[Congressional Record (Bound Edition), Volume 150 (2004), Part 3]
[House]
[Pages 3834-3836]
[From the U.S. Government Publishing Office, www.gpo.gov]




  COOPERATIVE RESEARCH AND TECHNOLOGY ENHANCEMENT (CREATE) ACT OF 2004

  Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 2391) to amend title 35, United States Code, to promote 
research among universities, the public sector, and private enterprise, 
as amended.
  The Clerk read as follows:

                               H.R. 2391

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Cooperative Research and 
     Technology Enhancement (CREATE) Act of 2004''.

     SEC. 2. COLLABORATIVE EFFORTS ON CLAIMED INVENTIONS.

       Section 103(c) of title 35, United States Code, is amended 
     to read as follows:
       ``(c)(1) Subject matter developed by another person, which 
     qualifies as prior art only under one or more of subsections 
     (e), (f), and (g) of section 102 of this title, shall not 
     preclude patentability under this section where the subject 
     matter and the claimed invention were, at the time the 
     claimed invention was made, owned by the same person or 
     subject to an obligation of assignment to the same person.
       ``(2) For purposes of this subsection, subject matter 
     developed by another person and a claimed invention shall be 
     deemed to have been owned by the same person or subject to an 
     obligation of assignment to the same person if--
       ``(A) the claimed invention was made by or on behalf of 
     parties to a joint research agreement that was in effect on 
     or before the date the claimed invention was made;
       ``(B) the claimed invention was made as a result of 
     activities undertaken within the scope of the joint research 
     agreement; and
       ``(C) the application for patent for the claimed invention 
     discloses or is amended to disclose the names of the parties 
     to the joint research agreement.
       ``(3) For purposes of paragraph (2), the term `joint 
     research agreement' means a written contract, grant, or 
     cooperative agreement entered into by two or more persons or 
     entities for the performance of experimental, developmental, 
     or research work in the field of the claimed invention.''.

     SEC. 3. EFFECTIVE DATE.

       (a) In General.--The amendments made by this Act shall 
     apply to any patent granted on or after the date of the 
     enactment of this Act.
       (b) Special Rule.--The amendments made by this Act shall 
     not affect any final decision of a court or the United States 
     Patent and Trademark Office rendered before the date of the 
     enactment of this Act, and shall not affect the right of any 
     party in any action pending before the United States Patent 
     and Trademark Office or a court on the date of the enactment 
     of this Act to have that party's rights determined on the 
     basis of the provisions of title 35, United States Code, in 
     effect on the day before the date of the enactment of this 
     Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Wisconsin (Mr. Sensenbrenner) and the gentleman from California (Mr. 
Berman) each will control 20 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).


                             General Leave

  Mr. SENSENBRENNER. 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. 2391, the bill 
currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, H.R. 2391 will help spur the development of new 
technologies by making it easier for collaborative inventors who 
represent more than one organization to obtain the protection of the 
U.S. patent system for their inventions.
  The bill achieves this goal by limiting the circumstances in which 
confidential information which is voluntarily exchanged by individual 
research team members may be asserted to bar the patenting of the 
team's new inventions.
  Today, intellectual property-reliant industries, such as 
pharmaceuticals, biotechnology and nanotechnology, serve as key 
catalysts to the U.S. economy, employing tens of thousands of 
Americans. More often than not, the innovations they develop are not 
done solely by researchers in-house, but rather, in concert with other 
researchers who may be located at universities, nonprofit institutions, 
and other private enterprises.
  Carl E. Gulbrandsen, the managing director of the Wisconsin Research 
Alumni Research Foundation, provided an assessment of the value of 
university research contributions when he testified before the 
Subcommittee on Intellectual Property last Congress that, ``In 2000, 
nonprofits and universities spent a record of $28.1 billion on research 
and development, much of

