[Congressional Record (Bound Edition), Volume 153 (2007), Part 17]
[House]
[Pages 23927-23966]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       PATENT REFORM ACT OF 2007

  The SPEAKER pro tempore. Pursuant to House Resolution 636 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. 1908.

                              {time}  1223


                     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. 1908) to amend title 35, United States Code, to provide for 
patent reform, with Ms. Solis in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Michigan (Mr. Conyers) and the gentleman from 
Texas (Mr. Smith) each will control 30 minutes.
  The Chair recognizes the gentleman from Michigan.
  Mr. CONYERS. Madam Chairman, I yield myself such time as I may 
consume.
  Members of the House, I am proud and privileged to be the chairman of 
the Judiciary Committee for this historic consideration of the Patent 
Reform Act of 2007.
  I can't help but begin by commending those members of Judiciary who 
were in this battle before I became chairman, namely, Lamar Smith of 
Texas; namely, Howard Berman of California; namely, Mr. Coble of North 
Carolina, all who have worked in a remarkable way. Even when the 
leadership changed in the committees and Smith became ranking and 
Berman became Chair, the cooperation and bipartisanship continued. I 
think it is important to lay that groundwork because of the intense 
cooperation in which we have sought to consult with every conceivable 
organization, individual, all stakeholders in this matter; and I think 
it has had a very telling effect on a bill that brings us all together 
here this afternoon.
  After all, patent reform is enshrined in the Constitution, isn't it? 
Article I, section 8. After all, we have had a patent office pursuant 
to constitutional direction since 1790. So for a couple hundred years, 
this has been the driving force for American competition, creativity, 
inventiveness, and a prosperous economy. Thomas Jefferson was

[[Page 23928]]

the first patent examiner in our American history. So I am humbly 
standing in the well to tell you that the continued robustness of the 
patent concept is very important. It has been estimated that the value 
of intellectual property in the United States amounts to $5 trillion, 
and much of that is in the value of the patents that come from the 
legislation produced by this bill.
  Well, if it is so great, why are we here? Well, because certain 
things have happened over the course of years that need some re-
examination. One of them is the trolling situation in which patents of 
less than high quality, they have created a whole legal industry, as 
some will continue to describe here today, in which, with very little 
pretext or excuse, patents are challenged and create a huge nuisance 
value. They flood the courts with unnecessary litigation. There are 
abusive practices that have grown up around the concept of patents, and 
there are certain inefficiencies where, for example, we use the first-
to-invent system of granting patents, while most of the active and 
creative inventors in other countries use the first-inventor-to-file 
system, and we harmonize that in this legislation.
  So there are problems, and they have been addressed with great care, 
because sometimes they go against the grain or to the detriment of the 
rest of the people, the stakeholders in this great legal activity of 
granting patents.
  So I am here to tell you that we finally closed the circle, and I am 
proud of this, being from the highly organized State of Michigan, that 
with our friends in Labor we have been able to work out differences 
that they had originally had with this measure. All the consumer 
groups, there are several of them that have now joined with us. The 
United States Public Interest Research Group has come in. The 
pharmaceuticals have mostly come in. The Association of Small Inventors 
has come in.
  We have done a great job, and we have created a manager's amendment 
to which we have allotted 20 minutes to discuss separately from the 
bill itself. I am proud, as you can tell, of the bipartisan nature of 
this work, because that is what it takes to make some 22 changes in the 
manager's amendment, more than two dozen changes in the underlying 
bill; and dealing with the question of damages and post grant 
opposition are stories that can only be told by the gentleman from 
California with his appropriate brevity. So it is in this spirit that 
we begin this final discussion of this measure.
  I thank all the Members of the Congress not on the Judiciary 
Committee who have helped us in so many different ways.
  Madam Chairman, I reserve the balance of my time.
  Mr. SMITH of Texas. Madam Chairman, I yield myself such time as I may 
consume.
  I strongly endorse H.R. 1908, the Patent Reform Act of 2007, and I 
urge my colleagues to support American inventors, American businesses, 
and the American people by voting for this bill today.
  Last year we laid a substantial foundation for patent reform. It was 
a good start, but we need to finish the job now. The Patent Reform Act 
is the most significant and comprehensive update to patent law since 
the 1952 act was enacted. The Judiciary Committee has undertaken such 
an initiative because changes to the patent system are necessary to 
bolster the U.S. economy and improve the quality of living for all 
Americans.
  There are two major reasons the committee wrote the bill: first, too 
many patents of questionable integrity have been approved. Second, 
holders of these weak patents discovered a novel way to make money, not 
by commercializing the patents but by suing manufacturing companies 
whose operations might incorporate the patents. This combination of 
weak patents and ``seat-of-the-patents'' litigation has hurt the 
economy.
  Most companies don't want to risk shutting down their operations in 
response to a questionable lawsuit. Nor do they have much faith in a 
legal system in which juries and even judges become confused by the 
complexities of patent law. The result: legalized extortion in which 
companies pay a lot of money to use suspect patents.
  The bill will eliminate legal gamesmanship from the current system 
that rewards lawsuit abuses. It will enhance the quality of patents and 
increase public confidence in their legal integrity. This will help 
individuals and companies obtain money for research, commercialize 
their inventions, expand their businesses, create new jobs, and offer 
the American people a dazzling array of products and services that 
continue to make our country the envy of the world.
  All businesses, small and large, will benefit. All industries 
directly or indirectly affected by patents, including finance, 
automotive, manufacturing, high tech, and pharmaceuticals, will profit.
  Given the scope of H.R. 1908, it is impossible to satisfy completely 
every interested party. But the committee has made many concessions to 
accommodate many individuals and many businesses.

                              {time}  1230

  The bill has not been rushed through the process. Over the past 3 
years, our committee has conducted 10 hearings with more than 40 
witnesses representing a broad range of interests and views.
  The Patent Reform Act was amended at different stages of the process 
to address criticisms of the bill. Still, not all interests have 
endorsed the bill. I think their response is mostly resistance to 
change, any change.
  This bill is not intended to favor the interests of one group over 
another. It does correct glaring inequities that encourage individuals 
to be less inventive and more litigious.
  Supporters of the bill run the educational, consumer and business 
spectrum. The Business Software Alliance, the Information Technology 
Industry Council, the American Association of Universities, the 
American Bankers Association, the Consumer Federation of America, the 
Computer and Communications Industry Association, and the Financial 
Services Roundtable, again, they all endorse this bill.
  Article I, section 8, as the chairman mentioned a while ago, of the 
Constitution empowers Congress, ``to promote the progress of science 
and the useful arts by securing for limited times to authors and 
inventors the exclusive right to their respective writings and 
discoveries.''
  The foresight of the founders, in creating an intellectual property 
system, demonstrates their understanding of how patent rights 
ultimately benefit the American people. Nor was the value of patents 
lost when one of our greatest Presidents, Abraham Lincoln, himself a 
patent owner, Lincoln described the patent system as adding ``the fuel 
of interest to the fire of genius.''
  Few issues are as important to the economic strength of the United 
States as our ability to create and protect intellectual property. 
American IP industries account for over half of all U.S. exports, 
represent 40 percent of the country's economic growth, and employ 18 
million Americans. A recent study valued U.S. intellectual property at 
$5 trillion, or about half of the U.S. gross domestic product.
  The Patent Reform Act represents a major improvement to our patent 
system that will benefit Americans for years to come.
  Madam Chairman, this bill has been a bipartisan effort. We would not 
be here now without the steady hand and gentle suggestions made by our 
chairman, Mr. Conyers.
  I also want to acknowledge the indispensable contributions of 
Congressman Howard Berman and Congressman Howard Coble, among others. 
All three of us have been chairmen of the Intellectual Property 
Subcommittee over the past number of years, and we have worked together 
on developing this bill. But it is Mr. Berman's good fortune and a 
testament to his legislative ability that we are on the House floor 
today, and I congratulate him for that achievement.
  Madam Chairman, I reserve the balance of my time.

[[Page 23929]]


  Mr. CONYERS. Madam Chairman, part of the Smith-Berman-Coble trio is 
the chairman now of the Courts, Intellectual Property and Internet 
Subcommittee. His indefatigable commitment to patent reform is now well 
known by all of the House, and I'm pleased to yield 2\1/2\ minutes to 
the gentleman from California (Mr. Berman).
  Mr. BERMAN. Madam Chairman, first I have to say that we wouldn't be 
here, not only for his substantive contributions to this legislation, 
but because of his suggestions about the approach we should take, 
whether it was in full committee or as we move towards the floor in 
terms of working out problems that existed, and that's Chairman 
Conyers. He played a critical role in getting us to this point.
  Lamar Smith, Howard Coble, Rick Boucher, who I started this with, 
Darrell Issa, Zoe Lofgren, Adam Schiff, Bob Goodlatte, a number of 
people played key roles in all this. I don't have too much time. The 
staff, on an issue like this, was indispensable; they made incredible 
contributions. This is really complicated stuff. Perry Apelbaum who 
demonstrated great leadership and guidance on many issues, George 
Elliott, a detailee from the Patent Office who is a great resource, 
Karl Manheim, who decided to spend his sabbatical helping on patent 
reform, Eric Gorduna who spent his summer working on the committee 
report, countless other staff, and of course my Chief Counsel Shanna 
Winters.
  But the question is why, why are we doing this? And here are the 
things we are told by groups like the National Academy of Sciences and 
so many other organizations that are tremendously respected for their 
understanding of science and of our economy:
  One, there are serious problems in the patent system;
  Two, many poor-quality patents have been issued, which cheapen the 
value of patents generally;
  Three, there have been a variety of abuses in patent litigation rules 
that have taken valuable resources away from research and innovation;
  Four, U.S.-based businesses are disadvantaged because our patent laws 
aren't harmonized with the rest of the world.
  Many organizations, many groups have argued for these reforms.
  A quick statement about support. Every major consumer group in this 
country has endorsed this legislation. There is tremendous support in 
the financial services sector, in the high technology sector. The 
universities have now, University of California, which is one of the 
critical magnets of research and development, have supported passage of 
this legislation through the House. The American Association of 
Universities has supported moving the bill forward.
  And one last comment. There is one very controversial issue, aside 
from the ones addressed by the amendments that we have seen that are 
not fully dealt with, and that particularly relates to the issue of 
damages and the apportionment of damages. It is our commitment, my 
commitment, the chairman's commitment, Mr. Smith's commitment, Mr. 
Coble's commitment, to work with people who are concerned about that 
language to reach an appropriate middle ground that reforms the way 
damages are calculated between now and the conference committee and 
when this comes back to deal with that controversy.
  I urge strong support for this bill so we can make this historic 
effort, first in 60 years, move forward to ultimate enactment.
  I include short list of the range of groups that support this bill.

       The Business Software Association, The Financial Services 
     Roundtable, Small Business & Entrepreneurship Council, 
     TechNet, Consumer Federation of America, Consumer Union, 
     Electronic Frontier Foundation, Knowledge Ecology 
     International, Public Knowledge, United States Public 
     Interest Research Group, American Corn Growers Association, 
     American Agricultural Movement, Federation of Southern 
     Cooperatives, National Family Farm Coalition, National 
     Farmers Organization, Rural Coalition, Securities Industry 
     and Financial Markets Association, Computer and 
     Communications Industry Association, Computing Technology 
     Industry Association, Illinois IT Association, Information 
     Technology Association of America, Information Technology 
     Industry Council, Software & Information Industry 
     Association, St. Jude Medical, Massachusetts Technology 
     Leadership Council, Inc., Hampton Roads Technology Council, 
     Northern Virginia Technology Council.

  Mr. SMITH of Texas. Madam Chairman, I yield 5 minutes to my friend 
from North Carolina (Mr. Coble), the ranking member and former chairman 
of the Intellectual Property Subcommittee.
  Mr. COBLE. I thank the gentleman from Texas for yielding.
  Madam Chairman, I recall several years ago, when we were discussing 
proposed patent legislation before a crowded hearing room, and I 
remember one Member saying to the crowd, he said, I have friends for 
this bill, I have friends opposed to this bill, and I want to make it 
clear, he said to that group, I'm for my friends. Well, we don't do it 
quite that easily; easier said than done. But as has been mentioned 
before, the distinguished gentleman from California (Mr. Berman) and I, 
along with the gentleman from Texas and the gentleman from Michigan, 
we've plowed this field before. And I've heard many argue that H.R. 
1908 undermines everything that we accomplished in 1999 when the 
American Inventors Protection Act was implemented.
  Madam Chairman, this is simply inaccurate. Mr. Berman and I 
shepherded that legislation which, among other things, created patent 
reexamination, banned deceptive practices, clarified the term for 
patents, required that patents be published before they're granted, and 
made the Patent Office independent within the Department of Commerce, 
among other things.
  As our domestic economy becomes increasingly dependent on the global 
economy, Madam Chairman, so, too, does our patent system.
  Other challenges stem from the marketplace. As our domestic economy 
becomes increasingly dependent on the global economy, so does the 
patent system. In many international markets, patent protection is one 
certainty on which American manufacturers can rely when they are trying 
to compete internationally.
  H.R. 1908 addresses these challenges in several respects. First, the 
bill implements a first-to-file patent system, which is in line with 
other countries and will streamline the patent review and issuance 
process.
  Other provisions in the bill dealing with willful infringement, post-
grant opposition, publication, inequitable conduct and best mode will 
also help improve patent issuance and patent quality.
  By improving patent quality, patent disputes and litigation should be 
reduced, and patent examiners' ability to perform the daunting task of 
searching scores of records and files should improve greatly.
  Unfortunately, H.R. 1908 has not enjoyed universal support. Several 
key stakeholders have voiced concerns and objections which cannot be 
overlooked. And I understand that many, if not all, of the changes in 
the manager's amendment will address many concerns, but I am still 
troubled that another key coalition may not endorse H.R. 1908 at the 
end of today's debate. Many of these companies in this coalition, 
unfortunately for me, are either located in or near my district, and 
I'm concerned that anything in H.R. 1908 would adversely affect them.
  So while I urge my colleagues to support H.R. 1908, I do not mean to 
cast any aspersions upon those who may very well have meritorious 
concern, particularly dealing with applicant responsibility and how any 
change to the rule for calculating infringement damages could impact 
the value of their patents.
  That being said, Madam Chairman, I know that Chairman Berman, the 
distinguished gentleman from California, the distinguished gentleman 
from Texas, the Ranking Member Smith, have accepted all criticisms in 
good faith and have worked diligently to forge some sort of compromise 
where it has been possible. I hope that after today we will continue to 
pursue compromise so that with some good fortune we may convince all 
stakeholders to support what I believe is needed patent reform.

[[Page 23930]]

  And I say to the gentleman from Texas, I thank you for having 
yielded.
  Mr. CONYERS. Madam Chairman, I am pleased to yield to the gentleman 
from Virginia (Mr. Boucher). He is the last Member on this side that's 
getting 3 minutes.
  Mr. BOUCHER. I thank the gentleman from Michigan for yielding this 
time. I also want to commend the gentleman from Michigan for the very 
fine and persistent work that he has performed in bringing this measure 
to the House floor today.
  Mr. Berman and I introduced an earlier version of this patent reform 
fully 5 years ago. And building on that early effort, Mr. Berman has 
worked tirelessly to build broad support for the patent reform, support 
externally and bipartisan support in this Chamber, to fine-tune the 
bill's provisions and to obtain Judiciary Committee approval of the 
measure earlier this year. That is truly an impressive accomplishment.
  There is an urgent need to improve the patent system. Patent 
examiners are burdened with many applications and are encouraged to 
move quickly on each one of them. And as they do their work, they are 
isolated from an important source of highly relevant information. That 
information source is the knowledge that individuals may have that the 
work that is the subject of the patent application may, in fact, not be 
original, that someone else, in fact, may have invented that particular 
object, and that that object has been in use prior to the time that the 
application was filed. That information we call ``prior art.'' The 
existing patent process contains no avenue for third parties who may 
possess information about prior art to submit that to the patent 
examiner while the application is being examined. Our reform bill 
corrects that flaw, and in so doing, will broadly operate to improve 
patent quality.
  Also in aid of patent quality is the provision which significantly 
strengthens the post-grant interparty's reexamination process through 
which the Patent Office can be required to take a more careful look at 
the patent and the application that accompanies it before that patent 
is issued in final form by the Patent Office.
  Our goal with this provision is to ensure that before a patent is 
issued, parties who contest its validity will have a full and complete 
opportunity to do so within the confines of the Patent Office itself. 
That should prove to be a very effective and less costly alternative 
than litigating the validity of the patent in the court process.
  Across its range of provisions, the reform measure before us makes 
long-needed changes that will improve the quality of patents, adjust 
aspects of the litigation process to the benefit of patent holders and 
those who license for use patented items.
  The bill before us contains a provision which I offered as an 
amendment in committee in partnership with my Virginia colleague, Mr. 
Goodlatte. Our provision prohibits prospectively the award of patents 
for tax planning methods.
  Madam Chairman, I strongly encourage that the bill, with that 
amendment, be approved.
  I thank the gentleman from Michigan for yielding this time to me, and 
I commend him on his effective work, which brings the patent reform 
measure to the House floor today.
  Mr. Berman and I introduced an earlier version of this reform 5 years 
ago.
  Building on that early effort Mr. Berman has worked tirelessly to 
build broad support for patent reform, to fine tune the bills 
provisions, and to obtain Judiciary Committee approval of this measure. 
It is a truly impressive achievement.
  There is an urgent need to improve the patent system.
  Patent examiners are burdened with many applications and are 
encouraged to conclude each one quickly.
  And as they do that work they are isolated from an important source 
of highly relevant information.
  That information source is the knowledge individuals may have, that 
the subject of the patent application is not original, that in fact, 
the object may have previously been invented by someone else. We call 
that prior art.
  And the existing patent process contains no avenue for third parties 
to submit evidence of prior art to the patent examiner.
  Our reform bill correct that flaw, and in so doing will help to 
improve overall patent quality.
  Also in aid of patent quality is the provision which significantly 
threatens the past grant inter partes reexamination process through 
which the Patent Office can be required to take a more careful look at 
the proposed patent prior to its final issuance.
  Our goal with this provision is to assure that before a patent is 
issued, parties who contest its validity will have a full and complete 
opportunity to make their case.
  A meaningful Inter Pates proceeding can also be an expeditious, less 
costly alternative to litigating the validity of the patent in the 
courts.
  Accross its range of provisions, the reform measure before us makes 
long-needed changes, which will improve the quality of patents and 
adjust aspects of the litigation process to the mutual benefit of 
patent holders and those who license for use patented items.
  The bill before us contains a provision which I offered as an 
amendment in committee along with my Virginia colleague, Mr. Goodlatte.
  Our provisions prohibits prospectively the award of patent for tax 
planning methods.
  Approximately 60 such patents have been issued and at least 85 more 
are pending at the Patent Office.
  These patents limit the ability of taxpayers, and the tax 
professionals they employ, to read the tax laws and find the most 
efficient means of lessening or avoiding tax liability (contrary to 
said public policy).
  If someone else has previously read the tax law, found the same means 
of reducing tax liability and received a patent for it, that person is 
entitled to a royalty if anyone else tries to reduce his taxes by the 
same means.
  I frankly think that is outrageous. No one should have to pay a 
royalty to pay their taxes. No one should have sole ownership of how 
taxes are paid.
  Such a barrier to the ability of every American to find creative 
lawful ways to lessen tax liability is contrary to said public policy.
  Our amendment, now a part of the bill before us, will bar the future 
award of such patents, and I would encourage the Patent Office to 
reexamine those that have been issued to date.
  I also want to thank the bipartisan leadership of the Ways and Means 
Committee for expressing support for our provision on tax planning 
strategies.
  Mr. Chairman, I urge approval of the bill.
  Mr. SMITH of Texas. Madam Chair, I yield a full 4 minutes to my 
friend from California (Mr. Rohrabacher) on the condition, of course, 
that he is not too critical of this legislation and that he is 
dispassionate in his remarks.
  Mr. ROHRABACHER. I thank my friend from Texas.
  I rise in strong opposition to H.R. 1908.
  The proponents suggest that it is the most fundamental and 
comprehensive change of American patent law in over a half century. 
Well, that's true, and that's why it should be defeated, because the 
changes are almost all aimed at undermining the technological creators 
and strengthening the hand of foreign and domestic thieves and 
scavengers who would exploit America's most creative minds and use our 
technology against us. It would be a disaster for individual inventors, 
with an impressive coalition strongly opposing this legislation: 
universities, labor unions, biotech industries, pharmaceuticals, 
nanotech, small business, traditional manufacturers, electronics and 
computer engineers, as well, of course, the patent examiners themselves 
who are telling us this will have a horrible impact on our patent 
system.

                              {time}  1245

  They are all begging us to vote ``no.'' This so-called reform will 
make them vulnerable to theft by foreign and domestic technology 
thieves. Our most cutting-edge technology will be available to our 
enemies and our competitors. That is why I call this the Steal American 
Technologies Act. The billionaires in the electronics industry and the 
financial industries who are supporting H.R. 1908, many of them already 
have built their factories in China, would do away with the patent 
system altogether if they could. They are so powerful and arrogant that 
they have set out to fundamentally alter our traditional technology 
protection laws, laws that have served America well for over 200 years.
  Yes, this is an issue vital to the well-being of the American people, 
to our

[[Page 23931]]

standard of living; yet we find ourselves with a severely limited 
debate. There is only 1 hour of debate. Those of us who are opposing 
this legislation haven't even been given the right, which is 
traditional in this body, to control our own time. Yes, the way we are 
handling this debate is a disgrace. There will be 12 minutes available 
for those of us who oppose a bill that they claim is so important for 
the future of our country.
  What do we know about this bill? It is a horror story for American 
inventors and a windfall for foreign and domestic thieves. We don't 
even know what is in the bill. The manager's amendment has been changed 
even after the committee did its business. So it wasn't even fully 
debated in the committee and much less fully debated at the 
subcommittee level. No, what we are doing is a power play here. That is 
what we are witnessing. The opposition doesn't even get the chance to 
argue our case adequately before this body or before the American 
people. Our inventors and our innovators are begging us not to pass 
this legislation. Foreign and domestic technology thieves are licking 
their chops. Let's not let the big guys beat down and smash the little 
guys, which is what the purpose of this legislation is.
  There are problems in the Patent Office, that is true, that can be 
fixed without having to fundamentally alter the principles that are the 
basis of our patent system, which is what this legislation does. This 
legislation, in the name of reform, is being used as a cover to 
basically destroy the patent system that has served us so well. In the 
long term, it will destroy American competitiveness and the standard of 
living of our working people. That is what is at stake here. Overseas, 
the people in India, China, Japan and Korea are waiting. We have quotes 
from newspapers suggesting that as soon as this bill passes, they will 
have a greater ability to take American technology even before a patent 
is granted and put it into commercial use against us.
  This is a shameful, shameful proposal. The American people have a 
right to know. We are watching out for their interests. I don't care 
what the billionaires in the electronics industry and the financial 
industry say. We should have more debate on this. We should have had 2 
or 3 hours of debate on this if it is as important as they say. 
Instead, we have been muzzled, and it is a power grab. Vote against 
H.R. 1908.
  Mr. CONYERS. Madam Chairman, I yield 10 seconds to my colleague from 
California (Mr. Berman).
  Mr. BERMAN. I thank the gentleman for yielding.
  Madam Chairman, just because the gentleman says it is so, doesn't 
mean it is so. I have letters from the AFL-CIO, the university 
community, and the major centers of innovation and research in this 
country that directly contradict his assertion that they are opposed to 
the passage of this bill. The Members of this body should understand 
that.
  Mr. CONYERS. Madam Chairman, I am pleased now to yield 2\1/2\ minutes 
to the gentleman from Illinois (Mr. Emanuel).
  Mr. EMANUEL. Right before our break, we passed and sent to the 
President comprehensive innovation legislation that allowed America to 
maintain its lead in the area of technology and investment in the R&D 
of this country. With this legislation, the patent reform, we are 
taking the second step in assuring that America, American companies and 
America's innovation, maintains its leadership in the world and the 
companies that are producing the jobs and well-paying manufacturing 
jobs here in this country.
  I have only a small assortment of letters from the CEO and 
managements of these companies: Mr. Chambers from Cisco, Safra Catz 
from Oracle, the president and chief financial officer, the CEOs from 
Palm and the Micron company, and other companies.
  Just to read the sense of what they are saying: ``As a company with 
several thousand patents, Cisco believes deeply in strong protection 
for intellectual property. Unfortunately, as you found during the 
hearing process, there are clear signs the current patent system is not 
functioning properly.''
  This is from Mr. Chambers, the chairman and CEO of Cisco: These 
reforms you are debating today, this legislation will allow us to 
continue to innovate and help maintain our Nation's position as the 
world's technology leader.
  This is essential legislation for American companies, America's 
innovation, and its ability to produce jobs for the future. Major CEOs 
from major companies that have maintained and also built America's 
leadership in the high-tech field all support this legislation, in 
addition to leaders of every major consumer group. So it is both good 
for consumers and good for business and good for the companies that are 
producing the jobs here in this country.
  I would like to submit into the Record these letters from just an 
assortment of the companies that support this legislation because of 
what we are doing to maintain America's leadership in the production of 
new jobs, new technology, and new companies here in the country, 
formation of new capital, venture capital funding, et cetera. This, 
though, is the most important step to ensure that when people invent 
things and design patents that they have the notion and the integrity 
that those patents and their ideas are going to be protected.
  Today we are taking a major step, forward as the CEOs have said in 
their own letters, in maintaining America's leadership in the 
production of not only new companies but the most innovative jobs and 
high-paying jobs that are the future of this country. I want to commend 
the leadership for producing this legislation and having it on the 
floor today for a vote.

                                          Cisco Systems. Inc.,

                                  San Jose, CA, September 6, 2007.
     Hon. John Conyers, Jr.,
     Chairman, Committee on the Judiciary, Rayburn House Office 
         Building, Washington, DC.
     Hon. Howard L. Berman,
     Chairman, Committee on the Judiciary, Subcommittee on Courts, 
         the Internet and Intellectual Property, Rayburn House 
         Office Building, Washington, DC.
     Hon. Lamar S. Smith,
     Ranking Member, Committe on the Judiciary, Rayburn House 
         Office Building, Washington, DC.
     Hon. Howard Coble,
     Ranking Member, Committee on the Judiciary, Subcommittee on 
         Courts, the Internet and Intellectual Property, Rayburn 
         House Office Building, Washington, DC.
       Dear Chairman Conyers, Ranking Member Smith, Chairman 
     Berman, and Ranking Member Coble:  I am writing to applaud 
     your tireless efforts to pass H.R. 1908, the Patent Reform 
     Act of 2007. As the House prepares to debate this bill, I 
     want to reiterate to you Cisco's strong support for the 
     legislation.
       In bringing the issue of patent reform to the floor, the 
     House of Representatives and the sponsors of H.R. 1908, have 
     demonstrated a genuine commitment to promoting innovation. As 
     a company with several thousand patents, Cisco believes 
     deeply in strong protection for intellectual property. 
     Unfortunately, as you found during the hearing process, there 
     are clear signs the current patent system is not functioning 
     properly. H.R. 1908 provides a series of needed reforms, 
     which will modernize and restore balance to the patent 
     system. These reforms will allow us to continue to innovate 
     and help maintain our nation's position as the world's 
     technology leader.
       Passage of comprehensive patent reform is Cisco's number 
     one legislative priority for 2007. We have made this issue a 
     priority because we believe a modernized and balanced patent 
     system will promote innovation throughout our economy and 
     thus improve our nation's ability to compete in the global 
     economy.
       I believe the time has come for patent reform legislation, 
     and I deeply appreciate your commitment to passing H.R. 1908.
           Kind Regards,
                                                    John Chambers,
     Chairman and CEO, Cisco.
                                  ____



                                                       Oracle,

                                 Washington DC, September 6, 2007.
     Hon. Nancy Pelosi,
     Speaker, House of Representatives, Washington, DC.
     Hon. John Boehner,
     Republican Leader, House of Representatives, Washington, DC.
       Dear Madam Speaker and Republican Leader Boehner: I am so 
     pleased to see that the House of Representatives will soon 
     begin debate and vote on H.R. 1908, the Patent Reform Act. I 
     can't emphasize enough the significance of this upcoming 
     vote--it is perhaps the single most important vote for our 
     innovation-driven industry in the last few years.

[[Page 23932]]

       Our economy historically has been at the forefront of each 
     new wave of innovation for one simple reason: our 
     intellectual property laws, starting with our nation's 
     Constitution, reward innovation. However, today's U.S. patent 
     system has not kept pace with the growth of highly complex 
     information management systems--the cornerstone of an 
     innovation wave that is truly global in scope. As a result, 
     we have seen a significant increase in low quality patents, 
     which has sparked a perverse form of patent litigation 
     innovation. Some of our nation's most creative companies have 
     been forced to spend tens of millions of dollars to defend 
     themselves against frivolous lawsuits that extract 
     settlements that are in the hundreds of millions of dollars.
       This is not news to you and your colleagues. A bipartisan 
     effort, led by Congressmen Howard Berman and Lamar Smith, has 
     been underway for several years now, and after numerous 
     public hearings and discussions with key stakeholders, a 
     balanced blueprint for reform has been produced and approved 
     by the House Judiciary Committee. In addition to long-sought 
     reforms in patent quality, H.R. 1908 will bring certainty, 
     fairness and equity to key stages of the patent litigation 
     process, including determinations of venue, willful 
     infringement and the calculation of damages.
       In short, H.R. 1908 is designed to strengthen and bring our 
     patent system back to basic principles: to reward innovation, 
     and preserve our economy's creative and competitive 
     leadership.
       We at Oracle thank you and your colleagues for the 
     tremendous work to advance this essential legislation, and we 
     look forward to seeing H.R. 1908 become law in the 110th 
     Congress.
           Sincerely,
                                                       Safra Catz,
     President and Chief Financial Officer.
                                  ____



                                                    Palm Inc.,

                                  Sunnyvale, CA, September 5, 2007
     Hon. Howard Berman,
     House of Representatives, Rayburn Building,
     Washington, DC.
       Dear Congressman Berman: On behalf of Palm, Inc., thank you 
     for your work in bringing the Patent Reform Act of 2007 to 
     the House floor for a vote this Friday, September 7, 2007.
       This legislation is extremely important to Palm as well as 
     other companies beyond the technology industry. By updating 
     the current patent system, including changes that affect the 
     litigation process, Palm will be able to continue to 
     effectively innovate in ways that will benefit the consumer 
     and the U.S. economy. We are proud to work with a diverse, 
     multi-industry national coalition that has advanced this 
     critical patent reform legislation over the past six years 
     and we appreciate your leadership in providing a strong 
     opportunity for passage.
       I thank you for your time and commitment on this critical 
     issue.
           Sincerely,
                                               Edward T. Colligan,
     Chief Executive Officer, Palm, Inc.
                                  ____



                                      Micron Technology, Inc.,

                                     Boise, ID, September 6, 2007.
     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     Washington, DC.
       Dear Madam Speaker: As H.R. 1908 the Patent Reform Act of 
     2007, led by Chairman John Conyers, Ranking Member Lamar 
     Smith, Representatives Berman and Coble, is considered in the 
     House of Representatives, I would like to take this 
     opportunity to thank you and all the bill's supporters who 
     have worked in a bipartisan fashion to help move this 
     legislation forward.
       Patent reform is a top legislative priority for the high-
     tech industry. Like many other supporters of this 
     legislation, Micron Technology, Inc. is one of the world's 
     top patent holders. Protecting our intellectual property is 
     critical to our success. However, the U.S. patent system has 
     not kept pace with the demands of rapidly evolving and 
     complex technologies, and the global competitiveness of U.S. 
     technology companies has suffered as a result. H.R. 1908 
     would balance many of the imbalances that currently plague 
     our patent system. It would promote innovation, yet safeguard 
     the rights of innovators, thereby restoring fairness to the 
     patent system in our nation.
       Thank you again for recognizing that now is the time to 
     move forward on this important legislation.
           Sincerely,
                                               Steven R. Appleton,
     Chairman and CEO, Micron Technology, Inc.
                                  ____



                                               Autodesk, Inc.,

                                San Rafael, CA, September 6, 2007.
     Hon. Nancy Pelosi,
     Speaker of the House, House of Representatives,
     Washington, DC.
       Dear Madam Speaker: I want to thank you and your colleagues 
     in the House leadership for scheduling H.R. 1908, The Patent 
     Reform Act of 2007, for consideration this week on the floor 
     of the House of Representatives. This legislation is my 
     company's top legislative priority this year and is important 
     to the innovation economy of the country. It has been 
     thoughtfully drafted in a bipartisan manner to accommodate 
     many diverse perspectives. I applaud the House for taking 
     decisive action on this critical bill, and look forward to 
     its passage and ultimate enactment into law.
           Sincerely,
                                                        Carl Bass,
     President & CEO, Autodesk, Inc.
                                  ____



                                                       Kalido,

                                Burlington, MA, September 6, 2007.
     Hon. Nancy Pelosi,
     Speaker of the House, House of Representatives, Washington, 
         DC.
     Hon. Steny Hoyer,
     Majority Leader, House of Representatives, Washington, DC.
     Hon. Howard Berman,
     Chairman, Subcommittee on Courts, the Internet and 
         Intellectual Property, Committee on the Judiciary, House 
         of Representatives, Washington, DC.
       Dear Madam Speaker, Majority Leader Hoyer, and Chairman 
     Berman: Thank you for bringing the Patent Reform Act of 2007 
     to the House floor for a vote this Friday, September 7, 2007.
       This legislation is extremely important to the livelihood 
     of my company as well as companies beyond the technology 
     industry. By updating the current patent system, including 
     changes that affect the litigation process, Kalido will be 
     able to continue to innovate in ways that will benefit the 
     consumer and the U.S. economy.
       As a software company, our business is our intellectual 
     property, and protecting software companies also protects the 
     large multinational firms that benefit from our innovation. 
     It is extremely important not only to protect our 
     intellectual capital, but to motivate our investors, 
     employees, and ultimately, our customers.
       Understanding the challenges in advancing this critical 
     patent reform legislation over the past six years, we 
     appreciate your leadership for providing a strong opportunity 
     for passage.
       I thank you for your time and commitment on this issue.
           Sincerely,
                                                William M. Hewitt,
     President & CEO.
                                  ____



                                               Authoria, Inc.,

                                   Waltham, MA, September 6, 2007.
     Hon. Nancy Pelosi,
     Speaker of the House, House of Representatives, Washington, 
         DC.
       Speaker Pelosi: I look forward to seeing you again at 
     TechNet Day this Spring.
       Thank you for bringing the Patent Reform Act of 2007 to the 
     House floor for a vote this Friday.
       This legislation is extremely important to the livelihood 
     of my company as well as tens of thousands of other high-
     growth companies.
       By updating the current patent system, including changes 
     that affect the litigation process, Authoria will be able to 
     continue to innovate in ways that will benefit the consumer 
     and the U.S. economy.
       Understanding the challenges in advancing this critical 
     patent reform legislation over the past six years, we 
     appreciate your leadership for providing a strong opportunity 
     for passage.
       I thank you for your time and commitment on this issue.
           Sincerely,
                                                  Tod Loofbourrow,
                           President, Founder & CEO Authoria, Inc.

