her 
rights as the inventor.
  This bill will only double or triple the losses that we have in terms 
of intellectual property theft overseas. Our own technology will be 
taken away from us, will be stolen, and it will be used to destroy us, 
as foreigners will have all the information they need about our 
advances, about our research, and then they will put that information 
to work to destroy us, to out-compete us, to put us out of business.
  H.R. 1908 would open up the doors for attack both before and after a 
patent is issued. So before a patent is issued, the

[[Page H10221]]

inventory will have to go through more hoops, and after the patent is 
issued, the inventor will go through more hoops.
  What we have got here is a piece of legislation that will go against 
the whole purpose that our law was established and the Founding Fathers 
put into the Constitution so many years ago, that inventors and writers 
and other creators, that their rights will be protected.
  I now would like to ask Mr. Manzullo if he would like to join me and 
share with us a few of his thoughts. Let me note that in 1997, Mr. 
Manzullo and Marcy Kaptur and myself and John Campbell of California, 
there were just a few of us, fought a battle. We were up against the 
most powerful forces in the world, these multinational corporations who 
were trying to sneak this through, and we were able to defeat them with 
the mobilization of the public behind us.
  This time, at least, we do have the major universities with us. This 
time we have the biotech industry and the pharmaceutical industry and 
the labor unions behind us. But we need to make sure that the American 
people understand what's going on here tomorrow and the vote and the 
significance of that vote tomorrow.
  I yield to the gentleman from Illinois.

                              {time}  1700

  Mr. MANZULLO. May I ask how much time is remaining?
  The SPEAKER pro tempore (Mr. Ellison). Thirty-two minutes.
  Mr. MANZULLO. Mr. Speaker, I rise today in opposition of H.R. 1908. 
Mr. Michaud and I just came from the Rules Committee a few minutes ago, 
which is in the process of preparing the rule under which the bill 
would be brought to the floor tomorrow. And we showed up at the 
hearing, which was set for 3:00, found out that an 18-page manager's 
amendment had been filed at 2:47, and during the course of our 
testimony before the Rules Committee, another manager's amendment 
consisting of 18 pages was filed at 3:50 p.m. So the Rules Committee 
was taking a look at still further amendments to a bill, not even 
knowing what the final form of the bill would be at the time we were 
there to testify either in favor of it or against it.
  Anytime you have a bill that presents a fundamental change in law, it 
should be a consensus bill; and there's a reason for that.
  Why hurt anybody on something so basic and so important as a patent 
bill?
  Why can't you protect the holders of patents, both large and small, 
the universities that have a stake in it, the labor unions whose people 
are employed by manufacturers who hold patents? Everybody really has 
the same stake here, and the stake is to have the United States be pre-
eminent in research and engineering and to use the patent system as a 
means to further research and development and manufacturing in this 
country.
  But this bill that's being presented has a very interesting split of 
people in favor and people against, and that's what's disconcerting 
about the entire bill.
  In fact, the last patent bill that was passed and signed into law 
never even made its way to the Senate. We passed it here in the House, 
and it was tacked on to an omnibus appropriations bill. The Senate 
never even read it or considered it. It got tucked into a massive 
multi-, hundred-page bill. It's a good thing that we had come up with a 
good bill by the time it passed here.
  And now we are hearing proponents of this bill say, just a second, we 
didn't use the subcommittee process to refine it, and we didn't use the 
committee process to refine it. This is a work in action that we 
continue to work on it as we go. And that's how we end up with bad law, 
when Members of Congress do not really have the opportunity to examine 
and to know what they're voting on.
  And I don't know anything as complicated as patent law. I've been 
here several terms; so has Mr. Rohrabacher. I look at patent laws 
