[Congressional Record (Bound Edition), Volume 160 (2014), Part 5]
[House]
[Pages 6371-6375]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        PATENT TRANSPARENCY ACT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2013, the Chair recognizes the gentleman from California 
(Mr. Rohrabacher) for 30 minutes.
  Mr. ROHRABACHER. Mr. Speaker, today, I rise to warn the American 
people that fundamental changes are being proposed in our legal system 
here in Washington that could have a dramatic impact on their freedom, 
a dramatic impact on the prosperity of this country, and a dramatic 
impact on the security of our country.
  These changes that I am talking about are not so apparent to the 
average person because they deal with a very complicated issue of 
technology and technology ownership. I have been in Congress for about 
25 years--actually 26 years at the end of this year. During that time 
period, there has been an ongoing fight that has not been recognized by 
many American people.
  It is the fight to maintain a very strong patent system in our 
country. It has been ongoing because major players around the world, 
especially multinational corporations, have not been supportive of the 
idea that the American people have a right to own their own creations. 
In fact, our Founding Fathers felt that this was so important

[[Page 6372]]

that we have the patent rights and copyrights for the average American 
person that they wrote it into our Constitution. I just happen to have 
a copy of the Constitution here.
  Article I, section 8 says one of the powers of Congress is ``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.'' This is what our Founding 
Fathers wrote into the Constitution. This is the body of the 
Constitution. This is before the Declaration of Independence.
  Our Founding Fathers were so much in favor of this concept where 
people would own what they created, and that would spur the creativity 
and the genius of people and that would uplift all of humankind, they 
were so much engaged in that concept they wrote it into our 
Constitution and put it on par thus above the Bill of Rights in terms 
of speech, religion, and other rights.
  People like Benjamin Franklin, who is one of our great Founding 
Fathers, a technologist at heart, knew this is the way we would be the 
shining light of the world where ordinary people would be able to live 
well. Jefferson--go to Monticello and see--he himself was an inventor. 
Yes, he was the first administrator of the U.S. Patent Office.
  The intellectual property rights that our people have enjoyed over 
the years have been one of America's greatest assets. They have 
provided ordinary people throughout the world a chance to live decent 
lives, have jobs in which they can own homes, have jobs that will 
create wealth. It wasn't because our American people work harder. 
People work hard all over the world. All over the world you have people 
struggling and working so hard, but they don't have freedom and they 
don't have technology. It is the freedom to create technology and the 
utilization of that technology by ordinary people that expands the 
creation of wealth so that ordinary people can live well.
  Tonight, I would like to alert the American people: one of the 
fundamental elements laid down by our Founding Fathers that would help 
us create this wonderful country of freedom and prosperity for ordinary 
people, it is now being threatened, it is being threatened by a 
concerted attack by large, huge corporations, multinational 
corporations, who do not have loyalty to the American people at their 
heart.
  Let me note that today, after fighting this fight for 26 years, the 
first fight that we were in dealt with, they were going to put an 
amendment on the gap implementation legislation, which is a treaty 
laying down the rules for trade around the world. The provisions they 
were going to put in would have reversed the basic tenets of our patent 
system.
  That is, number one, they were going to say that if you apply for a 
patent, after 18 months, whether or not that patent is issued to you, 
it is going to be published for the whole world to see. That is what 
they were trying to foist on us. I called it the Steal American 
Technologies Act.
  Today, if you apply for a patent, that is top secret. In fact, if 
somebody in the Patent Office leaks that information they can be put in 
jail for a felony. But they wanted to change that because the rest of 
the world--Europe and Japan--has that system and they want to globalize 
our rights, especially our patent rights.