  Mr. SMITH of Texas. Madam Chairman, I yield 4 minutes to my friend 
from Virginia (Mr. Goodlatte), the ranking member of the Agriculture 
Committee, the chairman of the House High Tech Caucus, and a senior 
member of the Judiciary Committee.
  Mr. GOODLATTE. I thank the gentleman, and I thank him for his 
leadership on the Judiciary Committee and for years of leadership on 
this legislation, along with Howard Berman, the chairman of the 
Intellectual Property Subcommittee, and their staffs for this 
legislation.
  Madam Chairman, article I, section 8 of our Constitution lays the 
framework for our Nation's patent laws. It grants Congress the power to 
award inventors, for limited periods of time, exclusive rights to their 
inventions. The Framers had the incredible foresight to realize that 
this type of incentive was crucial to ensure that America would become 
the world's leader in innovation and creativity.
  These incentives are just as important today as they were at the 
founding of our country. It is only right that as more and more 
inventions with increasing complexity emerge, we should examine our 
Nation's patent laws to ensure that they still work efficiently and 
that they still encourage, and not discourage, innovation, so America 
will remain the world's leader in innovation.
  The solution involves both ensuring that quality patents are issued 
in the

[[Page 23933]]

first place and ensuring that we take a good hard look at patent 
litigation and enforcement laws to make sure that they do not contain 
loopholes for opportunists with invalid claims to exploit. H.R. 1908 
addresses both of these concerns.
  First, the bill helps ensure that quality patents are being issued by 
the U.S. Patent and Trademark Office. The PTO, like any other large 
government agency, makes mistakes. H.R. 1908 creates a post-grant 
opposition procedure to allow the private sector to challenge a patent 
just after it is approved to provide an additional check on the 
issuance of bogus patents. Better quality patents mean more certainty 
and less litigation for patent holders and businesses.
  In addition, H.R. 1908 contains important litigation reforms to rein 
in abusive lawsuits and forum shopping so that aggressive trial lawyers 
do not make patent litigation their next gold mine like they did for 
asbestos lawsuits, class action lawsuits and the like. Specifically, 
the bill tightens the venue provisions in the current patent law to 
prevent forum shopping.
  H.R. 1908 also prohibits excessive damage awards. Believe it or not, 
there is no current requirement that damage awards in patent cases be 
limited to the value the patent added to the overall product. The 
courts have created a virtual free-for-all environment in this area. 
H.R. 1908 contains provisions to help ensure that damages are 
proportional to the value the invention added to the product, which 
will inject certainty into this area and allow businesses to devote 
their resources to R&D and innovating.
  The bill also creates clearer standards for ``willful infringement'' 
by requiring greater specificity in notice letters alleging 
infringement of patent claims and requiring courts to include in the 
record more information about how they calculate damage awards.
  Furthermore, the bill contains an important amendment that 
Congressman Boucher and I added during the Judiciary Committee markup 
to prevent individuals and companies from filing patents to protect tax 
strategies. Since 1998, when the Federal Circuit Court of Appeals held 
that business methods were patentable, 51 tax strategy patents have 
been granted covering such topics as estate and gift tax strategies, 
pension plans, charitable giving and the like. Over 80 additional tax 
strategy patents are pending before the USPTO.
  When one individual or business is given the exclusive right to a 
particular method of complying with the Tax Code, it increases the cost 
and complexity for every other citizen or tax preparer to comply with 
the Tax Code. No one should have to pay royalties to file their taxes. 
H.R. 1908 renders these tax strategy patents unpatentable so that 
citizens can be free to comply with the Tax Code in the most efficient 
manner without asking permission or paying a royalty.
  Our patent laws were written over 50 years ago and did not 
contemplate our modern economy where many products involve hundreds and 
even thousands of patented inventions. H.R. 1908 provides a much-needed 
update to these laws, and I urge my colleagues to support this 
litigation.
  Mr. CONYERS. Madam Chairman, I am pleased to add to that trio in the 
Judiciary that has worked for so long on patent reform. Her name is Zoe 
Lofgren, and she is a subcommittee Chair; but she stayed with patent 
reform. I yield her 2\1/2\ minutes.
  Ms. ZOE LOFGREN of California. Thank you, Mr. Conyers, Mr. Berman, 
Mr. Smith for your hard work.
  I rise in support of the bill which brings much-needed reform to our 
system. We have worked hard really over the past half decade to come to 
this floor today with this legislation.
  I want to talk about one issue, and that is venue. Due to a flawed 
Federal Court decision in 1990, B.E. Holdings, patent trolls have been 
able to file cases more or less wherever they choose in the United 
States. And that decision has led to forum shopping as plaintiffs filed 
in jurisdictions where they knew they stood a better chance of winning, 
and where they would get more money if they did win.
  For example, filings in eastern Texas went from 32 cases a year 4 
years ago to over 234 cases last year with a projected 8 percent 
increase this year. Patent holders win 27 percent more often there, and 
the awards are much bigger. The presiding judge himself describes the 
district as a ``plaintiff-oriented district.'' It has led to the 
formation of entities that exist solely to bring patent cases. For 
example, the Zodiac Conglomerate is formed of several smaller 
companies. None of the companies create any technology. They don't 
produce any products. All of those companies are incorporated in either 
Texas or Delaware. They exist for one purpose only, to bring patent 
cases. So far the Zodiac Conglomerate has sued 357 different companies, 
mostly in the Eastern District of Texas.

                              {time}  1300

  Manufacturing venue leads to overly aggressive litigation behavior, 
which deters legitimate innovation. This manager's amendment is going 
to correct the problem. The bill will allow cases to be filed where the 
defendant is located or has committed acts relevant to the patent 
dispute.
  We give the freest rules to independent inventors and to individual 
inventors and universities, noting their special role in this system. 
Corporate plaintiffs can only bring cases where the facilities are 
located if they have engaged in activities relevant to the patent 
dispute.
  In sum, the bill restores fairness and clarity to patent litigation 
by removing the most glaring instances of forum shopping by patent 
trolls.
  I represent Silicon Valley, which has a diversity of high tech. 
Biotech, large companies, small companies, universities, small 
inventors, pharmaceutical companies, we have got them all, including 
small inventors working out of a garage. A balanced approach to 
innovation is essential to all of these entities. H.R. 1908 provides 
that balance. We need to pass this bill today. I urge my colleagues to 
do so.
  Mr. SMITH of Texas. I yield 2 minutes to my friend, the gentleman 
from Ohio (Mr. Chabot), the ranking member of the Small Business 
Committee, ranking member of the Anti-Trust Task Force, and a senior 
member of the Judiciary Committee.
  Mr. CHABOT. Mr. Chairman, I rise in reluctant opposition to H.R. 
1908, the Patent Reform Act, that we are considering here now. While 
this bill has been improved since its introduction back in April, the 
scheduling of this bill for consideration today makes one question 
whether reform really is the majority's objective.
  Why else would we push a bill through on a Friday afternoon under a 
structured rule that will only allow a few selected amendments even to 
be considered? In fact, since this bill was reported from the Judiciary 
Committee in July, several of us, as well as the stakeholders, have 
asked the leadership to slow this bill down to ensure that we have a 
true reform bill that is fair and equitable to all who use the patent 
system.
  I believe the bill in its current form, and even if the manager's 
amendment is adopted, fails to strengthen the system Congress created 
to foster and protect innovation. In fact, more than 100 companies, 
unions, universities, coalitions and other organizations have voiced 
their concerns with this bill.
  These entities, users of the patent system, believe that the changes 
proposed by this act and the amendments we are considering today will 
be harmful to their respective businesses, will be bad for the economy, 
and could threaten our status as the number one patent system in the 
world. If that is even possible, why would we rush to pass a bill that 
could jeopardize the very industries and employees that have made this 
Nation what it is today?
  Innovation is the heart and soul of this country. What has made the 
U.S. the strongest patent system in the world is its ability to adapt 
to different business models and innovations, protecting those who 
invent, while at the same time encouraging public dissemination.
  Of course, our patent system is not perfect. The Small Business 
Committee

[[Page 23934]]

that I happen to be the ranking member of held a hearing on March 29th, 
2007, examining how small businesses use the patent system and the 
impact that this patent reform would have on them. The most revealing 
aspect of the hearing was the consensus among members and panelists 
that Congress should be very careful in making significant change to 
the system.
  Mr. Chairman, I urge my colleagues to oppose this.
  Mr. CONYERS. Mr. Chairman, I am pleased to yield 2 minutes to the 
gentleman from North Carolina (Mr. Watt), who has worked continuously 
on this bill to improve it.
  Mr. WATT. I thank the gentleman for yielding.
  Mr. Chairman, when you practice law for 22 years, as I have before 
coming to Congress, and served on the Judiciary Committee for 15 years 
and never even in all that time dealt with patents, you are tempted to 
think of patent lawyers and the law of patents as a bunch of 
technocrats and elevate constitutional considerations and criminal law 
and other civil rights matters to a higher position. It has been an 
eye-opening experience for me, the first time to serve on this 
subcommittee and to see how important patent law is to stimulating, 
encouraging innovation, and to see how difficult and precise the law 
needs to be and how far behind the patent law has become in adapting to 
changes.
  One of the changes that I think hasn't gotten much attention in this 
bill that I was surprised at as a member of the Financial Services 
Committee that has so many regulators of the various parts of our 
financial system which can promulgate rules, it seemed to me when I 
found out that the Patent and Trade Office really didn't have the 
authority to promulgate any meaningful rules, that that was 
contributing to the problem, because innovations and ideas and 
inventions and communications are traveling so fast that the law can't 
always keep up with them. It is in that context that meaningful 
regulation is important. So I wanted to point to that particular 
aspect.
  Mr. SMITH of Texas. Mr. Chairman, I yield 3 minutes to my friend, the 
gentleman from Illinois (Mr. Manzullo), the former chairman of the 
Small Business Committee.
  Mr. MANZULLO. Mr. Chairman, if we had to patent the way Congress is 
considering this bill, no one would claim to be its inventor. This is a 
disgrace. One of the most important bills to come before this Nation in 
60 years concerning manufacturing and patentability of articles and 
processes is so limited that the Democrats have given just 4 minutes of 
their 30 to two people on the other side. They owe them an apology. 
They owe them at least another hour of debate. The American people 
deserve a lot more debate than that.
  An amendment was filed at 2:46 yesterday before the Rules Committee, 
the manager's amendment. One of the groups that contacted us 
representing pharmacies and labor unions and Caterpillar and all kinds 
of manufacturing organizations got a hold of it, finally had to analyze 
it overnight because of the complexity of the issues, and said, my 
gosh, this could destroy the system of patent law and protection of 
patent holders in this country.
  What we are asking for is the opportunity to be able to explain it. 
Members of Congress should not be placed in the position of choosing 
between innovation.
  Let me give you an example. Caterpillar is on one side, in Peoria, 
Illinois, Phil Hare's district. Hundreds of thousands of suppliers 
across the country, including the Midwest. Research in Motion, the 
maker of the BlackBerry, is on the other side of the issue, in favor of 
it. But inside of the BlackBerry is this motherboard. It is magnesium. 
It is made by Chicago White Metals. They have the finest processes for 
magnesium hot-chamber diecasting, a company that is the only diecasting 
company in the country that is rated ISO 14001 for its higher 
environmental standards.
  You have to get on the inside of these machines to understand the 
importance of this law. You have to be able to take every single word 
that is added at the last minute and be able to study it to see the 
impact upon American innovation. That is what this debate is about. It 
is simply asking for more time.
  The first thing we learn as Members of Congress is do no harm. Why 
should we place ourselves in the position of choosing winners and 
losers in something as important as patent law, with the excuse that we 
have to harmonize and we have to adopt Asian and European standards of 
patent law? What is wrong with the American system? We are the 
innovators, we are the ones with the great minds. It is our system that 
is placed, in effect, in the entire world, all the products and the 
processes and the ideas that have made us free.
  I would therefore ask the Members, even if you lean towards this 
bill, to vote against it as a matter of free speech principle. The 
American people are entitled to more debate, because they need to know 
more about this bill.
  Mr. CONYERS. Mr. Chairman, I yield myself 10 seconds.
  I just want to tell the previous speaker that we have had to 
accommodate about 20 different parts of our American industry and 
society, and, of course, everybody is not equally happy. Apparently you 
are one of those.
  Mr. Chairman, I yield 2 minutes to the distinguished gentleman from 
Georgia (Mr. Johnson).
  Mr. JOHNSON of Georgia. I thank the chairman.
  Mr. Chairman, I rise in support of H.R. 1908, the Patent Reform Act 
of 2007. I want to commend the Chair of the Judiciary Committee, John 
Conyers, as well as all the members of the Subcommittee on Courts, the 
Internet and Intellectual Property, especially Chairman Howard Berman, 
and also Ranking Member Howard Coble, for their hard work in bringing 
this important piece of legislation to the floor. It is a bipartisan 
effort.
  Although I am a new member to this subcommittee, I am well aware that 
Congress has been debating patent reform for several years. This area 
of the law has not been updated for 55 years, yet patents touch upon so 
many different sectors, from agriculture to biotechnology to 
manufacturing and computer technology.
  In order to continue to stimulate growth and reward inventors in 
these various sectors, we in Congress are charged with finding the 
right balances between protecting inventions and stimulating 
innovation. Our Founding Fathers realized it was so important to 
protect inventions and promote innovation that they wrote that 
protection into our Constitution in article I, section 8.
  For more than half a century, the United States has led the world in 
research and innovation, partly due to the fact that the U.S. rewards 
its inventors and protects their ideas. But since the last update to 
our system over 55 years ago, technology has rapidly changed and has 
revolutionized our economy. In order to keep up with these changes, 
Congress has stepped forward to update this important body of law.
  This bill makes several important changes, including moving from a 
first-to-invent to a first-to-file system. It places certain 
limitations on willful infringement, it creates a new process of post-
grant review, and it addresses changes of venue to address the issue of 
forum shopping.
  This bill is not perfect, but I ask that the Members of this body 
pass this bill.
  Now this bill is not perfect, and Members as well as many 
representatives from various industries have come to my office with 
their concerns about the damages section of HR 1908.
  During the House Judiciary Committee markup, Congressman Feeney and I 
were able to craft an amendment that I believe struck a balance, giving 
juries the ability to come to a deliberate decision while giving them 
the flexibility within the law to assess damages.
  Our intent is also included in the Congressional Record; the case law 
used in assessing damages, also known as the fifteen Georgia Pacific 
factors, may still be considered when courts are assessing damages. We 
have diligently tried to meet the concerns of a wide spectrum of 
industries and while this bill is not perfect, it is a bipartisan 
effort to update the patent system.
  Mr. Chairman, it is my hope that although there are continued 
concerns, we can work on

[[Page 23935]]

them through the conference committee process in a continued bi-
partisan fashion and we can all come to a compromise.
  Mr. SMITH of Texas. Mr. Chairman, I yield 2 minutes to my friend and 
colleague, the gentleman from Texas (Mr. Gohmert), the deputy ranking 
member of the Crime Subcommittee of the Judiciary Committee.
  Mr. GOHMERT. I thank the ranking member.
  Mr. Chairman, there are some things that need repair in the U.S. 
patent system, but something about this bill kept troubling me. When I 
read the provision regarding the transfer of venue, I began to realize 
something was very wrong. The provision said the court may transfer an 
action only to a district where ``the defendant had substantial 
evidence or witnesses.''
  I could not believe it. That provision did not even allow a judge to 
consider fairness or justice or caseloads or time delays or whether the 
plaintiff was a small entrepreneur with only a few patents who could be 
led to bankruptcy by being forced to file in a court where it had a 5-
year delay. I would have been absolutely staggered during my years as a 
judge to see a venue provision like this. Many agreed and realized that 
was grossly overreaching and proponents of the bill immediately 
recognized that and were willing to work.
  But patent cases increased in the Eastern District of Texas when 
companies like Texas Instruments realized they could get a trial within 
18 months in front of some of the best judges in the country and get 
fairness. Initially, there were more plaintiff victories, but, as I 
understand, the last year or so it has been 50-50, which there is 
nowhere in the country comparable to that.
  I began to realize something was very wrong and one-sided when 
something like that could get into a bill, and especially the manager's 
amendment, without being noticed. And who would want something like 
that? Then you realize, it is big companies who do not want others to 
have the opportunities that they did.
  So that made me look again at the damage provision that was being 
completely changed. I realized to whom that was helping and whom that 
would destroy, and I realized that the language for that must have come 
from the same type source who did not want anything but a small cookie 
cutter or mold to consider damages when, for years now, there have been 
many more factors that needed to be considered. You have drug cases. 
You have objects that are patented. You have concepts.
  The Comprehensive Patent Reform bill being pushed at this time has 
some good features.
  There are some things that need repair in the U.S. patent system. 
But, something about this bill kept troubling me.
  When I read the provision regarding the transfer of venue, I began to 
realize something was very wrong. The provision said that the court may 
transfer an action only to a district where ``the defendant has 
substantial evidence or witnesses.'' That provision did not even allow 
the judge to consider fairness, or justice, or case loads and time 
delays of other courts or whether the plaintiff was a small 
entrepreneur with only a few patents who will be destroyed if the case 
is transferred to a court with a 5-year wait to trial. In my days as a 
trial judge, I would have been absolutely staggered to see a venue rule 
so incredibly one-sided. It was grossly overreaching and proponents of 
the bill immediately recognized that when it was pointed out, but they 
just had not noticed that. They then agreed to changes that prevent the 
language from being quite so egregious.
  As our colleague from the high tech area of California pointed out 
moments ago, there have been patent cases filed in the Eastern District 
of Texas in my district. That began happening when Texas Instruments, 
not some small patent troll, along with others who had patents being 
infringed, could not get a prompt trial elsewhere, realized the Eastern 
District of Texas had some of the best judicial minds who were rarely 
ever reversed, and they could receive a trial within 2 years instead of 
5. So lawsuits were filed there. As far as the rates of victories by 
plaintiffs to defendants, she cited old data and the new data shows 
that the district being excoriated in the past year probably has had 
more equality of verdicts than anywhere else in the country, which 
means the issue is a red herring for something else to get passed that 
is potentially deadly to invention.
  I agreed we needed to do something about patent trolls who buy 
patents so they can sue to try to hold up a company for cash. I agreed 
that's not right. I was willing to help fix it. But after proposing 
solutions to that which were met by a desire to use that issue only as 
an excuse to make comprehensive, devastating changes to two centuries 
of patent law, I realized something inappropriate was at work here.
  I began to realize something was very wrong for a terribly one-sided 
provision to make its way into the official bill being considered as a 
Manager's Amendment at the full Judiciary Committee. I began to think 
about who must have written or at least pushed to get that type of 
totally one-sided provision in there. It was not anyone interested in 
fairness. It was someone interested in really tilting the playing field 
completely one way. That had to be from huge defendants who wanted to 
drag small entrepreneurs into dilatory situations so that their 
invention or component could be usurped without proper compensation, 
even though it might mean the bankruptcy of the inventor and the 
destruction of the opportunity for the little guys with the inventive 
vision and spirit, which actually spurred some of the greatest 
developments and wealth we know and have in this country.
  So when I looked again at the damage provision that was being 
completely changed, I realized whom that was helping and whom that 
would destroy and I realized that language came from the same type 
source. It is extremely one-sided and completely abrogates the ability 
of a court to use factors or standards that are applicable in the vast 
variety of patent cases which arise. Patents are obtained for so many 
different types of objects, drugs, and even concepts. To try to force 
such a huge spectrum of patents into one small specific type of cookie 
cutter or mold is of great concern to so many.
  Then, I remembered also something about this ``comprehensive'' type 
approach--that's what was being said about immigration reform!! In the 
case of Immigration, ``Comprehensive Reform'' was being used to make 
some changes most of us could probably agree on in order to mask within 
those acceptable provisions other problematic provisions unacceptable 
to most Americans which could probably not pass by themselves. After 
finding examples of inappropriately oppressive language that was being 
stuffed or hidden in a large comprehensive bill, I am left wondering 
why not just fix the limited areas that are agreeable and not shove a 
brand new comprehensive, revolutionary change--that some say will 
absolutely set over 200 years of patent law on its head--that may give 
some of the largest corporations in the country the ability to prevent 
others from having the same opportunities they had to become large.
  It is real easy to continue to excoriate these horrid ``patent 
trolls'', which could easily be addressed by very small changes to a 
very limited provision. If you want to limit patent trolls, then 
restrict the abilities of those who purchase the patents or rights to 
sue as secondary holders of patents. If that is not enough, there are 
other limited ways to handle it, though one must be careful not to 
destroy principal patent assets after a company is bought out by 
another. But I would humbly submit that when an easy fix is rejected to 
such a problem because some desire the issue to mask an effort that may 
well denigrate or destroy the adequate ability to preserve such 
assets--something is amiss in Washington, DC.
  As objections from many areas have grown, the private interests 
pushing this bill have realized they may have pushed too far too fast, 
so have sought to appear less draconian, but we must review what this 
bill does. The bill before us today completely changes: The damages or 
compensation that may be obtained from a wrongdoer for stealing or 
usurping someone else's patent; the law on where such suits for 
infringement may be filed; the effect of a patent; the law on 
administrative review of patents and privacy issues of the patent 
before it is final. Is it any wonder that the worst thieves nationally 
and internationally of U.S. intellectual property are hoping we pass 
this bill.
  It is also important to point out that we have heard here today 
promises about things that will be fixed between now and when the law 
were to become law. We've been told that our input is welcome toward 
such fixes. The trouble is, we were told the same thing at the full 
committee. I was one who was called by name to help the group work on 
fixes to major problems. Though I am not questioning motivation at this 
juncture, I have made myself available to meet and have offered 
suggestions, but the group that was going to meet and work on the 
changes before today never met that I was advised. My staff says they 
were never advised. So much for getting in that valuable input.

[[Page 23936]]

  The question remains: Do we need this much of a complete change to a 
system that has spurred, nurtured and protected the greatest 
advancements in the history of mankind. I would submit that it is 
imperative that we back up, vote this down, and come back with non-
comprehensive provisions that do not include provisions that will tilt 
the playing field and so dramatically change our laws to protect 
intellectual property rights. We should borrow from the old Code in 
Medicine to first do no harm!
  Mr. CONYERS. Mr. Chairman, I yield 2\1/4\ minutes to the gentlewoman 
from Texas (Ms. Jackson-Lee).

                              {time}  1315

  Ms. JACKSON-LEE of Texas. Mr. Chairman, let me first of all thank the 
toiling committee chaired by Chairman Conyers and Ranking Member Smith. 
This has been a long journey. As a new member of the Subcommittee on 
Intellectual Property, let me also thank both the chairman and ranking 
member for a tough, tough challenge.
  It is important to express that this is a significant change in 
patent law, but it is done to protect, if you will, the very treasure 
that has propelled America into an economic engine and that we must 
insist continue.
  I think the changes that have been made certainly to some may be 
startling, but the effort was to bring all parties together. I am 
delighted that even though there are questions about, for example, the 
first-to-file over the first-to-invent, this committee saw fit to add 
my amendment which means that there will be periodic review so Congress 
will be instructed on whether or not this works on behalf of all 
inventors big and small.
  Then when we look at the workings in section 5 dealing with first-to-
file and dealing with damages. Rather than passing this law forever and 
ever, an amendment I added will give us an opportunity to study it to 
assess who is it helping and who is it hurting. We certainly want to 
ensure that all are given an opportunity.
  I am very glad that the manager's amendment has impacted the damages 
provision. The original bill seemed to require all apportionment in all 
cases. But in this instance the manager's amendment has made it as one 
of the factors. Therefore, when you look at a Post-it sticker, you can 
determine how much the glue has helped the Post-it sticker. This is 
apportionment of damages in case there was a lawsuit.
  I know that there are many groups, such as Innovation Alliance, that 
I look forward to working with as we make our way through to ensure 
that this bill answers the questions big and small and fuels the 
economic engine of manufacturing, universities, pharmaceuticals and 
others, like small inventors. I ask my colleagues to consider this bill 
and support it. It has a meaningful response to changing patent law for 
all involved.
  Mr. Chairman, as an original co-sponsor and member of the Judiciary 
Subcommittee on the Courts, Intellectual Property, and the Internet, I 
rise in strong support of H.R. 1908, the Patent Reform Act of 2007. I 
am proud to Support this legislation because in many ways the current 
patent system is flawed, outdated, and in need of modernization. Under 
the visionary leadership of Chairman Conyers and Subcommittee Chairman 
Berman, joined by Mr. Smith and Mr. Coble, their counterparts on the 
minority side, the Judiciary Committee labored long and hard to produce 
legislation that reforms the American patent system so that it 
continues to foster innovation and be the jet fuel of the American 
economy and remains the envy of the world.
  Mr. Chairman, Article I, Section 8, clause 8 of the Constitution 
confers upon the Congress the 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.

  In order to fulfill the Constitution's mandate, we must examine the 
patent system periodically. The legislation before us represents the 
first comprehensive review of the patent system in more than a 
generation. It is right and good and necessary that the Congress now 
reexamine the patent system to determine whether there may be flaws in 
its operation that may hamper innovation, including the problems 
described as decreased patent quality, prevalence of subjective 
elements in patent practice, patent abuse, and lack of meaningful 
alternatives to the patent litigation process.
  On the other hand, Mr. Chairman, we must always be mindful of the 
importance of ensuring that small companies have the same opportunities 
to innovate and have their inventions patented and that the laws will 
continue to protect their valuable intellectual property.
  The role of venture capital is very important in the patent debate, 
as is preserving the collaboration that now occurs between small firms 
and universities. We must ensure that whatever improvements we make to 
the patent laws are not done so at the expense of innovators and to 
innovation. The legislation before us, while not perfect, does a 
surprisingly good job at striking the right balance.
  Mr. Chairman, the subject of damages and royalty payments, which is 
covered in Section 5 of the bill, is a complex issue. The complexity 
stems from the subject matter itself but also interactive effects of 
patent litigation reform on the royalty negotiation process and the 
future of innovation. Important innovations come from universities, 
medical centers, and smaller companies that develop commercial 
applications from their basic research. These innovators must rely upon 
the licensing process to monetize their ideas and inventions.
  Mr. Chairman, the innovation ecosystem we create and sustain today 
will produce tomorrow's technological breakthroughs. That ecosystem is 
comprised of many different operating models. It is for that reason 
that we evaluated competing patent reform proposals thoroughly to 
ensure that sweeping changes in one part of the system do not result in 
unintended consequences to other important parts.
  Let me discuss briefly some of the more significant features of this 
legislation, which I will urge all members to support.


             Section 3: Right of the First Inventor to File

  H.R. 1908 converts the U.S. patent system from a first-to-invent 
system to a first-inventor-to file system. The U.S. is alone in 
granting priority to the first inventor as opposed to the first 
inventor to file a patent. H.R. 1908 will inject needed clarity and 
certainty into the system. While cognizant of the enormity of the 
change that a ``first inventor to file'' system may have on many small 
inventors and universities, a grace period is maintained to 
substantially reduce the negative impact to these inventors.
  Moreover, the legislation incorporates an amendment that I offered 
during the full committee markup that requires the Department of 
Commerce Undersecretary for Intellectual Property and Director of the 
Patent and Trademark Office director to conduct a study every seven 
years on the effectiveness of revisions made in the bill to the patent 
derivation litigation system and submit the report to the House and 
Senate Judiciary committees. In embracing this constructive addition to 
the bill, the Committee Report notes:

       [T]he amendments in section 3 of the bill serve to 
     implement a fundamental change in the operation of the United 
     States patent system. Such change, while well-reasoned, 
     requires a mechanism for monitoring its long-term effects.


     Section 5: Formula for Calculating Fair and Equitable Remedies

  Section 5 of the bill provides useful clarification to courts and 
juries designed to ensure inventors are compensated fairly, while not 
discouraging innovation with arbitrary or excessive damage awards. 
While preserving the right of patent owners to receive appropriate 
damages, the bill provides a formula to ensure that the patent owner be 
rewarded for the actual value of the patented invention.
  Computing damages in patent cases is an exceedingly complex task. The 
complexity stems not from the unwillingness of competing interests to 
find common ground but from the interactive effects of patent 
litigation reform on the royalty negotiation process and the future of 
innovation.
  To illustrate, consider this frequently cited hypothetical. A new 
turbine blade for a jet engine is invented which enables the plane to 
achieve a 40 percent increase in gas mileage. What is fair compensation 
for the holder of the patent? Damages could fairly be based on the 
number of turbine blades used, the number of jet engines employing 
those turbine blades, or on a percentage of the savings of the cost of 
jet fuel used, or the number of miles flown by aircraft using engines 
employing the turbine blades, or even, if the higher efficiency of 
aircraft using the turbine blades was the basis for the market demand 
for the jet, the jet itself.
  The original version of the bill was susceptible to a reasonable 
interpretation that apportionment would be required in all cases. But 
as marked up and amended, apportionment is only one of the several 
methods a court can use in awarding damages, including the use of the 
current approach established in Georgia-Pacific v. United States 
Plywood Corp., 318 F.Supp. 116 (S.D.N.Y. 1970), which provides

[[Page 23937]]

that reasonable royalty damages are ascertained by looking to what the 
infringer would have paid, and what the patent owner would have 
accepted, for a license, had one been negotiated at the time the 
infringement began.
  Moreover, apportionment no longer applies to damages based on lost 
profits. Another change allows plaintiff to recover the enhanced value 
of previously known elements where their combination in the invention 
adds value or functionality to the prior art. This is a very important 
and helpful compromise on the issue of patent case damages. We must 
keep in mind that important innovations come from universities, medical 
centers, and smaller companies that develop commercial applications 
from their basic research. These innovators must rely upon the 
licensing process to monetize their ideas and inventions. Thus, it is 
very important that we take care not to harm this incubator of 
tomorrow's technological breakthroughs. The bill before us strikes the 
proper balance.
  In addition, it should also be pointed out that included in the bill 
is another of my amendments adopted during the full committee markup 
requiring the PTO Director to conduct a study on the effectiveness and 
efficiency of the amendments to section 5 of the bill, and submit to 
the Committees on the Judiciary of the House of Representatives and the 
Senate a report on the results of the study. The report must include 
any recommendations the Director may have on amendments to the law add 
any other recommendations the Director may have with respect to the 
right of the inventor to obtain damages for patent infringement. The 
study must be done not later than the end of the 7-year period 
beginning on the date of enactment of this Act and at the end of every 
7-year period after the date of the first study. In adopting this 
amendment, the Judiciary Committee reported that:

       [T]he amendments in section 5 of the bill will have many 
     positive effects on the patent system, but that the changes 
     are sufficiently significant to require periodic monitoring. 
     By examining the effects of these changes on a regular basis, 
     and by paying attention to such feedback as may be obtained 
     through these studies, Congress can ensure that any 
     unforeseen negative consequences that may arise can be dealt 
     with through future legislation or other mechanisms.


               Willful Infringement and Prior Use Rights

  The legislation also contains certain limitations on willful 
infringement. A court may only find willful infringement if the patent 
owner shows, by clear and convincing evidence, that (1) the infringer, 
after receiving detailed written notice from the patentee, performed 
the acts of infringement, (2) the infringer intentionally copied the 
patented invention with knowledge that it was patented, or (3) after 
having been found by a court to have infringed a patent, the infringer 
engaged in conduct that again infringed on the same patent. An 
allegation of willfulness is subject to a ``good faith'' defense. H.R. 
1908 also expands the ``prior user rights'' defense to infringement, 
where an earlier inventor began using a product or process (although 
unpatented) before another obtained a patent for it.


          Post-Grant Procedures and Other Quality Enhancements

  Another beneficial feature of H.R. 1908 is that it cures the 
principal deficiencies of re-examination procedures and creates a new, 
post-grant review that provides an effective and efficient system for 
considering challenges to the validity of patents. Addressing concerns 
that one seeking to cancel a patent could abuse a post -grant review 
procedure, the bill establishes a single opportunity for challenge that 
must be initiated within 12 months of the patent being granted. It also 
requires the PTO Director to prescribe rules for abuse of discovery or 
improper use of the proceeding, limits the types of prior art which may 
be considered, and prohibits a party from reasserting claims in court 
that it raised in post-grant review.


                         Venue and Jurisdiction

  Finally, the bill also addresses changes to venue, to address 
extensive forum shopping and provides for interlocutory appeals to help 
clarify the claims of the inventions early in the litigation process. 
H.R. 1908 would restore balance to this statute by allowing cases to be 
brought in a variety of locales--including where the defendant is 
incorporated or has its principal place of business or has committed a 
substantial portion of the acts of infringement and has a physical 
facility controlled by the defendant. H.R. 1908 makes patent reform 
litigation more efficient by providing the Federal Circuit jurisdiction 
over interlocutory decisions, known as Markman orders, in which the 
district court construes the claims of a patent as a matter of law.


                               Conclusion

  In short, Mr. Chairman, the argument for supporting H.R. 1908 can be 
summed up as follows: For those who are confident about the future, the 
bill, as amended, offers vindication. For those who are skeptical that 
the new changes will work, the Jackson-Lee amendments added to the bill 
will provide the evidence they need to prove their case. And for those 
who believe that maintaining the status quo is intolerable, the 
legislation before us offers the best way forward.
  I urge all members to join me in supporting passage of this landmark 
legislation.
  Mr. SMITH of Texas. Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I am pleased to call on my neighbor and 
friend, Marcy Kaptur from Toledo, Ohio; and I recognize her for 2 
minutes.
  Ms. KAPTUR. Mr. Chairman, I thank my good friend from the great State 
of Michigan, the chairman of the committee, for yielding.
  Unfortunately, I have to disagree with him on this bill and urge my 
colleagues to vote ``no'' on H.R. 1908 because we don't want to weaken 
the U.S. patent system. This is surely not the time with a trillion-
dollar trade deficit to do more selling out of America and to try to 
harmonize our standards down to some of the worst intellectual property 
pirates like China.
  This bill essentially makes it easier for infringers to steal U.S. 
inventions, and it is truly sad that we are only given a few seconds to 
talk about this. That alone should tell our colleagues, vote ``no,'' 
give us a chance to open this up and talk about how this is going to 
affect jobs in America.
  This bill affects two-thirds to 80 percent of the asset value of all 
U.S. firms. Most industrial companies in this country oppose it. Over 
200 organizations across this country oppose it, including the 
electronics industry, pharmaceuticals, small inventors, and 
universities. And, yet, we just get a few seconds here.
  Let me tell you what is going on. Mr. Emanuel was down here earlier 
reading a list of the big semiconductor companies, the high-tech firms. 
This bill does heavily benefit them because they are some of the worst 
intellectual property infringers.
  What this bill does is it supports those large transnational 
corporations that repeatedly infringe on the patents of others, and 
they are looking to reduce what they have to pay in the courts. Now, 
they have had to pay about $3.5 billion in fines over the last couple 
of years, and it was deserved. But that represents less than 1 percent 
of their revenues. What they are trying to do is use this bill to make 
it harder for small inventors and others to file.
  What does this bill change? It says to an inventor, unlike since 1709 
in this country, when we say if you are first to invent, that patent 
belongs to us, they want to change it to first-to-file. In other words, 
they can file it anywhere else in the world and someone else can take 
that and infringe on that invention. It is not first-invention anymore, 
it is first-to-file. Boy, there is a lot more to say and our time 
should not be squashed in this House on an issue of such vital 
importance to the industrial and the commercial base of this country.
  Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentleman from 
Maine (Mr. Michaud).
  Mr. MICHAUD. Mr. Chairman, I thank the gentleman for yielding. Today 
I rise in strong opposition to the Patent Reform Act of 2007. While I 
appreciate all of the hard work that Chairman Berman did on this bill, 
I think this bill is bad for our manufacturing industry.
  We have been told that the manager's amendment significantly improves 
the bill. It actually is worse than the underlying bill, especially 
with respect to the damages section in the bill. This bill is 
fundamentally flawed. It can't be fixed by the manager's amendment.
  This bill will weaken patent protection by making patents less 
reliable, easier to challenge, and cheaper to infringe. This bill 
severely threatens American innovation, jobs and competitiveness and 
ought to be opposed.
  Hundreds of companies and organizations around the country have 
written

[[Page 23938]]

Congress to raise their strong opposition and their strong objections 
to certain provisions of this bill. Manufacturers, organized labor, 
biotech, nanotech, pharmaceuticals, small businesses, universities, and 
economic development organizations have serious concerns about this 
legislation.
  Foreign companies are watching this legislation and are eager to 
attack U.S. patents. The Economic Times reports that Indian companies 
see an opportunity to challenge our patents; and by doing so, they will 
leave our businesses in a litigation crisis.
  We are compromising many of our industries by passing this bill. We 
are creating a litigation nightmare. We need to proceed to get a better 
bill, and I urge my colleagues to defeat this legislation so we can 
move forward on legislation with more people who will support patent 
reform which has to be changed. I urge my colleagues to defeat this 
legislation.
  Mr. CONYERS. Mr. Chairman, I take 5 seconds to assure my 
distinguished friend from Maine that I have more industry in my State 
than he does, and I am protecting them pretty much.
  Mr. SMITH of Texas. Mr. Chairman, I yield the balance of my time to 
Mr. Issa, a member of the Judiciary Committee and the holder of 37 U.S. 
patents.
  Mr. ISSA. Mr. Chairman, for those who may be interested, some of my 
patents have expired and more will.
  I am no longer a day-to-day inventor; but I will always have the soul 
of an inventor, the belief that in fact if you have an idea, you can go 
to the Patent Office and for a relative de minimis amount of money you 
can in fact protect that idea for a period of 20 years from the time 
you ask the Patent Office to protect your invention and give you an 
opportunity to make a small or not-so-small fortune off of it.
  I don't think there is anyone in the Congress who owes their reason 
for being here to the success of patents more than myself. My company 
grew and thrived because we were able to protect our intellectual 
property, patents, copyrights and trademarks. So since I have been here 
as a non-attorney coming to the Congress and asking to be on the 
Judiciary Committee, a little bit like Sonny Bono, that is where the 
things he knew about were legislated. He knew about copyrights and 
songs; I know a little bit about patents, and a lot about the flaws in 
the system.
  And, Mr. Chairman, there are many flaws in the system. This bill has 
been the best work by the best minds, both by Members of Congress, but 
also by staff, trade associations and industry, to bring out those 
mistakes and to try to find solutions.
  Today you have heard a lot of anger and rancor about China. Nobody 
could want America to prosper more than I do. But, in fact, by next 
year more than half of all patents in the U.S. will be granted to non-
U.S. companies. This is not a debate about protecting patents against 
foreigners. Foreigners are patenting in our country, and we invite that 
innovation. It has often led to prosperity in all aspects of America.
  I include a long letter from UCSD CONNECT, an organization founded by 
Bill Otterson and the University of California at San Diego, in which 
they, along with California Healthcare Institute, BIOCOM, Gen-Probe, 
Invitrogen, Pfizer, Qualcomm and others who all say this is a good 
bill, but we have some additional areas we would like to find 
compromise on. Some of the things in this letter of yesterday are 
included in the manager's amendment. Some will be included in 
amendments that will be heard on the floor in a few minutes.

