[Congressional Record Volume 159, Number 172 (Thursday, December 5, 2013)]
[House]
[Pages H7511-H7556]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INNOVATION ACT
General Leave
Mr. GOODLATTE. 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. 3309 under
consideration.
The SPEAKER pro tempore (Mr. Hultgren). Is there objection to the
request of the gentleman from Virginia?
There was no objection.
The SPEAKER pro tempore. Pursuant to House Resolution 429 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the state of the Union for the consideration of the bill, H.R. 3309.
The Chair appoints the gentlewoman from North Carolina (Ms. Foxx) to
preside over the Committee of the Whole.
{time} 0915
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the state of the Union for the consideration of the bill
(H.R. 3309) to amend title 35, United States Code, and the Leahy-Smith
America Invents Act to make improvements and technical corrections, and
for other purposes, with Ms. Foxx in the chair.
The Clerk read the title of the bill.
The CHAIR. Pursuant to the rule, the bill is considered read the
first time.
The gentleman from Virginia (Mr. Goodlatte) and the gentleman from
Michigan (Mr. Conyers) each will control 30 minutes.
The Chair recognizes the gentleman from Virginia.
Mr. GOODLATTE. Madam Chairman, I yield myself such time as I may
consume.
Today, we are here to consider H.R. 3309, the Innovation Act. The
enactment of this bill is something I consider central to U.S.
competitiveness, job creation, and our Nation's future economic
security. The bill takes meaningful steps to address the abusive
practices that have damaged our patent system and resulted in
significant economic harm to our Nation.
During the last Congress, we passed the America Invents Act. Many
view the AIA as the most comprehensive overhaul to our patent system
since the 1836 Patent Act. However, the AIA was, in many respects, a
prospective bill. The problems that the Innovation Act will solve are
more immediate and go to the heart of current abusive patent litigation
practices.
This bill builds on our efforts over the past decade. It can be said
that this bill is the product of years of work. We have worked with
Members of both parties in both the Senate and the House, with
stakeholders from all areas of our economy, and with the administration
and the courts.
To ensure an open, deliberative, and thoughtful process, we held
several hearings and issued two public discussion drafts in May and
September of this year, which led to the formal introduction of the
Innovation Act in October. I strongly believe that the Innovation Act
takes the necessary steps to address abusive patent litigation.
Abusive patent litigation is a drag on our economy. Everyone from
independent inventors to start-ups to mid-and large-sized businesses
face this constant threat. The tens of billions of dollars spent on
settlements and litigation expenses associated with abusive patent
suits represent truly wasted capital--wasted capital that could have
been used to create new jobs, fund R&D, and create new innovations and
technologies that ``promote the progress of science and useful arts.''
And that is what innovation is really about, isn't it? If you are
able to create something, invent something new and unique, then you
should be allowed to sell your product, grow your business, hire more
workers, and live the American Dream.
The Innovation Act puts forward reasonable policies that allow for
more transparency and brings fundamental fairness to the patent system
and the courts.
The Innovation Act is designed to deal with systemic issues
surrounding abusive patent litigation as a whole, and includes a number
of provisions designed to ameliorate this significant problem.
Within the past couple of years, we have seen an exponential increase
in the use of weak or poorly granted patents against American
businesses with the hopes of securing a quick payday. Many of these
abusive practices are focused not just on larger companies but against
small and medium-sized businesses as well. These suits target a
settlement just under what it would cost for litigation, knowing that
these businesses will want to avoid costly litigation and probably pay
up. The patent system was never intended to be a playground for
litigation extortion and frivolous claims.
The Innovation Act contains needed reforms to address the issues that
businesses of all sizes and industries face from patent troll-type
behavior, while keeping in mind several key principles, including
targeting abusive behavior rather than specific entities, preserving
valid patent enforcement tools, preserving patent rights, promoting
invention by independents and small businesses, and strengthening the
overall patent system.
Congress, the Federal courts, and the PTO must take the necessary
steps to ensure that the patent system lives up to its constitutional
underpinnings, and let me be clear about Congress' constitutional
authority in this area. The Constitution grants Congress the power to
create the Federal courts, and the Supreme Court has long recognized
that the prescription of court procedure falls within the legislative
function.
To that end, the Innovation Act includes heightened pleading
standards and transparency provisions. Requiring parties to do a bit of
due diligence up front before filing an infringement suit is just plain
common sense. It not only reduces litigation expenses, but saves
[[Page H7512]]
the courts' time and resources. Greater transparency and information
make our patent system stronger.
The Innovation Act also provides for more clarity surrounding initial
discovery, case management, fee shifting, joinder, the common law
doctrine of customer stays, and protecting IP licenses in bankruptcy.
Further, the bill's provisions are designed to work hand-in-hand with
the procedures and practices of the Judicial Conference, including the
Rules Enabling Act and the courts, providing them with clear policy
guidance while ensuring we are not predetermining outcomes and that the
final rules and the implementation in the courts will be both
deliberative and effective.
Today, we are taking a pivotal step toward eliminating the abuses of
our patent system, discouraging frivolous patent litigation, and
keeping laws up to date. The Innovation Act will help fuel the engine
of American innovation and creativity, help create new jobs, and grow
our economy.
I reserve the balance of my time.
Mr. CONYERS. Madam Chair, I yield myself such time as I may consume.
Of course, we are here to correct the problem of patent trolls. We
are, unfortunately, faced with a measure, H.R. 3309, which goes well
beyond the issue of trolls and would, unfortunately, weaken every
single patent in America.
I say this for several reasons.
First, H.R. 3309 fails to respond to the single most important
problem facing our patent system today--the continuing diversion of
patent fees.
Nearly $150 million in badly needed user fees have been diverted in
fiscal 2013. It is estimated that $1 billion in fees have been diverted
in the last two decades. This cannot go on.
Next, the bill's heightened pleading requirements will deny
legitimate inventors access to the court in several critical respects:
They will have an unfair impact against patent holders across the
board;
They are drafted in a one-sided manner;
They will prolong litigation;
They are unnecessary because the courts are already addressing
pleading standards.
The next thing I would bring to your attention is the bill's fee-
shifting requirements will favor wealthy parties and chill meritorious
claims.
I am not surprised that the other side would be advancing something
like this, but it is shocking because the provision is drafted in an
overly broad manner and will apply well beyond patent infringement
actions.
The next thing that I would point out is that the bill's discovery
limitations are counterproductive. Limiting discovery prior to holding
hearings to construe patent claims and determine their scope will delay
litigation and lead to even greater expenses for the parties.
Finally, H.R. 3309 mandates that the Federal judiciary adopt a series
of new rules and judicial changes that will make it more difficult for
inventors to protect their patent rights.
These changes are strongly opposed by the Judicial Conference of the
United States, the principal policymaking body that Congress
established to administer our Federal court system.
I have spent my entire career on Judiciary to help foster an
independent judiciary that can resolve disputes between parties on a
fair and dispassionate basis based on an evenhanded set of rules. There
is little doubt that the Federal judiciary, as evidenced by its
exceedingly deliberative rulemaking process, is in a far better
position than the entire Congress to set the proper rules for their own
courtrooms on these matters.
By unbalancing the patent system, we send a signal to inventors--the
very people doing the research and developing the cures that benefit us
all every day--that their inventions are not worthy of full legal
protection. This means that the next cure for cancer or technological
breakthrough may be stymied and perhaps never come, or they will be
developed abroad rather than in the United States.
We can and should respond to the problem of patent trolls in a
direct, but fair and targeted, manner; but we must not do so in a way
that punishes our innovators and inhibits innovation.
Madam Chair, I reserve the balance of my time.
Mr. GOODLATTE. Madam Chairman, it is now my pleasure to yield 1
minute to the gentleman from North Carolina (Mr. Holding), a
distinguished member of the Judiciary Committee.
Mr. HOLDING. Madam Chairman, I rise in support of H.R. 3309, the
Innovation Act, because it is crucial to preserving the integrity of
our Nation's innovators and creators.
One of the constitutional responsibilities of Congress is to
``promote the progress of science and useful arts.'' This legislation
does just that by deterring abuse of our patent litigation system.
As a United States Attorney, I saw how patent trolls abuse our patent
litigation system by acquiring patents that they have no intention of
using for anything other than their own monetary gain. Patent trolls
sue companies for allegedly infringing on patents they had no business
acquiring in the first place.
The Innovation Act, which I am proud to cosponsor, makes it more
difficult for patent trolls to form a case. It also aligns fee shifting
in patent cases, which discourages frivolous cases.
Madam Chairman, there is a lot of opportunity for job creation in the
technology sector. The Innovation Acts is essential to protecting these
technology companies from fraud and abuse.
I want to thank Chairman Goodlatte for his leadership on this issue.
Mr. CONYERS. Madam Chair, I yield 3 minutes to the gentleman from
Kentucky (Mr. Massie).
Mr. MASSIE. Madam Chair, I want to briefly tell you about a young boy
who grew up in modest surroundings in rural Kentucky.
Although he had no money, he was inspired to invent. So he collected
junk to build his inventions--broken clocks, radios, vacuum cleaners.
Who knows, maybe one day he could assemble this junk into an invention
that would allow him to pull himself out of his humdrum environment.
He was inspired to invent by stories of Edison, Ford, and Tesla. In
the seventh grade, he invented this robot arm that you see here, which
won him a prize at the science fair. He even invented a flower pot that
would water itself for his grandmother.
He went on to college, where he met other inventors, inspired, again,
not just by creativity but by the fact that they can make an honest
living by improving the lives of others.
One of his inventor friends invented a robot that vacuums floors for
millions of people now. This boy went on to invent a touch interface
for computers, obtain 29 patents, raise venture capital, and create
dozen of jobs.
His story is only possible in America, where our robust intellectual
property system and judicial system work together to protect the
property rights of inventors.
{time} 0930
Knowing this and relying on this, many inventors dedicate their
entire lives to inventing things that will improve and extend the lives
of others.
Today's patent reform bill is a serious threat to American inventors.
That is why inventors are urging us not to pass this bill today. It
will extinguish creativity and invention in America.
Recklessly weakening the patent system, as this bill does, will
deprive inventors of income and a livelihood. They will pursue other
careers. As the role models for young inventors quietly fade into
history, fewer young students will pursue invention. A decade from now,
Congress will further lament the lack of interest among the next
generation in science, engineering, technology, and math, arrogantly
unaware that it was Congress that killed that interest today with this
bill, should it pass.
How do I know this boy's story so well? How can I anticipate the
unintended consequences of this bill? I am the boy in this picture, and
that was my story.
It would be shameful and wrong to kick out the ladder from our next
generation of inventors, as this bill would do; but if my story doesn't
compel you, please listen to the words of Dean Kamen. Pick your
favorite inventor in history--Tesla, Edison--and Dean Kamen is that
inventor of our time. Perhaps you know him as the inventor of the
Segway, but he has invented a
[[Page H7513]]
dialysis machine, an insulin pump, and a self-balancing wheelchair.
These inventions have improved the lives of millions of people all over
the world.
Here is what Mr. Kamen has to say about this very legislation:
Adding uncertainty and cost to getting and maintaining
patents will be the largest single cause of the decline of
innovation and, therefore, of the economy in this country
that I've seen in my lifetime.
Mr. Kamen doesn't just invent. He inspires the next generation to
invent with his America FIRST Robotics Competition that millions of
students have participated in. He inspires the next generation to
invent with his robotics contest.
The CHAIR. The time of the gentleman has expired.
Mr. CONYERS. Madam Chair, I yield the gentleman an additional half
minute.
Mr. MASSIE. I am scheduled to speak at two of these robotic contests
in Kentucky this weekend, not to inspire these kids to be politicians,
but to inspire them to be inventors. Should this bill pass, should we
kick the ladder out from our young inventors, it is going to be hard
for me to face them Saturday.
I urge my colleagues to listen to the inventors of America, who are
pleading to them to oppose this bill.
Mr. GOODLATTE. Madam Chairman, I am pleased to yield 1 minute to the
gentleman from Texas (Mr. Farenthold), who is a distinguished member of
the Judiciary Committee.
Mr. FARENTHOLD. Thank you very much.
Madam Chairman, the patent system is a vital part of our national
identity. It stimulates American ingenuity, and it enhances our global
competitiveness stance.
Traditionally, patent holders have asserted their patents against
those who produce infringing technologies, but in recent years, abusive
patent litigation--patent trolling--has ballooned as companies have
emerged solely to buy questionable and vaguely defined patents and to
assert them against thousands of end users in the hope of extracting
licensing fees. Right now, the patent trolls are going after hotels and
restaurants. It is the reason you don't have Wi-Fi in more restaurants.
Guess what? This is legalized extortion, and H.R. 3309 will
significantly curb this problem. Though I have some problems with
section 9(c) in the PTO's ability to apply the broadest reasonable
interpretation claim construction standard in post grant reviews, this
bill is a delicate compromise between competing interests.
I hope we can deal with the 9(c) problem in the future, but overall,
this is a great bill. I am not going to let the perfect get in the way
of the doable. I hope my colleagues who have minor objections to the
bill don't do the same. We have got to stop this abusive patent
trolling litigation, and this bill will do it. I urge my colleagues to
support it.
Mr. CONYERS. Madam Chair, I am pleased now to yield 2 minutes to the
gentleman from New York, Jerry Nadler, a senior member of the Judiciary
Committee.
Mr. NADLER. I thank the gentleman for yielding.
Madam Chairperson, I rise in reluctant support of this bill, the
Innovation Act.
The bill addresses the issue of patent trolls suing large companies,
small businesses, and retailers over vague patents and using the cost
of litigation as a weapon of extortion to secure settlement fees. The
bill is real; the problem is real; and addressing it is important.
The bill proposes to address the problem by providing end user
defendants the ability to switch the suit to the manufacturer when
confronted with patent trolls; it increases the transparency of patents
and of the companies that own them; and it asks the judicial conference
to review and amend certain discovery rules. These are reasonable
changes to the current law which will help reduce the burden of patent
trolls on our economy.
Unfortunately, the bill does not deal with the problem of the
diversion of user fees from the Patent Office. Unfortunately also, the
authors of the bill have grafted the Republican agenda of so-called
``tort reform'' onto the bill. These provisions may severely limit the
ability of real inventors and of those with meritorious patent claims
to obtain justice in our courts. They are deeply troubling and ought to
be addressed by amendments to the bill now and improvements to the bill
when it is taken up by the Senate.
The most troubling provision is the ``loser pays'' provision. I
oppose ``loser pays'' provisions in general and in this context as
well. The reason is one of fairness. I don't believe that only large
corporations or the wealthiest members of society should have access to
justice. Already, the threat of the enormous cost of litigation may act
to prevent individuals from pursuing even the most meritorious civil
liability claims. For most individuals and small businesses, the
financial risk of having to pay the other side's costs and legal fees
as well is one too great to bear no matter how valid the claim.
It is simply not fair to unnecessarily punish individuals with
serious and meritorious claims for seeking justice. Keep in mind, a
person or a business can have a legally legitimate dispute regarding
fact and law and, yet, can still ultimately lose the case. They
shouldn't be unduly punished for trying to protect their interests in
court. Furthermore, we don't want to create a situation in which
experienced corporate defendants with enormous resources and expert
legal talent can bully injured plaintiffs into unfair settlements due
to the risks associated with losing a potentially successful case.
The CHAIR. The time of the gentleman has expired.
Mr. CONYERS. I yield the gentleman an additional half minute.
Mr. NADLER. Thank you.
I have other concerns as well when it comes to some of the bill's
modifications to the pleadings standards, but we must deal with the
real problem of patent trolls exploiting the current legal system for
illegitimate purposes. We must disrupt the business model of the patent
troll. We must prevent the extortion of small businesses across
America.
I will support the bill today, but I want to encourage our friends in
the Senate to do a better job in balancing the competing interests. I
urge them, in particular, to insist on their version of the bill and to
not allow the House's ``loser pays'' provision into the final bill that
we vote on in the conference report.
Mr. GOODLATTE. Madam Chairman, at this time, it is my pleasure to
yield 2 minutes to the gentlewoman from Washington State (Ms. DelBene),
a distinguished member of the Judiciary Committee.
Ms. DelBENE. Thank you, Mr. Chair.
Madam Chairman, from the Judiciary Committee's examination of abusive
patent litigation this year, it is clear that there is a need for
legislative action. This issue has harmed companies large and small,
from big tech companies to small retailers, restaurants and credit
unions, and in recent years, even our public transit agencies have been
targeted by these so-called ``patent trolls.''
In my home State of Washington, King County Metro was hit with a
lawsuit in 2011 from ArrivalStar, a company that claimed infringement
of a patent that was so broad that it could potentially cover any
system that tracks a vehicle. With this lawsuit, King County's
innovative bus tracking technology and a popular mobile application
called ``OneBusAway,'' which relies on Metro's data, was threatened.
Even if there were a strong case to be made for challenging the
patent's validity, fighting a suit like this can run into the millions
of dollars, all at taxpayer expense. So King County had to settle with
ArrivalStar, costing taxpayers $80,000.
King County was not alone. At least 11 transit systems settled with
ArrivalStar in response to lawsuits over bus tracking systems rather
than undertake expensive and time-consuming litigation.
This kind of litigation abuse does a disservice to the U.S. patent
system and to our innovation economy. In the case of ArrivalStar, it
harmed taxpayers in King County and many other agencies across the
country.
Because of the widespread impact of abusive litigation like this,
there is broad support across industry and among public interest groups
for measures that reduce the financial incentive for bad actors to
bring predatory patent suits, measures such as: curbing the excessive
costs of litigation and
[[Page H7514]]
discovery abuse, making patent cases more efficient, and requiring
plaintiffs to be precise in their claims of infringement. The
Innovation Act would do all of these things, and it does so by
targeting abusive behaviors rather than singling out any particular
type of patent holder or business model.
I am pleased to support this bill today, but I also believe we must
continue to make improvements to the bill as it moves forward in the
legislative process. I will also be supporting several amendments on
the floor today, and I will continue to work with my colleagues in both
Chambers to get legislation passed that strikes the right balance in
protecting and strengthening our patent system.
Mr. CONYERS. Madam Chair, I am pleased to yield 1\1/2\ minutes to the
gentleman from Vermont (Mr. Welch).
Mr. WELCH. Madam Chair, patent trolls are not about protecting
patents. They are about trolling for easy money at the expense of
hardworking people. Patent trolling is a total and complete abuse of
the patent system and is a total rip-off of hardworking people. Worst
of all, it is a complete abuse of good people who are trying to do good
things in their communities. Let me give you a couple of examples.
In Vermont, MyWebGrocer is a Web-based company--innovative--located
in Winooski, Vermont, with over 180 employees. They have experienced
six patent troll attacks. One of the trolls claimed to have a patent--
and get this--on surfing the Web with a mobile device. This was a
stickup.
Another completely outrageous example is of a Vermont nonprofit. It
assists individuals with developmental disabilities. This nonprofit was
targeted by a patent troll that was demanding payment for a supposed
infringement on scanning technology. Can you imagine what it is like
for a small nonprofit, doing good work, to get a letter that is
essentially a stickup? That is what it is.
What these businesses and nonprofits then have to decide is: Do they
pay the bounty or do they fight?
This legislation is definitely needed so that our nonprofits and our
small businesses can get on with the good work they are doing without
the threat of abusive patent trolling.
Mr. GOODLATTE. Madam Chairman, at this time, it is my pleasure to
yield 1 minute to the gentleman from Pennsylvania (Mr. Marino), the
vice chairman of the Courts, Intellectual Property, and the Internet
Subcommittee.
Mr. MARINO. Thank you, Mr. Chairman.
Madam Chairman, I rise in support of H.R. 3309, the Innovation Act.
Each day, all across the United States, small businesses and
entrepreneurs are receiving abusive letters that insist the recipient
has somehow violated a patent. He or she is left with the option of
complying with the letter's demands, such as by sending a check for
$50,000--and all will be forgotten--or taking it to court, which could
cost millions of dollars and put these businesses out of business. In
2011, patent trolls cost the American economy $29 billion.
I want to skip the notes and go right to commonsense legislation.
This is what it is:
A veteran from Afghanistan came in to see me. He saved his money that
he had earned while protecting this country. He has got a little laptop
that has communications with his printer, and a troll is suing him,
saying he violated the patent. My computer at home talks to my printer,
and my kids' computer at home talks to my printer, so we must be
violating some patent of some sort.
This is abusive legislation. It is putting our small business
entrepreneurs out of business. I urge my colleagues to support this.
Mr. CONYERS. Madam Chair, I reserve the balance of my time.
Mr. GOODLATTE. Madam Chairman, may I ask how much time is remaining
on both sides?
The CHAIR. The gentleman from Virginia has 20 minutes remaining, and
the gentleman from Michigan has 18 minutes remaining.
Mr. GOODLATTE. At this time, Madam Chairman, it is my pleasure to
yield 2 minutes to the gentleman from California (Mr. Cardenas).
Mr. CARDENAS. Madam Chair, I rise today in support of the bipartisan
Innovation Act, which makes important reforms to the U.S. patent system
in order to curb abusive litigation.
I have heard from businesses of all sizes and from all industries in
my district about the added burden faced by too many companies at the
hands of patent assertion entities, or patent trolls. Resources should
be better spent on business expansion, on job creation, on the
development of new tools or services, or on improved infrastructure
instead of being used to pay settlements or even unnecessary licenses.
The enactment of the Innovation Act would go a long way towards solving
this problem.
We must support American innovation, job creation and economic
growth. I urge my colleagues to vote ``yes'' on H.R. 3309, the
Innovation Act. As a former small business owner myself, one of the
things that can hinder job growth in any small business or in any
community is unnecessary and frivolous lawsuits.
{time} 0945
Mr. CONYERS. Madam Chairman, I reserve the balance of my time.
Mr. GOODLATTE. Madam Chairman, at this time, it is my pleasure to
yield 1 minute to the gentleman from New York (Mr. Jeffries), a
distinguished member of the Judiciary Committee.
Mr. JEFFRIES. I thank the chairman for his stewardship and the
ranking member for his legitimate expressions of concern.
Madam Chairman, this bill is a work in progress, but it is a
meaningful step in the right direction as it relates to dealing with a
patent troll problem that is adversely impacting small businesses,
start-up companies, tech entrepreneurs, innovators, and inventors in
New York City and all across the country.
In our judicial system, we must ensure that outcome is determined on
the basis of the merits of a claim and not the high cost of litigation
in the patent context. When the latter occurs, innovation is hurt.
We must also jealously guard the ability of legitimate patent-holders
to vindicate their rights in court. With respect to that concern, there
is still significant work to be done in the Senate, particularly as it
relates to section 285. But notwithstanding that concern, this bill,
the Innovation Act, represents a solid foundation upon which to address
the patent troll dynamic, which almost everyone in this Chamber agrees
is a significant problem.
For that reason, I urge my colleagues to vote ``yes.''
Mr. CONYERS. Madam Chairman, I am pleased to yield 3 minutes to the
distinguished gentleman from California (Mr. Rohrabacher).
Mr. ROHRABACHER. Madam Chairman, we have certainly heard a lot about
trolls, haven't we? Maybe we should understand exactly how that word
came to be used in this debate.
Top executives from one of the huge electronics mega-companies, these
international corporations, were sitting around one day. One of them
happened to tell me about the conversation they had, which is, How do
we demonize the small inventor who is coming at us because we are
infringing on his patents? How do we do that? We can't attack the small
inventor because people know that is where the progress of the United
States comes from, is our independent inventors. We can villainize the
lawyers who represent those small inventors.
They went around the room, and this executive tells me about this
conversation: Well, what should we call them? What is a sinister, evil
sound that can get away from the fact that we don't have our own
arguments and our arguments against this don't stand up; that we are
really attacking the little guy's ability to prevent us from stealing
his patent? What word can we use that can get people so they won't see
that? Let's call them ``trolls.''
Well, the guy who was talking to me, who was in the conversation, he
was an executive from one of these multi-national corporations, he
said, Well, I suggested patent pirates, but trolls sounded so much more
sinister.
That is what we hear today. Every time you hear the word ``troll,''
what you are hearing is a manipulation of this debate by some very
special interest, powerful interest, who wants to steal from the
independent inventor. Everything in this bill that we are talking about
trolls actually impacts on America's independent inventors in a
dramatic way.
[[Page H7515]]
This is the greatest attack, the biggest attack, on the independent
inventor in the 25 years that I have been a Member of Congress. The
fact is, these big multi-national corporations are infringers. Every
one of the big corporations behind this bill that is trying to have us
ram this through the Congress has been found guilty of multiple
infringements against small inventors. So they are going to get us--oh,
no. We are going to pass rules in the name of stopping the trolls,
which are really going to undercut the small inventor in this country.
This is a disaster. This is the anti-innovation bill. This is the let's
kowtow to these multi-national electronic corporations like Google,
that have poured lots of campaign donations into this issue on Capitol
Hill in the last few years. No, let's watch out for the little guy.
What we have are the Philo Farnsworths or the Edisons, the people who
actually came up with the changes that have made America secure, made
us prosperous, made our people competitive with cheap labor overseas
because we have got the technology. Let's make sure that we don't smash
this generation's Edisons and Philo Farnsworths.
I oppose this bill.
Mr. GOODLATTE. Madam Chairman, I yield myself 30 seconds to affirm
what we have said from the outset: this bill is designed for the little
guy, both the innovator, the inventor, and the end-user small business
that are getting subjected to these trolling attacks.
No innovator, no inventor, no one who brings a lawsuit to perfect
their claim should fear this legislation unless their claim has no
reasonable basis in law or fact. It is only then that they would be
disadvantaged. In fact, most of the provisions in this bill are
designed to lower the cost of litigation.
The big guys can pay all they need to for litigation. The little guys
can't afford to. By lowering the cost of litigation, we are going to
create greater opportunity, both for the innovators to pursue their
good claims and for the little guys on the receiving end who get these
outrageous demand letters on the other side who are having to pay
outrageous costs or simply pay money.
At this time, Madam Chairman, I am pleased to yield 2 minutes to the
gentleman from California (Mr. Issa), a distinguished member of the
Judiciary Committee.
Mr. ISSA. Madam Chairman, my colleague from California a few moments
ago spoke eloquently on behalf of the small inventor, but he didn't
speak for me, and I am a small inventor.
When I patented my first product, all I had were a couple of
employees and an idea. I presented a product that I really wanted to
make to a company that I thought would buy it, and then I raced down to
protect my rights and succeeded. Ultimately, I was paid.
I know very well what you do if you assert patent infringement if you
want to prevail. You look at the competitor's product; you take some
due diligence. All this legislation is trying to do, and do well, is to
put some teeth into what my colleague from California disparaged: the
trolls who will simply surf the Internet and send out litigation
alleging patent infringement with products they have never looked at,
understood, nor do they know if they fall under their patent.
I have received damages under the rule 11 sanction. I know what it
takes to share a completely frivolous case. I have prosecuted my own
patents against infringers. I know what you should do before you assert
to somebody ``patent infringement.''
This bill does one thing very well. It puts a little bit of teeth
finally back into what the trolls use as a tool: file a lawsuit and
collect an amount of money because people don't want to spend it on
litigation.
Just for once I would like us to understand this is not sponsored by
the big guys. In fact, the little guy starting a company, who gets a
letter or a suit from a troll, is the person that this will protect. I
know this firsthand from more than three decades of being an inventor.
Mr. Chairman, I thank you for your leadership on this issue.
Mr. CONYERS. Madam Chairman, I am pleased to yield 3 minutes to the
distinguished gentleman from Georgia (Mr. Johnson).
Mr. JOHNSON of Georgia. Madam Chairman, I think it is time this
morning to reveal a little bit of truth.
We have had reports of trolls just running through the marketplace of
America. Trolls--you know those, the ones that hang out under bridges
and scare you when you were a child. A troll is just something that is,
oh boy, it is to be avoided. So all patent plaintiffs bringing actions
to protect their patents, we are now calling them trolls. That is not
true; that is not accurate. In fact, it is very inaccurate.
Only 5 percent of the patent cases that are filed in the courts of
this country could be considered done in bad faith. So you could call
those plaintiffs, I suppose, patent trolls. But 5 percent of the
litigation does not equate to ``we are being overrun by patent
trolls.'' That is just not correct.
There is a problem with abusive litigation. So how do you get at
that? How do you--without closing the courthouse door on plaintiffs
seeking to assert their rights to their patents, and those plaintiffs
tend to be small entities, mom-and-pop inventors back in the garage or
down in the basement, some 28-year-old ex-Harvard junior who dropped
out and comes up with the next thing that explodes in the technology
field--how do we protect those folks who are trying to honestly protect
their patents?
I submit that H.R. 3309 goes way beyond what is necessary. It also
has some constitutional implications. The Rules Enabling Act was passed
by Congress back in 1934. That Rules Enabling Act was a very wise and
considered piece of legislation. It recognized the fact that Federal
Courts would be better off, and the Federal body of law would be better
off, if we leave it to the Federal Courts to determine their rules of
procedure.
The CHAIR. The time of the gentleman has expired.
Mr. CONYERS. I yield an additional minute to the gentleman from
Georgia.
Mr. JOHNSON of Georgia. So prior to 1934, there was something called
the ``conformity principle,'' which held that Federal Court procedures
should be in accordance with the States wherein those Federal Courts
sat; but that proved to be unworkable, so the rules enabling clause
went into effect. Since then, we have left it to the Federal judiciary,
through the Judicial Conference, to promulgate rules of procedure in
both civil and criminal cases, and it has worked well.
Now we have section 6 of this ``patent troll act'' that imposes upon
our judicial rules of procedure. These rules have not been recommended
by the Judicial Conference. In fact, the Judicial Conference, led by
Chief Justice Roberts, is opposed to this change. Therefore, I think on
constitutional grounds this should be defeated.
Mr. GOODLATTE. Madam Chairman, at this time, it is my pleasure to
yield 3 minutes to the gentleman from Nebraska (Mr. Terry) for the
purpose of engaging in a colloquy with the gentleman from Utah (Mr.
Chaffetz) and myself.
Mr. TERRY. Madam Chairman, I rise for the purpose of entering into a
colloquy with my friend from Utah joining with me.
Chairman Goodlatte, I want to thank you for your attention to the
very serious problem of patent assertion entities, otherwise known as
``patent trolls'' here today.
On November 14, the House Energy and Commerce Committee held a
hearing entitled: ``The Impact of Patent Assertion Entities on
Innovation and the Economy.'' We heard from a variety of witnesses from
industries including the food, hospitality, and tech, all of whom had
been targeted by vague, unfair, and deceptive patent troll demand
letters.
That hearing revealed significant economic harm to Main Street
businesses in the economy caused by such patent troll demand letters.
These entities engage in abusive practices that often target small
businesses because they don't have the resources to fight back.
At the markup for the Innovation Act, Mr. Chaffetz offered an
amendment that resulted in a sense of Congress in the bill before us
today. That sentence says:
It is an abuse of the patent system and against public
policy for a party to send out a purposely evasive demand
letter to end-users alleging patent infringement.
{time} 1000
As chairman of the House Energy and Commerce Committee, Subcommittee
[[Page H7516]]
on Commerce, Manufacturing, and Trade with jurisdiction over these type
of consumer abuses, I join with your sentiments. We understand that
time is of the essence.
I yield to the gentleman from Utah (Mr. Chaffetz) at this point.
Mr. CHAFFETZ. I thank Chairman Terry for his good leadership and work
on this, and certainly Chairman Goodlatte for bringing this bill; and
knowing that you, Mr. Terry, are working on a bill that I am going to
wholeheartedly support.
Madam Chairman, we have received support for this approach from many
business groups, including the National Retail Federation, the National
Restaurant Association, the App Developers Alliance, the Direct
Marketing Association, the American Association of Advertising
Agencies, the Association of National Advertisers, the Food Marketing
Institute, the Mobile Marketing Association, the National Association
of Convenience Stores, the National Grocers Association, the American
Hotel and Lodging Association, just to name a few. These represent
hundreds of thousands of businesses and millions of employees across
the country.
It would be my hope that the House would expeditiously take up any
demand letter legislation reported out of the House Energy and Commerce
Committee under your leadership. I support it.
Mr. TERRY. To that end, the Energy and Commerce subcommittee intends
to proceed through regular order, as soon as it is practicable, to
examine both the problem of vague patent demand letters and potential
solutions the Federal Trade Commission could implement. We took another
step just recently in a hearing with our FTC commissioners this week on
the patent trolls demand letter issues.
Mr. GOODLATTE. Madam Chairman, I thank the gentleman from Nebraska
and the Energy and Commerce Committee for their good work on this
issue. He has my commitment to work on this important issue, and we
must continue to work to rein in the abuses of these demand letters.
I also look forward to working with Mr. Chaffetz and Chairman Upton
of the Energy and Commerce Committee, and I know that we can produce a
good product to further address this issue within that committee's
jurisdiction.
Mr. CONYERS. Madam Chair, I yield 30 seconds to the gentleman from
California (Mr. Rohrabacher).
Mr. ROHRABACHER. So we keep hearing that this is about trolls. And we
just heard about a problem that is being described, and it is a big
problem, where you have got people coming into a retailer and
suggesting that they were going to sue them for using a piece of
technology that the retailer is not really fully aware of. Okay, how is
taking away the rights of every American inventor through judicial
review of what the Patent Office has done to accept or reject his
patent, how does that affect the trolls? It affects the so-called
trolls not at all. But I tell you what it does, it means that we have
taken away a right of every inventor.
The CHAIR. The time of the gentleman has expired.
Mr. CONYERS. I yield an additional 30 seconds to the gentleman.
Mr. ROHRABACHER. What we are doing is taking away the right of every
independent inventor, a right that he has had since 1836, to say that
if a government official in the Patent Office is doing something
illegal to deny him his patent, this small inventor has a right, has a
right to go to the judges and get a court action on it. What does that
have to do with trolls? That is in this bill.
We are taking away the rights of little guys, small inventors, in the
name of getting the trolls, and we are making it impossible for small
inventors to go after the big infringers, these multinational
corporations which tell these guys, Screw off; you can't challenge us
in the courts anyway.
Mr. CONYERS. Madam Chair, I reserve the balance of my time.
Mr. GOODLATTE. Madam Chair, I yield myself 30 seconds to respond.
The very provision the gentleman from California references, section
145, is used by these very patent trolls to bypass the process. That is
why, working in conjunction with the America Invents Act that has
already been passed and this legislation, we will have an effective
tool for those legitimate inventors, and we will stop the trolls from
getting out from under the bridge.
I yield 1 minute to the gentleman from Texas (Mr. Poe), a
distinguished member of the Judiciary Committee.
Mr. POE of Texas. I thank the chairman for yielding.
Not all lawsuits in the patent business are done by trolls, but some
are, and these are obvious frivolous lawsuits on their face. The first
time it appears in the system is when that small business owner gets
that demand letter in the mail, and it is nothing more than legalized
extortion where the letter basically says, You will settle for $10,000
or we will sue you and it will cost you more money to defend yourself;
settle. What small business owners do, they are faced with that, many
of them settle or they go out of business.
That is what this legislation tries to prevent, the extortion racket
in the patent infringement business, and it is done by some people that
we call trolls. This legislation protects the small business owner. It
gets the troll, the frivolous lawsuit folks out of the extortion racket
early on in the system. That is why this piece of legislation is good
for small business, and that is why it is good for the patent industry.
And that's just the way it is.
Mr. CONYERS. Madam Chair, I am pleased to yield 2\1/2\ minutes to the
gentlelady from California (Ms. Lofgren).
Ms. LOFGREN. Madam Chair, I thank Mr. Conyers and Chairman Goodlatte.
I am glad we are here today addressing these issues of abusive lawsuits
in the patent system.
As has been mentioned by others, we do have a problem, it is widely
agreed to, among patent assertion entities, sometimes called patent
trolls. These lawsuits, these abusive lawsuits that are brought, can
easily cost $2 million to $10 million apiece, and that is why, when a
meritless lawsuit is threatened, it is easy to extort a smaller payment
to make it go away, and that is what we are trying to deal with here.
This is a big issue for small businesses. Professor Colleen Chien of
Santa Clara University, now with the White House, did a study and found
that more than half of these suits were against companies with less
than $10 million in annual revenue.
And that is why this bill, it is not a perfect bill, but why this
bill has such broad support. It is genuinely a bipartisan bill. I am a
cosponsor of this bill, along with the Congresswoman Anna Eshoo, Mike
Honda, Peter DeFazio, Jared Huffman, and many others. At a time when
the country is saying, ``Can't you just work together?'' we have.
Reasonable people can differ, which is why we have this debate here
today. We have 40 members in the House Judiciary Committee. Only five
members voted against reporting this bill out. That is remarkable.
The White House has just issued a very strong statement of
administrative policy. They support this bill. So at a time when too
often we are seen as the battling Bickersons, we have support across
the aisle with the White House to do this.
What does the bill do? It deals with pleading requirements.
Oftentimes, these patent assertion entities will allege infringing, but
they don't, with any particularity, say what is being infringed.
It does a change in attorneys' fees that matches the existing rule in
copyright. I oppose fee shifting in civil litigation generally, but the
Congress has, on many occasions, narrowly cast fee shifting to deal
with specific problems. This would join that. I would note that the
shifts would not occur unless the party's position is unreasonably
justified. The court is not to allow this shift if the party has a
reasonable case in fact or law or, as my colleague, Mr. Jeffries, had
added, a severe economic harm.
I would note that this is supported from start-ups to big companies.
Startup Investors Nationwide Support Broad Patent Reform
Dear Congress: Each year, we invest hundreds of millions of
dollars in software and information technology businesses and
emerging mobile technologies. Together with other investors,
we commit more than $1 billion annually in angel and venture
capital that ensures continuing growth of young, high-tech
companies employing 1.4 million people. Collectively, we have
invested in companies such as Netflix, Twitter, Facebook,
Dropbox, Palantir, Kickstarter, and countless other
technologies that power
[[Page H7517]]
American businesses everywhere. We are the fuel in America's
startup economy engine.
We write to urge comprehensive legislation to address the
troubling growth and success of the patent troll business
model. Young, innovative companies are increasingly
threatened and targeted by patent troll lawsuits. In fact,
the majority of companies targeted by patent trolls have less
than $10 million in revenue. And while big companies paid the
lion's share of the $29 billion of direct costs resulting
from patent troll activities in 2011, the costs borne by
small companies are a proportionately larger share of their
revenues.
As a result, Congress and the Administration are
considering multiple reform proposals. None alone will fix
the problem, but together they will make a substantial dent
in what one famous troll recently called ``a new industry.''
Successful legislation should make it harder to be a patent
troll, and easier for targeted businesses to protect and
defend themselves. Legislation should:
Make it easier to efficiently review patents at the Patent
Office, as an alternative to litigation. Increase
transparency by requiring patent trolls to specify, in
complaints and demand letters, which patent and what claims
are infringed, and specifically how the offending product or
technology infringes.
Limit the scope of expensive litigation discovery.
Require patent trolls to pay legal fees and other costs
incurred by prevailing defendants.
Protect end users of technology [e.g., wi-fi, printers and
scanners, and APIs) from being liable for infringements by
technology providers.
Our Founders did not intend to incentivize patent trolling
in the Constitution--nor did Congress intend the Patent Act
to promote this industry. Comprehensive legislation to reduce
abusive patent litigation will make the patent troll business
model less attractive, and will protect software, mobile and
information technology entrepreneurs. In turn, our digital
economy will continue to grow and so will our national
economy.
The undersigned:
Gil Bickel, St. Louis Arch Angels, St. Louis, MO; David
Bradbury, Vermont Center for Emerging Technologies,
Burlington, VT; Glen Bressner, Originate Ventures, Bethlehem,
PA; Brad Burnham, Union Square Ventures, New York, NY; Jeff
Bussgang, Flybridge Capital, Boston, MA; Steve Case,
Revolution Capital Washington, DC; Jeff Clavier, SoftTechVC,
Palo Alto, CA; Ron Conway, SV Angel, San Francisco, CA; Mark
Cuban, Investor in over 70 startups, Dallas TX; Peter
Esperago, Cultivation Capital, St. Louis, MO.
Brad Feld, Foundry Group, Boulder, CO; Nicole Glaros,
Techstars, Boulder, CO and New York, NY; David Gold, Access
Venture Partners, Westminster, CO; Greg Gottesman, Madrona
Venture Group Seattle, WA; Paul Graham, Y Combinator,
Mountain View, CA; Bill Gurley, Benchmark Capital, Menlo
Park, CA; Reid Hoffman; Greylock Partners, Menlo Park, CA;
Kirk Holland, Access Venture Partners, Westminster, CO; Len
Jordan, Madrona Venture Group, Seattle, WA; Scott Levine,
iSelect Fund, Clayton, MO.
John Lilly, Greylock Partners, Menlo Park, CA; Trevor Loy,
Flywheel Ventures, Albuquerque and Sante Fe, NM; Chris Marks,
High Country Venture, Boulder, CO; Dan Marriott, Stripes
Group, New York, NY; Matt McCall, Pritzker Venture Capital
Group, Chicago, IL and Los Angeles, CA; Jim McKelvey,
Cultivation Capital, St. Louis; Andrew McLaughlin, BetaWorks,
New York, NY; Josh Mendelsohn, Hangar, San Francisco, CA;
Jason Mendelsohn, Foundry Group, Boulder, CO; Michael Neril,
Webb Investment Network, San Francisco, CA.
Charlie O'Donnell, Brooklyn Bridge Ventures, New York, NY;
Alexis Ohanian, Angel Investor, New York, NY; Bijan Sabet,
Spark Capital, Boston, MA; Devin Talbott, Enlightenment
Capital, Washington, DC; Brett Topche, MentorTech Ventures,
Philadelphia, PA; Jorge M. Torres, Silas Capital, New York,
NY; Hunter Walk, Homebrew, San Francisco, CA; David Weekly,
Startup Founder and Angel Investor, Palo Alto, CA; Fred
Wilson, Union Square Ventures, New York, NY.
____
Professors' Letter in Support of Patent Reform Legislation
To Members of the United States Congress: We, the
undersigned, are 61 professors from 26 states and the
District of Columbia who teach and write about intellectual
property law and policy. We write to you today to express our
support for ongoing efforts to pass patent reform legislation
that, we believe, will improve our nation's patent system and
accelerate the pace of innovation in our country.
As a group we hold a diversity of views on the ideal
structure and scope of our nation's intellectual property
laws. Despite our differences, we all share concern that an
increasing number of patent owners are taking advantage of
weaknesses in the system to exploit their rights in ways that
on net deter, rather than encourage, the development of new
technology.
Several trends, each unmistakable and well supported by
empirical evidence, fuel our concern. First, the cost of
defending against patent infringement allegations is high and
rising. The American Intellectual Property Law Association
estimates that the median cost of litigating a moderately-
sized patent suit is now $2.6 million, an amount that has
increased over 70% since 2001. These and other surveys
suggest that the expense of defending even a low-stakes
patent suit will generally exceed $600,000. Moreover, the
bulk of these expenses are incurred during the discovery
phase of litigation, before the party accused of infringement
has an opportunity to test the merits of the claims made
against it in front of a judge or jury.
The magnitude and front-loaded nature of patent litigation
expenses creates an opportunity for abuse. Patentholders can
file suit and quickly impose large discovery costs on their
opponents regardless of the validity of their patent rights
and the merits of their infringement allegations. Companies
accused of infringement, thus, have a strong incentive to
fold and settle patent suits early, even when they believe
the claims against them are meritless.
Historically, this problem has largely been a self-
correcting one. In suits between product-producing technology
companies, the party accused of infringement can file a
counterclaim and impose a roughly equal amount of discovery
costs on the plaintiff. The costs, though high, are
symmetrical and, as a result, tend to encourage technology
companies to compete in the marketplace with their products
and prices, rather than in the courtroom with their patents.
