[Congressional Record (Bound Edition), Volume 157 (2011), Part 3]
[Senate]
[Pages 3203-3204]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        FIRST-TO-FILE PROVISIONS

  Mr. KYL. Mr. President, I wish to speak on the pending business 
before the Senate. We are hoping in maybe 45 minutes or so we will 
actually be able to vote on the Feinstein amendment to the patent bill. 
I am hoping that my colleagues will vote against the Feinstein 
amendment and support the authors of the legislation.
  I noted yesterday that every version of the patent bill from 2005 
forward has included the primary, centerpiece reform of the bill, which 
is the so-called first-to-file system. It may seem strange, but it has 
not been the case before this bill that you have a patent's priority 
from when you file it; that is to say, the first person to file on the 
patent is the one who has the patent; that the patent dates to the day 
it is filed. That is what we do in law and virtually every other 
situation I can imagine.
  Instead, what has been the law is called the first-to-invent system. 
One of the reasons the whole patent reform movement began 5 or 6 years 
ago was that this system is very costly and difficult to administer 
because it relies on a lot of legal discovery and legal process to 
resolve questions or disputes between who actually conceived of the 
idea first and then did they apply the necessary diligence to get it 
patented. As a result, every other industrialized country uses the 
first-to-file system. Most of the companies in the United States are 
obviously used to that system because of their patents that are 
worldwide in scope.
  The fundamental reform of the patent legislation to simplify, to 
reduce costs, to reduce the potential for litigation was to conform our 
system to that of the rest of the world--the first-to-file system.
  What the Feinstein amendment would do is to throw that over and say: 
No, we are going to go back to the concept of this first-to-conceive-
of-the-idea or first-to-invent notion. Whether intended or not, that 
will kill the bill. It is a poison pill amendment because the whole 
concept of the legislation and everything that follows from it is based 
on this first-to-file reform.
  As I will note a little bit later, the bill simply would not work 
otherwise. We would have to scrap it and start from scratch. In fact, 
most of the reforms that are in the bill would not exist because we 
would have to go back to that concept of first-to-invent. So all of the 
savings and simplified procedures would simply not be possible.
  Unfortunately, I note that if my colleagues have any notion of 
supporting the Feinstein amendment, they should realize that were it to 
be adopted, it would kill the bill. I do not think that is what we want 
to do. There have been so many improvements made in the bill. So many 
groups--all three of the major groups that have been working on the 
legislation are in support of the legislation and oppose the Feinstein 
amendment because they want us to move forward. We have not had patent 
reform in many years. Everybody recognizes it is time.
  First and foremost, the administration and the Patent Office itself 
support the legislation and oppose the Feinstein amendment. In fact, 
one of the good changes made by the bill from the Patent Office's point 
of view is that it will stop fee diversion. In the past, the fees that 
have been collected, the filing fees from the inventors, have not all 
gone to the Patent Office. They are woefully understaffed and 
underfunded in working through the tens and hundreds of thousands of 
patent applications that are filed every year.
  As we can all appreciate, our competitiveness in the world depends, 
first, on the ability of our people to invent and, second, to acquire 
the legal rights to those inventions so they have a property interest 
in them, and investors can then count on a return of their investment 
if they supply the capital for the invention to be brought to market.
  What we are talking about is critical. I urge my colleagues who 
perhaps have not focused as much on this amendment and on the patent 
reform legislation to understand that we are talking about something 
very important, something that can create jobs, that is important to 
the competitiveness of our country.
  The beauty is, unlike a lot of what we do around here, this is 
totally bipartisan. I am a Republican. The administration supports the 
legislation. It has Senator Leahy's name on it as chairman of the 
Judiciary Committee. In the House, it is supported by Democrats and 
Republicans. It is important we move this legislation through.
  As I said, unfortunately, the Feinstein amendment would result in 
having to scrap the bill. There is no point in enacting it if we are 
not going to include the change to first to file.
  Let me be a little more specific. One of the reasons we would not be 
able to move forward with the bill is the bill's entire post-grant 
review process, which is a big part of the bill, would be impossible 
for the Patent Office to administer under the discovery-intensive 
invention date issues that arise under the first-to-invent system. That 
is because, as I said, under that system you come before the Patent 
Office and say: I realize nobody else had a record of this, but I 
actually thought of this idea way back in 1999. I have a couple of 
notes that I made to myself. I dated them. One can see that all of a 
sudden they are getting into a big discovery and legal process. That is 
what we are trying to get away from. The whole post-grant review 
process would be turned upside down if we went back to the first-to-
invent principle.
  Also, striking the first-to-file provisions would greatly increase 
the workload for the Patent and Trademark Office. What we are trying to 
do is simplify procedures so they can get their work done, get the 
patents approved so our businesses can better compete in the world, and 
also provide more money for them to do that job. That also would be 
jeopardized as a result of this amendment. We will just add backlogs 
and delays and not enable our Patent Office to do what we are asking it 
to do.
  As I said, that is one of the reasons the Patent Office opposes the 
Feinstein amendment and supports the underlying legislation. It is 
interesting; many American companies already use first-to-file. It is 
the easiest, most direct way to confirm you have the patent. It is very 
hard to win a patent contest through what is called an interference 
proceeding if you were not the first to file, which, of course, is 
logical. And because all the other countries in the world use a first-
to-file system, if you want your patent to be valid outside the United 
States you need to comply with first-to-file in any event.
  Among many of our most innovative companies, 70 percent of their 
licensing revenues come from overseas. Obviously, they are already 
going to be complying with the first-to-file rules. This bill does not, 
therefore, so much switch the system with which Americans are complying 
today as it simply allows American companies to only have to comply 
with one system rather than two. As I said before, the first-to-file 
concept is clearer, faster, more transparent, and provides more 
certainty to inventors and manufacturers.
  On the other hand, the first-to-invent concept would make it 
impossible, in many instances, to know who has priority and which of 
the competing patents is the valid one. To determine who