                                          CONNECT',

                                                September 5, 2007.
     Hon. Darrell Issa,
     Washington, DC.
       Dear Representative Issa: We greatly appreciate the time 
     you spent meeting with CONNECT last week to discuss the 
     Patent Reform Act, H.R. 1908. Thank you for your efforts to 
     improve the bill and, in particular, your ongoing work on the 
     post-grant review provision.
       Given the immediacy of the House floor consideration, this 
     letter and ensuing draft language serves as a follow-up to 
     our recent meeting. On behalf of the San Diego innovation 
     community and CONNECT members, we request your continued 
     leadership and strongly urge your consideration of the 
     following improvements to the bill.


                        Apportionment of Damages

       As you well know, the damages provision in the patent 
     statute is a critical part of patent law and a vital part of 
     strong patent protection, which CONNECT supports. We believe 
     our patent system must have appropriate consequences that 
     serve as a deterrent for stealing intellectual property. 
     However, we do not want the law modified to the point where 
     patent infringement is simply a cost of doing business. Per 
     our meeting, we have worked with your staff to develop the 
     draft language at the end of this letter to address this 
     important matter.
       Further, the courts must have flexibility in the assessment 
     of damages. The bill takes away this flexibility. The 
     judicial system is working. A judge either accepts a jury 
     decision or not, and the appeals system is in place to handle 
     additional grievances. We encourage you to avoid binding the 
     court with a prescribed mechanism and ask you to consider the 
     language following this letter that preserves judges' 
     flexibility.


                               Rulemaking

       The existing rulemaking language in the bill is too 
     expansive and gives the U.S. Patent and Trademark Office 
     (PTO) unparalleled authority. Congress is expressly given 
     authority in the U.S. Constitution to safeguard intellectual 
     property. In addition, we believe this excessively broad 
     rulemaking power could lead to instability in the patent 
     system. Congress is better equipped to develop standards 
     through legislative means. As such, we urge you to follow the 
     Senate's lead and remove the PTO rulemaking provision from 
     the House bill.


                               User fees

       The diversion of user fees has long been a concern because 
     it hinders the PTO's ability to hire examiners and eliminate 
     the backlog of patents. It now takes approximately 31 months 
     for a patent to be issued, and a 2005 congressional report 
     stated that without fee diversion the patent backlog would 
     lower to about 22 months.
       Given this, we respectfully ask that you include language, 
     identical to Senator Coburn's amendment to S. 1145, to 
     prevent the diversion of fees collected by the PTO for 
     general revenue purposes by cancelling the appropriations 
     account for PTO fees and creating a new account in the U.S. 
     Treasury for the fees to be deposited.


                                 Venue

       We favor balanced venue language with respect to the 
     parties that is also symmetrical in terms of transfer. Venue 
     should be proper in a district or division: (1) in which 
     either party resides or (2) where the defendant has committed 
     acts of infringement and has a regular and established place 
     of business. Specifically, we urge a return to the pre-markup 
     venue provision in H.R. 1908.
       Thank you, again, for your consideration of our views and 
     the accompanying draft language. Though we do not support the 
     bill as currently written, we want to work with you to make 
     the legislation a means to strengthen the patent system to 
     advance innovation, promote entrepreneurship and boost job 
     growth. We look forward to continuing to work with you to 
     achieve these goals.
           Sincerely,
         CONNECT, AMN Healthcare, California Healthcare Institute, 
           BIOCOM, Gen-Probe, Invitrogen, Pfizer, QUALCOMM, San 
           Diego State University Research Foundation Tech 
           Transfer Office, Tech Coast Angels, Townsend and 
           Townsend and Crew.

                         Draft Damages Language

     SEC. 5. RIGHT OF THE INVENTOR TO OBTAIN DAMAGES.

       (a) Damages.--Section 284 is amended--
       (1) in the first paragraph--
       (A) by striking ``Upon'' and inserting ``(a) IN GENERAL.--
     Upon'';
       (B) by designating the second undesignated paragraph as 
     subsection (c); and
       (C) by inserting after subsection (a) (as designated by 
     subparagraph (A) of this paragraph) the following:
       ``(b) Resonable Roalty.--
       ``(1) In general.--An award pursuant to subsection (a) that 
     is based upon a reasonable royalty shall be determined in 
     accordance with this subsection. Based on the facts of the 
     case, the court shall consider the applicability of paragraph 
     (2), (3) and (5) in calculating a reasonable royalty. The 
     court shall identify the factors that are relevant to the 
     determination of a reasonable royalty under the applicable 
     paragraph, and the court or jury, as the case may be, shall 
     consider only those factors in making the determination.
       ``(2) Relationship of damages to contributions over prior 
     art.--If an infringer shows evidence that features not 
     covered by the claimed invention contribute economic value to 
     the accused product or process, an analysis may be conducted 
     to ensure that a reasonable royalty under subsection (a) is 
     applied only to that economic value properly attributable to 
     the claimed invention. The court, or the jury, as the case 
     may be, may exclude from the analysis the economic value 
     properly attributable to features not covered by the claimed 
     invention that contribute economic value to the infringing 
     product or process.

[[Page 23939]]

       ``(3) Entire market value.--If the claimant shows that the 
     claimed invention is the predominant basis for market demand 
     for a product or process that has a functional relationship 
     with the claimed invention, damages may be based upon the 
     entire market value of the products or professes involved 
     that satisfy that demand.
       ``(4) Combination inventions.--For purposes of paragraphs 
     (2) and (3), in the case of a combination product or process 
     the elements of which are present individually in the prior 
     art, the patentee may show that the economic value 
     attributable to the infringing product includes the value of 
     the additional function resulting from the combination, as 
     well as the enhanced value, if any, of some or all of the 
     prior art elements resulting from the combination.
       ``(5) Other factors.--In determining a reasonable royalty, 
     the court may also consider, or direct the jury to consider, 
     the terms of any nonexclusive marketplace licensing of the 
     invention, where appropriate, as well as any other relevant 
     factors under applicable law.''

  Mr. Chairman, this is a work in process; but since when does this 
body say that in fact the good will be sacrificed in search of the 
perfect? We have never done that. Every bill that goes through here is 
by definition the best work we can do as a continuous body, one that 
will come back after this bill becomes law and continue working on 
refinements.
  I would like to quickly say there will be amendments that will be 
offered that will deal with some of the very issues that people have 
said today are an outrage because they are not there. I hope that my 
colleagues, even if they do not vote for the final bill, will come and 
support the amendments that make this bill better because as a body 
what we do best is we take the best ideas from the best places we can 
get them, we bring them together and we create the best bill we 
possibly can.
  That is what we have done here today. It is the best work available. 
People who are dissenting today, we welcome on a bipartisan basis their 
input to find language that will make it better.
  Mr. Chairman, in closing, the one thing I would say is we are past 
the point of compromise. What we are into is finding win/wins. We are 
looking to take issues in which one side is for and one side is against 
and find real middle ground, and we have done that in a couple of 
areas, and we will continue to want to do that.
  I am a small inventor. I want to make sure that the small inventor is 
protected. That is why this bill is going to maintain the right of the 
small inventor, or any inventor, to retain the secrecy of their 
invention if they are not granted a patent. That is why we are going to 
limit the regulatory authority of the PTO so that for a time, as long 
as we need to, every time they propose a rule, we will have a right and 
an obligation to consider it and if even one Member of this body 
opposes it, to bring to a vote that opposition to the rule.
  These kinds of compromises and win/wins and thoughtful legislation 
are unusual in this body. That is why I believe that this will win 
overwhelming support here. We will continue to work to find an even 
better bill in conference with the Senate because, in fact, we are a 
bicameral body. We have to, in fact, get something that both sides can 
live with.
  In closing, I want to thank Mr. Berman, Mr. Conyers, and certainly 
Mr. Smith and Mr. Coble because they have made this the best bill we 
can possibly have.
  Mr. Chairman, I rise in support of H.R. 1908, the Patent Reform Act 
of 2007. While we will continue to improve the bill as this process 
moves forward, I support the product before us and look forward to 
ongoing efforts to strengthen this legislation.
  As the holder of 37 United States patents, I came to Congress with 
the desire to tackle elements I found awry in our patent laws. While in 
the private sector, I litigated several patent cases before our 
district courts and the United States Court of Appeals for the Federal 
Circuit. Through these experiences, I learned a great deal about patent 
law, both what was right with the law and areas that could use 
improvement.
  One area in need of improvement is in the ability of district court 
judges to hear patent cases effectively. I am gratified that the House 
passed legislation I authored to address this problem in the last two 
congresses. However, we are here today to deal with the substance of 
patent law, not our judges' ability to master it.
  There are strong arguments in favor of reform, as well as strong 
arguments in favor of caution as we move forward. Our patent laws have 
not had an overhaul in many decades, while technology has advanced 
exponentially. Not all of our patent laws fit today with the 
advancements we have seen in electronics, biotechnology, and many other 
areas. Importantly, many commentators and practitioners are concerned 
with the preponderance of over-zealous litigation and what some deem 
exaggerated damages awards.
  Both of these issues are addressed in part in this bill. The creation 
of a post grant review procedure at the Patent Office will help direct 
some conflicts away from court to an administrative remedy, hopefully 
saving vast resources in time and money. Damages awards are addressed 
in encouraging courts to look toward apportioning damages more often, 
or allowing damages that represent the value of an infringed invention 
in a product into which the invention is incorporated.
  With damages and several other issues in this legislation, there is 
still work to be done. But to keep this process moving, to keep parties 
negotiating in good faith, I believe we must support this bill today 
and commit to improving it in the weeks to come.
  I am offering two amendments today to help address issues that 
opponents of this legislation have highlighted over the forgoing 
negotiation process. The first maintains the ability of patent 
applicants to keep their application from going public until action is 
taken by the patent office. Opponents of the current bill argue that, 
because the legislation before us eliminates this option, entities at 
home and abroad will steal an applicant's ideas. My amendment solves 
this problem.
  The second amendment focuses on the ability of the United States 
Patent and Trademark Office to promulgate rules. The PTO currently has 
limited ability to do so, and opponents of this legislation argue that 
the very ability of the United States to compete in a global economy 
could be adversely affected by a bad rule put forth by the PTO. My 
amendment requires a 60-day delay before PTO rules take effect so that 
Congress may have the opportunity to review these rules. If Congress 
finds the rule unacceptable, it has the ability to vote on a Joint 
Resolution of Disapproval nullifying the PTO's action. If Congress does 
nothing, the rule takes effect. Therefore, this amendment helps to 
ameliorate concerns over possible PTO action that could harm innovation 
in the United States.
  Even opponents of the underlying bill should support these 
amendments. While my amendments do not cure all ills in the legislation 
as seen by its opponents, they do address two very controversial 
problems in the bill.
  I thank Judiciary Committee Ranking Member Lamar Smith and 
Subcommittee Chairman Howard Berman for all of their effort on this 
legislation, and I especially thank them for their indulgences in 
hearing my thoughts on these issues as we have worked over the years on 
patent reform. We have worked long and hard on this bill, and I have 
the full intention to continue our work together after today's votes.
  Mr. CONYERS. Mr. Chairman, I now introduce for our closing speaker 
the distinguished gentleman from Florida, Mr. Bob Wexler, to have the 
balance of our time.
  Mr. WEXLER. Mr. Chairman, a co-chair of the Congressional Caucus on 
Intellectual Property Promotion, I rise in strong support of this 
patent reform legislation because it is critical for the continued 
growth of American businesses and the creation of high-paying jobs in 
America.
  This bill will nurture and protect inventors, thereby promoting 
future Alexander Graham Bells and tomorrow's Microsofts.
  For more than 200 years, strong patent protection, along with timely 
examination of patent applications, has helped secure the economic 
success of the United States by empowering inventors and encouraging 
the development of American business both large and small.

                              {time}  1330

  Every day, Americans rely on the innovation that comes from our 
patent system. From new computer technologies to medicines for 
America's seniors, the American patent system provides the fuel for our 
most important technological accomplishments.
  In America today, our capacity to come up with new ideas actually 
outstrips the value of the goods we make. The licensing of U.S. patents 
contributes approximately $150 billion to our

[[Page 23940]]

annual economy, and intellectual property, including patents, is the 
only economic area where the United States maintains a solid trade 
surplus with the rest of the world.
  A well-functioning patent system is vital to America's commercial and 
scientific entrepreneurs and preserves the incentives for innovation 
guaranteed under the United States Constitution.
  This legislation will make America more competitive in the global 
marketplace, not less. We need to support Mr. Berman and Mr. Conyers in 
their effort to produce what I would respectfully suggest is the most 
important economic legislation that this House will pass. This is 
excellent for America's workers; it's excellent for America's 
universities and our economy at large.
  Ms. HIRONO. Mr. Chairman, I rise in reluctant opposition to H.R. 
1908, the Patent Reform Act.
  I applaud the House Judiciary Committee and the House Judiciary 
Subcommittee on Courts, the Internet, and Intellectual Property for 
their efforts in putting together this comprehensive bill. However, I 
cannot in good conscience support the Patent Reform Act in its current 
form given the concerns that continue to be raised from organizations 
in my district and at least 100 companies nationwide.
  Organizations in my district, such as the Hawaii Science & Technology 
Council and University of Hawaii's Office of Technology Transfer and 
Economic Development, have raised concerns regarding the provisions on 
mandatory publication, prior user rights, apportionment of damages, and 
post-grant review, which may discourage investment in innovative 
technologies, harm inventors, and reduce publication and collaborative 
activities among academic scientists. I want to make sure that the 
final bill that becomes law protects the interests of Hawaii's 
burgeoning high technology industry and small inventors.
  This bill remains a work-in-progress that certainly requires more 
debate. Our patent system serves as the basis for America's innovation. 
It is my hope that the concerns and needs of our inventors will be 
addressed in conference should this bill pass the House as I very much 
want to be able to support the final conference report.
  Mr. ETHERIDGE. Mr. Chairman, I rise in opposition to H.R. 1908, 
Patent Reform Act of 2007.
  While I recognize the need for some reform of the United States' 
patent process, I believe we must proceed carefully and with the goal 
of improvement for the many stakeholders affected by the patent system. 
We should continue to work towards an efficient system that issues 
high-quality patents and places reasonable limits on patent challenges. 
Although there are some provisions in H.R. 1908 that could prove 
beneficial, this far-reaching bill could do serious harm to many of the 
important employers in my district.
  North Carolina benefits greatly from its strong university system. 
Institutions including the University of North Carolina at Chapel Hill 
and North Carolina State University in my district serve as engines for 
research and innovation that help to drive the state's economy. In 
addition, the 2nd Congressional District of North Carolina contains a 
number of pharmaceutical companies and biotechnology companies that 
provide thousands of jobs and are helping to transform our economy. 
Along with many of the traditional manufacturing companies in North 
Carolina, the lifeblood of these institutions is the value of the 
patents they hold. These entities have expressed opposition to any 
measure that would weaken their patent portfolios. H.R. 1908 in its 
current form would endanger the value of their patents and harm their 
ability to continue fueling our economy.
  Our patent system has long been a wonderful tool that has helped to 
foster innovation and reward American ingenuity. Patents, and their 
value and validity, serve as the backbone for thousands of companies 
and help form the basis of our economy. Congress should continue to 
work to reform the system in a way that benefits all of the varied 
interests that keep our economy strong. I hope the conference committee 
on H.R. 1908 can correct its shortcomings so I can support and Congress 
can enact comprehensive reform of our patent process.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Chairman, I rise today to 
commend Chairman Conyers and the House Leadership for their diligence 
in addressing the issue of patent reform, and to express why I 
unfortunately must oppose this bill in its current form.
  There is an overwhelming need to move patents through the approval 
process quickly, fairly, and economically. I commend this bill on many 
of the positive changes it makes to the reform system, but I remain 
concerned about provisions that may dramatically restrict damages 
payable by infringers. It is my fear that this bill will alter the 
current system in favor of defendants resulting in further backlogs. 
These changes to the current system would ultimately hurt existing 
patent owners.
  In addition, this bill implements a post grant review process that 
will lead to duplicative challenges, resulting in an increase to the 
cost of patent ownership and significantly decreasing the 
enforceability, predictability and value of all patents.
  Numerous technology firms, both large and small are opposed to this 
bill, as well as, many universities. These are the people on the 
forefront of our technological future and their voice and opposition 
need to be heard.
  Innovation and advancement are key to the future of America. It is my 
concern that this bill will tilt the legal balance in favor of patent 
infringers and discourage innovation and investment in research and 
development. We must protect our innovators and allow them to pursue 
concise and necessary action in the court of law.
  Ms. MATSUI. Mr. Chairman, I rise today in support of the progress to 
our Nation's competitiveness that the Patent Reform Act represents. 
Patents are vital to our universities, our large and small companies, 
our entrepreneurs, and our economy. Our advances in technology are 
clearly demonstrated by the vast increase in patent applications 
submitted. Our policies and procedures governing the United States 
patent process must be updated to keep pace with our inventors. The 
Patent Reform Act takes significant steps towards that goal.
  I appreciate the extensive patent portfolio that is generated by the 
cutting-edge research at the University of California. These 
innovations provide the intellectual property that businesses depend on 
to develop new products. I have heard from numerous constituents in my 
district on this issue who benefit from the technology transfer 
process. I am happy to represent their interests by supporting patent 
reform. This is an incredibly complex topic, as we face the challenge 
of legislating a single patent system to meet the needs of many 
industries.
  I commend Subcommittee Chairman Berman, Chairman Conyers, Ranking 
Member Smith, and the entire House Judiciary Committee for their 
diligence. They have worked tirelessly with hundreds of stakeholders to 
reach the carefully crafted bill that we have on the floor today. I 
thank the committee and its staff for their long commitment to patent 
reform. The product of their years of work, the Patent Reform Act, will 
improve our nation's competitiveness and start moving our country's 
patent system into the 21st century.
  Mrs. BONO. Mr. Chairman, today I rise in support of the Patent Reform 
Act of 2007. I would like to commend Congressman Berman, Congressman 
Smith and the many Members of the House, on both sides of the aisle, 
who have worked diligently to bring this legislation before us. As one 
who cares deeply about the importance of strong legal protections for 
copyright and other intellectual property rights, I look forward to 
supporting this bill today.
  My experience with the importance of intellectual property rights has 
been in the field of entertainment, specifically music. The greatest 
protection that the innovators of these songs and performances have is 
their ability to copyright. To continue encouraging involvement and 
growth in the area of entertainment and the myriad of jobs that are 
tied to the industry, it is critical that patents are protected, in 
order to support the many creative individuals who bring music to the 
masses.
  Many of the issues that we address in Congress from 
telecommunications to energy to health care advancements all have their 
basis in a few core concepts--the ability for small and large inventors 
to pursue a unique idea through the patent process. With that pursuit 
brings the need for related capital that is often required from outside 
investors to further the research and development that brings the 
patent holder's idea to consumers across the world. California is home 
to some of the most impressive and entrepreneurial high-tech, bio-tech 
and entertainment industries that rely heavily on patent protection and 
copyright laws. Each of these industries, and their hundreds of 
thousands of employees, will be greatly impacted by these changes.
  This basic concept of innovation is as critical in the high-tech 
field as it is in the health sciences and biotech realm. However, as 
many of my colleagues have pointed out today, the interaction between 
competitors and the role of patent protections differs greatly between 
fields. There is no one-size-fits-all solution. As this legislation 
moves forward and is

[[Page 23941]]

considered in conference, it is my hope that the conferees will be 
aware of the concerns that have been expressed by the biotech industry 
and take these concerns into consideration.
  Again, I would like to reiterate my support of this long awaited 
legislation. There has been remarkable bipartisan work on this 
legislation over the past several years and I am proud to cast my vote 
in support of it.
  Mr. UDALL of Colorado. Mr. Chairman, while I have some concerns about 
this bill, I will vote for it because I think on balance it deserves to 
be approved as a necessary step toward needed improvements in the 
current law.
  I am far from expert in the intricacies of patent law, so I have 
listened carefully to those with more knowledge, including several 
companies employing substantial numbers of Coloradans that utilize 
patents in various fields. While they are not unanimous, most of them 
have urged support for the legislation.
  I have also noted that the passage of the legislation, as a step 
toward needed improvements in the current law, is supported by the 
Consumers Federation of America, Consumers Union, the Electronic 
Frontier Foundation, and other groups including the Financial Services 
Roundtable.
  At the same time, I have listened to the concerns expressed by others 
who have raised a number of objections to the bill and think that its 
defects are so serious as to merit rejection of the legislation in its 
current form.
  I take those objections seriously, but I have decided that 
nonetheless the better outcome today is for the House to pass the bill 
and for further discussion of the points they raise to occur in the 
context of debate in the Senate and then a conference between that body 
and the House of Representatives.
  Mrs. McCARTHY of New York. Mr. Chairman, I will support H.R. 1908 
with some reservations.
  Our patent laws need to be updated to address the concerns of a 21st 
Century global economy. For decades, the law has reacted to innovation 
rather than anticipating it. H.R. 1908 contains many positive 
provisions that will make it easier for us to compete. I, therefore, 
want the process to move forward.
  The American economy is strong in part because it is diverse. We do 
not depend on only one segment for our income. Some countries grow 
crops. Others rely on tourism. Still other countries depend on finite 
natural resources. Some specialize in manufacturing or providing 
specific services. We are fortunate enough to be able to conduct all 
these businesses and more.
  A revised patent law must protect and encourage all segments of our 
economy. We cannot favor high tech over manufacturing. We cannot 
discourage biotech research while encouraging financial services.
  If our economic foundation remains strong and diversified, we will be 
able to retain our preeminent role in the world's economy. However, if 
our patent laws inhibit invention and innovation in manufacturing and 
basic research, then we would be undermining the very strength of our 
national economy.
  As the legislative process continues, I hope that the authors of H.R. 
1908 and the members of the other body will remember one important 
point. The purpose of our patent law is to protect and promote American 
innovation. Innovation by Americans and for Americans is the keystone 
to our domestic economic vitality and strength.
  The final version of patent reform must address the legitimate 
interests of manufacturing, biotech, and small inventors. My vote on a 
final patent reform bill will depend on how well those interests are 
met.
  Ms. ESHOO. Mr. Chairman, I rise in strong support of this legislation 
which I am proud to cosponsor, and I congratulate Chairman Berman for 
his exceptional leadership and on this complex issue.
  I am proud to represent Silicon Valley, which is known worldwide for 
the innovation and developing technologies that continue to change and 
improve our lives. Nowhere in America--nowhere in the world--are ideas, 
invention, and intellectual property more important.
  Patents and IP are the cornerstone of the Information Economy, and it 
is essential that the United States patent system continue to foster 
the ideas and innovation which fuel our economy and keep America 
competitive.
  The patent system, unfortunately, has been subject to abuse, and 
unscrupulous opportunists have exploited the rights granted to 
legitimate patent holders to target innovative companies and file 
groundless lawsuits based on dubious patents.
  The rapid pace of innovation and increasingly complex patent filings 
have strained the Patent and Trademark Office and patent claims of 
questionable validity have been granted.
  Loopholes and shortcomings in the disposition of patent cases also 
allow baseless claims of infringement to create unnecessary litigation 
and extort nuisance settlements, sapping billions from economic growth, 
and creating a drag on real innovation.
  Technology companies have become particularly enticing targets for 
this litigation because of the broad importance of patents to 
technology products. Just a single piece of high-tech equipment can 
contain hundreds of patents, and any one of them can now be used to sue 
for the value of the entire product.
  One company in Silicon Valley--Cisco Systems--spent $45 million this 
year to defend patent infringement cases.
  It is time to implement reforms to the patent system and ensure that 
we reward truly novel ideas and cutting edge innovation, not successful 
litigation strategies.
  This bipartisan legislation enjoys broad support throughout the 
technology industry, major universities including the University of 
California, as well as major consumer groups such as Consumer 
Federation of America, Consumers Union, and U.S. PIRG.
  I urge my colleagues to support this bill which will restore balance 
to our patent system.
  Ms. WOOLSEY. Mr. Chairman, the patent reform bill before us today is 
a necessary step to modernize and streamline our patent process to 
ensure American innovation will keep our country competitive. It's been 
over 50 years since we have updated our patent process. That's before 
the Internet, before personal computers, and before digital music. 
Actually, it's 5 years before they launched Sputnik. So, there can be 
no doubt that reforming the system to accommodate a new era of 
innovation is needed.
  Although this bill isn't perfect, I think that it does move the ball 
forward in terms of reforming the system. Clearly, additional patent 
reform is needed in the pharmaceutical and biomedical industry as there 
are many issues left unresolved by H.R. 1908. Hopefully these issues 
can be addressed in conference with the Senate.
  Mr. Chairman, I commend my colleagues on the Judiciary committee for 
all of their hard work on this bill, it's been fifty-five years in the 
making, and it's time for an update.
  Mr. CANNON. Mr. Chairman, I urge you to support the Patent Reform Act 
of 2007, H.R. 1908.
  Certain aspects of our patent system have not been amended since 
1954, but our economy has changed dramatically since then and it's time 
our patent system caught up.
  H.R. 1908 was introduced and is supported by the bipartisan 
leadership of the Judiciary Committee and was approved by the committee 
in a unanimous voice vote.
  For the sake of our Nation's ability to innovate, grow and compete, 
we must pass this legislation.
  The danger of not reforming our patent system is real and we are 
witnessing its effects today.
  Patents of questionable validity are limiting competition and raising 
prices for consumers--a fact noted by the Federal Trade Commission in a 
2003 report.
  In addition, current interpretations of patent law by district and 
appellate courts have veered far from what Congress originally 
intended.
  The result is that companies are diverting resources from R&D to pay 
for legal defense.
  Because interpretations of patent law are so off-course, the U.S. 
Supreme Court has had to intervene in an unusually high number of 
patent cases in recent years.
  In one case, the Court explicitly called for Congress to take action.
  We have been debating patent reform for years. Such issues as post-
grant review and damages apportionment have been components of various 
patent reform bills in the House and Senate over the course of the last 
several sessions and have been discussed at length in nearly every 
forum, from Congressional hearings to the media.
  One issue that generated the most debate in previous Congresses--
injunctions--was resolved by the U.S. Supreme Court in 2006 in much the 
same way as proposed legislation would have done.
  Yet despite predictions from some that reforming the standards for 
granting injunctions would grind innovation to a halt, patent holders 
still are granted injunctions today to protect their intellectual 
property. In fact, the patent system is healthier as a result.
  H.R. 1908 will restore fairness and common sense to the standards for 
awarding reasonable damages.
  Today, patent holders regularly are awarded damages based on the 
value of an entire product, even if the patent in question is one of 
literally thousands of other patented components comprising the 
product.

[[Page 23942]]

  Additionally, H.R. 1908 will give trained patent examiners greater 
ability to review patents and enhance patent quality.
  Innovation is indeed threatened not by changes to the system, but by 
the status quo.
  After years of debate, it's time for action.
  One area of particular interest to me is the language in the 
manager's amendment dealing with venue reform.
  I am pleased the Chairman included venue reform language in the 
manager's amendment.
  At the Judiciary Committee, Representative Zoe Lofgren of California 
offered an amendment that I cosponsored that would inject sanity into 
the patent litigation system.
  The venue reform language will create a real and substantial 
relationship between the parties and the acts of infringement by 
denying the ability to manufacture venue for hopes of gaming the 
judicial system.
  During years of efforts on litigation reform, we have learned about 
what some have referred to as Judicial Hell Holes.
  These locations are where judges apply laws and procedures in an 
unfair and unbalanced manner.
  The underlying legislation's intent is to bring fairness and balance 
into the patent system.
  And the venue language will bring fairness and balance to patent 
litigation.
  This amendment will not close the court house door on any plaintiff.
  But it will require legitimate nexus for where claims may be brought.
  The nexus requirements of the amendment will prevent groups or 
entities from artificially manipulating presence in a judicial district 
just to game the system to file suit.
  Swift passage of H.R. 1908 will stimulate innovation, competition and 
growth--great news for consumers, workers and our global economic 
leadership.
  I urge support of H.R. 1908.
  Mrs. TAUSCHER. Mr. Chairman, I rise today to commend the work of my 
colleague, Chairman Howard Berman, on the Patent Reform Act of 2007.
  This bill is a necessary step forward in the modernization of a 
patent system that has not been meaningfully updated for decades.
  I urge my colleagues to show their support for reform by casting a 
vote for this bill.
  This bill will result in higher quality patents emerging from the 
Patent and Trademark Office.
  It will harmonize our patent system with that of our major trading 
partners.
  And it will improve fairness in litigation by preventing ``patent 
trolls'' from shopping around for friendly courts.
  At the same time, I look forward to working with Congressman Berman 
to fine-tune a number of provisions in this bill.
  In my State of California, our economy is based on the incredible 
advances made by university researchers, the high-tech sector, and the 
life sciences industry.
  Innovations in all sectors must be afforded the strongest possible 
protection.
  This has particular importance for small venture-backed firms whose 
patents are their only asset.
  With this in mind, I look forward to seeing improvements to 
provisions governing the way damage awards are calculated in patent 
suits.
  The inequitable conduct defense and the issue of continuations also 
deserve further review and revision.
  I again applaud Chairman Berman for his efforts, and urge my 
colleagues to support H.R. 1908.
  Mr. CARNAHAN. Mr. Chairman, for purposes of the record, I would like 
to register my opposition to H.R. 1908, the Patent Reform Act of 2007.
  I would like the record to further reflect that while I do support 
comprehensive patent reform, I cannot support legislation that so 
dramatically picks winners and losers.
  My opposition to H.R. 1908, the Patent Reform Act of 2007, stems from 
concerns raised that this legislation could actually undermine the 
value of patents, as well as innovative work conducted by universities, 
biotech facilities, and other companies.
  Many Missourians understand that research could be impeded by the 
passage of this bill.
  Indeed, a growing number of researchers and businesses agree that 
greater protections need to be put in place, but not in a way that 
risks existing patents or denies access for judicial relief.
  A strict one size fits all approach to this problem creates more 
problems than it cures, and puts companies in certain industries at an 
unfair disadvantage.
  I hope that as this bill moves through the legislative process, the 
disadvantages placed on certain industries are remedied, and that we 
have a patent reform bill that protects all U.S. businesses.
  Mr. CAPUANO. Mr. Chairman, I rise today to express my opposition to 
H.R. 1908--the Patent Reform Act of 2007. I do so reluctantly, and hope 
to work with my colleagues when this bill moves to conference to 
produce a final product that will adequately address the concerns of 
all sectors of our innovation economy.
  As the Representative of the 8th Congressional District of 
Massachusetts, I feel immensely privileged to represent many of the 
nation's leading innovators. The 8th District is home to some of the 
best institutions of higher learning in the nation, teaching hospitals, 
high tech businesses, financial services firms, and biotechnology 
companies big and small. I recognize how absolutely vital the strength 
and efficiency of our patent system is to each of them and I take the 
reform of that system very seriously.
  H.R. 1908 is the most comprehensive update to the patent system in 
generations. The bill makes changes to our patent system that are 
important to improving the business environment for many sectors of our 
economy. However, the bill also alters our current system in a way that 
could potentially prove damaging to other sectors. I oppose this 
legislation reluctantly because the committee, in particular Chairman 
Berman, has worked diligently to improve this legislation at every 
stage.
  I was very pleased, for example, to see in the manager's amendment 
wording to strike the ``prior use'' sections of the bill. This change 
was important to ensuring that those who infringe on patents continue 
to have to meet a reasonable threshold if they assert a ``prior use'' 
defense. I was also pleased that the bill as reported from committee 
eliminated the ``second window'' of review after patents are granted. 
While this section may need additional changes, significant progress 
has been made to improve it.
  I remain concerned, however, about the ramifications of the damages 
section of H.R. 1908. While I understand that the Chairman and the 
Committee have made several improvements to this section as well, as it 
is currently constituted in the bill the damages section will 
unnecessarily elevate apportionment as a method of determining damages 
when a patent has been infringed. This provision could produce 
devastating consequences for some innovators. I believe we must be 
cautious when implementing such a serious change, and that ensuring 
flexibility is of paramount importance.
  I look forward to working with my colleagues on the Judiciary 
Committee in order to produce the most balanced Patent Reform bill 
possible.
  The Acting CHAIRMAN (Mr. Ross). All time for general debate has 
expired.
  Pursuant to the rule, the amendment in the nature of a substitute 
printed in the bill shall be considered as an original bill for the 
purpose of amendment under the 5-minute rule and shall be considered 
read.
  The text of the amendment in the nature of a substitute is as 
follows:

                                H.R. 1908

       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 ``Patent 
     Reform Act of 2007''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Reference to title 35, United States Code.
Sec. 3. Right of the first inventor to file.
Sec. 4. Inventor's oath or declaration.
Sec. 5. Right of the inventor to obtain damages.
Sec. 6. Post-grant procedures and other quality enhancements.
Sec. 7. Definitions; patent trial and appeal board.
Sec. 8. Study and report on reexamination proceedings.
Sec. 9. Submissions by third parties and other quality enhancements.
Sec. 10. Tax planning methods not patentable.
Sec. 11. Venue and jurisdiction.
Sec. 12. Additional information; inequitable conduct as defense to 
              infringement.
Sec. 13. Best mode requirement.
Sec. 14. Regulatory authority.
Sec. 15. Technical amendments.
Sec. 16. Study of special masters in patent cases.
Sec. 17. Rule of construction.

     SEC. 2. REFERENCE TO TITLE 35, UNITED STATES CODE.

       Whenever in this Act a section or other provision is 
     amended or repealed, that amendment or repeal shall be 
     considered to be made to that section or other provision of 
     title 35, United States Code.

     SEC. 3. RIGHT OF THE FIRST INVENTOR TO FILE.

       (a) Definitions.--Section 100 is amended by adding at the 
     end the following:
       ``(f) The term `inventor' means the individual or, if a 
     joint invention, the individuals collectively who invented or 
     discovered the subject matter of an invention.

[[Page 23943]]

       ``(g) The terms `joint inventor' and `coinventor' mean any 
     one of the individuals who invented or discovered the subject 
     matter of a joint invention.
       ``(h) The `effective filing date of a claimed invention' 
     is--
       ``(1) the filing date of the patent or the application for 
     patent containing the claim to the invention; or
       ``(2) if the patent or application for patent is entitled 
     to a right of priority of any other application under section 
     119, 365(a), or 365(b) or to the benefit of an earlier filing 
     date in the United States under section 120, 121, or 365(c), 
     the filing date of the earliest such application in which the 
     claimed invention is disclosed in the manner provided by 
     section 112(a).
       ``(i) The term `claimed invention' means the subject matter 
     defined by a claim in a patent or an application for a 
     patent.
       ``(j) The term `joint invention' means an invention 
     resulting from the collaboration of inventive endeavors of 
     two or more persons working toward the same end and producing 
     an invention by their collective efforts.''.
       (b) Conditions for Patentability.--
       (1) In general.--Section 102 is amended to read as follows:

     ``Sec. 102. Conditions for patentability; novelty

       ``(a) Novelty; Prior Art.--A patent for a claimed invention 
     may not be obtained if--
       ``(1) the claimed invention was patented, described in a 
     printed publication, in public use, or on sale--
       ``(A) more than one year before the effective filing date 
     of the claimed invention; or
       ``(B) one year or less before the effective filing date of 
     the claimed invention, other than through disclosures made by 
     the inventor or a joint inventor or by others who obtained 
     the subject matter disclosed directly or indirectly from the 
     inventor or a joint inventor; or
       ``(2) the claimed invention was described in a patent 
     issued under section 151, or in an application for patent 
     published or deemed published under section 122(b), in which 
     the patent or application, as the case may be, names another 
     inventor and was effectively filed before the effective 
     filing date of the claimed invention.
       ``(b) Exceptions.--
       ``(1) Prior inventor disclosure exception.--Subject matter 
     that would otherwise qualify as prior art based upon a 
     disclosure under subparagraph (B) of subsection (a)(1) shall 
     not be prior art to a claimed invention under that 
     subparagraph if the subject matter had, before such 
     disclosure, been publicly disclosed by the inventor or a 
     joint inventor or others who obtained the subject matter 
     disclosed directly or indirectly from the inventor or a joint 
     inventor.
       ``(2) Derivation, prior disclosure, and common assignment 
     exceptions.--Subject matter that would otherwise qualify as 
     prior art only under subsection (a)(2) shall not be prior art 
     to a claimed invention if--
       ``(A) the subject matter was obtained directly or 
     indirectly from the inventor or a joint inventor;
       ``(B) the subject matter had been publicly disclosed by the 
     inventor or a joint inventor or others who obtained the 
     subject matter disclosed directly or indirectly from the 
     inventor or a joint inventor before the date on which the 
     application or patent referred to in subsection (a)(2) was 
     effectively filed; or
       ``(C) the subject matter and the claimed invention, not 
     later than the effective filing date of the claimed 
     invention, were owned by the same person or subject to an 
     obligation of assignment to the same person.
       ``(3) Joint research agreement exception.--
       ``(A) In general.--Subject matter 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 in 
     applying the provisions of paragraph (2) if--
       ``(i) the claimed invention was made by or on behalf of 
     parties to a joint research agreement that was in effect on 
     or before the effective filing date of the claimed invention;
       ``(ii) the claimed invention was made as a result of 
     activities undertaken within the scope of the joint research 
     agreement; and
       ``(iii) the application for patent for the claimed 
     invention discloses or is amended to disclose the names of 
     the parties to the joint research agreement.
       ``(B) For purposes of subparagraph (A), 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.
       ``(4) Patents and published applications effectively 
     filed.--A patent or application for patent is effectively 
     filed under subsection (a)(2) with respect to any subject 
     matter described in the patent or application--
       ``(A) as of the filing date of the patent or the 
     application for patent; or
       ``(B) if the patent or application for patent is entitled 
     to claim a right of priority under section 119, 365(a), or 
     365(b) or to claim the benefit of an earlier filing date 
     under section 120, 121, or 365(c), based upon one or more 
     prior filed applications for patent, as of the filing date of 
     the earliest such application that describes the subject 
     matter.''.
       (2) Conforming amendment.--The item relating to section 102 
     in the table of sections for chapter 10 is amended to read as 
     follows:

``102. Conditions for patentability; novelty.''.