[[Page 3835]]

which involved collaborations among private, public, and nonprofit 
entities.''
  Sales of products developed from inventions transferred from those 
research centers resulted in revenues that approached $42 billion that 
year, a portion of which was then reinvested into additional research. 
As significant as this research activity is, the tangible benefits of 
its application are also worth noting. Inventions such as the MRI and 
the sequencing of human genome technology were both made possible 
through collaborative research.
  In 1984, Congress acted to incentivize innovation by encouraging 
researchers within organizations to share information. That year, 
Congress amended the patent law to restrict the use of background 
scientific or technical information shared among researchers in an 
effort to deny a patent in instances where the subject matter and the 
claimed invention were under common ownership or control.
  This bill will provide a similar statutory ``safe harbor'' for 
inventions that result from collaborative activities of private, public 
and nonprofit entities. In doing so, the bill responds to the 1997 
OddzON Products, Inc. v. Just Toys, Inc., decision of the Federal 
Circuit Court of Appeals by clarifying that prior inventions of team 
members will not serve as an absolute bar of the patenting of the 
team's new invention when the parties conduct themselves in accordance 
with the terms of the bill.
  In the future, research collaborations between academia and industry 
will be even more critical to the efforts of U.S. industry to maintain 
our technological preeminence. By enacting this bill, Congress will 
help foster improved communication between researchers, provide 
additional certainty and structure for those who engage in 
collaborative research, reduce patent litigation incentives, and 
facilitate innovation and investment.
  Mr. Speaker, the Committee on the Judiciary unanimously approved H.R. 
2391 on January 21, 2004. I understand that the Congressional Budget 
Office considers the bill to have an insignificant effect on the U.S. 
Patent and Trademark Office's spending, and has found that the bill 
contains no intergovernmental or private sector mandates.
  The bill itself is a product of the collaborative efforts of a number 
of individuals and leading professional patent and research 
organizations. Among those who contributed substantially to the 
development of the bill are the USPTO, the Wisconsin Alumni Research 
Foundation, the American Council on Education, the American University 
Technology Managers, the Biotechnology Industry Organization, and the 
American Intellectual Property Law Association.
  Mr. Speaker, the bill is necessary to ensure that tomorrow's 
collaborative researchers enjoy a full measure of the benefits of the 
patent law. I urge Members to support the bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BERMAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 2391, the CREATE Act, and ask 
my colleagues to support it as well. The CREATE Act is a rare 
legislative achievement: It is a truly noncontroversial patent bill. It 
has achieved this unique status because it is the product of exhaustive 
discussion, negotiation, and redrafting at both the intellectual 
property subcommittee and the full Committee on the Judiciary levels.
  The CREATE Act effectively overturns the Federal court's decision in 
OddzON Products v. Just Toys. The OddzON decision held that certain 
prior art can be used to dismiss a patent application as obvious, one 
cannot patent the obvious, even if that prior art was confidential, 
shared among consenting parties or undocumented.
  In layman's terms, the OddzON decision means that research 
collaborations between different institutions may preclude patents 
arising from that joint research. As a result of its holding, the 
OddzON decision threatens to chill informal inter-institutional 
research collaborations. These are just the sort of research 
collaborations that are increasingly important in today's complex 
resource constrained research environment. Even more troubling, these 
sorts of research collaborations disproportionately involve research 
universities and nonprofit institutions which do not have the same 
flexibility as private institutions to engage in other research 
arrangements.
  Research collaborations contribute greatly to the U.S. economy. More 
importantly, they may be the key to curing many life-threatening 
diseases. Research collaborations are an important part of the 
technology transfer between universities, nonprofit institutions, and 
private companies that result in an estimated $40 billion of economic 
activity each year and support some 270,000 jobs.
  Similarly collaborations between Federal laboratories and other 
entities have resulted in an estimated 5,000 research agreements signed 
since 1986.
  There is no question that Congress should foster an environment in 
which researchers have the freedom, opportunity and incentive to 
collaboratively develop inventions and new ideas. By overturning the 
OddzON decision, the CREATE Act will remove a substantial roadblock to 
achieving this goal.
  The CREATE Act underwent substantial revisions to adjust relevant 
concerns. The version before us today constitutes a real improvement 
over H.R. 2391 as introduced. It has the support of the university 
community, the patent bar, the biotech industry, patent holders, and 
all other interested parties of which I am aware, and I want to express 
my appreciation to the gentleman from Texas (Chairman Smith) for 
working so closely with us in drafting and redrafting the CREATE Act. I 
ask my colleagues to vote in favor of this important bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield such time as he may consume 
to the gentleman from Texas (Mr. Smith).
  Mr. SMITH of Texas. Mr. Speaker, the CREATE Act, which I introduced 
along with the gentleman from California (Mr. Berman), allows 
researchers and inventors who work for different organizations and 
collaborate on inventions to share information without losing the 
ability to file for a patent.
  This legislation removes roadblocks to the patenting of collaborative 
inventions. It empowers researchers to choose to collaborate when it is 
in their interest, and to compete for inventions when it is not.
  Under current law, individuals who did not work on an invention or 
project can challenge patent applications. This leads to invalidated 
patents which harms our economy and the inventors, researchers and 
entrepreneurs who want to create new products.
  Today's biotech, pharmaceutical, and nanotechnology companies conduct 
much of their research with partners such as universities and other 
public or private organizations.
  In fact, the University of Texas ranks fourth on the list of 
universities that receive the most patents. Many of these patents 
result from working with the private sector on research.
  America's universities, private companies, public organizations and 
nonprofit institutions all have a stake in ensuring the U.S. patent 
system rewards rather than inhibits their innovations, from life-saving 
therapies to fuel cells.
  Yesterday, my subcommittee received a letter from the Biotechnology 
Industry Organization, which supports this legislation. The 
organization stated, ``The majority of our members routinely engage in 
collaborative research. We believe that encouraging this type of 
research will greatly enhance the ability of the biotechnology industry 
to develop life-saving and life-enhancing products.''
  The CREATE Act: (1) Promotes communication among team researchers 
located at multiple organizations; (2) discourages those who would use 
the discovery process to impede coinventors who voluntarily 
collaborated on research resulting in patentable inventions; (3) 
increases public knowledge; and (4) accelerates the commercial 
availability of new inventions.
  The CREATE Act benefits all industries that engage in collaborative 
and

