[Congressional Record (Bound Edition), Volume 150 (2004), Part 3]
[House]
[Pages 3326-3329]
[From the U.S. Government Publishing Office, www.gpo.gov]




  PROVIDING FOR CONSIDERATION OF H.R. 1561, UNITED STATES PATENT AND 
                TRADEMARK FEE MODERNIZATION ACT OF 2003

  Mr. LINDER. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 547 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 547

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 1561) to amend title 35, United States Code, 
     with respect to patent fees, and for other purposes. The 
     first reading of the bill shall be dispensed with. General 
     debate shall be confined to the bill and shall not exceed one 
     hour equally divided and controlled by the chairman and 
     ranking minority member of the Committee on the Judiciary. 
     After general debate the bill shall be considered for 
     amendment under the five-minute rule. It shall be in order to 
     consider as an original bill for the purpose of amendment 
     under the five-minute rule the amendment in the nature of a 
     substitute recommended by the Committee on the Judiciary now 
     printed in the bill. The committee amendment in the nature of 
     a substitute shall be considered as read. All points of order 
     against the committee amendment in the nature of a substitute 
     are waived. No amendment to the committee amendment in the 
     nature of a substitute shall be in order except those printed 
     in the report of the Committee on Rules accompanying this 
     resolution. Each such amendment may be offered only in the 
     order printed in the report, may be offered only by a Member 
     designated in the report, shall be considered as 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 a demand for division of the question in the House or in 
     the Committee of the Whole. All points of order against such 
     amendments are waived. At the conclusion of consideration of 
     the bill for amendment the Committee shall rise and report 
     the bill to the House with such amendments as may have been 
     adopted. Any Member may demand a separate vote in the House 
     on any amendment adopted in the Committee of the Whole to the 
     bill or to the committee amendment in the nature of a 
     substitute. The previous question shall be considered as 
     ordered on the bill and amendments thereto to final passage 
     without intervening motion except one motion to recommit with 
     or without instructions.


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  The SPEAKER pro tempore. The gentleman from Georgia (Mr. Linder) is 
recognized for 1 hour.
  Mr. LINDER. Mr. Speaker, for the purpose of debate only, I yield the 
customary 30 minutes to the gentleman from Florida (Mr. Hastings), 
pending which I yield myself such time as I may consume. During 
consideration of this resolution, all time yielded is for the purpose 
of debate only.
  Mr. Speaker, H. Res. 547 is a fair, structured rule that provides for 
the consideration of H.R. 1561, the U.S. Patent and Trademark Fee 
Modernization Act. This rule provides for 1 hour of general debate 
equally divided and controlled by the chairman and ranking minority 
member of the Committee on the Judiciary.
  H. Res. 547 provides that the amendment in the nature of a substitute 
recommended by the Committee on the Judiciary now printed in the bill 
shall be considered as an original bill for the purpose of amendment, 
and shall be considered as read. The rule waives all points of order 
against the Committee amendment in the nature of a substitute.
  H. Res. 547 makes in order only those amendments to the Committee 
amendment in the nature of a substitute which are printed in the 
Committee on Rules report accompanying the resolution.
  The rule provides that the amendments made in order may be offered 
only in the order printed in the report, may be offered only by a 
Member designated in the report, shall be considered as 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 a demand for division of the 
question in the House or in the Committee of the Whole.
  H. Res. 547 waives all points of order against the amendments printed 
in the report and provides one motion to recommit with or without 
instructions.
  With respect to the underlying legislation, H.R. 1561, the U.S. 
Patent and Trademark Fee Modernization Act, represents the beginning of 
the implementation of the revised Strategic Business Plan to transform 
the Patent and Trademark Office's operations by improving patent and 
trademark quality and reducing application backlogs and delays. The 
bill incorporates a revised fee schedule previously submitted by the 
PTO that would generate an additional $201 million in revenue. 
Specifically, H.R. 1561 amends Federal patent law to lower patent 
filing and basic national fees; increase appeal, excess claims, 
disclaimer, extension, revival, and maintenance fees; and add new fees 
for application examination, patent search, and patent issuance.
  As our former colleague and former director of the PTO, Jim Rogan, 
noted, the implementation of the revised Strategic Plan hinges on the 
passage of H.R. 1561. He stated, ``Without the ability to hire and 
train new examiners and also improve infrastructure, our hands will be 
tied . . . The consequences of failing to enact the fee bill and giving 
the (PTO) access to those fees will mean quality and pendency will 
continue to suffer. We will be unable to hire needed examiners, and 
over 140,000 patents will not issue over the next 5 years. The 
inventory of unexamined patent applications will skyrocket to a backlog 
of over 1 million applications by 2008, more than double the current 
amount, and pendency (as measured from the time of filing) will jump to 
over 40 months average in the next few years. This would represent the 
highest pendency rates in decades.''
  I agree with former Director Rogan's account, and I believe that H.R. 
1561 will benefit our Nation in the processing of patent and trademark 
applications. I have always supported the rights of independent 
inventors to seek protections under Federal patent laws.
  Undoubtedly, some of the world's greatest innovations have come from 
America's great independent inventors, including Thomas Edison and 
Alexander Graham Bell.