       (c) Conditions for Patentability; Non-Obvious Subject 
     Matter.--Section 103 is amended to read as follows:

     ``Sec. 103. Conditions for patentability; nonobvious subject 
       matter

       ``A patent for a claimed invention may not be obtained 
     though the claimed invention is not identically disclosed as 
     set forth in section 102, if the differences between the 
     claimed invention and the prior art are such that the claimed 
     invention as a whole would have been obvious before the 
     effective filing date of the claimed invention to a person 
     having ordinary skill in the art to which the claimed 
     invention pertains. Patentability shall not be negated by the 
     manner in which the invention was made.''.
       (d) Repeal of Requirements for Inventions Made Abroad.--
     Section 104, and the item relating to that section in the 
     table of sections for chapter 10, are repealed.
       (e) Repeal of Statutory Invention Registration.--
       (1) In general.--Section 157, and the item relating to that 
     section in the table of sections for chapter 14, are 
     repealed.
       (2) Removal of cross references.--Section 111(b)(8) is 
     amended by striking ``sections 115, 131, 135, and 157'' and 
     inserting ``sections 131 and 135''.
       (f) Earlier Filing Date for Inventor and Joint Inventor.--
     Section 120 is amended by striking ``which is filed by an 
     inventor or inventors named'' and inserting ``which names an 
     inventor or joint inventor''.
       (g) Conforming Amendments.--
       (1) Right of priority.--Section 172 is amended by striking 
     ``and the time specified in section 102(d)''.
       (2) Limitation on remedies.--Section 287(c)(4) is amended 
     by striking ``the earliest effective filing date of which is 
     prior to'' and inserting ``which has an effective filing date 
     before''.
       (3) International application designating the united 
     states: effect.--Section 363 is amended by striking ``except 
     as otherwise provided in section 102(e) of this title''.
       (4) Publication of international application: effect.--
     Section 374 is amended by striking ``sections 102(e) and 
     154(d)'' and inserting ``section 154(d)''.
       (5) Patent issued on international application: effect.--
     The second sentence of section 375(a) is amended by striking 
     ``Subject to section 102(e) of this title, such'' and 
     inserting ``Such''.
       (6) Limit on right of priority.--Section 119(a) is amended 
     by striking ``; but no patent shall be granted'' and all that 
     follows through ``one year prior to such filing''.
       (7) Inventions made with federal assistance.--Section 
     202(c) is amended--
       (A) in paragraph (2)--
       (i) by striking ``publication, on sale, or public use,'' 
     and all that follows through ``obtained in the United 
     States'' and inserting ``the 1-year period referred to in 
     section 102(a) would end before the end of that 2-year 
     period''; and
       (ii) by striking ``the statutory'' and inserting ``that 1-
     year''; and
       (B) in paragraph (3), by striking ``any statutory bar date 
     that may occur under this title due to publication, on sale, 
     or public use'' and inserting ``the expiration of the 1-year 
     period referred to in section 102(a)''.
       (h) Repeal of Interfering Patent Remedies.--Section 291, 
     and the item relating to that section in the table of 
     sections for chapter 29, are repealed.
       (i) Action for Claim to Patent on Derived Invention.--
       (1) In general.--Section 135(a) is amended to read as 
     follows:
       ``(a) Dispute Over Right to Patent.--
       ``(1) Institution of derivation proceeding.--
       ``(A) Request for proceeding.--An applicant may request 
     initiation of a derivation proceeding to determine the right 
     of the applicant to a patent by filing a request that sets 
     forth with particularity the basis for finding that another 
     applicant derived the claimed invention from the applicant 
     requesting the proceeding and, without authorization, filed 
     an application claiming such invention. Any such request--
       ``(i) may only be made within 12 months after the earlier 
     of--

       ``(I) the date on which a patent is issued containing a 
     claim that is the same or substantially the same as the 
     claimed invention; or
       ``(II) the date of first publication of an application 
     containing a claim that is the same or is substantially the 
     same as the claimed invention; and

       ``(ii) must be made under oath, and must be supported by 
     substantial evidence.
       ``(B) Determination of director.--Whenever the Director 
     determines that patents or applications for patent naming 
     different individuals as the inventor interfere with one 
     another because of a dispute over the right to patent under 
     section 101 on the basis of a request under subparagraph (A), 
     the Director shall institute a derivation proceeding for the 
     purpose of determining which applicant is entitled to a 
     patent.
       ``(2) Determination by patent trial and appeal board.--In 
     any proceeding under this subsection, the Patent Trial and 
     Appeal Board--
       ``(A) shall determine the question of the right to patent;
       ``(B) in appropriate circumstances, may correct the naming 
     of the inventor in any application or patent at issue; and
       ``(C) shall issue a final decision on the right to patent.
       ``(3) Derivation proceeding.--The Patent Trial and Appeal 
     Board may defer action on a

[[Page 23944]]

     request to initiate a derivation proceeding for up to three 
     months after the date on which the Director issues a patent 
     to the applicant that filed the earlier application.
       ``(4) Effect of final decision.--The final decision of the 
     Patent Trial and Appeal Board in a derivation proceeding, if 
     adverse to the claim of an applicant, shall constitute the 
     final refusal by the Patent and Trademark Office on the 
     claims involved. The Director may issue a patent to an 
     applicant who is determined by the Patent Trial and Appeal 
     Board to have the right to a patent. The final decision of 
     the Board, if adverse to a patentee, shall, if no appeal or 
     other review of the decision has been or can be taken or had, 
     constitute cancellation of the claims involved in the patent, 
     and notice of such cancellation shall be endorsed on copies 
     of the patent distributed after such cancellation by the 
     Patent and Trademark Office.''.
       (2) Conforming amendments.--(A) Section 135 is further 
     amended--
       (i) in subsection (b)--
       (I) by striking ``(b)(1) A claim'' and inserting the 
     following:
       ``(b) Same Claims.--
       ``(1) Issued patents.--A claim''; and
       (II) by striking ``(2) A claim'' and inserting the 
     following:
       ``(2) Published applications.--A claim''; and
       (III) moving the remaining text of paragraphs (1) and (2) 2 
     ems to the right;
       (ii) in subsection (c)--
       (I) by striking ``(c) Any agreement'' and inserting the 
     following:
       ``(c) Agreements To Terminate Proceedings.--
       ``(1) In general.--Any agreement'';
       (II) by striking ``an interference'' and inserting ``a 
     derivation proceeding'';
       (III) by striking ``the interference'' each place it 
     appears and inserting ``the derivation proceeding'';
       (IV) in the second paragraph, by striking ``The Director'' 
     and inserting the following:
       ``(2) Notice.--The Director'';
       (V) by amending the third paragraph to read as follows:
       ``(3) Judicial review.--Any discretionary action of the 
     Director under this subsection shall be reviewable under 
     chapter 7 of title 5.''; and
       (VI) by moving the remaining text of paragraphs (1) and (2) 
     of subsection (c) 2 ems to the right; and
       (iii) in subsection (d)--
       (I) by striking ``(d) Parties'' and inserting ``(d) 
     Arbitration.--Parties'';
       (II) by striking ``a patent interference'' and inserting 
     ``a derivation proceeding''; and
       (III) by striking ``the interference'' and inserting ``the 
     derivation proceeding''.
       (j) Elimination of References to Interferences.--(1) 
     Sections 41(a)(6), 134, 141, 145, 146, 154, 305, and 314 are 
     each amended by striking ``Board of Patent Appeals and 
     Interferences'' each place it appears and inserting ``Patent 
     Trial and Appeal Board''.
       (2) Section 141 is amended--
       (A) by striking ``an interference'' and inserting ``a 
     derivation proceeding''; and
       (B) by striking ``interference'' each additional place it 
     appears and inserting ``derivation proceeding''.
       (3) Section 146 is amended--
       (A) in the first paragraph--
       (i) by striking ``Any party'' and inserting ``(a) In 
     General.--Any party'';
       (ii) by striking ``an interference'' and inserting ``a 
     derivation proceeding''; and
       (iii) by striking ``interference'' each additional place it 
     appears and inserting ``derivation proceeding''; and
       (B) in the second paragraph, by striking ``Such suit'' and 
     inserting ``(b) Procedure.--A suit under subsection (a)''
       (4) The section heading for section 134 is amended to read 
     as follows:

     ``Sec. 134. Appeal to the Patent Trial and Appeal Board''.

       (5) The section heading for section 135 is amended to read 
     as follows:

     ``Sec. 135. Derivation proceedings''.

       (6) The section heading for section 146 is amended to read 
     as follows:

     ``Sec. 146. Civil action in case of derivation proceeding''.

       (7) Section 154(b)(1)(C) is amended by striking 
     ``interferences'' and inserting ``derivation proceedings''.
       (8) The item relating to section 6 in the table of sections 
     for chapter 1 is amended to read as follows:

``6. Patent Trial and Appeal Board.''.

       (9) The items relating to sections 134 and 135 in the table 
     of sections for chapter 12 are amended to read as follows:

``134. Appeal to the Patent Trial and Appeal Board.
``135. Derivation proceedings.''.

       (10) The item relating to section 146 in the table of 
     sections for chapter 13 is amended to read as follows:

``146. Civil action in case of derivation proceeding.''.

       (11) Certain Appeals.--Subsection 1295(a)(4)(A) of title 
     28, United States Code, is amended to read as follows:
       ``(A) the Patent Trial and Appeal Board of the United 
     States Patent and Trademark Office with respect to patent 
     applications, derivation proceedings, and post-grant review 
     proceedings, at the instance of an applicant for a patent or 
     any party to a patent interference (commenced before the 
     effective date provided in section 3(k) of the Patent Reform 
     Act of 2007), derivation proceeding, or post-grant review 
     proceeding, and any such appeal shall waive any right of such 
     applicant or party to proceed under section 145 or 146 of 
     title 35;''.
       (k) Effective Date.--
       (1) In general.--The amendments made by this section--
       (A) shall take effect 90 days after the date on which the 
     President transmits to the Congress a finding that major 
     patenting authorities have adopted a grace period having 
     substantially the same effect as that contained under the 
     amendments made by this section; and
       (B) shall apply to all applications for patent that are 
     filed on or after the effective date under subparagraph (A).
       (2) Definitions.--In this subsection:
       (A) Major patenting authorities.--The term ``major 
     patenting authorities'' means at least the patenting 
     authorities in Europe and Japan.
       (B) Grace period.--The term ``grace period'' means the 1-
     year period ending on the effective filing date of a claimed 
     invention, during which disclosures of the subject matter by 
     the inventor or a joint inventor, or by others who obtained 
     the subject matter disclosed directly or indirectly from the 
     inventor or a joint inventor, do not qualify as prior art to 
     the claimed invention.
       (C) Effective filing date.--The term ``effective filing 
     date of a claimed invention'' means, with respect to a 
     patenting authority in another country, a date equivalent to 
     the effective filing date of a claimed invention as defined 
     in section 100(h) of title 35, United States Code, as added 
     by subsection (a) of this section.
       (l) Review Every 7 Years.--Not later than the end of the 7-
     year period beginning on the effective date under subsection 
     (k), and the end of every 7-year period thereafter, the Under 
     Secretary of Commerce for Intellectual Property and Director 
     of the United States Patent and Trademark Office (in this 
     subsection referred to as the ``Director'') shall--
       (1) conduct a study on the effectiveness and efficiency of 
     the amendments made by this section; and
       (2) submit to the Committees on the Judiciary of the House 
     of Representatives and the Senate a report on the results of 
     the study, including any recommendations the Director has on 
     amendments to the law and other recommendations of the 
     Director with respect to the first-to-file system implemented 
     under the amendments made by this section.

     SEC. 4. INVENTOR'S OATH OR DECLARATION.

       (a) Inventor's Oath or Declaration.--
       (1) In general.--Section 115 is amended to read as follows:

     ``Sec. 115. Inventor's oath or declaration

       ``(a) Naming the Inventor; Inventor's Oath or 
     Declaration.--An application for patent that is filed under 
     section 111(a), that commences the national stage under 
     section 363, or that is filed by an inventor for an invention 
     for which an application has previously been filed under this 
     title by that inventor shall include, or be amended to 
     include, the name of the inventor of any claimed invention in 
     the application. Except as otherwise provided in this 
     section, each individual who is the inventor or a joint 
     inventor of a claimed invention in an application for patent 
     shall execute an oath or declaration in connection with the 
     application.
       ``(b) Required Statements.--An oath or declaration by an 
     individual under subsection (a) shall contain statements 
     that--
       ``(1) the application was made or was authorized to be made 
     by individual; and
       ``(2) the individual believes himself or herself to be the 
     original inventor or an original joint inventor of a claimed 
     invention in the application.
       ``(c) Additional Requirements.--The Director may specify 
     additional information relating to the inventor and the 
     invention that is required to be included in an oath or 
     declaration under subsection (a).
       ``(d) Substitute Statement.--
       ``(1) In general.--In lieu of executing an oath or 
     declaration under subsection (a), the applicant for patent 
     may provide a substitute statement under the circumstances 
     described in paragraph (2) and such additional circumstances 
     that the Director may specify by regulation.
       ``(2) Permitted circumstances.--A substitute statement 
     under paragraph (1) is permitted with respect to any 
     individual who--
       ``(A) is unable to file the oath or declaration under 
     subsection (a) because the individual--
       ``(i) is deceased;
       ``(ii) is under legal incapacity; or
       ``(iii) cannot be found or reached after diligent effort; 
     or
       ``(B) is under an obligation to assign the invention and 
     has refused to make the oath or declaration required under 
     subsection (a).
       ``(3) Contents.--A substitute statement under this 
     subsection shall--
       ``(A) identify the individual with respect to whom the 
     statement applies;
       ``(B) set forth the circumstances representing the 
     permitted basis for the filing of the substitute statement in 
     lieu of the oath or declaration under subsection (a); and
       ``(C) contain any additional information, including any 
     showing, required by the Director.
       ``(e) Making Required Statements in Assignment of Record.--
     An individual who is under an obligation of assignment of an 
     application for patent may include the required statements 
     under subsections (b) and (c) in the assignment executed by 
     the individual, in lieu of filing such statements separately.

[[Page 23945]]

       ``(f) Time for Filing.--A notice of allowance under section 
     151 may be provided to an applicant for patent only if the 
     applicant for patent has filed each required oath or 
     declaration under subsection (a) or has filed a substitute 
     statement under subsection (d) or recorded an assignment 
     meeting the requirements of subsection (e).
       ``(g) Earlier-Filed Application Containing Required 
     Statements or Substitute Statement.--The requirements under 
     this section shall not apply to an individual with respect to 
     an application for patent in which the individual is named as 
     the inventor or a joint inventor and that claims the benefit 
     of an earlier filing date under section 120 or 365(c), if--
       ``(1) an oath or declaration meeting the requirements of 
     subsection (a) was executed by the individual and was filed 
     in connection with the earlier-filed application;
       ``(2) a substitute statement meeting the requirements of 
     subsection (d) was filed in the earlier filed application 
     with respect to the individual; or
       ``(3) an assignment meeting the requirements of subsection 
     (e) was executed with respect to the earlier-filed 
     application by the individual and was recorded in connection 
     with the earlier-filed application.
       ``(h) Supplemental and Corrected Statements; Filing 
     Additional Statements.--
       ``(1) In general.--Any person making a statement required 
     under this section may withdraw, replace, or otherwise 
     correct the statement at any time. If a change is made in the 
     naming of the inventor requiring the filing of 1 or more 
     additional statements under this section, such additional 
     statements shall be filed in accordance with regulations 
     established by the Director.
       ``(2) Supplemental statements not required.--If an 
     individual has executed an oath or declaration under 
     subsection (a) or an assignment meeting the requirements of 
     subsection (e) with respect to an application for patent, the 
     Director may not thereafter require that individual to make 
     any additional oath, declaration, or other statement 
     equivalent to those required by this section in connection 
     with the application for patent or any patent issuing 
     thereon.
       ``(3) Savings clause.--No patent shall be invalid or 
     unenforceable based upon the failure to comply with a 
     requirement under this section if the failure is remedied as 
     provided under paragraph (1).
       ``(i) Acknowledgment of Penalties.--Any declaration or 
     statement filed under this section must contain an 
     acknowledgment that any willful false statement is punishable 
     by fine or imprisonment, or both, under section 1001 of title 
     18.''.
       (2) Relationship to divisional applications.--Section 121 
     is amended by striking ``If a divisional application'' and 
     all that follows through ``inventor.''.
       (3) Requirements for nonprovisional applications.--Section 
     111(a) is amended--
       (A) in paragraph (2)(C), by striking ``by the applicant'' 
     and inserting ``or declaration'';
       (B) in the heading for paragraph (3), by striking ``and 
     oath''; and
       (C) by striking ``and oath'' each place it appears.
       (4) Conforming amendment.--The item relating to section 115 
     in the table of sections for chapter 11 is amended to read as 
     follows:

``115. Inventor's oath or declaration.''.

       (b) Filing by Other Than Inventor.--Section 118 is amended 
     to read as follows:

     ``Sec. 118. Filing by other than inventor

       ``A person to whom the inventor has assigned or is under an 
     obligation to assign the invention may make an application 
     for patent. A person who otherwise shows sufficient 
     proprietary interest in the matter may make an application 
     for patent on behalf of and as agent for the inventor on 
     proof of the pertinent facts and a showing that such action 
     is appropriate to preserve the rights of the parties. If the 
     Director grants a patent on an application filed under this 
     section by a person other than the inventor, the patent shall 
     be granted to the real party in interest and upon such notice 
     to the inventor as the Director considers to be 
     sufficient.''.
       (c) Specification.--Section 112 is amended--
       (1) in the first paragraph----
       (A) by striking ``The specification'' and inserting ``(a) 
     In General.--The specification''; and
       (B) by striking ``of carrying out his invention'' and 
     inserting ``or joint inventor of carrying out the 
     invention''; and
       (2) in the second paragraph--
       (A) by striking ``The specification'' and inserting ``(b) 
     Conclusion.--The specification''; and
       (B) by striking ``applicant regards as his invention'' and 
     inserting ``inventor or a joint inventor regards as the 
     invention'';
       (3) in the third paragraph, by striking ``A claim'' and 
     inserting ``(c) Form.--A claim'';
       (4) in the fourth paragraph, by striking ``Subject to the 
     following paragraph,'' and inserting ``(d) Reference in 
     Dependent Forms.--Subject to subsection (e),'';
       (5) in the fifth paragraph, by striking ``A claim'' and 
     inserting ``(e) Reference in Multiple Dependent Form.--A 
     claim''; and
       (6) in the last paragraph, by striking ``An element'' and 
     inserting ``(f) Element in Claim for a Combination.--An 
     element''.
       (d) Effective Date.--The amendments made by this section--
       (1) shall take effect at the end of the 1-year period 
     beginning on the date of the enactment of this Act; and
       (2) shall apply to any application for patent, or 
     application for reissue patent, that is filed on or after the 
     effective date under paragraph (1).

     SEC. 5. RIGHT OF THE INVENTOR TO OBTAIN DAMAGES.

       (a) Damages.--Section 284 is amended--
       (1) in the first paragraph, by striking ``Upon'' and 
     inserting ``(a) In General.--Upon'';
       (2) by designating the second undesignated paragraph as 
     subsection (c);
       (3) by inserting after subsection (a) (as designated by 
     paragraph (1) of this subsection) the following:
       ``(b) Reasonable Royalty.--
       ``(1) In general.--An award pursuant to subsection (a) that 
     is based upon a reasonable royalty shall be determined in 
     accordance with this subsection. Based on the facts of the 
     case, the court shall determine whether paragraph (2), (3), 
     or (5) will be used by the court or the jury in calculating a 
     reasonable royalty. The court shall identify the factors that 
     are relevant to the determination of a reasonable royalty 
     under the applicable paragraph, and the court or jury, as the 
     case may be, shall consider only those factors in making the 
     determination.
       ``(2) Relationship of damages to contributions over prior 
     art.--The court shall conduct an analysis to ensure that a 
     reasonable royalty under subsection (a) is applied only to 
     that economic value properly attributable to the patent's 
     specific contribution over the prior art. The court shall 
     exclude from the analysis the economic value properly 
     attributable to the prior art, and other features or 
     improvements, whether or not themselves patented, that 
     contribute economic value to the infringing product or 
     process.
       ``(3) Entire market value.--Unless the claimant shows that 
     the patent's specific contribution over the prior art is the 
     predominant basis for market demand for an infringing product 
     or process, damages may not be based upon the entire market 
     value of the products or processes involved that satisfy that 
     demand.
       ``(4) Combination inventions.--For purposes of paragraphs 
     (2) and (3), in the case of a combination invention the 
     elements of which are present individually in the prior art, 
     the patentee may show that the contribution over the prior 
     art may include the value of the additional function 
     resulting from the combination, as well as the enhanced 
     value, if any, of some or all of the prior art elements 
     resulting from the combination.
       ``(5) Other factors.--In determining a reasonable royalty, 
     the court may also consider, or direct the jury to consider, 
     the terms of any nonexclusive marketplace licensing of the 
     invention, where appropriate, as well as any other relevant 
     factors under applicable law.'';
       (4) by amending subsection (c) (as designated by paragraph 
     (1) of this subsection) to read as follows:
       ``(c) Willful Infringement.--
       ``(1) Increased damages.--A court that has determined that 
     the infringer has willfully infringed a patent or patents may 
     increase the damages up to three times the amount of damages 
     found or assessed under subsection (a), except that increased 
     damages under this paragraph shall not apply to provisional 
     rights under section 154(d).
       ``(2) Permitted grounds for willfulness.--A court may find 
     that an infringer has willfully infringed a patent only if 
     the patent owner presents clear and convincing evidence 
     that--
       ``(A) after receiving written notice from the patentee--
       ``(i) alleging acts of infringement in a manner sufficient 
     to give the infringer an objectively reasonable apprehension 
     of suit on such patent, and
       ``(ii) identifying with particularity each claim of the 
     patent, each product or process that the patent owner alleges 
     infringes the patent, and the relationship of such product or 
     process to such claim,

     the infringer, after a reasonable opportunity to investigate, 
     thereafter performed one or more of the alleged acts of 
     infringement;
       ``(B) the infringer intentionally copied the patented 
     invention with knowledge that it was patented; or
       ``(C) after having been found by a court to have infringed 
     that patent, the infringer engaged in conduct that was not 
     colorably different from the conduct previously found to have 
     infringed the patent, and that resulted in a separate finding 
     of infringement of the same patent.
       ``(3) Limitations on willfulness.--(A) A court may not find 
     that an infringer has willfully infringed a patent under 
     paragraph (2) for any period of time during which the 
     infringer had an informed good faith belief that the patent 
     was invalid or unenforceable, or would not be infringed by 
     the conduct later shown to constitute infringement of the 
     patent.
       ``(B) An informed good faith belief within the meaning of 
     subparagraph (A) may be established by--
       ``(i) reasonable reliance on advice of counsel;
       ``(ii) evidence that the infringer sought to modify its 
     conduct to avoid infringement once it had discovered the 
     patent; or
       ``(iii) other evidence a court may find sufficient to 
     establish such good faith belief.
       ``(C) The decision of the infringer not to present evidence 
     of advice of counsel is not relevant to a determination of 
     willful infringement under paragraph (2).
       ``(4) Limitation on pleading.--Before the date on which a 
     court determines that the patent in suit is not invalid, is 
     enforceable, and has

[[Page 23946]]

     been infringed by the infringer, a patentee may not plead and 
     a court may not determine that an infringer has willfully 
     infringed a patent. The court's determination of an 
     infringer's willfulness shall be made without a jury.''; and
       (5) in the third undesignated paragraph, by striking ``The 
     court'' and inserting ``(d) Expert Testimony.--The court''.
       (b) Defense to Infringement Based on Earlier Inventor.--
     Section 273 is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``of a method''; and
       (ii) by striking ``review period;'' and inserting ``review 
     period; and'';
       (B) in paragraph (2)(B), by striking the semicolon at the 
     end and inserting a period; and
       (C) by striking paragraphs (3) and (4);
       (2) in subsection (b)--
       (A) in paragraph (1)--
       (i) by striking ``for a method''; and
       (ii) by striking ``at least 1 year before the effective 
     filing date of such patent, and'' and all that follows 
     through the period and inserting ``and commercially used, or 
     made substantial preparations for commercial use of, the 
     subject matter before the effective filing date of the 
     claimed invention.'';
       (B) in paragraph (2)--
       (i) by striking ``The sale or other disposition of a useful 
     end product produced by a patented method'' and inserting 
     ``The sale or other disposition of subject matter that 
     qualifies for the defense set forth in this section''; and
       (ii) by striking ``a defense under this section with 
     respect to that useful end result'' and inserting ``such 
     defense'';
       (C) in paragraph (3)--
       (i) by striking subparagraph (A); and
       (ii) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (A) and (B), respectively; and
       (D) in paragraph (7), by striking ``of the patent'' and 
     inserting ``of the claimed invention''; and
       (3) by amending the heading to read as follows:

     ``Sec. 273. Special defenses to and exemptions from 
       infringement''.

       (c) Table of Sections.--The item relating to section 273 in 
     the table of sections for chapter 28 is amended to read as 
     follows:

``273. Special defenses to and exemptions from infringement.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to any civil action commenced on or after the 
     date of the enactment of this Act.
       (e) Review Every 7 Years.--Not later than the end of the 7-
     year period beginning on the date of the enactment of this 
     Act, and the end of every 7-year period thereafter, the Under 
     Secretary of Commerce for Intellectual Property and Director 
     of the United States Patent and Trademark Office (in this 
     subsection referred to as the ``Director'') shall--
       (1) conduct a study on the effectiveness and efficiency of 
     the amendments made by this section; and
       (2) submit to the Committees on the Judiciary of the House 
     of Representatives and the Senate a report on the results of 
     the study, including any recommendations the Director has on 
     amendments to the law and other recommendations of the 
     Director with respect to the right of the inventor to obtain 
     damages for patent infringement.

     SEC. 6. POST-GRANT PROCEDURES AND OTHER QUALITY ENHANCEMENTS.

       (a) Citation of Prior Art.--
       (1) In general.--Section 301 is amended to read as follows:

     ``Sec. 301. Citation of prior art

       ``(a) In General.--Any person at any time may cite to the 
     Office in writing--
       ``(1) prior art consisting of patents or printed 
     publications which that person believes to have a bearing on 
     the patentability of any claim of a particular patent; or
       ``(2) written statements of the patent owner filed in a 
     proceeding before a Federal court or the Patent and Trademark 
     Office in which the patent owner takes a position on the 
     scope of one or more patent claims.
       ``(b) Submissions Part of Official File.--If the person 
     citing prior art or written submissions under subsection (a) 
     explains in writing the pertinence and manner of applying the 
     prior art or written submissions to at least one claim of the 
     patent, the citation of the prior art or written submissions 
     (as the case may be) and the explanation thereof shall become 
     a part of the official file of the patent.
       ``(c) Procedures for Written Statements.--
       ``(1) Submission of additional materials.--A party that 
     submits written statements under subsection (a)(2) in a 
     proceeding shall include any other documents, pleadings, or 
     evidence from the proceeding that address the patent owner's 
     statements or the claims addressed by the written statements.
       ``(2) Limitation on use of statements.--Written statements 
     submitted under subsection (a)(2) shall not be considered for 
     any purpose other than to determine the proper meaning of the 
     claims that are the subject of the request in a proceeding 
     ordered pursuant to section 304 or 313. Any such written 
     statements, and any materials submitted under paragraph (1), 
     that are subject to an applicable protective order shall be 
     redacted to exclude information subject to the order.
       ``(d) Identity Withheld.--Upon the written request of the 
     person citing prior art or written statements under 
     subsection (a), the person's identity shall be excluded from 
     the patent file and kept confidential.''.
       (b) Reexamination.--Section 303(a) is amended to read as 
     follows:
       ``(a) Within three months after the owner of a patent files 
     a request for reexamination under section 302, the Director 
     shall determine whether a substantial new question of 
     patentability affecting any claim of the patent concerned is 
     raised by the request, with or without consideration of other 
     patents or printed publications. On the Director's own 
     initiative, and at any time, the Director may determine 
     whether a substantial new question of patentability is raised 
     by patents and publications discovered by the Director, is 
     cited under section 301, or is cited by any person other than 
     the owner of the patent under section 302 or section 311. The 
     existence of a substantial new question of patentability is 
     not precluded by the fact that a patent or printed 
     publication was previously cited by or to the Office or 
     considered by the Office.''.
       (c) Conduct of Inter Partes Proceedings.--Section 314 is 
     amended--
       (1) in the first sentence of subsection (a), by striking 
     ``conducted according to the procedures established for 
     initial examination under the provisions of sections 132 and 
     133'' and inserting ``heard by an administrative patent judge 
     in accordance with procedures which the Director shall 
     establish'';
       (2) in subsection (b), by striking paragraph (2) and 
     inserting the following:
       ``(2) The third-party requester shall have the opportunity 
     to file written comments on any action on the merits by the 
     Office in the inter partes reexamination proceeding, and on 
     any response that the patent owner files to such an action, 
     if those written comments are received by the Office within 
     60 days after the date of service on the third-party 
     requester of the Office action or patent owner response, as 
     the case may be.''; and
       (3) by adding at the end the following:
       ``(d) Oral Hearing.--At the request of a third party 
     requestor or the patent owner, the administrative patent 
     judge shall conduct an oral hearing, unless the judge finds 
     cause lacking for such hearing.''.
       (d) Estoppel.--Section 315(c) is amended by striking ``or 
     could have raised''.
       (e) Reexamination Prohibited After District Court 
     Decision.--Section 317(b) is amended--
       (1) in the subsection heading, by striking ``Final 
     Decision'' and inserting ``District Court Decision''; and
       (2) by striking ``Once a final decision has been entered'' 
     and inserting ``Once the judgment of the district court has 
     been entered''.
       (f) Post-Grant Opposition Procedures.--
       (1) In general.--Part III is amended by adding at the end 
     the following new chapter:

               ``CHAPTER 32--POST-GRANT REVIEW PROCEDURES

``Sec.
``321. Petition for post-grant review.
``322. Timing and bases of petition.
``323. Requirements of petition.
``324. Prohibited filings.
``325. Submission of additional information; showing of sufficient 
              grounds.
``326. Conduct of post-grant review proceedings.
``327. Patent owner response.
``328. Proof and evidentiary standards.
``329. Amendment of the patent.
``330. Decision of the Board.
``331. Effect of decision.
``332. Settlement.
``333. Relationship to other pending proceedings.
``334. Effect of decisions rendered in civil action on post-grant 
              review proceedings.
``335. Effect of final decision on future proceedings.
``336. Appeal.

     ``Sec. 321. Petition for post-grant review

       ``Subject to sections 322, 324, 332, and 333, a person who 
     is not the patent owner may file with the Office a petition 
     for cancellation seeking to institute a post-grant review 
     proceeding to cancel as unpatentable any claim of a patent on 
     any ground that could be raised under paragraph (2) or (3) of 
     section 282(b) (relating to invalidity of the patent or any 
     claim). The Director shall establish, by regulation, fees to 
     be paid by the person requesting the proceeding, in such 
     amounts as the Director determines to be reasonable.

     ``Sec. 322. Timing and bases of petition

       ``A post-grant proceeding may be instituted under this 
     chapter pursuant to a cancellation petition filed under 
     section 321 only if--
       ``(1) the petition is filed not later than 12 months after 
     the grant of the patent or issuance of a reissue patent, as 
     the case may be; or
       ``(2) the patent owner consents in writing to the 
     proceeding.

     ``Sec. 323. Requirements of petition

       ``A cancellation petition filed under section 321 may be 
     considered only if--
       ``(1) the petition is accompanied by payment of the fee 
     established by the Director under section 321;
       ``(2) the petition identifies the cancellation petitioner; 
     and
       ``(3) the petition sets forth in writing the basis for the 
     cancellation, identifying each claim challenged and providing 
     such information as the Director may require by regulation, 
     and includes copies of patents and printed publications that 
     the cancellation petitioner relies upon in support of the 
     petition; and
       ``(4) the petitioner provides copies of those documents to 
     the patent owner or, if applicable,

[[Page 23947]]

     the designated representative of the patent owner.

     ``Sec. 324. Prohibited filings

       ``A post-grant review proceeding may not be instituted 
     under section 322 if the petition for cancellation requesting 
     the proceeding identifies the same cancellation petitioner 
     and the same patent as a previous petition for cancellation 
     filed under such section.

     ``Sec. 325. Submission of additional information; showing of 
       sufficient grounds

       ``(a) In General.--The cancellation petitioner shall file 
     such additional information with respect to the petition as 
     the Director may require. For each petition submitted under 
     section 321, the Director shall determine if the written 
     statement, and any evidence submitted with the request, 
     establish that a substantial question of patentability exists 
     for at least one claim in the patent. The Director may 
     initiate a post-grant review proceeding if the Director 
     determines that the information presented provides sufficient 
     grounds to believe that there is a substantial question of 
     patentability concerning one or more claims of the patent at 
     issue.
       ``(b) Notification; Determinations Not Reviewable.--The 
     Director shall notify the patent owner and each petitioner in 
     writing of the Director's determination under subsection (a), 
     including a determination to deny the petition. The Director 
     shall make that determination in writing not later than 60 
     days after receiving the petition. Any determination made by 
     the Director under subsection (a), including whether or not 
     to institute a post-grant review proceeding or to deny the 
     petition, shall not be reviewable.

     ``Sec. 326. Conduct of post-grant review proceedings

       ``(a) In General.--The Director shall prescribe 
     regulations, in accordance with section 2(b)(2)--
       ``(1) establishing and governing post-grant review 
     proceedings under this chapter and their relationship to 
     other proceedings under this title;
       ``(2) establishing procedures for the submission of 
     supplemental information after the petition for cancellation 
     is filed; and
       ``(3) setting forth procedures for discovery of relevant 
     evidence, including that such discovery shall be limited to 
     evidence directly related to factual assertions advanced by 
     either party in the proceeding, and the procedures for 
     obtaining such evidence shall be consistent with the purpose 
     and nature of the proceeding.
       ``(b) Post-Grant Regulations.--Regulations under subsection 
     (a)(1)--
       ``(1) shall require that the final determination in a post-
     grant proceeding issue not later than one year after the date 
     on which the post-grant review proceeding is instituted under 
     this chapter, except that, for good cause shown, the Director 
     may extend the 1-year period by not more than six months;
       ``(2) shall provide for discovery upon order of the 
     Director;
       ``(3) shall provide for publication of notice in the 
     Federal Register of the filing of a petition for post-grant 
     review under this chapter, for publication of the petition, 
     and documents, orders, and decisions relating to the 
     petition, on the website of the Patent and Trademark Office, 
     and for filings under seal exempt from publication 
     requirements;
       ``(4) shall prescribe sanctions for abuse of discovery, 
     abuse of process, or any other improper use of the 
     proceeding, such as to harass or to cause unnecessary delay 
     or unnecessary increase in the cost of the proceeding;
       ``(5) may provide for protective orders governing the 
     exchange and submission of confidential information; and
       ``(6) shall ensure that any information submitted by the 
     patent owner in support of any amendment entered under 
     section 329 is made available to the public as part of the 
     prosecution history of the patent.
       ``(c) Considerations.--In prescribing regulations under 
     this section, the Director shall consider the effect on the 
     economy, the integrity of the patent system, and the 
     efficient administration of the Office.
       ``(d) Conduct of Proceeding.--The Patent Trial and Appeal 
     Board shall, in accordance with section 6(b), conduct each 
     post-grant review proceeding authorized by the Director.

