[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.''

                          ____________________