                              {time}  1615

  Nevertheless, it is also necessary to expedite patent applications to 
help protect small independent inventors.
  Mr. Speaker, this rule was approved by the Committee on Rules last 
night. I urge my colleagues to support the rule and the underlying 
bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield myself such time as I 
may consume, and I thank the gentleman from Georgia (Mr. Linder) for 
yielding me the time.
  Mr. Speaker, I rise today in opposition to the U.S. Patent and 
Trademark Fee Modernization Act of 2003, as well as the rule providing 
for its consideration.
  As the majority member of the committee previously mentioned, I agree 
that the premise of our patent system lies in its mutual benefit to 
both the inventor and our country. With the constant evolution of 
science and technology, spurred by the monetary incentive the U.S. 
patent system offers to inventors, new inventions have led to new 
technologies, job creation and improvements to our quality of life. 
Indeed, Congress should be creating legislation that fosters and 
nurtures the relationship between the United States Patent Office and 
the entrepreneur and business communities.
  The underlying legislation, however, does nothing of the sort, and 
the rule which the majority is asking us to approve today stifles 
debate and limits our ability to improve this legislation.
  I really find it outrageous that the bill in its current state hurts 
aspiring small businesses by inflicting additional fees on their patent 
and trademark applications. It should be our mission to build an 
enterprise society in which small firms of all kinds thrive and achieve 
their potential. We should not allow small businesses to fail before 
they even get started.
  An amendment will be offered later today by our colleague the 
gentlewoman from Texas (Ms. Jackson-Lee) that I strongly support. This 
amendment will aid in the promotion of enterprise across society, 
particularly in underrepresented and disadvantaged groups. I urge my 
colleagues to support this amendment.
  In examining the underlying legislation, it is becoming increasingly 
clear that we should not call this bill the U.S. Patent and Trademark 
Fee Modernization Act. Instead, we should call it what it really is, 
the Increased Fees on Small Businesses Act of Fiscal Year 2003.
  To make a bad bill worse, the majority is once again seeking to 
outsource the jobs of Federal employees. Simply put, the patent 
examining and processing are core governmental functions and should be 
performed by Federal employees. Yet, my friends in the majority are 
using the bill as another opportunity to fail Federal employees by 
outsourcing their jobs.
  Mr. Speaker, Congress must protect the jobs of Federal employees. 
Like any workforce, the primary interests of Federal employees lie in 
opportunities for reward, professional development and job 
satisfaction. The United States Government trails behind the private 
sector when it comes to investing in its employees. When I see bills 
such as the underlying legislation, it seems unrealistic to think that 
change will occur under this leadership. Perhaps it will take their 
jobs to be on the line before we institute change.
  Mr. Speaker, this bill has many glaring problems, and as I previously 
mentioned, I oppose the underlying legislation, and I will oppose the 
rule, and I urge my colleagues to do the same.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LINDER. Mr. Speaker, I am pleased to yield 4 minutes to the 
gentleman from North Carolina (Mr. Coble).
  Mr. COBLE. Mr. Speaker, I thank the gentleman from Georgia for 
yielding me the time. I appreciate that.
  Mr. Speaker, this bill implements the revised Strategic Business Plan 
proposed by Director Rogan when he was at the Patent and Trademark 
Office to update the services and structure of the office. The 
Strategic Business Plan will enhance the quality of the patent and 
trademark examining operations, accelerating the application pendency 
period, making it more consumer friendly and efficient.