     ``Sec. 327. Patent owner response

       ``After a post-grant proceeding under this chapter has been 
     instituted with respect to a patent, the patent owner shall 
     have the right to file, within a time period set by the 
     Director, a response to the cancellation petition. The patent 
     owner shall file with the response, through affidavits or 
     declarations, any additional factual evidence and expert 
     opinions on which the patent owner relies in support of the 
     response.

     ``Sec. 328. Proof and evidentiary standards

       ``(a) In General.--The presumption of validity set forth in 
     section 282 shall not apply in a challenge to any patent 
     claim under this chapter.
       ``(b) Burden of Proof.--The party advancing a proposition 
     under this chapter shall have the burden of proving that 
     proposition by a preponderance of the evidence.

     ``Sec. 329. Amendment of the patent

       ``(a) In General.--In response to a challenge in a petition 
     for cancellation, the patent owner may file one motion to 
     amend the patent in one or more of the following ways:
       ``(1) Cancel any challenged patent claim.
       ``(2) For each challenged claim, propose a substitute 
     claim.
       ``(3) Amend the patent drawings or otherwise amend the 
     patent other than the claims.
       ``(b) Additional Motions.--Additional motions to amend may 
     be permitted only for good cause shown.
       ``(c) Scope of Claims.--An amendment under this section may 
     not enlarge the scope of the claims of the patent or 
     introduce new matter.

     ``Sec. 330. Decision of the Board

       ``If the post-grant review proceeding is instituted and not 
     dismissed under this chapter, the Patent Trial and Appeal 
     Board shall issue a final written decision with respect to 
     the patentability of any patent claim challenged and any new 
     claim added under section 329.

     ``Sec. 331. Effect of decision

       ``(a) In General.--If the Patent Trial and Appeal Board 
     issues a final decision under section 330 and the time for 
     appeal has expired or any appeal proceeding has terminated, 
     the Director shall issue and publish a certificate canceling 
     any claim of the patent finally determined to be unpatentable 
     and incorporating in the patent by operation of the 
     certificate any new claim determined to be patentable.
       ``(b) New Claims.--Any new claim held to be patentable and 
     incorporated into a patent in a post-grant review proceeding 
     shall have the same effect as that specified in section 252 
     for reissued patents on the right of any person who made, 
     purchased, offered to sell, or used within the United States, 
     or imported into the United States, anything patented by such 
     new claim, or who made substantial preparations therefor, 
     before a certificate under subsection (a) of this section is 
     issued.

     ``Sec. 332. Settlement

       ``(a) In General.--A post-grant review proceeding shall be 
     terminated with respect to any petitioner upon the joint 
     request of the petitioner and the patent owner, unless the 
     Patent Trial and Appeal Board has issued a written decision 
     before the request for termination is filed. If the post-
     grant review proceeding is terminated with respect to a 
     petitioner under this paragraph, no estoppel shall apply to 
     that petitioner. If no petitioner remains in the proceeding, 
     the panel of administrative patent judges assigned to the 
     proceeding shall terminate the proceeding.
       ``(b) Agreement in Writing.--Any agreement or understanding 
     between the patent owner and a petitioner, including any 
     collateral agreements referred to in the agreement or 
     understanding, that is made in connection with or in 
     contemplation of the termination of a post-grant review 
     proceeding, must be in writing. A post-grant review 
     proceeding as between the parties to the agreement or 
     understanding may not be terminated until a copy of the 
     agreement or understanding, including any such collateral 
     agreements, has been filed in the Office. If any party filing 
     such an agreement or understanding requests, the agreement or 
     understanding shall be kept separate from the file of the 
     post-grant review proceeding, and shall be made available 
     only to Government agencies on written request, or to any 
     person on a showing of good cause.

     ``Sec. 333. Relationship to other pending proceedings

       ``(a) In General.--Notwithstanding subsection 135(a), 
     sections 251 and 252, and chapter 30, the Director may 
     determine the manner in which any reexamination proceeding, 
     reissue proceeding, interference proceeding (commenced before 
     the effective date provided in section 3(k) of the Patent 
     Reform Act of 2007), derivation proceeding, or post-grant 
     review proceeding, that is pending during a post-grant review 
     proceeding, may proceed, including providing for stay, 
     transfer, consolidation, or termination of any such 
     proceeding.
       ``(b) Stays.--The Director may stay a post-grant review 
     proceeding if a pending civil action for infringement 
     addresses the same or substantially the same questions of 
     patentability.

     ``Sec. 334. Effect of decisions rendered in civil action on 
       post-grant review proceedings

       ``If a final decision is entered against a party in a civil 
     action arising in whole or in part under section 1338 of 
     title 28 establishing that the party has not sustained its 
     burden of proving the invalidity of any patent claim--
       ``(1) that party to the civil action and the privies of 
     that party may not thereafter request a post-grant review 
     proceeding on that patent claim on the basis of any grounds, 
     under the provisions of section 321, which that party or the 
     privies of that party raised or could have raised; and
       ``(2) the Director may not thereafter maintain a post-grant 
     review proceeding that was requested, before the final 
     decision was so entered, by that party or the privies of that 
     party on the basis of such grounds.

     ``Sec. 335. Effect of final decision on future proceedings

       ``If a final decision under section 330 is favorable to the 
     patentability of any original or new claim of the patent 
     challenged by the cancellation petitioner, the cancellation 
     petitioner may not thereafter, based on any ground that the 
     cancellation petitioner raised during the post-grant review 
     proceeding--
       ``(1) request or pursue a reexamination of such claim under 
     chapter 31;
       ``(2) request or pursue a derivation proceeding with 
     respect to such claim;
       ``(3) request or pursue a post-grant review proceeding 
     under this chapter with respect to such claim; or

[[Page 23948]]

       ``(4) assert the invalidity of any such claim in any civil 
     action arising in whole or in part under section 1338 of 
     title 28.

     ``Sec. 336. Appeal

       ``A party dissatisfied with the final determination of the 
     Patent Trial and Appeal Board in a post-grant proceeding 
     under this chapter may appeal the determination under 
     sections 141 through 144. Any party to the post-grant 
     proceeding shall have the right to be a party to the 
     appeal.''.
       (g) Conforming Amendment.--The table of chapters for part 
     III is amended by adding at the end the following:

``32. Post-Grant Review Proceedings..........................321''.....

       (h) Repeal.--Section 4607 of the Intellectual Property and 
     Communications Omnibus Reform Act of 1999, as enacted by 
     section 1000(a)(9) of Public Law 106-113, is repealed.
       (i) Effective Dates.--
       (1) In general.--The amendments and repeal made by this 
     section shall take effect at the end of the 1-year period 
     beginning on the date of the enactment of this Act.
       (2) Applicability to ex parte and inter partes 
     proceedings.--Notwithstanding any other provision of law, 
     sections 301 and 311 through 318 of title 35, United States 
     Code, as amended by this section, shall apply to any patent 
     that issues before, on, or after the effective date under 
     paragraph (1) from an original application filed on any date.
       (3) Applicability to post-grant proceedings.--The 
     amendments made by subsection (f) shall apply to patents 
     issued on or after the effective date under paragraph (1).
       (j) Regulations.--
       (1) Regulations.--The Under Secretary of Commerce for 
     Intellectual Property and Director of the United States 
     Patent and Trademark Office (in this subsection referred to 
     as the ``Director'') shall, not later than the date that is 1 
     year after the date of the enactment of this Act, issue 
     regulations to carry out chapter 32 of title 35, United 
     States Code, as added by subsection (f) of this section.
       (2) Pending interferences.--The Director shall determine 
     the procedures under which interferences under title 35, 
     United States Code, that are commenced before the effective 
     date under subsection (i)(1) are to proceed, including 
     whether any such interference is to be dismissed without 
     prejudice to the filing of a cancellation petition for a 
     post-grant opposition proceeding under chapter 32 of title 
     35, United States Code, or is to proceed as if this Act had 
     not been enacted. The Director shall include such procedures 
     in regulations issued under paragraph (1).

     SEC. 7. DEFINITIONS; PATENT TRIAL AND APPEAL BOARD.

       (a) Definitions.--Section 100 (as amended by this Act) is 
     further amended by adding at the end the following:
       ``(k) The term `cancellation petitioner' means the real 
     party in interest requesting cancellation of any claim of a 
     patent under chapter 32 of this title and the privies of the 
     real party in interest.''.
       (a) Patent Trial and Appeal Board.--Section 6 is amended to 
     read as follows:

     ``Sec. 6. Patent Trial and Appeal Board

       ``(a) Establishment and Composition.--There shall be in the 
     Office a Patent Trial and Appeal Board. The Director, the 
     Deputy Director, the Commissioner for Patents, the 
     Commissioner for Trademarks, and the administrative patent 
     judges shall constitute the Patent Trial and Appeal Board. 
     The administrative patent judges shall be persons of 
     competent legal knowledge and scientific ability who are 
     appointed by the Director. Any reference in any Federal law, 
     Executive order, rule, regulation, or delegation of 
     authority, or any document of or pertaining to the Board of 
     Patent Appeals and Interferences is deemed to refer to the 
     Patent Trial and Appeal Board.
       ``(b) Duties.--The Patent Trial and Appeal Board shall--
       ``(1) on written appeal of an applicant, review adverse 
     decisions of examiners upon application for patents;
       ``(2) on written appeal of a patent owner, review adverse 
     decisions of examiners upon patents in reexamination 
     proceedings under chapter 30;
       ``(3) review appeals by patent owners and third-party 
     requesters under section 315;
       ``(4) determine priority and patentability of invention in 
     derivation proceedings under section 135(a); and
       ``(5) conduct post-grant opposition proceedings under 
     chapter 32.

     Each appeal and derivation proceeding shall be heard by at 
     least 3 members of the Patent Trial and Appeal Board, who 
     shall be designated by the Director. Only the Patent Trial 
     and Appeal Board may grant rehearings. The Director shall 
     assign each post-grant review proceeding to a panel of 3 
     administrative patent judges. Once assigned, each such panel 
     of administrative patent judges shall have the 
     responsibilities under chapter 32 in connection with post-
     grant review proceedings.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect at the end of the 1-year period beginning 
     on the date of the enactment of this Act.

     SEC. 8. STUDY AND REPORT ON REEXAMINATION PROCEEDINGS.

       The Under Secretary of Commerce for Intellectual Property 
     and Director of the Patent and Trademark Office shall, not 
     later than 2 years after the date of the enactment of this 
     Act--
       (1) conduct a study of the effectiveness and efficiency of 
     the different forms of proceedings available under title 35, 
     United States Code, for the reexamination of patents; and
       (2) submit to the Committees on the Judiciary of the House 
     of Representatives and the Senate a report on the results of 
     the study, including any of the Director's suggestions for 
     amending the law, and any other recommendations the Director 
     has with respect to patent reexamination proceedings.

     SEC. 9. SUBMISSIONS BY THIRD PARTIES AND OTHER QUALITY 
                   ENHANCEMENTS.

       (a) Publication.--Section 122(b)(2) is amended--
       (1) by striking subparagraph (B); and
       (2) in subparagraph (A)--
       (A) by striking ``(A) An application'' and inserting ``An 
     application''; and
       (B) by redesignating clauses (i) through (iv) as 
     subparagraphs (A) through (D), respectively.
       (b) Preissuance Submissions by Third Parties.--Section 122 
     is amended by adding at the end the following:
       ``(e) Preissuance Submissions by Third Parties.--
       ``(1) In general.--Any person may submit for consideration 
     and inclusion in the record of a patent application, any 
     patent, published patent application, or other publication of 
     potential relevance to the examination of the application, if 
     such submission is made in writing before the earlier of--
       ``(A) the date a notice of allowance under section 151 is 
     mailed in the application for patent; or
       ``(B) either--
       ``(i) 6 months after the date on which the application for 
     patent is published under section 122, or
       ``(ii) the date of the first rejection under section 132 of 
     any claim by the examiner during the examination of the 
     application for patent,
     whichever occurs later.
       ``(2) Other requirements.--Any submission under paragraph 
     (1) shall--
       ``(A) set forth a concise description of the asserted 
     relevance of each submitted document;
       ``(B) be accompanied by such fee as the Director may 
     prescribe; and
       ``(C) include a statement by the submitter affirming that 
     the submission was made in compliance with this section.''.
       (c) Effective Date.--The amendments made by this section--
       (1) shall take effect at the end of the 1-year period 
     beginning on the date of the enactment of this Act; and
       (2) shall apply to any application for patent filed before, 
     on, or after the effective date under paragraph (1).

     SEC. 10. TAX PLANNING METHODS NOT PATENTABLE.

       (a) In General.--Section 101 is amended--
       (1) by striking ``Whoever'' and inserting ``(a) Patentable 
     Inventions.--Whoever''; and
       (2) by adding at the end the following:
       ``(b) Tax Planning Methods.--
       ``(1) Unpatentable subject matter.--A patent may not be 
     obtained for a tax planning method.
       ``(2) Definitions.--For purposes of paragraph (1)--
       ``(A) the term `tax planning method' means a plan, 
     strategy, technique, or scheme that is designed to reduce, 
     minimize, or defer, or has, when implemented, the effect of 
     reducing, minimizing, or deferring, a taxpayer's tax 
     liability, but does not include the use of tax preparation 
     software or other tools used solely to perform or model 
     mathematical calculations or prepare tax or information 
     returns;
       ``(B) the term `taxpayer' means an individual, entity, or 
     other person (as defined in section 7701 of the Internal 
     Revenue Code of 1986) that is subject to taxation directly, 
     is required to prepare a tax return or information statement 
     to enable one or more other persons to determine their tax 
     liability, or is otherwise subject to a tax law;
       ``(C) the terms `tax', `tax laws', `tax liability', and 
     `taxation' refer to any Federal, State, county, city, 
     municipality, or other governmental levy, assessment, or 
     imposition, whether measured by income, value, or otherwise; 
     and
       ``(D) the term `State' means each of the several States, 
     the District of Columbia, and any commonwealth, territory, or 
     possession of the United States.''.
       (b) Applicability.--The amendments made by this section--
       (1) shall take effect on the date of the enactment of this 
     Act;
       (2) shall apply to any application for patent or 
     application for a reissue patent that is--
       (A) filed on or after the date of the enactment of this 
     Act; or
       (B) filed before that date if a patent or reissue patent 
     has not been issued pursuant to the application as of that 
     date; and
       (3) shall not be construed as validating any patent issued 
     before the date of the enactment of this Act for an invention 
     described in section 101(b) of title 35, United States Code, 
     as amended by this section.

     SEC. 11. VENUE AND JURISDICTION.

       (a) Venue for Patent Cases.--Section 1400 of title 28, 
     United States Code, is amended by striking subsection (b) and 
     inserting the following:
       ``(b) Notwithstanding section 1391 of this title, in any 
     civil action arising under any Act of Congress relating to 
     patents, a party shall not manufacture venue by assignment, 
     incorporation, or otherwise to invoke the venue of a specific 
     district court.
       ``(c) Notwithstanding section 1391 of this title, any civil 
     action for patent infringement or any action for declaratory 
     judgment may be brought only in a judicial district--

[[Page 23949]]

       ``(1) where the defendant has its principal place of 
     business or in the location or place in which the defendant 
     is incorporated, or, for foreign corporations with a United 
     States subsidiary, where the defendant's primary United 
     States subsidiary has its principal place of business or in 
     the location or place in which the defendants primary United 
     States subsidiary is incorporated;
       ``(2) where the defendant has committed a substantial 
     portion of the acts of infringement and has a regular and 
     established physical facility that the defendant controls and 
     that constitutes a substantial portion of the operations of 
     the defendant;
       ``(3) where the primary plaintiff resides, if the primary 
     plaintiff in the action is an institution of higher education 
     as defined under section 101(a) of the Higher Education Act 
     of 1965 (20 U.S.C. 1001(a)); or
       ``(4) where the plaintiff resides, if the plaintiff or a 
     subsidiary of the plaintiff has an established physical 
     facility in such district dedicated to research, development, 
     or manufacturing that is operated by full-time employees of 
     the plaintiff or such subsidiary, or if the sole plaintiff in 
     the action is an individual inventor who is a natural person 
     and who qualifies at the time such action is filed as a micro 
     entity under section 124 of title 35.
       ``(d) If the plaintiff brings a civil action for patent 
     infringement in a judicial district under subsection (c), the 
     district court may transfer that action to any other district 
     or division where--
       ``(1) the defendant has substantial evidence or witnesses; 
     and
       ``(2) venue would be appropriate under section 1391 of this 
     title, if such transfer would be appropriate under section 
     1404 of this title.''.
       (b) Interlocutory Appeals.--Subsection (c) of section 1292 
     of title 28, United States Code, is amended--
       (1) by striking ``and'' at the end of paragraph (1);
       (2) by striking the period at the end of paragraph (2) and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) of an appeal from an interlocutory order or decree 
     determining construction of claims in a civil action for 
     patent infringement under section 271 of title 35.

     Application for an appeal under paragraph (3) shall be made 
     to the court within 10 days after entry of the order or 
     decree. The district court shall have discretion whether to 
     approve the application and, if so, whether to stay 
     proceedings in the district court during pendency of the 
     appeal.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any action commenced on or after the date of 
     the enactment of this Act.

     SEC. 12. ADDITIONAL INFORMATION; INEQUITABLE CONDUCT AS 
                   DEFENSE TO INFRINGEMENT.

       (a) Disclosure Requirements for Applicants.--
       (1) In general.--Chapter 11 is amended by adding at the end 
     the following new section:

     ``Sec. 123. Additional information

       ``(a) In General.--The Director shall, by regulation, 
     require that applicants submit a search report and other 
     information and analysis relevant to patentability. An 
     application shall be regarded as abandoned if the applicant 
     fails to submit the required search report, information, and 
     analysis in the manner and within the time period prescribed 
     by the Director.
       ``(b) Exception for Micro Entities.--Applications from 
     micro-entities shall not be subject to the requirements of 
     regulations issued under subsection (a).

     ``Sec. 124. Micro entities

       ``(a) Definition.--For purposes of this title, the term 
     `micro entity' means an applicant for patent who makes a 
     certification under either subsection (b) or (c).
       ``(b) Unassigned Application.--A certification under this 
     subsection is a certification by each inventor named in the 
     application that the inventor--
       ``(1) qualifies as a small entity as defined in regulations 
     issued by the Director;
       ``(2) has not been named on five or more previously filed 
     patent applications;
       ``(3) has not assigned, granted, or conveyed, and is not 
     under an obligation by contract or law to assign, grant, or 
     convey, a license or any other ownership interest in the 
     application; and
       ``(4) does not have a gross income, as defined in section 
     61(a) of the Internal Revenue Code of 1986, exceeding 2.5 
     times the median household income, as reported by the Bureau 
     of the Census, for the most recent calendar year preceding 
     the calendar year in which the examination fee is being paid.
       ``(c) Assigned Application.--A certification under this 
     subsection is a certification by each inventor named in the 
     application that the inventor--
       ``(1) qualifies as a small entity as defined in regulations 
     issued by the Director and meets the requirements of 
     subsection (b)(4);
       ``(2) has not been named on five or more previously filed 
     patent applications; and
       ``(3) has assigned, granted, conveyed, or is under an 
     obligation by contract or law to assign, grant, or convey, a 
     license or other ownership interest in the application to an 
     entity that has five or fewer employees and has a gross 
     taxable income, as defined in section 61(a) of the Internal 
     Revenue Code of 1986, that does not exceed 2.5 times the 
     median household income, as reported by the Bureau of the 
     Census, for the most recent calendar year preceding the 
     calendar year in which the examination fee is being paid.''.
       (2) Conforming amendment.--The table of sections for 
     chapter 11 is amended by adding at the end the following new 
     items:

``123. Additional information.
``124. Micro entities.''.

       (b) Inequitable Conduct as Defense to Infringement.--
     Section 282 is amended--
       (1) in the first undesignated paragraph, by striking ``A 
     patent'' and inserting ``(a) In General.--A patent'';
       (2) in the second undesignated paragraph--
       (A) by striking ``The following'' and inserting ``(b) 
     Defenses.--The following''; and
       (B) by striking the comma at the end of each of paragraphs 
     (1), (2), and (3) and inserting a period;
       (3) in the third undesignated paragraph--
       (A) by striking ``In actions'' and inserting ``(d) Notice 
     of Actions; Pleading.--In actions'';
       (B) by inserting after the second sentence the following: 
     ``In an action involving any allegation of inequitable 
     conduct under subsection (c), the party asserting this 
     defense or claim shall comply with the pleading requirements 
     set forth in Rule 9(b) of the Federal Rules of Civil 
     Procedure.''; and
       (C) by striking ``Invalidity'' and inserting ``(e) 
     Extension of Patent Term.--Invalidity''; and
       (4) by inserting after subsection (b), as designated by 
     paragraph (2) of this subsection, the following:
       ``(c) Inequitable Conduct.--
       ``(1) Defense.--A patent may be held to be unenforceable, 
     or other remedy imposed under paragraph (3), for inequitable 
     conduct only if it is established, by clear and convincing 
     evidence, that--
       ``(A) the patentee, its agents, or another person with a 
     duty of disclosure to the Office, with the intent to mislead 
     or deceive the patent examiner, misrepresented or failed to 
     disclose material information concerning a matter or 
     proceeding before the Office; and
       ``(B) in the absence of such deception, the Office, acting 
     reasonably, would, on the record before it, have made a prima 
     facie finding of unpatentability.
       ``(2) Intent.--In order to prove intent to mislead or 
     deceive under paragraph (1), specific facts beyond 
     materiality of the information submitted or not disclosed 
     must be proven that support an inference of intent to mislead 
     or deceive the Patent and Trademark Office. Facts support an 
     inference of intent if they show circumstances that indicate 
     conscious or deliberate behavior on the part of the patentee, 
     its agents, or another person with a duty of disclosure to 
     the Office, to not disclose material information or to submit 
     materially false information.
       ``(3) Remedy.--Upon a finding of inequitable conduct, the 
     court shall balance the equities to determine which of the 
     following remedies to impose:
       ``(A) Denying equitable relief to the patent holder and 
     limiting the remedy for infringement to damages.
       ``(B) Holding the claims-in-suit, or the claims in which 
     inequitable conduct occurred, unenforceable.
       ``(C) Holding the patent unenforceable.
       ``(D) Holding the claims of a related patent unenforceable.
       ``(4) Attorney misconduct.--Upon a finding of inequitable 
     conduct, if there is evidence that the conduct can be 
     attributable to a person or persons authorized to practice 
     before the Office, the court shall refer the matter to the 
     Office for appropriate disciplinary action under section 32, 
     and shall order the parties to preserve and make available to 
     the Office any materials that may be relevant to the 
     determination under section 32.''.
       (c) Effective Date.--
       (1) Subsection (a).--The amendments made by subsection 
     (a)--
       (A) shall take effect at the end of the 1-year period 
     beginning on the date of the enactment of this Act; and
       (B) shall apply to any application for patent filed on or 
     after the effective date under subparagraph (A).
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to any civil action commenced on or after the 
     date of the enactment of this Act.

     SEC. 13. BEST MODE REQUIREMENT.

       Section 282(b) (as designated by section 12(b) of this Act) 
     is amended by striking paragraph (3) and inserting the 
     following:
       ``(3) Invalidity of the patent or any claim in suit for 
     failure to comply with--
       ``(A) any requirement of section 112 of this title, other 
     than the requirement that the specification shall set forth 
     the best mode contemplated by the inventor of carrying out 
     his invention; or
       ``(B) any requirement of section 251 of this title.''.

     SEC. 14. REGULATORY AUTHORITY.

       (a) Regulatory Authority.--Section 2(c) is amended by 
     adding at the end the following:
       ``(6) The powers granted under paragraph (2) of subsection 
     (b) include the authority to promulgate regulations to ensure 
     the quality and timeliness of applications and their 
     examination, including specifying circumstances under which 
     an application for patent may claim the benefit under 
     sections 120, 121 and 365(c) of the filing date of a prior 
     filed application for patent.''.
       (b) Clarification.--The amendment made by subsection (a) 
     clarifies the scope of power granted to the United States 
     Patent and Trademark

[[Page 23950]]

      Office by paragraph (2) of section 2(b) of title 35, United 
     States Code, as in effect since the enactment of Public Law 
     106-113.

     SEC. 15. TECHNICAL AMENDMENTS.

       (a) Joint Inventions.--Section 116 is amended--
       (1) in the first paragraph, by striking ``When'' and 
     inserting ``(a) Joint Inventions.--When'';
       (2) in the second paragraph, by striking ``If a joint 
     inventor'' and inserting ``(b) Omitted Inventor.--If a joint 
     inventor''; and
       (3) in the third paragraph, by striking ``Whenever'' and 
     inserting ``(c) Correction of Errors in Application.--
     Whenever''.
       (b) Filing of Application in Foreign Country.--Section 184 
     is amended--
       (1) in the first paragraph, by striking ``Except when'' and 
     inserting ``(a) Filing in Foreign Country.--Except when'';
       (2) in the second paragraph, by striking ``The term'' and 
     inserting ``(b) Application.--The term''; and
       (3) in the third paragraph, by striking ``The scope'' and 
     inserting ``(c) Subsequent Modifications, Amendments, and 
     Supplements.--The scope''.
       (c) Reissue of Defective Patents.--Section 251 is amended--
       (1) in the first paragraph, by striking ``Whenever'' and 
     inserting ``(a) In General.--Whenever'';
       (2) in the second paragraph, by striking ``The Director'' 
     and inserting ``(b) Multiple Reissued Patents.--The 
     Director'';
       (3) in the third paragraph, by striking ``The provisions'' 
     and inserting ``(c) Applicability of This Title.--The 
     provisions''; and
       (4) in the last paragraph, by striking ``No reissued 
     patent'' and inserting ``(d) Reissue Patent Enlarging Scope 
     of Claims.--No reissued patent''.
       (d) Effect of Reissue.--Section 253 is amended--
       (1) in the first paragraph, by striking ``Whenever'' and 
     inserting ``(a) In General.--Whenever''; and
       (2) in the second paragraph, by striking ``In like manner'' 
     and inserting ``(b) Additional Disclaimer or Dedication.--In 
     the manner set forth in subsection (a),''.
       (e) Correction of Named Inventor.--Section 256 is amended--
       (1) in the first paragraph, by striking ``Whenever'' and 
     inserting ``(a) Correction.--Whenever''; and
       (2) in the second paragraph, by striking ``The error'' and 
     inserting ``(b) Patent Valid if Error Corrected.--The 
     error''.
       (f) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 16. STUDY OF SPECIAL MASTERS IN PATENT CASES.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the Director of the Administrative 
     Office of the United States Courts shall conduct a study of, 
     and 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 use of special masters in patent 
     litigation who are appointed in accordance with Rule 53 of 
     the Federal Rules of Civil Procedure.
       (b) Objective.--In conducting the study under subsection 
     (a), the Director shall consider whether the use of special 
     masters has been beneficial in patent litigation and what, if 
     any, program should be undertaken to facilitate the use by 
     the judiciary of special masters in patent litigation.
       (c) Factors To Consider.--In conducting the study under 
     subsection (a), the Director, in consultation with the 
     Federal Judicial Center, shall consider--
       (1) the basis upon which courts appoint special masters 
     under Rule 53(b) of the Federal Rules of Civil Procedure;
       (2) the frequency with which special masters have been used 
     by the courts;
       (3) the role and powers special masters are given by the 
     courts;
       (4) the subject matter at issue in cases that use special 
     masters;
       (5) the impact on court time and costs in cases where a 
     special master is used as compared to cases where no special 
     master is used;
       (6) the legal and technical training and experience of 
     special masters;
       (7) whether the use of special masters has an impact on the 
     reversal rate of district court decisions at the Court of 
     Appeals for the Federal Circuit; and
       (8) any other factors that the Director believes would 
     assist in gauging the effectiveness of special masters in 
     patent litigation.

     SEC. 17. RULE OF CONSTRUCTION.

       The enactment of section 102(b)(3) of title 35, United 
     States Code, under section (3)(b) of this Act is done with 
     the same intent to promote joint research activities that was 
     expressed, including in the legislative history, through the 
     enactment of the Cooperative Research and Technology 
     Enhancement Act of 2004 (Public Law 108-453; the ``CREATE 
     Act''), the amendments of which are stricken by section 3(c) 
     of this Act. The United States Patent and Trademark Office 
     shall administer section 102(b)(3) of title 35, United States 
     Code, in a manner consistent with the legislative history of 
     the CREATE Act that was relevant to its administration by the 
     Patent and Trademark Office.

  The Acting CHAIRMAN. No amendment to the committee amendment is in 
order except those printed in House Report 110-319. Each 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 of the amendment, shall not be subject to 
amendment, and shall not be subject to a demand for division of the 
question.


                 Amendment No. 1 Offered by Mr. Conyers

  The Acting CHAIRMAN. It is now in order to consider amendment No. 1 
printed in House Report 110-319.
  Mr. CONYERS. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Conyers:
       Page 3, strike lines 22 through 25.
       Page 3, line 21, insert quotation marks and a second period 
     after ``patent.''.
       Page 10, strike line 24 and all that follows through page 
     11, line 2, and insert the following:
       (i) Action for Claim to Patent on Derived Invention.--
     Section 135 is amended to read as follows:

     ``Sec. 135. Derivation proceedings''.

       Page 11, lines 14 and 15, strike ``Any such request--'' and 
     insert the following:
       ``(B) Requirements for request.--Any request under 
     subparagraph (A)--''.
       Page 12, line 3, strike ``(B)'' and insert ``(C)''.
       Page 12, line 8, strike ``under section 101''.
       Page 13, line 16, strike the quotation marks and second 
     period.
       Page 13, insert the following after line 16:
       ``(b) Settlement.--Parties to a derivation proceeding may 
     terminate the proceeding by filing a written statement 
     reflecting the agreement of the parties as to the correct 
     inventors of the claimed invention in dispute. Unless the 
     Patent Trial and Appeal Board finds the agreement to be 
     inconsistent with the evidence of record, it shall take 
     action consistent with the agreement. Any written settlement 
     or understanding of the parties shall be filed with the 
     Director. At the request of a party to the proceeding, the 
     agreement or understanding shall be treated as business 
     confidential information, shall be kept separate from the 
     file of the involved patents or applications, and shall be 
     made available only to Government agencies on written 
     request, or to any person on a showing of good cause.
       ``(c) Arbitration.--Parties to a derivation proceeding, 
     within such time as may be specified by the Director by 
     regulation, may determine such contest or any aspect thereof 
     by arbitration. Such arbitration shall be governed by the 
     provisions of title 9 to the extent such title is not 
     inconsistent with this section. The parties shall give notice 
     of any arbitration award to the Director, and such award 
     shall, as between the parties to the arbitration, be 
     dispositive of the issues to which it relates. The 
     arbitration award shall be unenforceable until such notice is 
     given. Nothing in this subsection shall preclude the Director 
     from determining patentability of the invention involved in 
     the derivation proceeding.''.
       Page 13, strike line 17 and all that follows through page 
     15, line 8.
       Page 17, line 10, insert ``with respect to an application 
     for patent filed'' after ``commenced''.
       Page 17, lines 21 and 22, strike ``transmits to the 
     Congress a finding'' and insert ``issues an Executive order 
     containing the President's finding''.
       Page 18, insert the following after line 23:
       (3) Retention of interference procedures with respect to 
     applications filed before effective date.--In the case of any 
     application for patent that is filed before the effective 
     date under paragraph (1)(A), the provisions of law repealed 
     or amended by subsections (h), (i), and (j) shall apply to 
     such application as such provisions of law were in effect on 
     the day before such effective date.
       Page 21, lines 24 and 25, strike ``is under an obligation 
     of assignment of'' and insert ``has assigned rights in''.
       Page 24, strike line 23 and all that follows through page 
     25, line 13 and redesignate the succeeding subsections 
     accordingly.
       Page 27, line 13, strike ``(5)'' and insert ``(4)''.
       Page 27, line 21, strike ``The court'' and insert ``Upon a 
     showing to the satisfaction of the court that a reasonable 
     royalty should be based on a portion of the value of the 
     infringing product or process, the court''.
       Page 28, lines 5 and 6, strike ``Unless the claimant 
     shows'' and insert ``Upon a showing to the satisfaction of 
     the court''.
       Page 28, line 9, strike ``may not'' and insert ``may''.
       Page 28, strike line 12 and all that follows through page 
     29, line 2, and insert the following:
       ``(4) Other factors.--If neither paragraph (2) or (3) is 
     appropriate for determining a reasonable royalty, the court 
     may consider, or direct the jury to consider, the terms of 
     any nonexclusive marketplace licensing of the invention, 
     where appropriate, as well as