In recent years, however, a second trend--the rise of
``patent assertion entities'' (PAEs)--has disrupted this
delicate balance, making the high cost of patent litigation
even more problematic. PAEs are businesses that do not make
or sell products, but rather specialize in enforcing patent
rights. Because PAEs do not make or sell any products of
their own, they cannot be countersued for infringement. As a
result, PAEs can use the high cost of patent litigation to
their advantage. They can sue, threaten to impose large
discovery costs that overwhelmingly fall on the accused
infringer, and thereby extract settlements from their targets
that primarily reflect a desire to avoid the cost of
fighting, rather than the chance and consequences of actually
losing the suit.
To be sure, PAEs can in theory play a beneficial role in
the market for innovation and some undoubtedly do. However,
empirical evidence strongly suggests that many PAEs have a
net negative impact on innovation. Technology companies--
which, themselves, are innovators--spend tens of billions of
dollars every year litigating and settling lawsuits filed by
PAEs, funds that these tech companies might otherwise spend
on additional research and design. Surveys also reveal that a
large percentage of these suits settle for less than the cost
of fighting, and multiple empirical studies conclude that
PAEs lose about nine out of every ten times when their claims
are actually adjudicated on their merits before a judge or
jury.
The impact of these suits is made more troubling by the
fact that PAE activity appears to be on the rise. Empirical
studies suggest that at least 40%, and perhaps as high as 59%
or more, of all companies sued for patent infringement in
recent years were sued by PAEs. PAE suits were relatively
rare more than a decade ago, and they remain relatively rare
today elsewhere in the world.
More worrisome than these bare statistics is the fact that
PAEs are increasingly targeting not large tech firms, but
rather small business well outside the tech sector. Studies
suggest that the majority of companies targeted by PAEs in
recent years earn less than $10 million in annual revenue.
When PAEs target the numerous small companies downstream in
the supply chain, rather than large technology manufacturers
upstream, they benefit in two ways. First, for every product
manufacturer, there may be dozens or hundreds of retailers
who sell the product, and hundreds or thousands of customers
who purchase and use the technology. Patent law allows patent
owners to sue makers, sellers, or users. Suing sellers or
users means more individual targets; some PAEs have sued
hundreds of individual companies. And, more targets means
more lawyers, more case filings, more discovery, and thus
more litigation costs overall to induce a larger total
settlement amount.
Second, compared to large manufacturers, small companies
like retailers are less familiar with patent law, are less
familiar with the accused technology, have smaller litigation
budgets, and thus are more likely to settle instead of fight.
In fact, many small businesses fear patent litigation to such
an extent that they are willing to pay to settle vague
infringement allegations made in lawyers' letters sent from
unknown companies. Like spammers, some patent owners have
indiscriminately sent thousands of demand letters to small
businesses, with little or no intent of actually filing suit
but instead with hopes that at least a few will pay to avoid
the risk.
This egregious practice in particular, but also all abusive
patent enforcement to some extent, thrives due to a lack of
reliable information about patent rights. Brazen patent
owners have been known to assert patents they actually do not
own or, conversely, to go to great lengths to hide the fact
that they actually do own patents being used in abusive ways.
Some patent owners have also sought double recovery by
accusing companies selling or using products made by
manufacturers that already paid to license the asserted
patent. Still others have threatened or initiated
litigation without first disclosing any specific
information about how, if at all, their targets arguably
infringe the asserted patents.
[[Page H7518]]
In short, high litigation costs and a widespread lack of
transparency in the patent system together make abusive
patent enforcement a common occurrence both in and outside
the technology sector. As a result, billions of dollars that
might otherwise be used to hire and retain employees, to
improve existing products, and to launch new products are,
instead, diverted to socially wasteful litigation.
Accordingly, we believe that the U.S. patent system would
benefit from at least the following six reforms, which
together will help reduce the cost of patent litigation and
expose abusive practices without degrading inventors' ability
to protect genuine, valuable innovations:
1. To discourage weak claims of patent infringement brought
at least in part for nuisance value, we recommend an increase
in the frequency of attorneys' fee awards to accused patent
infringers who choose to fight, rather than settle, and
ultimately defeat the infringement allegations levelled
against them.
2. To reduce the size and front-loaded nature of patent
litigation costs, we recommend limitations on the scope of
discovery in patent cases prior to the issuance of a claim
construction order, particularly with respect to the
discovery of electronic materials like software source code,
emails, and other electronic communications.
3. To further protect innocent retailers and end-users that
are particularly vulnerable to litigation cost hold-up, we
recommend that courts begin to stay suits filed against
parties that simply sell or use allegedly infringing
technology until after the conclusion of parallel litigation
between the patentee and the technology's manufacturer.
4. To facilitate the early adjudication of patent
infringement suits, we recommend that patentees be required
to plead their infringement allegations with greater
specificity.
And finally, to increase transparency and confidence in the
market for patent licensing, we recommend:
5. that patentees be required to disclose and keep up-to-
date the identity of parties with an ownership stake or other
direct financial interest in their patent rights, and
6. that Congress consider additional legislation designed
to deter fraudulent, misleading, or otherwise abusive patent
licensing demands made outside of court.
In closing, we also wish to stress that as scholars and
researchers we have no direct financial stake in the outcome
of legislative efforts to reform our patent laws. We do not
write on behalf of any specific industry or trade
association. Rather, we are motivated solely by our own
convictions informed by years of study and research that the
above proposals will on net advance the best interests of our
country as a whole. We urge you to enact them.
Sincerely,
Professor John R. Allison, The University of Texas at
Austin, McCombs School of Business; Professor Clark D. Asay,
Penn State University Dickinson School of Law (visiting);
Professor Jonathan Askin, Brooklyn Law School; Professor Gaia
Bernstein, Seton Hall University School of Law; Professor
James E. Bessen, Boston University School of Law; Professor
Jeremy W. Bock, The University of Memphis Cecil C. Humphreys
School of Law; Professor Annemarie Bridy, University of Idaho
College of Law; Professor Irene Calboli, Marquette University
Law School; Professor Michael A. Carrier, Rutgers School of
Law, Camden; Professor Bernard Chao, University of Denver
Sturm College of Law.
Professor Andrew Chin, University of North Carolina School
of Law; Professor Ralph D. Clifford, University of
Massachusetts School of Law; Professor Jorge L. Contreras,
American University Washington College of Law; Professor
Rebecca Curtin, Suffolk University Law School; Professor
Samuel F. Ernst, Chapman University Dale E. Fowler School
of Law; Professor Robin Feldman, University of California
Hastings College of the Law; Professor William T.
Gallagher, Golden Gate University School of Law; Professor
Jon M. Garon, Northern Kentucky University Chase College
of Law; Professor Shubha Ghosh, University of Wisconsin
Law School; Professor Eric Goldman, Santa Clara University
School of Law.
Professor Leah Chan Grinvald, Suffolk University Law
School; Professor Debora J. Halbert, University of Hawaii at
Manoa Department of Political Science; Professor Bronwyn H.
Hall, University of California Berkeley Department of
Economics; Professor Yaniv Heled, Georgia State University
College of Law; Professor Christian Helmers, Santa Clara
University Leavey School of Business; Professor Sapna Kumar,
University of Houston Law Center; Professor Mary LaFrance,
University of Nevada Las Vegas; William S. Boyd School of
Law; Professor Peter Lee, University of California Davis
School of Law; Professor Mark A. Lemley, Stanford Law School;
Professor Yvette Joy Liebesman, Saint Louis University School
of Law.
Professor Lee Ann W. Lockridge, Louisiana State University
Paul M. Hebert Law Center; Professor Brian J. Love, Santa
Clara University School of Law; Professor Glynn S. Lunney,
Jr., Tulane University School of Law; Professor Phil Malone,
Stanford Law School; Professor Mark P. McKenna, Notre Dame
Law School; Professor Michael J. Meurer, Boston University
School of Law; Professor Joseph Scott Miller, University of
Georgia Law School; Professor Fiona M. Scott Morton, Yale
University School of Management; Professor Lateef Mtima,
Howard University School of Law; Professor Ira Steven
Nathenson, St. Thomas University School of Law.
Professor Laura Lee Norris, Santa Clara University School
of Law; Professor Tyler T. Ochoa, Santa Clara University
School of Law; Professor Sean A. Pager, Michigan State
University College of Law; Professor Cheryl B. Preston,
Brigham Young University J. Reuben Clark Law School;
Professor Jorge R. Roig, Charleston School of Law; Professor
Jacob H. Rooksby, Duquesne University School of Law;
Professor Brian Rowe, Seattle University School of Law &
University of Washington Information School; Professor
Matthew Sag, Loyola University of Chicago School of Law;
Professor Pamela Samuelson, University of California Berkeley
School of Law; Professor Jason Schultz, New York University
School of Law.
Professor Christopher B. Seaman, Washington and Lee
University School of Law; Professor Carl Shapiro, University
of California Berkeley Haas School of Business; Professor Lea
Shaver, Indiana University Robert H. McKinney School of Law;
Professor Jessica Silbey, Suffolk University Law School;
Professor Christopher Jon Sprigman, New York University
School of Law; Professor Madhavi Sunder, University of
California Davis School of Law; Professor Toshiko Takenaka,
University of Washington School of Law; Professor Sarah Tran,
Southern Methodist University Dedman School of Law; Professor
Catherine Tucker, Massachusetts Institute of Technology Sloan
School of Management; Professor Jennifer M. Urban, University
of California Berkeley School of Law; Professor Samson
Vermont, Charlotte School of Law (visiting).
Mr. GOODLATTE. Madam Chair, it is my pleasure to yield 2 minutes to
the gentleman from Ohio (Mr. Chabot), a distinguished member of the
Judiciary Committee.
Mr. CHABOT. Madam Chair, I want to recognize and appreciate the
leadership of the gentleman from Virginia (Mr. Goodlatte) for pushing
this bill forward. It is very important for our country.
Our patent system is complex, and in our litigious society, it is
unfortunate that some bad actors are using that complexity to take
advantage of our small businesses. Young, innovative companies are
increasingly threatened and targeted by patent troll lawsuits, and the
majority of companies targeted by patent trolls have less than $10
million in revenue. They target these small companies because the
companies typically don't have the resources to fight back. So small
businesses have a choice: Do they settle with a patent troll or do they
go out of business and people lose jobs? That is the choice that small
businesses and start-ups are forced to make--pay off a patent troll or
shut their doors.
The Innovation Act levels the playing field for small businesses and
start-ups. It brings transparency to the patent process and helps
protect one of our founding constitutional principles: protect property
and promote innovation.
These trolls do not create products. They do not create jobs. They
create headaches, and at a significant cost to our economy. It was $80
billion in 2011 alone--$80 billion.
It is said that sunlight is the best disinfectant. This bill provides
sunlight that effectively sanitizes the shadowy abuse of patent
litigation. Madam Chair, the Innovation Act is a good first step in
protecting our small businesses and entrepreneurs from this type of
abuse. I urge my colleagues to support the bill.
Mr. CONYERS. Madam Chair, I am pleased now to yield 3 minutes the
gentlelady from Texas (Ms. Sheila Jackson Lee), an effective member of
the Judiciary Committee.
Ms. JACKSON LEE. Madam Chair, I thank the gentleman from Michigan for
his leadership, and I likewise thank the chairman for his leadership.
The discourse in debate on the floor of the House is not evidencing
the unity, the unanimity that members of the House Judiciary Committee
and, I venture to say, of this body have with respect to innovation and
competition and the idea of protecting our small inventors. And so I
would offer myself and many others as a champion for this concept that
we are greatest when we are protecting and coddling and growing the
inventive mind of America and our small inventors.
The Innovation Act has a wonderful name, and I congratulate Chairman
Goodlatte for his interest and commitment to this process. We have
always worked in a collaborative and bipartisan manner on the Judiciary
Committee as it relates to intellectual property and competition.
[[Page H7519]]
Today, however, our disagreement, if you will, is not on the
underlying concept but on a very crucial process that is not in keeping
with the mind-set of the Founding Fathers. I imagine that patent law
got intimately engaged in the constitutional process because of a young
man by the name of Benjamin Franklin, an inventor. He foresaw a great
America and the need to be able to encourage those in garages and maybe
by candlelight looking to change the landscape of the lives of those
who live in that country and now have lived and do live in the greatest
Nation in the world.
And so the question is, on H.R. 3309, for all of our friends that are
making their decisions, whether or not this is a bill before its time
and whether or not this question that we have before us, this bill,
truly stops the trolls, as this advertisement that was not placed by me
but put in the newspaper to suggest that the trolls may not be the ugly
beast, but it may be the way this bill, H.R. 3309, is written.
Because, in fact, the small guy does pay. In fact, the small inventor
is not protected. In fact, the pleadings are difficult. In fact, the
early days of Madame C.J. Walker, who invented hair lotion for black
women; or Frederick McKinley Jones, who invented the automatic
refrigeration system for long-haul trucks; or Lewis Latimer, who
invented less expensive and more efficient, long-lasting light bulbs;
or maybe even the early days of giant companies that are now known to
live in places like Silicon Valley, from Yahoo to Google, that started
in the earliest moments of their beginning, small, maybe in a Harvard
dorm room, or someone else's dorm room, I think the question becomes:
Are these individuals protected?
{time} 1015
According to the research that we have done, small investors are not
protected.
I would just say, Madam Chair, that I would ask for more time; and if
we want to do some work, let's pass H.R. 15, comprehensive immigration
reform, because that is ready to pass.
Mr. GOODLATTE. Madam Chairman, it is now my very sincere pleasure to
yield 3 minutes to the gentleman from Oregon (Mr. DeFazio), the lead
Democratic cosponsor of this legislation who came to me with his ideas
at the beginning of this Congress and has worked with me throughout
this Congress on this legislation.
Mr. DeFAZIO. Madam Chairwoman, I thank the chairman for his
tremendous efforts on this. I believe this is an improvement over the
SHIELD Act, which Jason Chaffetz and I authored a couple of years ago.
Here is the thing: we have got a nationwide protection racket going
on here. It is a little more sophisticated than the gang that says,
Hey, we are going to smash the windows of your store unless you pay us
50 bucks a week.
What you have here are hugely sophisticated, well-funded patent
assertion entities across America; and they did file 62 percent of the
patent litigation, not 5 percent, as we heard earlier asserted by one
of my colleagues. The payoff here is that if you pay us $50,000, we
won't drag you through endless court proceedings that will cost you $1
million or more. All they have to do is assert something very vague,
such as we own this patent and you are infringing on it. That is it.
That is all they have to assert.
It is up to the small business to figure out what that infringement
is, which means they have to hire attorneys, they have to go through
discovery, which is an incredibly lengthy and expensive process. I
found out about this in my district while visiting a small software
firm with less than 100 people that was about to launch a new product,
and the owner told me it is going to be delayed because I had to hire
new employees to launch this product, but I have got a shadow over the
business right now. I said, What is that? The owner said he had been
sued over a patent troll. They are claiming that this very simple,
common thing that is part of their software is their patent and they
must pay them $200,000 to make them go away. He said, I can't do an
expansion and $200,000.
His company can't be named because these patent trolls are so
aggressive. When NPR ran a story about this--and one company was
featured with an egregious story of one of these patent trolls, one of
these blackmailers. They went public, and then they immediately got a
pile of new assertions on them by patent trolls. The patent trolls have
lots of attorneys, lots of money. It is a very lucrative extortion
racket to go out and do this.
Some companies will fight. EMC out of Massachusetts fought. The
claims were totally specious, but they fought. This is what it takes.
They had to go to this one district in Texas where all these cases are
heard. They had to go to one hotel and rent it for their team. The
electricity wasn't adequate. They didn't have broadband. They had to
install all that so they could be there and defend themselves because
no one goes there to defend themselves against these patent trolls. It
is too expensive. They just pay the bribes.
They went there, and it cost them over $2 million. The jury was out
less than 10 minutes because it was a totally specious claim. Most
things don't go that far because most people have to pay because they
can't afford the disruption or the litigation; or other times after
they are halfway through paying for the litigation, the patent
assertion entities drop their false claims.
Some people are saying we are closing the courthouse door, we are
barring litigation here. In fact, the standard is no reasonable basis
in law and fact. Universities and innovators don't bring those kinds of
suits. Patent trolls do.
Stop the patent trolls.
Mr. CONYERS. Madam Chair, I reserve the balance of my time.
Mr. GOODLATTE. Madam Chair, may I inquire as to how much time is
remaining on each side.
The CHAIR. The gentleman from Virginia has 5\1/2\ minutes remaining,
and the gentleman from Michigan has 4\1/2\ minutes remaining.
Mr. GOODLATTE. Madam Chair, it is now my pleasure to yield 1\1/2\
minutes to the gentleman from Colorado (Mr. Polis).
Mr. POLIS. Madam Chairwoman, I thank the gentleman from Virginia.
When we look at the cost, not just of litigation, but of companies
having to consult with lawyers at times because of completely frivolous
letters that they get that are vague with regard to what the abuses
are, the damage is not only to the company that receives the message;
the damage is to all consumers. The extra price is simply passed along
to all of us who use goods and services in a digital economy. This bill
makes an important step forward for bringing our patent process into
the 21st century, taking into account digital innovation.
There is a long way to go. When our patent system was first put
together for mechanical innovation, for which it still works, people
didn't even know what software or biological innovation was. We have
come a long way. I think we have learned a lot over that time. One
thing we have learned is that we need to fine-tune how software and
digital innovation interact with our intellectual property protections.
This bill takes an important step in this direction. While it doesn't
wholly fix our patent system, it will undeniably deter abusive patent
suits that are brought by patent entities and trolls that raise prices
for consumers, destroy jobs, are particularly onerous on start-up
businesses and entrepreneurs, and have essentially a tax across our
entire economy on innovation and job growth.
I strongly encourage my colleagues to support this bill, and I
appreciate the good work of Representative Goodlatte and Representative
Lofgren in bringing this bill to us on the floor today.
Mr. CONYERS. Madam Chairwoman, we are ready to close on this side,
and I reserve the balance of my time.
Mr. GOODLATTE. Madam Chairwoman, it is my pleasure to yield 1
additional minute to the gentleman from Utah (Mr. Chaffetz).
Mr. CHAFFETZ. Madam Chairwoman, I thank Chairman Goodlatte, and I
thank Members on both sides of the aisle for working on this. In the
112th Congress, I worked closely with Congressman DeFazio on the SHIELD
Act, but a much better bill is before us today.
I want people to understand the gravity of the problem and who is
also being attacked. I find this fascinating. Fifty-five percent of
troll suits involve companies with annual revenues of $10
[[Page H7520]]
million or less. Yes, the Microsofts and the Oracles and the really big
companies out there are going to be in constant flux and in points of
litigation, but it is really these small companies that are getting
bombarded.
In fact, if you look since 2005, there are literally four times as
many troll suits going through the patent system right now than there
were in 2005. They are being extorted. This helps solve it. This is why
I am so enthusiastic in supporting this bill.
I appreciate the bipartisan support on this. It does solve a very
real problem. The majority of the problem is for companies with annual
revenues of less than $10 million.
Mr. CONYERS. Madam Chairwoman, I continue to reserve the balance of
my time.
Mr. GOODLATTE. Madam Chairwoman, I am pleased to yield an additional
30 seconds to the gentleman from Pennsylvania (Mr. Marino), the vice
chair of the Intellectual Property Subcommittee.
Mr. MARINO. Madam Chairwoman, I have been involved in working on
patent reform since I was elected and took office here in 2011. This is
not new. We have been working on this legislation if not for several
months, at least several weeks where it has been up on the Internet for
people to see and for our colleagues to read. I am tired of hearing
here in Congress we need more time and more time to do something. If
businesses operated the way Congress did, they would be out of
business.
Finally, this is a quintessential example of us getting off our duff
and doing something in a reasonable amount of time that is going to
help small business owners. As we stand here and speak, more and more
are being put out of business because of trolls.
Mr. CONYERS. Madam Chairwoman, how much time remains?
The CHAIR. The gentleman from Michigan has 4\1/2\ minutes remaining.
Mr. CONYERS. Madam Chairwoman, I am pleased now to yield such time as
he may consume to the gentleman from North Carolina (Mr. Watt), a
senior member of the committee who has worked on this assiduously for a
number of years.
Mr. WATT. Madam Chairwoman, I thank the gentleman for yielding.
I am pained to be here today in opposition to this bill. I stood
shoulder to shoulder with the chair of our full committee 2 years ago
in patent reform after working almost 6 years to find consensus on a
patent bill that moved our Nation forward.
We are here this time a maximum of 6 months into the process, and we
haven't done our due diligence because we have heard all morning people
coming to the floor and saying this is a work in progress. I thought
the place we did works in progress was in our committee system.
Here we are on the floor with a bill that everybody is bragging about
it being a work in progress. The result of that is that the work will
be done on this bill by the United States Senate. They will write this
bill. We won't write it because we didn't take the time to do what we
should have done in the Judiciary Committee to refine this bill.
I stood shoulder to shoulder with the former director of the Patent
and Trademark Office 2 years ago, David Kappos, and this is what he
says in an op-ed piece today:
Our news is peppered these days with reports of ``patent
trolls,'' dark, ugly creatures shaking down innocent
companies based on absurd claims of patent infringement.
Congress should quickly pass legislation to curtail this
abusive behavior. However, some are using the need to address
the patent troll issue as cover to unnecessarily weaken our
Nation's patent laws. If passed in this current form, the
focus of legislative discussions would undermine U.S.
innovation and job creation.
That is what the former director of the Patent and Trademark Office
says because we haven't done what we should have done.
We set out to solve a problem dealing with patent trolls, and there
is an argument about whether that is 5 percent, 20 percent. The GAO
says it is a maximum of 20 percent, regardless of where these
statistics are coming from. We are imposing a burden on 100 percent of
the people in the patent litigation system to deal with a problem that
at most is 20 percent of the litigation in our system. Everybody is
going to pay the price of this bill if it goes forward in its current
form. That is the problem I have with this. We have a problem.
Patent trolls are a problem, but you can't define what a patent troll
is; and in order to deal with patent trolls, we are imposing a burden
on the other people in the litigation system who are not patent trolls.
That is unfair. We are imposing a burden on small innovators because
they will fear that they will lose a lawsuit and end up paying
exorbitant costs of the people who they litigated against, even though
their claim was a legitimate claim; and they will spend extra money to
litigate about whether they should have to pay the cost. Millions of
dollars will be spent litigating about whether the fees should be
shifted or not, and that is not the way we have done this in our
American system.
The problem is we haven't done anything in this bill--and you have
heard it discussed in the debate up to this point--about the real
problem here, which is people who are writing demands on little people
out in the stream of commerce. That is before they ever get to
litigation. This bill says nothing about demand letters.
{time} 1030
We are going to concede that, we say, to the Commerce Committee.
Well, what is this bill going to do? It is going to encourage a
burden on everybody in the litigation system as we try to deal with a
20 percent problem or a 5 percent problem, at most.
Mr. GOODLATTE. Madam Chairman, I yield myself the balance of my time.
In closing, Madam Chairman, I want to thank my fellow Judiciary
colleagues and their staffs who have devoted much time, energy, and
intellect to this project. We have worked together for the common goal
of comprehensive patent litigation reform for the past decade.
While some of us still have differences over individual items, I want
these Members to know that I appreciate their contributions to the
project and I value their friendship.
I also want to particularly thank Representatives Howard Coble, Zoe
Lofgren, and Peter DeFazio for serving as lead sponsors of this
legislation and, most particularly, Congresswoman Lofgren, who worked
so hard with us in the markup process in the Judiciary Committee.
In the Senate, we have worked closely with Senators Leahy, Grassley,
Cornyn, Hatch, Lee, and others. I want to thank them and their staffs
for their contributions to this effort.
Furthermore, I would like to thank the White House and the U.S.
Patent and Trademark Office for working collaboratively with us and
providing important technical assistance.
I also want to thank both my full committee and IP subcommittee staff
for all of their hard work on this important legislation, and most
particularly, Vishal Amin, counsel to the subcommittee.
This bill is something I consider central to U.S. competitiveness,
job creation, and our Nation's future economic security. The Innovation
Act is the product of much negotiation and compromise. This bill builds
on our efforts over the past decade. It can be said that this bill is
the product of years of work. We have worked with Members of both
parties in both the Senate and the House, with stakeholders from all
areas of our economy, and with the administration and the courts.
To ensure an open, deliberative, and thoughtful process, we held
several hearings and issued two public discussion drafts in May and
September of this year, which led to the formal introduction of the
Innovation Act in October.
The Innovation Act takes meaningful steps to address the abusive
practices that have damaged our patent system and resulted in
significant economic harm to our Nation. This bill will help grow
America's innovation economy.
Madam Chairman, I urge my colleagues to support H.R. 3309, and I
yield back the balance of my time.
[Inventors listed on nearly 200 patents call on Congress to pass
legislation to fix the patent troll problem, Nov. 19, 2013]
Patent Holders Urge Comprehensive Patent Reform
San Francisco.--Fifty inventors, technologists and
entrepreneurs joined Engine
[[Page H7521]]
Advocacy and the Electronic Frontier Foundation (EFF) today
in requesting that Congress immediately pass meaningful
patent reform legislation to curb the growing patent troll
problem.
The signatories are collectively listed as inventors on
nearly 200 patents, many of which cover software inventions.
They expressed support for patent reform. Congress is
currently pursuing several approaches that have the potential
to curb the chilling effect on innovation posed by trolls and
improve patent quality.
``Broad, vague patents covering software-type inventions--
some of which we ourselves are listed as inventors on--are a
malfunctioning component of America's inventive machinery,''
the inventors write.
``This is particularly the case when those patents end up
in the hands of non-practicing patent trolls.'' The inventors
believe that ``software patents are doing more harm than
good,'' and they urge Congress to pass legislation that would
curb patent troll abuses, which pose an immediate threat to
innovation and the promise of technology.
``It's time to force these trolls to take responsibility
for the damage they cause with their dangerous claims,'' said
inventor Derek Parham, who helped organize the letter. ``We
need legislation that will put a stop to the patent troll
business model once and for all.''
In addition to Derek, many prominent engineers and
entrepreneurs signed the letter, including Twitter cofounder
Evan Williams; Facebook co-founder Dustin Moskovitz; former
Principal Engineer at Qualcomm Ranganathan Krishnan; and
Quantcast's co-founder Paul Sutter.
``The time for meaningful reform is now,'' said Julie
Samuels, EFF Senior Staff Attorney and the Mark Cuban Chair
to Eliminate Stupid Patents. ``We hope Congress will hear
these engineers and inventors and so many others and pass
legislation that ends the patent troll problem once and for
all.''
For the full open letter: https://www.eff.org/
documentinventorslettersupport
patentreform
Contacts:
Julie Samuels, Staff Attorney and The Mark Cuban Chair to
Eliminate Stupid Patents, Electronic Frontier Foundation.
Eva Arevuo; Engine.
____
[Nov. 18, 2013]
We, the undersigned, are a group of inventors,
technologists and entrepreneurs. Many of us have founded
technology businesses; we have invented many of the
protocols, systems and devices that make the Internet work,
and we are collectively listed as the inventors on over 150
patents.
We write to you today about the U.S. patent system. That
system is broken. Based on our experiences building and
deploying new digital technologies, we believe that software
patents are doing more harm than good. Perhaps it is time to
reexamine the idea, dating from the 1980s. that government-
issued monopolies on algorithms, protocols and data
structures are the best way to promote the advancement of
computer science.
But that will be a complex task, and one we don't expect to
happen quickly. Unfortunately, aspects of the problem have
become so acute they must be addressed immediately.
Broad, vague patents covering software-type inventions--
some of which we ourselves are listed as inventors on--are a
malfunctioning component of America's inventive machinery.
This is particularly the case when those patents end up in
the hands of non-practicing patent trolls.
These non-practicing entities do not make or sell anything.
Their exploitation of patents as a tool for extortion is
undermining America's technological progress; patent trolls
are collecting taxes on innovation by extracting billions of
dollars in dubious licensing fees, and wasting the time and
management resources of creative businesses. Many of us would
have achieved much less in our careers if the trolling
problem had been as dire in past decades as it is now.
Some legislative proposals under current consideration
would fix the trolling problem. These include: requiring that
patent lawsuits actually explain which patents are infringed
by which aspects of a defendant's technology, and how; making
clear who really owns the patent at issue; allowing courts to
shift fees to winning parties, making it rational for those
threatened with an egregious patent suit to actually fight
against the threat rather than paying what amounts to
protection money; ensuring that those who purchase common,
off-the-shelf technologies are shielded if they are sued for
using them; and increasing opportunities for streamlined
patent review at the patent office.
While subduing the trolling threat, these proposed changes
will not fix the software patent problem completely. Congress
should consider ways to stop these patents from interfering
with open standards and open source software; from being
claimed on problems, rather than solutions; and from being
drafted so obscurely that they teach us nothing and cannot be
searched. Congress needs to examine the very question of
whether their net impact is positive.
But for now, we urge you to implement simple and urgently
necessary reforms. We believe in the promise of technology
and the power of creation to increase access to information,
to create jobs, and to make the world a better place. Please
do not let patent trolls continue to frustrate that purpose.
The undersigned:
Ranganathan Krishnan--30 patents; Former Principal Engineer
at Qualcomm; led the software team building the aircraft
modems that now power GoGo in-flight Wi-Fi; Data center
architect for Zoho Corporation; Startup founder.
Paul Sutter--26 patents, 22 applications; Co-founder of
Quantcast.
Dr. Neil Hunt--14 patents; Chief Product Officer at
Netflix.
Justin Rosenstein--13 patents, 23 applications; Founder of
Asana; Former Engineering Lead at Facebook.
Dustin Moskovitz--2 patents; Co-Founder of Facebook and
Asana.
Ev Williams--Entrepreneur, CEO of the Obvious Corporation,
co-founder of Odeo, Blogger, Twitter, and Medium.
David S.H. Rosenthal--24 patents; Founder of the LOCKSS
program, aimed at long-term preservation of web published
materials.
Frederick Baker--15 patents, 52 RFCs; Former chair of IETF
[the standards body of Internet tech); member to FCC TAC,
BITAG and other bodies that advise the U.S. government on
technology.
John H. Howard--10 patents; Researcher at MIT, University
of Texas, IBM, Carnegie Mellon, MERL, and Distinguished
Engineer at Sun Microsystems.
Jon Callas--7 patents, 4 RFCs; Cryptographer, technologist,
entrepreneur; Co-founder of PGP Corporation, Silent Circle
and others.
Igor Kofman--6 patents, 7 applications; Co-founder of
Hackpad Inc., a company that develops next generation online
collaboration tools; Former Engineer at YouTube/Google and
Microsoft.
Barbara Simons--5 patents; Fellow and Former President at
Association for Computing Machinery.
Joshua Bloch--4 patents, 4 applications; Former Chief Java
Architect at Google and Distinguished Engineer at Sun
Microsystems; Led the design and implementation of numerous
Java platform features.
Rick Adams--3 patents; Founder of UUNET Technologies, the
first commercial Internet provider.
Brandon Ballinger--2 patents, 10 applications; Co-founder
of Sift Science, a company that helps fight fraud through
machine-learning; Former software engineer at Google.
Andrew Conway--1 patent, 2 applications; Founder & CEO of
Silicon Genetics, a bioinformatics company (now part of
Agilent); First to control a helicopter entirely by GPS (and
thus win 1995 AUVS contest).
Derek Parham--1 patent, 2 applications; Creator of Google
Apps for Businesses; Entrepreneur, investor, and advisor.
James Gettys--1 patent, 1 application, 2 RFCs; Editor of
the HTTP/1.1 specification that underlies the World Wide Web;
Co-author of the X Window System.
Harry Hochheiser--1 patent, 1 application; Professor of
Biomedical Informatics at UPitt.
Ian Lance Taylor--1 patent, 1 application; Senior Staff
Software Engineer at Google, Co-founder of Zembu Labs, and
long time open source contributor.
Vincent C. Jones, PhD, PE--1 patent; 40 years of designing
and building computer networks; published author in the field
of computer networking.
Jim Fruchterman--1 patent; CEO of Benetech, a nonprofit
tech company; former rocket scientist and co-founder of
Calera Recognition Systems and RAF Technology, Inc.
Todd Huffman--company holds 1 Patent; CEO of 3Scan,
utilizes a novel serial sectioning technique, KESM (Knife
Edge Scanning Microscope) to create 3D models of large volume
tissue samples.
Anselm Levskaya--1 application; Founder of Cambrian
Genomics, a company developing a new technology pipeline to
produce fully synthetic DNA at a fraction of the cost of
current approaches.
Lorrie Cranor--1 application: Professor of Computer
Science, Engineering, and Public Policy at Carnegie Mellon;
Director of CyLab Usable Privacy and Security Laboratory.
Mark Kohler--3 RFCs; Implemented the IPv6 tunneling
protocols RFC 2893, RFC 2473, and RFC 3056 for HP-UX and
other Unix operating systems.
John Vittal--3 RFCs; Creator of the first integrated email
program (MSG) and the initial ``killer application'' on the
ARPAnet/Internet; Developed email standards still in use
today.
Dan McDonald--3 RFCs; IPsec and IPv6 pioneer, former
project lead for Solaris/OpenSolaris IPsec, Current Illumos
RTI advocate, and Principal Software Engineer for Nexenta
Systems; Co-author of RFCs 1751, 2367, 5879.
Russell Nelson--3 RFCs; Ran the Clarkson (later Crynwr)
Packet Driver Collection.
John Gilmore--1 RFC; Programmer, entrepreneur (Sun
Microsystems, Cygnus Solutions); Free software author,
maintainer, and co-creator (GOB, GNU Tar, Binutils, GNU
Radio, Gnash, OpenBTS); protocol designer (RFC 951, BOOTP,
which you use whenever you connect to Ethernet or WiFi);
Angel investor, philanthropist.
Stephen Wolff--Builder of NSFNET as a successor to ARPANET
and for its transition to carrying commercial traffic,
enabling the Internet as we know it today; Internet Hall of
Fame Inductee--2013.
Frode Hernes--VP of TV Product Management and former VP of
Product Development at Opera Software; Contributor to ISO/
[[Page H7522]]
CCITT and IETF standards within email directories and
security; Board member of the HbbTV Association; Currently
active in the spacifications for the TV industry.
Dan Lang--VP, Intellectual Property at Cisco Systems.
Jaan Tallin--Founding Engineer of Skype; Refused to sign
patents while at Skype.
Megan Klimen--Co-founder of 3Scan.
Matthew Goodman--Co-founder of 3Scan.
Kodi Daniel--Co-founder of 3Scan.
Mikki Barry--Co-founder of InterCon Systems Corporation,
the first commercial Internet applications company on the Mac
platform; Intellectual Property and IT Attorney.
Jim DeLeskie--Founder and CM, Heimdall Networks, previously
Chief Architect Tata Communications/Teleglobe; Sr. Engineer
internetMCI and contributor to IEEE and IETF working groups.
Brandon Ross--Designer and builder of operating service
provider networks such as MindSpring, NetRail, Internap and
Comast; Member of the North American Network Operators Group
(NANOG), the Internet Engineering Task Force (IETF); Founder
of Network Utility Force.
Benjamin C. Pierce--Professor of Computer and Information
Science at University of Pennsylvania; Fellow of the ACM;
Lead developer of Unison, a widely used open-source file
synchronization tool; Author.
David Snigler--Led several successful projects as part of
the Emerging Technologies group at the University of
Massachusetts; Responsible for the design of systems used for
research and administration throughout the UMass system.
Dylan Morris--Co-founder and VP of Strategy of Integrated
Plasmonics, a technology startup in San Francisco operating
at the intersection of semiconductors, biotechnology, and
digital health.
Robb Walters--Founder, CEO, President, Board Director,
Integrated Plasmonics.
Andrew Binstock--Editor in Chief of Dr. Dobb's; founded
iText Software Corp.; previously in charge of Global
Technology Forecasts at PricewaterhouseCoopers; programmer.
Mary Shaw--Educator and researcher in software engineering;
ACM SIGSOFT Outstanding Research Award for work in software
architecture; Fellow of the Institute for Electrical and
Electronic Engineers, the Association for Computing
Machinery, and the American Association for the Advancement
of Science.
Ernest E. [Lee] Keet--President of Vanguard Atlantic Ltd.,
Former Chair, Intellectual Property Section, Software
Industry Association, ADAPSO; Board member and lead investor
in high tech startups.
The above have collectively contributed to the invention of
the following technologies:
Patents:
4460974 Electronic computer with access to keyboard status
information (Jones).
4531185 Centralized synchronization of clocks (Simons).
4584643 Decentralized synchronization of clocks (Simons).
4603380 DASD cache block staging (Howard).
4706081 Method and apparatus for bridging local area
networks (Baker).
4809265 Method and apparatus for interfacing to a local
area network (Baker).
4916605 Fast write operations (Howard).
5073933 X window security system (Rosenthal).
5127098 Method and apparatus for the context switching of
devices (Rosenthal).
5187786 Method for apparatus for implementing a class
hierarchy of objects in a hierarchical file system
(Rosenthal).
5432824 Credit/rate-based system for controlling traffic in
a digital communication network (Howard).
5442708 Computer network encryption/decryption device
(Adams).
5444782 Computer network encryption/decryption device
(Adams).
5470223 Microprocessor controlled fuel and ignition control
for a fuel burning device (Fruchterman).
5600834 Method and apparatus for reconciling different
versions of a file (Howard).
5619658 Method and apparatus for trapping unimplemented
operations in input/output devices (Rosenthal).
5623692 Architecture for providing input/output operations
in a computer system (Rosenthal).
5638535 Method and apparatus for providing flow control
with lying for input/output operations in a computer system
(Rosenthal).
5640456 Computer network encryption/decryption device
(Adams).
5640591 Method and apparatus for naming input/output
devices in a computer system (Rosenthal).
5652793 Method and apparatus for authenticating the use of
software (Rosenthal).
5659750 Apparatus for context switching of input/output
devices in response to commands from unprivileged application
programs (Rosenthal).
5685011 Apparatus for handling failures to provide a safe
address translation in an improved input/output architecture
for a computer system (Rosenthal).
5696990 Method and apparatus for providing improved flow
control for input/output operations in a computer system
having a FIFO circuit and an overflow storage area
(Rosenthal).
5721947 Apparatus adapted to be joined between the system
I/O bus and I/O devices which translates addresses furnished
directly by an application program (Rosenthal).
5732087 ATM local area network switch with dual queues
(Howard).
5740406 Method and apparatus for providing fifo buffer
input to an input/output device used in a computer system
(Rosenthal).
5740464 Architecture for providing input/output operations
in a computer system (Rosenthal).
5745477 Traffic shaping and ABR flow control (Howard).
5751951 Network interface (Howard).
5758182 DMA controller translates virtual I/O device
address received directly from application program command to
physical I/O device address of I/O device on device bus
(Rosenthal).
5764861 Apparatus and method for controlling context of
input/output devices in a computer system (Rosenthal).
5805930 System for FIFO informing the availability of
stages to store commands which include data and virtual
address sent directly from application programs (Rosenthal).
5887174 System, method, and program product for instruction
scheduling in the presence of hardware lookahead accomplished
by the rescheduling of idle slots (Simons).
5887190 System for determining from a command storing in a
storage circuit an application program which has initiated
the command to determine an input/output device address
(Rosenthal).
5909595 Method of controlling I/O routing by setting
connecting context for utilizing I/O processing elements
within a computer system to produce multimedia effects
(Rosenthal).
5918050 Apparatus accessed at a physical I/O address for
address and data translation and for context switching of I/O
devices in response to commands from application programs
(Rosenthal).
5924126 Method and apparatus for providing address
translations for input/output operations in a computer system
(Rosenthal).
6023738 Method and apparatus for accelerating the transfer
of graphical images (Rosenthal).
6044222 System, method, and program product for loop
instruction scheduling hardware lookahead (Simons).
6065071 Method and apparatus for trapping unimplemented
operations in input/output devices (Rosenthal).
6081854 System for providing fast transfers to input/output
device by assuring commands from only one application program
reside in FIFO (Rosenthal).
6098079 File version reconciliation using hash codes
(Howard).
6292938 Retargeting optimized code by matching tree
patterns in directed acyclic graphs (Simons).
6336186 Cryptographic system and methodology for creating
and managing crypto policy on certificate servers (Callas).
6513032 Search and navigation system and method using
category intersection pre-computation (Sutter).
6584450 Method and apparatus for renting items (Hunt).
6594260 Content routing (Baker).
6629198 Data storage system and method employing a write-
ahead hash log (Howard).
6738437 Symbol recovery from an oversampled hard-decision
binary stream (Krishnan).
6742044 Distributed network traffic load balancing
technique implemented without gateway router (Baker).
6744572 System and method for imaging an object (3Scan).
6775231. Dynamic weighted resource sharing (Baker).
6789125 Distributed network traffic load balancing
technique implemented without gateway router (Baker).
6801811 Software-directed, energy-aware control of display
(Gettys).
6820261 Inheritable thread-local storage (Bloch).
6839895 Method of, system for, and computer program
product for providing efficient utilization of memory
hierarchy through code restructuring (Simons).
6915282 Autonomous data mining (Conway).
6928062 Uplink pilot and signaling transmission in
wireless communication systems (Krishnan).
7013458 Method and apparatus for associating metadata
attributes with program elements (Bloch).
7024381 Approach for renting items to customers (Hunt).
7039001 Channel estimation for OFDM communication systems
(Krishnan).
7042857 Uplink pilot and signaling transmission in
wireless communication systems (Krishnan).
7062562 Methods and apparatus for content server selection
(Baker).
7080138 Methods and apparatus for content server selection
(Baker).
7095790 Transmission schemes for multi-antenna
communication systems utilizing multi-carrier modulation
(Krishnan).
7098815 Method and apparatus for efficient compression
(Rosenthal).
7159237 Method and system for dynamic network intrusion
monitoring, detection and response (Callas).
7171657 Method and apparatus for importing static members
of a class (Bloch).
7263687 Object-oriented enumerated type facility (Bloch).
7292826 System and method for reducing rake finger
processing (Krishnan).
7359728 Modified power control for reduction of system
power consumption (Krishnan).
7383439 Apparatus and method for facilitating encryption
and decryption operations over an email server using an
unsupported protocol (Callas).
[[Page H7523]]
7401159 Distributed network traffic load balancing
technique implemented without gateway router (Baker).
7403910 Approach for estimating user ratings of items
(Hunt).
7408914 Time-hopping systems and techniques for wireless
communications (Krishnan).
7437558 Method and system for verifying identification of
an electronic mail message (Baker).
7447481 System and method for reducing rake finger
processing (Krishnan).
7450963 Low power dual processor architecture for multi
mode devices (Krishnan).
7463576 Channel estimation for OFDM communication systems
(Krishnan).
7493133 Power control in ad-hoc wireless networks
(Krishnan).
7515595 Network using encoded transmissions and forwarding
(Krishnan).
7515924 Method and module for operating independently of a
remote terminal if an incoming pilot signal is not detected
within a time period and enabling a pilot signal transmission
(Krishnan).
7519371 Multi-hop communications in a wireless network
(Krishnan).
7529780 Conflict management during data object
synchronization between client and server (Rosenstein).
7536641 Web page authoring tool for structured documents
(Rosenstein).
7542471 Method of determining path maximum transmission
unit (Sutter).
7546252 Approach for managing rental items across a
plurality of distribution locations (Hunt).
7551620 Protecting data integrity in an enhanced network
connection (Sutter).
7593943 Method and system for synchronizing multiple user
revisions to a shared object (Kofman).
7606326 Transmission schemes for multi-antenna
communication systems utilizing multi-carrier modulation
(Krishnan).
7616638 Wavefront detection and disambiguation of
acknowledgments (Sutter).
7617127 Approach for estimating user ratings of items
(Hunt).
7630305 TCP selective acknowledgements for communicating
delivered and missed data packets (Sutter).