[[Page 3836]]

cooperative research involving more than one organization. The classic 
example is biotechnology, since it has a culture and a business model 
that is multi-disciplinary.
  When a biotechnology company decides to partner with a university, we 
want to prevent that partnership from being harassed by a third party. 
Biotech investment dollars dedicated to research should and must be 
used in an effective way without the possibility of a lawsuit or a 
grievance filed against it.
  The CREATE Act was inspired by two principles essential to a 
democracy: The protection of intellectual property rights and the 
freedom to exchange goods and services.
  Research collaborations are essential to the discovery of new 
inventions, the creation of new jobs, and the health of the U.S. 
economy. Protecting them will provide greater incentives to develop new 
technologies.
  Mr. BERMAN. Mr. Speaker, I yield such time as she may consume to the 
gentlewoman from California (Ms. Lofgren).
  Ms. LOFGREN. Mr. Speaker, cooperative research among private, public, 
and nonprofit entities has become a common feature of modern research 
and development. Many technology start-ups in my home in Silicon Valley 
rely on university-based researchers to support their basic R&D 
programs, and the result of these collaborations benefit both the 
economy and consumers.
  However, as has been mentioned by other Members, since the Federal 
Circuit decision in OddzON Products v. Just Toys, collaboration has 
become too risky. The OddzON decision created an environment where an 
otherwise patentable invention can be rendered nonpatentable on the 
basis of information routinely exchanged between research partners.
  Collaborative research is absolutely vital to our economy. A 1988 
report by the National Science Foundation found that nonprofits and 
universities spent a record $23.8 billion on research and development, 
the majority of which came from collaborations. Congress needs to act 
to ensure that our patent laws provide the proper incentives for 
private, public, and nonprofit entities to work together to make all 
our futures brighter, and I am happy to say that the CREATE Act that is 
before us today does that.
  Mr. Speaker, I would like to thank the gentleman from Texas (Mr. 
Smith) and the gentleman from California (Mr. Berman), the ranking 
member, for their hard work on this bill. I support it, and I urge all 
Members to support it as well.