[[Page 23951]]

     any other relevant factors under applicable law.
       ``(5) Combination inventions.--For purposes of paragraphs 
     (2) and (3), in the case of a combination invention the 
     elements of which are present individually in the prior art, 
     the patentee may show that the contribution over the prior 
     art may include the value of the additional function 
     resulting from the combination, as well as the enhanced 
     value, if any, of some or all of the prior art elements 
     resulting from the combination.'';
       Page 31, line 17, strike ``The court's'' and all that 
     follows through ``jury.'' on line 19.
       Page 31, strike line 23 and all that follows through the 
     matter following line 17 on page 33 and insert the following:
       (b) Report to Congressional Committees.--Not later than 
     June 30, 2009, the Under Secretary of Commerce for 
     Intellectual Property and Director of the United States 
     Patent and Trademark Office (in this subsection referred to 
     as the ``Director'') shall report to the Committee on the 
     Judiciary of the House of Representatives and the Committee 
     on the Judiciary of the Senate the findings and 
     recommendations of the Director on the operation of prior 
     user rights in selected countries in the industrialized 
     world. The report shall include the following:
       (1) A comparison between the patent laws of the United 
     States and the laws of other industrialized countries, 
     including the European Union, Japan, Canada, and Australia.
       (2) An analysis of the effect of prior user rights on 
     innovation rates in the selected countries.
       (3) An analysis of the correlation, if any, between prior 
     user rights and start-up enterprises and the ability to 
     attract venture capital to start new companies.
       (4) An analysis of the effect of prior user rights, if any, 
     on small businesses, universities, and individual inventors.
       (5) An analysis of any legal or constitutional issues that 
     arise from placing elements of trade secret law, in the form 
     of prior user rights, in patent law.
     In preparing the report, the Director shall consult with the 
     Secretary of State and the Attorney General of the United 
     States.
       Page 33, line 18, strike ``(d)'' and insert ``(c)''.
       Page 33, line 21, strike ``(e)'' and insert ``(d)''.
       Page 36, lines 22 and 23, strike ``cited by or to the 
     Office or''.
       Page 39, line 10, strike ``grant of the patent or issuance 
     of'' and insert ``issuance of the patent or''.
       Page 39, strike line 21 and all that follows through page 
     40, line 2 and insert the following:
       ``(3) for each claim sought to be canceled, the petition 
     sets forth in writing the basis for cancellation and provides 
     the evidence in support thereof, including copies of patents 
     and printed publications, or written testimony of a witness 
     attested to under oath or declaration by the witness, or any 
     other information that the Director may require by 
     regulation.; and
       Page 40, lines 3 and 4, strike ``those documents'' and 
     insert ``the petition, including any evidence submitted with 
     the petition and any other information submitted under 
     paragraph (3),''.
       Page 41, add the following after line 25:
     In carrying out paragraph (3), the Director shall bear in 
     mind that discovery must be in the interests of justice.
       Page 44, lines 23 and 24, strike ``with respect to'' and 
     insert ``addressing''.
       Page 46, line 1, strike ``of administrative patent 
     judges''.
       Page 46, line 18, strike ``pending''.
       Page 46, line 23, insert ``with respect to an application 
     for patent filed'' after ``commenced''.
       Page 47, line 5, insert ``of a patent'' after 
     ``infringement''.
       Page 47, line 7, insert after ``patentability'' the 
     following: ``raised against the patent in a petition for 
     post-grant review''.
       Page 47, insert the following after line 7:
       ``(c) Effect of Commencement of Proceeding.--The 
     commencement of a post-grant review proceeding--
       ``(1) shall not limit in any way the right of the patent 
     owner to commence an action for infringement of the patent; 
     and
       ``(2) shall not be cited as evidence relating to the 
     validity of any claim of the patent in any proceeding before 
     a court or the International Trade Commission concerning the 
     patent.
       Page 48, line 14, strike ``or''.
       Page 48, line 17, strike the period and insert ``; or''.
       Page 48, insert the following after line 17:
       ``(5) assert the invalidity of any such claim in defense to 
     an action brought under section 337 of the Tariff Act of 1930 
     (19 U.S.C. 1337).
       Page 49, line 18, strike ``subsection (f)'' and insert 
     ``subsections (f) and (g)''.
       Page 49, strike lines 21 and 22 and insert the following:
       (j) Regulations.--The Under Secretary of
       Page 49, lines 23 through 25, and page 50, lines 1 through 
     4, move the text 2 ems to the left.
       Page 50, strike lines 5 through 15.
       Page 51, lines 3 through 5, strike ``The Director, the 
     Deputy, the Commissioner for Patents, and the Commissioner 
     for Trademarks, and the'' and insert ``The''.
       Page 51, line 9, strike ``Director'' and insert ``Secretary 
     of Commerce''.
       Page 54, line 18, strike ``and''.
       Page 54, line 21, strike the 2 periods and quotation marks 
     and insert ``; and''.
       Page 54, insert the following after line 21:
       ``(D) identify the real party-in-interest making the 
     submission.''.
       Page 57, strike line 12 and all that follows through page 
     59, line 7, and insert the following:
       ``(b) In any civil action arising under any Act of Congress 
     relating to patents, a party shall not manufacture venue by 
     assignment, incorporation, joinder, or otherwise primarily to 
     invoke the venue of a specific district court.
       ``(c) Notwithstanding section 1391 of this title, except as 
     provided in paragraph (3) of this subsection, any civil 
     action for patent infringement or any action for declaratory 
     judgment relating to a patent may be brought only in a 
     judicial district--
       ``(1) where the defendant has its principal place of 
     business or is incorporated, or, for foreign corporations 
     with a United States subsidiary, where the defendant's 
     primary United States subsidiary has its principal place of 
     business or is incorporated;
       ``(2) where the defendant has committed a substantial 
     portion of the acts of infringement and has a regular and 
     established physical facility that the defendant controls and 
     that constitutes a substantial portion of the defendant's 
     operations;
       ``(3) for cases involving only foreign defendants with no 
     United States subsidiary, according to section 1391(d) of 
     this title;
       ``(4) where the plaintiff resides, if the plaintiff is--
       ``(A) an institution of higher education as defined under 
     section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 
     section 1001(a)); or
       ``(B) a nonprofit organization that--
       ``(i) is described in section 501(c)(3) of the Internal 
     Revenue Code of 1986;
       ``(ii) is exempt from taxation under section 501(a) of such 
     Code; and
       ``(iii) serves primarily as the patent and licensing 
     organization for an institution of higher education as 
     defined under section 101(a) of the Higher Education Act of 
     1965 (20 U.S.C. 1001(a));
       ``(5) where the plaintiff or a subsidiary has a place of 
     business that is engaged in substantial--
       ``(A) research and development,
       ``(B) manufacturing activities, or
       ``(C) management of research and development or 
     manufacturing activities,
     related to the patent or patents in dispute;
       ``(6) where the plaintiff resides if the plaintiff is named 
     as inventor or co-inventor on the patent and has not 
     assigned, granted, conveyed, or licensed, and is under no 
     obligation to assign, grant, convey, or license, any rights 
     in the patent or in enforcement of the patent, including the 
     results of any such enforcement; or
       ``(7) where any of the defendants has substantial evidence 
     and witnesses if there is no other district in which the 
     action may be brought under this section.''.
       Page 60, strike lines 1 through 3 and insert the following:
       (c) Effective Date.--
       (1) In general.--The amendments made by this section--
       (A) shall take effect on the date of the enactment of this 
     Act; and
       (B) shall apply to any civil action commenced on or after 
     such date of enactment.
       (2) Pending cases.--Any case commenced in a United States 
     district court on or after September 7, 2007, in which venue 
     is improper under section 1400 of title 28, United States 
     Code, as amended by this section, shall be transferred 
     pursuant to section 1404 of such title, unless--
       (A) one or more substantive rulings on the merits, or other 
     substantial litigation, has occurred; and
       (B) the court finds that transfer would not serve the 
     interests of justice.
       Page 60, line 10, strike ``shall'' and insert ``may''.
       Page 60, line 12, insert after ``patentability.'' the 
     following: ``If the Director requires a search report to be 
     submitted by applicants, and an applicant does not itself 
     perform the search, the search must be performed by one or 
     more individuals who are United States citizens or by a 
     commercial entity that is organized under the laws of the 
     United States or any State and employs United States citizens 
     to perform such searches.''.
       Page 60, line 14, strike ``the required search report, 
     information, and'' and insert ``a search report, information, 
     or an''.
       Page 60, line 16, add after the period the following: ``Any 
     search report required by the Director may not substitute in 
     any way for a search by an examiner of the prior art during 
     examination.''.
       Page 63, strike line 19 and all that follows through line 
     15 on page 65 and insert the following:
       ``(1) Defense.--One or more claims of a patent may be held 
     to be unenforceable, or other remedy imposed under paragraph 
     (4), for inequitable conduct only if it is established, by 
     clear and convincing evidence, that a person with a duty of 
     disclosure to the Office, with the intent to mislead or 
     deceive

[[Page 23952]]

     the patent examiner, misrepresented or failed to disclose 
     material information to the examiner during examination of 
     the patent.
       ``(2) Materiality.--
       ``(A) In general.--Information is material under this 
     section if--
       ``(i) a reasonable examiner would have made a prima facie 
     finding of unpatentability, or maintained a finding of 
     unpatentability, of one or more of the patent claims based on 
     the information, and the information is not cumulative to 
     information already of record or previously considered by the 
     Office;or
       ``(ii) information that is otherwise material refutes or is 
     inconsistent with a position the applicant takes in opposing 
     a rejection of the claim or in asserting an argument of 
     patentability.
       ``(B) Prima facie finding.--A prima facie finding of 
     unpatentability under this section is shown if a reasonable 
     examiner, based on a preponderance of the evidence, would 
     conclude that the claim is unpatentable based on the 
     information misrepresented or not disclosed, when that 
     information is considered alone or in conjunction with other 
     information or record. In determining whether there is a 
     prima facie finding of unpatentability, each term in the 
     claim shall be given its broadest reasonable construction 
     consistent with the specification, and rebuttal evidence 
     shall not be considered.
       ``(3) Intent.--To prove a person with a duty of disclosure 
     to the Office intended to mislead or deceive the examiner 
     under paragraph (1), specific facts beyond materiality of the 
     information misrepresented or not disclosed must be proven 
     that establish the intent of the person to mislead or deceive 
     the examiner by the actions of the person. Facts support an 
     intent to mislead or deceive if they show circumstances that 
     indicate conscious or deliberate behavior on the part of the 
     person to not disclose material information or to submit 
     false material information in order to mislead or deceive the 
     examiner. Circumstantial evidence may be used to prove that a 
     person had the intent to mislead or deceive the examiner 
     under paragraph (1).
       ``(4) Remedy.--Upon a finding of inequitable conduct, the 
     court shall balance the equities to determine which of the 
     following remedies to impose:
       ``(A) Denying equitable relief to the patent holder and 
     limiting the remedy for infringement to reasonable royalties.
       ``(B) Holding the claims-in-suit, or the claims in which 
     inequitable conduct occurred, unenforceable.
       ``(C) Holding the patent unenforceable.
       ``(D) Holding the claims of a related patent unenforceable.
       ``(5) Attorney misconduct.--Upon a finding of inequitable 
     conduct, if there is evidence that the conduct is 
     attributable to a person or persons authorized to practice 
     before the Office, the court shall refer the matter to the 
     Office for appropriate disciplinary action under section 32, 
     and shall order the parties to preserve and make available to 
     the Office any materials that may be relevant to the 
     determination under section 32.''.
       Page 69, line 17, strike ``180 days'' and insert ``1 
     year''.
       Page 71, insert the following after line 6 and redesignate 
     the succeeding section accordingly:

     SEC. 17. STUDY ON WORKPLACE CONDITIONS.

       The Comptroller General shall, not later than 2 years after 
     the date of the enactment of this Act--
       (1) conduct a study of workplace conditions for the 
     examiner corps of the United States Patent and Trademark 
     Office, including the effect, if any, of this Act and the 
     amendments made by this Act on--
       (A) recruitment, retention, and promotion of employees; and
       (B) workload, quality assurance, and employee grievances; 
     and
       (2) submit to the Committees on the Judiciary of the House 
     of Representatives and the Senate a report on the results of 
     the study, including any suggestions for improving workplace 
     conditions, together with any other recommendations that the 
     Comptroller General has with respect to patent reexamination 
     proceedings.
       Page 71, add the following after line 19:

     SEC. 19. SEVERABILITY.

       If any provision of this Act or of any amendment or repeals 
     made by this Act, or the application of such a provision to 
     any person or circumstance, is held to be invalid or 
     unenforceable, the remainder of this Act and the amendments 
     and repeals made by this Act, and the application of this Act 
     and such amendments and repeals to any other person or 
     circumstance, shall not be affected by such holding.
  The Acting CHAIRMAN. Pursuant to House Resolution 636, the gentleman 
from Michigan (Mr. Conyers) and a Member opposed each will control 10 
minutes.
  The Chair recognizes the gentleman from Michigan.


                         Parliamentary Inquiry

  Mr. ROHRABACHER. Mr. Chairman, parliamentary inquiry.
  The Acting CHAIRMAN. Does the gentleman from Michigan yield for a 
parliamentary inquiry?
  Mr. CONYERS. Yes, of course.
  The Acting CHAIRMAN. The gentleman will state his parliamentary 
inquiry.
  Mr. ROHRABACHER. Does the person who controls the time against the 
manager's amendment have to be against the manager's amendment?
  The Acting CHAIRMAN. It is reserved for a Member in opposition to the 
amendment.
  Mr. ROHRABACHER. Who controls the time in opposition?
  The Acting CHAIRMAN. No one has claimed time in opposition to the 
amendment yet.
  Mr. ROHRABACHER. I would suggest that whoever does control the time 
should be in opposition, and if Mr. Smith, who I respect greatly, does 
not oppose the manager's amendment, he should not be in control of the 
debate against the manager's amendment, and I would note that there are 
others of us who would like to have that.
  The Acting CHAIRMAN. The gentleman from Michigan is recognized.
  Mr. CONYERS. Mr. Chairman, I yield myself as much time as I may 
consume.
  I rise in support of the manager's amendment which is, of course, 
very bipartisan and which makes further changes to the underlying bill.
  Now, this is a work in progress. The reason it came up so late in the 
afternoon yesterday in the Rules Committee is we were making changes to 
accommodate the minority side, and so even now the manager's amendment 
is a piece of work that will not be concluded until we come out of 
conference, and I'm sure Mr. Berman will have some comments to make 
about that.
  I want anyone who has not seen the manager's amendment or wants to 
review it, even as it's discussed on the floor today, to please come to 
my seat, and I will be happy to provide them with a copy of it.
  Well, what does it do? We deal with damages, the most controversial 
provision of the bill, with labor, with the universities, with 
inequitable conduct, and additional changes that will be made.
  For workers and inventors, how do we help them? Well, there was 
concern that in our attempt to simplify the assignment procedures, we 
cut the inventor out of the process. We've ensured that changes to 
applications will require inventor involvement.
  And also, there was a fear about working environment at the PTO. We 
inquired of the Government Accountability Office to conduct a study of 
examining work conditions.
  And finally, the examiners themselves were concerned about the 
quality submission requirements, that their job would be outsourced. We 
ensured that that will not happen.
  Now, damages. We made further changes to explain clearly that a 
portion that is not mandatory in the calculations of damages can be 
considered under a similar formula that courts use today.
  Universities, we spent enormous time, and I have as many universities 
in Michigan as anybody has in any other State in the Union, and to 
address their concern, we spent unbelievable amounts of time 
negotiating with them individually and collectively about the expansion 
of prior user rights which might reduce the value of their patents and 
harm their ability to license invention.
  We've eliminated the expansion. Instead, we're calling for a study of 
the operation of prior user rights in countries where they already 
exist to determine their effects.
  It allows universities to sue in districts where they are located but 
does not extend that right to universities' associated nonprofit 
organizations.
  We deal with inequitable conduct by tightening the standards for 
pleading and finding inequitable conduct as a defense to infringement.
  We continue to operate in good faith with additional changes. We've 
adopted suggestions made by outside groups to improve our post-grant 
opposition provision, changed the discovery standard to interest of 
justice and ensured that a patent owner can bring a patent suit, even 
if a post-grant suit is instituted.

[[Page 23953]]

  So we've addressed every concern that has been brought to our 
attention. No concern was too small or too technical, and we continue 
even now to listen to the parties in other ways to continue to enhance 
the bill.
  So now is the time for patent reform.
  Mr. Chairman, I reserve the balance of my time.
  Mr. ROHRABACHER. Mr. Chairman, I rise to claim the time in opposition 
to the manager's amendment.
  The Acting CHAIRMAN. The gentleman from California is recognized for 
10 minutes.
  Mr. ROHRABACHER. Mr. Chairman, I ask unanimous consent to yield 5 
minutes of the 10 minutes in opposition to the gentlewoman from Ohio 
(Ms. Kaptur) for her to control that time.
  The Acting CHAIRMAN. Without objection, the gentlewoman from Ohio is 
recognized for 5 minutes.
  There was no objection.
  Ms. KAPTUR. Mr. Chairman, I yield myself such time as I may consume. 
I thank the gentleman kindly for yielding me this time.
  On the manager's amendment, you know what's really sad about this 
bill is that it is very complicated, and it's a work in progress as we 
sit here on the floor. It's too important for America and for the 
future of our industrial and economic base to be treated this way, and 
I know that the Chair of the subcommittee and the full committee are 
listening as I speak today. We shouldn't be drafting this in a 
manager's amendment on the floor.
  There's been some inference that the AFL-CIO supports this bill. The 
AFL-CIO does not support this bill. They support the fact that it is 
being improved but they do not support the bill.
  In addition to that, there's something very important I was not able 
to address earlier, and that is that this bill prematurely reveals 
inventors' secrets. In 1999, the Patent Act required the Patent Office 
to publish on the Internet a patent application 18 months from the date 
of filing, but the act also allowed inventors to opt out from that if 
they agreed not to file for patent in another nation. That's the so-
called opt-out provision.
  Now, between 20 and 33 percent of U.S.-origin patents opt out of the 
system. They're small people. They're trying to get the venture capital 
to start up their company and so forth, and the average time the Patent 
Office takes to process a patent is 31 months. Thus, all the secrets in 
all patent applications will be made available to every pirate in the 
world for more than a year before a small inventor, any inventor has a 
chance for patent protection.
  Now, we're going to be told, well, Mr. Issa's amendment will fix 
this. No, it will not, and we will argue against that a little bit more 
down the road.
  Several speakers this morning, Mr. Welch of Vermont and Mr. Johnson 
of Georgia, said, well, we need this reform because we haven't had 
patent reform since 1952. That's not true. There have been 17 
amendments in major bills before this Congress that deal with patent 
reform in the last 15 years.
  The problem with this bill is that it tries to harmonize to lower 
standards in the world rather than cause other countries to harmonize 
up to our standards. It takes away the right of first to invent, and it 
transfers it to first to file. That means an inventor who come here to 
the Patent Office here in the United States, no matter how small, and 
file a patent and got the right as an inventor first to invent could be 
superseded in the international market by someone who happened to catch 
that invention on the Internet or elsewhere and file it in China first. 
So it changes it from a first-to-invent to a first-to-file system. This 
is a substantial change from the system that has been in place in this 
country since the early 1700s.
  You know what I said earlier what's going on here is the big 
proponents of this, the semiconductor companies, and Mr. Emanuel read 
some of their names, have been fined substantially for patent 
infringement over the last several years, about $3.5 billion, and 
they're trying to get the law changed to make it easier for them. You 
know what, they have a right to exist. They have a right to function. 
The problem is they have been taken to court, and there are 15 
standards the courts use to ascertain damages. They want to reduce it 
to one and make the 14 optional. You know what, the Federal judges are 
saying don't do that; we like the current system. It gives the courts 
the flexibility that they use.
  Why should a few transnational corporations, sort of the big tech 
companies, have this much power in this Congress? Why don't we have the 
right of others to be heard here fully rather than having to condense 
such a serious debate into a few seconds here on the floor?
  Why am I opposed to this bill? I'm opposed to this bill because it 
gives too much power to the big tech transnationals, and it takes away 
power from the universities that are opposed to this; although, some in 
California, where so many of these big tech companies are located, are 
happy. But come to Ohio, come to Wisconsin, come to New York. There are 
lots of universities that are opposed to this. So it's giving too much 
advantage to a few companies.
  In addition to that, it totally turns upside down the first-to-invent 
system to a first-to-file system, and it would permit lots of 
infringements internationally.
  It does eliminate the opt-out provision where, if a small inventor 
doesn't want their invention put up on the Internet, it takes away the 
opt-out provision from them. Mr. Issa's amendment does not fix it. We 
want an opportunity to fix that, because we want to protect the third 
of inventors that do not file internationally, that do not want their 
patents put out there like that, and they are not the big companies. 
They're the smaller companies. And why force them to go into court? 
They don't have the money to defend themselves anyway.
  There's broad-based opposition to this bill. There are lots of 
organizations, including the Institute of Electronic Engineers, Medical 
College of Wisconsin. There are many, many others, Cornell University, 
all opposed to this.
  I thank the gentleman for yielding me the time and allowing me to 
broaden the record here in the very few short seconds we have been 
allowed.

                              {time}  1345

  Mr. CONYERS. I can't help but take 6 seconds in rebuttal.
  The universities support this measure. Small inventors support this 
measure. This bill is to create jobs in America. How could anybody 
think that I would be supporting a bill that didn't do this in patent 
law reform?
  I yield 2 minutes to the ranking member of the Judiciary Committee, 
Mr. Lamar Smith.
  Mr. SMITH of Texas. I want to thank the chairman of the Judiciary 
Committee for yielding me time.
  Mr. Chairman, I want to be unequivocal, first of all, in saying that 
I support this manager's amendment.
  I yield to my friend from California (Mr. Herger) for purposes of a 
colloquy.
  Mr. HERGER. I would like to thank the ranking member for engaging in 
this colloquy.
  As you know, the manager's amendment was released yesterday 
afternoon, and it contains language concerning section 337 proceedings 
before the U.S. International Trade Commission.
  However, this language was not considered by the Committee on Ways 
and Means, even though it is squarely in our jurisdiction. I am aware 
that Chairman Rangel and Chairman Conyers have exchanged letters in 
which Chairman Conyers has acknowledged that this issue is within the 
jurisdiction of the Ways and Means committee. I will support a request 
for conferees to be named from the Ways and Means committee.
  As you know, section 337 proceedings are very complex, and we must 
ensure that the full ramifications of this language are clearly 
understood.
  As ranking member of the Ways and Means Trade Subcommittee, I hope 
that you would agree with me that these provisions warrant further 
analysis and ask that you would work with me and other members of the 
committee in conference to ensure that

[[Page 23954]]

these provisions are thoroughly understood as the bill moves through 
the legislative process.
  Mr. SMITH of Texas. Mr. Chairman, I want to thank my friend from 
California for pointing these provisions out, and I certainly do agree 
with them, and we will work towards that goal.
  Mr. CONYERS. Would the ranking member yield to me?
  Mr. SMITH of Texas. I yield to the chairman of the committee.
  Mr. CONYERS. Thank you. I want to assure the gentleman.
  Mr. Chairman, I would submit for the Record a letter dated September 
7, 2007, between myself and the chairman of Ways and Means, Charles 
Rangel.

                                         House of Representatives,


                                  Committee on Ways and Means,

                                Washington, DC, September 7, 2007.
     Hon. John Conyers, Jr.,
     Chairman, Judiciary Committee,
     Washington, DC.
       Dear John: I am writing regarding H.R. 1908, the Patent 
     Reform Act of 2007. During consideration of the bill by the 
     Rules Committee, a manager's amendment was made in order that 
     includes provisions affecting section 337 of the Tariff Act 
     of 1930.
       As you know, section 337 falls within the jurisdiction of 
     the Committee on Ways and Means. The Ways and Means Committee 
     has jurisdiction over all issues concerning import trade 
     matters.
       In order to expedite this legislation for floor 
     consideration, the Committee will forgo action on this bill, 
     and will not oppose the inclusion of this provision relating 
     to section 337 of the Tariff Act within H.R. 1908. This is 
     being done with the understanding that it does not in any way 
     prejudice the Committee with respect to its jurisdictional 
     prerogatives on this bill or similar legislation in the 
     future.
       I would appreciate your response to this letter, confirming 
     this understanding with respect to H.R. 1908, and would ask 
     that a copy of our exchange of letters on this matter be 
     included in the Record.
           Sincerely,
                                                Charles B. Rangel,
     Chairman.
                                  ____

                                         House of Representatives,


                                   Committee on the Judiciary,

                                Washington, DC, September 7, 2007.
     Hon. Charles B. Rangel,
     Chairman, Committee on Ways and Means, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: Thank you for your recent letter 
     regarding your committee's jurisdictional interest in H.R. 
     1908, the Patent Reform Act of 2007.
       I appreciate your willingness to support expediting floor 
     consideration of this important legislation today. I 
     understand and agree that this is without prejudice to your 
     Committee's jurisdictional interests in this or similar 
     legislation in the future. In the event a House-Senate 
     conference on this or similar legislation is convened, I 
     would support your request for an appropriate number of 
     conferees.
       I will include a copy of your letter and this response in 
     the Congressional Record during consideration of the bill on 
     the House floor. Thank you for your cooperation as we work 
     towards enactment of this legislation.
           Sincerely,
                                                 John Conyers, Jr.
                                                         Chairman.

  I completely agree that it was totally inadvertent, and we want the 
Ways and Means Committee to assert, and we will help them assert, their 
full rights in terms of jurisdiction in this matter. I thank him for 
bringing it to our attention.
  Mr. ROHRABACHER. Mr. Chairman, I yield 2 minutes to the gentleman 
from Illinois (Mr. Manzullo).
  Mr. MANZULLO. Mr. Chairman, while I was in the Rules Committee 
yesterday, the gentleman from California said with regard to the types 
of damages and the standard for damages that could be used that the 
judge would have the discretion to determine that.
  Well, taking a look at the manager's amendment. That discretion has 
been taken away, and now there is a presumption in favor of the most 
onerous provision dealing with damages, and that really would impact 
the small inventor.
  Let's take a look at what would happen with the majority's view on 
patent damage reform. The Wright brothers' airplane, here is the 
patent, I have got a picture of it right here.
  The flying machine, if it had been patented today, or, no, if the 
rules that the majority is suggesting now were in effect at the time 
that the Wright brothers got their patent, the amount that they 
recovered would have been limited to the fractional value of the 
surface controls alone, that's it, even though everything else went on 
what was called an airplane, but the thing never flew.
  That's what this does to innovation. If you want to get something for 
your trim tab and your ailerons and whatever else they put on an 
aircraft, that's fine.
  But this is an example, nobody else in the entire debate has given 
one example except me. This is the only opportunity that the people 
opposed to this bill have had to talk about the actual impact of the 
law upon a factual situation.
  Mr. BERMAN. Mr. Chairman, will the gentleman yield?
  Mr. MANZULLO. I yield 20 seconds to the gentleman from California.
  Mr. BERMAN. Under the entire market value rule, which is in this 
bill, the Wright brothers, every value of what was created was those 
surface controls.
  Mr. MANZULLO. But under your manager's amendment, the judge would 
have to say that that does not apply.
  Mr. ROHRABACHER. How much time do I have left?
  The Acting CHAIRMAN. The gentleman from California has 3 minutes 
remaining.
  Mr. ROHRABACHER. And the time on the other side?
  The Acting CHAIRMAN. The gentleman from Michigan has 2\1/4\ minutes 
remaining.
  Mr. ROHRABACHER. I yield myself 3 minutes.
  Let's just note when we are talking, Ms. Kaptur and Mr. Manzullo talk 
about one of the horrible provisions of the bill, which changes the 
whole concept of how damages are assessed, and who has benefited by 
this.
  We have to ask ourselves, we talk about the Wright brothers, the 
little guys who actually made all the difference in whether or not 
America has a high standard of living, the damages that these inventors 
have when people violate their rights and how those damages are 
assessed. That's right in this legislation.
  Yes, they are changing it to the benefit of the infringers. They are 
beating down the little guys, making it more difficult for the Wright 
brothers and for all the other little guys who have come up with these 
ideas in order to help the big corporations.
  By the way, let me just add this thought: we are not just talking 
about American corporations here. We are not talking about making 
inventors just vulnerable to the big American corporations. We are 
talking about multinational corporations, and we are talking about 
foreign corporations.
  Our little guys, with just this change, are going to be dramatically 
damaged. Their ability, in order to protect their rights, will be 
dramatically reduced.
  This is just one example of the type of diminishing of the rights of 
the inventor in this bill. Yet, we aren't able to discuss it fully. One 
hour of debate for a bill that's being described here as one of the 
most important pieces of legislation in the century? One hour of debate 
in which the opposition was not given a chance to control any time in 
opposition? This is a disgrace. What's going on?
  This alone should raise the red flag to all of our Members saying 
something is going on here; there is a power play people in our 
legislation aren't being able to control their time. What's happening 
here? We have a manager's amendment now that was permitted to be 
changed after it left committee. There wasn't even a proper debate on 
this bill then and this manager's amendment in the committee, much less 
the subcommittee.
  So what we have here is a power play by somebody. The rules don't 
count when it comes to the bill, because somebody out there really 
wants it really bad in order to not give us a chance to give the other 
side, not give the full committee a chance even to discuss these 
details that are changed in the manager's amendment, not to let the 
subcommittee play its role.
  Now, all I am suggesting is this should raise a red flag for all of 
our Members. All of us should be aware that when these types of 
shenanigans are being played, something is going on, that the 
legislation that's being pushed through probably is not good 
legislation, but, instead, helps a small group of powerful people.

[[Page 23955]]


  Mr. CONYERS. How much time remains?
  The Acting CHAIRMAN. The gentleman from Michigan has 2\1/4\ minutes 
remaining.
  The gentleman from California, his time has expired.
  Mr. CONYERS. I yield myself 6 seconds before I yield the rest of the 
time to Mr. Berman.
  This is curious, here I am a son of Labor, out of Labor, represents 
Labor all my life, being told publicly that I don't represent the 
little guy from people whose connection with working people in 
collective bargaining movements is unknown.
  With that, I yield to my dear friend, Mr. Berman, for the remainder 
of our time.
  Mr. BERMAN. I thank the gentleman for yielding, and I would like to 
yield to the gentleman from Oregon for purposes of a colloquy.
  Mr. WU. I thank the chairman.
  As both Chairman Conyers and Chairman Berman are aware, the version 
of the legislation in the other body contains a section that ends the 
diversion of fees from the Patent and Trademark Office.
  Absent a compelling consideration, would the chairman be amenable to 
working to keep that provision in conference?
  Mr. BERMAN. That is a provision that I have supported, it is 
legislation I have introduced, it embodies and enacts a philosophy I 
completely agree with. All PTO fees should be kept within the PTO 
office to reduce backlogs, to hire qualified people, and to come to 
better operations of that critical office.
  Mr. WU. I thank the chairman.
  Mr. BERMAN. The chairman of the committee obviously will be a key 
member of the conference committee and indicates that he feels the same 
way.
  Reclaiming my time, I just want to make a couple of points.
  First, I have never said, quote, Labor supports this bill. What I 
said was Labor thinks a number of improvements have been made, 
particularly in this manager's amendment. There are other issues that 
concern them, that they believe we are moving in the right direction, 
and that they have no opposition to the passage of this bill, 
understanding they have other concerns that want to be addressed.
  The same applies for a number of pharmaceutical companies. The major 
institution, and they are not small guys, Mr. Rohrabacher. Opposition 
to this, concerns about this bill, come from large and important--
  The Acting CHAIRMAN. The gentleman's time has expired.
  The question is on the amendment offered by the gentleman from 
Michigan (Mr. Conyers).
  The question was taken; and the Acting Chairman announced that the 
noes appeared to have it.
  Mr. BERMAN. Mr. Chairman, I demand a recorded vote.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from Michigan 
will be postponed.


                  Amendment No. 2 Offered by Mr. Issa

  The Acting CHAIRMAN. It is now in order to consider amendment No. 2 
printed in House Report 110-319.
  Mr. ISSA. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mr. Issa:
       Page 53, strike lines 9 through 15 and insert the 
     following:
       (a) Publication.--Section 122(b)(2)(B)(i) is amended by 
     striking ``published as provided in paragraph (1).'' and 
     inserting the following: ``published until the later of--
       ``(I) three months after a second action is taken pursuant 
     to section 132 on the application, of which notice has been 
     given or mailed to the applicant; or
       ``(II) the date specified in paragraph (1).''.

  The Acting CHAIRMAN. Pursuant to House Resolution 636, the gentleman 
from California (Mr. Issa) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from California.
  Mr. ISSA. Mr. Chairman, I rise in support of this amendment.
  In short, this amendment simply seeks to maintain our historic and 
important American-only right for an inventor who was denied a patent 
to keep that patent a secret.
  Additionally, it allows sufficient time in the process for a patent 
holder to know that his patent, his or her patent, either will or will 
not likely be granted significant claims.
  For that reason, we struck a balance between the rest of the world 
that recognizes that patents are normally published after 18 months. We 
said, no, it will be the greater of the second office action, which can 
be anywhere from 3 to 5 years or 18 months, and we did so because we 
believe somebody should know when they receive significant claims or 
not before they are forced to decide whether or not to retain a trade 
secret.
  It's an important issue; it's one that I believe will allow us a 
final and lasting way for a secret to be balanced with the interest to 
not have submarine patents and unknown information.
  I yield to the chairman of the full committee.
  Mr. CONYERS. We have reviewed the amendment. It's an important 
contribution. We are prepared to accept the amendment.
  Mr. ISSA. I yield to the chairman of the subcommittee.
  Mr. BERMAN. I thank the gentleman, I also agree with the amendment. I 
would like to use the time, if you would allow me to finish the 
sentence, which is with respect to these important companies, that, in 
the biotechnology and pharmaceutical field, I just want to repeat, a 
number of things they want, first-inventor-to-file, not first-to-file, 
first-inventor-to-file, repeal of the best-mode defense, reform of the 
inequitable-conduct defense, are in this bill, and we intend to work 
with them on the damages issue between now and a final conference 
report to try to come to a better understanding on that very important, 
but very complicated, field.

                              {time}  1400

  Mr. ISSA. I yield to the ranking member of the full committee.
  Mr. SMITH of Texas. I thank my friend from California for yielding. I 
certainly endorse his amendment and thank him for offering it.
  Mr. ISSA. Mr. Chairman, I reserve the balance of my time.
  Mr. ROHRABACHER. Mr. Chairman, I rise in opposition to the amendment.
  The Acting CHAIRMAN. The gentleman from California is recognized for 
5 minutes.
  Mr. ROHRABACHER. First and foremost, let us note that over and over 
again we hear, well, they are not opposing the bill. Well, the labor 
unions and others, many of them are opposing the bill. But the ones 
you're describing, you're just saying they aren't necessarily 
supporting the bill. What we are saying, they are not supporting the 
bill. This has been reconfirmed by what my colleagues have said in the 
last 10 minutes.
  Also, let us note, over and over again we hear, we're going to work 
this out. We're going to work all these things out in the bill as it 
moves through the process, which means to all of us there are major 
flaws in this bill, huge flaws in this bill, and we have to take it 
just on faith that they're going to work out all these flaws as it goes 
through the process.
  I would suggest that we take this, we vote ``no'' on this bill, and 
then let's correct those flaws and come back to the floor when you've 
got a bill that isn't flawed. Let's go back to the floor when you can 
support a bill with an honest debate and not be so afraid of a debate 
that you'll neuter the chances and mute our opposition voices by giving 
us almost no time to discuss the issues.
  I would yield to my friend, Ms. Kaptur.
  Ms. KAPTUR. Mr. Chairman, I just want to place on the record that 
Issa's amendment, Issa's choice, is would you rather have the inventor 
shot with a pistol or a rifle? In either case, he or she ends up dead.
  Now, why is that? Because the 1999 Patent Act required the Patent 
Office to publish on the Internet a patent application 18 months from 
the date of

[[Page 23956]]

filing. But the issue really is, it takes an average of 31 months for 
patent review. Mr. Issa, I think, brings it up to 24 months. Thus, what 
happens is there's a gap between when it's filed and when it's 
approved, and you have to go up on the Internet. Under current law, you 
can opt out of that so you can protect your invention and not have some 
pirate in China or Japan or somewhere else take it from you. That is 
not in this bill.
  The elimination of the opt-out provision is a terrible, terrible 
omission and a major change from existing law, and the Issa amendment 
does not make it better.
  Mr. ROHRABACHER. Reclaiming my time, Ms. Kaptur has made a really 
important observation here, and that is, at the end of the day, yeah, 
the Issa amendment does make some changes, but at the end of the day, 
there will be American patent applications in which the inventor would 
like to keep secret until he gets the patent issued to him, which will 
be published for all of the thieves in China and India and Japan and 
Korea and elsewhere who would like to have all of that information 
before the patent is issued. There will still be a significant number 
of patent applications published for the whole world to see, and the 
patent applicant doesn't want that.
  Ms. KAPTUR. Will the gentleman yield further?
  Mr. ROHRABACHER. I certainly will.
  Ms. KAPTUR. I just would point out, in the area of biology and 
microbiology, the average amount of time for patent approval is over 40 
months. So, in other words, your invention is out there, and you have 
no way to protect it globally.
  Mr. ROHRABACHER. So in the end, where Mr. Issa's amendment does take 
things one or two steps forward, the fact is it doesn't come anywhere 
close to offering the protection that currently exists in the law that 
is being destroyed by the language in the Steal American Technologies 
Act, H.R. 1908.
  Let me just note, for my own situation, in terms of the chairman 
asking me about my credentials in terms of being associated with labor, 
I was a member of a labor union. I actually scrubbed toilets at times 
in my life. I have had menial jobs. I care about the working people. My 
family comes from working class farmers, poor farmers and people who 
went off to defend this country.
  The American people, the standard of living of ordinary people 
depends on technology. This bill that's being proposed will give our 
technological secrets to our competitors which undermines the working 
people's chances here of competing with cheap labor overseas.
  Ms. KAPTUR. Will the gentleman yield on that?
  Mr. ROHRABACHER. I certainly will.
  Ms. KAPTUR. I would like to defend your labor credentials. You voted 
against NAFTA on this floor. You were a leader on your side of the 
aisle. That vote was proven to be right.
  What this is going to do, this is going to ``NAFTAtize'' the patent 
system and allow China to infringe on more of our inventions. We should 
not permit this to happen. We should be allowed to fully debate this 
for the people of this country.
  Two-thirds of the value of companies, up to 80 percent of our 
industrial companies value, relate to their patents, and we should be 
given more respect. We should give our constituents more respect than 
compressing this debate into such a narrow time slot.
  Mr. ROHRABACHER. If this bill passes, those people who will be our 
competitors overseas, even if Mr. Issa's amendment passes, they will 
have our secrets before the patent is issued and be outcompeting us 
with our own technologies.


                  Announcement by the Acting Chairman

  The Acting CHAIRMAN. Members are reminded to direct their comments to 
the Chair.
  Mr. CONYERS. Could the gentleman from California (Mr. Issa) yield 
briefly?
  Mr. ISSA. I would yield to the full committee chairman.
  Mr. CONYERS. I'm glad we've all proved our working class credentials 
in support of working people, and I'm very impressed, if not surprised. 
And so I want to describe this debate that's currently going on on this 
second provision.
  Here is the one man in Congress with more patents as a small-time 
inventor than anybody in the House and the Senate being explained to 
why this is contrary to the interests of small-time inventors. Very 
interesting.
  Mr. ISSA. Reclaiming my time, I yield myself such time as I may 
consume.
  I guess as a machinist union worker and a mechanic, I'll get that out 
there so that I get my claim to union membership and to having gotten a 
lot of grease under fingernails, for Ms. Kaptur's understanding, 
because I think what she brought up is crucial, and full understanding 
is essential as to this amendment.
  This amendment, if it takes 10 years to get a second office action, 
will give the inventor 10 years of no one else seeing it. It is an 
infinite period of time, subject to the 20-year expiration. It is, in 
fact, an infinite period of time. And as an inventor, I chose the 
second office action, even though small inventors had said the first 
office action was good enough, because I was aware that the first 
office action is most often a rejection over which you overcome most of 
the objections. The second rejection, if there is one, they usually 
accept some, and if they give you a rejection, you usually don't 
overcome them, and the venture community, if you've had a second 
rejection, tends to discount potential additional claims. So that's the 
reason I chose those because, in fact, it gives you unlimited time to 
pursue your patent up to and through a second and, usually, final 
rejection.
  Ms. KAPTUR. Would the gentleman kindly yield to me?
  Mr. ISSA. I would be glad to yield to the gentlelady.
  Ms. KAPTUR. Does your amendment preserve the opt-out provision of 
existing law?
  Mr. ISSA. It does. Under this provision, if you receive your second 
and usually final rejection and you say, okay, I'm going to take my, 
within 90 days, I'm going to discard my patent, that wrapper is not 
available to anyone. It remains a secret and you're allowed to keep 
your trade secrets.
  Ms. KAPTUR. And how many months or years do you have to wait before 
you get that opt-out provision? Can you do it immediately?
  The Acting CHAIRMAN. The gentleman's time has expired.
  The question is on the amendment offered by the gentleman from 
California (Mr. Issa).
  The question was taken; and the Acting Chairman announced that the 
ayes appeared to have it.
  Mr. ROHRABACHER. Mr. Chairman, I demand a recorded vote.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from California 
will be postponed.