7631252 Distributed processing when editing an image in a
browser (Rosenstein).
7631253 Selective image editing in a browser (Rosenstein).
7631323 Method of sharing an item rental account (Hunt).
7634715 Effects applied to images in a browser
(Rosenstein).
7640427 System and method for secure electronic
communication in a partially keyless environment (Callas).
7650387 Method and system for managing storage on a shared
storage space (Baker).
7656799 Flow control system architecture (Sutter).
7657037 Apparatus and method for identity-based encryption
within a conventional public-key infrastructure (Callas).
7664140 Early termination of low data rate traffic in a
wireless network (Krishnan).
7698453 Early generation of acknowledgements for flow
control (Sutter).
7730213 Object-based storage device with improved
reliability and fast crash recovery (Howard).
7840648 Web-page authoring tool for automatic enrollment
in advertising program (Rosenstein).
7843938 QoS optimization with compression (Sutter).
7852799 Network using randomized time division duplexing
(Krishnan).
7864770 Routing messages in a zero-information nested
virtual private network (Baker).
786772 Protecting data integrity in an enhanced network
connection (Sutter).
789561 Method and system for dynamic network intrusion
monitoring, detection and response (Callas).
7907898 Asynchronous inter-piconet routing (Krishnan).
7912457 Methods and apparatus for creation and transport of
multimedia content flows (Krishnan).
7953000 Mechanism to improve preemption behavior of
resource reservations (Baker).
7953794 Method and system for transitioning between
synchronous and asynchronous communication modes (Kofman).
7958529 Method of sharing an item rental account (Hunt).
7969876 Method of determining path maximum transmission
unit (Sutter).
7978710 Synchronous inter-piconet routing (Krishnan).
8004973 Virtual inline configuration for a network device
(Sutter).
8015067 Deleted account handling for hosted services
(Parham).
8019351 Multi-hop communications in a wireless network
(Krishnan).
8024652 Techniques to associate information between
application programs (Kofman).
8028024 System and method of instant messaging between
wireless devices (Krishnan).
8050271 Protecting data integrity in an enhanced network
connection (Sutter).
8077632 Automatic LAN/WAN port detection (Sutter).
8086524 Systems and methods for transaction processing and
balance transfer processing (Sutter).
8150919 Method and system for transitioning between
synchronous and asynchronous communication modes (Kofman).
8155444 Image text to character information conversion
(Kofman).
8156554 Method and system for verifying identification of
an electronic mail message (Baker).
8161368 Distributed processing when editing an image in a
browser (Rosenstein).
8176120 Web-page authoring tool for automatic enrollment in
advertising program (Rosenstein).
8208972 Low power dual processor architecture for multi
mode devices (Krishnan).
8230318 Selective image editing in a browser (Rosenstein).
8233392 Transaction boundary detection for reduction in
timeout penalties (Sutter).
8238241 Automatic detection and window virtualization for
flow control (Sutter).
8245123 Effects applied to images in a browser
(Rosenstein).
8245277 Universally usable human-interaction proof
(Hochheiser).
8259729 Wavefront detection and disambiguation of
acknowledgements (Sutter).
8271338 Approach for estimating user ratings of items
(Hunt).
8310928 Flow control system architecture (Sutter).
8311981 Conflict management during data object
synchronization between client and server (Rosenstein).
8315977 Data synchronization between a data center
environment and a cloud computing environment (Hunt).
8320244 Reservation based MAC protocol (Krishnan).
8351985 Low power dual processor architecture for multi
mode devices (Krishnan).
8365235 Trick play of streaming media (Hunt).
8369361 Early termination of low data rate traffic in a
wireless network (Krishnan).
8386601 Detecting and reporting on consumption rate changes
(Sutter).
8386621 Parallel streaming (Hunt).
8411560 TCP selection acknowledgements for communicating
delivered and missing data packets (Sutter).
8417476 Dynamic randomized controlled testing with consumer
electronics devices (Hunt).
8433814 Digital content distribution system and method
(Hunt).
8438280 Detecting and reporting on consumption rate changes
(Sutter).
8443056 Client-server signaling in content distribution
networks (Hunt).
8448057 Audience segment selection (Sutter).
8462630 Early generation of acknowledgements for flow
control (Sutter).
8464237 Method and apparatus for optimizing compilation of
a computer program (Taylor).
872930 Methods and apparatus for creation and transport of
multimedia content flows (Krishnan).
8478590 Word-level correction .of speech input (Ballinger).
8489135 Network topology formation (Krishnan).
8489889 Method and apparatus for restricting access to
encrypted data (Callas).
8493955 Interference mitigation mechanism to enable spatial
reuse in UWB networks (Krishnan).
8494852 Word-level correction of speech input (Ballinger).
8504905 Audience segment selection (Sutter).
8553699 Wavefront detection and disambiguation of
acknowledgements (Sutter).
8554832 Server side user interface simulation (Moskovitz,
Rosenstein).
8566353 Web-based system for collaborative generation of
interactive videos (Kofman).
8572477 Web-based incremental computing (Moskovitz,
Rosenstein).
Applications:
20020065919 Peer-to-peer caching network for user data
(Taylor).
20040049763 Method and apparatus for importing static
members of a class (Bloch).
20040049764 Object-oriented enumerated type facility
(Bloch).
20040049766 Method and apparatus for associating metadata
attributes with program elements (Bloch).
20050005024 Method of determining path maximum transmission
unit (Sutter).
20050058131 Wavefront detection and disambiguation of
acknowledgments (Sutter).
20050060426 Early generation of acknowledgements for flow
control (Sutter).
20050063302 Automatic detection and window virtualization
for flow control (Sutter).
20050063303 TCP selective acknowledgements for
communicating delivered and missed data packets (Sutter).
20050063307 Flow control system architecture (Sutter).
20050074007 Transaction boundary detection for reduction in
timeout penalties (Sutter).
20050120329 Method and apparatus for supporting typesafe
software design (Bloch).
20050222779 Detecting recessive diseases in inbred
populations (Conway).
20060159029 Automatic LAN/WAN port detection (Sutter).
20060161516 Method and system for synchronizing multiple
user revisions to a shared object (Kofman).
20060161585 Method and system for transitioning between
synchronous and asynchronous communication modes (Kofman).
20060248442 Web page authoring tool for structured
documents (Rosenstein).
20070031886 Detecting recessive diseases in inbred
populations (Conway).
20070198662 Deleted account handling for hosted services
(Parham).
[[Page H7524]]
20070198938 Account administration for hosted services
(Parham).
20070245310 Message catalogs for remote modules
(Rosenstein).
20070248090 Virtual inline configuration for a network
device (Sutter).
20070260979 Distributed processing when editing an image in
a browser (Rosenstein).
20070285428 Self-refreshing display controller for a
display device in a computational unit (Gettys).
20080086741 Audience commonality and measurement (Sutter).
20080170785 Converting Text (Kofman).
20080225057 Selective image editing in a browser
(Rosenstein).
20080225058 Effects applied to images in a browser
(Rosenstein).
20080256113 Techniques to associate information between
application programs (Kofman).
20080256114 Techniques to display associated information
between application programs (Kofman).
20080270761 Techniques to generate event contexts for
recurring events (Kofman).
20090083442 Tracking Identifier Synchronization (Sutter).
20090119167 Social Advertisements and Other Informational
Messages on a Social Networking Website, and Advertising
Model for Same (Rosenstein).
20090182589 Communicating Information in a Social
Networking Website About Activities from Another Domain
(Rosenstein).
20090201828 Method of determining path maximum transmission
unit (Sutter).
20090216815 Conflict Management During Data Object
Synchronization Between Client and Server (Rosenstein).
20090235158 Web Page Authoring Tool for Structured
Documents (Rosenstein).
20100036779 User-controllable learning of policies
(Cranor).
20100046372 Wavefront Detection and Disambiguation of
Acknowledgements (Sutter).
20100050040 Tcp selection acknowledgements for
communicating delivered and missing data packets (Sutter).
20100095350 Universally usable human-interaction proof
(Hochheiser).
20100103819 Flow control system architecture (Sutter).
20100110092 Distributed processing when editing an image in
a browser (Rosenstein).
20100110104 Effects applied to images in a browser
(Rosenstein).
20100111406 Selective image editing in a browser
(Rosenstein).
20100232294 Early generation of acknowledgements for flow
control (Sutter).
20100309922 Protecting data integrity in an enhanced
network connection (Sutter).
20110029388 Social Advertisements and Other Informational
Messages on a Social Networking Website, and Advertising
Model for Same (Rosenstein).
20110055314 Page rendering for dynamic web pages
(Rosenstein).
20110153324 Language Model Selection for Speech-to-Text
Conversion (Ballinger).
20110153325 Multi-Modal Input on an Electronic Device
(Ballinger).
20110161080 Speech to Text Conversion (Ballinger).
20110161081 Speech Recognition Language Models (Ballinger).
20110161178 Web-Page Authoring Tool for Automatic
Enrollment in Advertising Program (Rosenstein).
20110166851 Word-Level Correction of Speech Input
(Ballinger).
20110225242 Method and system for transitioning between
synchronous and asynchronous communication modes (Kofman).
20120022853 Multi-Modal Input on an Electronic Device
(Ballinger).
20120022866 Language Model Selection for Speech-to-Text
Conversion (Ballinger).
20120022867 Speech to Text Conversion (Ballinger).
20120022868 Word-Level Correction of Speech Input
(Ballinger).
20120022873 Speech Recognition Language Models (Ballinger).
20120093156 Virtual inline configuration for a network
device (Sutter).
20120095836 Social Advertisements Based on Actions on an
External System (Rosenstein).
20120101898 Presenting personalized social content on a web
page of an external system (Rosenstein).
20120109757 Sponsored stories and news stories within a
newsfeed of a social networking system (Rosenstein).
20120203847 Sponsored Stories and News Stories within a
Newsfeed of a Social Networking System (Rosenstein).
20120204096 Presenting Personalized Social Content on a Web
Page of an External System (Rosenstein).
20120327772 Wavefront detection and disambiguation of
acknowledgements (Sutter).
20130003553 Automatic detection and window virtualization
for flow control (Sutter).
20130124612 Conflict Management During Data Object
Synchronization Between Client and Server (Rosenstein).
20130132222 Method and Apparatus Pertaining to Financial
Investment Quantitative Analysis Signal Auctions (Sutter).
20130198008 Social Advertisements And Other Informational
Messages On A Social Networking Website, And Advertising
Model For Same (Rosenstein).
20130198024 Method and Apparatus Pertaining to the
Aggregation and Parsing of Behavioral-Event Content (Sutter).
20130204954 Communicating information in a social
networking website about activities from another domain
(Rosenstein).
20110207116 Spatio-Temporal Control of Proten Interactions
Using Phytochromes (Levskaya).
Mr. HONDA. Mr. Chairman, I rise today in support of H.R. 3309, The
Innovation Act, which will help to curtail the damage done by patent
trolls to the American economy and consumers.
In recent years, patent trolls have had a significant negative impact
on America's economy, with organizations from all walks of life being
attacked and facing costly licensing fees, settlements, and even court
battles. The direct impact of this has been estimated at roughly $29
billion per year.
It is important to realize that the impact of patent trolls is
falling not just on big, wealthy companies, but on America's consumers.
In one notable case, a patent troll has threatened nonprofit charities
in Vermont and a community choir in Nebraska, asking for $1,000 per
employee simply because the organizations use scanners. And another has
demanded licensing fees from more than 8,000 businesses, including
coffee houses and hotels, and ultimately sued hundreds of them--all
because they provide wifi to their customers.
The impact of this on the consumer is significant. The expense
associated with facing a patent troll leaves small businesses with a
low profit margin already with the choice of either halting use of this
service to its customers, or offsetting the cost by charging for use.
When these small businesses are able to go to court, the trolls lose
the cases over 85 percent of the time. But in our current system, most
of them can't afford to do so.
What's more, the long-term impact is even more damaging for
consumers. The cost of this type of litigation has risen to more than
$29 billion per year, with each suit costing an estimated average of
$5-10 million. These are funds that companies can't use to create jobs
or innovate. By diverting resources to fighting trolls, Silicon Valley
companies have less to spend on investment in new products, expansion
to new areas, and improvement of services.
The Federal Trade Commission, which is charged with protecting
consumers and policing unfair and deceptive acts, recently began an
investigation of patent trolls. An investigation is a good step in the
right direction, but legislation like H.R. 3309 is needed to truly
combat patent trolls.
As a cosponsor of the bipartisan Innovation Act, I know this bill
will take important steps to curb the abusive patent litigation we see
today, in which trolls send vague demand letters about overbroad
patents, don't clearly identify themselves, and deliberately run up
discovery costs to pressure defendants to settle.
The bill will change the rules for patent lawsuits by requiring
plaintiffs to identify who is really behind the suit, what patent is
being asserted, and what the infringement claim is. This will allow the
targets of patent suits to know who is accusing them of infringement
and what exactly they are being accused of doing.
H.R. 3309 will also require judges to shift litigation costs and fees
to a non-prevailing party in cases where the party's position was not
reasonably justified, unless it would cause severe economic harm to the
named inventor. This will make it easier for defendants to fight
unjustified patent suits and deter illegitimate claims, while
protecting legitimate inventors and preserving courts' discretion to
not shift costs.
The bill will also require the Judicial Conference of the United
States to make rules that would shift discovery costs, while leaving
the details of the rulemaking are up the Judicial Conference. The rule
should require parties to pay for their own discovery requests beyond
the core documents needed to advance the suit, which aims to rein in
broad discovery requests in patent suits that are unnecessary, unfair,
and costly, and are often designed simply to intimidate the other party
into a settlement. The bill would allow the courts to maintain
discretion to modify the rules for good cause.
Another aspect of the bill will allow manufacturers and suppliers to
intervene and stay lawsuits against customers and end users of a
product that allegedly infringe patents, if both the manufacturer and
customer agree. This will protect the coffee shop or hotel, which is
accused of infringing a wifi patent because it uses a particular
wireless router, by allowing the maker of the allegedly infringing
product to step in and take responsibility for the case.
It is important to note that this bill does not diminish or devalue
patent rights in the United States. It does not attempt to eliminate
valid patent litigation; rather, it is aimed at abusive behaviors in
the patent litigation system and seeks to put them to a stop. Its
provisions for higher pleading standards and greater transparency will
save the court's time and resources by making parties do their due
diligence and provide information up front, before an infringement suit
is filed. Greater transparency and information are a good thing, and
will make the system stronger.
[[Page H7525]]
H.R. 3309 had broad bipartisan support in the Judiciary Committee,
where it passed by a vote of 33-5, and it deserves our support. I look
forward to working with my colleagues on both sides of the aisle in the
House and the Senate to send a bill to the President that will bring an
end to these abusive practices that are stifling American businesses
and innovation.
Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I rise today in
support of H.R. 3309, the Innovation Act. I would like to applaud my
colleagues for bringing this important issue to the floor today.
Throughout my tenure in Congress, I have long supported the
principles for reforming patent litigation to prevent troll litigation.
As Ranking Member of the House Committee on Science, Space and
Technology I have long supported policy in order to prioritize
investments that will advance our knowledge, create new industries and
jobs, and give our children the grounding in science and technology
they will need to succeed in a competitive world economy. During this
time of economic need, I support H.R. 3309 which is integral to curbing
frivolous and costly patent litigation that currently hinders our
ability to innovate, create jobs and economic growth.
Many companies, from both the technology and non-technology sectors,
have been the target of numerous, merit-less lawsuits from patent
trolls. Since 2005, the number of defendants sued by patent trolls has
quadrupled, activity that is estimated to have cost the U.S. economy
$80 billion in 2011. And, what's even more startling is that in 2012
patent trolls sued more non-tech companies than tech companies. I am
supportive of the Innovation Act of 2013 which takes a multi-faceted
approach to end this abuse.
While I recognize there may be no single solution that addresses all
complexities surrounding our nation's patent process, H.R. 3309 is a
good faith bi-partisan first step towards addressing patent trolling. I
am pleased that the Administration is also supportive of H.R. 3309.
Moving forward, I would like to work with all sides on this issue to
curb patent trolling. I would like to think that all of us in Congress
agree that we must work to address the problem of patent trolls.
Ms. JACKSON LEE. Mr. Chairman, I rise to talk about innovation in
America--the great job creator that I feel is being put in jeopardy by
H.R. 3309, the Innovation Act.
H.R. 3309 is a bill before its time as the America Invents Act was
signed into law barely two years ago. Many of the major provisions of
this landmark legislation which many on the Judiciary Committee and in
this body voted for have not even been put into practice.
It is well documented that our innovation ecosystem--founded on
patents--drives economic growth and job creation in the United States.
From the hustle and bustle of downtown Houston, Silicon Valley,
Chicago, New York, and even here in Washington, D.C., Americans want to
keep our cherished system as strong as possible. For the future of our
economy, we cannot risk jeopardizing it.
And while the AIA was unquestionably pro-innovator legislation, its
post-grant challenge provisions also unquestionably shifted the balance
of rights toward implementers and away from patent holders. The only
remaining question, brought on by the adolescence of the AIA, is--just
how much has that balance shifted?
``Loser pays'', also commonly referred to as the British Rule,
mandates that the losing side in a civil dispute pay the legal costs of
the other side. Loser pays laws ensure that only the wealthiest members
of society or large corporations can afford to undertake a civil action
and also unnecessarily punishes individuals with serious and
meritorious claims for seeking access to justice.
Loser pays policies fail to recognize that a person or a business can
have a legally legitimate dispute regarding fact and law, and yet still
ultimately lose the case. Loser pays policy sets a dangerous precedent
and may prevent individuals from pursuing even the most meritorious
civil liability claims.
For most individuals and small businesses, the financial risk of
having to pay the other side's costs and legal fees is one too great to
bear, no matter how valid the claim. It creates a situation where
experienced corporate defendants with enormous resources and expert
legal talent can bully injured plaintiffs into unfair settlements due
to the risks associated with losing a potentially successful case.
If ``loser pays'' is implemented it could be a roadblock for people
pursuing whistleblower, consumer mortgage, employment discrimination
and other civil rights cases. The only losers under a ``loser pays''
system is the small business or individual plaintiff, or the innovator
who is discouraged from pursuing her rights due to the chilling effect
brought on by the onerous language in H.R. 3309.
This bill tries to discourage patent litigation abuse by patent
assertion entities, better known as ``patent trolls''. Trolls use
patents of questionable quality to pressure their targets into
settlement for an amount that is lower than the legal fees to defend
against a lawsuit. Trolls typically have no interest in moving the
patented technology into the marketplace. Generally, the troll's target
has had a product on the market for some time and the troll's patent
covers the targeted product through exceedingly broad claims, often
through a broad interpretation of vague claim terms.
In one common tactic, a troll will approach a target with a proposal
to license patents with a one-time fee of $50k to $200k, where it might
cost the target $15k to $50k for an initial legal opinion on validity
and infringement, and it might cost the target $20k to $50k per month
in legal fees in litigation proceedings (mainly driven by discovery and
motions practice). So the one-time fee may sound appealing as a simple
payoff to avoid legal fees that are comparable and inevitable.
In theory, one can discourage the patent troll business model by
increasing patent quality, promoting stricter requirements on claim
construction, and lowering the cost of litigation (by limiting
discovery). Each of these purported remedies has a cost that may be
worse than the alleged benefit. That is why it is critical that we
carefully consider any and all legislation and policy which looks to
improve.
At the outset of considering further changes to our patent system, we
must recognize that the time constant of the patent system--the period
between new patent application and court decision on a patent
infringement claim--is very long. Therefore, the impact of Congress'
very recent major change to our patent system has barely begun to be
felt.
Moreover, in long time constant systems such as our patent system,
over-correction, especially that which leaves scant time for due
deliberation, is a major danger.
By the time we realize that an over-correction is apparent, it will
be years after the system is badly damaged. If there were ever a case
where caution is called for, this is it, and I say that because my
constituents in Texas, and particularly in Houston, wanted change in
the patent system, and surely every one of them was not satisfied with
the Leahy-Smith Act but some changes we can live with.
I would hope that due caution would yield to a deliberative process
that takes the time to reach out and listen to all stakeholders,
including those who will not be the fastest ones off the mark, and I am
sure that some of them exist in Texas. Many small innovators--today's
Priceline.coms, Yahoo's, Google's, Facebook's, Eli Lilly's, Twitter's,
akin to yesteryears Edisons--have not had time to make their views
heard.
Others having various levels of dependence on strong IP rights are
just now beginning to consider the prospect of further changes to our
patent system. We need to allow these important stakeholders their time
to participate.
I look forward to hearing from these witnesses but would hope that
this Committee proceeds on any changes with due caution--because the
ink on the America Invents Act is barely dry--and another patent bill
is before us with changes that are fraught with difficulty for many in
our innovation economy.
My amendment modifies the Manager's Amendment to ensure that small
businesses that motivated this provision are protected and by expanding
the amendment so that businesses with under $25 million are included--
my hope is that it will garner the support.
Under my amendment, the customer stay provision a covered customer is
one who is accused of infringing a patent or patents on a covered
product or process, and is a small business that has revenue of $25
million or less.
I have modified this amendment from that offered in the Judiciary
Committee markup in order to accommodate more businesses who feel they
might benefit from the narrowed language while still maintaining the
intended consequence of allowing for stays in proceedings. The expanded
language might allow some businesses who are past the ``mom and pop''
growth phase but if this will provide medium-sized businesses from
going bankrupt, or losing valuable revenues because of litigation, it
is a useful expansion.
A number of the provisions in this bill may be well-intentioned, but
they have undesirable consequences for the patent system as a whole.
They have the potential to undermine the enforceability of all patent
rights, no matter how valuable the patent, and thus potentially
incentivize infringement.
That is why I offered three amendments in the Judiciary Committee and
three in the Rules Committee yesterday. My first amendment struck
section 9(a) of H.R. 3309 which strikes Section 9(a) of the bill which
repeals Section 145 of 35 U.S.C. Under this repeal, applicants would be
gratuitously denied the fundamental right of de-novo judicial review of
adverse patentability determinations by the Patent and Trademark Office
when it refuses to consider certain evidence. This is a limiting
provision and unfairly prevents a full adjudication of the rights of
litigants. The importance of this 170-year-old protective provision is
in its restraining effect on PTO's potential abuse of
[[Page H7526]]
discretion for all patent applicants--not just for those who would seek
judicial review. I attempted to modify my amendment based on a meeting
I had with Chief Judge Rader of the Federal Circuit, which hears all
patent claims, and is the lodestar for patent litigation.
My second amendment which was made in order by the Rules Committee
yesterday evening, modifies the Manager's Amendment to ensure that
small businesses that motivated this provision are protected and by
expanding the amendment so that businesses with under $25 million are
included--my hope is that it will garner the support. Under my
amendment, a covered customer is one who is accused of infringing a
patent or patents on a covered product or process, and is a small
business that has revenue of $25 million or less. I have modified this
amendment from that offered in the Judiciary Committee markup in order
to accommodate more businesses who feel they might benefit from the
narrowed language while still maintaining the intended consequence of
allowing for stays in proceedings. The expanded language might allow
some businesses who are past the ``mom and pop'' growth phase but if
this will provide medium-sized businesses from going bankrupt, or
losing valuable revenues because of litigation, it is a useful
expansion.
Also made-in-order by the Rules Committee is my third amendment which
simply requires the PTO Director, in consultation with other relevant
agencies, and interested parties, to conduct a study to examine the
economic impact of the litigation reforms contained in the bill
(sections 3, 4, and 5 of this Act) on the ability of individuals and
small businesses owned by women, veterans, and minorities to assert,
secure, and vindicate the constitutionally guaranteed exclusive right
to inventions and discoveries by such individuals and small business.
This amendment supplements and improves the bill, which requires PTO to
conduct 4 studies and submit reports to Congress. The required studies
are:
1. Study On Secondary Market Oversight For Patent Transactions To
Promote Transparency And Ethical Business Practices.
2. Study On Patents Owned By The United States Government
3. Study On Patent Quality And Access To The Best Information During
Examination
4. Study On Patent Small Claims Court
My last amendment was done with Ranking Member Conyers of the
Judiciary Committee, strikes Section 3(b) which requires that courts
reward attorney's fees and expenses to the prevailing party. I remain
convinced that this provision is onerous and prepares us for a slippery
slope that leads to more and more restraints against plaintiffs in
litigation.
This will have a chilling effect and deter litigation in areas which
might lead to more harm being exacted on the public--particularly in
areas such as civil rights, environmental protection, and business
regulations.
Mr. Chairman, in the name of fairness to the little person--the
Davids in the land of the Goliaths, commercially-speaking--and I ask my
colleagues to slow the train down and exercise prudence and due caution
before we vote on H.R. 3309.
We must act thoughtfully and with great caution as we pursue reforms
to a system which took sixty years to change--and then in batting of a
Congressional eyelash--look to significantly modify once again. I was
here during the long road that led to the path that became Smith-Leahy,
or the American Invents Act. That it took so long is somewhat
perplexing; but even more interesting is that the bill had a Republican
House and a Democratic Senate. Yet we came together in a collaborative
fashion and made lemonade out of sixty years of lemons while in the
midst of some of the most jarring partisanship we have seen in this
great body. Yet H.R. 3309 has been cobbled together in a couple of
months--this is no small, technical correction bill Mr. Chairman--it is
comprehensive yet potentially pernicious legislation which should be
slowed, if not stopped.
Ms. KAPTUR. Mr. Chairman, today I rise in opposition to H.R. 3309.
This bill hurts innovation by small business and many American
inventors with less than 5 patents. My amendment to exempt them from
the strictures and inherent costs of this bill was not made in order.
Issues with this bill:
Proponents of the bill claim that H.R. 3309 attempts to fix the issue
with patent trolls. However, there is no evidence that patent trolls
make up more than a very small percent of the civil suits brought in
court--probably less than 5 percent.
The bill does however make it more difficult and for the vast
majority of inventors and much more expensive for the ``little guy'' to
sue for patent infringement. Small inventors simply cannot afford to
defend themselves. Truly, this is un-American.
Fee shifting and ``loser pay'' rules ensure that only wealthy
inventors and large business are able to protect their patents. Many
small inventors and entrepreneurs simply cannot afford the cost of
civil litigation and the potential cost of paying the legal fees for
losing a lawsuit. Why throttle the most important source of innovation
in our Nation?
Six national higher education associations including the Association
of American Universities, Association of American Medical Universities,
Association of Public and Land Grant Universities, and the American Bar
Association and the Association of University Technology Managers
oppose this bill. More than half of the U.S. economic growth since
World War II is the result of technological innovation resulting from
federally funded research. Universities are worried that this bill will
hurt their ability to turn their federally funded research into the
commercial sector because of how difficult it will be to defend their
patents in court with the new fee shifting rules.
The American Association of Justice is ``deeply concerned with the
continued inclusion of burdensome mandatory fee shifting, unfair
limitations on discovery and impediments on the discretion of the
courts.''
The bill should be sent back to committee. It should review in
particular the development and improvement of rules of procedure and
case management to address the concerns over abusive litigation
practices so we can address the real issues with patent law without
making unnecessary changes that hurt small business and individual
inventors.
Mr. BLUMENAUER. Mr. Chairman, I support H.R. 3309, the Innovation
Act, as a step in the right direction to address the growing and
serious issue of abusive patent lawsuits or ``patent trolling.''
We need to be careful that certain provisions of this legislation do
not have unintended consequences for legitimate patent holders,
especially institutions of higher education. It is encouraging that the
administration's support includes a commitment to help refine this
legislation. I look forward to participating in that effort.
The Acting CHAIR (Mr. Massie). All time for general debate has
expired.
Pursuant to the rule, the bill shall be considered for amendment
under the 5-minute rule.
In lieu of the amendment in the nature of a substitute recommended by
the Committee on the Judiciary, printed in the bill, it shall be in
order to consider as an original bill for the purpose of amendment
under the 5-minute rule an amendment in the nature of a substitute
consisting of the text of Rules Committee Print 113-28. That amendment
in the nature of a substitute shall be considered as read.
The text of the amendment in the nature of a substitute is as
follows:
H.R. 3309
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Innovation
Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Patent infringement actions.
Sec. 4. Transparency of patent ownership.
Sec. 5. Customer-suit exception.
Sec. 6. Procedures and practices to implement and recommendations to
the Judicial Conference.
Sec. 7. Small business education, outreach, and information access.
Sec. 8. Studies on patent transactions, quality, and examination.
Sec. 9. Improvements and technical corrections to the Leahy-Smith
America Invents Act.
Sec. 10. Effective date.
SEC. 2. DEFINITIONS.
In this Act:
(1) Director.--The term ``Director'' means the Under
Secretary of Commerce for Intellectual Property and Director
of the United States Patent and Trademark Office.
(2) Office.--The term ``Office'' means the United States
Patent and Trademark Office.
SEC. 3. PATENT INFRINGEMENT ACTIONS.
(a) Pleading Requirements.--
(1) Amendment.--Chapter 29 of title 35, United States Code,
is amended by inserting after section 281 the following:
``Sec. 281A. Pleading requirements for patent infringement
actions
``(a) Pleading Requirements.--Except as provided in
subsection (b), in a civil action in which a party asserts a
claim for relief arising under any Act of Congress relating
to patents, a party alleging infringement shall include in
the initial complaint, counterclaim, or cross-claim for
patent infringement, unless the information is not reasonably
accessible to such party, the following:
``(1) An identification of each patent allegedly infringed.
``(2) An identification of each claim of each patent
identified under paragraph (1) that is allegedly infringed.
``(3) For each claim identified under paragraph (2), an
identification of each accused process, machine, manufacture,
or composition of matter (referred to in this section as an
`accused instrumentality') alleged to infringe the claim.
[[Page H7527]]
``(4) For each accused instrumentality identified under
paragraph (3), an identification with particularity, if
known, of--
``(A) the name or model number of each accused
instrumentality; or
``(B) if there is no name or model number, a description of
each accused instrumentality.
``(5) For each accused instrumentality identified under
paragraph (3), a clear and concise statement of--
``(A) where each element of each claim identified under
paragraph (2) is found within the accused instrumentality;
and
``(B) with detailed specificity, how each limitation of
each claim identified under paragraph (2) is met by the
accused instrumentality.
``(6) For each claim of indirect infringement, a
description of the acts of the alleged indirect infringer
that contribute to or are inducing the direct infringement.
``(7) A description of the authority of the party alleging
infringement to assert each patent identified under paragraph
(1) and of the grounds for the court's jurisdiction.
``(8) A clear and concise description of the principal
business, if any, of the party alleging infringement.
``(9) A list of each complaint filed, of which the party
alleging infringement has knowledge, that asserts or asserted
any of the patents identified under paragraph (1).
``(10) For each patent identified under paragraph (1),
whether a standard-setting body has specifically declared
such patent to be essential, potentially essential, or having
potential to become essential to that standard-setting body,
and whether the United States Government or a foreign
government has imposed specific licensing requirements with
respect to such patent.
``(b) Information Not Readily Accessible.--If information
required to be disclosed under subsection (a) is not readily
accessible to a party, that information may instead be
generally described, along with an explanation of why such
undisclosed information was not readily accessible, and of
any efforts made by such party to access such information.
``(c) Confidential Information.--A party required to
disclose information described under subsection (a) may file,
under seal, information believed to be confidential, with a
motion setting forth good cause for such sealing. If such
motion is denied by the court, the party may seek to file an
amended complaint.
``(d) Exemption.--A civil action that includes a claim for
relief arising under section 271(e)(2) shall not be subject
to the requirements of subsection (a).''.
(2) Conforming amendment.--The table of sections for
chapter 29 of title 35, United States Code, is amended by
inserting after the item relating to section 281 the
following new item:
``281A. Pleading requirements for patent infringement actions.''.
(b) Fees and Other Expenses.--
(1) Amendment.--Section 285 of title 35, United States
Code, is amended to read as follows:
``Sec. 285. Fees and other expenses
``(a) Award.--The court shall award, to a prevailing party,
reasonable fees and other expenses incurred by that party in
connection with a civil action in which any party asserts a
claim for relief arising under any Act of Congress relating
to patents, unless the court finds that the position and
conduct of the nonprevailing party or parties were reasonably
justified in law and fact or that special circumstances (such
as severe economic hardship to a named inventor) make an
award unjust.
``(b) Certification and Recovery.--Upon motion of any party
to the action, the court shall require another party to the
action to certify whether or not the other party will be able
to pay an award of fees and other expenses if such an award
is made under subsection (a). If a nonprevailing party is
unable to pay an award that is made against it under
subsection (a), the court may make a party that has been
joined under section 299(d) with respect to such party liable
for the unsatisfied portion of the award.
``(c) Covenant Not to Sue.--A party to a civil action that
asserts a claim for relief arising under any Act of Congress
relating to patents against another party, and that
subsequently unilaterally extends to such other party a
covenant not to sue for infringement with respect to the
patent or patents at issue, shall be deemed to be a
nonprevailing party (and the other party the prevailing
party) for purposes of this section, unless the party
asserting such claim would have been entitled, at the time
that such covenant was extended, to voluntarily dismiss the
action or claim without a court order under Rule 41 of the
Federal Rules of Civil Procedure.''.
(2) Conforming amendment and amendment.--
(A) Conforming amendment.--The item relating to section 285
of the table of sections for chapter 29 of title 35, United
States Code, is amended to read as follows:
``285. Fees and other expenses.''.
(B) Amendment.--Section 273 of title 35, United States
Code, is amended by striking subsections (f) and (g).
(3) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act
and shall apply to any action for which a complaint is filed
on or after the first day of the 6-month period ending on
that effective date.
(c) Joinder of Interested Parties.--Section 299 of title
35, United States Code, is amended by adding at the end the
following new subsection:
``(d) Joinder of Interested Parties.--
``(1) Joinder.--In a civil action arising under any Act of
Congress relating to patents in which fees and other expenses
have been awarded under section 285 to a prevailing party
defending against an allegation of infringement of a patent
claim, and in which the nonprevailing party alleging
infringement is unable to pay the award of fees and other
expenses, the court shall grant a motion by the prevailing
party to join an interested party if such prevailing party
shows that the nonprevailing party has no substantial
interest in the subject matter at issue other than asserting
such patent claim in litigation.
``(2) Limitation on joinder.--
``(A) Discretionary denial of motion.--The court may deny a
motion to join an interested party under paragraph (1) if--
``(i) the interested party is not subject to service of
process; or
``(ii) joinder under paragraph (1) would deprive the court
of subject matter jurisdiction or make venue improper.
``(B) Required denial of motion.--The court shall deny a
motion to join an interested party under paragraph (1) if--
``(i) the interested party did not timely receive the
notice required by paragraph (3); or
``(ii) within 30 days after receiving the notice required
by paragraph (3), the interested party renounces, in writing
and with notice to the court and the parties to the action,
any ownership, right, or direct financial interest (as
described in paragraph (4)) that the interested party has in
the patent or patents at issue.
``(3) Notice requirement.--An interested party may not be
joined under paragraph (1) unless it has been provided actual
notice, within 30 days after the date on which it has been
identified in the initial disclosure provided under section
290(b), that it has been so identified and that such party
may therefore be an interested party subject to joinder under
this subsection. Such notice shall be provided by the party
who subsequently moves to join the interested party under
paragraph (1), and shall include language that--
``(A) identifies the action, the parties thereto, the
patent or patents at issue, and the pleading or other paper
that identified the party under section 290(b); and
``(B) informs the party that it may be joined in the action
and made subject to paying an award of fees and other
expenses under section 285(b) if--
``(i) fees and other expenses are awarded in the action
against the party alleging infringement of the patent or
patents at issue under section 285(a);
``(ii) the party alleging infringement is unable to pay the
award of fees and other expenses;
``(iii) the party receiving notice under this paragraph is
determined by the court to be an interested party; and
``(iv) the party receiving notice under this paragraph has
not, within 30 days after receiving such notice, renounced in
writing, and with notice to the court and the parties to the
action, any ownership, right, or direct financial interest
(as described in paragraph (4)) that the interested party has
in the patent or patents at issue.
``(4) Interested party defined.--In this subsection, the
term `interested party' means a person, other than the party
alleging infringement, that--
``(A) is an assignee of the patent or patents at issue;
``(B) has a right, including a contingent right, to enforce
or sublicense the patent or patents at issue; or
``(C) has a direct financial interest in the patent or
patents at issue, including the right to any part of an award
of damages or any part of licensing revenue, except that a
person with a direct financial interest does not include--
``(i) an attorney or law firm providing legal
representation in the civil action described in paragraph (1)
if the sole basis for the financial interest of the attorney
or law firm in the patent or patents at issue arises from the
attorney or law firm's receipt of compensation reasonably
related to the provision of the legal representation; or
``(ii) a person whose sole financial interest in the patent
or patents at issue is ownership of an equity interest in the
party alleging infringement, unless such person also has the
right or ability to influence, direct, or control the civil
action.''.
(d) Discovery Limits.--
(1) Amendment.--Chapter 29 of title 35, United States Code,
is amended by adding at the end the following new section:
``Sec. 299A. Discovery in patent infringement action
``(a) Discovery in Patent Infringement Action.--Except as
provided in subsection (b), in a civil action arising under
any Act of Congress relating to patents, if the court
determines that a ruling relating to the construction of
terms used in a patent claim asserted in the complaint is
required, discovery shall be limited, until such ruling is
issued, to information necessary for the court to determine
the meaning of the terms used in the patent claim, including
any interpretation of those terms used to support the claim
of infringement.
``(b) Discretion To Expand Scope of Discovery.--
``(1) Timely resolution of actions.--If, under any
provision of Federal law (including the amendments made by
the Drug Price Competition and Patent Term Restoration Act of
1984 (Public Law 98-417)), resolution within a specified
period of time of a civil action arising under any Act of
Congress relating to patents will necessarily affect the
rights of a party with respect to the patent, the court shall
permit discovery, in addition to the discovery authorized
under subsection (a), before the ruling described in
subsection (a) is issued as necessary to ensure timely
resolution of the action.
``(2) Resolution of motions.--When necessary to resolve a
motion properly raised by a
[[Page H7528]]
party before a ruling relating to the construction of terms
described in subsection (a) is issued, the court may allow
limited discovery in addition to the discovery authorized
under subsection (a) as necessary to resolve the motion.
``(3) Special circumstances.--In special circumstances that
would make denial of discovery a manifest injustice, the
court may permit discovery, in addition to the discovery
authorized under subsection (a), as necessary to prevent the
manifest injustice.''.
(2) Conforming amendment.--The table of sections for
chapter 29 of title 35, United States Code, is amended by
adding at the end the following new item:
``299A. Discovery in patent infringement action.''.
(e) Sense of Congress.--It is the sense of Congress that it
is an abuse of the patent system and against public policy
for a party to send out purposely evasive demand letters to
end users alleging patent infringement. Demand letters sent
should, at the least, include basic information about the
patent in question, what is being infringed, and how it is
being infringed. Any actions or litigation that stem from
these types of purposely evasive demand letters to end users
should be considered a fraudulent or deceptive practice and
an exceptional circumstance when considering whether the
litigation is abusive.
(f) Demand Letters.--Section 284 of title 35, United States
Code, is amended--
(1) in the first undesignated paragraph, by striking ``Upon
finding'' and inserting ``(a) In General.--Upon finding'';
(2) in the second undesignated paragraph, by striking
``When the damages'' and inserting ``(b) Assessment by Court;
Treble Damages.--When the damages'';
(3) by inserting after subsection (b), as designated by
paragraph (2) of this subsection, the following:
``(c) Willful Infringement.--A claimant seeking to
establish willful infringement may not rely on evidence of
pre-suit notification of infringement unless that
notification identifies with particularity the asserted
patent, identifies the product or process accused, and
explains with particularity, to the extent possible following
a reasonable investigation or inquiry, how the product or
process infringes one or more claims of the patent.''; and
(4) in the last undesignated paragraph, by striking ``The
court'' and inserting ``(d) Expert Testimony.--The court''.
(g) Effective Date.--Except as otherwise provided in this
section, the amendments made by this section shall take
effect on the date of the enactment of this Act and shall
apply to any action for which a complaint is filed on or
after that date.
SEC. 4. TRANSPARENCY OF PATENT OWNERSHIP.
(a) Amendments.--Section 290 of title 35, United States
Code, is amended--
(1) in the heading, by striking ``suits'' and inserting
``suits; disclosure of interests'';
(2) by striking ``The clerks'' and inserting ``(a) Notice
of Patent Suits.--The clerks''; and
(3) by adding at the end the following new subsections:
``(b) Initial Disclosure.--
``(1) In general.--Except as provided in paragraph (2),
upon the filing of an initial complaint for patent
infringement, the plaintiff shall disclose to the Patent and
Trademark Office, the court, and each adverse party the
identity of each of the following:
``(A) The assignee of the patent or patents at issue.
``(B) Any entity with a right to sublicense or enforce the
patent or patents at issue.
``(C) Any entity, other than the plaintiff, that the
plaintiff knows to have a financial interest in the patent or
patents at issue or the plaintiff.
``(D) The ultimate parent entity of any assignee identified
under subparagraph (A) and any entity identified under
subparagraph (B) or (C).
``(2) Exemption.--The requirements of paragraph (1) shall
not apply with respect to a civil action filed under
subsection (a) that includes a cause of action described
under section 271(e)(2).
``(c) Disclosure Compliance.--
``(1) Publicly traded.--For purposes of subsection
(b)(1)(C), if the financial interest is held by a corporation
traded on a public stock exchange, an identification of the
name of the corporation and the public exchange listing shall
satisfy the disclosure requirement.
``(2) Not publicly traded.--For purposes of subsection
(b)(1)(C), if the financial interest is not held by a
publicly traded corporation, the disclosure shall satisfy the
disclosure requirement if the information identifies--
``(A) in the case of a partnership, the name of the
partnership and the name and correspondence address of each
partner or other entity that holds more than a 5-percent
share of that partnership;
``(B) in the case of a corporation, the name of the
corporation, the location of incorporation, the address of
the principal place of business, and the name of each officer
of the corporation; and
``(C) for each individual, the name and correspondence
address of that individual.
``(d) Ongoing Duty of Disclosure to the Patent and
Trademark Office.--
``(1) In general.--A plaintiff required to submit
information under subsection (b) or a subsequent owner of the
patent or patents at issue shall, not later than 90 days
after any change in the assignee of the patent or patents at
issue or an entity described under subparagraph (B) or (D) of
subsection (b)(1), submit to the Patent and Trademark Office
the updated identification of such assignee or entity.
``(2) Failure to comply.--With respect to a patent for
which the requirement of paragraph (1) has not been met--
``(A) the plaintiff or subsequent owner shall not be
entitled to recover reasonable fees and other expenses under
section 285 or increased damages under section 284 with
respect to infringing activities taking place during any
period of noncompliance with paragraph (1), unless the denial
of such damages or fees would be manifestly unjust; and
``(B) the court shall award to a prevailing party accused
of infringement reasonable fees and other expenses under
section 285 that are incurred to discover the updated
assignee or entity described under paragraph (1), unless such
sanctions would be unjust.
``(e) Definitions.--In this section:
``(1) Financial interest.--The term `financial interest'--
``(A) means--
``(i) with regard to a patent or patents, the right of a
person to receive proceeds related to the assertion of the
patent or patents, including a fixed or variable portion of
such proceeds; and
``(ii) with regard to the plaintiff, direct or indirect
ownership or control by a person of more than 5 percent of
such plaintiff; and
``(B) does not mean--
``(i) ownership of shares or other interests in a mutual or
common investment fund, unless the owner of such interest
participates in the management of such fund; or
``(ii) the proprietary interest of a policyholder in a
mutual insurance company or of a depositor in a mutual
savings association, or a similar proprietary interest,
unless the outcome of the proceeding could substantially
affect the value of such interest.