[[Page 3328]]

  The manager's amendment to the bill addresses the fee diversion 
problem and prevents the PTO funds from being used to fund general 
revenue programs throughout the Federal Government.
  Under the agreement reached between the gentleman from Wisconsin 
(Chairman Sensenbrenner) and the Committee on Appropriations, PTO fees 
collected in a given fiscal year that exceed the appropriation to PTO 
for that year would be placed in what will be known as a PTO reserve 
fund. At the end of that fiscal year, the Director of the Patent and 
Trademark Office may determine if, and how, these funds should be 
allocated back to the eligible applicants.
  Mr. Speaker, I have been a proponent of modernizing the patent and 
trademark fee structure and have fought on this floor year after year 
to protect these dollars from being used to fund non-PTO programs, as 
have my chairman the gentleman from Wisconsin and other Members of the 
Committee on the Judiciary. They have fought equally diligently to this 
end.
  A fully funded United States Patent and Trademark Office is vital to 
sustaining the strength and growth of United States companies, 
inventors and innovations, and this legislation is integral to 
preserving the United States' worldwide leadership in the intellectual 
property industry.
  I say to my friend from Georgia, who yielded to me, I was at the PTO 
office about 5 years ago for an event. I was invited to take part in an 
event there, and I said to those people, from the Director to all the 
patent examiners who were there and trademark examiners, I said I want 
to send a message to Capitol Hill and I want to tell everybody up there 
to keep their grubby paws out of the PTO coffers. Now that may have 
been an indelicate way of saying it, but I wanted to make clear to 
everyone up here that these funds should not be removed from PTO 
custody and control.
  The opponents of such a proposal indicate that some sort of unjust 
enrichment will ensue if the PTO gets to keep these funds. That is 
poppycock. That is nonsense. These funds belong to the PTO, and I am 
confident that with the passage of this legislation, the diversion 
anathema that has plagued us for so long hopefully will finally be 
resolved.
  I again thank the gentleman from Georgia for yielding me time.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 7 minutes to the 
gentlewoman from Ohio (Ms. Kaptur).
  Ms. KAPTUR. Mr. Speaker, I thank the gentleman from Florida for 
yielding me time.
  Mr. Speaker, I would like to strongly oppose this bill, H.R. 1561, 
and I do so because it is based on our good old Constitution, which 
says the Congress shall have power to promote the progress of science 
and useful arts by securing for limited times to authors and inventors 
the exclusive right to their respective writings and discoveries, and 
from the very founding of the republic that knowledge has been housed 
in the U.S. Patent Office where inventors around our country had 
confidence that those inventions belonged to them, protected by the 
Constitution of our Nation. So important patents are listed, patents 
inventors, congressional protection.
  Today, we have a bill before us, H.R. 1561, that really is another 
episode in the outsourcing of American jobs. Yes, the outsourcing craze 
continues. It is like a virus that cannot be stopped. The American 
people cannot understand why their officials in Washington do not step 
in and put an end to this nonsense, but guess what, now the Federal 
Government is getting into the act and the outsourcing of jobs from our 
government, in this case the U.S. Patent Office, has infected the heart 
of American ingenuity.
  Mr. Speaker, the bill before us authorizes the Patent and Trademark 
Office to outsource work. There is some palliative, feel-good language 
about companies being organized under the laws of the United States in 
the bill, but under U.S. law Honda is a U.S. company, Toshiba is a U.S. 
company. Saudi companies, if they operate on U.S. soils, are U.S. 
companies. That does not give me a lot of comfort. This is an insult to 
the entrepreneurs and inventors of this country.
  As someone who comes from the State of Ohio, home of Thomas Edison 
and Charles Kettering, the thought of outsourcing patent application 
reviews from the U.S. Patent and Trademark Office is inconceivable. One 
might think that with this outsourcing, well, the price is going to go 
down to inventors. Are they going to get anything out of this? That is 
the way the free trade fundamentalists try to tell the story, send the 
work overseas if it can be done, send it out of the government, but 
guess what. They are going to raise the cost to patent holders. So the 
same old bankrupt theory is at work.
  Patent application reviews will be outsourced, but the price to the 
small inventor or the small entrepreneur would not decrease. In fact, 
they put an additional fee, an additional tax on them. Currently, a 
small entity pays $385. The proposed fee would be $675 with an e-file 
and $750 without an e-file. Total fees for the life of a patent 
currently are $4,160, which is a lot of money for a small inventor. The 
proposed fee with an e-file would raise it to $4,875.
  Call it what you want, fee increase, user fee adjustment, search fee. 
I will tell my colleagues what it really is. It is another tax, and a 
tough one, on the very people who are trying to invent America's 
future, the very people on whom we are counting for the intellectual 
moxie to fuel the information-based economy or knowledge-based economy 
that the experts say are supposed to lead us out of the doldrums that 
this economy is in.
  The people in this country who tinker with objects and machines and 
ideas, why should they be taxed and why should we want to outsource 
anything from the U.S. Patent and Trademark Office?
  If my colleagues vote for this bill, they are voting for a tax 
increase, and a rather large increase at that, on the best and 
brightest minds of our country. It is bad enough they want to outsource 
such an important function such as patent application search and 
examination. This is so important that it still remains right here in 
the Constitution of our country, and now we are talking about 
outsourcing constitutional responsibility. That in itself is an 
outrage, but to raise taxes on our inventors and our bright minds 
actually, in this environment, verges on insanity.
  Where does it stop? Where does it stop? I urge my colleagues to vote 
against H.R. 1561.
  Mr. BERMAN. Mr. Speaker, will the gentlewoman yield?
  Ms. KAPTUR. I yield to the gentleman from California.
  Mr. BERMAN. Mr. Speaker, I thank the gentlewoman for yielding and 
appreciate her comments.
  At this time I will not get into the issue of the restricted nature 
under which outsourcing is permitted, but I think the gentlewoman 
accurately described the base bill. The chairman of the Committee on 
the Judiciary will be offering an amendment with respect to outsourcing 
outside the United States that restricts even the limited outsourcing 
that is allowed under this bill to companies organized under the laws 
of the United States. As the gentlewoman mentioned, that in and of 
itself does not protect against international outsourcing, or any 
State, and employ U.S. citizens to perform the searches.
  So there will be an amendment to the base bill at the time that once 
the rule is adopted, if it is adopted, that will deal with that 
specific issue very specifically and prohibit that kind of outsourcing 
that the gentlewoman was concerned about.
  Ms. KAPTUR. Mr. Speaker, this is a very important point, and I 
respect my dear colleague from California (Mr. Berman), but the facts 
are we are outsourcing patent review procedures from the U.S. Patent 
and Trademark Office. In other words, it is going to go to private 
companies, not the government of the United States, protected by what 
the Constitution demands. It is going to be outsourced to companies.
  The question is what is a U.S. company? If we look into the law, a 
U.S. company operating within the boundaries of the United States, even 
if it is