through the eyes of a piece of machinery. I've spent my life in 
Congress involved in manufacturing. I have one of the most 
industrialized congressional districts in the country. One out of four 
people is directly employed in manufacturing.
  And I spend time on the floors, I've visited hundreds of factories in 
the United States, Europe, China, given speeches all over. I go to 
forums that deal with manufacturing processes and try to keep up on the 
latest in manufacturing so I can share those, not only with my 
constituents, but with my colleagues who are in Congress, on a 
bipartisan basis. In fact, we formed the Manufacturing Caucus for the 
purpose of making sure that the latest in manufacturing techniques is 
shared with Members so as to strengthen our manufacturing base to make 
us more competitive in this world.
  But this bill's opposed by the National Association of Manufacturers. 
Those are large and small manufacturers, the little guys and the big 
guys. And the reason they're concerned is that the manufacturers are 
the ones that make things, make things with their hands. They make the 
exotic machines, and they're very much concerned about international 
piracy already going on and the fact that this will actually, this bill 
will actually lend itself to that.
  And I met this morning with people from the pharmaceutical industry, 
the biotech industry, the food industry, people concerned that 
processes involved in food preparations would be protected. And it was 
the most incredible group of people that I've ever seen come together 
on an issue in opposition.
  And one of the reasons that they're so opposed, and I'm just going to 
speak on one of those, it's on the damage issue, because there are so 
many other issues that are extremely important.
  We just found out that the administration now opposes H.R. 1908 
because, again, it limits the courts' discretion in determining the 
damages for infringement. Now, that's the damage issue. And I'm glad 
they came out with that, and that's important. And let's explain why.
  H.R. 1908 will reduce the value of U.S. patents because patent 
holders will no longer be able to receive the fair market value of 
their patent when infringed upon. It mandates this apportionment of 
damages be the pre-eminent factor and exclusion of all the other market 
factors considered in infringement cases.
  Current law, the law that's used today, states that juries should 
consider 15 factors, many of which are based on market forces and 
competitive pricing which allow the patent holder to receive the market 
value of the invention that was infringed upon. And that's always been 
the standard of damages. What is the value?
  They'll take a look at its incorporation into the device. What value 
does it add to it? What price would the holder of the completed product 
have paid for this?
  It has been established over a period of years of long series of 
judicial decisions, and it's not the legislature abandoning our role in 
this issue, but it's allowing the courts' working their way through 
technology changes to say these are the factors that we should take a 
look at.
  The change of law requires a judge to determine the economic value of 
the invention by subtracting the value of prior art. That means 
subtracting the value of other existing components in the invention. 
And this complex economic analysis is not something we want to leave 
the district court judges. Even Judge Michael, chief judge of the U.S. 
Court of Appeals for the Federal Circuit, agrees.
  But what's dangerous about this provision is that the bill allows a 
new set of damages, a new standard when it's never been tested. It's 
nothing more than a theory.
  Mr. ROHRABACHER. I would ask the gentleman, isn't it very clear when 
you're looking at that change, and there are about, as I was going 
through, six or seven changes, what was the purpose? What was in the 
mind of those people who wrote this into law and pushed for this change 
to be made?
  Mr. MANZULLO. The purpose was to diminish the value of the patent 
holder whose patent had been infringed upon. That's the problem.
  Mr. ROHRABACHER. There it is. The bottom line is, you go through this 
bill and there are about 20 different provisions like the damage 
provision that you're talking about, and each and every one of them is 
designed to weaken the protection and hurt the person who's the 
innovator.