``(2) Proceeding.--The term `proceeding' means all stages
of a civil action, including pretrial and trial proceedings
and appellate review.
``(3) Ultimate parent entity.--
``(A) In general.--Except as provided in subparagraph (B),
the term `ultimate parent entity' has the meaning given such
term in section 801.1(a)(3) of title 16, Code of Federal
Regulations, or any successor regulation.
``(B) Modification of definition.--The Director may modify
the definition of `ultimate parent entity' by regulation.''.
(b) Technical and Conforming Amendment.--The item relating
to section 290 in the table of sections for chapter 29 of
title 35, United States Code, is amended to read as follows:
``290. Notice of patent suits; disclosure of interests.''.
(c) Regulations.--The Director may promulgate such
regulations as are necessary to establish a registration fee
in an amount sufficient to recover the estimated costs of
administering subsections (b) through (e) of section 290 of
title 35, United States Code, as added by subsection (a), to
facilitate the collection and maintenance of the information
required by such subsections, and to ensure the timely
disclosure of such information to the public.
(d) Effective Date.--The amendments made by this section
shall take effect upon the expiration of the 6-month period
beginning on the date of the enactment of this Act and shall
apply to any action for which a complaint is filed on or
after such effective date.
SEC. 5. CUSTOMER-SUIT EXCEPTION.
(a) Amendment.--Section 296 of title 35, United States
Code, is amended to read as follows:
``Sec. 296. Stay of action against customer
``(a) Stay of Action Against Customer.--Except as provided
in subsection (d), in any civil action arising under any Act
of Congress relating to patents, the court shall grant a
motion to stay at least the portion of the action against a
covered customer related to infringement of a patent
involving a covered product or process if the following
requirements are met:
``(1) The covered manufacturer and the covered customer
consent in writing to the stay.
``(2) The covered manufacturer is a party to the action or
to a separate action involving the same patent or patents
related to the same covered product or process.
``(3) The covered customer agrees to be bound by any issues
that the covered customer has in common with the covered
manufacturer and are finally decided as to the covered
manufacturer in an action described in paragraph (2).
``(4) The motion is filed after the first pleading in the
action but not later than the later of--
``(A) the 120th day after the date on which the first
pleading in the action is served that specifically identifies
the covered product or process as a basis for the covered
customer's alleged infringement of the patent and that
specifically identifies how the covered product or process is
alleged to infringe the patent; or
``(B) the date on which the first scheduling order in the
case is entered.
``(b) Applicability of Stay.--A stay issued under
subsection (a) shall apply only to the patents, products,
systems, or components accused of infringement in the action.
``(c) Lift of Stay.--
``(1) In general.--A stay entered under this section may be
lifted upon grant of a motion based on a showing that--
``(A) the action involving the covered manufacturer will
not resolve a major issue in suit against the covered
customer; or
``(B) the stay unreasonably prejudices and would be
manifestly unjust to the party seeking to lift the stay.
``(2) Separate manufacturer action involved.--In the case
of a stay entered based on the participation of the covered
manufacturer in a separate action involving the same patent
or patents related to the same covered product or process, a
motion under this subsection may only be made if the court in
such separate action determines the showing required under
paragraph (1) has been met.
``(d) Exemption.--This section shall not apply to an action
that includes a cause of action described under section
271(e)(2).
``(e) Consent Judgment.--If, following the grant of a
motion to stay under this section, the covered manufacturer
seeks or consents to entry
[[Page H7529]]
of a consent judgment relating to one or more of the common
issues that gave rise to the stay, or declines to prosecute
through appeal a final decision as to one or more of the
common issues that gave rise to the stay, the court may, upon
grant of a motion, determine that such consent judgment or
unappealed final decision shall not be binding on the covered
customer with respect to one or more of such common issues
based on a showing that such an outcome would unreasonably
prejudice and be manifestly unjust to the covered customer in
light of the circumstances of the case.
``(f) Rule of Construction.--Nothing in this section shall
be construed to limit the ability of a court to grant any
stay, expand any stay granted under this section, or grant
any motion to intervene, if otherwise permitted by law.
``(g) Definitions.--In this section:
``(1) Covered customer.--The term `covered customer' means
a party accused of infringing a patent or patents in dispute
based on a covered product or process.
``(2) Covered manufacturer.--The term `covered
manufacturer' means a person that manufactures or supplies,
or causes the manufacture or supply of, a covered product or
process or a relevant part thereof.
``(3) Covered product or process.--The term `covered
product or process' means a product, process, system,
service, component, material, or apparatus, or relevant part
thereof, that--
``(A) is alleged to infringe the patent or patents in
dispute; or
``(B) implements a process alleged to infringe the patent
or patents in dispute.''.
(b) Conforming Amendment.--The table of sections for
chapter 29 of title 35, United States Code, is amended by
striking the item relating to section 296 and inserting the
following:
``296. Stay of action against customer.''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act
and shall apply to any action for which a complaint is filed
on or after the first day of the 30-day period that ends on
that date.
SEC. 6. PROCEDURES AND PRACTICES TO IMPLEMENT RECOMMENDATIONS
OF THE JUDICIAL CONFERENCE.
(a) Judicial Conference Rules and Procedures on Discovery
Burdens and Costs.--
(1) Rules and procedures.--The Judicial Conference of the
United States, using existing resources, shall develop rules
and procedures to implement the issues and proposals
described in paragraph (2) to address the asymmetries in
discovery burdens and costs in any civil action arising under
any Act of Congress relating to patents. Such rules and
procedures shall include how and when payment for document
discovery in addition to the discovery of core documentary
evidence is to occur, and what information must be presented
to demonstrate financial capacity before permitting document
discovery in addition to the discovery of core documentary
evidence.
(2) Rules and procedures to be considered.--The rules and
procedures required under paragraph (1) should address each
of the following issues and proposals:
(A) Discovery of core documentary evidence.--Whether and to
what extent each party to the action is entitled to receive
core documentary evidence and shall be responsible for the
costs of producing core documentary evidence within the
possession or control of each such party, and whether and to
what extent each party to the action may seek nondocumentary
discovery as otherwise provided in the Federal Rules of Civil
Procedure.
(B) Electronic communication.--If the parties determine
that the discovery of electronic communication is
appropriate, whether such discovery shall occur after the
parties have exchanged initial disclosures and core
documentary evidence and whether such discovery shall be in
accordance with the following:
(i) Any request for the production of electronic
communication shall be specific and may not be a general
request for the production of information relating to a
product or business.
(ii) Each request shall identify the custodian of the
information requested, the search terms, and a time frame.
The parties shall cooperate to identify the proper
custodians, the proper search terms, and the proper time
frame.
(iii) A party may not submit production requests to more
than 5 custodians, unless the parties jointly agree to modify
the number of production requests without leave of the court.
(iv) The court may consider contested requests for up to 5
additional custodians per producing party, upon a showing of
a distinct need based on the size, complexity, and issues of
the case.
(v) If a party requests the discovery of electronic
communication for additional custodians beyond the limits
agreed to by the parties or granted by the court, the
requesting party shall bear all reasonable costs caused by
such additional discovery.
(C) Additional document discovery.--Whether the following
should apply:
(i) In general.--Each party to the action may seek any
additional document discovery otherwise permitted under the
Federal Rules of Civil Procedure, if such party bears the
reasonable costs, including reasonable attorney's fees, of
the additional document discovery.
(ii) Requirements for additional document discovery.--
Unless the parties mutually agree otherwise, no party may be
permitted additional document discovery unless such a party
posts a bond, or provides other security, in an amount
sufficient to cover the expected costs of such additional
document discovery, or makes a showing to the court that such
party has the financial capacity to pay the costs of such
additional document discovery.
(iii) Limits on additional document discovery.--A court,
upon motion, may determine that a request for additional
document discovery is excessive, irrelevant, or otherwise
abusive and may set limits on such additional document
discovery.
(iv) Good cause modification.--A court, upon motion and for
good cause shown, may modify the requirements of
subparagraphs (A) and (B) and any definition under paragraph
(3). Not later than 30 days after the pretrial conference
under Rule 16 of the Federal Rules of Civil Procedure, the
parties shall jointly submit any proposed modifications of
the requirements of subparagraphs (A) and (B) and any
definition under paragraph (3), unless the parties do not
agree, in which case each party shall submit any proposed
modification of such party and a summary of the disagreement
over the modification.
(v) Computer code.--A court, upon motion and for good cause
shown, may determine that computer code should be included in
the discovery of core documentary evidence. The discovery of
computer code shall occur after the parties have exchanged
initial disclosures and other core documentary evidence.
(D) Discovery sequence and scope.--Whether the parties
shall discuss and address in the written report filed
pursuant to Rule 26(f) of the Federal Rules of Civil
Procedure the views and proposals of each party on the
following:
(i) When the discovery of core documentary evidence should
be completed.
(ii) Whether additional document discovery will be sought
under subparagraph (C).
(iii) Any issues about infringement, invalidity, or damages
that, if resolved before the additional discovery described
in subparagraph (C) commences, might simplify or streamline
the case, including the identification of any terms or
phrases relating to any patent claim at issue to be construed
by the court and whether the early construction of any of
those terms or phrases would be helpful.
(3) Definitions.--In this subsection:
(A) Core documentary evidence.--The term ``core documentary
evidence''--
(i) includes--
(I) documents relating to the conception of, reduction to
practice of, and application for, the patent or patents at
issue;
(II) documents sufficient to show the technical operation
of the product or process identified in the complaint as
infringing the patent or patents at issue;
(III) documents relating to potentially invalidating prior
art;
(IV) documents relating to any licensing of, or other
transfer of rights to, the patent or patents at issue before
the date on which the complaint is filed;
(V) documents sufficient to show profit attributable to the
claimed invention of the patent or patents at issue;
(VI) documents relating to any knowledge by the accused
infringer of the patent or patents at issue before the date
on which the complaint is filed;
(VII) documents relating to any knowledge by the patentee
of infringement of the patent or patents at issue before the
date on which the complaint is filed;
(VIII) documents relating to any licensing term or pricing
commitment to which the patent or patents may be subject
through any agency or standard-setting body; and
(IX) documents sufficient to show any marking or other
notice provided of the patent or patents at issue; and
(ii) does not include computer code, except as specified in
paragraph (2)(C)(v).
(B) Electronic communication.--The term ``electronic
communication'' means any form of electronic communication,
including email, text message, or instant message.
(4) Implementation by the district courts.--Not later than
6 months after the date on which the Judicial Conference has
developed the rules and procedures required by this
subsection, each United States district court and the United
States Court of Federal Claims shall revise the applicable
local rules for such court to implement such rules and
procedures.
(5) Authority for judicial conference to review and
modify.--
(A) Study of efficacy of rules and procedures.--The
Judicial Conference shall study the efficacy of the rules and
procedures required by this subsection during the 4-year
period beginning on the date on which such rules and
procedures by the district courts and the United States Court
of Federal Claims are first implemented. The Judicial
Conference may modify such rules and procedures following
such 4-year period.
(B) Initial modifications.--Before the expiration of the 4-
year period described in subparagraph (A), the Judicial
Conference may modify the requirements under this
subsection--
(i) by designating categories of ``core documentary
evidence'', in addition to those designated under paragraph
(3)(A), as the Judicial Conference determines to be
appropriate and necessary; and
(ii) as otherwise necessary to prevent a manifest
injustice, the imposition of a requirement the costs of which
clearly outweigh its benefits, or a result that could not
reasonably have been intended by the Congress.
(b) Judicial Conference Patent Case Management.--The
Judicial Conference of the United States, using existing
resources, shall develop case management procedures to be
implemented by the United States district courts and the
United States Court of Federal Claims for any civil action
arising under any Act of Congress relating to patents,
including initial disclosure and early case management
conference practices that--
(1) will identify any potential dispositive issues of the
case; and
(2) focus on early summary judgment motions when resolution
of issues may lead to expedited disposition of the case.
[[Page H7530]]
(c) Revision of Form for Patent Infringement.--
(1) Elimination of form.--The Supreme Court, using existing
resources, shall eliminate Form 18 in the Appendix to the
Federal Rules of Civil Procedure (relating to Complaint for
Patent Infringement), effective on the date of the enactment
of this Act.
(2) Revised form.--The Supreme Court may prescribe a new
form or forms setting out model allegations of patent
infringement that, at a minimum, notify accused infringers of
the asserted claim or claims, the products or services
accused of infringement, and the plaintiff's theory for how
each accused product or service meets each limitation of each
asserted claim. The Judicial Conference should exercise the
authority under section 2073 of title 28, United States Code,
to make recommendations with respect to such new form or
forms.
(d) Protection of Intellectual-Property Licenses in
Bankruptcy.--
(1) In general.--Section 1520(a) of title 11, United States
Code, is amended--
(A) in paragraph (3), by striking ``; and'' and inserting a
semicolon;
(B) in paragraph (4), by striking the period at the end and
inserting ``; and''; and
(C) by inserting at the end the following new paragraph:
``(5) section 365(n) applies to intellectual property of
which the debtor is a licensor or which the debtor has
transferred.''.
(2) Trademarks.--
(A) In general.--Section 101(35A) of title 11, United
States Code, is amended--
(i) in subparagraph (E), by striking ``or'';
(ii) in subparagraph (F), by striking ``title 17;'' and
inserting ``title 17; or''; and
(iii) by adding after subparagraph (F) the following new
subparagraph:
``(G) a trademark, service mark, or trade name, as those
terms are defined in section 45 of the Act of July 5, 1946
(commonly referred to as the `Trademark Act of 1946') (15
U.S.C. 1127);''.
(B) Conforming amendment.--Section 365(n)(2) of title 11,
United States Code, is amended--
(i) in subparagraph (B)--
(I) by striking ``royalty payments'' and inserting
``royalty or other payments''; and
(II) by striking ``and'' after the semicolon;
(ii) in subparagraph (C), by striking the period at the end
of clause (ii) and inserting ``; and''; and
(iii) by adding at the end the following new subparagraph:
``(D) in the case of a trademark, service mark, or trade
name, the trustee shall not be relieved of a contractual
obligation to monitor and control the quality of a licensed
product or service.''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act
and shall apply to any case that is pending on, or for which
a petition or complaint is filed on or after, such date of
enactment.
SEC. 7. SMALL BUSINESS EDUCATION, OUTREACH, AND INFORMATION
ACCESS.
(a) Small Business Education and Outreach.--
(1) Resources for small business.--Using existing
resources, the Director shall develop educational resources
for small businesses to address concerns arising from patent
infringement.
(2) Small business patent ombudsman.--The Patent Ombudsman
Program established under section 28 of the Leahy-Smith
America Invents Act (Public Law 112-29; 125 Stat. 339; 35
U.S.C. 2 note) shall coordinate with the existing small
business outreach programs of the Office, and the relevant
offices at the Small Business Administration and the Minority
Business Development Agency, to provide education and
awareness on abusive patent litigation practices. The
Director may give special consideration to the unique needs
of small firms owned by disabled veterans, service-disabled
veterans, women, and minority entrepreneurs in planning and
executing the outreach efforts by the Office.
(b) Improving Information Transparency for Small Business
and the United States Patent and Trademark Office Users.--
(1) Web site.--Using existing resources, the Director shall
create a user-friendly section on the official Web site of
the Office to notify the public when a patent case is brought
in Federal court and, with respect to each patent at issue in
such case, the Director shall include--
(A) information disclosed under subsections (b) and (d) of
section 290 of title 35, United States Code, as added by
section 4(a) of this Act; and
(B) any other information the Director determines to be
relevant.
(2) Format.--In order to promote accessibility for the
public, the information described in paragraph (1) shall be
searchable by patent number, patent art area, and entity.
SEC. 8. STUDIES ON PATENT TRANSACTIONS, QUALITY, AND
EXAMINATION.
(a) Study on Secondary Market Oversight for Patent
Transactions To Promote Transparency and Ethical Business
Practices.--
(1) Study required.--The Director, in consultation with the
Secretary of Commerce, the Secretary of the Treasury, the
Chairman of the Securities and Exchange Commission, the heads
of other relevant agencies, and interested parties, shall,
using existing resources of the Office, conduct a study--
(A) to develop legislative recommendations to ensure
greater transparency and accountability in patent
transactions occurring on the secondary market;
(B) to examine the economic impact that the patent
secondary market has on the United States;
(C) to examine licensing and other oversight requirements
that may be placed on the patent secondary market, including
on the participants in such markets, to ensure that the
market is a level playing field and that brokers in the
market have the requisite expertise and adhere to ethical
business practices; and
(D) to examine the requirements placed on other markets.
(2) Report on study.--Not later than 1 year after the date
of the enactment of this Act, the Director shall submit a
report to the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the
Senate on the findings and recommendations of the Director
from the study required under paragraph (1).
(b) Study on Patents Owned by the United States
Government.--
(1) Study required.--The Director, in consultation with the
heads of relevant agencies and interested parties, shall,
using existing resources of the Office, conduct a study on
patents owned by the United States Government that--
(A) examines how such patents are licensed and sold, and
any litigation relating to the licensing or sale of such
patents;
(B) provides legislative and administrative recommendations
on whether there should be restrictions placed on patents
acquired from the United States Government;
(C) examines whether or not each relevant agency maintains
adequate records on the patents owned by such agency,
specifically whether such agency addresses licensing,
assignment, and Government grants for technology related to
such patents; and
(D) provides recommendations to ensure that each relevant
agency has an adequate point of contact that is responsible
for managing the patent portfolio of the agency.
(2) Report on study.--Not later than 6 months after the
date of the enactment of this Act, the Director shall submit
to the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the
Senate a report on the findings and recommendations of the
Director from the study required under paragraph (1).
(c) Study on Patent Quality and Access to the Best
Information During Examination.--
(1) GAO study.--The Comptroller General of the United
States shall conduct a study on patent examination at the
Office and the technologies available to improve examination
and improve patent quality.
(2) Contents of the study.--The study required under
paragraph (1) shall include the following:
(A) An examination of patent quality at the Office.
(B) An examination of ways to improve patent quality,
specifically through technology, that shall include examining
best practices at foreign patent offices and the use of
existing off-the-shelf technologies to improve patent
examination.
(C) A description of how patents are classified.
(D) An examination of procedures in place to prevent double
patenting through filing by applicants in multiple art areas.
(E) An examination of the types of off-the-shelf prior art
databases and search software used by foreign patent offices
and governments, particularly in Europe and Asia, and whether
those databases and search tools could be used by the Office
to improve patent examination.
(F) An examination of any other areas the Comptroller
General determines to be relevant.
(3) Report on study.--Not later than 6 months after the
date of the enactment of this Act, the Comptroller General
shall submit to the Committee on the Judiciary of the House
of Representatives and the Committee on the Judiciary of the
Senate a report on the findings and recommendations from the
study required by this subsection, including recommendations
for any changes to laws and regulations that will improve the
examination of patent applications and patent quality.
(d) Study on Patent Small Claims Court.--
(1) Study required.--
(A) In general.--The Director of the Administrative Office
of the United States Courts, in consultation with the
Director of the Federal Judicial Center and the United States
Patent and Trademark Office, shall, using existing resources,
conduct a study to examine the idea of developing a pilot
program for patent small claims courts in certain judicial
districts within the existing patent pilot program mandated
by Public Law 111-349.
(B) Contents of study.--The study under subparagraph (A)
shall examine--
(i) the number of and qualifications for judges that could
serve on such small claims courts;
(ii) how such small claims courts would be designated and
the necessary criteria for such designation;
(iii) the costs that would be incurred for establishing,
maintaining, and operating such a pilot program; and
(iv) the steps that would be taken to ensure that the
courts in the pilot program are not misused for abusive
patent litigation.
(2) Report on study.--Not later than 1 year after the date
of the enactment of this Act, the Director of the
Administrative Office of the United States Courts shall
submit a report to the Committee on the Judiciary of the
House of Representatives and the Committee on the Judiciary
of the Senate on the findings and recommendations of the
Director of the Administrative Office from the study required
under paragraph (1).
(e) Study on Demand Letters.--
(1) Study.--The Director, in consultation with the heads of
other appropriate agencies, shall conduct a study of the
prevalence of the practice of sending patent demand letters
in bad faith and the extent to which that practice may,
through fraudulent or deceptive practices, impose a negative
impact on the marketplace.
(2) Report to congress.--Not later than 1 year after the
date of the enactment of this Act,
[[Page H7531]]
the Director shall submit a report to the Committee on the
Judiciary of the House of Representatives and the Committee
on the Judiciary of the Senate on the findings and
recommendations of the Director from the study required under
paragraph (1).
(3) Patent demand letter defined.--In this subsection, the
term ``patent demand letter'' means a written communication
relating to a patent that states or indicates, directly or
indirectly, that the recipient or anyone affiliated with the
recipient is or may be infringing the patent.
(f) Study on Business Method Patent Quality.--
(1) GAO study.--The Comptroller General of the United
States shall conduct a study on the volume and nature of
litigation involving business method patents.
(2) Contents of study.--The study required under paragraph
(1) shall focus on examining the quality of business method
patents asserted in suits alleging patent infringement, and
may include an examination of any other areas that the
Comptroller General determines to be relevant.
(3) Report to congress.--Not later than 6 months after the
date of the enactment of this Act, the Comptroller General
shall submit to the Committee on the Judiciary of the House
of Representatives and the Committee on the Judiciary of the
Senate a report on the findings and recommendations from the
study required by this subsection, including recommendations
for any changes to laws or regulations that the Comptroller
General considers appropriate on the basis of the study.
SEC. 9. IMPROVEMENTS AND TECHNICAL CORRECTIONS TO THE LEAHY-
SMITH AMERICA INVENTS ACT.
(a) Repeal of Civil Action To Obtain a Patent.--
(1) Repeal.--Section 145 of title 35, United States Code,
is repealed.
(2) Conforming amendments.--
(A) Federal circuit jurisdiction.--Section 1295(a)(4) of
title 28, United States Code, is amended--
(i) in subparagraph (A), by striking ``except that an
applicant or a party'' and all that follows through the end
of the subparagraph and inserting the following: ``except
that a party to a derivation proceeding may also have remedy
by civil action under section 146 of title 35; an appeal
under this subparagraph of a decision of the Board with
respect to a derivation proceeding shall waive the right of
such party to proceed under section 146 of title 35;''; and
(ii) in subparagraph (C), by striking ``section 145, 146,
or'' and inserting ``section 146 or''.
(B) Federal circuit appeal.--Section 141(a) of title 35,
United States Code, is amended--
(i) by striking ``may appeal the Board's decision to'' and
inserting ``may appeal the Board's decision only to''; and
(ii) by striking the second sentence.
(C) Adjustment of patent term.--Section 154(b)(1)(A)(iii)
of title 35, United States Code, is amended by striking
``section 141, 145, or 146'' and inserting ``section 141 or
146''.
(D) Clerical amendment.--The table of sections for chapter
13 of title 35, United States Code, is amended by repealing
the item relating to section 145.
(3) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act
and apply to any proceeding in which a decision is made by
the Patent Trial and Appeal Board on or after such date of
enactment.
(b) Post-Grant Review Amendment.--Section 325(e)(2) of
title 35, United States Code is amended by striking ``or
reasonably could have raised''.
(c) Use of District-Court Claim Construction in Post-Grant
and Inter Partes Reviews.--
(1) Inter partes review.--Section 316(a) of title 35,
United States Code, is amended--
(A) in paragraph (12), by striking ``; and'' and inserting
a semicolon;
(B) in paragraph (13), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(14) providing that for all purposes under this chapter--
``(A) each claim of a patent shall be construed as such
claim would be in a civil action to invalidate a patent under
section 282(b), including construing each claim of the patent
in accordance with the ordinary and customary meaning of such
claim as understood by one of ordinary skill in the art and
the prosecution history pertaining to the patent; and
``(B) if a court has previously construed the claim or a
claim term in a civil action in which the patent owner was a
party, the Office shall consider such claim construction.''.
(2) Post-grant review.--Section 326(a) of title 35, United
States Code, is amended--
(A) in paragraph (11), by striking ``; and'' and inserting
a semicolon;
(B) in paragraph (12), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(13) providing that for all purposes under this chapter--
``(A) each claim of a patent shall be construed as such
claim would be in a civil action to invalidate a patent under
section 282(b), including construing each claim of the patent
in accordance with the ordinary and customary meaning of such
claim as understood by one of ordinary skill in the art and
the prosecution history pertaining to the patent; and
``(B) if a court has previously construed the claim or a
claim term in a civil action in which the patent owner was a
party, the Office shall consider such claim construction.''.
(3) Technical and conforming amendment.--Section
18(a)(1)(A) of the Leahy-Smith America Invents Act (Public
Law 112-29; 126 Stat. 329; 35 U.S.C. 321 note) is amended by
striking ``Section 321(c)'' and inserting ``Sections 321(c)
and 326(a)(13)''.
(4) Effective date.--The amendments made by this subsection
shall take effect upon the expiration of the 90-day period
beginning on the date of the enactment of this Act, and shall
apply to any proceeding under chapter 31 or 32 of title 35,
United States Code, as the case may be, for which the
petition for review is filed on or after such effective date.
(d) Codification of the Double-Patenting Doctrine for
First-Inventor-To-File Patents.--
(1) Amendment.--Chapter 10 of title 35, United States Code,
is amended by adding at the end the following new section:
``Sec. 106. Prior art in cases of double patenting
``A claimed invention of a patent issued under section 151
(referred to as the `first patent') that is not prior art to
a claimed invention of another patent (referred to as the
`second patent') shall be considered prior art to the claimed
invention of the second patent for the purpose of determining
the nonobviousness of the claimed invention of the second
patent under section 103 if--
``(1) the claimed invention of the first patent was
effectively filed under section 102(d) on or before the
effective filing date of the claimed invention of the second
patent;
``(2) either--
``(A) the first patent and second patent name the same
inventor; or
``(B) the claimed invention of the first patent would
constitute prior art to the claimed invention of the second
patent under section 102(a)(2) if an exception under section
102(b)(2) were deemed to be inapplicable and the claimed
invention of the first patent was, or were deemed to be,
effectively filed under section 102(d) before the effective
filing date of the claimed invention of the second patent;
and
``(3) the patentee of the second patent has not disclaimed
the rights to enforce the second patent independently from,
and beyond the statutory term of, the first patent.''.
(2) Regulations.--The Director shall promulgate regulations
setting forth the form and content of any disclaimer required
for a patent to be issued in compliance with section 106 of
title 35, United States Code, as added by paragraph (1). Such
regulations shall apply to any disclaimer filed after a
patent has issued. A disclaimer, when filed, shall be
considered for the purpose of determining the validity of the
patent under section 106 of title 35, United States Code.
(3) Conforming amendment.--The table of sections for
chapter 10 of title 35, United States Code, is amended by
adding at the end the following new item:
``106. Prior art in cases of double patenting.''.
(4) Exclusive rule.--A patent subject to section 106 of
title 35, United States Code, as added by paragraph (1),
shall not be held invalid on any nonstatutory, double-
patenting ground.
(5) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act
and shall apply to a patent or patent application only if
both the first and second patents described in section 106 of
title 35, United States Code, as added by paragraph (1), are
patents or patent applications that are described in section
3(n)(1) of the Leahy-Smith America Invents Act (35 U.S.C. 100
note).
(e) PTO Patent Reviews.--
(1) Clarification.--
(A) Scope of prior art.--Section 18(a)(1)(C)(i) of the
Leahy-Smith America Invents Act (35 U.S.C. 321 note) is
amended by striking ``section 102(a)'' and inserting
``subsection (a) or (e) of section 102''.
(B) Effective date.--The amendment made by subparagraph (A)
shall take effect on the date of the enactment of this Act
and shall apply to any proceeding pending on, or filed on or
after, such date of enactment.
(2) Authority to waive fee.--Subject to available
resources, the Director may waive payment of a filing fee for
a transitional proceeding described under section 18(a) of
the Leahy-Smith America Invents Act (35 U.S.C. 321 note).
(f) Clarification of Limits on Patent Term Adjustment.--
(1) Amendments.--Section 154(b)(1)(B) of title 35, United
States Code, is amended--
(A) in the matter preceding clause (i), by striking ``not
including--'' and inserting ``the term of the patent shall be
extended 1 day for each day after the end of that 3-year
period until the patent is issued, not including--'';
(B) in clause (i), by striking ``consumed by continued
examination of the application requested by the applicant''
and inserting ``consumed after continued examination of the
application is requested by the applicant'';
(C) in clause (iii), by striking the comma at the end and
inserting a period; and
(D) by striking the matter following clause (iii).
(2) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act
and apply to any patent application or patent that is pending
on, or filed on or after, such date of enactment.
(g) Clarification of Jurisdiction.--
(1) In general.--The Federal interest in preventing
inconsistent final judicial determinations as to the legal
force or effect of the claims in a patent presents a
substantial Federal issue that is important to the Federal
system as a whole.
(2) Applicability.--Paragraph (1)--
(A) shall apply to all cases filed on or after, or pending
on, the date of the enactment of this Act; and
[[Page H7532]]
(B) shall not apply to a case in which a Federal court has
issued a ruling on whether the case or a claim arises under
any Act of Congress relating to patents or plant variety
protection before the date of the enactment of this Act.
(h) Patent Pilot Program in Certain District Courts
Duration.--
(1) Duration.--Section 1(c) of Public Law 111-349 (124
Stat. 3674; 28 U.S.C. 137 note) is amended to read as
follows:
``(c) Duration.--The program established under subsection
(a) shall be maintained using existing resources, and shall
terminate 20 years after the end of the 6-month period
described in subsection (b).''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act.
(i) Technical Corrections.--
(1) Novelty.--
(A) Amendment.--Section 102(b)(1)(A) of title 35, United
States Code, is amended by striking ``the inventor or joint
inventor or by another'' and inserting ``the inventor or a
joint inventor or another''.
(B) Effective date.--The amendment made by subparagraph
(A) shall be effective as if included in the amendment made
by section 3(b)(1) of the Leahy-Smith America Invents Act
(Public Law 112-29).
(2) Inventor's oath or declaration.--
(A) Amendment.--The second sentence of section 115(a) of
title 35, United States Code, is amended--
(i) by striking ``Except as otherwise provided'' and
inserting ``Except for an application filed under section 118
or as otherwise provided''; and
(ii) by striking ``shall execute'' and inserting ``may be
required by the Director to execute''.
(B) Effective date.--The amendments made by subparagraph
(A) shall be effective as if included in the amendment made
by section 4(a)(1) of the Leahy-Smith America Invents Act
(Public Law 112-29).
(3) Assignee filers.--
(A) Benefit of earlier filing date; right of priority.--
Section 119(e)(1) of title 35, United States Code, is
amended, in the first sentence, by striking ``by an inventor
or inventors named'' and inserting ``that names the inventor
or a joint inventor''.
(B) Benefit of earlier filing date in the united states.--
Section 120 of title 35, United States Code, is amended, in
the first sentence, by striking ``names an inventor or joint
inventor'' and inserting ``names the inventor or a joint
inventor''.
(C) Effective date.--The amendments made by this paragraph
shall take effect on the date of the enactment of this Act
and shall apply to any patent application, and any patent
issuing from such application, that is filed on or after
September 16, 2012.
(4) Derived patents.--
(A) Amendment.--Section 291(b) of title 35, United States
Code, is amended by striking ``or joint inventor'' and
inserting ``or a joint inventor''.
(B) Effective date.--The amendment made by subparagraph (A)
shall be effective as if included in the amendment made by
section 3(h)(1) of the Leahy-Smith America Invents Act
(Public Law No. 112-29).
(5) Specification.--Notwithstanding section 4(e) of the
Leahy-Smith America Invents Act (Public Law 112-29; 125 Stat.
297), the amendments made by subsections (c) and (d) of
section 4 of such Act shall apply to any proceeding or matter
that is pending on, or filed on or after, the date of the
enactment of this Act.
(6) Time limit for commencing misconduct proceedings.--
(A) Amendment.--The fourth sentence of section 32 of title
35, United States Code, is amended by striking ``1 year'' and
inserting ``2 years''.
(B) Effective date.--The amendment made by this paragraph
shall take effect on the date of the enactment of this Act
and shall apply to any action in which the Office files a
complaint on or after such date of enactment.
(7) Patent owner response.--
(A) Conduct of inter partes review.--Paragraph (8) of
section 316(a) of title 35, United States Code, is amended by
striking ``the petition under section 313'' and inserting
``the petition under section 311''.
(B) Conduct of post-grant review.--Paragraph (8) of section
326(a) of title 35, United States Code, is amended by
striking ``the petition under section 323'' and inserting
``the petition under section 321''.
(C) Effective date.--The amendments made by this paragraph
shall take effect on the date of the enactment of this Act.
(8) International applications.--
(A) Amendments.--Section 202(b) of the Patent Law Treaties
Implementation Act of 2012 (Public Law 112-211; 126 Stat.
1536) is amended--
(i) by striking paragraph (7); and
(ii) by redesignating paragraphs (8) and (9) as paragraphs
(7) and (8), respectively.
(B) Effective date.--The amendments made by subparagraph
(A) shall be effective as if included in title II of the
Patent Law Treaties Implementation Act of 2012 (Public Law
112-21).
SEC. 10. EFFECTIVE DATE.
Except as otherwise provided in this Act, the provisions of
this Act shall take effect on the date of the enactment of
this Act, and shall apply to any patent issued, or any action
filed, on or after that date.
The Acting CHAIR. No amendment to that amendment in the nature of a
substitute shall be in order except those printed in part A of House
Report 113-283. Each such amendment may be offered only in the order
printed in the report, by a Member designated in the report, shall be
considered read, shall be debatable for the time specified in the
report equally divided and controlled by the proponent and an opponent,
shall not be subject to amendment, and shall not be subject to demand
for a division of the question.
Amendment No. 1 Offered by Mr. Goodlatte
The Acting CHAIR. It is now in order to consider amendment No. 1
printed in part A of House Report 113-283.
Mr. GOODLATTE. Mr. Chairman, I have an amendment at the desk made in
order under the rule.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 12, line 3, strike ``subsection (b)'' and insert
``subsections (b) and (c)''.
Page 12, strike lines 14 through 25 and insert the
following:
``(1) Timely resolution of actions.--In the case of an
action under any provision of Federal law (including an
action that includes a claim for relief arising under section
271(e)), for which resolution within a specified period of
time of a civil action arising under any Act of Congress
relating to patents will necessarily affect the rights of a
party with respect to the patent, the court shall permit
discovery, in addition to the discovery authorized under
subsection (a), before the ruling described in subsection (a)
is issued as necessary to ensure timely resolution of the
action.''.
Page 13, insert after line 13 the following:
``(4) Actions seeking relief based on competitive harm.--
The limitation on discovery provided under subsection (a)
shall not apply to an action seeking a preliminary injunction
to redress harm arising from the use, sale, or offer for sale
of any allegedly infringing instrumentality that competes
with a product sold or offered for sale, or a process used in
manufacture, by a party alleging infringement.
``(c) Exclusion From Discovery Limitation.--The parties may
voluntarily consent to be excluded, in whole or in part, from
the limitation on discovery provided under subsection (a) if
at least one plaintiff and one defendant enter into a signed
stipulation, to be filed with and signed by the court. With
regard to any discovery excluded from the requirements of
subsection (a) under the signed stipulation, with respect to
such parties, such discovery shall proceed according to the
Federal Rules of Civil Procedure.''.
Page 35, strike line 16 and all that follows through page
36, line 3, and insert the following:
(1) In general.--Section 1522 of title 11, United States
Code, is amended by adding at the end the following:
``(e) Section 365(n) shall apply to cases under this
chapter. If the foreign representative rejects or repudiates
a contract under which the debtor is a licensor of
intellectual property, the licensee under such contract shall
be entitled to make the election and exercise the rights
described in section 365(n).''.
Page 38, line 1, strike ``ombudsman'' and insert
``outreach''.
Page 38, strike line 2 and all that follows through
``programs'' on line 6 and insert ``The existing small
business patent outreach programs''.
Page 38, lines 8 and 9, strike ``to provide'' and insert
``shall provide''.
Page 40, line 13, strike ``1 year'' and insert ``18
months''.
Page 41, lines 20 and 21, strike ``6 months'' and insert
``1 year''.
Page 42, line 6, strike ``shall conduct a study'' and
insert ``shall, using existing resources, conduct a study''.
Page 43, lines 9 and 10, strike ``6 months'' and insert ``1
year''.
Page 44, line 3, strike ``courts'' and insert
``procedures''.
Page 44, strike lines 8 through 13 and insert the
following:
(i) the necessary criteria for using small claims
procedures;
Page 44, line 14, strike ``(iii)'' and insert ``(ii)''.
Page 44, line 17, strike ``(iv)'' and insert ``(iii)''.
Page 44, line 18, strike ``courts'' and insert ``procedures
used''.
Page 45, lines 7 and 8, strike ``shall conduct a study''
and insert ``shall, using existing resources, conduct a
study''.
Page 46, line 4, strike ``shall conduct a study'' and
insert ``shall, using existing resources, conduct a study''.
Page 46, lines 13 and 14, strike ``6 months'' and insert
``1 year''.
Page 52, line 5, strike ``name the same inventor'' and
insert ``name the same individual or individuals as the
inventor''.
Page 53, line 11, after ``double-patenting ground'' insert
``based on a patent described in section 3(n)(1) of the
Leahy-Smith America Invents Act (35 U.S.C. 100 note)''.
Page 53, lines 13-14, after ``shall take effect'' insert
``upon the expiration of the 1-year period beginning''.
Page 55, line 10, strike ``or patent''.
Page 57, strike lines 4 through 13 and insert the
following:
(A) Amendment.--The second sentence of section 115(a) of
title 35, United States Code, is amended by striking ``shall
execute'' and inserting ``may be required to execute''.
Page 57, line 14, strike ``amendments'' and insert
``amendment''.
Page 59, lines 9 and 10, strike ``2 years'' and insert ``18
months''.
[[Page H7533]]
The Acting CHAIR. Pursuant to House Resolution 429, the gentleman
from Virginia (Mr. Goodlatte) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Virginia.
Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may
consume.
The manager's amendment was developed based on discussions with a
cross-range of industry stakeholders, the input of Members from the
House and Senate, the courts, and the administration, including the
U.S. Patent and Trademark Office.
My amendment consists of technical edits and a few modifications that
improve the bill. The manager's amendment includes clarifications and
edits to the limitations on discovery prior to a Markman or a claim
construction hearing. They ensure that the provision works effectively
and can be complied with, providing additional discretion for the
courts to ensure the provision does not result in reverse gamesmanship.
The amendment also makes clarifications to the bankruptcy provisions
so that they work properly, ensuring that U.S. law is followed and not
foreign law. Further, it includes modifications to the deadlines for
various studies to provide the agencies enough time to prepare and
develop their reports. The manager's amendment makes additional
clarifications and modifications that, on the whole, make necessary and
positive improvements to our patent system.
The Innovation Act targets abusive patent litigation, protects the
patent system, increases transparency, prevents extortion, and provides
greater clarity.
Mr. Chairman, I urge my colleagues to support the amendment, and I
reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I rise in opposition to the manager's
amendment.
The Acting CHAIR. The gentleman from Michigan is recognized for 5
minutes.
Mr. CONYERS. Just simply put, I must oppose the manager's amendment
because it does not significantly alter the underlying bill, which will
be making sweeping and unnecessary changes to patent litigation and
encroach upon the independence of the Federal Judiciary.
Section 6(d) does not address the substantive deficiencies in the
bill. 6(d), by mandating U.S. law, applies in determining the rights of
intellectual property licensees, directly contravenes the important
principles that pertain to Chapter 15 of the Bankruptcy Code, which
deals with transnational bankruptcies.
Congress intended that Chapter 15 not mandate any one country's
substantive law should control, but Section 6(d) does exactly this and
may encourage other countries to opt out of the cooperative insolvency
system that is integral to Chapter 15.
So this, in short, is failing to address another flawed revision to
the Bankruptcy Code, and Section 6(d) imposes an impossible affirmative
duty on a bankrupt licensor to monitor and control the quality of the
license, product, or service, even if there is no money to pay for
this.
Please vote against this manager's amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may
consume.
It is unusual for a party in opposition to oppose a manager's
amendment because they don't disagree with the provisions in the
amendment but, rather, say that they don't make enough changes. So,
even though it is acknowledged that this improves the bill, that still
causes opposition.
But I want to address what the gentleman says he wants in the
manager's amendment. Section 365(n) of title XI prevents a bankruptcy
trustee from terminating licenses to patents and other intellectual
property of the debtor. When Congress enacted Section 365(n) in 1989,
it recognized that allowing patent and other IP licenses to be revoked
in bankruptcy would be extremely disruptive to the economy and damaging
both to patent owners and to licensing manufacturers.
Manufacturers often invest billions of dollars in reliance on their
right to practice a technology pursuant to a license. Allowing the
license to be eliminated in bankruptcy would create commercial
uncertainty and would undermine manufacturing investment.
In recent years, some bankruptcy trustees have tried to subvert the
protections of section 365(n) for U.S. intellectual property by filing
bankruptcy in a foreign country and demanding that U.S. courts extend
comity to termination of licenses to U.S. intellectual property in the
foreign proceeding.
The provision that the gentleman wants would eliminate important
provisions that would eliminate--the underlying bill provisions
eliminate this uncertainty and would guarantee that licenses to U.S.
patents and other IP will always be protected in U.S. courts. The
gentleman wants something that would undermine that.
Failing to include this provision, a manufacturer deciding where to
build a new fabrication plant would face a powerful incentive to invest
his resources in a foreign country that protects IP licenses instead of
in the United States. The gentleman's provision that he would like to
see in the manager's amendment would encourage offshoring of U.S.
manufacturing.
So I strongly support the language in the manager's amendment and
object to the suggestion that his provision that is not in this
amendment, which we will also address later in the amendment debate,
would enhance the manager's amendment. It would not. It would have the
opposite effect. I strongly urge my colleagues to support the manager's
amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I yield myself 15 seconds, before I yield
to Mr. Watt, merely to let you know that the National Bankruptcy
Conference is opposed to this amendment and has set forth in a very
detailed draft their reasons for that.
National Bankruptcy Conference,
Washington, DC, November 15, 2013.
Re H.R. 3309 (Innovation Act).
Hon. John Conyers, Jr.,
Ranking Member, House Judiciary Committee, House of
Representatives, Washington, DC.
Dear Chairman, Ranking Member, and Members of the House
Judiciary Committee: I am writing to you in my capacity as
Chair of the Committee on Legislation of the National
Bankruptcy Conference (NBC or Conference). The NBC is a
voluntary, non-partisan, not-for-profit organization composed
of about 60 of the nation's leading bankruptcy judges,
professors and practitioners; it has provided advice to
Congress on bankruptcy-related legislation for over 75 years.
The Conference takes substantive policy positions on issues.
It also provides technical advice on bankruptcy legislation
without regard to its policy positions so that, to the extent
possible, such legislation will achieve the objectives
intended by its supporters.
The Innovation Act, which is primarily focused on patent
litigation reform, contains an amendment to section 1520 of
chapter 15 of the Bankruptcy Code that the Conference opposes
in its present form. The proposed amendment appears in SEC.
6. PROCEDURES AND PRACTICES TO IMPLEMENT AND RECOMMENDATIONS
TO THE JUDICIAL CONFERENCE and provides as follows:
(d) PROTECTION OF INTELLECTUAL-PROPERTY LICENSES IN
BANKRUPTCY.--
(1) IN GENERAL.--Section 1520(a) of title 11, United States
Code, is amended--
(A) in paragraph (3), by striking ``; and'' and inserting a
semicolon;
(B) in paragraph (4), by striking the period at the end and
inserting ``; and''; and
(C) by inserting at the end the following new paragraph:
`(5) section 365(n) applies to intellectual property of
which the debtor is a licensor or which the debtor has
transferred.''