[[Page 3204]]

has priority under first to invent, extensive discovery must be 
conducted and the Patent Office and courts must examine notebooks and 
other evidence to determine who conceived of the invention first and 
whether the inventor then diligently reduced it to practice.
  Under first-to-file, on the other hand, an inventor can get priority 
by filing a provisional application. This is an important point. It is 
easy. It is not as if the first-to-file is hard to do. This provisional 
application, which only costs $110 for the small inventor, only 
requires you to write a description of what your invention is and how 
it works. That is all. That is the same thing that an inventor's 
notebook would have to contain under the first-to-invent concept if you 
are ever going to prevail in court by proving your invention date.
  Because a provisional application is a government document, the date 
is clear. There is no opportunity for fraudulently backdating the 
invention date. There is no need for expensive discovery: What did the 
inventor know and when did he know it? You are essentially not 
requiring anything in addition. You file a provisional application. You 
have an entire year to get all of your work together and file your 
completed application, but your date is as of the time you file the 
provisional application.
  As I said, for a small entity, the fee is only $110. That grace 
period makes it clear that the patent will not be invalid because of 
disclosures made by the inventor or someone who got information from an 
inventor during 1 year before filing. That is important.
  A lot of academics and folks go to trade shows and begin talking 
about their concepts and what they have done. If you disclose this, you 
have a year to file after you disclose the information. And under the 
bill's second, enhanced grace period, no other disclosure, regardless 
of whether it was obtained from the inventor, can then invalidate the 
invention.
  The bill has been very carefully written to protect the small 
inventor or the academic. That is what it is designed to do. This is 
not a case of big versus small, although people both big and small 
support the legislation. If anybody suggests the Feinstein amendment 
will protect the small inventor, it does not protect the small 
inventor. In fact, as I said, the legislation is very carefully crafted 
to give the small inventor a variety of ways to ensure that he or she 
is protected.
  The first coalition to bring the whole idea of patent reform to the 
Congress, the Coalition for 21st Century Patent Reform, is very 
strongly in support of the legislation and in opposition to the 
Feinstein amendment. In fact, it noted in a statement released 
Wednesday that not only does it oppose the amendment, it would oppose 
the entire bill if the amendment were to be adopted and this first-to-
file concept were stricken from the bill.
  In fact, here is what they said:

       The first-inventor-to-file provisions currently in S. 23 
     form the linchpin that makes possible the quality 
     improvements that S. 23 promises.

  Here is what the Obama Statement of Administration Policy says. It 
lays out exactly what is at stake:

       By moving the United States to a first-to-file system, the 
     bill simplifies the process of acquiring rights. This 
     essential provision will reduce legal costs, improve 
     fairness, and support U.S. innovators seeking to market their 
     products and services in the global marketplace.

  I am continuing the statement:

       Most of the arguments in opposition to the bill and FITF 
     appear to be decades-old contentions that have been fully and 
     persuasively rebutted. As one example, the National Research 
     Council of the National Academies assembled a group of 
     leading patent professionals, economists, and academics who 
     spent four years intensely studying these issues and 
     concluded in 2004 that the move to FITF represented a 
     necessary change for our patent system to operate fairly, 
     effectively and efficiently in the 21st century.

  They go on to say:

       Without retaining S. 23's current FITF provisions, the bill 
     would no longer provide meaningful patent reform.

  Let me repeat that. If the Feinstein amendment would prevail, ``the 
bill would no longer provide meaningful patent reform.''

       As an example, the new provisions on post-grant review of 
     patents, an important new mechanism for assuring patent 
     quality, could no longer be made to work. Instead of a patent 
     reform bill, what would remain of S. 23 would be essentially 
     an empty shell.

  Let me finish the statement:

       Thus, we could not continue our support of passage of S. 23 
     without the first-inventor-to-file provisions present in the 
     bill. It would place us in the unfortunate position of 
     opposing moving forward with a bill where we have been among 
     the longest, most ardent supporters.

  Just to conclude, the National Association of Manufacturers, which 
represents both large and small manufacturers in every industrial 
sector, has also made it clear that it strongly opposes the amendment. 
I will conclude by quoting from that group's statement in opposition to 
the Feinstein amendment.

       The NAM supports transitioning the United States from a 
     ``first-to-invent'' system to a ``first-to-file'' system to 
     eliminate unnecessary cost and complexity in the U.S. patent 
     system. Manufacturers large and small operate in the global 
     marketplace and the United States needs to move toward a 
     system that will provide more patent protection around the 
     world for our innovative member companies. The ``first-to-
     file'' provision currently included in S. 23 achieves this 
     goal.

  Mr. President, I hope my colleagues will pay close attention to the 
arguments made by Chairman Leahy and the arguments I have made in 
opposition to the Feinstein amendment. Whether intended or not, it 
would be a poison pill. It would kill the legislation if it were 
adopted. We need to move this important legislation forward, as the 
administration notes in its statement of policy, and therefore I urge 
my colleagues, when we have an opportunity to vote on the Feinstein 
amendment, to vote against it and to support the legislation as 
reported.
  The ACTING PRESIDENT pro tempore. Morning business is closed.

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