[[Page H10222]]

  And what has been our greatest asset in the United States of America? 
Is that we protected those innovators.
  If the gentleman would yield for one moment, we do have a gentleman 
with us from Maine who would like to say a few words, and I would yield 
whatever time you would consume to Congressman Michaud from Maine.
  Mr. MICHAUD. Thank you very much, Congressman Rohrabacher. I really 
appreciate both yours and Congressman Manzullo's leadership on this 
patent issue. It's definitely an issue that's very important.
  Tomorrow, the House is expected to consider the Patent Reform Act of 
2007. I strongly oppose this bill. It's fundamentally flawed.
  There are nearly 300 large, small businesses, associations, 
universities, and labor unions from a wide diversity of industry and 
perspectives that have raised serious concerns about this legislation.
  H.R. 1908, the Patent Reform Act of 2007, as you heard earlier, has 
been described as, I quote from one of the quotes, ``the most sweeping 
changes in America's patent system since 1952.''
  Yet, the House Judiciary Committee reported H.R. 1908 to the floor of 
the House after holding only one public hearing this Congress and 
despite bipartisan and widespread cross-industry opposition.
  At a time when America's innovators, manufacturers, and laborers need 
strong patent protection to compete internationally, the net effect of 
this bill will be to weaken patent protection by making patents less 
reliable, easier to challenge and cheaper to infringe.
  H.R. 1908 is a severe threat to American innovation, American jobs 
and American competitiveness, and ought to be opposed.
  Hundreds of companies and organizations around the United States have 
written to Congress to raise serious objections about this legislation. 
And you heard some of them earlier: manufacturers, organized labor, 
biotech, nanotech, pharmaceuticals, small businesses, independent 
inventors, universities, economic development organizations, and the 
list goes on.
  Foreign companies are watching this legislation, and the reason why 
they are watching and eagerly looking at this legislation is they want 
to attack U.S. patents, as evidenced by the recent article in the 
Economic Times, India's second largest newspaper.
  We are compromising many of our industries by passing this 
legislation. Many stakeholders of the United States patent system have 
complained about the process surrounding the Patent Reform Act.
  Only one hearing has occurred on this bill in this Congress. Tomorrow 
we are prepared to vote on this bill without ample time to review the 
two manager's amendments designed to address some of the complaints 
that have been raised about this. And this actually is violating the 
pledge made at the beginning of this Congress to allow Members ample 
time to review legislation.
  Patent legislation is very complicated. It's very technical, and we 
need that ample time to review it. So at this point in time I would 
urge my colleagues to defeat the bill tomorrow and send it back to the 
Judiciary Committee, because we do have to make some changes in patent 
reform. I'm not ultimately opposed to it. We have to make changes. But 
this legislation is not the way to go.
  So with that, I want to thank the good gentleman for yielding time to 
me and, hopefully, we'll be able to get the problems corrected with 
this patent reform law.
  Mr. ROHRABACHER. I appreciate the support of the gentleman from Maine 
for this position. It lets us know that this is as bipartisan an issue 
as any one that I have ever been on. From day one it was Marcy Kaptur 
and others who have played a major role in this fight.
  We have unions who are traditionally supporting the Democratic Party 
who are very deeply involved in this fight, right alongside small 
businesses, which quite generally have been Republicans. So this goes 
across the board. This is an issue, because it is the American people 
who are going to suffer the consequences.
  We need to ask ourselves, if all of these groups are against it, who 
the heck is for this bill?
  And this is a power grab. This is a classic power grab, and it's 
being headed by companies that are basically controlled by billionaires 
from the electronics industry.
  Now, let's take a look at the electronics industry. What do they want 
to do?
  The electronics industry has a product that they have to include 
various elements that are created by innovators and by inventors. This 
isn't like the pharmaceutical industry or a small business person or 
the biotech industry or the nanotech industry. Usually, what we've got 
with those industries, we've got one new invention or one creative 
improvement that serves as the basis for their profit.
  No, when you're in the electronics industry you have a computer or 
some other type of piece of electronics that has three or four elements 
in it, and if an inventor comes up with something new, they either have 
to include it in their product, or they will be non-competitive.

                              {time}  1715

  Mr. MANZULLO. Will the gentleman yield?
  Mr. ROHRABACHER. I certainly will.
  Mr. MANZULLO. Which means that you manufacture, then you worry about 
the legals. You manufacture and sell; then you worry about the legals, 
whether or not you have infringed upon somebody's patent.
  And what this bill will do is this will encourage infringing because 
it greatly limits the damages to which the inventor would be entitled.
  Mr. ROHRABACHER. Right. So what we have got is the electronics 
industry knows that if there are new ideas that improve things, they 
will have to include it in their product in order to remain 
competitive. They just don't want to buy those new ideas. They don't 
want to pay for it. They want to be able to steal those ideas and 
minimize the consequences of that theft. That's the ultimate purpose 
for what is going on here.
  The electronics industry is different than these other industries. 
And as you can see by the wide scope and breadth of the opposition to 
this bill, the other industries know that this will be dramatically 
harmful to them. But it will permit the electronic industry 
billionaires to increase their profit.
  And, by the way, what does the electronics industry do now? They are 
the ones who, of course, go to China and build their factories in China 
and increase the technology capabilities of that country, which is, of 
course, run by a regime that is the world's worst human rights abuser. 
These are electronics companies, some of which have gone to the 
dictatorship in China and helped them sort of restructure their 
computer systems so they can track down religious dissidents who are 
trying to use the Internet. This is the type of people who are behind 
this bill.
  This power grab of the electronics industry would send even more 
technology to China and India. It would permit the people in Korea and 
Japan and others to be able to basically beat our inventors into the 
ground. And it has been our creative genius that has protected our 
country against these types of regimes in the past.
  In fact, as Americans, we don't match people man for man. We don't 
match our competition with muscle power and sweat. We can beat the 
competition in this modern world by making sure our people have a 
technological edge over their competitors. The working people in those 
other countries may work for a pittance, but American workers should 
have the competitive edge.
  People in the electronic industry who are behind this bill don't care 
one iota about those American workers or America's long-term 
competitiveness because they consider themselves multinational 
corporations.
  Well, I am here to say that the coalition of Democrats and 
Republicans on the floor of the House opposing this bill do not 
consider ourselves multinationalists or globalists. We consider 
ourselves patriotic Americans, and we have got to watch out for the 
interests of the American people.
  Mr. MANZULLO. Will the gentleman yield?
  Mr. ROHRABACHER. Yes, I will.
  Mr. MANZULLO. I appreciate that. We were with a company called