                              {time}  1745

  They said they were going to eliminate it so that, after 18 months, 
they would just publish it. We fought that back--Marcy Kaptur, who is a 
Democrat, and I. On both sides of the aisle, we had people fighting 
this, and we beat the big guys.
  Unfortunately, over the years, we have had three or four of these 
fights. Sometimes, we have lost; and sometimes, we have won. Once 
again, we are talking about people who have come to the floor to reform 
the patent system. They always use the word ``reform'' when, in 
reality, they are trying to destroy the fundamentals of a strong 
American patent system.
  The last patent reform bill was the America Invents Act, which just 
went into effect last year. The patent lawyers and courts and 
innovators are still trying to figure out what the implications are of 
the changes that we made in the last Congress. However, we have to 
recognize that that bill itself was the most sweeping in changes to the 
American patent system in the history of our country.
  Now, even before we see how that is going to impact America and the 
American people, they are trying to shove another one through. It 
actually has gone through the House. Even before we are able to judge 
the effects of the last Congress' America Invents Act, another bill--
that is H.R. 3309, the Innovation Act--was rammed through the House 
last December.
  Its companion bill, S. 1720, the Patent Transparency and Improvements 
Act--all of these sound so good, don't they--right now is being 
considered in the United States Senate.
  Prudence and good judgment suggest that Congress should move forward 
slowly and see how at least the last bill that we put in place is 
working. If it is phase one, let's wait for phase two, to see how phase 
one is working. Perhaps we should take time to see if there are 
unintended consequences.
  By the way, there are unintended consequences, but I am here to say 
to the American people today that there are intended consequences to 
these changes. The intended consequences are to diminish the patent 
protection that has been afforded the American people since the 
founding of our country--to diminish your rights to own the 
technologies you have developed. It is a great threat to our people.
  This onslaught has been under the guise of being pro-patent and pro-
inventor. They use those words over and over again when, in reality, 
this is cynical, and it is being proposed by huge corporations--
multinational corporations--that despise the little guy because he is 
demanding to be paid when his technology discoveries are being used.
  Instead, of course, what we have is a globalist effort to neuter the 
patent rights of the American people, the patent rights that we have 
had--the strongest patent system since our Constitution was written. In 
the whole world, we have the strongest patent system. This antipatent 
juggernaut has been organized and financed by megacompanies, by mega-
multinational companies.
  The public and, yes, my colleagues haven't had time to fully 
understand the implications of this power play that has been ongoing, 
especially the power play that we see now on the part of the electronic 
industry giants like Google; yet a vote approaches in the Senate which 
could take us down a road which will be hostile to American innovation, 
a road from which we will never return.
  The vote in the Senate should be and must be postponed. The American 
people need to speak to their Senators and let them know that they 
expect the Senate patent bill to be postponed--maybe, perhaps, until 
next year--while we get a chance to look and see what is in this bill 
and what impact it will have on the American people.
  Right now, as I say, some huge corporate interests are on the verge 
of being given power--that is what this bill would do--to steal the 
creative genius and innovation of American technology entrepreneurs and 
inventors.
  What will this do to the United States? This may help those big 
companies for a little while, but in the long run, it will undercut the 
well-being, the standard of living, the prosperity that we have for 
average Americans here.
  How could this be? How could this be happening? Why would we give up 
our freedom and undercut our competitiveness?
  The big boys have set out to scare us into giving up our freedom. 
They have set out to create some horrible threat--the sound of which is 
very sinister--that will let us put restrictions on the ownership of 
intellectual property, which we know is America's greatest asset, yet 
we are going to go along with it because there is some threat to that.
  Twenty-five years ago, they called it the submarine patent. Oh, how 
horrible

[[Page 6373]]