(2) EFFECTIVE DATE.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act
and shall apply to any action for which a complaint is
pending on, or filed on or after, such date of enactment.
Chapter 15 of the Bankruptcy Code, included in the 2005
amendments to the Code with large bipartisan majorities, is
designed to achieve worldwide cooperation in the liquidation
or reorganization of a multinational company in order to
preserve value for creditors and other stakeholders,
especially employees. Its fundamental structure is
``universalist'' in that it requires that each country
recognize a foreign main proceeding in the debtor's home
country as the leader in the worldwide effort and that it
cooperate with that jurisdiction to achieve the best results
for all concerned. Among other advantages, this approach
permits the sale of whole divisions with assets and
operations in several nations as a single piece, which almost
always will yield a higher price. It is also essential to
reorganization of a global business.
Chapter 15 incorporated the UNCITRAL Model Law on Cross-
Border Insolvency ``to
[[Page H7534]]
encourage cooperation between the United States and foreign
countries with respect to transnational insolvency cases.''
While the Model Law required modifications to fit into the
existing judicial and legislative scheme, chapter 15 followed
the exhortation of UNCITRAL: ``Therefore, in order to achieve
a satisfactory degree of harmonization and certainty, it is
recommended that States [countries] make as few changes as
possible in incorporating the model law into their legal
systems.'' The proposed amendment to section 1520 violates
the purpose of chapter 15 to further international
cooperation and, to that end, the guidance of UNCITRAL to
minimize modifications to the Model Law.
Adding a provision to chapter 15 that deals with a special
situation violates the principle of uniformity that makes the
Model Law a valuable mechanism for greater legal certainty
for trade and investment. This is true even if one believes
that, as a matter of public policy, the special situation
should always be decided applying U.S. law. By such a
unilateral, non-uniform amendment, the United States invites
other countries to modify their versions of the Model Law in
ways that may be detrimental to United States parties in
foreign proceedings. The situation addressed by the proposed
amendment is already before the courts and the tools to
address the situation are already within chapter 15. The
courts can deal with the issue appropriately and predictably
without opening the door to other countries to reciprocate
with their own deviations from the Model Law.
Section 1520, Effects of recognition of a foreign main
proceeding, provides automatic relief on recognition of a
foreign main proceeding. It implements Article 20 of the
Model Law by incorporating sections of the Bankruptcy Code
that are consistent with the purpose of Article 20. Both
Article 20 and section 1520 operate automatically upon
recognition of a foreign main proceeding and impose
``effects'' that ``are necessary to allow steps to be taken
to organize an orderly and fair cross-border insolvency
proceeding. . .'' The fundamental effects necessary for an
orderly and fair cross-border insolvency are (a) a stay of
actions against or concerning the debtor or its assets,
rights, obligations or liabilities, including a stay of
execution against the debtor's assets and (b) a stay of the
debtor's transfer, encumbrance or disposition of assets.
Section 1520 imposes the stay by incorporating the automatic
stay of section 362 (but limited to the debtor and its assets
within the territorial jurisdiction of the United States) and
the transfer restrictions of sections 549, 363 and 552.
The Innovation Act would introduce into section 1520 a
section of the Bankruptcy Code, section 365(n), that has
nothing to do with allowing ``steps to be taken to organize
an orderly and fair cross-border insolvency proceeding.''
This would be a blow to the goals of uniformity and
harmonization embodied in the Model Law and chapter 15.
Instead of a provision that affects all parties with an
interest in a foreign proceeding, that effectively preserves
the status quo and (potentially) going concern value and that
does not intrude on the foreign proceeding, section 365(n) is
not concerned with preservation of the status quo and affects
the rights of a subset of licensees of intellectual property
in the event that their license agreement is rejected or
otherwise subjected to nonperformance in a foreign main
bankruptcy case of a debtor who is their licensor. It may
impose U.S. law on the foreign proceeding whether or not U.S.
law should apply to a particular license. If the legislation
is adopted, it should, at the very least, be limited to
licenses that are within the territorial jurisdiction of the
United States.
Automatically applying section 365(n) upon recognition of a
foreign main proceeding would ignore the territorial limits
of chapter 15 to property within the territorial jurisdiction
of the United States, since license grants by the foreign
debtor may not be governed by U.S. law or may not even
involve U.S. intellectual property. There should be a choice
of law analysis performed before section 365(n) is applied in
a chapter 15 case. Section 365(n) would then be applied in
appropriate situations on an appropriate showing under
section 1522(a) and (b). Applying it automatically, without
considering whether U.S. law should apply to the license in
question and without the safeguards of sections 1521 and 1522
would be detrimental to the goals of the Model Law and
chapter 15. Rather than enhancing a cross-border insolvency
proceeding, automatic application of section 365(n) would
likely deter foreign representatives from seeking recognition
to obtain necessary assistance for the foreign proceeding if
a condition to recognition were entanglement in the possible
briar patch of licensee rights under U.S. bankruptcy law.
The genesis of section 6(d) of the Innovation Act is likely
the case of In re Qimonda AG, 462 B.R. 165 (Bankr. E.D. Va.
2011). There, on the petition of the administrator appointed
in Qimonda's German main proceeding, the bankruptcy court
entered an order recognizing the foreign main proceeding and,
on the same date, entered a Supplemental Order under section
1521 that applied several sections of the Bankruptcy Code,
including section 365, to the chapter 15 case. Upon realizing
that section 365(n) interfered with his rights under the
German insolvency code to ``elect non-performance'' of
contracts, the administrator sought modification of the
Supplemental Order. Licensees of U.S. patents, who would lose
the protection of section 365(n) if section 365 no longer
applied, objected. The Bankruptcy Court, on remand from the
district court, found, under the facts and circumstances of
that case, that there was a fundamental U.S. policy favoring
innovation and that eliminating section 365(n) protection
would be manifestly contrary to that policy. The court also
ruled that the requested relief should be denied on the
alternative section 1522 ground that the interests of the
licensees would not be ``sufficiently protected'' if the
requested relief were granted. The Qimonda decision was
certified for direct appeal to the Fourth Circuit. The Fourth
Circuit heard argument on September 17, 2013 but has not
ruled.
Rather than passing legislation that would pre-empt the
ruling of the Fourth Circuit and conflict with the purpose of
the Model Law and chapter 15, Congress should reject this
amendment. As noted, relief is already available to licensees
in appropriate circumstances under section 1522 if a foreign
representative seeks to deprive them of their rights under
U.S. law. Applying section 365(n) to all foreign main
proceedings would implicate licenses that are not within the
territorial jurisdiction of the United States and would be
inconsistent with the ancillary nature of a chapter 15 case,
to provide assistance to the main case in another country
where the debtor has the center of its main interests.
If the debtor's property is sliced into national bits, the
cooperative approach of chapter 15 and the Model Law is
seriously handicapped. The proposed amendment does just that
as to intellectual property. Intellectual property is itself
subject to a worldwide system of recognition and enforcement,
which will be shattered for companies emerging from
reorganization, creating a host of difficult questions and
serious uncertainty about these crucial property rights. We
believe the United States would make a mistake by going it
alone and by failing to let the courts develop the key issues
under the existing statute.
Sincerely,
Sally S. Neely,
Chair, Legislation Committee of the National Bankruptcy
Conference.
Mr. Chairman, I yield the balance of our time to the distinguished
gentleman from North Carolina (Mr. Watt).
Mr. WATT. I thank the gentleman for yielding time.
Mr. Chairman, I want to rise not so much in opposition to the
manager's amendment, but in opposition to the bill and so that we can
try to make sure that people understand what it is that they are voting
on.
We set out to solve a problem of patent trolls, and that term has
become a convenient shorthand to refer to a class of plaintiffs who
engage in abusive litigation tactics against deep-pocketed alleged
infringers as well as individual inventors and small companies.
I certainly recognize, as I have in my previous statement, that there
are entities that exploit the litigation system to gain leverage
against businesses, large and small, that represent a vital part of our
economy, and I would like for Congress actually to deal with that issue
in a meaningful way.
Unfortunately, this bill adopts an extreme, unbalanced approach to
address those abuses. The term ``patent troll'' simply has no concrete
contours in application, making it nearly impossible to craft
legislation specifically targeted to a category of entities or
particular business models.
And because not only patent trolls initiate litigation to enforce
patent rights, legislation aimed at patent litigation system must not
erect unfair barriers that deter legitimate, meritorious claims of
infringement, nor should this bill be treated as if it will apply only
in the troublesome jurisdictions in which these abuses are taking
place.
This bill has broad application across our entire patent ecosystem.
The bill suffers from a rushed process and responds to only a part of
the constituency in the patent ecosystem. What is most regretful and
regrettable to me is that, I believe that with thoughtful, inclusive
deliberation, the goals of the bill could be achieved if we would
simply take the time to do it.
The Acting CHAIR. The time of the gentleman has expired.
Madam Chair, I rise in opposition to H.R. 3309. The term ``patent
troll'' has become convenient shorthand to refer to a class of
plaintiffs who engage in abusive litigation tactics against deep-
pocketed alleged infringers as well as individual inventors and small
companies. I recognize that there are entities that exploit the
litigation system to gain leverage against businesses large and small
that represent a vital part of our economy. And I'd like
[[Page H7535]]
this Congress to find meaningful ways to arrest this behavior.
Unfortunately, H.R. 3309, the ``Innovation Act,'' adopts an extreme,
unbalanced approach to address these abuses.
The term ``patent troll'' simply has no concrete contours in
application making it nearly impossible to craft legislation
specifically targeting a category of entities or particular business
model. And, because not only ``patent trolls'' initiate litigation to
enforce patent rights, legislation aimed at the patent litigation
system must not erect unfair barriers that deter legitimate,
meritorious claims of infringement. Nor should it be treated as if it
will apply only to the most troublesome jurisdictions in which such
abuses are purportedly tolerated.
This bill suffers from a rushed and insular process that responds to
only one constituency of the patent litigation system and has resulted
in a skewed product with inadequate public debate.
What is most regretful and regrettable to me is that I believe that
with thoughtful, inclusive deliberation, the goals of this bill are
achievable. The product before us, however, is destined to produce
unintended, but foreseeable, adverse consequences. I will identify
three:
First, with its illogical presumption that this legislation will
apply only to ``patent trolls'' who sue pristine, non-infringing
defendants, this bill creates perverse incentives that will invite
further litigation abuse. I have now been a member of IP 21 years and a
practicing lawyer 22 years, and I can tell you with absolute certainty
that legal gamesmanship is not the exclusive domain of plaintiffs or
even ``patent trolls.'' By imposing lop-sided, disproportionate
obligations on one side of the litigation equation, this bill creates
nefarious incentives on the other. I can guarantee you that if this
bill passes in its present form, there will be a subsequent lobbying
effort to curtail abuses by bad faith defendants who may engage in
dilatory tactics, swamp plaintiffs with data dumps in response to
reasonable discovery requests, and otherwise drive up the costs of
litigation.
Second, another predictable, and I hope, unintended consequence of
this bill is that it may saddle legitimate patent owners with
exorbitant and duplicative fee awards due to sloppy drafting. Section
3(b) of the bill mandates that a judge award fees to the prevailing
party under certain circumstances. Presumably the award will consist of
reasonable costs and attorneys' fees incurred to litigate the entire
case. However, section 4 likewise mandates an award of fees to a
prevailing party when the non-prevailing plaintiff failed to comply
with the transparency obligations under the bill. This additional award
is punitive and duplicative, and I hope a mistake. And the escape
hatches do not provide comfort. Courts and legal commentators are loath
to permit an exception to become the rule. Instead, ``special
circumstances'' or awards unless ``unjust'' are strictly applied to
circumstances that are unique to the case and unusual in occurrence.
Finally, and perhaps most invidious is the foreseeable possibility
that this bill may become the victim of its own success. In the effort
to discourage the litigation by increasing the risks and obligations of
``patent trolls'', the bill may very well succeed in driving the trolls
out of the courtrooms. But it may also result in the most nefarious and
persistent of the trolls retreating to an even more aggressive use of
demand letters which this bill does nothing to prevent. The end result
will be that only legitimate patent owner will be subject to the
onerous litigation reforms, while the unsophisticated individual or
small inventor will face the very extortion this bill claims to
address.
This is a bad bill and I hope that my colleagues will vote to protect
innovation by voting against this bill.
Mr. GOODLATTE. Mr. Chairman, I yield myself the balance of my time.
Mr. Chairman, the provision that the gentleman from Michigan
complains of is supported by the Intellectual Property Owners
Association, the 21st Century Coalition, which is a group of
manufacturers, the Semiconductor Industry Association. They very
strongly support the provision in the bill that is enhanced in the
manager's amendment because, otherwise, we would be allowing a foreign
trustee, a foreign bankruptcy trustee to liquidate licenses and create
great uncertainty in the free market. That is definitely not what is
intended by this legislation, and it would create a giant loophole that
would create incentives to locate businesses, manufacturing businesses
outside the United States rather than inside the United States. The
language is very definitely needed, and I urge my colleagues to support
the manager's amendment.
Mr. Chairman, I yield back the balance of my time.
{time} 1045
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Virginia (Mr. Goodlatte).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. GOODLATTE. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Virginia
will be postponed.
Amendment No. 2 Offered by Mr. Watt
The Acting CHAIR. It is now in order to consider amendment No. 2
printed in part A of House Report 113-283.
Mr. WATT. Mr. Chairman, I have an amendment at the desk which was
made in order under the rule.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 5, insert the following after line 23 and redesignate
succeeding subsections, and references thereto, accordingly:
``(b) Reduction or Denial of Awards.--The court, in its
discretion, may reduce the amount to be awarded under
subsection (a), or deny an award, to the extent that the
prevailing party during the course of the proceedings engaged
in conduct that unduly and unreasonably protracted the final
resolution of the matter in controversy.
The Acting CHAIR. Pursuant to House Resolution 429, the gentleman
from North Carolina (Mr. Watt) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from North Carolina.
Mr. WATT. Mr. Chairman, I yield myself as much time as I may consume.
Mr. Chairman, upon introduction of this bill, the chairman released a
statement that section 3(b) of the bill, ``aligns fee shifting in
patent cases with the standard that is used for awarding fees against
the United States under the Equal Access to Justice Act.''
Unfortunately, the fee-shifting provision in this bill, even as
amended, cherry-picks the most burdensome requirements from the Equal
Access to Justice Act that mandate that judges award fees against the
loser unless they prove that their position was reasonably justified.
The bill was amended at the last minute of the markup presumably to
relax the burden on the nonprevailing party to escape the requirement
to pay the fees of the adverse party. I actually supported the
amendment during markup relying on that presumption. Since then,
however, it has become apparent both based on the committee report and
independent research that the amendment to change the ``substantially
justified'' standard to a ``reasonably justified'' standard is
practically meaningless.
As summarized in the CRS report that I will submit for the record,
the Senate Judiciary Committee in the 96th Congress ``considered and
rejected an amendment to the Equal Access to Justice Act that would
have changed the pertinent language from `substantially justified' to
`reasonably justified.' '' Subsequently, the Supreme Court in Pierce v.
Underwood held that ``substantially justified'' actually means
reasonable.
This troubling development highlights the pitfalls to considering
legislative language in haste. It also makes my amendment all the more
important to a balanced and unbiased fee-shifting mechanism.
The American rule, that each party to litigation bears their own cost
and attorney's fees, is the bedrock of the civil justice system. I
generally oppose litigation that erodes this rule because I believe it
provides open access to our courts to anyone who has a grievance.
The departure from the American rule as enacted in the Equal Access
to Justice Act was far more complex than the provision extracted and
incorporated in this bill. For example, the Equal Access to Justice Act
prescribes a fee cap of $125 per hour that is not in this bill. It also
prohibits, with a couple of exceptions, fee awards to attorneys whose
net worth exceeds $2 million, to businesses with a net worth in excess
of $7 million or more than 500 employees. This limitation also did not
find its way into this provision in the bill.
My amendment seeks to amend H.R. 3309 with yet another feature of the
Equal Access to Justice Act that is not in the Innovation Act, which is
the provision that gives a judge the flexibility to deny or reduce an
award that would be required if the nonprevailing
[[Page H7536]]
party could not establish that their position, as we now know, was
reasonable.
This amendment injects balance into this regime that represents a
departure from the American rule. A judge should be able to assess the
behavior of all the parties; otherwise, a wealthy party that is not
concerned if they are imposed with the costs and fees of their
adversary may engage in behavior intended to deplete the resources of
the poorer opposing party. The threshold for authorizing fee-shifting,
I think, should be sufficiently stringent so that the exception doesn't
become the rule, but it should not be so stringent that it becomes
meaningless.
Whether that is the case in Octane Fitness v. Icon Health Fitness is
the question before the Supreme Court. In Octane Fitness, the Court
will consider whether the two-part test of the Federal Circuit that
provides that a case be ``objectively baseless'' and brought in
``subjective bad faith'' to qualify a prevailing party for fees is too
high.
Although I think the Court will adjust the formula downward for
identifying cases in which fee-shifting may be appropriate, we are
clearly not deferring to the Court's docket. I think my amendment is
the preferred and necessary approach.
And with that, I reserve the balance of my time.
III. The Equal Access to Justice Act
Awards of attorneys' fees against the United States were
barred at common law not only because of the American rule,
but also because of the doctrine of sovereign immunity, under
which the United States may not be sued, nor its funds
expended, without its consent. ``Congress alone has the power
to waive or qualify that immunity,'' and it did so, with
respect to awards of attorneys' fees, with the Equal Access
to Justice Act (EAJA) in 1980. Prior to enactment of EAJA,
the common law exceptions to the American rule were
inapplicable against the United States. Even statutory
exceptions to the American rule were inapplicable against the
United States unless they specifically authorized fee awards
against the United States.
EAJA allows awards of attorneys' fees against the United
States in two broad situations. The first, codified at 28
U.S.C. Sec. 2412(b), makes the United States liable for the
prevailing party's attorneys' fees to the same extent that
any other party would be under the common law and statutory
exceptions to the American rule, including the statutory
exceptions that do not specifically authorize fee awards
against the United States. This provision, unlike the rest of
EAJA, contains no limitations on the assets or number of
employees of parties eligible to recover fees, and no maximum
hourly rate for fee awards.
The second broad situation in which EAJA authorizes fee
awards against the United States is codified at 5 U.S.C.
Sec. 504 and 28 U.S.C. Sec. 2412(d). These sections provide
that, in specified agency adjudications and in all civil
actions (except tort actions and tax cases) brought by or
against the United States, the United States shall be liable
for the attorneys' fees of prevailing parties, unless it
proves that its position was substantially justified or that
special circumstances make an award unjust.
This second portion of EAJA contains two limitations on fee
awards that are not found in Sec. 2412(b). First, it
prescribes a fee cap unless the court or agency determines
that a special factor justifies a higher fee. (Most fee
statutes authorize awards of ``reasonable'' fees, with the
court determining the amount.) The cap was originally $75 per
hour, but P.L. 104-121, 231-233, increased it to $125 per
hour for cases commenced on or after the date of its
enactment, which was March 29, 1996. Second, this portion of
EAJA does not allow (with two exceptions) fees to be awarded
to individuals whose net worth exceeds $2 million, or to
businesses or organizations, including units of local
government, with a net worth exceeding $7 million or more
than 500 employees. This portion of EAJA sunset, by the terms
of the original Act, on October 1, 1984. In 1985, EAJA was
reenacted, retroactive to October 1, 1984, and made
permanent.
P.L. 104-121, in addition to raising the cap under EAJA to
$125 per hour, added the following provision to 28 U.S.C.
Sec. 2412(d), and a corresponding one to 5 U.S.C. Sec. 504
applicable to adversary adjudications:
``If, in a civil action brought by the United States or a
proceeding for judicial review of an adversary adjudication
described in section 504(a)(4) of title 5, the demand by the
United States [other than a recitation of the maximum
statutory penalty] is substantially in excess of the judgment
finally obtained by the United States and is unreasonable
when compared with such judgment, under the facts and
circumstances of the case, the court shall award to the party
the fees and other expenses related to defending against the
excessive demand, unless the party has committed a willful
violation of law or otherwise acted in bad faith, or special
circumstances make an award unjust. Fees and expenses awarded
under this paragraph shall be paid only as a consequence of
appropriations provided in advance.''
This provision thus authorizes fee awards in favor of
losing parties and in that respect is unique in the law of
attorneys' fees.
In Pierce v. Underwood, 487 U.S. 552 (1988), the Supreme
Court decided three issues concerning EAJA: (1) the
applicable standard of appellate review, (2) the meaning of
``substantially justified,'' and (3) the ``special factors''
that allow a court to award more than $75 per hour.
(1) Standard of Review. Pierce v. Underwood addressed the
standard that a federal court of appeals applies in reviewing
a decision of a federal district court under EAJA. Either
party may appeal a district court's decision under EAJA, and,
as the Supreme Court explained:
``For purposes of standard of review, decisions by judges
are traditionally divided into three categories, denominated
questions of law (reviewable de novo), questions of fact
(reviewable for clear error), and matters of discretion
(reviewable for ``abuse of discretion'').''
487 U.S. at 558.
The Supreme Court found that EAJA did not provide a clear
prescription as to the appropriate standard of review
(unlike, for example, 42 U.S.C. Sec. 1988(b), which provides
that ``the court, in its discretion, may allow the prevailing
party . . . a reasonable attorney's fee''). The Court,
therefore, for a variety of reasons, held that the ``abuse of
discretion'' standard was most appropriate for appeals of
EAJA court decisions.
Awards of attorneys' fees under EAJA at the agency level
may be appealed to a court only by the prevailing party, not
by the United States. The statute, at 5 U.S.C.
Sec. 504(c)(2), provides:
``The court's determination on any appeal heard under this
paragraph shall be based solely on the factual record made
before the agency. The court may modify the determination of
fees and other expenses only if the court finds that the
failure to make an award of fees and other expenses, or the
calculation of the amount of the award, was unsupported by
substantial evidence.''
Prior to the 1985 amendments to EAJA, this provision stated
that the court could modify an agency decision only if it
found ``an abuse of discretion.'' It was intended that the
new standard--``unsupported by substantial evidence''--permit
``a broader scope of review . . . consistent with the normal
scope of judicial review of agency actions.
(2) ``substantially justified.'' The United States may
avoid liability for attorneys'' fees under EAJA by proving
that its position ``was substantially justified or that
special circumstances make an award unjust.'' 5 U.S.C.
Sec. 504(a)(1), 28 U.S.C. Sec. 2412(d). The legislative
history of the original EAJA stated that ``Nile test of
whether the Government position is substantially justified is
essentially one of reasonableness in law and fact.'' Twelve
of the thirteen federal circuits subsequently interpreted
``substantially justified'' to mean reasonable. See, Pierce
v. Underwood, 487 U.S. at 565-566. The U.S. Court of Appeals
for the District of Columbia was the exception. It reasoned:
``The Senate Judiciary Committee considered and rejected an
amendment to the bill that would have changed the pertinent
language from ``substantially justified'' to ``reasonably
justified.'' S. Rept. 96-253 [96th Cong., 1st sess.] at 8.
That refusal suggests that the test should, in fact, be
slightly more stringent than ``one of reasonableness.''
According to this view, the government's position may be
reasonable, yet fail to be substantially justified, making it
easier to recover fees under the substantially justified
standard than under a reasonableness standard. The 1985
amendments to EAJA did not alter the text of the
substantially justified language, but an accompanying
committee report expressed support for the D.C. Circuit's
interpretation:
``Several courts have held correctly that ``substantial
justification'' means more than merely reasonable. Because in
1980 Congress rejected a standard of ``reasonably justified''
in favor of ``substantially justified,'' the test must be
more than just reasonableness.''
The Supreme Court in Pierce v. Underwood held that
substantially justified means reasonable. The Court found
that a ``more than mere reasonableness'' test would be ``out
of accord with prior usage'' and ``unadministerable.''
``Between the test of reasonableness,'' the Court wrote,
``and a test such as `clearly and convincingly justified' . .
. there is simply no accepted stopping-place, no ledge that
can hold the anchor for steady and consistent judicial
behavior.'' 487 U.S. at 568. The Court found that the 1985
committee report was not controlling because it was neither
``(1) an authoritative interpretation of what the 1980
statute meant, or (2) an authoritative expression of what the
1985 Congress intended.'' Id. at 566.
(3) Exceeding $75 (now $125) per hour. EAJA provides that
fees ``shall be based upon prevailing market rates for the
kind and quality of the services furnished,'' but ``shall not
be awarded in excess of $75 [$125 for cases commenced on or
after March 29, 1996] per hour unless the court determines
that an increase in the cost of living or a special
factor, such as the limited availability of qualified
attorneys for the proceedings involved, justifies a higher
fee.'' 28 U.S.C. Sec. 2412(d)(2)(A)(ii). (The same cap
applies in agency proceedings; see, 5 U.S.C.
Sec. 504(b)(1)(A)). The Court in Pierce v. Underwood held:
``If ``the limited availability of qualified attorneys for
the proceedings involved'' meant merely that lawyers skilled
and experienced enough to try the case are in short
[[Page H7537]]
supply, it would effectively eliminate the $75 cap--since the
``prevailing market rates for the kind and quality of the
services furnished'' are obviously determined by the relative
supply and quality of services . . .. We think it refers to
attorneys having some distinctive knowledge or specialized
skill needful for the litigation in question--as opposed to
an extraordinary level of the general lawyerly knowledge and
ability useful in all litigation. Examples of the former
would be an identifiable practice specialty such as patent
law, or knowledge of foreign law or language.
487 U.S. at 571-572.
As for other ``special factors,'' the Court wrote:
``For the same reason of the need to preserve the intended
effectiveness of the $75 cap, we think the other ``special
factors'' envisioned by the exception must be such as are not
of broad and general application. We need not specify what
they might be. . . .''
Id. at 573.
The Court, however, specified some items which are not
special factors for purposes of exceeding the $75 per hour
cap: ``the novelty and difficulty of issues,'' ``the
undesirability of the case,'' ``the work and ability of
counsel,'' ``the results obtained,'' ``customary fees and
awards in other cases,'' and ``the contingent nature of the
fee.'' All these ``are factors applicable to a broad spectrum
of litigation; they are little more than routine reasons why
market rates are what they are.'' Id.
In Commissioner, Immigration and Naturalization Service v.
Jean, 496 U.S. 154 (1990), the Supreme Court held that, under
EAJA, a prevailing party may recover attorneys' fees for
services rendered in seeking a fee award without regard to
whether the position of the United States was substantially
justified. If the prevailing party is entitled to fees in the
main action, then he is automatically entitled to fees for
the time spent seeking fees. To hold otherwise could ``spawn
a `Kafkaesque judicial nightmare' of infinite litigation for
the last round of litigation over fees.'' Id. at 163.
In Scarborough v. Principi, 541 U.S. 401 (2004), the
Supreme Court addressed EAJA's requirement that fee
applications be filed ``within thirty days of final judgment
in the action,'' and ``allege that the position of the United
States was not substantially justified.'' 28 U.S.C.
Sec. 2412(d)(1)(B). The Court held that, when a fee
application is filed within 30 days, but fails to allege that
the position of the United States was not substantially
justified, the application may be amended to remedy the
oversight, even after the 30 days have elapsed.
In Richlin Security Service Co. v. Chertoff, 128 S. Ct.
2007, 2019 (2008), the Supreme Court held that, under EAJA,
``a prevailing party . . . may recover its paralegal fees
from the Government at prevailing market rates.'' The lower
court, which the Supreme Court reversed, had held that the
prevailing party could recover fees for paralegal services
only at their cost to the party's attorney.
Source of Fees Paid by the Government
Both agency-awarded and court-awarded fees are ``paid by
the agency over which the party prevails from any funds made
available to the agency by appropriation or otherwise.'' 5
U.S.C. Sec. 504(d), 28 U.S.C. Sec. 2412(d)(4). Fee awards
under 28 U.S.C. 2412(b) are presumably paid from the source
that pays damages awarded under the statute that authorizes
fee awards.
Formerly Required Annual Reports to Congress
With respect to agency-awarded fees, the EAJA provides,
``The Chairman of the Administrative Conference of the United
States, after consultation with the Chief Counsel for
Advocacy of the Small Business Administration, shall report
annually to the Congress on the amount of fees and other
expenses awarded during the preceding fiscal year pursuant to
this section.'' 5 U.S.C. Sec. 504(e). This provision remains
on the books, but it has no effect because the Administrative
Conference of the United States has not been functioning
since 1996.
With respect to court-awarded fees, the EAJA formerly
provided, ``The Attorney General shall report annually to the
Congress on the amount of fees and other expenses awarded
during the preceding fiscal year pursuant to this
subsection.'' 28 U.S.C. Sec. 2412(d)(5). This provision was
repealed by P.L. 104-66, 1091(b)(1995).
Mr. GOODLATTE. Madam Chair, I rise in opposition to the amendment.
The CHAIR. The gentleman from Virginia is recognized for 5 minutes.
Mr. GOODLATTE. Madam Chairman, this amendment includes language that
we believe is already implicit in the Innovation Act's fee-shifting
provision section 3.
The gentleman's amendment adds language that allows a judge to reduce
an award in certain circumstances. This amendment is redundant with the
provisions in the bill and does not appear to add anything new but,
rather, adds extraneous language that simply adds clutter to the
section.
The Judiciary Committee considered and rejected this amendment during
its markup of the bill. The fee-shifting language in the bill is a
carefully crafted compromise that we negotiated on a bipartisan basis
in the committee. Mr. Jeffries offered an amendment at the committee
that was adopted and included in the bill that modified the fee-
shifting language. With that amendment, all but five committee
Democrats joined with all voting Republicans of the committee and
reported the bill by a vote of 33-5. This amendment upsets that balance
and should be rejected.
Mr. WATT. Will the gentleman yield?
Mr. GOODLATTE. I yield to the gentleman from North Carolina.
Mr. WATT. I am wondering, if you think this is redundant and
extraneous rather than contrary to the intent, why wouldn't we just
accept the amendment and keep going?
Mr. GOODLATTE. I believe it is both, and it causes confusion in the
legislation, and, therefore, I oppose the amendment.
I reserve the balance of my time.
Mr. WATT. Madam Chair, I yield such time as she may consume to the
gentlelady from Washington State (Ms. DelBene).
Ms. DelBENE. I rise in support of this amendment.
Madam Chair, as an entrepreneur and businesswoman, I know how hard it
is to get a business off the ground. We know that small businesses are
on the receiving end of frivolous litigation, and it is critical that
we work to pass legislation to disincentivize such abusive behavior
while also ensuring that we do not adversely affect the small inventors
and start-ups who need to protect their IP and have access to the
courts for their legitimate claims.
Many folks have had concerns. I think it is important that we
continue to work together to address these issues.
During Judiciary Committee consideration we heard concerns about this
issue from diverse stakeholders who rely on a strong patent system,
from the National Venture Capital Association to the American
Association for Justice.
I support the underlying bill, but I also believe that we can
continue to work towards a more balanced change to the current fee
shifting standard as the bill advances in the legislative process.
For this reason, I support the Ranking Member's amendment and look
forward to continuing to work with my colleagues to improve the bill.
Mr. GOODLATTE. Madam Chairman, I yield such time as she may consume
to the gentlewoman from California (Ms. Lofgren).
Ms. LOFGREN. I thank the gentleman for yielding.
Madam Chair, I am afraid I must oppose my colleague's amendment. I
believe that the amendment would basically gut core elements of the
Innovation Act protections for small business and leave small
businesses exposed.
We have discussed the fee-shifting issue, so I want to focus on two
other issues: the discovery cost-shifting and the heightened pleading
provisions that I think are very important in the bill.
First, on pleading requirements, patent assertion entities often sue
and do not reveal what patent the defendant is allegedly infringing or
how, and that is why the Innovation Act requires greater particularity
in pleading. The bill's requirement includes information that the
plaintiffs should already have on hand, but the bill specifically
provides an exception for information that is not reasonably accessible
to the plaintiff. The amendment would eliminate that provision.
Relative to discovery, one of the ways that patent entities bully
defendants is by driving up the cost of litigation through broad
discovery requests. Section 3 of the bill directs the court to limit
discovery until claim construction occurs in the routine Markman
hearing. That gives defendants a break from costly discovery requests
until it is more clear what the claims against them are.
Now the bill also says the court shall--that is mandatory--shall
require discovery beyond that related to claim construction if it is
necessary to ensure a timely resolution of the action. The bill
provides the court with discretion to permit discovery to prevent
manifest injustice.
I believe that the bill before us is a very important element of
protecting against abusive litigation, and the amendment would do
damage to it.
And finally, I would just associate myself with the chairman's
comments on fee-shifting.
[[Page H7538]]
Mr. GOODLATTE. Madam Chairman, I reiterate my opposition to the
amendment and yield back the balance of my time.
The CHAIR. The question is on the amendment offered by the gentleman
from North Carolina (Mr. Watt).
The question was taken; and the Chair announced that the noes
appeared to have it.
Mr. WATT. Madam Chair, I demand a recorded vote.
The CHAIR. Pursuant to clause 6 of rule XVIII, further proceedings on
the amendment offered by the gentleman from North Carolina will be
postponed.
Amendment No. 3 Offered by Mr. Polis
The CHAIR. It is now in order to consider amendment No. 3 printed in
part A of House Report 113-283.
Mr. POLIS. Madam Chair, I have an amendment at the desk.
The CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 14, line 20, insert after ``accused,'' the following:
``identifies the ultimate parent entity of the claimant,''.
The CHAIR. Pursuant to House Resolution 429, the gentleman from
Colorado (Mr. Polis) and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Colorado.
Mr. POLIS. Madam Chair, I am thankful for Chairman Goodlatte and his
staff and the committee for their work on this bill and increasing
demand letter transparency in both the committee mark and working with
us on the floor to incorporate a bipartisan amendment that we were able
to work on with Representatives Connolly, Chaffetz, and Marino that
builds upon the language in the bill.
Very simply, our amendment would ensure that trolls can no longer
hide behind shell companies to conceal their true identity from demand
letter recipients. Our amendment is a step in the right direction in
providing businesses and entrepreneurs the tools to better assess the
validity of demand letters.
I do have a comprehensive bill, along with Representatives Marino and
Deutch, that moves further in that direction that we introduced 2 weeks
ago, and our bill would clarify that the FTC has the authority to go
after patent trolls.
As we move to enhance the value of demand letter transparency, I am
pleased that Energy and Commerce Subcommittee Chairman Terry, a few
minutes ago, expressed the intent of the committee to further examine
this issue. And this amendment is an important step in the right
direction.
I urge my colleagues to support the Polis-Connolly-Chaffetz-Marino
amendment and reserve the balance of my time.
Mr. ROHRABACHER. Madam Chair, I rise in opposition to the amendment.
The CHAIR. The gentleman from California is recognized for 5 minutes.
Mr. ROHRABACHER. Madam Chair, let us remember, as we go through this
debate, that it is the contention of those who oppose this legislation
that this legislation has a more dramatic negative impact on the
independent inventor who is seeking justice from the multinational
corporations who infringe a great deal upon these little guys, and we
are cutting off the little guys' ability to protect their patent by
making it much more difficult, number one, to have a patent.
{time} 1100
How does that stop the trolls, by making it more difficult to have a
patent? And it makes it more difficult to defend a patent, as we are
seeing in this amendment. And how does that necessarily deal with the
trolls?
So we now have put a huge burden that small, independent inventors
don't have now when they are fighting Goliath. They are fighting these
big corporations that routinely infringe and steal from the little guy;
and as I have said openly in the beginning, this is the strategy set
down by these big corporate interests to make trolls the issue and not
patent rights the issue.
In this particular amendment, what we have added is a further burden
on the part of the small inventor to protect his patent in the name of
getting the trolls. We have notification required and confirmation of
exactly who owns it.
What we have got here now in the current law, yes, small inventors
can seek investors, can seek people to join them to help them take on
the big guys. Now, all of those people who are trying to help the
little guy are going to have to be public knowledge. That would have
destroyed so many of the small inventors who have done so many great
things for America because they know these corporate people who are
infringing on the little guy, they seek vengeance on people who oppose
their power grab on these little guys.
We don't need that. We need to know whether or not it is a valid
patent claim. That is what we need to know--does someone have a valid
patent claim. And if they do, let's not demonize these people who are
helping the small inventor. Let's find out if this is a legitimate
claim or not.
Unfortunately, this legislation and this amendment have nothing to do
with whether or not we are determining a legitimate claim has been made
or not made in a particular case, especially what we are talking about
here. We do need to make sure these suits are not being filed. But what
does that have to do with making sure that every small inventor in this
country has to disclose all of the people who have invested in this
company, et cetera?
Again, we have an example where the little guy is going to be
emasculated by this law and what is being proposed. And the big guys:
of course, this doesn't hurt them at all.
And, again, if the public is having trouble understanding that, let's
figure out how does taking away the constitutional right of the small
inventor to having a judicial review--a constitutional right that he
has had since 1830--how does taking that away help in some way get
controls under control? How does that do that?
This is a front. It is just like those businessmen that had that
meeting that I described knew exactly what they were doing. They were
creating a demon over here, the troll, in order to what? In order to
gain changes in the system that will help these mega-corporations
defeat the small inventor who is trying to sue them on infringement.
That is what is behind this.
For 25 years, I have been sitting here in Congress fighting the
battle with these same multinational corporations. This is just the
most recent step towards this power grab in destroying the strong
patent system that America has had--the patent system that protects the
little guy--as compared to the patent systems in Europe and Japan,
where the little guys are smothered and routinely have their patents
stolen from them.
Let's be real here. Okay, we can talk patent troll, patent troll,
patent troll; and then they put in place changes like this that
dramatically damage small inventors and their rights to protect
themselves against infringement.
I oppose the amendment, and I yield back the balance of my time.
Mr. POLIS. Madam Chair, I yield 30 seconds to the gentleman from
Virginia (Mr. Goodlatte), the chair of the committee.
Mr. GOODLATTE. I thank the gentleman for his amendment, and I support
it.
Contrary to what the previous speaker said, this amendment does
exactly that--it helps to determine more fairly and more quickly
whether or not there is a valid patent claim. It requires parties
sending demand letters who wish to pursue treble damages to disclose
their ultimate parent entity.
This amendment improves the provision offered by Mr. Chaffetz and Mr.
Deutch in committee, and I support its inclusion in the bill.
Mr. POLIS. Madam Chair, I would point out that very little of the
arguments made by the gentleman from California were related to this
particular amendment. Much of that was stuff that may have been loosely
related to the overall bill.
I yield 1 minute to the gentleman from Virginia (Mr. Connolly), the
cosponsor of the amendment.
Mr. CONNOLLY. I thank my colleague, Mr. Polis, for his leadership.
Madam Chair, I join with the distinguished chairman in support of
this amendment. I am proud to be one of the coauthors.
I must say, contrary to what our dear friend from California just
said, a lot of small investors have in fact endorsed this bill because
it protects innovators
[[Page H7539]]
in the garage from being killed off by large litigation they cannot
afford. And it is precisely the opposite of what was being asserted by
our friend from California. That is why Application Developers
Alliance, Engine, EFF, and others have in fact endorsed the bill.
I want to commend my friend, Mr. Polis, for his leadership on this
amendment, and I am glad to join my colleagues, Messrs. Chaffetz and
Marino, in offering it.
Businesses large and small are being inundated with demand letters
that essentially amount to an extortion for money based on vague or
even illegitimate claims that a patent has been infringed upon. Because
the cost of litigation often runs into the millions of dollars, many
businesses are forced to settle, which is sapping them of money that
could otherwise be spent on innovation and hiring.
We know last year, for the first time ever, Apple and Google spent
more on litigation than they did on R&D.
I urge the adoption of the amendment.
For example, Apple and Google recently reached a dubious milestone as
both spent more on patent lawsuits and purchases than on R&D. The cost
of payouts from frivolous suits brought by patent trolls drained $29
billion from the economy last year.
Our amendment would require claimants alleging patent infringements
to disclose their parent entities, which will prevent patent trolls
from hiding behind shell corporations. This will help weed out nuisance
claims and preserve the rights of legitimate patent holders.
I urge my colleagues to support this common-sense, bipartisan
amendment.
There is a list of industry supporters below. PhRMA will not oppose
and AAJ is neutral. Goodlatte has agreed to go on voice.
Supporting organizations: App Developers Alliance, American Hotel and
Lodging Association, American Association of Advertising Agencies,
American Bankers Association, Association of National Advertisers,
Credit Union National Association, Direct Marketers Association, DISH
Network, Electronic Frontier Foundation, Food Marketing Institute,
Independent Community Bankers of America, International Franchise
Association, Mobile Marketing Association, National Association of
Convenience Stores, National Council of Chain Restaurants, National
Grocers Association, National Restaurant Association, and National
Retail Federation.
Mr. POLIS. I am happy to yield 1 minute to the gentleman from Utah
(Mr. Chaffetz), a cosponsor of the amendment.
Mr. CHAFFETZ. Madam Chair, we do this in a very bipartisan way. I
appreciate Mr. Polis; Mr. Connolly; my colleague, Mr. Marino; and
Chairman Goodlatte.
This is simple. If you want to help the little guy, if you want to
help protect the integrity of the system, you should be for
transparency in the legal system.
This amendment simply builds upon something that is already in the
bill by mandating that claimants seeking to bring willful infringement
claims identify the ultimate parent entity in the demand letters they
send to their targets.
It is about openness. It is about transparency. You should be able to
face your accuser in the courts; and that is all that this does is make
sure that we strengthen the openness and transparency of the system. We
think that will improve the system. We do it in a very bipartisan way.
That is going to help everybody in this process, especially the little
guy.
Mr. POLIS. I am happy to yield 1 minute to the gentleman from
Pennsylvania (Mr. Marino), an original sponsor of the underlying bill
that I introduced with him 2 weeks ago and a cosponsor of this
amendment.
Mr. MARINO. Thank you, Mr. Polis.
Madam Chair, I rise in support of the Polis-Chaffetz-Marino-Connolly
amendment.
Trolls assert a claim in a letter with little or no specificity, and
often it isn't clear who owns the patent being asserted or how the
patent was even infringed. It is time the entity sending out these mass
mailers does their due diligence, just as we expect in just about every
other area of the law.
This amendment requires the entity sending the letter to include the
person who holds the rights to the patent in order to later raise a
claim that the opposing party received an adequate letter putting them
on notice of their infringement.
Patent trolls have been playing a shell game and hiding who is
actually holding the rights to the patent and often who is supplying
the money to the litigation.
I fully support this amendment. This amendment will shine some much-
needed light on this dark practice.
Mr. POLIS. Madam Chair, this amendment is important.
First, I like the way my colleague Mr. Chaffetz put it: the right to
face your accuser in court is an important part of our justice system.
There is a long way to go with regard to demand letter transparency,
but this amendment is the first step.
I encourage my colleagues to support it, and I yield back the balance
of my time.
The CHAIR. The question is on the amendment offered by the gentleman
from Colorado (Mr. Polis).
The amendment was agreed to.
Amendment No. 4 Offered by Mr. Massie
The CHAIR. It is now in order to consider amendment No. 4 printed in
part A of House Report 113-283.
Mr. MASSIE. Madam Chair, I have an amendment at the desk.
The CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Strike section 5, redesignate subsequent sections, and
amend the table of contents accordingly.
The CHAIR. Pursuant to House Resolution 429, the gentleman from
Kentucky (Mr. Massie) and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Kentucky.
Mr. MASSIE. Madam Chair, section 5 of this bill shares a common
defect with the rest of this bill. Although well-intentioned, it will
have bad effects on our patent law. In fact, it will affect legitimate
patent-holders as much or worse than it would patent trolls.
Section 5 of H.R. 3309, the Innovation Act, is entitled, ``Customer-
Suit Exemption.'' This section inserts a new provision into the patent
code: section 296, Stay of Action Against the Customer.