[[Page 3329]]

Honda Motor Corporation, is a U.S. company. Foreign corporations 
operating within the United States are defined as U.S. corporations 
because they operate within our soil.

                              {time}  1630

  But they are not U.S. corporations, because their profits are booked 
back to their home country. So I have a real problem with this.
  Number one, we should not be outsourcing the jobs from the Patent 
Office. That is the most important line that we are breaching here. 
Never before in the history of this country has this been done. It has 
never been done. And then we are saying, well, you know, it will be a 
U.S. company. But then look to the law. How do we define what a U.S. 
company is? Any company operating within the boundaries of the United 
States? It could be Honda, it could be Toshiba, it could be Daemler, it 
could be any company.
  Mr. BERMAN. Mr. Speaker, will the gentlewoman yield?
  Ms. KAPTUR. I yield to the gentleman from California.
  Mr. BERMAN. Mr. Speaker, I take the gentlewoman's point about U.S. 
companies and who might be called a U.S. company. I simply wanted to 
point out that the chairman of the Committee on the Judiciary has a 
manager's amendment that will not simply limit this to U.S. companies, 
but limit it to searches only by companies employing U.S. citizens to 
perform the searches. So there is that as an additional element.
  Ms. KAPTUR. Mr. Speaker, reclaiming my time, and I thank the 
gentleman from California for those comments, but it is interesting 
because our submarine technology happened to end up in the hands of the 
former Soviet Union through a subsidiary of a company operating here 
and also in Europe. It does not matter if U.S. citizens are in those 
jobs; what matters is who owns the company. And beyond that, why should 
we be outsourcing anything from the Patent and Trademark Office?
  I totally oppose this bill. At least I want on the record that there 
was one Member standing to say that the constitutional protections to 
America's patent holders and inventors should not be breached. It has 
been working. Why change it?


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. LaHood). The Chair would appreciate 
Members' abiding by the time limits.
  Mr. HASTINGS of Florida. Mr. Speaker, I have no further requests for 
time, and I yield back the balance of my time.
  Mr. LINDER. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. All time has expired. Without objection, the 
previous question is ordered.
  There was no objection.
  The SPEAKER pro tempore. The question is on the resolution.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.

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