                  Amendment No. 3 Offered by Mr. Issa

  The Acting CHAIRMAN. It is now in order to consider amendment No. 3 
printed in House Report 110-319.
  Mr. ISSA. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Issa
       Page 67, insert the following after line 7:
       (c) Effective Date of Regulations.--
       (1) Review by congress.--A regulation promulgated by the 
     United States Patent and Trademark Office under section 
     2(b)(2) of title 35, United States Code, with respect to any 
     matter described in section 2(c)(6) of such title, as added 
     by subsection (a) of this section, may not take effect before 
     the end of a period of 60 days beginning on the date on which 
     the Under Secretary of Commerce for Intellectual Property and 
     Director of the United States Patent and Trademark Office 
     submits to each House of Congress a copy of the regulation, 
     together with a report containing the reasons for its 
     adoption. The regulation and report so submitted shall be 
     referred to the Committee on the Judiciary of the House of 
     Representatives and the Committee on the Judiciary of the 
     Senate.
       (2) Joint resolution of disapproval.--If a joint resolution 
     of disapproval with respect

[[Page 23957]]

     to the regulation is enacted into law, the regulation shall 
     not become effective or continue in effect.
       (3) Joint resolution defined.--For purposes of this 
     subsection, the term a ``joint resolution of disapproval'' 
     means a joint resolution, the matter after the resolving 
     clause of which is as follows: ``That Congress disapproves 
     the regulation submitted by the Under Secretary of Commerce 
     for Intellectual Property and Director of the United States 
     Patent and Trademark Office on ___ relating to ___, and such 
     regulation shall have no force or effect.'', with the first 
     space being filled with the appropriate date, and the second 
     space being filled with a description of the regulation at 
     issue.
       (4) Referral.--A joint resolution of disapproval shall be 
     referred in the House of Representatives to the Committee on 
     the Judiciary and in the Senate to the Committee on the 
     Judiciary.
       (5) Floor consideration.--A vote on final passage of a 
     joint resolution of disapproval shall be taken in each House 
     on or before the close of the 15th day after the bill or 
     resolution is reported by the committee of that House to 
     which it was referred or after such committee has been 
     discharged from further consideration of the joint resolution 
     of disapproval.
       (6) No inferences.--If the Congress does not enact a joint 
     resolution of disapproval, no court or agency may infer 
     therefrom any intent of the Congress with regard to such 
     regulation or action.
       (7) Calculation of days.--The 60-day period referred to in 
     paragraph (1) and the 15-day period referred to in paragraph 
     (5) shall be computed by excluding--
       (A) the days on which either House of Congress is not in 
     session because of an adjournment of the Congress sine die; 
     and
       (B) any Saturday and Sunday, not excluded under 
     subparagraph (A), when either House is not in session.
       (8) Rulemaking authority.--This subsection is enacted by 
     the Congress as an exercise of the rulemaking power of the 
     Senate and House of Representatives respectively, and as such 
     it is deemed a part of the rules of each House, respectively.

  The Acting CHAIRMAN. Pursuant to House Resolution 636, the gentleman 
from California (Mr. Issa) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from California.
  Mr. ISSA. Mr. Chairman, I'll briefly explain the amendment. Almost 
every single agency of the Federal Government has rule-making 
authority. But, quite frankly, rules are, in fact, laws made by 
agencies. So when the Patent and Trademark Office repeatedly has asked 
us for rule-making authority, it has been a long process to figure out 
the best way to allow them to make rules but to retain our genuine 
constitutional obligation over the effects of those laws. So, in doing 
so, what we did was we crafted a constitutional review. We're not 
allowed to veto these agencies, but we are allowed to overrule them. 
And in doing so, what we have decided to do is to allow any Member of 
the House or the Senate to bring a motion in opposition to any rule 
produced or proposed by the Patent and Trademark Office, and we will, 
in fact, within 60 days, hear that rule, that opposition and make a 
decision. This is designed specifically to stop any overreaching under 
this underlying bill from potentially causing things which we would not 
have legislated to, in fact, be legislated, while recognizing that we 
want the Patent and Trademark Office to have the ability to move 
swiftly and accurately to the conclusion of patents on behalf of our 
economy.
  Mr. Chairman, I reserve the balance of my time.
  Mr. ROHRABACHER. Mr. Chairman, I rise in opposition to the amendment.
  The Acting CHAIRMAN. The gentleman from California is recognized for 
5 minutes.
  Mr. ROHRABACHER. This is yet another example of why this overall bill 
should be defeated. The fact is that we shouldn't be changing the 
provision and permitting outside agencies and taking authority away 
from us from setting the basic ground rules about patents in the first 
place. This idea that, well, let me put it this way. This bill is so 
filled with this type of imperfection, and as we have had our guarantee 
from those people who brought this bill to the floor so precipitously, 
they will work really hard to make sure all the flaws are out. I would 
suggest that that statement alone should have all these red flags going 
up for all of us. And then the muting of the opposition and not 
permitting us an adequate amount of time to actually discuss the 
provisions of the bill and not giving us time to control our own 
opposition, again, should be the red flags for all of us who's 
listening to this debate.
  I yield 1\1/2\ minutes to the gentleman from Texas (Mr. Gohmert).
  Mr. GOHMERT. Mr. Chairman, I appreciate so much my friend from 
California. And, in fact, I like Mr. Issa so much, I want more people 
like Darrell Issa. I want more people to have the opportunity to create 
patents, to use ingenuity, to do well based on their thought processes. 
And I'm afraid now this bill will prevent us from having the 
opportunity to have more Darrell Issas.
  The amendment works on one of the problems, well, gee, we'll look at 
the regulations. But, my goodness, this is a comprehensive bill. We 
keep hearing, you know, we need comprehensive bills. And red flags went 
up in my mind. And where have I heard that? Oh, yes, on immigration 
reform. We had to have a comprehensive bill because there were some 
things that needed to be passed, some people thought, that they knew 
could not pass if they had the bright enough light of day shown on 
them, and so we have a comprehensive bill to put some things in there 
that do more damage than good.
  We need more time to look at these provisions so that we can ensure 
that there are more Darrell Issas that get to have the same 
opportunities to do as well and make us as proud as our good friend 
from California.
  Mr. ROHRABACHER. Mr. Chairman, how much time do I have?
  The Acting CHAIRMAN. The gentleman from California has 2\1/2\ minutes 
remaining.
  The other gentleman from California has 3\1/2\ minutes remaining.
  Mr. ROHRABACHER. I yield 1 minute to Ms. Kaptur.
  Ms. KAPTUR. Mr. Chairman, I just wanted to place on the record 
opposition to Mr. Issa's amendment to try to politicize decision making 
that is done by professionals over at the Patent Office. But in doing 
so, also to place on the record who's financing the expensive lobbying 
campaign on behalf of the bill that is before us today. They are a 
coalition of companies including transnational corporations: Adobe, 
Microsoft, Cisco, Intel, eBay, Lenovo, Dell and Oracle.

                              {time}  1415

  During the period of 1993-2005, four of them alone paid out more than 
$3.5 billion in patent settlements. And in the same period, their 
combined revenues were over $1.4 trillion, making their patent 
settlements only about one-quarter of 1 percent of those revenues. Now 
they wish to reduce even those costs, not by changing their obviously 
unfair and often illegal business practices, but by persuading Congress 
and also the Supreme Court to weaken U.S. patent protections.
  We ought to stand up for American inventors. We should not allow this 
bill to go forward. It should have sunlight. I know my colleagues are 
doing the best they can, but they can surely do better than this.
  Mr. ISSA. Mr. Chairman, I am proud to yield 1 minute to the chairman 
of the full committee, Mr. Conyers.
  Mr. CONYERS. Ladies and gentlemen, I keep noticing that the opponents 
to the bill, opponents to the rule, opponents to the manager's 
amendment, opponents to the amendments to include it in this are all 
opposed to everything, anything. And I am glad these great sons of 
Labor, like the gentleman from California who knows his voting record 
on Labor and so, unfortunately, do I, recognize how he is supporting 
the working people and the person who has invented more inventions than 
all of us put together is opposing the small inventors. What a debate 
this is.
  I just rise to let you know, sir, that on this side of the aisle, we 
are proud to support this amendment.


                  Announcement by the Acting Chairman

  Mr. Acting CHAIRMAN. All Members are reminded to address their 
comments to the Chair.
  Mr. ROHRABACHER. Mr. Chairman, I yield myself such time as I may 
consume.

[[Page 23958]]

  Let me just note I think it is really much more important to talk 
about provisions of the bill rather than trying to point out things 
about each other, and that is one of the reasons we needed more time in 
this debate so that we could actually get into the provisions of this 
bill.
  The fact that no matter what happens with Mr. Issa's first amendment, 
that still there will be patent applications that will be published for 
the world to see even before the patent is issued; that our overseas 
competitors will then have information that they will be able to use to 
outcompete us even before our patents are issued to those inventors who 
have applied for patents. Those are the issues we need to talk about.
  We need to talk about why the assessment of damages has been changed 
in a way that helps these big guys, these big companies that Ms. Kaptur 
has just outlined, as well as the foreign corporations, I might add, at 
the expense of the small inventor. The inventor is just trying to 
prevent theft of his lifetime of work. We have to know why we have had 
different ways of determining the validity of a patent and opening up 
challenges in the front of the patent as well as afterwards so that we 
add cost after cost after cost to the little guy.
  We need to discuss these things in detail. Instead we have 1 hour in 
which the opposition, I think, had 12 minutes in order to discuss these 
issues. This should raise a flag to everyone listening to this debate. 
Why is Congress trying to stampede the rest of the Members of Congress 
into voting for an act that could be so damaging to the American 
people?
  The Acting CHAIRMAN. The time of the gentleman has expired.
  Mr. ISSA. Mr. Chairman, I yield myself such time as I may consume.
  Both of my amendments are intended to improve this bill. I don't 
stand before the Committee of the Whole to say that this bill will 
become perfect. As a matter of fact, in the general debate, I named 
companies like BIOCOM and GenProbe and Invitrogen, who are part of UCSD 
CONNECT, who have specific areas we are including in the material that 
they want continued work done on. They are, in fact, dissatisfied with 
the bill because it hasn't done everything it could do. But this 
amendment on rulemaking which would stop an arbitrary decision by the 
Patent Office on something it may want to do such as eliminate 
continuations, et cetera, is there for a reason. And I would hope that 
people who are going to perhaps oppose the bill as not yet good enough 
would recognize that it is crucial for this amendment to get into it if 
we are going to protect against arbitrary action by the Patent and 
Trademark Office.
  And last but not least, Ms. Kaptur was kind enough to ask one more 
question during the previous amendment that couldn't be answered, and I 
just want to make it clear on the previous amendment, you will be able 
to keep your secret through an unlimited period of debate back and 
forth with the Patent Office up to two full rejections and then 90 days 
in which to close. And I would hope the gentlewoman would recognize 
that that is an improvement even if nothing is perfect.
  Ms. KAPTUR. Mr. Chairman, will the gentleman yield?
  Mr. ISSA. I yield to the gentlewoman from Ohio.
  Ms. KAPTUR. Mr. Chairman, I thank the gentleman very much for 
yielding.
  As I said with Issa's choice, it is either being shot with a pistol 
or a rifle. It does not guarantee that once the patent is granted that 
that person can keep their intellectual property, can opt out and not 
have it published for that 18-month period. So we are taking away that 
intellectual property protection.
  Mr. ISSA. Reclaiming my time, Mr. Chairman, under the current law 
when your patent claims are granted, you have an obligation to make 
available to the world and to people of ordinary skill in the art how 
to knock off your product. That's current law. That has been around 
since the founding. The deal between the Patent Office, the American 
people, if you will, and the inventor is that you have disclosed to the 
world if you are given those claims for a limited period of time. We 
are not changing that in 200 years. We are protecting your right if you 
are not granted a patent. That is what current law does; that is what 
this amendment does.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from California (Mr. Issa).
  The question was taken; and the Acting Chairman announced that the 
ayes appeared to have it.
  Mr. ROHRABACHER. Mr. Chairman, I demand a recorded vote.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from California 
will be postponed.


          Amendment No. 4 Offered by Ms. Jackson-Lee of Texas

  The Acting CHAIRMAN. It is now in order to consider amendment No. 4 
printed in House Report 110-319.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Ms. Jackson-Lee of Texas:
       At the end of the bill insert the following new section:

     SEC. 18. STUDY ON PATENT DAMAGES.

       (a) In General.--The Under Secretary of Commerce for 
     Intellectual Property and Director of the United States 
     Patent and Trademark Office (in this section referred to as 
     the ``Director'') shall conduct a study of patent damage 
     awards in cases where such awards have been based on a 
     reasonable royalty under section 284 of title 35, United 
     States Code. The study should, at a minimum, consider cases 
     from 1990 to the present.
       (b) Conduct.--In conducting the study under subsection (a), 
     the Director shall investigate, at a minimum, the following:
       (1) Whether the mean or median dollar amount of reasonable-
     royalty-based patent damages awarded by courts or juries, as 
     the case may be, has significantly increased on a per case 
     basis during the period covered by the study, taking into 
     consideration adjustments for inflation and other relevant 
     economic factors.
       (2) Whether there has been a pattern of excessive and 
     inequitable reasonable-royalty-based damages during the 
     period covered by the study and, if so, any contributing 
     factors, including, for example, evidence that Federal courts 
     have routinely and inappropriately broadened the scope of the 
     ``entire market value rule'', or that juries have routinely 
     misapplied the entire market value rule to the facts at 
     issue.
       (3) To the extent that a pattern of excessive and 
     inequitable damage awards exists, measures that could guard 
     against such inappropriate awards without unduly prejudicing 
     the rights and remedies of patent holders or significantly 
     increasing litigation costs, including legislative reforms or 
     improved model jury instructions.
       (4) To the extent that a pattern of excessive and 
     inequitable damage awards exists, whether legislative 
     proposals that would mandate, or create a presumption in 
     favor of, apportionment of reasonable-royalty-based patent 
     damages would effectively guard against such inappropriate 
     awards without unduly prejudicing the rights and remedies of 
     patent holders or significantly increasing litigation costs.
       (c) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Director shall submit to the 
     Congress a report on the study conducted under this section.

  The Acting CHAIRMAN. Pursuant to House Resolution 636, 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 of Texas. Mr. Chairman, I started out in this debate 
to say that we worked very hard for a long period of time to be able to 
look at the small and the big, the big inventor and the little man 
inventor. All of them have been great to America, and we have benefited 
from their inventions and their intellect.
  This patent bill preserves the intellectual property, the art, the 
invention, the minds of America. And it does, in fact, protect us 
against those who would undermine this very viable economic engine, and 
that is our mind, our talent.
  But I believe that all voices should be heard. And throughout this 
whole process there is probably no one who focused on the damages issue 
as much as I did, the proportionality issue. And I

[[Page 23959]]

worked with Mr. Berman and Mr. Conyers and our bipartisan friends.
  So this gives us an opportunity, and my amendment is very simple. And 
it doesn't wait 7 years or 10 years to give us answers. It's 1 year. It 
provides us with the opportunity in this landmark legislation to study 
the patent damage awards in cases where such awards have been based on 
a reasonable royalty under section 84 of title 35 of the United States 
Code. The study should at a minimum consider cases from 1990 to the 
present. It has a very detailed analysis, and what that will do is it 
will find its way to this Congress and we will have a better way of 
assessing the impact.
  We are concerned. Proportionality is an issue. But we are not 
ignoring your concerns, and this particular study helps to bring us 
along.
  Let me just quickly suggest the entities that will be impacted in a 
positive way: the American Intellectual Property Law Association, a 
number of universities that will be impacted from the University of 
Illinois to Massachusetts to the University of Iowa, Maryland, 
Michigan, Minnesota, New Hampshire, North Carolina, Texas A&M. Small 
inventors will be impacted by this study because it will give us more 
information.
  I would ask my colleagues to support this amendment.
  Thank you, Mr. Chairman for affording me this opportunity to explain 
my amendment to H.R. 1908, the ``Patent Reform Act of 2007.'' Let me 
also thank the distinguished Chairman of the Judiciary Committee, Mr. 
Conyers, and the Ranking Member, Mr. Smith, for the example of 
bipartisan leadership coming together to address the real problems of 
the American people and the economy.
  I especially wish to thank Mr. Berman and Mr. Coble, the chair and 
ranking member of the Judiciary Subcommittee on Courts, Intellectual 
Property, and the Internet for their hard work, perseverance, and 
visionary leadership in producing landmark legislation that should 
ensure that the American patent system remains the envy of the world. I 
am proud to have joined with all of them as original co-sponsor of H.R. 
1908, the Patent Reform Act of 2007.
  On behalf of the small business enterprises, technology firms, and 
academics I am privileged to represent, I want to publicly thank them 
for working with me on two other amendments to the bill offered by me 
which were adopted during the full committee markup.
  Mr. Chairman, my amendment is a simple but important addition to this 
landmark legislation, which I believe can be supported by every member 
of this body. My amendment calls for a study of patent damage awards in 
cases where such awards have been based on a reasonable royalty under 
Section 284 of Title 35 of the United States Code. The study should, at 
a minimum, consider cases from 1990 to the present. The results of this 
study shall be reported to the House and Senate Judiciary Committees.
  I have attached to my statement a partial listing of groups, 
organizations, institutions, and industries that will benefit from the 
study called for in my amendment.
  Mr. Chairman, Article I, Section 8, clause 8 of the Constitution 
confers upon the Congress the 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.''
  In order to fulfill the Constitution's mandate, we must examine the 
patent system periodically to determine whether there may be flaws in 
its operation that may hamper innovation, including the problems 
described as decreased patent quality, prevalence of subjective 
elements in patent practice, patent abuse, and lack of meaningful 
alternatives to the patent litigation process.
  On the other hand, we must be mindful of the importance of ensuring 
that small companies have the same opportunities to innovate and have 
their inventions patented and that the laws will continue to protect 
their valuable intellectual property.
  Chairman Berman is to be commended for his yeoman efforts in seeking 
to broker a consensus on the subject of damages and royalty payments, 
which is covered in Section 5 of the bill. But as all have learned by 
now, this is an exceedingly complex issue. The complexity stems not 
from the unwillingness of competing interests to find common ground but 
from the interactive effects of patent litigation reform on the royalty 
negotiation process and the future of innovation.
  Important innovations come from universities, medical centers, and 
smaller companies that develop commercial applications from their basic 
research. These innovators must rely upon the licensing process to 
monetize their ideas and inventions. Thus, it is very important that we 
take care not to harm this incubator of tomorrow's technological 
breakthroughs. It is for that reason that we need to study whether 
patent damage awards in cases where such awards have been based on a 
reasonable royalty under 35 U.S.C. 284 have and are hindering 
technological innovation.
  And it is important to emphasize Mr. Chairman, that this evaluation 
will be based on empirical data rigorously analyzed.
  Among the matters to be studied and reviewed are the following: 
Whether the mean or median dollar amount of reasonably royalty-based 
patent damages awarded by courts or juries, as the case may be, has 
significantly increased on a per case basis during the period covered 
by the study, taking into consideration adjustments for inflation and 
other relevant economic factors; Whether there has been a pattern of 
excessive and inequitable reasonable-royalty based damages during the 
period covered by the study and, if so, any contributing factors; To 
the extent that a pattern of excessive and inequitable damage awards 
exists, measures that could guard against such inappropriate awards 
without unduly prejudicing the rights and remedies of patent holders or 
significantly increasing litigation costs; and To the extent that a 
pattern of excessive and inequitable damage awards exists, whether 
legislative proposals that would mandate, or create a presumption in 
favor of, apportionment of reasonable royalty-based patent damages 
would effectively guard against such inappropriate awards without 
unduly prejudicing the rights and remedies of patent holders or 
significantly increasing litigation costs.
  In short, Mr. Chairman my amendment can be summed up as follows: For 
those who are confident of the future, my amendment offers vindication. 
For those who are skeptical that the new changes will work, my 
amendment will provide the evidence they need to prove their case. And 
for those who believe that maintaining the status quo is intolerable, 
my amendment offers a way forward.
  I urge all members to support my amendment.

                                Appendix

       AmberWave Systems Aware, Inc., Canopy Venture Partners, 
     LLC, Cantor Fitzgerald, LP, Cryptography Research, Cummins-
     Allison Corp., Digimarc Corporation, Fallbrook Technologies, 
     Inc., Helius, Inc, Immersion Corporation, Inframat 
     Corporation, InterDigital Communications Corporation, 
     Intermolecular, Inc., LSI Metabolix.
       QUALCOMM, Inc., Symyx, Tessera, US Nanocorp. 3M, Abbott, 
     Accelerated Technologies, Inc., Acorn Cardiovascular Inc., 
     Adams Capital Management, Adroit Medical Systems, Inc., 
     AdvaMed, Advanced Diamond Technologies, Inc., Advanced 
     Medical Optics, Inc., Advanced Neuromodulation Systems, Inc., 
     Aero-Marine Company.
       AFL-CIO, Air Liquide, Air Products, ALD NanoSolutions, 
     Inc., ALIO Industries, Allergan, Inc., Almyra, Inc., 
     AmberWave Systems Corporation, American Intellectual Property 
     Law Association (AIPLA), American Seed Trade, Americans for 
     Sovereignty, Americans for the Preservation of Liberty, 
     Amylin Pharmaceuticals, AngioDynamics, Inc. Applied Medical, 
     Applied Nanotech, Inc.
       Argentis Pharmaceuticals, LLC, Arizona BioIndustry 
     Association, ARYx Therapeutics, Ascenta Therapeutics, Inc., 
     Association of University Technology Managers (AUTM), 
     Asthmatx, Inc., AstraZeneca, Aware, Inc., Baxa Corporation, 
     Baxter Healthcare Corporation, BayBio, Beckman Coulter, BIO--
     Biotechnology Industry Organization, BioCardia, Inc.
       BIOCOM, Biogen Idec. Biomedical Association, BioOhio, 
     Bioscience Institute, Biotechnology Council of New Jersey, 
     Blacks for Economic Security Trust Fund, BlazeTech 
     Corporation, Boston Scientific, Bridgestone Americas Holding, 
     Inc., Bristol-Myers Squibb, BuzzLogic, California Healthcare 
     Institute, Canopy Ventures, Carbide Derivative Technologies, 
     Cardiac Concepts, Inc.
       CardioDynamics, Cargill, Inc., Cassie-Shipherd Group, 
     Caterpillar, Celgene Corporation, Cell Genesys, Inc., Center 
     7, Inc. Center for Small Business and the Environment, Centre 
     for Security Policy, Cephalon, CheckFree, Christian Coalition 
     of America, Cincinnati Sub-Zero Products, Coalition for 21st 
     Century Patent Reform, Coalitions for America.
       CogniTek Management Systems, Inc., Colorado Bioscience 
     Association, Conceptus, Inc., CONNECT, Connecticut United for 
     Research Excellence, Cornell University, Corning, Coronis 
     Medical Ventures, Council for America, CropLife America, 
     Cryptography Research, Cummins Inc.
       Cummins-Allison Corporation, CVRx Inc., Dais Analytic 
     Corporation, Dartmouth Regional Technology Center, Inc., 
     Declaration Alliance
       Deltanoid Pharmaceuticals, Digimarc Corporation, 
     DirectPointe, Dow Chemical Company, DuPont, Dura-Line 
     Corporation,

[[Page 23960]]

     Dynatronics Co., Eagle Forum, Eastman Chemical Company.
       Economic Development Center, Edwards Lifesciences, Elan 
     Pharmaceuticals, Inc., Electronics for Imaging, Eli Lilly and 
     Company, Ellman Innovations LLC, Enterprise Partners Venture 
     Capital, Evalve, Inc. Exxon Mobil Corporation, Fallbrook 
     Technologies Inc., FarSounder, Inc., Footnote.com, Gambro 
     BCT, General Electric.
       Genomic Health, Inc., Gen-Probe Incorporated, Genzyme, 
     Georgia Biomedical Partnership, Glacier Cross, Inc.
       GlaxoSmithKline, Glenview State Bank, Hawaii Science & 
     Technology Council, HealthCare Institute of New Jersey, 
     HeartWare, Inc., Helius, Inc., Henkel Corporation.
       Hoffman-LaRoche, Inc., iBIO, Imago Scientific Instruments, 
     Impulse Dynamics (USA), Inc., Indiana Health Industry Forum, 
     Indiana University, Innovation Alliance, Institute of 
     Electrical and Electronics Engineers (IEEE)-USA.
       InterDigital Communications Corporation, Intermolecular, 
     Inc., International Association of Professional and Technical 
     Engineers (IFPTE), Invitrogen Corporation, Iowa Biotechnology 
     Association, ISTA Pharmaceuticals, Jazz Pharmaceuticals, 
     Inc., Johnson & Johnson, KansasBio, Leadership Institute, Let 
     Freedom Ring, Life Science Alley, LITMUS, LLC, LSI 
     Corporation, Lux Capital Management, Luxul Corporation, 
     Maryland Taxpayers' Association.
       Masimo Corporation, Massachusetts Biotechnology Council, 
     Massachusetts Medical Device Industry Council (MassMEDIC), 
     Maxygen Inc., MDMA--Medical Device Manufacturer's 
     Association, Medical College of Wisconsin, Medlmmune, Inc., 
     Medtronic, Merck, Metabasis Therapeutics, Inc., Metabolex, 
     Inc., Metacure (USA), Inc., MGI Pharma Inc., MichBio.
       Michigan Small Tech Association, Michigan State University, 
     Millennium Pharmaceuticals, Inc., Milliken & Company, Mohr, 
     Davidow Ventures, Monsanto Company, NAM--National Association 
     of Manufacturers, NanoBioMagnetics, Inc. (NBMI), NanoBusiness 
     Alliance, Nanolnk, Inc., Nanolntegris, Inc., Nanomix, Inc., 
     Nanophase Technologies, NanoProducts Corporation, Nanosys, 
     Inc., Nantero, Inc., National Center for Public Policy 
     Research, Nektar Therapeutics, Neoconix, Inc.
       Neuro Resource Group (NRG), Neuronetics, Inc., NeuroPace, 
     New England Innovation Alliance, New Hampshire Biotechnology 
     Council, New Hampshire Department of Economic Development, 
     New Mexico Biotechnical and Biomedical Association, New York 
     Biotechnology Association.
       Norseman Group, North Carolina Biosciences Organization, 
     North Carolina State University, North Dakota State 
     University, Northrop Grumman Corporation, Northwestern 
     University, Novartis, Novartis Corporation.
       Novasys Medical Inc., NovoNordisk, NUCRYST Pharmaceuticals, 
     Inc., NuVasive, Inc., Nuvelo, Inc., Ohio State University, 
     OpenCEL, LLC, Palmetto Biotechnology Alliance, Patent 
     Cafe.com, Inc., Patent Office Professional Association, 
     Pennsylvania Bio, Pennsylvania State University, PepsiCo, 
     Inc., Pfizer, PhRMA--Pharmaceutical Research and 
     Manufacturers of America, Physical Sciences Inc., PointeCast 
     Corporation.
       Power Innovations International, Power Metal Technologies, 
     Inc., Preformed Line Products, Procter & Gamble, Professional 
     Inventors' Alliance.
       ProRhythm, Inc., Purdue University, Pure Plushy Inc., 
     QUALCOMM Inc., QuantumSphere, Inc., QuesTek Innovations LLC, 
     Radiant Medical, Inc., Rensselaer Polytechnic Institute, 
     Research Triangle Park, NC, Retractable Technologies, Inc., 
     RightMarch.com.
       S & C Electric Company, Salix Pharmaceuticals, Inc., 
     SanDisk Corporation, Sangamo BioSciences, Inc., Semprius, 
     Inc, Small Business Association of Michigan--Economic 
     Development Center, Small Business Exporters Association of 
     the United States, Small Business Technology Council, Smart 
     Bomb Interactive, Smile Reminder, SmoothShapes, Inc., Solera 
     Networks, South Dakota Biotech Association, Southern 
     California Biomedical Council, Spiration, Inc., Standup Bed 
     Company.
       State of New Hampshire Department of Resources and Economic 
     Development, Stella Group, Ltd., StemCells, SurgiQuest, Inc., 
     Symyx Technologies, Inc., Tech Council of Maryland/MdBio, 
     Technology Patents & Licensing, Tennessee Biotechnology 
     Association, Tessera, Inc., Texas A&M, Texas Healthcare, 
     Texas Instruments, Three Arch Partners, United Technologies, 
     University of California System, University of Illinois, 
     University of Iowa, University of Maryland, University of 
     Michigan, University of Minnesota, University of New 
     Hampshire, University of North Carolina System, University of 
     Rochester, University of Utah, University of Wisconsin-
     Madison.
       US Business and Industry Council, US Council for 
     International Business, USGI Medical, USW--United 
     Steelworkers, Vanderbilt University and Medical Center, 
     Virent Energy Systems, Inc., Virginia Biotechnology 
     Association, Visidyne, Inc., VisionCare Opthamalogic 
     Technologies, Inc., Washington Biotechnology & Biomedical 
     Association.
       Washington University, WaveRx, Inc., Wayne State 
     University, Wescor, Inc., Weyerhaeuser, Wilson Sonsini 
     Goodrich & Rosati, Wisconsin Alumni Research Foundation 
     (WARF), Wisconsin Biotechnology and Medical Device 
     Association, Wyeth.

  Mr. Chairman, I reserve the balance of my time.
  Mr. ROHRABACHER. Mr. Chairman, I rise in opposition to the 
gentlewoman's amendment.
  The Acting CHAIRMAN. The gentleman from California is recognized for 
5 minutes.
  Mr. ROHRABACHER. Mr. Chairman, I yield 1 minute to Mr. Manzullo.
  Mr. MANZULLO. Mr. Chairman, what is interesting about the amendment 
from the gentlewoman from Texas is the fact that she wants to have a 
study, and I agree with it, of patent damage awards from at least 1990 
to the present case.
  So this is very interesting because here we are about to do this 
massive change in law and no one has done the study. But now we are 
going to do the study after we have this massive change in law.
  I'll tell you, this train just turned around with the caboose going 
forward. That is why this bill has to be ditched.
  Mr. ROHRABACHER. Mr. Chairman, I yield 1 minute to Mr. Gohmert from 
Texas.
  Mr. GOHMERT. Mr. Chairman, our chairman of the Judiciary Committee 
commented that it looks like the people opposed to anything are opposed 
to everything.
  I'm really not. I think this is a good idea, a good amendment; and I 
applaud my colleague from Texas for pushing this forward.
  I would like to have had these results before we went forward with 
this so-called comprehensive bill.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, will the gentleman yield?
  Mr. GOHMERT. I yield to the gentlewoman from Texas.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, my intent was to respond to 
the disparate voices.
  Would you at least admit that this improves or adds to by giving us 
additional information?
  Mr. GOHMERT. Reclaiming my time, Mr. Chairman, as I said, I think 
it's a good idea and I'm going to vote for it. But I would rather have 
this as a stand-alone before we do all of these what some have referred 
to as draconian comprehensive measures.
  And I do not question whatsoever the sincerity or the effort on 
behalf of the chairman for working people and others. And I do not 
question the sincerity when we were told, and I was among those who 
were told, you could be in a group that will revise this. I just never 
was given that opportunity.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield 30 seconds to the 
gentlewoman from California (Ms. Zoe Lofgren).
  Ms. ZOE LOFGREN of California. I thank the gentlewoman for yielding, 
and I support the amendment.
  I would just like to note, however, that we have had over 21 hearings 
in the subcommittee and have convened several briefings on top of that. 
We have had reports from the National Academy, the FTC on this subject. 
And I think the gentlewoman's amendment to get still further 
information is valid. I support it. But certainly we have information 
today that has been gained over an extensive process over half a 
decade.
  Mr. ROHRABACHER. Mr. Chairman, I yield 2 minutes to Mr. Roscoe 
Bartlett, Ph.D., a man who holds 20 patents, a man who is greatly 
respected for his scientific knowledge and who has been deeply 
appreciated for the advice he has given us in that endeavor in the last 
15 years in Congress.
  Mr. BARTLETT of Maryland. I thank the gentleman for yielding.
  I have been, for the last couple of hours, doing what is seldom done 
in this House. I have been listening to every minute of this debate. 
And I felt compelled to come to the floor.
  When I was listening to the debate, I was reminded of the story of 
the father who was looking at the white shirt that he wore yesterday to 
see if he could wear it again.

                              {time}  1430

  And his daughter observed, daddy, if it's doubtful, it's dirty. And I 
thought

[[Page 23961]]

of that when I was listening to this debate because obviously this bill 
is doubtful. We're amending it on the run. And I wonder if, Mr. 
Chairman, maybe the little girl isn't right, that if it's doubtful, 
it's dirty.
  There's been a lot of talk about protecting the rights of the little 
guy. In a former life, I had 20 patents. And I'm really committed to 
protecting the rights of the little guy because I was a little guy, not 
just because of the little guy, but because most of our creativity and 
innovation comes from the little guy.
  And what I would suggest is that if this bill is so flawed that we're 
modifying it, amending it on the run and hope to make it okay when we 
come to conference, wouldn't it be better just to send it back to 
committee and do it right the first time?
  Ms. JACKSON-LEE of Texas. May I inquire as to how much time I have 
remaining?
  The Acting CHAIRMAN. The gentlewoman from Texas has 2 minutes 
remaining.
  Ms. JACKSON-LEE of Texas. I yield 45 seconds to the distinguished 
chairman, Mr. Conyers.
  Mr. CONYERS. I rise only to say to the distinguished previous speaker 
that this mistaken impression that this is being amended on the run is 
incorrect. And I'm glad you listened to the full debate, and I respect 
your position.
  The point that you think it's being amended on the run is that we had 
nearly 50 organizations in which we were negotiating with up until the 
last moment, and even now, sir. That's why we have a manager's 
amendment.
  Mr. BARTLETT of Maryland. Will the gentleman yield?
  Mr. CONYERS. I will yield to the gentleman.
  Mr. BARTLETT of Maryland. I was simply quoting what you said.
  Ms. JACKSON-LEE of Texas. May I inquire as to how much time I have 
remaining?
  The Acting CHAIRMAN. The gentlewoman from Texas has 1\1/4\ minutes 
remaining.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield the balance of my 
time to the distinguished gentleman from California.
  Mr. BERMAN. I thank the gentlelady, and I support her amendment.
  Just to review the bidding, my friend from California (Mr. 
Rohrabacher) over and over again talks about the flaws in this bill. 
Other than four Gohmert amendments on the issue of venue and one 
amendment from the gentleman from Iowa that was an earmark amendment, 
no other amendments were kept from consideration here. For all the 
arguments about flaws, where were the amendments to correct the flaws 
that they talk about? For all the notions of, we're not against reform, 
but this one isn't perfect, and this one isn't right, and this has some 
flaws, and it hasn't resolved every issue to everyone's satisfaction, 
nothing will, where is their alternative bill?
  I'm telling you, this is an issue of whether we're going to address a 
system that the National Academy of Sciences and so many other 
objective agencies have said is getting near broken or doing nothing, 
and I suggest doing nothing is not a good answer for a Congress that 
wants to keep the American economy strong.
  Mr. ROHRABACHER. Mr. Chairman, I yield myself such time as I may 
consume.
  Let's note that there are several amendments that were not permitted 
by the Rules Committee. I did not submit amendments because those of us 
who have been following this bill realize it is fundamentally flawed. 
The purpose of the bill is to support those large corporations that Ms. 
Kaptur noted who are dramatically supporting the legislation. And it is 
being opposed, I might add, by a large number of universities, unions, 
pharmaceutical industries, biotech industries, et cetera, et cetera. So 
we have everybody except the electronics industry and the financial 
industry, who are already over in China making their profit at our 
expense, are opposed to the bill.
  I yield my remaining 30 seconds to the gentleman from Maryland (Mr. 
Bartlett).
  Mr. BARTLETT of Maryland. I just wanted to clarify the basis for my 
observation that the bill was being amended on the run. I was simply 
quoting the chairman, who said that they worked late last night 
changing the manager's amendment, that they were going to continue to 
work through conference so that they could change the bill to make it 
better. So obviously the bill is being amended and being changed on the 
run.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Texas (Ms. Jackson-Lee).
  The question was taken; and the Acting Chairman announced that the 
ayes appeared to have it.
  Mr. ROHRABACHER. Mr. Chairman, I demand a recorded vote.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentlewoman from Texas will 
be postponed.