The new section 296 would require a court to grant a motion to stay a
patent infringement suit against certain ``covered customers.'' While
well-intentioned, this section of the bill was not drafted in a careful
and narrowly tailored way so as to achieve its purpose, which is to
protect innocent customers, i.e., small retail customers involved in
patent lawsuits.
Instead, the broad language of section 296 would likely insert more
confusion into an already complicated patent infringement suit process
and cause harmful unintended consequences.
For example, section 5's weakening of the right to sue downstream
from the original manufacturer opens a new loophole for corporations to
exploit--a huge loophole. It could allow a large computer corporation,
for instance, to hide behind third-party chip manufacturers or third-
party developers and thus continue to ship infringing products. The
large computer corporation could thus construct a shadow shield against
injunctions. The injunction tool is one of the most effective weapons
in an individual, independent inventor's arsenal. We should not protect
those in the supply chain who stand to benefit the most from stealing
patents.
Patent experts oppose section 5 of H.R. 3309. My amendment would
strike section 5 of H.R. 3309.
Let me tell you what David Kappos, former Under Secretary of Commerce
and Director of the United States Patent and Trademark Office, said
about this bill, particularly section 5, which my amendment seeks to
strike:
I am most concerned about the covered customer stay
provision which, as written, is significantly overbroad.
While we all want to help relieve innocent retailers and
coffee shops from being taken hostage in patent infringement
suits, we should not open up the patent system to abuse by
others who will take advantage of this provision to shift
liability up or down the product creation and distribution
chain to thwart legitimate innovators from enforcing their
patent rights.
We should listen to the experts. This was the former Under Secretary
of Commerce and Director of the United States Patent Office. He is
telling us that this part of the bill is drafted overly broad and has
unintended consequences.
I reserve the balance of my time.
Mr. GOODLATTE. Madam Chair, I rise in opposition to this amendment.
[[Page H7540]]
The CHAIR. The gentleman from Virginia is recognized for 5 minutes.
Mr. GOODLATTE. Madam Chairman, I yield myself such time as I may
consume.
This amendment strikes a key provision of the bill for retailers,
restaurants, and grocery stores, among others. This provision is the
product of years of discussion with stakeholders and the Patent Office.
This section codifies and provides for the enforcement of the common
law doctrine that infringement suits against a customer, retailer, or
user of an infringing product should be stayed in favor of an action
against the manufacturer of the allegedly infringing product.
Customers and retailers typically are ill-suited to defend against an
infringement suit. They often are not familiar with the inner workings
of the product and usually have no reason to know whether or not the
product infringes a valid patent. Suits against such parties are
inherently coercive and have become a tactic employed by patent trolls.
{time} 1115
As an infamous recent example, one troll has begun suing cafes,
restaurants, and shops that provide wireless Internet access to their
customers via routers that they bought off the shelf. These small shops
have no idea how the routers work or why they infringe, and they have
often paid as little as $40 for them. Now they are being sued for using
allegedly infringing products and are being asked to pay thousands of
dollars.
The troll could have sued the manufacturer but chose not to because
the manufacturer would have vigorously defended against the suit.
Coffee shops and other small businesses, however, are more likely to
settle for a few thousand dollars rather than the hundreds of thousands
it would cost to fight an infringement suit over technology that the
coffee shop did not design or develop, and we see the same situation
repeated over and over again.
Another troll has sued small businesses, charities, and others just
because they use scanners and photocopiers. Again, the troll chose not
to sue the manufacturer because the manufacturer understands the
technology and would be able to defend against the suit. These types of
lawsuits are a little more than a shakedown of small, medium, and large
businesses that simply bought technology and are not the true sources
of any infringement.
This provision is designed to stay actions against customers when the
manufacturer, who is the true source of any infringement, is a party to
a co-pending action. The provision effectively pushes infringement
claims up the supply chain to the true source of infringement. The
provision thereby prevents harassment and the abuse of customers when
it is unnecessary for the plaintiff to sue customers.
Despite the Federal circuit precedent of recognizing the customer
suit exception, district courts continue to deny stays of customer
suits in a wide array of circumstances in which a stay would be
appropriate. The stay under section 5 is voluntary. No stay would be
entered unless the customer and manufacturer agreed that the
manufacturer most appropriately bore the burden of defending against
the infringement litigation.
This is a good provision. It is a key provision. It is an essential
part of the bill to protect customers and retailers against abusive
suits over technology that they did not design or develop. It is for
these and many other reasons that I strongly oppose the amendment
offered by the gentleman from Kentucky to strike section 5.
I would also point out that former Director Kappos, speaking pre-
manager's amendment version of the bill, indicated a concern that has
been addressed in the manager's amendment, and we made important
improvements to this section in coordination with Senators Leahy and
Lee. I think that this provision in the bill is very good and that this
amendment is not well-founded, and I oppose it.
I reserve the balance of my time.
Mr. MASSIE. Mr. Chairman, I yield 1 minute to the gentleman from
Michigan (Mr. Conyers).
Mr. CONYERS. I thank you.
I want to applaud the gentleman from Kentucky (Mr. Massie). This is
exactly what will improve this measure considerably.
Mr. Chair, the language currently in section 5 will not likely curb
abusive patent litigation. It needs substantial revisions to be
effective and to remove loopholes which allow manufacturers and others
to avoid litigation. Striking section 5 of the bill will give patent
stakeholders, retailers, and customers more time to improve the
customer stay provision.
I support the gentleman's amendment.
Mr. GOODLATTE. Mr. Chairman, may I ask how much time is remaining on
both sides.
The Acting CHAIR (Mr. Yoder). The gentleman from Virginia has 1\1/2\
minutes remaining, and the gentleman from Kentucky has 1\1/4\ minutes
remaining.
The gentleman from Virginia has the right to close.
Mr. GOODLATTE. Mr. Chairman, at this time, it is my pleasure to yield
1 minute to the gentleman from North Carolina (Mr. Coble), the chairman
of the Courts, Intellectual Property, and the Internet Subcommittee.
Mr. COBLE. I thank the chairman for yielding.
Mr. Chairman, I support the Goodlatte bill, and I oppose the
gentleman from Kentucky's amendment.
This is a commonsense provision that cures one of the patent troll
abuses. These suits against customers target the wrong people. Patent
owners should be suing the people who actually made the product, not
the retailer who sold it or the customer who uses it.
How on Earth is the owner of a coffee shop supposed to know how a
router works? I don't know how a router works. Why would we expect
someone who didn't build it to defend a claim that it infringes?
For this reason, Max Bibo's deli in Wethersfield, Connecticut,
supports this legislation. I am not sure any patent bill before the
Congress has ever won the support of a delicatessen, but this one does.
Chairman Goodlatte's bill addresses it, so I support the bill, and I
oppose the amendment.
Mr. MASSIE. Mr. Chairman, section 5 remains overly broad.
The former Director of the United States Patent and Trademark Office
told me as early as yesterday that we are playing with fire with
section 5. That is why I urge my colleagues to oppose section 5 and to
support my amendment.
Only in Washington, D.C., would you see the kind of hubris that is
displayed here. We portend that we are going to protect the
innovators--the people who invent in this country--yet we are ignoring
their pleas to protect their rights. In this very bill, we will take
away their rights while maintaining that we are helping them.
If you must vote for this bill, please vote for this amendment. This
amendment will improve the bill considerably.
I yield back the balance of my time.
Mr. GOODLATTE. Mr. Chairman, this amendment will considerably harm
this bill and the hundreds of organizations and businesses that have
supported this bill because they know how important it is that the
common law customer stay be applied fairly in jurisdictions across the
country.
Concerns have been voiced that an injunction could not be obtained
because of this provision against a party that is the supplier of the
infringing product. However, the bill expressly requires that all
parties, both customers and manufacturers, agree to be bound by any
issues decided in the suit against the manufacturer. In other words, if
the patent is found valid and infringed, an injunction could also be
obtained against any supplier of the product because of this
requirement.
I believe that this amendment should be strongly opposed.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Kentucky (Mr. Massie).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. MASSIE. Mr. Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Kentucky
will be postponed.
[[Page H7541]]
Amendment No. 5 Offered by Ms. Jackson Lee
The Acting CHAIR. It is now in order to consider amendment No. 5
printed in part A of House Report 113-283.
Ms. JACKSON LEE. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 24, strike lines 7 through 10 and insert the
following:
``(1) Covered customer.--The term `covered customer' means
a party that--
``(A) is accused of infringing a patent or patents in
dispute based on a covered product or process; and
``(B) is a small business concern as defined under section
3 of the Small Business Act (15 U.S.C. 632) that has an
annual revenue of $25,000,000 or less.''.
The Acting CHAIR. Pursuant to House Resolution 429, the gentlewoman
from Texas (Ms. Jackson Lee) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentlewoman from Texas.
Ms. JACKSON LEE. Mr. Chairman, I rise again to express my
appreciation to Chairman Goodlatte and to Ranking Member Conyers.
This is an unusual posture for us to be in. Again, all of us are for
innovation and love the name of the legislation, but are raising
concerns that would be worked out or could be worked out with a slower
process. Again, I refer to the Constitution and to the aging that went
on with the constitutional leaders in Philadelphia who meticulously
designed how this great government would work. I noted earlier that
they focused on innovation, competition, and inventiveness.
My amendment builds on that of the gentleman from Kentucky (Mr.
Massie), an inventor whom, I believe, we should listen to. He has
chosen to strike the section dealing with small businesses or the
covered customer issue, and mine narrowly focuses to hone in on helping
small businesses. My point here on the floor of the House is that we
cannot ignore that this bill skews the scales of justice against small
investors.
When my good friend from Virginia was explaining it, it was already
too complicated. My bill is simple. It expands or provides the covered
customer to small businesses making $25 million or less. So we are
looking for the balance and the compromise that pointedly goes toward
small businesses. It modifies that they are protected and that their
litigation costs are down.
Under my amendment, the definition of a ``covered customer'' is
modified to be one who is accused of infringing a patent or patents on
a covered product or process, and is a small business concern under
section 3 that has revenue of $25 million or less.
It is well-documented that our innovation ecosystem, founded on
patents, started with small businesses. This bill skews the justice
system away from them. Why would we want to do so?
As the bill is currently drafted, the provision applies to all
entities. Mom-and-pop shops at the end of the chain are, in essence,
undermined. The legs have gone from underneath them. I know that all of
us are committed to innovation, and I ask that the Jackson Lee
amendment be accepted.
I reserve the balance of my time.
Mr. Chairman, I wish to thank the Rules Committee, particularly
Chairman Sessions and Ranking Member Slaughter, for making my amendment
in order.
Let me also express my appreciation to Chairman Goodlatte and Ranking
Member Conyers for their hard work on this legislation and for their
shared commitment to ensuring that the American patent system remains
the best in the world.
My amendment modifies the bill to ensure that small businesses are
protected and by expanding the amendment from what was offered in the
Judiciary Committee markup so that businesses with revenue under $25
million are included--my hope is that it will garner more support.
Under my amendment, the definition of a covered customer is modified
to be one who is accused of infringing a patent or patents on a covered
product or process, and is a small business concern under Section 3 of
the Small Business Act that has revenue of $25 million or less.
I have modified this amendment from that offered in the Judiciary
Committee markup in order to accommodate more businesses who feel they
might benefit from the narrowed language while still maintaining the
intended consequence of allowing for stays in proceedings. The expanded
language might allow some businesses who are past the ``mom and pop''
growth phase but if this will provide medium-sized businesses from
going bankrupt, or losing valuable revenues because of expensive patent
litigation, it is a useful expansion.
It is well documented that our innovation ecosystem--founded on
patents--drives economic growth and job creation in the United States.
From the hustle and bustle of downtown Houston, Silicon Valley,
Chicago, New York, and even here in Washington, D.C., Americans want to
keep our cherished system as strong as possible. For the future of our
economy, we cannot risk jeopardizing it.
Section 5 is no doubt the most overbroad proposal in this
legislation. In the only Judiciary hearing none other than former
Undersecretary of Commerce and USPTO Director David Kappos testified
that the litigation stay provisions of H.R. 3309 would immunize from
liability ALL parties and not just end users and retailers, provided
they are located somewhere in a product channel downstream of the first
component part maker. This grant of infringement immunity would include
large commercial actors. such as manufacturers combining procured
components into value-added completed devices, as well as those who
assemble.
My amendment seeks to narrowly tailor the language in the bill so
that it harms fewer inventors and legitimate patent licensing activity.
We must act thoughtfully and with great caution as we pursue reforms
to a system which took sixty years to change--and then in the batting
of a Congressional eyelash--look to significantly modify once again. I
was here during the long road that led to the path that became Smith-
Leahy, or the American Invents Act. That it took so long is somewhat
perplexing but even more interesting is that the bill had a Republican
House and a Democratic Senate. Yet we came together in a collaborative
fashion and made lemonade out of sixty years of lemons while in the
midst of some of the most jarring partisanship we have seen in this
great body.
A number of the provisions in this bill may be well-intentioned, but
they have undesirable consequences for the patent system as a whole.
They have the potential to undermine the enforceability of all patent
rights, no matter how valuable the patent, and thus potentially
incentivize infringement.
When patent rights are weakened, the incentive for investing in
innovation is diminished. We must guard against that at all costs.
One such provision is the customer-suit exception. Though well-
intentioned, this provision is overbroad. Former USPTO Director David
Kappos said this himself when he testified before us recently.
As currently drafted, the provision applies to all entities in the
chain of commerce of a good, not just the innocent `mom and pop' shops
at the end of the chain.
In fact, this provision is drafted so that it would protect the very
companies that benefit the most from the sale of an infringing good.
And the provision would require a patent holder to prove indirect
infringement--which requires a higher level of proof--as well as direct
infringement. Taken together, these changes would result in
significantly more litigation, not less.
My amendment modifies the Manager's Amendment to ensure that all of
those small businesses that motivated this provision are protected.
Please support this amendment to protect innocent end users without
jeopardizing the patent system as a whole and all of the benefits that
it provides us.
And Mr. Chairman, I quote from the Federalist Papers No. 18: It
happened but too often, according to Plutarch, that the deputies of the
strongest cities awed and corrupted those of the weaker; and that
judgment went in favor of the most powerful party. And that is what is
the underlying theme of this amendment: protecting the small business
which might grow into the bigger business. Jeff Bezos of Amazon.com
drove a Ford truck to make some of his earlier deliveries--but now he
could probably buy Ford.
In the name of fairness to the little person--the Davids in the land
of the Goliaths, commercially-speaking--and I ask my colleagues to
support the Jackson Lee Amendment.
Mr. GOODLATTE. Mr. Chairman, I rise in opposition to this amendment.
The Acting CHAIR. The gentleman from Virginia is recognized for 5
minutes.
Mr. GOODLATTE. I yield myself such time as I may consume.
Mr. Chairman, this amendment offers a reformulation of section 5 of
the bill. The provision, however, is the product of years of
discussions with stakeholders and the Patent Office. This amendment
unduly restricts the protections offered by section 5 to customers.
The amendment has been presented as protecting small business, but
the
[[Page H7542]]
underlying provision already applies to small businesses. What this
amendment does is deny protection to larger grocery stores, charities,
hospitals, universities, and restaurant chains that are sued on account
of technology that they have purchased from others and did not design
or develop.
This provision would prevent many customers from benefiting from the
important protections of section 5. Customer suits against a party that
neither manufactures nor develops the product, accused of infringement,
are frequent tactics used by trolls because they know that most
customers are not sophisticated in patent laws and, thus, are more
vulnerable to extortion. This amendment would eliminate a tool the bill
provides to customers to protect themselves from truly abusive patent
litigation.
It is for these and many other reasons that I strongly oppose the
amendment.
I reserve the balance of my time.
Ms. JACKSON LEE. Mr. Chair, what is the remaining time?
The Acting CHAIR. The gentlewoman from Texas has 2\1/2\ minutes
remaining, and the gentleman from Virginia has 3\3/4\ minutes
remaining.
Ms. JACKSON LEE. Mr. Chair, I yield 1 minute to the distinguished
gentleman from Michigan (Mr. Conyers).
Mr. CONYERS. I thank the gentlelady from Texas for her amendment. It
is an important one because it limits the use of customer stay
provisions to smaller businesses. This is very, very important.
Mr. Chair, this amendment would improve the customer stay provision
by limiting the use of the provision to smaller businesses, those who
most likely did not know they were infringing when they bought and used
a modern scanner or a fax machine. They are most likely local mom-and-
pop shops. So, in preventing larger businesses from using the customer
stay provision to avoid litigation, this amendment will also help
protect the ability of individual inventors and entrepreneurs to
enforce their patent rights.
Please support the Jackson Lee amendment.
Mr. GOODLATTE. Mr. Chairman, at this time, I yield 1\1/2\ minutes to
the gentleman from Pennsylvania (Mr. Marino).
Mr. MARINO. I thank the chairman.
Mr. Chairman, I have had a rash of people in my office over the last
couple of months from all sides of this issue, and there is no one who
supports the intent of my colleague's across the aisle concerning small
business, and there is an unintended consequence here that, I think,
may be overlooked.
It is the fact that, certainly, those doing business with gross
revenues coming in of $25 million or less are protected, as they should
be and as it stands in our legislation at this point. However, this
amendment could cause a problem in which anyone making over $25 million
in gross revenues would not be protected. So why complicate the matter?
This amendment that my distinguished colleague wants to put in is not
required because it is already addressed in the legislation that we
have been going over for months and months and months. Therefore, I do
not support her amendment, and I support the chairman's bill.
Ms. JACKSON LEE. Mr. Chairman, I think quite the contrary to my good
friend from Pennsylvania, my legislation responds to the very
individuals whom we are proclaiming we are interested in--the small
inventors and businesses.
{time} 1130
I would offer to say that the opposition to this whole scheme of this
bill comes from the Association of American Universities, the Institute
of Electrical and Electronics Engineers, and the Innovation Alliance.
These are groups that understand there is a problem. These are
typically smaller groups.
I would suggest that in the Federalist Papers No. 18 it says that we
shall not tip the scales of justice to the big and the wealthy, but
protect the weak. This particular amendment provides for protecting
those making $25 million, not having them in the crosshairs of the
pleading scheme that is in this bill, in the crosshairs of loser pays
that is in this bill.
I would ask my colleagues to recognize that David Kappas has not
retrenched from his position that this liability posture is too
dangerous. As my good friend Mr. Massie indicated, he is striking the
whole section. I am finding a balance.
With that, I reserve the balance of my time.
Mr. GOODLATTE. Mr. Chairman, let's use a little common sense here. We
have a provision in the common law called ``customer stay,'' which says
that a customer can ask to join the manufacturer of the product that it
is alleged is infringing because that manufacturer knows a lot more
about how the product was manufactured, what licenses and patents were
used to do that, and is best able to defend a claim by a patent troll
or by a legitimate inventor that a claim is valid or not valid.
What the gentlewoman from Texas does is she says that any small
business above $25 million--say the local hospital, the local
university, the restaurant chain of, say, 15 or 20 restaurants, the
same thing for a retail store, a grocery store chain--they can't avail
themselves. So what happens? The patent troll knows that there are
certain jurisdictions in this country where the court will not issue
the customer stay, notwithstanding the long historic common law
doctrine of customer stay.
What we simply say in this bill is that if the customer, regardless
of the size, and the manufacturer, regardless of the size, both agree,
then the customer stay provision will apply; the manufacturer can come
in and defend the case. It is eminently fair to every party involved to
get at the core of whether or not the patent is a good patent and a
valid patent. And who knows best? The manufacturer.
So this provision in the bill is very important and this amendment is
harmful to the interest of small businesses, and I urge my colleagues
to oppose it.
I reserve the balance of my time.
Ms. JACKSON LEE. Mr. Chairman, the Club for Growth is opposed to this
legislation. What this legislation does my amendment corrects. That is
why I want to ensure that we slow this down and make sure that the
people who are impacted positively are small inventors and small
businesses.
This gives a gift to big guys, conglomerates, that can already hammer
you down if you challenge their use of your invention. What this says
is the small guys get protected. That means innovation and
inventiveness is protected. My amendment is a right way to go. It is a
good solid balance.
I ask my colleagues to support the Jackson Lee amendment, and I yield
back the balance of my time.
I have modified this amendment from that offered in the Judiciary
Committee markup in order to accommodate more businesses who feel they
might benefit from the narrowed language while still maintaining the
intended consequence of allowing for stays in proceedings. The expanded
language might allow some businesses who are past the ``mom and pop''
growth phase but if this will provide medium-sized businesses from
going bankrupt, or losing valuable revenues because of expensive patent
litigation, it is a useful expansion.
It is well documented that our innovation ecosystem--founded on
patents--drives economic growth and job creation in the United States.
From the hustle and bustle of downtown Houston, Silicon Valley,
Chicago, New York, and even here in Washington, DC, Americans want to
keep our cherished system as strong as possible. For the future of our
economy, we cannot risk jeopardizing it.
Section 5 is no doubt the most overbroad proposal in this
legislation. In the only Judiciary hearing none other than former
Undersecretary of Commerce and USPTO Director David Cappos testified
that the litigation stay provisions of H.R. 3309 would immunize from
liability ALL parties--and not just end users and retailers, provided
they are located somewhere in a product channel downstream of the first
component part maker. This grant of infringement immunity would include
large commercial actors such as manufacturers combining procured
components into value-added completed devices, as well as those who
assemble.
It is well documented that our innovation ecosystem--founded on
patents--drives economic growth and job creation in the United States.
From the hustle and bustle of downtown Houston, Silicon Valley,
Chicago, New York, and even here in Washington, DC, Americans want to
keep our cherished system as strong as possible. For the future of our
economy, we cannot risk jeopardizing it.
[[Page H7543]]
A number of the provisions in this bill may be well-intentioned, but
they have undesirable consequences for the patent system as a whole.
They have the potential to undermine the enforceability of all patent
rights, no matter how valuable the patent, and thus potentially
incentivize infringement.
My amendment seeks to narrowly tailor the language in the bill so
that it harms fewer inventors and legitimate patent licensing activity.
I would note the opposition of my colleague from Kentucky,
Congressman Thomas Massie, himself an inventor, and unlike most of us
in this body--a holder of patents--whose amendment seeks to strike the
entire Section 5 of the bill. My amendment seeks to find a happy medium
while not allowing large business concerns who have unlimited resources
and use the might of big law firms to take out smaller businesses.
Also my colleague Mr. Rohrabacher, a long-time champion of small
inventors and innovators has helped to spearhead a push urging
leadership to delay this vote.
We must act thoughtfully and with great caution as we pursue reforms
to a system which took sixty years to change--and then in the batting
of a Congressional eyelash--look to significantly modify once again. I
was here during the long road that led to the path that became Smith-
Leahy, or the American Invents Act.
That it took so long is somewhat perplexing but even more interesting
is that the bill had a Republican House and a Democratic Senate. Yet we
came together in a collaborative fashion and made lemonade out of sixty
years of lemons while in the midst of some of the most jarring
partisanship we have seen in this great body.
Yet here we are this morning looking to pass a bill which has been
essentially done in under two months.
Mr. GOODLATTE. Mr. Chairman, I would just say to the gentlewoman
there is a wide array of organizations. We have 4 pages with hundreds
of organizations, including Americans for Prosperity, Americans for Tax
Reform, Public Knowledge. It crosses the spectrum.
Small business innovators like Engine Advocacy that the gentlewoman
from California put in their statement, a lengthy statement, listing a
whole host of companies that support this legislation. One of the key
reasons they support it is because it protects small businesses, both
the innovators and the people who are the recipients of these demand
letters.
I oppose the amendment and urge my colleagues to join me in doing so.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Texas (Ms. Jackson Lee).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. GOODLATTE. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from Texas will
be postponed.
Amendment No. 6 Offered by Ms. Jackson Lee
The Acting CHAIR. It is now in order to consider amendment No. 6
printed in part A of House Report 113-283.
Ms. JACKSON LEE. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 46, after line 22, insert the following:
(g) Study on Impact of Legislation on Ability of
Individuals and Small Businesses to Protect Exclusive Rights
to Inventions and Discoveries.--
(1) Study required.--The Director, in consultation with the
Secretary of Commerce, the Director of the Administrative
Office of the United States Courts, the Director of the
Federal Judicial Center, the heads of other relevant
agencies, and interested parties, shall, using existing
resources of the Office, conduct a study to examine the
economic impact of sections 3, 4, and 5 of this Act, and any
amendments made by such sections, on the ability of
individuals and small businesses owned by women, veterans,
and minorities to assert, secure, and vindicate the
constitutionally guaranteed exclusive right to inventions and
discoveries by such individuals and small business.
(2) Report on study.--Not later than 2 years after the date
of the enactment of this Act, the Director shall submit to
the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the
Senate a report on the findings and recommendations of the
Director from the study required under paragraph (1).
The Acting CHAIR. Pursuant to House Resolution 429, the gentlewoman
from Texas (Ms. Jackson Lee) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentlewoman from Texas.
Ms. JACKSON LEE. Mr. Chairman, again, my hope is that we have the
opportunity to continue to work to get where all of us would like to
be.
My amendment is very simple. It requires the PTO director in
consultation with other relevant agencies and interested parties to
conduct a study to examine the economic impact of the litigation reform
contained in the bill, sections 3, 4, and 5 of this act, on the ability
of individuals and small businesses owned by women, veterans, and
minorities to assert, secure, and vindicate the constitutionally
guaranteed exclusive right to inventions and discoveries. In essence, I
think it brings all of us together to be able to ensure that we promote
this body politic of inventors, the people who built America.
This is, in essence, to follow in the constitutional mandate to
promote the progress of science and useful arts by securing for limited
times to authors and inventors an exclusive right to their respective
writings and discoveries. In my earlier discussions I said the wise
persons of the constitutional construct recognize the importance of
inventiveness.
I have with me a chart that recognizes some of our great African
American inventors: Madame C.J. Walker from Granville Woods invented a
device that allowed for messages to be sent from moving trains and
railway stations; Patricia Bath invented a method for removing eye
cataracts. Great women inventors: Mary Anderson invented the windshield
wipers. And our famous Hispanic inventors and others from other
backgrounds: Pedro Flores, the first woman to manufacture the yo-yo.
Our veterans are included in that. Many, many others throughout the
Nation are included in this body of inventors.
With that, I ask my colleagues to support this amendment, and I
reserve the balance of my time.
Mr. GOODLATTE. Mr. Chairman, although I am not opposed to the
amendment, I ask unanimous consent to control the time in opposition to
the amendment.
The Acting CHAIR. Without objection, the gentleman from Virginia is
recognized for 5 minutes.
There was no objection.
Mr. GOODLATTE. Mr. Chairman, this amendment provides for a study that
the USPTO would conduct to examine the impact of the changes in
sections 3, 4, and 5 of the bill on individuals and small businesses
owned by women, veterans, and minorities.
The Innovation Act will benefit all businesses, both large and small,
regardless of who owns them, including women, veterans, and minorities.
This bill has received strong support from independent inventors, small
businesses, start-ups, manufacturers, retailers, Realtors, travel
agents, hotels, and even a delicatessen.
By bringing transparency and curbing litigation abuses, the
Innovation Act will reduce litigation costs for innovators and
innovative companies from all across this great land. This will reduce
the leverage patent litigation opportunists possess to extort money
from legitimate businesses and individuals.
This bill not only lines up with our constitutional authority, but
our constitutional duty and will help grow our economy, create jobs,
and promote the engine of American ingenuity for decades to come.
Mr. CONYERS. Will the gentleman yield?
Mr. GOODLATTE. I yield to the gentleman from Michigan.
Mr. CONYERS. I just want to associate myself with the gentleman's
remarks and join in the support for the Jackson Lee amendment No. 6. It
is a very important one.
Mr. GOODLATTE. I reserve the balance of my time.
Ms. JACKSON LEE. Mr. Chairman, let me thank both the chairman of the
committee and the ranking member for their kind support of this
amendment.
May I ask the Chair the amount of time remaining, please.
The Acting CHAIR. The gentlewoman from Texas has 3 minutes remaining.
The gentleman from Virginia has 3\3/4\ minutes remaining.
Ms. JACKSON LEE. Thank you very much.
[[Page H7544]]
Mr. Chairman, I insert in the Record the list of inventors that are
just a small measure of those coming from a wide array of diversity.
Let me say that we are on the floor today because we do believe in
innovation. We are on the floor today because we all believe in
innovation. My amendment attests to that fact. Both the chairman and
ranking member agree that we should look into those small inventors
that have been the backbone of American society.
I would ask again that as we look at the full measure of this
legislation, that we also will take that into consideration.
I am hoping that my amendment No. 6 will be supported. But in
conclusion, I want to take note of the fact that the Jackson Lee
amendment No. 5 will be voted on and Mr. Massie's amendment will be
voted on. We hope that we will get a strong vote of support. But I
would hope that whatever reflection those votes characterize, it in no
way reflects on the issue which we are trying to bring forward. Members
will vote and Members will not vote. We hope they will vote for our
amendments.
But, really, what this is all about is to make sure that we do cover
and protect that genius that lies across the landscape of America.
Maybe a 5-year-old that is tinkering with Legos is an inventor who
needs to be protected. That is the gist of what our discussion and
debate is. That is why my amendment No. 6 was offered and No. 5.
I ask that this amendment be accepted by my colleagues, and I yield
back the balance of my time.
Mr. Chairman, I wish to thank the Rules Committee, particularly
Chairman Sessions and Ranking Member Slaughter, for making my amendment
in order. Let me also express my appreciation to Chairman Goodlatte and
Ranking Member Conyers for their hard work on this legislation and for
their shared commitment to ensuring that the American patent system
remains the best in the world.
The Jackson Lee Amendment simply requires the PTO Director, in
consultation with other relevant agencies, and interested parties, to
conduct a study to examine the economic impact of the litigation
reforms contained in the bill (sections 3, 4, and 5 of this Act) on the
ability of individuals and small businesses owned by women, veterans,
and minorities to assert, secure, and vindicate the constitutionally
guaranteed exclusive right to inventions and discoveries.
Mr. Chairman, while there may be conflicting views on both sides of
the aisle regarding the wisdom or necessity of some of the legislative
proposals contained in H.R. 3309, there is no disagreement in this
House on the central importance of honoring the mandate of the
Constitution 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'' (U.S. Const. Art. I,
Sec. 8, clause 8.)
Mr. Chairman, the Founding Fathers understood that America's future
and its security lay in its ability to transform itself from a rural
and agrarian economy into a commercial and manufacturing powerhouse
that produced the products and ideas and created the jobs that would
give Americans the highest standard of living in the world. The patent
system created by the Constitution's framers played an indispensable
part in this transformation.
Mr. Chairman, it is critically important that whenever we consider
legislation intended to improve or modernize our patent system that we
do no harm to the individual inventors whose innovations fuel our
economy.
We also must take that we not change the patent system in such a way
that we discourage inventors from unleashing the creative energies that
turn impossible dreams into practical and commercially viable products
and American jobs.
Mr. Chairman, my amendment supplements and improves the bill, which
already requires PTO to conduct 4 studies and submit reports to
Congress. The required studies are:
1. Study On Secondary Market Oversight For Patent Transactions To
Promote Transparency And Ethical Business Practices.
2. Study On Patents Owned By The United States Government
3. Study On Patent Quality And Access To The Best Information During
Examination
4. Study On Patent Small Claims Court
What is missing from this list is a study on the impact of the
changes wrought by the legislation on the very persons the American
patent system was created to encourage and protect: individual
innovators who take the risk to create, innovate, and invent the
discoveries that change our world for the better. Inventors like Steve
Jobs (Apple), Bill Gates (Microsoft), Henry Ford (Ford Motors), Thomas
Edison (GE); Alexander Graham Bell (AT&T).
Mr. Chairman, H.R. 3309 contains many new and complex changes to the
patent litigation system such as ``loser pays,'' delayed and restricted
discovery, and heightened pleading requirements imposed on inventors
seeking to protect their constitutional right to their discoveries.
If these changes were found to impede their ability to protect their
rights and thus discourage future innovators from inventing, would we
not want to revisit the law and make the needed revisions?
The Jackson Lee Amendment simply directs that the impact of these new
changes be studied and reported to Congress so that identified
problems, if any, may be later corrected to ensure our patent system
remains the best in the world.
I ask unanimous consent to append at the end of my remarks a list of
some of the great advances created by American inventors of all
backgrounds, races, and gender.
I urge my colleagues to support the Jackson Lee Amendment #8.
FAMOUS WOMEN INVENTORS OF THE MODERN ERA
Mary Anderson, Inventor of Windshield Wipers; Barbara
Askins, Inventor of a New Film Developing Method Used by
NASA; Patricia Billings, Invented Geobond', first
non-toxic workable replacement for asbestos; Marion Donovan,
Inventor of Disposable Diapers; Bette Nesmith Graham,
Inventor of Liquid Paper; Ruth Handler, Inventor of the
Barbie Doll; Dr. Grace Murray Hopper, Invented COBOL Computer
Language.
Mary Phelps Jacob, Inventor of the Modern Brassiere;
Margaret Knight, Inventor of the Paper Bag Machine; Stephanie
Kwolek, Inventor of Kevlar, the main ingredient in bullet-
proof vests; Ann Moore, Inventor of Snugli' Baby
Carrier; Lyda Newman, Inventor of a Synthetic Bristle Hair
Brush; Patsy Sherman, Inventor of ScotchgardTM
Stain Repellent; Ruth Wakefield, Inventor of the Chocolate
Chip Cookie.
FAMOUS HISPANIC INVENTORS
Pedro Flores, First person to manufacture the yo-yo in the
United States; Ellen Ochoa, Invented an optical analysis
system. Also was first Hispanic astronaut; Luis Federico,
Awarded Nobel Prize for discovery of sugar nucleotides and
their role in the biosynthesis of carbohydrates; Carlos
Finlay, Identified the mosquito as a carrier of the deadly
yellow fever germ; Santiago Ramon y Cajal, Inventor who was
awarded the Nobel Prize for his work on the structure of the
nervous system; Luis Miramontes, Co-inventor of the
contraceptive pill. Discovered procedure for synthesizing
progestin norethindrone, the active ingredient in the birth
control pill; Guillermo Gonzalez Camarena, Invented an early
color television system; Felipe Vadillo, Invented method of
predicting premature fetal membrane rupture in pregnant
women; Juan Lozano, Invented the Rocket Belt, inspired by his
fascination with jet packs.
TEN GREAT AFRICAN AMERICAN INVENTORS
Despite the hardships suffered through slavery, many
African Americans have managed to become great inventors,
scientists, and thinkers. This is a list of the ten greatest
African American inventors.
Madame CJ Walker 1867-1919: Invented: Hair Lotion for black
women--Madam Walker was an entrepreneur who built her empire
developing hair products for black women. She was the first
African-American woman millionaire.
Frederick McKinley Jones 1893-1961: Invented automatic
refrigeration systems for long-haul trucks--Frederick
McKinley is best known for inventing an automatic
refrigeration system for long-haul trucks in 1935 (a roof-
mounted cooling device).
Jan Ernst Matzeliger 1852-1889: Invented: Shoe lasting
machinery--Jan Matzeliger was born in Paramaribo, Dutch
Guiana in 1852. He immigrated to the United States at the age
of 18. Jan Matzeliger helped revolutionize the shoe industry
by developing a shoe lasting machine that would attach the
sole to the shoe in one minute.
Norbert Rillieux 1806-1894: Invented: Sugar refining
machinery--Norbert Rillieux was born on March 17, 1806 in New
Orleans, Louisiana. Norbert was born a free man, although his
mother was a slave. His father was a wealthy White engineer
involved in the cotton industry. Rillieux invented the
multiple-effect vacuum pan evaporator. This innovation,
adopted in sugar refining, escalated production, reduced the
price, and was responsible for transforming sugar into a
household item.
George Edward Alcorn 1940: Invented: Imaging X-Ray
Spectrometer--Physicist George Edward Alcorn, Jr. is best
known for his development of the imaging x-ray spectrometer.
An x-ray spectrometer assists scientists in identifying a
material by producing an x-ray spectrum of it, allowing it to
be examined visually. For this achievement he was recognized
with the NASA/GSFC (Goddard Space Flight Center) Inventor of
the Year Award.
Lewis Latimer 1848-1928: Invented: Long life lightbulb--
Lewis Latimer was born in Chelsea, Massachusetts in 1848. He
was the son of George and Rebecca Latimer, escaped slaves
from Virginia. Latimer devised a way of encasing the filament
within a cardboard envelope which prevented the carbon from
breaking and thereby provided a much longer life to the bulb
and hence made the
[[Page H7545]]
bulbs less expensive and more efficient. This enabled
electric lighting to be installed within homes and throughout
streets.
Granville Woods 1856-1910: Invented: A variation on the
induction telegraph--Granville Woods was often referred to as
the ``Black Thomas Edison.'' In 1887, Woods developed his
most important invention--a device that allowed for messages
to be sent from moving trains and railway stations. By
allowing dispatchers to know the location of each train, it
provided for greater safety and a decrease in railway
accidents.
Patricia Bath 1942: Invented: A form of eye surgery using
lasers--Dr. Patricia Bath, an ophthalmologist became the
first African American woman doctor to receive a patent for a
medical invention. The method she invention for removing
cataract lenses, transformed eye surgery, using a laser
device making the procedure more accurate. Another device
invented by Dr. Bath was able to restore sight to people who
had been blind for over 30 years.
Garrett Morgan 1877-1963: Invented: Gas mask, and a type of
traffic light--Garrett Morgan invented the gas mask in 1914.
On July 25, 1916, Garrett Morgan made national news for using
his gas mask to rescue 32 men trapped during an explosion in
an underground tunnel 250 feet beneath Lake Erie. The Morgan
gas mask was later refined for use by U.S. Army during WWI.
After witnessing a collision between an automobile and a
horse-drawn carriage, Garrett Morgan invented the traffic
signal.
Otis Boykin 1920-1982: Invented: Improved electrical
resistor, and a control unit for pacemakers--Boykin's most
famous invention was a control unit for the heart pacemaker.
The device uses electrical impulses to maintain a regular
heartbeat. Also invented more than 25 electronic devices,
including an improved electrical resistor for computers,
radios, televisions, and guided missiles.
Mr. GOODLATTE. Mr. Chairman, I thank the gentlewoman for her
amendment and urge my colleagues to support the underlying bill.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Texas (Ms. Jackson Lee).
The amendment was agreed to.
Amendment No. 7 Offered by Mr. Rohrabacher
The Acting CHAIR. It is now in order to consider amendment No. 7
printed in part A of House Report 113-283.
Mr. ROHRABACHER. Mr. Chairman, I rise in support of my amendment.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 47, strike line 3 and all that follows through page
48, line 20, and redesignate succeeding subsections, and
references thereto, accordingly.
The Acting CHAIR. Pursuant to House Resolution 429, the gentleman
from California (Mr. Rohrabacher) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentleman from California.
Mr. ROHRABACHER. Mr. Chairman, I rise in support of my own amendment,
which would remove section 9(a) from the Innovation Act.
My amendment would protect the American inventors from an incredible
attack on their constitutional rights by eliminating from this bill the
bill's elimination of the right for judicial review of the American
inventors who feel that perhaps they were not treated legally by their
applications to the patent system.
They have had a right since 1836 to a judicial review. This is a
constitutional right that has been for a long time recognized. This
bill eliminates that. Of course, we are out to get the troll.
Everything is going to be aimed at getting the troll. How does
eliminating the constitutional right of an independent inventor who
doesn't have a lot of money but now he feels maybe he has been
mistreated or maybe not legally treated by the patent office, up until
now he has had the right, as every other American citizen, to their day
in court; and instead, we are taking the little guy and eliminating his
day in court if he feels that he has a legitimate legal claim that he
was not treated legally through the patent system?
Why are we attacking the little guy? Well, we have to get to the
trolls. We have got to make it much more difficult for a little guy to
get a patent. We have got to make it much more difficult for a little
guy to defend a patent against these mega-multinational corporations
that routinely infringe on the small guy.
Now, we know we have heard about the wrongdoing of a certain
percentage of inventors or people who own patents in this country.
Let's get a patent. But this bill totally undermines and attacks the
rights of people who are handling themselves correctly. It makes it
more difficult for the independent inventor. Here we are taking away
his constitutional rights.
By the way, let me just note I have heard Mr. Goodlatte say that this
in some way eliminates the regular process of the Patent Office. That
is not the case, Mr. Goodlatte. The Patent Office procedures are kept
the same in this bill as they have been. The only thing that this bill
changes, or that your bill seeks to change that my amendment would
eliminate, is eliminating the right of these independent inventors to
go to court and say they made an unconstitutionally legal decision on
my patent.
I yield 1 minute to the gentlewoman from California (Ms. Lofgren).
Ms. LOFGREN. I thank the gentleman for yielding.
Mr. Chairman, while Mr. Rohrabacher and I do not agree on the
underlying bill, I do support his amendment.
The Innovation Act would repeal section 145, the right of a patent
applicant to appeal an initial PTO determination in Federal court.
{time} 1145
This is a long-standing provision of law, and while it is rarely
used, and even less often successful, I do believe that it poses at
least theoretically a hedge against misconduct in the Patent Office
and, at a minimum, will help ensure that the PTO's initial
determinations are as meticulous as inventors deserve.
I spoke in favor of this amendment and voted for it when it was
offered in the Judiciary Committee, and I continue to support it. I
urge my colleagues to vote in favor.
Mr. GOODLATTE. Mr. Chairman, I rise in opposition to the amendment
and claim the time in opposition to the amendment.
The Acting CHAIR. The gentleman from Virginia is recognized for 5
minutes.
Mr. GOODLATTE. Mr. Chairman, I strongly oppose the gentleman's
amendment to strike the bill's provisions regarding section 145. The
bill's provisions are strongly supported by the Patent Office.
The amendment would strike one of the bill's most important reforms
for preventing patent trolls from obtaining low-quality patents and
bringing extortionate lawsuits. The bill's provisions are necessary
because of the Supreme Court's recent decision in Kappos v. Hyatt which
construed section 145 to allow an applicant to evade substantive patent
examination in the Patent Office and to instead present his evidence of
patentability for the first time in Federal district court. A district
judge would then be required to make de novo findings of patentability.
Section 145 is outdated and unnecessary. Today, applicants have
administrative routes for offering new evidence. Even after a board
decision affirming the examiner's rejection, an applicant can file a
continuation application and can introduce new evidence of
patentability in that continuation.
Ever since 1836, the United States has required that all patent
applications be reviewed by patent examiners with a scientific
education, people who understand the technology that the patent covers.
This helps to ensure that patents are not issued for inventions that
are already in the public domain or that would be obvious to a person
skilled in the technology.
Under the gentleman from California's amendment, however, an
applicant could short-circuit the entire application process and
present his evidence of patentability for the first time in district
court. Now, I have known many district judges who are expert lawyers,
but very few of them have degrees in biotechnology. Very few of them
have degrees in electrical engineering; yet under this amendment, these
judges would be making the initial determination whether, for example,
a purported computer invention is novel and nonobvious and whether it
has been properly enabled.
I would ask my colleagues, is there anyone here who believes the
United States will issue higher-quality patents if the applications are
never, never, never reviewed by an examiner with a
[[Page H7546]]
scientific background? Does anyone believe that we will have better
semiconductor patents if they are never examined by an electrical
engineer? Will we really have better drug patents if they are never
reviewed by someone with a degree in chemistry?
I would submit that the gentleman's amendment is nothing more than a
recipe book for patent trolls to obtain low-quality patents claiming
technology that is already in widespread use.