that was going to be, in that it was going to undercut our 
competitiveness. Of course, it proved to be nothing, zero.
  Today, the patent battle is supposedly aimed at patent trolls. This 
sinister sounding classification refers to scam artists who are using 
patent infringement claims to extort money from innocent small business 
men and small business owners. Yes, some of that happens in our 
country.
  Throughout our economy, you will find lawyers who are threatening 
lawsuits that are not substantive, but that are aimed at forcing 
victims to pay and face exorbitant legal fees in order to get them off 
their backs.
  Of course, that is a frivolous lawsuit. It is throughout our system, 
and it is something that, unfortunately, the average businessman in 
America and businesswoman in America has to put up with.
  Frivolous lawsuits have plagued every portion of our society. Every 
businessman, doctor, lawyer--you name it--throughout our society is 
affected by frivolous lawsuits, but this only focuses on, supposedly, 
frivolous lawsuits by inventors.
  How come they are being singled out? How come they have to make sure 
that we have to change the rules of the game, so there won't be 
frivolous lawsuits by inventors, as compared to all of the other 
frivolous lawsuits?
  That is because this legislation that is going through Congress 
treats all inventors as if they are scam artists. You see, there aren't 
any legitimate lawsuits by these guys against inventors. Every one of 
them is a scam artist.
  In order to get those scam artists, they have got to eliminate or 
dramatically reduce the ability of small inventors to protect their 
inventions. This bill, of course, is a reversal of the frivolous 
lawsuit scam.
  Interestingly enough, what we have here are large corporate interests 
that want to steal the inventions and inventiveness of our little guys 
by making it too expensive and complicated for them to protect their 
rights through our judicial process.
  Of course, they are not going to tell you that is their goal, but 
that is what it is. They are trying to shackle the little guy, so he 
can't protect his own rights. In the legislation making its way through 
Congress, the terms ``patent troll'' and ``patent assertion entity'' 
and ``non-practicing entity'' are all lumped together.
  This is the evil. This is, obviously, a semblance of a wrongdoing by 
someone and is certainly not a legitimate property right for these 
people to be bringing these suits. That is what we are being told.
  The legislation, however, doesn't limit just frivolous lawsuits. In 
fact, it doesn't limit frivolous lawsuits at all. It limits lawsuits by 
every inventor. It weakens the position of every inventor in 
relationship to a large corporation that is involved with arrogantly 
trying to steal that inventor's patent rights without paying the little 
guy.
  It is the little guy who created these things, and this law that we 
are putting through in the name of getting the patent troll basically 
cuts the ground out from the people who we have most to be grateful 
for, the inventors of this country, who have come up with the 
technology that has created the wealth and the freedom that we have 
here and the security that we have here.
  This battle is the ultimate David versus Goliath, and I am sorry to 
say that the Congress of the United States seems to be on the side of 
Goliath. After all of these years of fighting this battle, Marcy Kaptur 
and I--Democrats and Republicans on both sides of the aisle--now find 
with this legislation on behalf of one huge, mammoth company--the 
``Goliath Google gang'' we can call them--that they have greased the 
skids.
  With the power play, of course, we have to recognize they have 
greased the skids. They have gotten a lot of them. They have gone way 
down the road on this, but they are not unstoppable, and it is not 
irreversible yet, but if the Senate passes the bill, that is probably 
the point of no return.
  However, we do have a chance. They have overplayed their hand, and 
that is often what happens when companies become too arrogant. In this 
case, the universities, which are not helpless and without supporters 
as compared to the small inventors--the little guys in their garages or 
the small inventors--have been put at risk by this legislation.
  Science and research departments of educational institutions create 
new things all the time. They have patents that they apply for and get 
all the time because they are involved almost on a full-time basis of 
pushing back the boundaries and the understanding of knowledge that 
would help us create new technologies.
  They deserve to reap the rewards from these discoveries. They deserve 
to have the benefit of patents. Our Founding Fathers knew this would be 
a great source of wealth for institutions that invested in creating new 
ideas.
  Yes, they have many patents that are not practiced, which means the 
universities just develop the new technology, but they don't practice 
it. They don't try to commercialize it. Guess what? That makes them 
patent trolls, by the definition of the legislation. According to the 
patent legislation, they are patent trolls. Our universities become 
patent trolls.
  In fact, if this legislation passes in the Senate and if it is 
enacted into law, much of the value of the patents held by America's 
universities will evaporate. It will be the most damaging hit ever 
taken by university-based science in the history of our country.
  Google, however, will be doing just fine. Our universities may take a 
big hit, but Google will be doing fine, along with these other 
multinational corporations.
  If this becomes law, small businesses will be forced to sue in order 
to defend their patents, and they will find that the process is more 
costly, more risky, less certain.
  Investors will stop investing in small companies, by the way. They 
will stop investing and trying if someone comes to them with a good 
idea, and they will require a greater return for their investments if 
someone is trying to help an innovator or a technologist develop his or 
her idea.
  Their risks will be increased, so that any investor will demand more 
of a return. This will destroy the small and independent inventors, but 
these big companies don't care. What they care about is taking anything 
they can get their hands on and using it without paying the inventor.
  In the past, we have had an effort by the corporations to eliminate 
what you call triple damages. Triple damages are if someone comes to 
them and says--or if one is informed or if it can be proven that one is 
aware that they are using patented technology and not paying a royalty 
to the inventor of that technology, they can be sued for triple 
damages.
  They tried to take this away. The reason the corporations wanted to 
take it away was that you could never get a lawyer to work for you on 
contingency if you were only going to get your equal damages paid for, 
but if you have got triple damages, a lawyer could be called in to help 
defend the little guy against the big guy. They tried their best to get 
this taken out.
  Now, why are they doing that? Why is a big corporation doing that? 
They are doing it because they don't want to pay that little guy. What 
has happened is that because they couldn't get the triple damages taken 
out--that is something that Marcy Kaptur and I defeated--they have 
found a way around it.
  Before, when a company was developing a new type of video screen or 
electronic device, if there were a new chip or something that needed to 
be included, there would be a patent search to go and see if they were 
stepping on somebody's toes. That was part of what they did. That was 
part of the process.
  It was a costly part, but it made sure that everybody's rights were 
protected. They didn't go forward in building something without 
notifying the patent owner and working out a deal with him or her.
  That is not the way it is anymore. These big corporations that we are 
talking about instruct their engineers and their scientists: don't do a 
patent search because, if you don't do a patent search, they can't 
prove that we knew