                  Amendment No. 5 Offered by Mr. Pence

  The Acting CHAIRMAN. It is now in order to consider amendment No. 5 
printed in House Report 110-319.
  Mr. PENCE. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 5 offered by Mr. Pence:
       Page 40, line 9, strike ``identifies'' and all that follows 
     through line 11 and insert the following:
       ``(1) identifies the same cancellation petitioner and the 
     same patent as a previous petition for cancellation filed 
     under such section; or
       ``(2) is based on the best mode requirement contained in 
     section 112.

  The Acting CHAIRMAN. Pursuant to House Resolution 636, the gentleman 
from Indiana (Mr. Pence) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Indiana.
  Mr. PENCE. I yield myself such time as I may consume.
  Mr. Chairman, I rise today in support of an amendment that would 
simply clarify patent law in what is known as ``best mode.''
  Before explaining my amendment and the need for it, I want to take a 
brief moment to express my personal gratitude to Ranking Member Lamar 
Smith for his years of work on this issue, and to express my 
appreciation not only to Chairman Conyers, but to Chairman Berman, for 
the bipartisan manner in which they have proceeded on this legislation, 
so vital as it is to our national life and to our economic vitality.
  Years of countless hearings, great dedication have gone into this 
bill on both sides of the aisle. And while, Mr. Chairman, I'm not 
convinced that it's a perfect bill, I believe, as the gentleman from 
California said, it's a work in progress, as is all complex American 
law, and I think that moving forward is the right thing to do today.
  With that, I would like to yield 1 minute to the distinguished 
ranking member of the committee, the gentleman from Texas.
  Mr. SMITH of Texas. Mr. Chairman, I thank my friend from Indiana for 
yielding, and I want to point out that he is a member of the 
Intellectual Property Subcommittee of the Judiciary Committee. I know 
he is going to describe this amendment very well, so I will not go into 
that detail, but simply urge my colleagues to support it.
  Mr. PENCE. I thank the gentleman for his support.
  Mr. Chairman, the Constitution vests, in article I, section 8, clause 
8, the power and the duty of the Congress ``to promote the progress of 
science and useful arts by securing for limited times to inventors the 
exclusive right to their discoveries.'' This is an express obligation 
of the Congress under the Constitution.
  Our patent laws, as currently written, were essentially drafted over 
50 years ago, and I believe it is time to update them to account for 
changes in our dynamic 21st century economy.
  We need to strengthen out patent laws to make sure that patents that 
are issued are strong and high quality,

[[Page 23962]]

but I would submit that we also need to reform our patent laws to 
eliminate lawsuit abuse that has become so prevalent. Aspects of this 
legislation will do that; my amendment seeks to do that further.
  As I said before, I am sympathetic to those who say that further work 
on damages needs to be done in conference. I agree with their sentiment 
to that point, and I trust that will occur.
  On balance, though, I have determined that this legislation is an 
important and useful step toward modernizing and strengthening our 
American patent law, and I am pleased to support it. But I encourage 
Members of the House not to take this step without first supporting the 
Pence amendment, which makes an important clarification of provisions 
governing what is known as best mode in patent law.
  At the Judiciary Committee markup of this bill, I first supported an 
amendment which would have repealed best mode in full. American patent 
law requires that a patent application, ``set forth the best mode 
contemplated by the inventor of carrying out his invention'' at the 
time the application is filed. But providing the best mode at the time 
of application is not a requirement in Europe or in Japan or in any of 
the rest of the world, and it has become a vehicle for lawsuit abuse.
  In my view, the best mode requirement of American law imposes 
extraordinary and unnecessary costs on the inventor and adds a 
subjective requirement to the application process, and I believe public 
interest is already adequately met in ensuring quality technical 
disclosures for patents.
  At the Judiciary Committee, I offered a best mode relief amendment 
that was accepted. The Pence amendment then retained best mode as a 
specifications requirement for obtaining a patent, the intent to 
maintain in the law the idea that patent applicants should provide 
extensive disclosure to the public about an invention. But the Pence 
amendment endeavored to remove best mode from litigation.
  Increasingly in patent litigation defendants have put forth best mode 
as a defense and a reason to find patents unenforceable. It becomes 
virtually a satellite piece of litigation in and of itself, detracts 
from the actual issue of infringement, and literally costs American 
inventors millions in legal fees.
  The intent of the amendment was to keep best mode in the Patent and 
Trademark Office. My amendment today continues this effort toward 
eliminating this archaic and costly provision of the law. Specifically, 
the amendment today makes it clear that arguments about best mode 
cannot serve as the basis for post-grant review proceedings. It's quite 
simple in that effect.
  With my amendment, under the new post-grant review system, best mode 
will not be litigated. That will lessen the burden put on patent 
holders in defending their patents in post-grant review proceedings, 
and it will prevent the expenditure of millions of dollars in needless 
lawsuit abuse.
  I encourage my colleagues to support the amendment.
  Mr. CONYERS. Will the gentleman yield?
  Mr. PENCE. I would be very pleased to yield to the distinguished 
Chair.
  Mr. CONYERS. Not only to thank the gentleman for producing this 
amendment, but also to appreciate all the work that he did on helping 
us make this bill as good as it was. We thank you very much.
  Mr. PENCE. I thank the chairman for his remarks. And I urge my 
colleagues to support the Pence amendment so we can further clarify the 
intended best mode relief.
  Mr. ROHRABACHER. Mr. Chairman, I rise in opposition to the amendment.
  The Acting CHAIRMAN. The gentleman from California is recognized for 
5 minutes.
  Mr. ROHRABACHER. I would, first of all, submit for the Record a list 
of several hundred organizations, including unions and universities, et 
cetera, all of whom have raised objections to the patent legislation, 
H.R. 1908, not necessarily that they're all opposed to it, but they 
have strong objections.

  Organizations and Companies Which Have Raised Objections to Patent 
                        Legislation (H.R. 1908)

       Organizations and Companies Raising Objections to H.R. 
     1908, the Patent Reform Act of 2007: 3M, Abbott, Accelerated 
     Technologies, Inc., Acorn Cardiovascular Inc., Adams Capital 
     Management, Adroit Medical Systems, Inc., AdvaMed, Advanced 
     Diamond Technologies, Inc., Advanced Medical Optics, Inc., 
     Advanced Neuromodulation Systems, Inc., Aero-Marine Company, 
     AFL-CIO, African American Republican Leadership Council.
       Air Liquide, Air Products, ALD NanoSolutions, Inc., ALIO 
     Industries, Allergan, Inc., Almyra, Inc., AmberWave Systems 
     Corporation, American Conservative Union, American 
     Intellectual Property Law Association (AIPLA), American Seed 
     Trade, Americans for Sovereignty.
       Americans for the Preservation of Liberty, Amylin 
     Pharmaceuticals, AngioDynamics, Inc., Applied Medical, 
     Applied Nanotech, Inc., Argentis Pharmaceuticals, LLC, 
     Arizona BioIndustry Association, ARYx Therapeutics, Ascenta 
     Therapeutics, Inc., Association of University Technology 
     Managers (AUTM).
       Asthmatx, Inc., AstraZeneca, Aware, Inc., Baxa Corporation, 
     Baxter Healthcare Corporation, BayBio, Beckman Coulter, BIO--
     Biotechnology Industry Organization, BioCardia, Inc., BIOCOM, 
     Biogen Idec, Biomedical Association, BioOhio, Bioscience 
     Institute, Biotechnology Council of New Jersey.
       Blacks for Economic Security Trust Fund, BlazeTech 
     Corporation, Boston Scientific, Bridgestone Americas Holding, 
     Inc., Bristol-Myers Squibb, BuzzLogic, California Healthcare 
     Institute, Canopy Ventures, Carbide Derivative Technologies, 
     Cardiac Concepts, Inc., CardioDynamics, Cargill, Inc., 
     Cassie-Shipherd Group, Caterpillar, Celgene Corporation, Cell 
     Genesys, Inc., Center 7, Inc., Center for Small Business and 
     the Environment, Centre for Security Policy, Cephalon, 
     CheckFree, Christian Coalition of America.
       Cincinnati Sub-Zero Products, Coalition for 21st Century 
     Patent Reform, Coalitions for America, CogniTek Management 
     Systems, Inc., Colorado Bioscience Association, Conceptus, 
     Inc., CONNECT, Connecticut United for Research Excellence, 
     Cornell University, Corning, Coronis Medical Ventures, 
     Council for America, CropLife America, Cryptography Research, 
     Cummins Inc., Cummins-Allison Corporation.
       CVRx Inc., Dais Analytic Corporation, Dartmouth Regional 
     Technology Center, Inc., Declaration Alliance, Deltanoid 
     Pharmaceuticals, Digimarc Corporation, DirectPointe, Dow 
     Chemical Company, Dupont, Dura-Line Corporation, Dynatronics 
     Co., Eagle Forum, Eastman Chemical Company, Economic 
     Development Center, Edwards Lifesciences, Elan 
     Pharmaceuticals, Inc., Electronics for Imaging, Eli Lilly and 
     Company, Ellman Innovations LLC, Enterprise Partners Venture 
     Capital, Evalve, Inc.
       Exxon Mobile Corporation, Fallbrook Technologies Inc., 
     FarSounder, Inc. Footnote.com.
       Gambro BCT, General Electric, Genomic Health, Inc., Gen-
     Probe Incorporated, Genzyme, Georgia Biomedical Partnership, 
     Glacier Cross, Inc., GlaxoSmithKline, Glenview State Bank, 
     Hawaii Science & Technology Council, HealthCare Institute of 
     New Jersey, HeartWare, Inc., Helius, Inc., Henkel 
     Corporation, Hoffman-LaRoche, Inc.
       iBIO, Imago Scientific Instruments, Impulse Dynamics (USA), 
     Inc., Indiana Health Industry Forum, Indiana University, 
     Innovation Alliance, Institute of Electrical and Electronics 
     Engineers (IEEE)-USA, InterDigital Communications 
     Corporation, Intermolecular, Inc., International Association 
     of Professional and Technical Engineers (IFPTE), Invitrogen 
     Corporation, Iowa Biotechnology Association, ISTA 
     Pharmaceuticals, Jazz Pharmaceuticals, Inc., Johnson & 
     Johnson, KansasBio, Leadership Institute, Let Freedom Ring, 
     Life Science Alley, LITMUS, LLC.
       LSI Corporation, Lux Capital Management, Luxul Corporation, 
     Maryland Taxpayers' Association.
       Masimo Corporation, Massachusetts Biotechnology Council, 
     Massachusetts Medical Device Industry Council (MassMEDIC), 
     Maxygen Inc., MDMA--Medical Device Manufacturer's 
     Association, Medical College of Wisconsin, MedImmune, Inc., 
     Medtronic, Merck, Metabasis Therapeutics, Inc., Metabolex, 
     Inc., Metacure (USA), Inc., MGI Pharma Inc., MichBio, 
     Michigan Small Tech Association, Michigan State University, 
     Millennium Pharmaceuticals, Inc., Milliken & Company, Mohr, 
     Davidow Ventures, Monsanto Company.
       NAM--National Association of Manufacturers, 
     NanoBioMagnetics, Inc. (NBMI), NanoBusiness Alliance, 
     NanoInk, Inc., NanoIntegris, Inc., Nanomix, Inc., Nanophase 
     Technologies, NanoProducts Corporation, Nanosys, Inc., 
     Nantero, Inc., National Center for Public Policy Research, 
     Nektar Therapeutics, Neoconix, Inc., Neuro Resource Group 
     (NRG), Neuronetics, Inc., NeuroPace, New England Innovation 
     Alliance, New Hampshire Biotechnology Council, New Hampshire 
     Department of Economic Development, New Mexico Biotechnical 
     and Biomedical Association, New York Biotechnology 
     Association.

[[Page 23963]]

       Norseman Group, North Carolina Biosciences Organization, 
     North Carolina State University, North Dakota State 
     University, Northrop Grumman Corporation, Northwestern 
     University, Novartis, Novartis Corporation, Novasys Medical 
     Inc., NovoNordisk, NUCRYST Pharmaceuticals, Inc. NuVasive, 
     Inc., Nuvelo, Inc., Ohio State University, OpenCEL, LLC.
       Palmetto Biotechnology Alliance, Patent Cafe.com, Inc., 
     Patent Office Professional Association, Pennsylvania Bio, 
     Pennsylvania State University, PepsiCo, Inc., Pfizer, PhRMA--
     Pharmaceutical Research and Manufacturers of America, 
     Physical Sciences Inc., PointeCast Corporation, Power 
     Innovations International, PowerMetal Technologies, Inc., 
     Preformed Line Products, Procter & Gamble, Professional 
     Inventors' Alliance, ProRhythm, Inc., Purdue University, Pure 
     Plushy Inc., QUALCOMM Inc.
       QuantumSphere, Inc., QuesTek Innovations LLC, Radiant 
     Medical, Inc., Rensselaer Polytechnic Institute, Research 
     Triangle Park, NC, Retractable Technologies, Inc., 
     RightMarch.com, S & C Electric Company, Salix 
     Pharmaceuticals, Inc., SanDisk Corporation, Sangamo 
     BioSciences, Inc., Semprius, Inc., Small Business Association 
     of Michigan--Economic Development Center, Small Business 
     Exporters Association of the United States.
       Small Business Technology Council, Smart Bomb Interactive, 
     Smile Reminder, SmoothShapes, Inc., Solera Networks, South 
     Dakota Biotech Association, Southern California Biomedical 
     Council, Spiration, Inc., Standup Bed Company, State of New 
     Hampshire Department of Resources and Economic Development, 
     Stella Group, Ltd., StemCells, SurgiQuest, Inc.
       Symyx Technologies, Inc., Tech Council of Maryland/MdBio, 
     Technology Patents & Licensing, Tennessee Biotechnology 
     Association, Tessera, Inc., Texas A&M, Texas Healthcare, 
     Texas Instruments, Three Arch Partners.
       United Technologies, University of California System, 
     University of Illinois, University of Iowa, University of 
     Maryland, University of Michigan, University of Minnesota, 
     University of New Hampshire, University of North Carolina 
     System, University of Rochester, University of Utah, 
     University of Wisconsin-Madison, US Business and Industry 
     Council, US Council for International Business.
       USGI Medical, USW--United Steelworkers, Vanderbilt 
     University and Medical Center, Virent Energy Systems, Inc., 
     Virginia Biotechnology Association, Visidyne, Inc., 
     VisionCare Opthamalogic Technologies, Inc., Washington 
     Biotechnology & Biomedical Association, Washington 
     University, WaveRx, Inc.
       Wayne State University, Wescor, Inc., Weyerhaeuser, Wilson 
     Sonsini Goodrich & Rosati, Wisconsin Alumni Research 
     Foundation (WARF), Wisconsin Biotechnology and Medical Device 
     Association, Wyeth.

  And we know there are many, many people who have strong reservations, 
even by the wording of what we have heard from the other side of this 
debate, that there are people who have serious questions, even though 
they may not officially be in opposition.
  Well, if there are so many serious questions around that we have 
amendments like that of Mr. Pence and the other amendments that we've 
heard, we shouldn't be having this bill on this floor at this time, 
much less muzzling the opposition so we have only an hour to debate on 
the central issues of the bill. Instead, we have had to argue our case 
hamper-scamper here as opposition to the amendment to the bill only to 
get time to offer a few objections. That's not the way this system is 
supposed to work. And it's not supposed to work that we bring bills to 
the floor and ask Members to vote on it so that we can fix it later on. 
That should raise flags for everybody that there is something to fix in 
this bill. And the fact that this bill has been brought to the floor 
very quickly and that debate has been limited, that alone should cause 
people to want to vote ``no'' on H.R. 1908 and send it back to 
committee and see if we can have a bill that doesn't require Mr. Pence 
to be up here.
  And also this, before I yield to Ms. Kaptur: Yes, there are problems 
with the Patent Office, as has been described. Bad patents are being 
issued. This bill does nothing to cure that. What this bill does is use 
that as a cover to fundamentally change the rules of the game that are 
going to help those huge corporations that Ms. Kaptur talked about, as 
well as the overseas people who are waiting to steal our technology.
  We can correct those problems, and I would support that. You bring a 
bill to the floor that gives more money to the patent examiners, more 
training to the patent examiners, keeps the money that goes into the 
Patent Office there to improve the system, you're going to have lots of 
support. But don't use the imperfections of the Patent Office as an 
excuse to change the fundamental protections for American inventors.
  Mr. Chairman, I yield 2 minutes to the gentlewoman from Ohio (Ms. 
Kaptur).
  Ms. KAPTUR. I thank the gentleman for yielding and rise in opposition 
to the amendment.
  I wanted to point out that in every year when patents are granted the 
very small number of lawsuits that are generated as a result of that. 
For example, in the year 2006, there were 183,000 patents granted; 1.47 
percent actually ended up in some type of lawsuit, and most of those 
lawsuits were settled before trial.
  The current system is working very well for the majority of inventors 
as lawsuits have represented that smaller percentage going back as far 
as the eye can see.
  I would like to place on the Record those facts that, in fact, 
lawsuits are a minuscule percent of all patents reviewed and granted. 
And I would also like to place on the Record from the United States 
Court of Appeals the following letter from the chief judge who states 
that the present bill creates a new type of macroeconomic analysis that 
would be extremely costly and time consuming, far more so than current 
application of the well-settled apportionment law.

           TABLE FOUR--PATENTS GRANTED AND LAWSUITS COMMENCED
                             [FY 1992-2006]
------------------------------------------------------------------------
                                                             Lawsuits as
                                     Patents      Patents     a Percent
           Fiscal Year               Granted       Suits      of Patents
                                                 Commenced     Granted
------------------------------------------------------------------------
2006.............................      183,000        2,700         1.47
2005.............................      165,000        2,720         1.64
2004.............................      187,000        3,075         1.64
2003.............................      190,000        2,814         1.48
2002.............................      177,000        2,700         1.52
2001.............................      188,000        2,520         1.32
2000.............................      182,000        2,484         1.36
1999.............................      159,000        2,318         1.45
1998.............................      155,000        2,218         1.43
1997.............................      123,000        2,112         1.71
1996.............................      117,000        1,840         1.57
1995.............................      114,000        1,723         1.51
1994.............................      113,000        1,617         1.43
1993.............................      107,000        1,553        1.45
------------------------------------------------------------------------
Sources: Data from the patents Granted is from USPTO Annual Reports.
  Data for lawsuits commence is from the Federal Judicial Statistics.
  The lawsuit data is as of March 31 of each year. The patents granted
  data is as of the Federal Fiscal Year. While the data is skewed by the
  different times used for the reporting years, a long-term view is
  created for this 14-year period. The author calculated the ratios.

  
                                  ____
                                    United States Court of Appeals


                                      for the Federal Circuit,

                                     Washington, DC, June 7, 2007.
     Shana A. Winters,
     Rayburn House Office Building,
     Washington, DC.
       Dear Ms. Winters: Thank you for your telephone call 
     yesterday afternoon concerning determining damages in patent 
     infringement cases under the reasonable royalty language of 
     the Patent Act. As promised, I have since reviewed some of 
     the Federal Circuit decisions that address aspects of this 
     subject, and I have also identified and attached an article 
     that should help you more than reading individual opinions. 
     Significantly, it was written by a seasoned patent litigator 
     with direct experience in how such damage theories are 
     actually litigated in court. Lawyers employed by particular 
     companies, like most law professors, have little or no 
     experience from that perspective. Mr. Rooklidge, by contrast, 
     has several decades of litigation experience in precisely 
     these types of cases.
       His article was written since late April and may be the 
     most current available on the subject. It is certainly clear 
     and comprehensive. In addition, it references some of the 
     testimony before your subcommittee in April, as well as the 
     specific language of the pending bills.
       The footnotes cite other useful sources you may wish to 
     consult, including authoritative treatises by practitioner 
     Robert Harmon and Professor Donald Chisum, and several recent 
     articles on the point. They provide further background, which 
     you may find helpful.
       If the House Judiciary Committee intends to continue the 
     damages law as currently practiced, after decades of 
     refinement in individual court decisions, it need do nothing. 
     This body of law is highly stable and well understood by 
     litigators as well as judges. If, on the other hand, the 
     Congress wishes to radically change the law, I suggest that a 
     far more carefully-crafted and lengthy provision would be 
     required. Like the body of caselaw, such a provision would 
     need to account for many different types of circumstances, 
     which the present provision does not.
       In my opinion, plucking limited language out of the long 
     list of factors summarized in the Georgia Pacific case that 
     may be relevant in various cases is unsatisfactory, 
     particularly when cast as a rigid requirement imposed on the 
     court, and required in every case, rather than an assignment 
     of a burden of proof under a clear standard of proof imposed 
     on the party that should bear that particular burden, and 
     that would only arise in

[[Page 23964]]

     a rare case. As I said, under current caselaw, the burden of 
     apportioning the base for reasonable royalties falls on the 
     infringer, while the burden for application of the Entire 
     Market Value Rule falls on the patentee. In most cases, 
     apportionment is not an issue requiring analysis.
       Further, as I also attempted to explain, the present bills 
     require a new, kind of macroeconomic analysis that would be 
     extremely costly and time consuming, far more so than current 
     application of the well-settled apportionment law. Resulting 
     additional court delays would be severe, as would additional 
     attorneys' fees and costs. Many view current delays and costs 
     as intolerable.
       In short, the current provision has the following 
     shortcomings. First, it requires a massive damages trial in 
     every case and does so without an assignment of burden of 
     proof on the proper party and articulation of a clear 
     standard of proof associated with that burden. Second, the 
     analysis required is vastly more complicated than that done 
     under current law. Third, the meaning of various phrases in 
     the bills would be litigated for many years creating an 
     intervening period of great uncertainty that would discourage 
     settlements of disputes without litigation or at least prior 
     to lengthy and expensive trials.
       I appreciate your call and your effort to better understand 
     the gap between current law and practice, and what the bills 
     would require. I am of course available if you need further 
     assistance in understanding the reality behind my May letter 
     to the Chairman.
           Sincerely,
                                                   Paul R. Michel,
     Chief Judge.
                                  ____

  This gentleman's amendment, as well as the underlying bill, would 
result in additional court delays that could be severe and would 
probably result in additional attorney fees and costs, and those 
additional costs are intolerable. We are actually charging more for 
inventors to maintain their inventions. We tried to stop that several 
years ago and were unsuccessful in doing that.

                              {time}  1445

  And now we are, in this bill, creating a more complicated legal 
system that is going to cost them more money. We have a system that 
works. We have the best patent system in the world. We have the most 
innovation in the world.
  I hope this bill goes down to defeat so we can make it much, much 
better. We had a system where we protect the inventor if they wish to 
opt out of having their intellectual property put up on the Internet, 
they have the right to do that. This bill takes that away. It is one of 
the most egregious parts of this bill that should be fixed.
  I thank the gentleman for yielding.
  Mr. ROHRABACHER. How much more time is left in this debate?
  The Acting CHAIRMAN. The gentleman from California now has 30 seconds 
remaining. The time of the gentleman from Indiana has expired.
  Mr. ROHRABACHER. I would yield myself the right to close, and this is 
the final, I guess, arguments in this debate.
  We can correct the flaws at the Patent Office. We do not need to 
destroy the American patent system as it has functioned for 200 years. 
We do not need to make all of our inventors vulnerable to foreign theft 
so foreigners and large corporations can steal their creative genius 
and use it against us. That is what this bill does. It is being foisted 
off on us. The process has been flawed. As we can see, we have had 
limited debate. They brought this to the floor admitting there are 
flaws in the bill. We need to defeat the Steal American Technologies 
Act and go back and work on it so we can make real reform rather than a 
bill that is going to help America's economic adversaries.
  I would ask my colleagues to join me in supporting the little guy 
against the big guy and demonstrating that that is the rules of the 
game here.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Indiana (Mr. Pence).
  The amendment was agreed to.
  Mr. ROHRABACHER. Mr. Chairman, I ask unanimous consent to withdraw my 
requests for recorded votes on the amendments numbered 2, 3 and 4, to 
the end that each such amendment stand disposed of by the voice vote 
thereon.
  The Acting CHAIRMAN. Is there objection to the request of the 
gentleman from California?
  There was no objection.


                 Amendment No. 1 Offered by Mr. Conyers

  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, proceedings 
will now resume on the amendment on which further proceedings were 
postponed.
  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 CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 263, 
noes 136, not voting 38, as follows:

                             [Roll No. 862]

                               AYES--263

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Bachus
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Bono
     Bordallo
     Boren
     Boswell
     Boucher
     Boyda (KS)
     Brady (PA)
     Brady (TX)
     Braley (IA)
     Brown (SC)
     Brown, Corrine
     Butterfield
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Capps
     Capuano
     Cardoza
     Carson
     Castor
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Coble
     Cohen
     Conaway
     Conyers
     Cooper
     Costa
     Costello
     Crowley
     Cuellar
     Culberson
     Cummings
     Davis (AL)
     Davis (IL)
     Davis (KY)
     Davis, Lincoln
     Davis, Tom
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Doolittle
     Doyle
     Drake
     Dreier
     Edwards
     Ellison
     Emanuel
     Engel
     Eshoo
     Faleomavaega
     Farr
     Fattah
     Filner
     Flake
     Forbes
     Fortenberry
     Fossella
     Frank (MA)
     Gallegly
     Giffords
     Gilchrest
     Gillibrand
     Gohmert
     Gonzalez
     Goodlatte
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Harman
     Hastings (FL)
     Hastings (WA)
     Heller
     Hensarling
     Herseth Sandlin
     Higgins
     Hinchey
     Hinojosa
     Hirono
     Hoekstra
     Honda
     Hoyer
     Inslee
     Israel
     Issa
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Kagen
     Kanjorski
     Keller
     Kennedy
     Kilpatrick
     Kind
     King (NY)
     Kirk
     Klein (FL)
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lofgren, Zoe
     Lowey
     Lungren, Daniel E.
     Lynch
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (CA)
     McCarthy (NY)
     McCaul (TX)
     McCollum (MN)
     McGovern
     McKeon
     McMorris Rodgers
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Miller (MI)
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Musgrave
     Myrick
     Nadler
     Napolitano
     Neal (MA)
     Neugebauer
     Norton
     Oberstar
     Obey
     Olver
     Ortiz
     Pascrell
     Pastor
     Payne
     Pence
     Perlmutter
     Peterson (MN)
     Peterson (PA)
     Pomeroy
     Porter
     Price (GA)
     Price (NC)
     Pryce (OH)
     Putnam
     Rahall
     Ramstad
     Rangel
     Reyes
     Richardson
     Rodriguez
     Rogers (KY)
     Ros-Lehtinen
     Ross
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (WI)
     Sali
     Sanchez, Linda T.
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Sensenbrenner
     Serrano
     Sessions
     Sestak
     Sherman
     Shuster
     Simpson
     Sires
     Skelton
     Slaughter
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Tiahrt
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walden (OR)
     Walz (MN)
     Wasserman Schultz
     Waters
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wilson (OH)
     Wolf
     Wu
     Wynn
     Yarmuth

                               NOES--136

     Aderholt
     Akin
     Alexander
     Bachmann
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Blackburn
     Blunt
     Boehner
     Bonner
     Boozman
     Boustany
     Broun (GA)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Carnahan
     Carney
     Castle
     Chabot
     Cole (OK)
     Courtney
     Cramer
     Crenshaw
     Davis (CA)
     Davis, David
     Deal (GA)
     Dent
     Duncan
     Ehlers
     Emerson
     English (PA)
     Etheridge
     Everett
     Fallin
     Feeney
     Ferguson
     Foxx
     Franks (AZ)
     Frelinghuysen
     Garrett (NJ)
     Gerlach
     Gingrey
     Goode
     Graves
     Hall (TX)

[[Page 23965]]


     Hare
     Hayes
     Herger
     Hill
     Hobson
     Hodes
     Holt
     Hunter
     Johnson (IL)
     Johnson, E. B.
     Jones (NC)
     Jordan
     Kaptur
     Kildee
     King (IA)
     Kingston
     Kline (MN)
     Knollenberg
     Kucinich
     Kuhl (NY)
     LaHood
     Lamborn
     Lampson
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Loebsack
     Lucas
     Mack
     Mahoney (FL)
     Manzullo
     Marchant
     McCotter
     McCrery
     McHenry
     McHugh
     McIntyre
     Melancon
     Mica
     Michaud
     Miller (FL)
     Miller, Gary
     Murphy, Tim
     Nunes
     Petri
     Pitts
     Platts
     Poe
     Radanovich
     Regula
     Rehberg
     Renzi
     Rogers (AL)
     Rogers (MI)
     Rohrabacher
     Roskam
     Rothman
     Ryan (OH)
     Saxton
     Schmidt
     Shadegg
     Shea-Porter
     Shuler
     Souder
     Stearns
     Taylor
     Terry
     Tiberi
     Turner
     Upton
     Walberg
     Wamp
     Weldon (FL)
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Young (FL)

                             NOT VOTING--38

     Baker
     Barrett (SC)
     Bishop (UT)
     Boyd (FL)
     Carter
     Christensen
     Cubin
     Davis, Jo Ann
     Ellsworth
     Fortuno
     Granger
     Hastert
     Holden
     Hooley
     Hulshof
     Inglis (SC)
     Jindal
     Johnson, Sam
     Jones (OH)
     McDermott
     Pallone
     Paul
     Pearce
     Pickering
     Reichert
     Reynolds
     Royce
     Salazar
     Sanchez, Loretta
     Shays
     Shimkus
     Sullivan
     Tancredo
     Walsh (NY)
     Watson
     Weller
     Woolsey
     Young (AK)

                              {time}  1511

  Messrs. AKIN, HODES, BOEHNER, POE, BURTON of Indiana, HOLT and RYAN 
of Ohio changed their vote from ``aye'' to ``no.''
  Messrs. KIRK, MEEKS of New York, McCARTHY of California and GILCHREST 
changed their vote from ``no'' to ``aye.''
  So the amendment was agreed to.
  The result of the vote was announced as above recorded.
  Stated against:
  Mr. INGLIS of South Carolina. Mr. Chairman, on rollcall No. 862 I was 
unavoidably detained. Had I been present, I would have voted ``no.''
  The Acting CHAIRMAN. The question is on the committee amendment in 
the nature of a substitute, as amended.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  The Acting CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Pomeroy) having assumed the chair, Mr. Ross, Acting Chairman 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. 1908) to 
amend title 35, United States Code, to provide for patent reform, he 
reported the bill back to the House with an amendment adopted by 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 reported from the 
Committee of the Whole? If not, the question is on the amendment.
  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. ROHRABACHER. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on passage of H.R. 1908 will be followed by a 5-minute vote 
on adopting the conference report to accompany H.R. 2669.
  The vote was taken by electronic device, and there were--ayes 220, 
noes 175, not voting 37, as follows:

                             [Roll No. 863]

                               AYES--220

     Ackerman
     Allen
     Andrews
     Arcuri
     Bachus
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Bonner
     Bono
     Boren
     Boswell
     Boucher
     Boyda (KS)
     Brady (PA)
     Brady (TX)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Capps
     Cardoza
     Carson
     Castor
     Chandler
     Clay
     Cleaver
     Clyburn
     Coble
     Cohen
     Conyers
     Cooper
     Costa
     Crowley
     Cuellar
     Culberson
     Cummings
     Davis (AL)
     Davis (IL)
     Davis, Lincoln
     Davis, Tom
     DeGette
     Delahunt
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Doolittle
     Doyle
     Drake
     Dreier
     Edwards
     Ellison
     Emanuel
     Engel
     Eshoo
     Farr
     Fattah
     Filner
     Forbes
     Fortenberry
     Fossella
     Frank (MA)
     Gallegly
     Giffords
     Gilchrest
     Gillibrand
     Gonzalez
     Goodlatte
     Gordon
     Green, Al
     Green, Gene
     Gutierrez
     Hall (NY)
     Harman
     Hastings (FL)
     Hastings (WA)
     Heller
     Hensarling
     Herger
     Hinojosa
     Honda
     Hoyer
     Inslee
     Israel
     Issa
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Kagen
     Keller
     Kennedy
     Kilpatrick
     Kind
     King (NY)
     Klein (FL)
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lofgren, Zoe
     Lowey
     Lungren, Daniel E.
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Marchant
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (CA)
     McCarthy (NY)
     McCaul (TX)
     McGovern
     McKeon
     McMorris Rodgers
     McNerney
     Meek (FL)
     Meeks (NY)
     Miller (NC)
     Miller, George
     Mitchell
     Moore (KS)
     Moran (VA)
     Murphy (CT)
     Murtha
     Musgrave
     Nadler
     Napolitano
     Neal (MA)
     Neugebauer
     Nunes
     Obey
     Ortiz
     Pence
     Perlmutter
     Peterson (PA)
     Pomeroy
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Reyes
     Richardson
     Rodriguez
     Rogers (KY)
     Ross
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (WI)
     Sali
     Sanchez, Linda T.
     Sarbanes
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Sensenbrenner
     Serrano
     Sessions
     Sestak
     Sherman
     Shuster
     Simpson
     Skelton
     Slaughter
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Tiahrt
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Walden (OR)
     Walz (MN)
     Wasserman Schultz
     Waters
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wicker
     Wilson (NM)
     Wolf
     Wu
     Wynn
     Yarmuth

                               NOES--175

     Abercrombie
     Aderholt
     Akin
     Alexander
     Altmire
     Baca
     Bachmann
     Bartlett (MD)
     Barton (TX)
     Berry
     Biggert
     Bilbray
     Bilirakis
     Blackburn
     Blunt
     Boehner
     Boozman
     Boustany
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Capuano
     Carney
     Castle
     Chabot
     Clarke
     Cole (OK)
     Conaway
     Costello
     Courtney
     Cramer
     Crenshaw
     Davis (CA)
     Davis (KY)
     Davis, David
     Deal (GA)
     DeFazio
     DeLauro
     Dent
     Donnelly
     Duncan
     Ehlers
     Emerson
     English (PA)
     Etheridge
     Everett
     Fallin
     Feeney
     Ferguson
     Flake
     Foxx
     Franks (AZ)
     Frelinghuysen
     Garrett (NJ)
     Gerlach
     Gingrey
     Gohmert
     Goode
     Graves
     Grijalva
     Hall (TX)
     Hare
     Hayes
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hirono
     Hobson
     Hodes
     Hoekstra
     Holt
     Hunter
     Inglis (SC)
     Johnson (IL)
     Johnson, E. B.
     Jones (NC)
     Jordan
     Kanjorski
     Kaptur
     Kildee
     King (IA)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kucinich
     Kuhl (NY)
     LaHood
     Lamborn
     Lampson
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Loebsack
     Lucas
     Mack
     Manzullo
     McCollum (MN)
     McCotter
     McCrery
     McHenry
     McHugh
     McIntyre
     McNulty
     Melancon
     Mica
     Michaud
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mollohan
     Moore (WI)
     Moran (KS)
     Murphy, Patrick
     Murphy, Tim
     Myrick
     Oberstar
     Olver
     Pascrell
     Pastor
     Payne
     Peterson (MN)
     Petri
     Pitts
     Platts
     Poe
     Price (NC)
     Rahall
     Ramstad
     Regula
     Rehberg
     Renzi
     Rogers (AL)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Rothman
     Ryan (OH)
     Saxton
     Schmidt
     Schwartz
     Shadegg
     Shea-Porter
     Shuler
     Sires
     Smith (NE)
     Souder
     Stearns
     Taylor
     Terry
     Tiberi
     Tierney
     Turner
     Upton
     Visclosky
     Walberg
     Wamp
     Weldon (FL)
     Westmoreland
     Whitfield
     Wilson (OH)
     Wilson (SC)
     Young (FL)

                             NOT VOTING--37

     Baker
     Barrett (SC)
     Bishop (UT)
     Boyd (FL)
     Carnahan
     Carter
     Cubin
     Davis, Jo Ann
     Ellsworth
     Granger
     Hastert
     Holden
     Hooley
     Hulshof
     Jindal
     Johnson, Sam
     Jones (OH)
     McDermott
     Pallone
     Paul
     Pearce
     Pickering
     Rangel
     Reichert
     Reynolds
     Royce
     Salazar
     Sanchez, Loretta
     Shays
     Shimkus
     Sullivan

[[Page 23966]]


     Tancredo
     Walsh (NY)
     Watson
     Weller
     Woolsey
     Young (AK)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised 2 
minutes remain in this vote.

                              {time}  1530

  Mr. OLVER and Mr. FLAKE changed their vote from ``aye'' to ``no.''
  Mr. SERRANO 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.

                          ____________________