Finally, we cannot ignore the evidence of who is actually using these
section 145 actions. These lawsuits, which seek to obtain a patent
without review by technically trained examiners, are heavily used by
infamous patent trolls who are trying to obtain patents on computer
technology from the 1980s and 1990s. These trolls are still pursuing
patent applications that were filed before 1995 when patent terms ran
17 years from when the patent was issued. The most infamous user of
section 145 still has hundreds of these applications pending and is
trying to obtain patents on computer technology that literally predate
Windows and Apple Macintosh. A vote for this amendment is nothing more
than a vote to advance that patent troll agenda and allow abuse of the
U.S. patent system. I strongly urge my colleagues to vote ``no'' on
this amendment.
I reserve the balance of my time.
Mr. ROHRABACHER. Mr. Chairman, I yield 30 seconds to the gentleman
from Michigan (Mr. Conyers).
Mr. CONYERS. I want to commend Mr. Rohrabacher for what he is doing
here. This is another little guy provision that deserves support
because the Supreme Court has even recently affirmed the expansive
breadth of evidence that a patent applicant may introduce in a section
145 proceeding. And so I am for keeping this provision in, and I am
proud to add my support to the Rohrabacher amendment.
Mr. GOODLATTE. I reserve the balance of my time.
Mr. ROHRABACHER. I yield myself 30 seconds.
Well, the Supreme Court disagrees with what the chairman of our
Judiciary Committee says. The Supreme Court has decided against the
very argument that he gave. And the fact is, if someone in this
country, an inventor, an independent inventor or anybody else thinks
they have a claim that a government agency has not treated them in a
constitutional and lawful manner, they have a right to take that before
a court. This bill eliminates that constitutional right that our
inventors have had since the 1830s. I am sorry, this again discloses
the power grab behind this bill. I ask support for my amendment.
I yield back the balance of my time.
Mr. GOODLATTE. Mr. Chairman, I yield myself the balance of my time.
I would just say to the gentleman, the Supreme Court doesn't disagree
with my position. The Supreme Court is interpreting the current law on
the books, a law which has been on the books for a long time, and is
superseded by new provisions that have been added into the patent law
that give inventors additional ways to have their patents reviewed if
they are denied by the Patent Office. So the Supreme Court is
interpreting the current law.
What this bill does is it changes the current law because it
recognizes that, based on that decision, it enables patent trolls to do
some of the most outrageous things and cripples the ability of the
Patent Office to actually look at the patent in the form that the law
intends, and that is by engineers and scientists, chemists, biologists,
people who have training in the field and can identify whether
something is indeed a novel idea or not. That is what the amendment
would lop off.
The amendment would continue a pathway around the Patent Office that
would allow patent trolls to get low-quality patents because they would
not be properly examined and continue the problem that we face with
patent trolls. So I strongly oppose the amendment.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from California (Mr. Rohrabacher).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. ROHRABACHER. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from California
will be postponed.
Amendment No. 8 Offered by Mr. Conyers
The Acting CHAIR. It is now in order to consider amendment No. 8
printed in part A of House Report 113-283.
Mr. CONYERS. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Deceptive
Patent Practices Reduction Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Transparency of patent ownership.
Sec. 4. Customer stay.
Sec. 5. Small business education, outreach, and information access.
Sec. 6. Codification of the double-patenting doctrine for first-
inventor-to-file patents.
Sec. 7. Technical corrections to the Leahy-Smith America Invents Act.
Sec. 8. Reports.
Sec. 9. Effective date.
SEC. 2. DEFINITIONS.
In this Act:
(1) Director.--The term ``Director'' means the Under
Secretary of Commerce for Intellectual Property and Director
of the United States Patent and Trademark Office.
(2) Office.--The term ``Office'' means the United States
Patent and Trademark Office.
SEC. 3. TRANSPARENCY OF PATENT OWNERSHIP.
(a) Judicial Proceedings.--
(1) In general.--Section 281 of title 35, United States
Code, is amended--
(A) by striking ``A patentee'' and inserting ``(a) In
General.--A patentee''; and
(B) by adding at the end the following:
``(b) Initial Disclosure.--A patentee who has filed a civil
action under subsection (a) is required to disclose to the
court and to all adverse parties, any persons, associations
of persons, firms, partnerships, corporations (including
parent corporations), or other entities other than the
patentee itself known by the patentee to have--
``(1) a financial interest (of any kind) in the subject
matter in controversy or in a party to the proceeding; or
``(2) any other kind of interest that could be
substantially affected by the outcome of the proceeding.
``(c) Enforcement.--The court may enforce the requirement
under subsection (b) upon a motion by an opposing party or
sua sponte.
``(d) Definitions.--For purposes of this section, the terms
`proceeding' and `financial interest' have the meaning given
those terms in section 455(d) of title 28.''.
(2) Technical and conforming amendment.--Section 290 of
title 35, United States Code, is amended in the first
sentence by inserting after ``inventor,'' the following:
``any information that a patentee has publicly disclosed
under section 281(b),''.
(b) Patent and Trademark Office Proceedings.--
(1) In general.--Chapter 26 of title 35, United States
Code, is amended by adding at the end the following:
``Sec. 263. Disclosure of information relating to patent
ownership
``(a) Definitions.--In this section--
``(1) the term `period of noncompliance' refers to a period
of time during which the ultimate parent entity of an
assignee of a patent has not been disclosed to the United
States Patent and Trademark Office in accordance with this
section; and
``(2) the term `ultimate parent entity' has the meaning
given the term in section 801.1(a)(3) of title 16, Code of
Federal Regulations, or any successor regulation.
``(b) Requirement to Disclose Assignment.--An assignment of
all substantial rights in an issued patent that results in a
change to the ultimate parent entity shall be recorded in the
Patent and Trademark Office within 3 months of the
assignment.
``(c) Disclosure Requirements.--A disclosure under
subsection (b) shall include the name of the assignee and the
ultimate parent entity of the assignee.
``(d) Failure to Comply.--If a party required to make a
disclosure under subsection (b) fails to comply with such
requirement, in a civil action in which that party asserts a
claim for infringement of the patent, that party may not
recover increased damages under section 284 or attorney fees
under section 285 with respect to infringing activities
taking place during any period of noncompliance.''.
(2) Applicability.--The amendment made by paragraph (1)
shall apply to any patent issued on or after the date of
enactment of this Act.
(3) Conforming amendment.--The table of sections for
chapter 26 of title 35, United States Code, is amended by
adding at the end the following new item:
``263. Disclosure of information relating to patent ownership.''.
[[Page H7547]]
SEC. 4. CUSTOMER STAY.
(a) In General.--Chapter 29 of title 35, United States
Code, is amended by adding at the end the following new
section:
``Sec. 299A. Customer stay
``(a) Definitions.--In this section--
``(1) the term `covered customer' means a party accused of
infringing a patent or patents in dispute based on a covered
product or process;
``(2) the term `covered manufacturer' means a person who
manufactures or supplies, or causes the manufacture or supply
of, a covered product or process, or a relevant part thereof;
and
``(3) the term `covered product or process' means a
component, product, process, system, service, method, or a
relevant part thereof, that--
``(A) is alleged to infringe the patent or patents in
dispute, or
``(B) implements a process alleged to infringe the patent
or patents in dispute.
``(b) Motion for Stay.--In a civil action in which a party
asserts a claim for relief arising under any Act of Congress
relating to patents (other than an action that includes a
cause of action described in section 271(e) of this title),
the court shall grant a motion to stay at least the portion
of the action against a covered customer that relates to
infringement of a patent involving a covered product or
process if--
``(1) the covered manufacturer and the covered customer
consent in writing to the stay;
``(2) the covered manufacturer is a party to the action or
a separate action involving the same patent or patents
relating to the same covered product or process;
``(3) the covered customer agrees to be bound under the
principles of collateral estoppel by any issues finally
decided as to the covered manufacturer in an action described
in paragraph (2) that the covered customer has in common with
the covered manufacturer; and
``(4) the motion is filed after the first pleading in the
action but not later than the later of--
``(A) 120 days after service of the first pleading in the
action that specifically identifies the covered product or
process as a basis for the alleged infringement of the patent
by the covered customer, and specifically identifies how the
covered product or process is alleged to infringe the patent;
or
``(B) the date on which the first scheduling order in the
case is entered.
``(c) Applicability.--A stay issued under subsection (b)
shall apply only to those asserted patents and products,
systems, methods, or components accused of infringement in
the action.
``(d) Vacating Stay.--
``(1) In general.--A stay entered under this section may be
vacated upon grant of a motion based on a showing that--
``(A) the action involving the covered manufacturer will
not resolve a major issue in suit against the covered
customer; or
``(B) the stay unreasonably prejudices or would be
manifestly unjust to the party seeking to vacate the stay.
``(2) Separate actions.--In the case of a stay entered
under this section based on the participation of the covered
manufacturer in a separate action described in subsection
(b)(2), a motion under paragraph (1) may only be granted if
the court in such separate action determines that the showing
required under paragraph (1) has been made.
``(e) Waiver of Estoppel Effect.--If, following the grant
of a motion to stay under this section, the covered
manufacturer in an action described in subsection (b)(2)--
``(1) seeks or consents to entry of a consent judgment
involving one or more of the common issues that gave rise to
the stay; or
``(2) fails to prosecute, to a final, non-appealable
judgment, a final decision as to one or more of the common
issues that gave rise to the stay,
the court may, upon motion, determine that such consent
judgment or unappealed final decision shall not be binding on
the covered customer with respect to one or more of such
common issues based on a showing that such an outcome would
unreasonably prejudice or be manifestly unjust to the covered
customer in light of the circumstances of the case.
``(f) Rule of Construction.--Nothing in this section shall
be construed to limit the ability of a court to grant,
expand, or modify any stay granted pursuant to this section,
or grant any motion to intervene, if otherwise permitted by
law.''.
(b) Conforming Amendment.--The table of sections for
chapter 29 of title 35, United States Code, is amended by
adding at the end the following new item:
``299A. Customer stay.''.
SEC. 5. SMALL BUSINESS EDUCATION, OUTREACH, AND INFORMATION
ACCESS.
(a) Small Business Education and Outreach.--
(1) Resources for small business.--Using existing
resources, the Director shall develop educational resources
for small businesses to address concerns arising from patent
infringement.
(2) Small business patent ombudsman.--The Patent Ombudsman
Program established under section 28 of the Leahy-Smith
America Invents Act (35 U.S.C. 2 note) shall coordinate with
the existing small business outreach programs of the Office
to provide education and awareness on abusive patent
litigation practices.
(b) Improving Information Transparency for Small Business
and the United States Patent and Trademark Office Users.--
(1) Web site.--Using existing resources, the Director shall
create a user-friendly section on the official Web site of
the Office to notify the public when a patent case is brought
in Federal court and with respect to each patent at issue in
such case, the Director shall include--
(A) information disclosed pursuant to section 290 of title
35, United States Code, as amended by section 4(a)(2) of this
Act; and
(B) any information the Director determines to be relevant.
(2) Format.--In order to promote accessibility for the
public, the information described in paragraph (1) shall be
searchable by patent number, patent art area, and entity.
SEC. 6. CODIFICATION OF THE DOUBLE-PATENTING DOCTRINE FOR
FIRST-INVENTOR-TO-FILE PATENTS.
(a) Amendment.--Chapter 10 of title 35, United States Code,
is amended by adding at the end the following new section:
``Sec. 106. Prior art in cases of double patenting
``A claimed invention of a patent issued under section 151
(referred to in this section as the `first patent') that is
not prior art to a claimed invention of another patent
(referred to in this section as the `second patent') shall be
considered prior art to the claimed invention of the second
patent for the purpose of determining the nonobviousness of
the claimed invention of the second patent under section 103
if--
``(1) the claimed invention of the first patent was
effectively filed under section 102(d) on or before the
effective filing date of the claimed invention of the second
patent;
``(2) either--
``(A) the first patent and the second patent name the same
inventor; or
``(B) the claimed invention of the first patent would
constitute prior art to the claimed invention of the second
patent under section 102(a)(2) if an exception under section
102(b)(2) were deemed to be inapplicable and the claimed
invention of the first patent was, or were deemed to be,
effectively filed under section 102(d) before the effective
filing date of the claimed invention of the second patent;
and
``(3) the patentee of the second patent has not disclaimed
the rights to enforce the second patent independently from,
and beyond the statutory term of, the first patent.''.
(b) Regulations.--The Director shall promulgate regulations
setting forth the form and content of any disclaimer required
for a patent to be issued in compliance with section 106 of
title 35, United States Code, as added by subsection (a).
Such regulations shall apply to any disclaimer filed after a
patent has issued. A disclaimer, when filed, shall be
considered for the purpose of determining the validity of the
patent under section 106 of title 35, United States Code.
(c) Conforming Amendment.--The table of sections for
chapter 10 of title 35, United States Code, is amended by
adding at the end the following new item:
``106. Prior art in cases of double patenting.''.
(d) Exclusive Rule.--A patent subject to section 106 of
title 35, United States Code, as added by subsection (a),
shall not be held invalid on any nonstatutory, double-
patenting ground.
(e) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act
and shall apply to a patent or patent application only if
both the first and second patents described in section 106 of
title 35, United States Code, as added by subsection (a), are
patents or patent applications that are described in section
3(n)(1) of the Leahy-Smith America Invents Act (35 U.S.C. 100
note).
SEC. 7. TECHNICAL CORRECTIONS TO THE LEAHY-SMITH AMERICA
INVENTS ACT.
(a) Technical Corrections.--
(1) Inventor's oath or declaration.--
(A) Amendment.--Section 115(g)(1) of title 35, United
States Code, is amended--
(i) in the matter preceding subparagraph (A), by striking
``claims the benefit'' and inserting ``is entitled, as to
each invention claimed in the application, to the benefit'';
and
(ii) in subparagraph (A), by striking ``meeting the
requirements of subsection (a) was executed by the individual
and was filed in connection with the earlier-filed
application'' and inserting the following: ``executed by or
on behalf of the individual was filed in connection with the
earlier-filed application and meets the requirements of this
section as effective on the date such oath or declaration was
filed''.
(B) Effective date.--The amendment made by subparagraph (A)
shall be effective as if included in the amendment made by
section 4(a)(1) of the Leahy-Smith America Invents Act
(Public Law 112-29; 125 Stat. 293).
(2) Novelty.--
(A) Amendment.--Section 102(b)(1)(A) of title 35, United
States Code, is amended by striking ``the inventor or joint
inventor or by another'' and inserting ``the inventor or a
joint inventor or another''.
(B) Effective date.--The amendment made by subparagraph (A)
shall be effective as if included in the amendment made by
section 3(b)(1) of the Leahy-Smith America Invents Act
(Public Law 112-29; 125 Stat. 285).
(3) Assignee filers.--
(A) Benefit of earlier filing date; right of priority.--
Section 119(e)(1) of title 35, United States Code, is
amended, in the first sentence, by striking ``by an inventor
or inventors named'' and inserting ``that names the inventor
or a joint inventor''.
[[Page H7548]]
(B) Benefit of earlier filing date in the united states.--
Section 120 of title 35, United States Code, is amended, in
the first sentence, by striking ``names an inventor or joint
inventor'' and inserting ``names the inventor or a joint
inventor''.
(C) Effective date.--The amendments made by this paragraph
shall take effect on the date of the enactment of this Act
and shall apply to any patent application, and any patent
issuing from such application, that is filed on or after
September 16, 2012.
(4) Derived patents.--
(A) Amendment.--Section 291(b) of title 35, United States
Code, is amended by striking ``or joint inventor'' and
inserting ``or a joint inventor''.
(B) Effective date.--The amendment made by subparagraph (A)
shall be effective as if included in the amendment made by
section 3(h)(1) of the Leahy-Smith America Invents Act
(Public Law 112-29; 125 Stat. 288).
(5) Specification.--Notwithstanding section 4(e) of the
Leahy-Smith America Invents Act (Public Law 112-29; 125 Stat.
297), the amendments made by subsections (c) and (d) of
section 4 of such Act shall apply to any proceeding or
matter, that is pending on, or filed on or after, the date of
the enactment of this Act.
(6) Patent owner response.--
(A) Conduct of inter partes review.--Section 316(a)(8) of
title 35, United States Code, is amended by striking ``the
petition under section 313'' and inserting ``the petition
under section 311''.
(B) Conduct of post-grant review.--Section 326(a)(8) of
title 35, United States Code, is amended by striking ``the
petition under section 323'' and inserting ``the petition
under section 321''.
(C) Effective date.--The amendments made by this paragraph
shall take effect on the date of the enactment of this Act.
(7) Time limit for commencing misconduct proceedings.--
(A) Amendment.--The fourth sentence of section 32 of title
35, United States Code, is amended by striking ``1 year'' and
inserting ``2 years''.
(B) Effective date.--The amendment made by this paragraph
shall apply to any action in which the Office files a
complaint on or after the date of enactment of this Act.
(b) Post-grant Review Amendment.--Section 325(e)(2) of
title 35, United States Code, is amended by striking ``or
reasonably could have raised''.
(c) Clarification of Jurisdiction.--Section 1338 of title
28, United States Code, is amended by adding at the end the
following:
``(d) For purposes of this section, section 1454, and
section 1295(a), a claim of legal malpractice that
necessarily raises a disputed question of patent law shall be
deemed to arise under an Act of Congress relating to
patents.''.
SEC. 8. REPORTS.
(a) Study on Secondary Market Oversight for Patent
Transactions To Promote Transparency and Ethical Business
Practices.--
(1) Study required.--The Director, in consultation with the
Secretary of Commerce, the Secretary of the Treasury, the
Chairman of the Securities and Exchange Commission, the heads
of other relevant agencies, and interested parties, shall,
using existing resources of the Office, conduct a study--
(A) to develop legislative recommendations to ensure
greater transparency and accountability in patent
transactions occurring on the secondary market;
(B) to examine the economic impact that the patent
secondary market has on the United States;
(C) to examine licensing and other oversight requirements
that may be placed on the patent secondary market, including
on the participants in such markets, to ensure that the
market is a level playing field and that brokers in the
market have the requisite expertise and adhere to ethical
business practices; and
(D) to examine the requirements placed on other markets.
(2) Submission of study.--Not later than 18 months after
the date of the enactment of this Act, the Director shall
submit a report to the Committee on the Judiciary of the
House of Representatives and the Committee on the Judiciary
of the Senate on the findings and recommendations of the
Director from the study required under paragraph (1).
(b) Study on Patents Owned by the United States
Government.--
(1) Study required.--The Director, in consultation with the
heads of relevant agencies and interested parties, shall,
using existing resources of the Office, conduct a study on
patents owned by the United States Government that--
(A) examines how such patents are licensed and sold, with
reference to any litigation relating to the licensing or sale
of such patents;
(B) provides legislative and administrative recommendations
on whether there should be restrictions placed on patents
acquired from the United States Government;
(C) examines whether or not each relevant agency maintains
adequate records on the patents owned by such agency,
specifically whether such agency addresses licensing,
assignment, and Government grants for technology related to
such patents; and
(D) provides recommendations to ensure that each relevant
agency has an adequate point of contact that is responsible
for managing the patent portfolio of the agency.
(2) Report on study.--Not later than 9 months after the
date of completion of the study required by subsection
(a)(1), the Director shall submit to the Committee on the
Judiciary of the House of Representatives and the Committee
on the Judiciary of the Senate a report on the findings and
recommendations of the Director from the study required under
paragraph (1).
(c) Study on Patent Quality and Access to the Best
Information During Examination.--
(1) GAO study.--The Comptroller General of the United
States shall conduct a study on patent examination at the
Office and the technologies available to improve examination
and improve patent quality.
(2) Contents of the study.--The study required under
paragraph (1) shall include the following:
(A) An examination of patent quality at the Office.
(B) An examination of ways to improve quality, specifically
through technology, that shall include examining best
practices at foreign patent offices and the use of existing
off-the-shelf technologies to improve patent examination.
(C) A description of how patents are classified.
(D) An examination of procedures in place to prevent double
patenting through filing by applicants in multiple art areas.
(E) An examination of the types of off-the-shelf prior art
databases and search software used by foreign patent offices
and governments, particularly in Europe and Asia, and whether
those databases and search tools could be used by the Office
to improve patent examination.
(F) An examination of any other areas the Comptroller
General determines to be relevant.
(3) Report to congress.--Not later than 6 months after the
date of the completion of the study required by subsection
(b)(1), the Comptroller General shall submit to the Committee
on the Judiciary of the House of Representatives and the
Committee on the Judiciary of the Senate a report on the
findings and recommendations from the study required by this
subsection, including recommendations for any changes to laws
and regulations that will improve the examination of patent
applications and patent quality.
(d) Study on Patent Small Claims Court.--
(1) Study required.--
(A) In general.--The Director of the Administrative Office
of the United States Courts, in consultation with the
Director of the Federal Judicial Center, shall, using
existing resources, conduct a study to examine the idea of
developing a pilot program for patent small claims courts in
certain judicial districts within the existing patent pilot
program mandated by Public Law 111-349 (28 U.S.C. 137 note).
(B) Contents of study.--The study conducted under
subparagraph (A) shall examine--
(i) the number and qualifications for judges that could
serve on the courts described in subparagraph (A);
(ii) how the courts described in subparagraph (A) would be
designated and the necessary criteria;
(iii) the costs that would be incurred for establishing,
maintaining and operating the pilot program described in
subparagraph (A); and
(iv) the steps that would be taken to ensure that the pilot
small claims courts are not misused for abusive patent
litigation.
(2) Report.--Not later than 1 year after the date of the
enactment of this Act, the Director of the Administrative
Office of the United States Courts shall submit a report to
the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the
Senate on the findings and recommendations from the study
required under paragraph (1).
(e) Study on Bad-faith Demand Letters.--
(1) Study.--The Intellectual Property Enforcement
Coordinator, in consultation with the Director, shall conduct
a study of the practice by a person, in connection with the
assertion of a United States patent, of sending written
communications that state that the intended recipients or any
affiliated persons of such recipients are infringing or have
infringed the patent and bear liability or owe compensation
to another, whereby--
(A) the communications falsely threaten that administrative
or judicial relief will be sought if compensation is not paid
or the infringement issue is not otherwise resolved;
(B) the assertions contained in the communications lack a
reasonable basis in fact or law, including, for example,
because--
(i) the person asserting the patent is not a person, or
does not represent a person, with the current right to
license the patent to, or to enforce the patent against, the
intended recipients or any such affiliated persons; or
(ii) the communications seek compensation on account of
activities undertaken after the patent has expired; or
(C) the content of the written communications is likely to
materially mislead a reasonable recipient, including, for
example, because the content fails to include such facts
reasonably necessary to inform the recipient of--
(i) the identity of the person asserting a right to license
the patent to, or enforce the patent against, the intended
recipient or any affiliated person of the recipient;
(ii) the patent issued by the United States Patent and
Trademark Office alleged to have been infringed; and
[[Page H7549]]
(iii) the reasons for the assertion that the patent may be
or may have been infringed.
(2) Report to congress.--Not later than 18 months after the
date of the enactment of this Act, the Intellectual Property
Enforcement Coordinator shall submit to the Committee on the
Judiciary of the House of Representatives and the Committee
on the Judiciary of the Senate a report on the study
conducted under paragraph (1), including recommendations for
any changes to laws and regulations that will deter any
abuses found in the practice described in paragraph (1).
SEC. 9. EFFECTIVE DATE.
Except as otherwise provided in this Act, the provisions of
this Act shall take effect on the date of the enactment of
this Act, and shall apply to any patent issued, or any action
filed, on or after that date.
The Acting CHAIR. Pursuant to House Resolution 429, the gentleman
from Michigan (Mr. Conyers) and a Member opposed each will control 10
minutes.
The Chair recognizes the gentleman from Michigan.
Mr. CONYERS. Mr. Chairman, this substitute amendment is entitled the
Conyers-Watt amendment, and I am very pleased to bring it to the
attention of our colleagues at this time.
I am offering this substitute amendment because it will give the
Members an opportunity to vote for language that will actually address
the identifiable abuses in the patent system. These abuses include the
inability to identify the real party in interest and filing abusive
lawsuits against end users instead of manufacturers of product. These
issues are addressed in a measured and balanced way in this substitute.
Unlike the reported bill, which makes one-sided changes in fee-
shifting, discovery, and pleading requirements in all patent cases, not
just cases involving trolls, my, our amendment, directly responds to
the real problems without undermining the patent or legal system as a
whole. That is what the thrust of our arguments have been throughout
this debate.
Our amendment builds in large part on a patent reform bill introduced
on the Senate side by Chairman Leahy and which even the present
administration and other stakeholders strongly support. The amendment
does the following:
It promotes transparency of patent ownership by using a well-
established standard utilized by many Federal courts to require
plaintiffs to disclose entities with an interest in the patent;
It protects customers who are targeted in infringement suits by
providing an option to stay the case against them while the
manufacturer litigates the alleged infringement;
It directs the USPTO to develop educational resources for small
businesses that are targeted in patent suits;
It helps innovators by ensuring that applicants do not abuse the
patent system by simply filing variations on their patents to extend
the length of the patent term.
Our amendment addresses the major concerns expressed by key
stakeholders about abusive patent litigation. And Members on both sides
of the aisle, and a broad range of patent stakeholders, are strongly
opposed to H.R. 3309 because of its many deficiencies and unintended
consequences.
So rather than promoting innovation and job growth, we fear that the
underlying bill will have just the opposite effect. Our amendment
corrects many of the bill's deficiencies in a responsive and measured
approach without unbalancing the entire patent system.
I implore my colleagues very strongly to support this amendment.
I reserve the balance of my time.
Mr. GOODLATTE. Mr. Chairman, I rise in opposition to the amendment
and seek the time in opposition.
The Acting CHAIR. The gentleman from Virginia is recognized for 10
minutes.
Mr. GOODLATTE. Mr. Chairman, I must strongly oppose this substitute
amendment. It is quite simply a poison bill that is designed to kill
the Innovation Act. Although the substitute cuts and pastes a few
provisions from the current bill, it includes additional provisions
that create serious problems and excludes whole sections of the
Innovation Act that are vital for America's job creators and
innovators.
This substitute does not even include all of the provisions of the
Leahy-Lee bill. It omits provisions that are important to our Senate
colleagues.
The amendment's transparency provision would require a patent owner
to ``disclose to the court and all adverse parties any person known by
the patentee to have a financial interest of any kind in a party to the
proceeding.''
The bill then defines financial interest in the context of the
judicial recusal provision in the law. Under this definition,
``financial interest'' means ``ownership of a legal or equitable
interest however small.'' This would clearly appear to include
ownership of a single share of stock in a company.
Moreover, this disclosure is required not just to be made with
respect to the patentee but, by the terms of the bill, with respect to
``a party to the proceeding.'' This would mean that a patentee would
have to disclose all known shareholders of even the defendant or any
other party in the lawsuit. This is obviously an absurd requirement. I
assume that the sponsors did not intend to require this, but this is
what their language requires. Clearly, the substitute needs more work.
Indeed, the substitute's cosponsors have, themselves, admitted that
the substitute needs more work and could have serious, unintended
consequences.
This substitute's changes to the bill's pleading requirements would
also allow patent trolls to hide their identity, denying defendants the
right to know who is suing them.
This substitute denies the defendant the right to know what they are
being sued on in the first place.
This substitute also denies the defendant the right to know why they
are being dragged into Federal court.
This substitute enables patent trolls to create an elaborate web of
shell companies that can engage in frivolous litigation, allowing the
patent trolls to hide behind them.
This substitute would allow a patent troll to engage in abusive and
extortionate patent litigation without any accountability for the costs
imposed on defendants.
{time} 1200
This substitute would allow trolls to engage in submarine patenting
by delaying prosecution and unreasonably extending patent terms far
beyond the 20-year term. This substitute would force U.S. courts to
follow foreign law and terminate IP licenses for U.S. manufacturers.
This substitute would also encourage courts to delay case dispositive
motions and prolong litigation. This substitute also allows the
issuance of low-quality patents by permitting them to issue without
review by technically trained patent examiners. This substitute
amendment is a poison pill that will kill any chance at meaningful
patent reform in this Congress.
By contrast, the Innovation Act helps to address the issues that
businesses of all sizes and industries face from patent troll-type
behavior and aims to correct the current asymmetries surrounding
abusive patent litigation. Our bill keeps in mind several key
principles.
First, we are targeting abusive patent litigation behavior and not
specific entities or attempting to eliminate valid patent litigation.
When we use the term ``patent troll,'' it is as an adjective describing
behavior rather than as a noun. Our goal is to prevent individuals from
taking advantage of gaps in the system to engage in litigation
extortion.
Second, our bill does not diminish or devalue patent rights. The
patent system is integral to U.S. competitiveness, and we have ensured
that our legislation strengthens the overall patent system, aligns with
our international treaty obligations, and comports with the
Constitution.
Third, this bill strikes the right balance of pushing for robust
legal reform measures while protecting property rights, promoting
invention by independent inventors and small businesses, and
strengthening the overall patent system.
Supporters of this bill understand that if America's inventors are
forced to waste time with frivolous litigation, they won't have time
for innovation. We can no longer allow our economy and job creators to
be held hostage to legal maneuvers and the judicial lottery.
American inventors have led the world for centuries in new
innovations, from Benjamin Franklin and Thomas Edison to the Wright
brothers and Henry Ford. But if we want to continue as leaders in the
global economy, we must encourage the innovators of
[[Page H7550]]
today to develop the technologies of tomorrow.
This bill holds true to the Constitution, our Founders, and our
promise to future generations that America will continue to lead the
world as a fountain for discovery, innovation, and economic growth.
I stand in strong opposition to this substitute, and I urge my
colleagues to support the underlying bill. Oppose the substitute.
I reserve the balance of my time.
Mr. CONYERS. Mr. Chair, I am pleased to yield 2 minutes to the
gentleman from North Carolina (Mr. Watt), the cosponsor of this
substitute amendment.
Mr. WATT. Mr. Chairman, I rise in support of the Conyers-Watt
substitute because the substitute is a superior alternative.
The short title of our substitute is appropriately titled ``The
Deceptive Patent Practices Reduction Act'' because it narrowly and
specifically focuses on areas within our patent system where abuses can
be curtailed without imposing onerous and disproportionate burdens on
good-faith participants in the system; and in a number of cases, I
believe the substitute will create efficiencies that will benefit all
patent stakeholders.
Our substitute has three core provisions. First, we require patent
holders who sue on a patent to provide transparency of ownership and
other financial interests in the patent. This will expose those who
seek to shield the true identity of the real party with the primary
interests in asserting an infringement claim.
Second, our substitute reduces the burden on retailers, hotels,
restaurants, and mom-and-pop shops that find themselves entangled in
legal battles simply for using a product to make their businesses more
attractive to their customers. I believe our customer stay provides a
better baseline than the provision in the underlying bill, but I also
recognize that it too requires further work.
Finally, I believe the study required under our substitute sets forth
a clearer, more precise definition of demand letters that will avoid
intrusions into legitimate business negotiations.
Perhaps more important is what the substitute does not do, namely, it
does not disregard judicial independence in the courtroom or judicial
prerogatives outside the courtroom to study, develop, and promulgate
rules of procedure to govern trials and appeals in the courtroom. Our
substitute also does not act with utter indifference to the collateral
damage levied upon legitimate inventors and businesses that this bill
will do.
Mr. GOODLATTE. Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I am now pleased to yield 2 minutes to the
gentleman from New York (Mr. Nadler), a senior member of the committee.
Mr. NADLER. Mr. Chairman, I thank the gentleman for yielding.
I rise to support the Conyers-Watt substitute. Unlike the underlying
bill, the substitute takes effective steps to address the patent troll
problem without including the unnecessary endangered so-called ``tort
reform'' provisions.
The substitute, like the bill, includes provisions providing customer
stay exceptions, raising awareness in the small business community as
to their rights when confronted with patent trolls, and increasing
transparency of patents in the companies that own them.
The substitute takes additional steps to address the problem. It
includes a study of how to address bad-faith demand letters, which are
scaring retailers and others into settling claims based on convenience
as opposed to merit.
And very importantly, the substitute does not include the loser-pays
provisions of the underlying bill. Loser-pays laws have a chilling
effect on justice. They would deter legitimate patent owners with
meritorious claims from pursuing justice.
In this country, the general rule is that each side in a legal
proceeding pays its own attorney fees and costs. Most of the statutory
exceptions that Congress has enacted have been geared towards
encouraging private litigation to implement good public policy.
Awards of attorneys' fees are often designed to help to equalize
disputes between private individual plaintiffs and corporate or
government defendants. Thus, attorneys' fees provisions are most often
found in civil rights, environmental protection, and consumer
protection statutes.
The provision in this bill differs from other congressional
exceptions in that it would require anyone who loses a patent claim to
pay the attorneys' fees of even large corporate defendants. This is a
giant deterrent to genuine inventors from filing good-faith suits to
defend their valid patent claims.
Therefore, I urge the adoption of the Conyers-Watt substitute which
would drop the loser-pays provisions from the underlying bill while
still including the key reforms that are present in the underlying bill
and in the Senate bill drafted by Senator Leahy.
I urge adoption of the substitute.
Mr. GOODLATTE. Mr. Chairman, I am pleased to yield 2 minutes to the
gentlewoman from California (Ms. Lofgren), who has been a great person
to work with on the Judiciary Committee and here on the floor of the
House on this legislation.
Ms. LOFGREN. Mr. Chairman, I appreciate the time.
Earlier in the debate, I jumped ahead of myself and addressed the
issue of pleadings and discovery costs during the Watt amendment about
fee shifting. So I will focus on fee shifting now.
The provision in the bill is absolutely right on. I oppose the
English rule generally, but we have created dozens of times instances
where the losing party can pay--let me just read the language:
The courts will shift the costs and fees to a non-
prevailing party unless the party's position is reasonably
justified in fact or law or the fee award would cause
economic harm.
The discretion is still with the judicial officer to avoid harm.
In terms of what should be in the bill, I mentioned at the outset
that I don't believe this bill is perfect. If it were up to me, the
bill would also exempt PTO user-fees from sequestration; it would
clarify the scope of prior art and the grace period; it would allow the
PTO to continue using its BRI standard in post-grant and inter partes
review. I hope that the Senate will address those issues. Certainly,
the amendment by Mr. Watt and Mr. Conyers does not.
It pains me when I have to disagree with my ranking member, who I
admire so very much, but I do disagree with this amendment. I think it
will absolutely gut the bill. I intend to vote against it, and I hope
that others join me.
Mr. CONYERS. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman
from Georgia (Mr. Johnson).
Mr. JOHNSON of Georgia. Mr. Chairman, I rise in support of the
Conyers-Watt substitute amendment.
I must say that this has been a very spirited debate here today, but
I would be remiss not to come back to speak on the issue of an inventor
such as Danny Ross, a venture capitalist and an example of the type of
person that this bill should protect.
Danny cofounded a tech company down in Atlanta that employed more
than 100 people and reached more than half the Internet audience at its
peak. He owns several patents based on great inventions and has got a
start-up. He had the Patent Office review and affirm these patents. But
not only were these strong patents, they were also sought after by
several companies. Rather than pay Danny for his innovation and hard
work, these companies refused to license his patent. This practice is
common for large companies that would rather bully someone in court
than license their patents.
We are an innovation economy. The drive to create and tinker is what
motivates Americans to innovate. Those innovations should be rewarded,
and those innovators should be rewarded for their labor and
contribution to society. That is the whole point of the patent system;
but if this bill becomes law, patent owners and inventors will be
unable to enforce their patents without risking personal bankruptcy.
I have long supported reform and am a friend of the innovation
economy, but today I call on my colleagues to support this amendment.
Mr. GOODLATTE. Mr. Chairman, I yield 1 minute to the gentleman from
Pennsylvania (Mr. Marino), the vice chairman of the Courts,
Intellectual Property and the Internet Subcommittee.
[[Page H7551]]
Mr. MARINO. Mr. Chairman, I oppose this substitute, and I will
explain why I support the Goodlatte bill, H.R. 3309.
This bill has been methodically drafted with abundant openness and
clarity. Among other parts of this bill, and there are many, two are
extremely important that I see. One is that it protects small business
owners, entrepreneurs, young men and women who could lose their
business or could lose their idea, young men and women that may even be
visiting the Capitol today.
I want to explain what a troll does. A troll doesn't primarily go
after larger companies. They go after upstarts, they go after young
people who are starting to make a profit after years of work. They send
them a letter and say, Pay me X amount of dollars, $10,000, $20,000,
$50,000, and I won't sue you. If I do sue you, we will go to court and
you will probably go bankrupt because it is going to cost you that
much. They are suing people based on using a phone, a scanner, and a
copier which they purchased. They have no interest in the software; yet
they are being sued for that.
This is good law. We have to get over the fact that the trolls are
really taking advantage here. It is really going to cut the cost of
litigation and get owners to the court on time.
Mr. CONYERS. Mr. Chairman, I am pleased to yield the balance of my
time to the distinguished gentleman from California (Mr. Rohrabacher).
Mr. ROHRABACHER. Mr. Chairman, we keep hearing about the trolls; and,
yes, there is some problem with the trolls, and sometimes it hurts
middle class people. But we can solve that problem without destroying
the rights of our American independent inventors, and they are pleading
with us, interest groups around the country are pleading with us not to
go so fast.
I support the Conyers substitute, but I rise in opposition to this
bill. Among those opposing or having expressed serious concern about
this Innovation Act are the Association of American Universities,
American Council on Education, Association of American Medical
Colleges, Eagle Forum, Club for Growth, the American Bar Association,
the Patent Office Professional Association, the American Intellectual
Property Association, the National Association for Patent
Practitioners, the Judicial Conference committee on rules and practices
and procedures. Our judges are absolutely opposed to this, and yet we
have this idea that we will just take away the rights of the little guy
to have his day in court, that it doesn't make any difference. That is
not what our judges say.
Mr. Chairman, I submit this list to be placed in the Record.
Please, let's not rush into a move that will destroy our independent
inventors and our innovators in America.
Don't Blow Up the Bridge to Innovation To Kill the ``Patent Troll''
Oppose HR 3309, the Innovation Act, which will have
numerous unintended consequences.
Some of the groups opposing, or concerned with, the
Innovation Act: Association of American Universities;
American Council on Education; Association of American
Medical Colleges; Association of Public and Land-grant
Universities; Association of University Technology Managers;
California Healthcare Institute; Council on Government
Relations; Eagle Forum; Club for Growth; American Bar
Association (ABA); Patent Office Professional Association;
Judicial Conference, Committee on Rules of Practice and
Procedure; American Intellectual Property Association
(AIPLA); Intellectual Property Owners Association IPO);
National Association of Patent Practitioners (NAPP);
University of California; National Venture Capital
Association; Innovation Alliance; Coalition for 21st Century
Patent Reform; Institute of Electrical and Electronics
Engineers (IEEE).
Some concerns with the Innovation Act: creates more
paperwork when an inventor files an infringement claim,
increasing the costs to defend their rights; forces a patent
holder who files a claim of infringement to maintain a new
bureaucratic reporting requirement; and to pay new
recordkeeping fees; eliminates the independent judicial
review of patent applicants by striking Section 145 of Title
35. This is very important in order to keep the patent office
honest. Striking this provision will leave the inventor with
no independent recourse outside of the patent office.
Dramatically increases the potential financial risks for
filing an infringement lawsuit.
{time} 1215
Mr. GOODLATTE. Mr. Chairman, I yield myself the balance of my time.
Yes, there is some problem with patent trolls, tens of billions of
dollars a year in problems with patent trolls. Fifty-five percent of
all the demand letters that are sent by these patent trolls go to small
businesses.
There are serious problems that require real patent litigation
reform, and I am proud that this bipartisan bill, supported by many
Members on both sides of the aisle, supported by the administration,
and supported by hundreds of organizations that are listed right here--
come by the desk and you can see the huge list of organizations,
conservatives, all across the political spectrum support this
legislation.
American inventors have led the world for centuries. This bill holds
true to the Constitution, our Founders, and our promise to future
generations that America will continue to lead the world as a fountain
for discovery, innovation, economic growth, and job creation.
I stand in strong opposition to this substitute amendment, and I urge
my colleagues to vote for the underlying bill.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Michigan (Mr. Conyers).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. CONYERS. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Michigan
will be postponed.
Announcement by the Acting Chair
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, proceedings
will now resume on those amendments printed in part A of House Report
113-283 on which further proceedings were postponed, in the following
order:
Amendment No. 1 by Mr. Goodlatte of Virginia.
Amendment No. 2 by Mr. Watt of North Carolina.
Amendment No. 4 by Mr. Massie of Kentucky.
Amendment No. 5 by Ms. Jackson Lee of Texas.
Amendment No. 7 by Mr. Rohrabacher of California.
Amendment No. 8 by Mr. Conyers of Michigan.
The Chair will reduce to 2 minutes the minimum time for any
electronic vote after the first vote in this series.
Amendment No. 1 Offered by Mr. Goodlatte
The Acting CHAIR. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentleman from Virginia
(Mr. Goodlatte) on which further proceedings were postponed and on
which the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIR. A recorded vote has been demanded.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 341,
noes 73, not voting 17, as follows:
[Roll No. 623]
AYES--341
Aderholt
Amash
Amodei
Bachmann
Bachus
Barber
Barletta
Barr
Barrow (GA)
Barton
Bass
Beatty
Benishek
Bentivolio
Bera (CA)
Bilirakis
Bishop (UT)
Black
Blackburn
Blumenauer
Bonamici
Boustany
Brady (PA)
Brady (TX)
Bridenstine
Brooks (AL)
Brooks (IN)
Broun (GA)
Brown (FL)
Brownley (CA)
Buchanan
Bucshon
Burgess
Bustos
Calvert
Camp
Cantor
Capito
Capps
Cardenas
Carter
Cassidy
Castro (TX)
Chabot
Chaffetz
Chu
Clarke
Clay
Cleaver
Clyburn
Coble
Coffman
Cohen
Cole
Collins (GA)
Collins (NY)
Conaway
Connolly
Cook
Cooper
Costa
Cotton
Courtney
Cramer
Crenshaw
Crowley
Cuellar
Daines
Davis, Rodney
DeFazio
DeGette
Delaney
DelBene
Denham
Dent
DeSantis
DesJarlais
Deutch
Diaz-Balart
Dingell
Doggett
Duckworth
Duffy
Duncan (SC)
Duncan (TN)
Ellmers
Engel
Enyart
Eshoo
Esty
Farenthold
Farr
Fattah
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foster
Foxx
Franks (AZ)
Frelinghuysen
Gabbard
Gallego
Garamendi
Garcia
Gardner
Garrett
Gerlach
Gibbs
Gibson
Gohmert
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (MO)
[[Page H7552]]
Green, Al
Green, Gene
Griffin (AR)
Griffith (VA)
Grimm
Guthrie
Gutierrez
Hahn
Hall
Hanabusa
Hanna
Harper
Harris
Hartzler
Hastings (WA)
Heck (NV)
Heck (WA)
Hensarling
Higgins
Himes
Hinojosa
Holding
Honda
Horsford
Hoyer
Hudson
Huelskamp
Huffman
Huizenga (MI)
Hultgren
Hunter
Hurt
Israel
Issa
Jeffries
Jenkins
Johnson (OH)
Johnson, Sam
Jordan
Kelly (IL)
Kelly (PA)
Kildee
Kilmer
Kind
King (IA)
King (NY)
Kingston
Kinzinger (IL)
Kirkpatrick
Kline
Kuster
Labrador
LaMalfa
Lamborn
Lance
Lankford
Larsen (WA)
Larson (CT)
Latham
Latta
Lee (CA)
Levin
Lipinski
LoBiondo
Lofgren
Long
Lowey
Lucas
Luetkemeyer
Lujan, Ben Ray (NM)
Maffei
Maloney, Carolyn
Maloney, Sean
Marchant
Marino
Matheson
Matsui
McAllister
McCarthy (CA)
McCaul
McClintock
McCollum
McDermott
McGovern
McIntyre
McKeon
McKinley
Meadows
Meehan
Meeks
Meng
Messer
Mica
Michaud
Miller (FL)
Miller (MI)
Moran
Mullin
Mulvaney
Murphy (FL)
Murphy (PA)
Nadler
Neugebauer
Noem
Nugent
Nunes
Nunnelee
O'Rourke
Olson
Owens
Palazzo
Pallone
Pascrell
Pastor (AZ)
Paulsen
Pearce
Perlmutter
Perry
Peters (MI)
Peterson
Petri
Pittenger
Pitts
Poe (TX)
Polis
Pompeo
Price (GA)
Price (NC)
Quigley
Rahall
Reichert
Renacci
Ribble
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rokita
Rooney
Ros-Lehtinen
Roskam
Ross
Rothfus
Roybal-Allard
Royce
Ruiz
Runyan
Ruppersberger
Ryan (WI)
Salmon
Sanchez, Linda T.