[[Page H10223]]

QUALCOMM today, 11,000 employees. They are opposed to the bill. It's 
just an interesting mix. And it appears that a lot of the people in 
favor of the bill have been some of the biggest infringers, and that is 
why some have called this the ``Infringers' Bill of Rights.'' I don't 
know if I would go that far.
  Mr. ROHRABACHER. I think that's a good description.
  Mr. MANZULLO. But I would like to just bring up one thing. The 
proponents of the bill are saying this is tort reform. And how could 
this be tort reform when the National Association of Manufacturers are 
on the other side, oppose it? It is not really tort reform. It is an 
all-out assault upon awarding reasonable damages to the inventor. That 
is done in two ways. One is through extreme limitation of damages, and 
the second is finding a way to lengthen the process of litigation.
  Now, another portion of this bill says, well, you shouldn't be able 
to shop for venue. And in America it has always been the tradition that 
you can bring a suit in any area, any county, any State where damage 
has occurred, and with a widely distributed product, you should be able 
to bring a lawsuit really wherever you want. And now, of course, the 
proposed reform says, well, you can't bring it in certain areas unless 
you have a certain nexus.
  Here's the problem: If you bring this in Chicago, the little guy, 
it's 5 years. If you bring it in Washington, D.C.'s ``rocket docket,'' 
it's called, you get it there in 1 year. Well, who is to gain by taking 
litigation and lengthening the time of it? It's the big guys versus the 
small guys. And if there had been a problem in these rocket dockets, 
and there are three or four across the country where you can move 
something fast, but if there had been a problem such as in Madison 
County, Illinois, which has been known for abuse of class action 
lawsuits, we would know it. But the judges in these rocket dockets 
willingly take the case because they have become experts on patent law. 
People trust their judgment, and they have come down in favor of the 
inventor as many times as they have come down opposed to the inventor.
  Thank you for your leadership.
  Mr. ROHRABACHER. I appreciate that.
  I think that we need to understand that there are so many parts of 
this bill, as Mr. Manzullo has pointed out, whether we are talking 
about damages or whether we are talking about challenges before and 
after the patent can be filed and hoops to be jumped through, each and 
every one of them designed basically to thwart the little guy, thwart 
the inventor. And, as I said, the group behind it, the electronics 
industry, their purpose, I believe, is to be able to promote the theft.
  But what do they say? What do the people who are the proponents of 
this legislation say is their motive? They claim that we have to have 
this patent reform in order to harmonize the patent laws of the United 
States with those of the rest of the world. Harmonization.
  Well, we have had the strongest patent protection of any country on 
this planet, which has guaranteed the success of our country and the 
high standard of living of our people. That is what we got from the 
strongest patent protection because we considered that strong 
protection of our rights the same protection that we would give for 
speech or freedom of religion or the other rights that we hold sacred.
  Well, if we have the strongest patent rights in the world, patent 
protections in the world, and if we want to harmonize them with the 
rest of the world, that means we are going to decrease the protection 
of our citizens.
  What would happen if we told our citizens in order to have harmony 
with the rest of the world's laws, we are going to meld them all 
together and harmonize our laws of freedom of speech and religion with 
the rest of the world and we would be told, well, maybe we could enjoy 
the freedoms now at the level of the people of Singapore or someplace 
like that? Well, there would be a revolt in this country if we tried to 
diminish the protections of our people to harmonize it with the rest of 
the world. But that is what they are doing for the economic freedom 
that we are talking about today. The economic rights of our people are 
being harmonized in terms of their ownership of their creation, their 
patents and innovations. They want to harmonize that with the rest of 
the world.
  Well, if there should be one standard for the rest of the world, let 
them harmonize with our laws. Let us bring up their standards. The 
Japanese and the Europeans do have a different standard on this, and 
that is why the Japanese are incapable of creating new technologies. 
They just take what we have and try to improve it.
  The fact is we have had the strongest patent protection rights in the 
world and we have thus had more innovation and a higher standard of 
living of any other people of the world. The common man here has had 
the opportunity that common people in other parts of the world do not 
have because of American technological superiority. We can't let those 
who profit already by setting up factories in China and other 
dictatorships that are totally contrary to our way of life to tell us 
they want to make even more money to be able to steal even the 
technology and the new ideas so that those factories over there will be 
able to produce the newest and cutting-edge technologies coming out of 
our innovators even before our innovators are able to commercialize it 
in the United States.
  Well, perhaps if you are a corporate elitist, the idea of harmonizing 
our rights with the rest of the world and harmonizing our property and 
bringing down certain levels of protection makes sense. If you are a 
corporate leader who lives behind a gated community and you are not 
affected by the fact that American workers are becoming less 
competitive because we are sending our technology overseas, no, you 
don't understand that because you are in the corporate boardroom. But 
the American people understand that. And that is why the unions are 
against this bill. That is why we have a broad coalition of Democrats 
and Republicans against H.R. 1908.
  What we have is a disguised destruction of the fundamental patent 
system that has been in place in our country for a long time, for over 
200 years. As I read, it was part of our own Constitution.
  Well, this attempt to steal the little guy's creation is not new to 
our country. Even with our patent protection, it has been a rough haul 
for our inventors.
  There is a statue in the Capitol of the United States. There are many 
statues in the Capitol. My favorite statue is right downstairs. It is 
the statue of Philo Farnsworth. Anyone visiting the Capitol, I would 
suggest, should go see the statue of Philo Farnsworth. It's there with 
the rest of the heroes of freedom and a bunch of politicians who have 
made statues to themselves. Philo Farnsworth was the quintessential 
American inventor, individual inventor. He was a poor person, of 
course, but had limited education, probably a master's degree. I'm not 
really sure what his education level was. But he came from a rural area 
in Utah, and through his own creative instincts and his understanding 
of physics and other theories and electronics, he was able early in the 
last century to fully understand how to create a picture tube. He was 
actually the ``father of television.''