[[Page 6374]]

that this was invented by somebody else; thus, we don't have triple 
damages.
  This is as cynical as it gets, but yet we have Members of the House 
who come to the floor and defend these corporate scavengers, who defend 
these big guys who are trying to step on little Americans. They defend 
them because--guess what--these are powerful players; and, yes, Google 
has given enormous amounts of money politically over the years in order 
to make sure people listen to them.
  I am not saying people are bought by them, but they have laid the 
foundation, and now, Congress is listening to them. That is why that 
bill passed.

                              {time}  1800

  The American people have to counter that. We counter that by making 
sure our voice is heard, by making sure that the voice of the little 
guy is heard, by making sure that the people who believe in the 
Constitution of the United States, that their voices are heard over 
some mega-multinational corporation board members who are out wining 
and dining people.
  We can turn this around. America has proven that freedom works if the 
American people are willing to work at it. But we have had the 
fundamentals working for us. We have had a patent system and a 
Constitution working for us.
  So what we need to do, and if indeed there is a problem with trolls, 
let's admit to these corporations, yes, there are some frivolous 
lawsuits in your area of the economy. Just like in all the other areas 
of the economy, there are frivolous lawsuits by people who shouldn't be 
filing them, who are trying just to get paid off because the cost of 
the litigation will be so high.
  Okay. We admit that to them. Let's say, Let's fix that problem. Let's 
go and just fix the problem of frivolous lawsuits, and let's make sure 
that if there is a frivolous lawsuit, it is easier for people to 
counteract a frivolous lawsuit in the technology. If they want to do it 
just for technology people, fine. It hurts everybody, but we should do 
it for everybody. But fine, if they have got the ear of the Congress 
now, let's work and change that law, the laws that will then make it 
easier to counteract the frivolous lawsuits by these sinister people, 
the trolls that are aimed at putting pressure on when it really isn't 
legitimate. We can do that.
  The legislation that has passed here last year and the legislation in 
the Senate does just the opposite. It only focuses on all inventors, on 
regular people who are doing things and creating things themselves, not 
trolls.
  What it is is the old theory of how we are going to make America 
under different countries better. This is way back when our country was 
being founded we had to decide: Are we going have a system in which the 
government can control everybody in order to prevent the bad people 
from doing things or are we going to give everybody freedom and then 
really punish the bad people?
  This legislation that we have now before us and what has just passed 
the House and is now lingering in the Senate is an attempt to 
supposedly control the bad people in our country by controlling all of 
us, by making rules that will take away the rights of every inventor. 
No. No, that is not what you do. That is inconsistent with American 
tradition, inconsistent with our Constitution, inconsistent with what 
our Founding Fathers had in mind.
  Let's go down and say: What specifically, if you have frivolous 
lawsuits coming at large electronic corporations, how can we handle 
that without undermining the rights of those inventors who are coming 
up with the apps and the new creations, the three-dimensional printers 
and the wonderful things that we are on the verge of today?
  That is not going to happen unless the American people rise up. That 
is not going to happen unless the voice of these giants, these Goliaths 
of the industrial world, Google and the rest of them who are now 
rampaging and stepping on the rights of individual American inventors, 
unless we speak up, unless our voice is heard at least as loud as 
theirs, we are going lose our freedom. We are going to lose our edge.
  It has been the American technology and our inventiveness over the 
years that has made us a secure country. It is the technology that we 
have developed for our Nation's defense. You take away the patent 
rights of our American people, we will neuter that and we will be 
vulnerable, you take away the patent protections that we have had for 
our inventors that have come up with newer ways to compete.
  How can American workers compete with a world filled with cheap 
labor? I will tell you how we can do it. We can make sure they have the 
best technology and the newest ideas and are the greatest innovators, 
because they can outcompete people who are working just with their 
muscles and their sweat. We can do that, but that is not the direction 
our government is going in. That is not the direction our multinational 
corporations want us to go in.
  Let me alert you, we have a bill in the Senate. If it passes the 
Senate, it will totally undermine the little guys, the independent 
inventors. It will undermine the universities. It will undermine 
everybody but the big multinational electronics corporations. That 
needs to be thwarted.
  Something else is happening. Something again is being snuck through, 
just like they tried to sneak through 25 years ago in the gap 
implementation legislation. The gap is, again, a trade treaty we are 
getting into to try to do this where we would publish all of America's 
patent applications even before they were issued to our inventors. They 
tried that.
  The other thing they tried to do was what? Was if someone applies for 
a patent, that at that moment the clock starts ticking and 20 years 
later they have no more patent protection. Of course, until their 
patent is issued, they have no patent protection anyway. Quite often 
patents take 5 to 10 years. Plus, they are cutting in half the time the 
inventor has for patent protection. They are trying to push that 
through. We stopped that.
  Well, guess what? We now have several trade treaties that people are 
negotiating for this Congress. Look real close at what is happening. 
These big multinational corporations, from what I understand, are 
trying to put provisions into those trade treaties that will change the 
fundamental law of intellectual property rights here in this country.
  Beware. Be aware and beware of what will happen if that comes about. 
You put this into a treaty. It snuck through. They tried to do that in 
gap, and it took a Herculean effort on the part of a few of us to try 
to stop that 20 years ago.
  With that said, I would like to put into the Record, Mr. Speaker, at 
this point a list of those things that would be very detrimental to the 
small inventor that are provisions of the bill that is now in the 
Senate.