                              {time}  1215

  We often come on the House floor and engage in debates on things that 
divide us which, when all is said and done, will not necessarily be 
very important to the American economy or the American public.
  This is an item that may be a little bit of a sleeper. I do not see a 
cast of thousands here on the House floor, and yet passing this bill 
will be very important for the economy of our Nation and for the 
advance of science, and it is something we can do together proudly and 
serve our country quite well. I am happy to be involved in this effort.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of H.R. 
2391, the Cooperative Research and Technology Enhancement (CREATE) Act 
introduced on June 9, 2003. We held a markup hearing for this 
legislation in January of this year, and I offered my support at that 
time. To spur innovation and accelerate new technologies, this bill 
encourages cooperative research efforts that involve the private 
sector, universities, non-profit institutions and public entities. In a 
recent decision (Oddzon Products, Inc., v. Just Toys, Inc., et al., 122 
F.3d 1396, 43 U.S.P.Q.2d 1641 (Fed. Cir. 1997), or Oddzon), the Federal 
Circuit Court of Appeals narrowed the scope of a 1984 law that promoted 
collaborative research. I support H.R. 2391 because it will only result 
in the overall improvement of the quality of research that is done by 
collaborating members of the academic community in the areas of 
science, art and information resourcing.
  In Oddzon, the Federal Circuit found that in the case of an inventive 
collaboration involving researchers from multiple organization, the 
novelty (Sec. 102) and non-obvious (Sec. 103) requirements of the 
Patent Act could be read to cover prior art so as to invalidate a 
patent. The court wrote:

       The statutory language provides a clear statement that 
     subject matter that qualifies as prior art under subsection 
     (f) or (g) cannot be combined with other prior art to render 
     a claimed invention obvious and hence inpatentable when the 
     relevant prior art is commonly owned with the claimed 
     invention at the time the invention was made. While the 
     statute does not expressly state . . . that Sec. 102(f) 
     creates a type of prior art for purposes of Sec. 103, 
     nonetheless that conclusion is inescapable; the language that 
     states that Sec. 102(f) subject matter is not prior art under 
     limited circumstances clearly implies that it is prior art 
     otherwise.

  In making this ruling, the court states ``[t]here is no clearly 
apparent purpose in Congress's inclusion of Sec. 102(f) in the 
amendment other than an attempt to ameliorate the problems of patenting 
the results of team research.'' Finally, the court added ``while there 
is a basis for an opposite conclusion, principally based on the fact 
that Sec. 102(f) does not refer to public activity, as do the other 
provisions that clearly define prior art, nonetheless we cannot escape 
the import of the 1984 amendment.'' The holding creates a significant 
problem due to the way that most public-private sector research and 
development projects are structured. Since the early 1980s, 
universities, States and the Federal Government have become much more 
adept at generating licensing revenue from intellectual property 
developed by their faculty, staff and students. Many States and the 
Federal Government now operate under laws and practices under which 
they cannot or will not assign their rights to inventions to a private-
sector collaborative partner. Typically, the university, State or 
Federal Government retains sole ownership of the invention, while the 
invention is licensed for commercial exploitation to their research 
partner.
  The Oddzon decision has created a situation where an otherwise 
patentable invention may be rendered nonpatentable on the basis of 
information routinely exchanged between research partners. Thus, 
parties who enter into a clearly defined and structured research 
relationship, but who do not or cannot elect to define a common 
ownership interest in or a common assignment of the inventions they 
jointly develop, can create obstacles to obtaining patent protection by 
simply exchanging information among them. There is no requirement that 
the information be publicly disclosed or commonly known; all that is 
required is that the collaborators exchange the information.
  The CREATE Act's purposes are to promote communication among team 
researchers from multiple organizations, to discourage those who would 
use the discovery process to harass co-inventors who voluntarily 
collaborated on research, to increase public knowledge and to 
accelerate the commercial availability of new inventions. Overall, this 
bill will serve to create a more technology-friendly environment and 
encourage continued collaboration and innovation.
  Mr. Speaker, I support this bill and hope that my colleagues will do 
the same.
  Mr. BERMAN. Mr. Speaker, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Culberson). The question is on the 
motion offered by the gentleman from Wisconsin (Mr. Sensenbrenner) that 
the House suspend the rules and pass the bill, H.R. 2391, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  The title of the bill was amended so as to read: ``A bill to amend 
title 35, United States Code, to promote cooperative research involving 
universities, the public sector, and private enterprises.''.
  A motion to reconsider was laid on the table.

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