Sanford
Scalise
Schiff
Schneider
Schock
Schrader
Schwartz
Schweikert
Scott (VA)
Scott, Austin
Sensenbrenner
Serrano
Sessions
Sherman
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smith (WA)
Southerland
Stewart
Stivers
Stutzman
Swalwell (CA)
Takano
Terry
Thompson (CA)
Thompson (PA)
Thornberry
Tiberi
Tipton
Titus
Tonko
Turner
Upton
Valadao
Van Hollen
Veasey
Velazquez
Wagner
Walberg
Walden
Walorski
Walz
Wasserman Schultz
Watt
Waxman
Weber (TX)
Webster (FL)
Welch
Wenstrup
Westmoreland
Whitfield
Williams
Wilson (SC)
Wittman
Wolf
Womack
Woodall
Yoder
Yoho
Young (AK)
Young (IN)
NOES--73
Andrews
Becerra
Bishop (NY)
Braley (IA)
Butterfield
Capuano
Carney
Carson (IN)
Cartwright
Castor (FL)
Cicilline
Conyers
Cummings
Davis (CA)
Davis, Danny
DeLauro
Edwards
Ellison
Frankel (FL)
Fudge
Grayson
Grijalva
Hastings (FL)
Holt
Jackson Lee
Johnson (GA)
Johnson, E. B.
Jones
Kaptur
Keating
Kennedy
Langevin
Lewis
Loebsack
Lowenthal
Lujan Grisham (NM)
Lummis
Lynch
Massie
McNerney
Miller, George
Moore
Napolitano
Neal
Negrete McLeod
Payne
Pelosi
Peters (CA)
Pingree (ME)
Pocan
Posey
Rangel
Richmond
Rohrabacher
Ryan (OH)
Sanchez, Loretta
Sarbanes
Schakowsky
Scott, David
Sewell (AL)
Shea-Porter
Slaughter
Speier
Stockman
Thompson (MS)
Tierney
Tsongas
Vargas
Vela
Visclosky
Waters
Wilson (FL)
Yarmuth
NOT VOTING--17
Bishop (GA)
Campbell
Crawford
Culberson
Doyle
Gingrey (GA)
Herrera Beutler
Joyce
McCarthy (NY)
McHenry
McMorris Rodgers
Miller, Gary
Nolan
Radel
Reed
Rush
Sires
{time} 1241
Mr. JEFFRIES, Ms. WASSERMAN SCHULTZ, Messrs. REICHERT, BERA of
California, HALL, ROKITA, GOSAR, HIGGINS, MEEKS, and AL GREEN of Texas
changed their vote from ``no'' to ``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
Amendment No. 2 Offered by Mr. Watt
The Acting CHAIR. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentleman from North
Carolina (Mr. Watt) on which further proceedings were postponed and on
which the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIR. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIR. This will be a 2-minute vote.
The vote was taken by electronic device, and there were--ayes 199,
noes 213, not voting 19, as follows:
[Roll No. 624]
AYES--199
Amash
Andrews
Barber
Barrow (GA)
Bass
Beatty
Becerra
Bera (CA)
Bishop (NY)
Bonamici
Brady (PA)
Braley (IA)
Bridenstine
Broun (GA)
Brown (FL)
Brownley (CA)
Bustos
Butterfield
Capps
Capuano
Carney
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu
Cicilline
Clarke
Cleaver
Clyburn
Cohen
Connolly
Conyers
Cooper
Cotton
Courtney
Cramer
Crowley
Cummings
Davis (CA)
Davis, Danny
DeGette
Delaney
DeLauro
DelBene
Deutch
Dingell
Doggett
Duckworth
Edwards
Ellison
Engel
Enyart
Esty
Farr
Fattah
Fitzpatrick
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Garamendi
Garcia
Gibson
Gosar
Grayson
Green, Al
Green, Gene
Griffith (VA)
Grijalva
Hahn
Hanabusa
Hastings (FL)
Heck (WA)
Higgins
Himes
Hinojosa
Holt
Horsford
Hoyer
Huelskamp
Huffman
Israel
Jackson Lee
Jeffries
Johnson (GA)
Johnson, E. B.
Jones
Kaptur
Keating
Kelly (IL)
Kennedy
Kildee
Kilmer
Kind
Kirkpatrick
Kuster
Lance
Langevin
Larsen (WA)
Larson (CT)
Lee (CA)
Levin
Lewis
Lipinski
Loebsack
Lowenthal
Lowey
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lynch
Maloney, Carolyn
Maloney, Sean
Massie
Matsui
McDermott
McGovern
McNerney
Meeks
Meng
Michaud
Miller (MI)
Moore
Moran
Murphy (FL)
Nadler
Napolitano
Neal
Negrete McLeod
O'Rourke
Owens
Pallone
Pascrell
Pastor (AZ)
Pelosi
Perlmutter
Peters (CA)
Peters (MI)
Petri
Pingree (ME)
Pocan
Posey
Quigley
Rahall
Rangel
Richmond
Rigell
Rohrabacher
Ross
Roybal-Allard
Ruiz
Ruppersberger
Ryan (OH)
Salmon
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schneider
Schrader
Schwartz
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
Sherman
Sinema
Slaughter
Smith (WA)
Speier
Stockman
Swalwell (CA)
Takano
Terry
Thompson (MS)
Tierney
Titus
Tonko
Tsongas
Valadao
Van Hollen
Vargas
Veasey
Vela
Velazquez
Visclosky
Wagner
Walz
Wasserman Schultz
Waters
Watt
Waxman
Welch
Wilson (FL)
Yarmuth
Yoho
NOES--213
Aderholt
Amodei
Bachmann
Bachus
Barletta
Barr
Barton
Benishek
Bentivolio
Bilirakis
Bishop (UT)
Black
Blackburn
Blumenauer
Boustany
Brady (TX)
Brooks (AL)
Brooks (IN)
Buchanan
Bucshon
Burgess
Calvert
Camp
Cantor
Capito
Cardenas
Carter
Cassidy
Chabot
Chaffetz
Coble
Coffman
Cole
Collins (GA)
Collins (NY)
Conaway
Cook
Costa
Crenshaw
Cuellar
Daines
Davis, Rodney
DeFazio
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Duffy
Duncan (SC)
Duncan (TN)
Ellmers
Eshoo
Farenthold
Fincher
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Gardner
Garrett
Gerlach
Gibbs
Gohmert
Goodlatte
Gowdy
Granger
Graves (GA)
Graves (MO)
Griffin (AR)
Grimm
Guthrie
Hall
Hanna
Harper
Harris
Hartzler
Hastings (WA)
Heck (NV)
Hensarling
Holding
Honda
Hudson
Huizenga (MI)
Hultgren
Hunter
Hurt
Issa
Jenkins
Johnson (OH)
Johnson, Sam
Jordan
Joyce
Kelly (PA)
King (IA)
King (NY)
Kingston
Kinzinger (IL)
Kline
Labrador
LaMalfa
Lamborn
Lankford
Latham
Latta
LoBiondo
Lofgren
Long
Lucas
Luetkemeyer
Lummis
Maffei
Marchant
Marino
Matheson
McAllister
McCarthy (CA)
McCaul
McClintock
McCollum
McHenry
McIntyre
McKeon
McKinley
Meadows
Meehan
Messer
Mica
Miller (FL)
Miller, George
Mullin
Mulvaney
Murphy (PA)
Neugebauer
Noem
Nugent
Nunes
Nunnelee
Olson
Palazzo
Paulsen
Payne
Pearce
Perry
Peterson
Pittenger
Pitts
Poe (TX)
Polis
Pompeo
Price (GA)
Price (NC)
Reichert
Renacci
Ribble
Rice (SC)
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rokita
Rooney
Ros-Lehtinen
Roskam
Rothfus
Royce
Runyan
Ryan (WI)
Sanford
Scalise
Schock
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Smith (NE)
Smith (NJ)
Smith (TX)
Southerland
Stewart
Stivers
Thompson (CA)
Thompson (PA)
Thornberry
Tiberi
Tipton
Turner
Upton
Walberg
Walden
Walorski
Weber (TX)
Webster (FL)
Wenstrup
Westmoreland
Whitfield
Williams
Wilson (SC)
Wittman
Wolf
Womack
Woodall
Yoder
Young (AK)
Young (IN)
[[Page H7553]]
NOT VOTING--19
Bishop (GA)
Campbell
Clay
Crawford
Culberson
Doyle
Gingrey (GA)
Gutierrez
Herrera Beutler
McCarthy (NY)
McMorris Rodgers
Miller, Gary
Nolan
Radel
Reed
Rush
Sires
Smith (MO)
Stutzman
Announcement by the Acting Chair
The Acting CHAIR (during the vote). There is 1 minute remaining.
{time} 1246
Mr. POE of Texas changed his vote from ``aye'' to ``no.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
Amendment No. 4 Offered by Mr. Massie
The Acting CHAIR. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentleman from Kentucky
(Mr. Massie) on which further proceedings were postponed and on which
the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIR. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIR. This will be a 2-minute vote.
The vote was taken by electronic device, and there were--ayes 119,
noes 296, not voting 16, as follows:
[Roll No. 625]
AYES--119
Amash
Andrews
Bachmann
Barton
Beatty
Bentivolio
Bishop (NY)
Brady (PA)
Braley (IA)
Bridenstine
Brooks (AL)
Broun (GA)
Brown (FL)
Burgess
Capuano
Carson (IN)
Cartwright
Cicilline
Cleaver
Conyers
Cotton
Cramer
Davis (CA)
Davis, Danny
Davis, Rodney
DeLauro
Denham
Dent
Duncan (TN)
Engel
Fattah
Frankel (FL)
Fudge
Garamendi
Garrett
Gibson
Gosar
Grayson
Green, Al
Grijalva
Gutierrez
Hanabusa
Harris
Hastings (FL)
Holt
Huelskamp
Hultgren
Jackson Lee
Johnson (GA)
Johnson, E. B.
Jones
Joyce
Kaptur
Keating
Kind
Lamborn
Lance
Langevin
Lee (CA)
Loebsack
Lowenthal
Lujan Grisham (NM)
Lummis
Marchant
Massie
Matsui
McDermott
McNerney
Messer
Mullin
Mulvaney
Napolitano
Paulsen
Payne
Perlmutter
Peters (CA)
Petri
Pingree (ME)
Pitts
Pocan
Posey
Rangel
Richmond
Rohrabacher
Rooney
Ross
Ryan (OH)
Salmon
Sanchez, Linda T.
Sanchez, Loretta
Sanford
Sarbanes
Schakowsky
Schweikert
Scott (VA)
Scott, David
Serrano
Shea-Porter
Slaughter
Smith (NE)
Speier
Stockman
Stutzman
Thompson (MS)
Tierney
Tonko
Tsongas
Valadao
Vargas
Vela
Visclosky
Waters
Watt
Weber (TX)
Westmoreland
Wilson (FL)
Wolf
Yarmuth
Yoho
NOES--296
Aderholt
Amodei
Bachus
Barber
Barletta
Barr
Barrow (GA)
Bass
Becerra
Benishek
Bera (CA)
Bilirakis
Bishop (UT)
Black
Blackburn
Blumenauer
Bonamici
Boustany
Brady (TX)
Brooks (IN)
Brownley (CA)
Buchanan
Bucshon
Bustos
Butterfield
Calvert
Camp
Cantor
Capito
Capps
Cardenas
Carney
Carter
Cassidy
Castor (FL)
Castro (TX)
Chabot
Chaffetz
Chu
Clarke
Clay
Clyburn
Coble
Coffman
Cohen
Cole
Collins (GA)
Collins (NY)
Conaway
Connolly
Cook
Cooper
Costa
Courtney
Crenshaw
Crowley
Cuellar
Cummings
Daines
DeFazio
DeGette
Delaney
DelBene
DeSantis
DesJarlais
Deutch
Diaz-Balart
Dingell
Doggett
Duckworth
Duffy
Duncan (SC)
Edwards
Ellison
Ellmers
Enyart
Eshoo
Esty
Farenthold
Farr
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foster
Foxx
Franks (AZ)
Frelinghuysen
Gabbard
Gallego
Garcia
Gardner
Gibbs
Gohmert
Goodlatte
Gowdy
Granger
Graves (GA)
Graves (MO)
Green, Gene
Griffin (AR)
Griffith (VA)
Grimm
Guthrie
Hahn
Hall
Hanna
Harper
Hartzler
Hastings (WA)
Heck (NV)
Heck (WA)
Hensarling
Higgins
Himes
Hinojosa
Holding
Honda
Horsford
Hoyer
Hudson
Huffman
Huizenga (MI)
Hunter
Hurt
Israel
Issa
Jeffries
Jenkins
Johnson (OH)
Johnson, Sam
Jordan
Kelly (IL)
Kelly (PA)
Kennedy
Kildee
Kilmer
King (IA)
King (NY)
Kingston
Kinzinger (IL)
Kirkpatrick
Kline
Kuster
Labrador
LaMalfa
Lankford
Larsen (WA)
Larson (CT)
Latham
Latta
Levin
Lewis
Lipinski
LoBiondo
Lofgren
Long
Lowey
Lucas
Luetkemeyer
Lujan, Ben Ray (NM)
Lynch
Maffei
Maloney, Carolyn
Maloney, Sean
Marino
Matheson
McAllister
McCarthy (CA)
McCaul
McClintock
McCollum
McGovern
McHenry
McIntyre
McKeon
McKinley
Meadows
Meehan
Meeks
Meng
Mica
Michaud
Miller (FL)
Miller (MI)
Miller, George
Moore
Moran
Murphy (FL)
Murphy (PA)
Nadler
Neal
Negrete McLeod
Neugebauer
Noem
Nugent
Nunes
Nunnelee
O'Rourke
Olson
Owens
Palazzo
Pallone
Pascrell
Pastor (AZ)
Pearce
Pelosi
Perry
Peters (MI)
Peterson
Pittenger
Poe (TX)
Polis
Pompeo
Price (GA)
Price (NC)
Quigley
Rahall
Reichert
Renacci
Ribble
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rokita
Ros-Lehtinen
Roskam
Rothfus
Roybal-Allard
Royce
Ruiz
Runyan
Ruppersberger
Ryan (WI)
Scalise
Schiff
Schneider
Schock
Schrader
Schwartz
Scott, Austin
Sensenbrenner
Sessions
Sewell (AL)
Sherman
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NJ)
Smith (TX)
Smith (WA)
Southerland
Stewart
Stivers
Swalwell (CA)
Takano
Terry
Thompson (CA)
Thompson (PA)
Thornberry
Tiberi
Tipton
Titus
Turner
Upton
Van Hollen
Veasey
Velazquez
Wagner
Walberg
Walden
Walorski
Walz
Wasserman Schultz
Waxman
Webster (FL)
Welch
Wenstrup
Whitfield
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Young (AK)
Young (IN)
NOT VOTING--16
Bishop (GA)
Campbell
Crawford
Culberson
Doyle
Gerlach
Gingrey (GA)
Herrera Beutler
McCarthy (NY)
McMorris Rodgers
Miller, Gary
Nolan
Radel
Reed
Rush
Sires
Announcement by the Acting Chair
The Acting CHAIR (during the vote). There is 1 minute remaining.
{time} 1250
Messrs. PALLONE, VEASEY, and Ms. GABBARD changed their vote from
``aye'' to ``no.''
Ms. SPEIER changed her vote from ``no'' to ``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
Amendment No. 5 Offered by Ms. Jackson Lee
The Acting CHAIR. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentlewoman from Texas
(Ms. Jackson Lee) on which further proceedings were postponed and on
which the ayes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIR. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIR. This will be a 2-minute vote.
The vote was taken by electronic device, and there were--ayes 144,
noes 266, not voting 21, as follows:
[Roll No. 626]
AYES--144
Andrews
Barrow (GA)
Bass
Beatty
Becerra
Bishop (NY)
Bonamici
Brady (PA)
Braley (IA)
Broun (GA)
Brown (FL)
Brownley (CA)
Bustos
Butterfield
Capps
Capuano
Carney
Carson (IN)
Cartwright
Castor (FL)
Cicilline
Clarke
Clay
Cleaver
Clyburn
Conyers
Cooper
Courtney
Crowley
Cuellar
Cummings
Davis (CA)
Davis, Danny
DeGette
DeLauro
Deutch
Duckworth
Duncan (TN)
Edwards
Ellison
Engel
Enyart
Esty
Fattah
Foster
Frankel (FL)
Fudge
Gabbard
Garamendi
Garcia
Gosar
Grayson
Green, Al
Green, Gene
Grijalva
Hahn
Hanabusa
Hastings (FL)
Heck (WA)
Himes
Holt
Horsford
Hoyer
Huelskamp
Jackson Lee
Jeffries
Johnson (GA)
Johnson, E. B.
Jones
Kaptur
Keating
Kelly (IL)
Kennedy
Kilmer
Kirkpatrick
Langevin
Larson (CT)
Lee (CA)
Lewis
Lipinski
Loebsack
Lowenthal
Lujan Grisham (NM)
Lynch
Massie
Matsui
McGovern
McIntyre
McNerney
Meeks
Moore
Murphy (FL)
Napolitano
Neal
Negrete McLeod
O'Rourke
Owens
Pallone
Pascrell
Payne
Perlmutter
Peters (CA)
Peters (MI)
Pingree (ME)
Pocan
Poe (TX)
Quigley
Rahall
Rangel
Richmond
Rohrabacher
Rothfus
Roybal-Allard
Ruppersberger
Ryan (OH)
Salmon
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schweikert
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
[[Page H7554]]
Slaughter
Speier
Stockman
Thompson (MS)
Tierney
Tonko
Tsongas
Van Hollen
Vargas
Veasey
Vela
Velazquez
Visclosky
Waters
Watt
Wilson (FL)
Yarmuth
NOES--266
Aderholt
Amash
Bachmann
Bachus
Barber
Barletta
Barr
Barton
Benishek
Bentivolio
Bera (CA)
Bilirakis
Bishop (UT)
Black
Blackburn
Blumenauer
Boustany
Brady (TX)
Bridenstine
Brooks (AL)
Brooks (IN)
Buchanan
Bucshon
Burgess
Calvert
Camp
Cantor
Capito
Cardenas
Carter
Cassidy
Castro (TX)
Chabot
Chaffetz
Chu
Coble
Coffman
Cohen
Cole
Collins (GA)
Collins (NY)
Conaway
Connolly
Cook
Costa
Cotton
Cramer
Crenshaw
Daines
Davis, Rodney
DeFazio
Delaney
DelBene
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Dingell
Doggett
Duffy
Duncan (SC)
Ellmers
Eshoo
Farenthold
Farr
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Gallego
Gardner
Garrett
Gerlach
Gibbs
Gibson
Gohmert
Goodlatte
Gowdy
Granger
Graves (GA)
Graves (MO)
Griffin (AR)
Griffith (VA)
Grimm
Guthrie
Hall
Hanna
Harper
Harris
Hartzler
Hastings (WA)
Heck (NV)
Hensarling
Higgins
Hinojosa
Holding
Honda
Hudson
Huffman
Huizenga (MI)
Hultgren
Hunter
Hurt
Israel
Issa
Jenkins
Johnson (OH)
Johnson, Sam
Jordan
Joyce
Kelly (PA)
Kildee
Kind
King (IA)
King (NY)
Kingston
Kinzinger (IL)
Kline
Kuster
Labrador
LaMalfa
Lamborn
Lance
Lankford
Larsen (WA)
Latham
Latta
Levin
LoBiondo
Lofgren
Long
Lowey
Lucas
Luetkemeyer
Lujan, Ben Ray (NM)
Lummis
Maffei
Maloney, Carolyn
Maloney, Sean
Marchant
Marino
Matheson
McAllister
McCarthy (CA)
McCaul
McClintock
McCollum
McDermott
McHenry
McKeon
McKinley
Meadows
Meehan
Meng
Mica
Michaud
Miller (FL)
Miller (MI)
Miller, George
Moran
Mullin
Mulvaney
Murphy (PA)
Nadler
Neugebauer
Noem
Nugent
Nunes
Nunnelee
Olson
Palazzo
Pastor (AZ)
Paulsen
Pearce
Pelosi
Perry
Peterson
Petri
Pittenger
Pitts
Polis
Pompeo
Posey
Price (GA)
Price (NC)
Reichert
Renacci
Ribble
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rooney
Ros-Lehtinen
Roskam
Ross
Royce
Ruiz
Runyan
Ryan (WI)
Sanford
Scalise
Schneider
Schock
Schrader
Schwartz
Scott, Austin
Sensenbrenner
Sessions
Sherman
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smith (WA)
Southerland
Stewart
Stivers
Stutzman
Swalwell (CA)
Takano
Terry
Thompson (CA)
Thompson (PA)
Thornberry
Tiberi
Tipton
Titus
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walorski
Wasserman Schultz
Waxman
Weber (TX)
Webster (FL)
Welch
Wenstrup
Westmoreland
Whitfield
Williams
Wilson (SC)
Wittman
Wolf
Womack
Yoder
Yoho
Young (AK)
Young (IN)
NOT VOTING--21
Amodei
Bishop (GA)
Campbell
Crawford
Culberson
Doyle
Gingrey (GA)
Gutierrez
Herrera Beutler
McCarthy (NY)
McMorris Rodgers
Messer
Miller, Gary
Nolan
Radel
Reed
Rokita
Rush
Sires
Walz
Woodall
Announcement by the Acting Chair
The Acting CHAIR (during the vote). There is 1 minute remaining.
{time} 1253
So the amendment was rejected.
The result of the vote was announced as above recorded.
Amendment No. 7 Offered by Mr. Rohrabacher
The Acting CHAIR. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentleman from California
(Mr. Rohrabacher) on which further proceedings were postponed and on
which the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIR. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIR. This will be a 2-minute vote.
The vote was taken by electronic device, and there were--ayes 260,
noes 156, not voting 15, as follows:
[Roll No. 627]
AYES--260
Andrews
Bachmann
Barber
Barr
Barrow (GA)
Barton
Bass
Beatty
Becerra
Bentivolio
Bera (CA)
Bishop (NY)
Black
Blumenauer
Bonamici
Brady (PA)
Braley (IA)
Brooks (AL)
Brooks (IN)
Broun (GA)
Brown (FL)
Brownley (CA)
Burgess
Bustos
Butterfield
Calvert
Capito
Capps
Capuano
Cardenas
Carney
Carson (IN)
Cartwright
Castor (FL)
Chu
Cicilline
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Cook
Cooper
Costa
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (CA)
Davis, Danny
Davis, Rodney
DeGette
Delaney
DeLauro
DelBene
Denham
Dent
DesJarlais
Dingell
Duckworth
Duffy
Duncan (SC)
Duncan (TN)
Edwards
Engel
Enyart
Eshoo
Esty
Farr
Fattah
Fincher
Fitzpatrick
Fleischmann
Fortenberry
Foster
Frankel (FL)
Frelinghuysen
Fudge
Gabbard
Garamendi
Garcia
Garrett
Gerlach
Gibbs
Gibson
Gohmert
Gosar
Graves (GA)
Graves (MO)
Grayson
Green, Al
Green, Gene
Grijalva
Grimm
Guthrie
Gutierrez
Hahn
Hanabusa
Harper
Harris
Hastings (FL)
Heck (WA)
Higgins
Himes
Holt
Honda
Horsford
Hoyer
Huelskamp
Huffman
Hultgren
Hunter
Israel
Jackson Lee
Jeffries
Jenkins
Johnson (GA)
Johnson, E. B.
Jones
Joyce
Kaptur
Keating
Kelly (IL)
Kennedy
Kildee
Kilmer
Kind
Kinzinger (IL)
Kirkpatrick
Kuster
LaMalfa
Lance
Langevin
Larsen (WA)
Larson (CT)
Lee (CA)
Levin
Lewis
Lipinski
LoBiondo
Loebsack
Lofgren
Lowenthal
Lowey
Luetkemeyer
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lummis
Lynch
Maloney, Carolyn
Maloney, Sean
Marchant
Massie
Matsui
McClintock
McCollum
McGovern
McIntyre
McNerney
Meeks
Meng
Messer
Miller, George
Moore
Nadler
Napolitano
Neal
Noem
Nugent
Nunes
Pallone
Pascrell
Pastor (AZ)
Paulsen
Payne
Pelosi
Perlmutter
Peters (CA)
Peters (MI)
Peterson
Petri
Pingree (ME)
Pocan
Polis
Posey
Price (NC)
Quigley
Rahall
Rangel
Richmond
Roe (TN)
Rohrabacher
Rokita
Rooney
Ross
Roybal-Allard
Royce
Ruiz
Ryan (OH)
Ryan (WI)
Salmon
Sanchez, Linda T.
Sanchez, Loretta
Sanford
Sarbanes
Schakowsky
Schiff
Schneider
Schock
Schrader
Schwartz
Scott (VA)
Scott, David
Sensenbrenner
Serrano
Sewell (AL)
Shea-Porter
Sherman
Sinema
Slaughter
Smith (NJ)
Smith (WA)
Speier
Stivers
Stockman
Stutzman
Takano
Terry
Thompson (CA)
Thompson (MS)
Tiberi
Tierney
Tonko
Tsongas
Turner
Valadao
Van Hollen
Vargas
Veasey
Vela
Velazquez
Visclosky
Wagner
Walorski
Walz
Waters
Watt
Waxman
Weber (TX)
Webster (FL)
Welch
Wenstrup
Westmoreland
Whitfield
Wilson (FL)
Wolf
Yarmuth
Yoder
NOES--156
Aderholt
Amash
Amodei
Bachus
Barletta
Benishek
Bilirakis
Bishop (UT)
Blackburn
Boustany
Brady (TX)
Bridenstine
Buchanan
Bucshon
Camp
Cantor
Carter
Cassidy
Castro (TX)
Chabot
Chaffetz
Coble
Coffman
Cole
Collins (GA)
Collins (NY)
Conaway
Connolly
Cotton
Crenshaw
Daines
DeFazio
DeSantis
Deutch
Diaz-Balart
Doggett
Ellison
Ellmers
Farenthold
Fleming
Flores
Forbes
Foxx
Franks (AZ)
Gallego
Gardner
Goodlatte
Gowdy
Granger
Griffin (AR)
Griffith (VA)
Hall
Hanna
Hartzler
Hastings (WA)
Heck (NV)
Hensarling
Hinojosa
Holding
Hudson
Huizenga (MI)
Hurt
Issa
Johnson (OH)
Johnson, Sam
Jordan
Kelly (PA)
King (IA)
King (NY)
Kingston
Kline
Labrador
Lamborn
Lankford
Latham
Latta
Long
Lucas
Maffei
Marino
Matheson
McAllister
McCarthy (CA)
McCaul
McDermott
McHenry
McKeon
McKinley
Meadows
Meehan
Mica
Michaud
Miller (FL)
Miller (MI)
Moran
Mullin
Mulvaney
Murphy (FL)
Murphy (PA)
Negrete McLeod
Neugebauer
Nunnelee
O'Rourke
Olson
Owens
Palazzo
Pearce
Perry
Pittenger
Pitts
Poe (TX)
Pompeo
Price (GA)
Reichert
Renacci
Ribble
Rice (SC)
Rigell
Roby
Rogers (AL)
Rogers (KY)
Rogers (MI)
Ros-Lehtinen
Roskam
Rothfus
Runyan
Ruppersberger
Scalise
Schweikert
Scott, Austin
Sessions
Shimkus
Shuster
Simpson
Smith (MO)
Smith (NE)
Smith (TX)
Southerland
Stewart
Swalwell (CA)
Thompson (PA)
Thornberry
Tipton
Titus
Upton
Walberg
Walden
Wasserman Schultz
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoho
Young (AK)
Young (IN)
[[Page H7555]]
NOT VOTING--15
Bishop (GA)
Campbell
Crawford
Culberson
Doyle
Gingrey (GA)
Herrera Beutler
McCarthy (NY)
McMorris Rodgers
Miller, Gary
Nolan
Radel
Reed
Rush
Sires
Announcement by the Acting Chair
The Acting CHAIR (during the vote). There is 1 minute remaining.
{time} 1257
Mr. POE of Texas changed his vote from ``aye'' to ``no.''
Ms. BROWN of Florida changed her vote from ``no'' to ``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
Stated for:
Mr. MEEHAN. Mr. Chairman, on amendments to the Innovation Act (H.R.
3309), I intended to vote ``yes'' on the Rohrabacher amendment
(rollcall No. 627), but inadvertently voted ``no.''
Amendment No. 8 Offered by Mr. Conyers
The Acting CHAIR. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentleman from Michigan
(Mr. Conyers) on which further proceedings were postponed and on which
the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIR. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIR. This will be a 2-minute vote.
The vote was taken by electronic device, and there were--ayes 157,
noes 258, not voting 16, as follows:
[Roll No. 628]
AYES--157
Andrews
Barrow (GA)
Bass
Beatty
Becerra
Bishop (NY)
Bonamici
Brady (PA)
Braley (IA)
Brown (FL)
Brownley (CA)
Bustos
Butterfield
Capuano
Carney
Carson (IN)
Cartwright
Castor (FL)
Chu
Cicilline
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Courtney
Crowley
Cummings
Davis (CA)
Davis, Danny
DeGette
DeLauro
Deutch
Doggett
Edwards
Ellison
Engel
Enyart
Esty
Farr
Fattah
Foster
Frankel (FL)
Fudge
Gabbard
Garamendi
Garcia
Grayson
Green, Al
Grijalva
Gutierrez
Hahn
Hall
Hanabusa
Hastings (FL)
Heck (WA)
Higgins
Himes
Holt
Horsford
Hoyer
Israel
Jackson Lee
Jeffries
Johnson (GA)
Johnson, E. B.
Jones
Kaptur
Keating
Kelly (IL)
Kennedy
Kilmer
Kind
Kirkpatrick
Kuster
Langevin
Larson (CT)
Lee (CA)
Lewis
Lipinski
Loebsack
Lowenthal
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lummis
Lynch
Maffei
Maloney, Carolyn
Maloney, Sean
Matsui
McDermott
McGovern
McIntyre
McNerney
Meeks
Meng
Michaud
Miller, George
Moore
Murphy (FL)
Nadler
Napolitano
Negrete McLeod
Pallone
Pascrell
Pastor (AZ)
Payne
Pelosi
Perlmutter
Peters (CA)
Petri
Pingree (ME)
Pocan
Quigley
Rahall
Rangel
Richmond
Rohrabacher
Roybal-Allard
Ruppersberger
Ryan (OH)
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schneider
Schwartz
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
Sherman
Slaughter
Speier
Takano
Thompson (CA)
Thompson (MS)
Tierney
Titus
Tonko
Tsongas
Van Hollen
Vargas
Veasey
Vela
Velazquez
Visclosky
Walz
Wasserman Schultz
Waters
Watt
Waxman
Welch
Wilson (FL)
Yarmuth
NOES--258
Aderholt
Amash
Amodei
Bachmann
Bachus
Barber
Barletta
Barr
Barton
Benishek
Bentivolio
Bera (CA)
Bilirakis
Bishop (UT)
Black
Blackburn
Blumenauer
Boustany
Brady (TX)
Bridenstine
Brooks (AL)
Brooks (IN)
Broun (GA)
Buchanan
Bucshon
Burgess
Calvert
Camp
Cantor
Capito
Capps
Cardenas
Carter
Cassidy
Castro (TX)
Chabot
Chaffetz
Coble
Coffman
Cole
Collins (GA)
Collins (NY)
Conaway
Connolly
Cook
Cooper
Costa
Cotton
Cramer
Crenshaw
Cuellar
Daines
Davis, Rodney
DeFazio
Delaney
DelBene
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Dingell
Duckworth
Duffy
Duncan (SC)
Duncan (TN)
Ellmers
Eshoo
Farenthold
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Gallego
Gardner
Garrett
Gerlach
Gibbs
Gibson
Gohmert
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (MO)
Green, Gene
Griffin (AR)
Griffith (VA)
Grimm
Guthrie
Hanna
Harper
Harris
Hartzler
Hastings (WA)
Heck (NV)
Hensarling
Hinojosa
Holding
Honda
Hudson
Huelskamp
Huffman
Huizenga (MI)
Hultgren
Hunter
Hurt
Issa
Jenkins
Johnson (OH)
Johnson, Sam
Jordan
Joyce
Kelly (PA)
Kildee
King (IA)
King (NY)
Kingston
Kinzinger (IL)
Kline
Labrador
LaMalfa
Lamborn
Lance
Lankford
Larsen (WA)
Latham
Latta
Levin
LoBiondo
Lofgren
Long
Lowey
Lucas
Luetkemeyer
Marchant
Marino
Massie
Matheson
McAllister
McCarthy (CA)
McCaul
McClintock
McCollum
McHenry
McKeon
McKinley
Meadows
Meehan
Messer
Mica
Miller (FL)
Miller (MI)
Moran
Mullin
Mulvaney
Murphy (PA)
Neal
Neugebauer
Noem
Nugent
Nunes
Nunnelee
O'Rourke
Olson
Owens
Palazzo
Paulsen
Pearce
Perry
Peters (MI)
Peterson
Pittenger
Pitts
Poe (TX)
Polis
Pompeo
Posey
Price (GA)
Price (NC)
Reichert
Renacci
Ribble
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rokita
Rooney
Ros-Lehtinen
Roskam
Ross
Rothfus
Royce
Ruiz
Runyan
Ryan (WI)
Salmon
Sanchez, Linda T.
Sanford
Scalise
Schock
Schrader
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smith (WA)
Southerland
Stewart
Stivers
Stockman
Stutzman
Swalwell (CA)
Terry
Thompson (PA)
Thornberry
Tiberi
Tipton
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walorski
Weber (TX)
Webster (FL)
Wenstrup
Westmoreland
Whitfield
Williams
Wilson (SC)
Wittman
Wolf
Womack
Yoder
Yoho
Young (AK)
Young (IN)
NOT VOTING--16
Bishop (GA)
Campbell
Crawford
Culberson
Doyle
Gingrey (GA)
Herrera Beutler
McCarthy (NY)
McMorris Rodgers
Miller, Gary
Nolan
Radel
Reed
Rush
Sires
Woodall
Announcement by the Acting Chair
The Acting CHAIR (during the vote). There is 1 minute remaining.
{time} 1301
So the amendment was rejected.
The result of the vote was announced as above recorded.
The Acting CHAIR (Mr. Womack). The question is on the amendment in
the nature of a substitute, as amended.
The amendment was agreed to.
The Acting CHAIR. Under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Yoder) having assumed the chair, Mr. Womack, Acting Chair of the
Committee of the Whole House on the state of the Union, reported that
that Committee, having had under consideration the bill (H.R. 3309) to
amend title 35, United States Code, and the Leahy-Smith America Invents
Act to make improvements and technical corrections, and for other
purposes, and, pursuant to House Resolution 429, he reported the bill
back to the House with an amendment adopted in the Committee of the
Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on any amendment to the amendment
reported from the Committee of the Whole?
If not, the question is on the amendment in the nature of a
substitute, as amended.
The amendment was agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. CONYERS. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 5-
minute vote on passage of the bill will be followed by a 5-minute vote
on the question on agreeing to the Speaker's approval of the Journal,
if ordered.
The vote was taken by electronic device, and there were--ayes 325,
noes 91, not voting 15, as follows:
[[Page H7556]]
[Roll No. 629]
AYES--325
Aderholt
Amodei
Bachmann
Bachus
Barber
Barletta
Barr
Barrow (GA)
Barton
Bass
Benishek
Bentivolio
Bera (CA)
Bilirakis
Black
Blackburn
Blumenauer
Bonamici
Boustany
Brady (PA)
Brady (TX)
Brooks (IN)
Brown (FL)
Brownley (CA)
Buchanan
Bucshon
Burgess
Bustos
Butterfield
Calvert
Camp
Cantor
Capito
Capps
Cardenas
Carter
Cassidy
Castro (TX)
Chabot
Chaffetz
Chu
Clarke
Clay
Cleaver
Clyburn
Coble
Coffman
Cohen
Cole
Collins (GA)
Collins (NY)
Conaway
Connolly
Cook
Cooper
Costa
Cotton
Courtney
Crenshaw
Crowley
Cuellar
Daines
Davis, Rodney
DeFazio
DeGette
Delaney
DelBene
Denham
Dent
DeSantis
DesJarlais
Deutch
Diaz-Balart
Dingell
Doggett
Duckworth
Duffy
Ellmers
Engel
Eshoo
Esty
Farenthold
Farr
Fattah
Fincher
Fitzpatrick
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Gabbard
Gallego
Garcia
Gardner
Garrett
Gerlach
Gibbs
Gibson
Goodlatte
Gowdy
Granger
Graves (GA)
Graves (MO)
Green, Al
Green, Gene
Griffin (AR)
Griffith (VA)
Grimm
Guthrie
Gutierrez
Hahn
Hall
Hanabusa
Hanna
Harper
Hartzler
Hastings (FL)
Hastings (WA)
Heck (NV)
Heck (WA)
Hensarling
Higgins
Himes
Holding
Honda
Horsford
Hoyer
Hudson
Huffman
Hultgren
Hunter
Hurt
Israel
Issa
Jeffries
Jenkins
Johnson (OH)
Johnson, E. B.
Johnson, Sam
Jordan
Kelly (IL)
Kelly (PA)
Kennedy
Kildee
Kilmer
King (IA)
King (NY)
Kingston
Kinzinger (IL)
Kirkpatrick
Kline
Kuster
Labrador
LaMalfa
Lamborn
Lance
Lankford
Larsen (WA)
Larson (CT)
Latham
Latta
Lee (CA)
Levin
Lipinski
LoBiondo
Lofgren
Long
Lowey
Lucas
Luetkemeyer
Lujan, Ben Ray (NM)
Maffei
Maloney, Carolyn
Maloney, Sean
Marchant
Marino
Matheson
Matsui
McAllister
McCarthy (CA)
McCaul
McClintock
McCollum
McGovern
McHenry
McIntyre
McKeon
McKinley
Meadows
Meehan
Meeks
Meng
Messer
Mica
Michaud
Miller (FL)
Miller (MI)
Miller, George
Moran
Mullin
Mulvaney
Murphy (FL)
Murphy (PA)
Nadler
Neal
Neugebauer
Noem
Nugent
Nunes
Nunnelee
O'Rourke
Olson
Owens
Palazzo
Pallone
Pascrell
Paulsen
Pearce
Pelosi
Perlmutter
Perry
Peters (MI)
Peterson
Pittenger
Pitts
Poe (TX)
Polis
Pompeo
Price (GA)
Price (NC)
Quigley
Rahall
Reichert
Renacci
Ribble
Rice (SC)
Richmond
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rokita
Rooney
Ros-Lehtinen
Roskam
Ross
Roybal-Allard
Ruiz
Runyan
Ruppersberger
Ryan (OH)
Ryan (WI)
Sanchez, Linda T.
Sanchez, Loretta
Sanford
Scalise
Schneider
Schock
Schrader
Schwartz
Schweikert
Scott, Austin
Scott, David
Sensenbrenner
Serrano
Sessions
Sewell (AL)
Shimkus
Shuster
Simpson
Sinema
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smith (WA)
Southerland
Speier
Stewart
Stivers
Stutzman
Swalwell (CA)
Takano
Terry
Thompson (CA)
Thompson (MS)
Thompson (PA)
Thornberry
Tiberi
Tipton
Titus
Tonko
Turner
Upton
Valadao
Van Hollen
Veasey
Velazquez
Wagner
Walberg
Walden
Walorski
Walz
Wasserman Schultz
Waxman
Webster (FL)
Welch
Wenstrup
Westmoreland
Whitfield
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yarmuth
Yoder
Young (AK)
Young (IN)
NOES--91
Amash
Andrews
Beatty
Becerra
Bishop (NY)
Bishop (UT)
Braley (IA)
Bridenstine
Brooks (AL)
Broun (GA)
Capuano
Carney
Carson (IN)
Cartwright
Castor (FL)
Cicilline
Conyers
Cramer
Cummings
Davis (CA)
Davis, Danny
DeLauro
Duncan (SC)
Duncan (TN)
Edwards
Ellison
Enyart
Foster
Frankel (FL)
Fudge
Garamendi
Gohmert
Gosar
Grayson
Grijalva
Harris
Hinojosa
Holt
Huelskamp
Huizenga (MI)
Jackson Lee
Johnson (GA)
Jones
Joyce
Kaptur
Keating
Kind
Langevin
Lewis
Loebsack
Lowenthal
Lujan Grisham (NM)
Lummis
Lynch
Massie
McDermott
McNerney
Moore
Napolitano
Negrete McLeod
Pastor (AZ)
Payne
Peters (CA)
Petri
Pingree (ME)
Pocan
Posey
Rangel
Rohrabacher
Rothfus
Royce
Salmon
Sarbanes
Schakowsky
Schiff
Scott (VA)
Shea-Porter
Sherman
Slaughter
Stockman
Tierney
Tsongas
Vargas
Vela
Visclosky
Waters
Watt
Weber (TX)
Wilson (FL)
Wolf
Yoho
NOT VOTING--15
Bishop (GA)
Campbell
Crawford
Culberson
Doyle
Gingrey (GA)
Herrera Beutler
McCarthy (NY)
McMorris Rodgers
Miller, Gary
Nolan
Radel
Reed
Rush
Sires
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). There is 1 minute
remaining.
{time} 1312
Mr. FINCHER changed his vote from ``no'' to ``aye.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Personal Explanation
Mrs. McMORRIS RODGERS. Mr. Speaker, on rollcall No. 623, on H.R.
3309, on Agreeing to the Amendment offered by Mr. Goodlatte of
Virginia, I am not recorded because I was absent due to the birth of my
daughter. Had I been present, I would have voted ``yea.''
Mr. Speaker, on rollcall No. 624, on H.R. 3309, on Agreeing to the
Amendment offered by Mr. Watt of North Carolina, I am not recorded
because I was absent due to the birth of my daughter. Had I been
present, I would have voted ``nay.''
Mr. Speaker, on rollcall No. 625, on H.R. 3309, on Agreeing to the
Amendment offered by Mr. Massie of Kentucky, I am not recorded because
I was absent due to the birth of my daughter. Had I been present, I
would have voted ``nay.''
Mr. Speaker, on rollcall No. 626, on H.R. 3309, on Agreeing to the
Amendment offered by Ms. Jackson Lee of Texas, I am not recorded
because I was absent due to the birth of my daughter. Had I been
present, I would have voted ``nay.''
Mr. Speaker, on rollcall No. 627, on H.R. 3309, on Agreeing to the
Amendment offered by Mr. Rohrabacher of California, I am not recorded
because I was absent due to the birth of my daughter. Had I been
present, I would have voted ``nay.''
Mr. Speaker, on rollcall No. 628, on H.R. 3309, on Agreeing to the
Amendment offered by Mr. Conyers of Michigan, I am not recorded because
I was absent due to the birth of my daughter. Had I been present, I
would have voted ``nay.''
Mr. Speaker, on rollcall No. 629, on H.R. 3309, on Passage, the
Innovation Act, I am not recorded because I was absent due to the birth
of my daughter. Had I been present, I would have voted ``yea.''
____________________