[Congressional Record Volume 159, Number 175 (Wednesday, December 11, 2013)]
[Extensions of Remarks]
[Pages E1836-E1837]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             INNOVATION ACT

                                 ______
                                 

                               speech of

                        HON. HAKEEM S. JEFFRIES

                              of new york

                    in the house of representatives

                       Thursday, December 5, 2013

       The House in Committee of the Whole House on the state of 
     the Union 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:

  Mr. JEFFRIES. Mr. Chairman, the Jeffries Amendment to H.R. 3309 
accepted in the House Judiciary Committee amended the bill's fee-
shifting provision in a meaningful manner designed to reduce the 
likelihood of an adverse award made against a non-prevailing party. As 
originally introduced, H.R. 3309 required the court to award fees to a 
prevailing party in patent litigation ``unless the court finds that the 
position of the nonprevailing party or parties was substantially 
justified or that special circumstances make an award unjust.''
  The Jeffries Amendment modifies this provision to disallow fee-
shifting when: 1) ``the court finds that the position and conduct of 
the nonprevailing party or parties were reasonably justified in law and 
fact'' or 2) when a named inventor or non-prevailing party encounters 
special circumstances such as ``severe economic hardship'' that would 
make a fee-shifting award unjust. With respect to the latter provision, 
the amendment further limits the circumstances under which a fee-
shifting award is proper by mandating consideration of additional 
factors by the court.
  During the debate on the House floor, a claim was made that the term 
``substantially justified'' means ``reasonably justified'' as 
interpreted through the Equal Access to Justice Act (EAJA), The EAJA is 
a body of law unrelated to intellectual property jurisprudence. 
Accordingly, its precedential value is uncertain. However, to the 
extent this body of law is considered relevant, the oft-referenced 
Supreme Court decision in Pierce v. Underwood explicitly asserts that 
``substantially justified'' and ``reasonably justified'' are not 
synonymous. Consequently, even when viewed through the EAJA lens, the 
Jeffries Amendment clearly lowers the bar that a non-prevailing party 
must meet in order to avoid an adverse fee-shifting determination.
  The EAJA states in pertinent part: ``(1)(A) Except as otherwise 
specifically provided by statute, a court shall award to a prevailing 
party other than the United States fees and other expenses . . . 
incurred by that party in any civil action . . . brought by or against 
the United States . . . unless the court finds that the position of the 
United States was substantially justified or that special circumstances 
make an award unjust.''
  The Supreme Court in Pierce v. Underwood decided several issues 
regarding the EAJA, including the applicable standard of appellate 
review and the meaning of ``substantially justified.'' Regarding the 
standard of review, the court held that the plain language of the 
statute stating ``the court finds,'' makes clear ``that the 
determination is for the district court to make, and thus suggests some 
deference to the district court on appeal'' by employing an abuse of 
discretion standard. H.R. 3309 also includes ``the court finds'' 
language in its formulation. As such, any appellate court reviewing a 
fee-shifting decision by the district court should apply the 
deferential abuse of discretion standard as well.
  In order to determine the meaning of ``substantially justified,'' the 
Court studied the plain meaning of the statute, dictionary definitions 
and the legislative history to conclude: ``[w]e are of the view, 
therefore, that as between the two commonly used connotations of the 
word `substantially,' the one most naturally conveyed by the phrase 
before us here is not `justified to a high degree,' but rather 
`justified in substance or in the main'--that is, justified to a degree 
that could satisfy a reasonable person. That is no different from the 
`reasonable basis both in law and fact' formulation adopted by the 
ninth Circuit . . .'' It is important to note, of course, that the 
phrase ``reasonable

[[Page E1837]]

basis'' as referenced in Pierce v. Underwood does not appear in H.R. 
3309 as originally introduced, or as amended.
  For purposes of understanding the reduced burden effectuated by the 
Jeffries Amendment, the most relevant part of the Pierce v. Underwood 
decision is the majority opinion's assertion that ``our analysis does 
not convert the statutory term `substantially justified' into 
`reasonably justified.' '' In other words, the two terms yield 
different standards. Logically, then, ``reasonably justified'' sets 
forth a lower threshold that must be met by a non-prevailing party.
  The concurring opinion of Justice William Brennan further clarifies 
the practical difference in terms. `` Reasonable' has a variety of 
connotations, but may be defined as 'not absurd' or `not ridiculous.' 
Webster's New Third International Dictionary 1892 (1976) . . . While it 
is true `reasonable' and `substantial' overlap somewhat . . . an 
overlap is not an identity.''
  Accordingly, since the Supreme Court does not equate ``substantially 
justified'' with ``reasonably justified,'' the suggestion that the 
change made to the fee-shifting provision in H.R. 3309 is practically 
meaningless lacks merit. In sum, the Jeffries Amendment deliberately 
lowers the bar from ``substantially justified'' to ``reasonably 
justified'' in a manner that relaxes the fee-shifting standard in the 
bill.

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