  RCA at that time had spent hundreds of millions of dollars, hundreds 
of millions of dollars investigating, doing research, trying to find 
the secret of how you could turn radio waves into a television tube. 
They never were successful.
  He discovered it. He was the one who had the breakthrough idea of how 
it could be done. Philo Farnsworth. And he wrote to RCA and said, I 
have discovered this. I understand you are doing a lot of research. I 
know how to do it.
  And the head of RCA's research department came out all the way on a 
train to see Philo, and he went through his small laboratory and showed 
him what he had discovered. And it was with an understanding that 
Philo, perhaps a very naive understanding, was going to work with RCA 
and develop this picture tube so all of the American people would have 
now a whole new way of life with the television set. And television has 
changed our way of life.
  The guy from RCA took all the notes, and he sped away on the train 
back to New York, saying, ``We're going to get right back to you so we 
can get moving on the development of this technology.''

[[Page H10224]]

  Well, Philo waited and he waited, and there never was a phone call 
from New York. And guess what. He read in the paper a few months later 
that RCA had made a huge discovery, and it was the discovery of how to 
produce the television picture tube and how they had had this 
incredible breakthrough in their laboratories.
  Philo Farnsworth fought for 20 years to get recognition that he was 
indeed the inventor of the picture tube. It was an incredible fight. 
David Sarnoff, an arrogant head of RCA, a corporate leader who could 
give a darn about little guys like Philo Farnsworth, ended up doing 
what? Instead of paying royalties and recognizing and giving credit to 
this wonderful inventor, he decided to smash him like a bug, decided to 
fight him and use every bit of the treasure that was available to RCA 
to beat this guy into submission, this little guy who thought he had 
the right to challenge the great David Sarnoff.

                              {time}  1730

  It went all the way to the Supreme Court. And God bless America, the 
Supreme Court decided for little Philo Farnsworth against one of the 
great arrogant corporate giants in America, David Sarnoff.
  Unfortunately, Philo Farnsworth, by that time most of the patent time 
had run out, he never made much money from his great discovery that 
changed the world we live in. But I will tell you, today, as you go 
through the Nation's Capitol, you can take a look at the statue of 
Philo Farnsworth right here and you can understand that we pass laws 
here to make sure the rights of the little guy are protected, even when 
that little guy is in a fight with a powerful interest like RCA. David 
Sarnoff does not have a statue in this Capitol. So let us note this, 
that in this Capitol is the statue to the little guy and to the rights 
of the little guy.
  Tomorrow we will face a bill, H.R. 1908, that is designed to smash 
down the little guys, the inventors, so that arrogant corporate giants 
can steal their technology, corporate giants who do business overseas 
who consider themselves globalists and multi-nationalists taking 
American technology overseas. That's what is at hand. That is the issue 
that is being discussed.
  Mr. Speaker, I would call on my colleagues to join me and Marcy 
Kaptur and members of the Democrat Party and Republican Party who are 
watching out for the little guy tomorrow. Join with the universities 
and the unions and other corporate interests and manufacturers in the 
United States who are trying to protect intellectual properties so they 
can compete overseas. Join us in defeating the Steal American 
Technologies Act II, H.R. 1908.
  And with that, I yield back the balance of my time.

                          ____________________