                     Patent Transparency Provisions

       It would create a new requirement that a patent holder 
     must, once filing a claim for infringement, provide 
     information about all parties with an interest in the patent 
     to the patent office, the court, and the accused infringer.
       This means the elimination of privacy in business dealings. 
     The little guy is totally exposed as his friends and 
     suppliers will be as well. The patent holder will be forced 
     to provide a list of potential ``bank accounts to raid'' to 
     the accused infringers.
       In addition, once this requirement has been invoked, the 
     patent holder must maintain a current record of the 
     information on file at the patent office or forfeit their 
     rights. That means a patent holder gains a new bureaucratic 
     reporting requirement, dramatically increasing the 
     vulnerability of the small inventor and investors. This just 
     because they reported an infringement of their intellectual 
     property rights.
       In addition, the patent holder gains a new bureaucratic fee 
     by being forced to pay recordkeeping fees to maintain their 
     current record at the patent office.
       These are minor inconveniences to multinational 
     corporations, but will be of killer significant burden on the 
     little guy.


                        Customer Stay Provisions

       The Patent Transparency Act also enables large multi-
     national corporations to create nested ``shell companies'' 
     which have few assets, but can infringe on patents while the 
     inventor is unable to sue their ``customers'' who are free to 
     continue infringing the patent while the first court case 
     moves through

[[Page 6375]]

     the system. This process could keep an infringing process in 
     place for a decade or more while an inventor, if he has the 
     resources, tries to stop it.


 Small Business Education, Outreach, and Information Access Provisions

       The Patent Transparency Act authorizes the patent office 
     Director to create a ``patent troll'' database, and to create 
     a strategy program to teach small businesses how to defend 
     themselves from ``patent trolls.''
       So we will be encouraging the Director of the patent office 
     to create an ``enemies list'' and a strategy guide for 
     infringers to undermine patent rights.
       The ultimate results of this legislation will be: increased 
     patent infringement, reduced legal remedies for those being 
     infringed, reduced investments in small business, and 
     irreparable damage to our research universities, our 
     inventors, our entrepreneurs, our economy, and our nation.

  Mr. ROHRABACHER. Mr. Speaker, so I would suggest that the American 
people read this and take a look at what the impact of these changes 
that they are proposing will be. They are going to claim it is a patent 
troll and there is a monitor behind the curtain, but who that person is 
behind the curtain is the inventor, the person who is coming up with 
the invention, the Edisons, the Teslas, and the other people who have 
improved our standard of living. The people who have come up--even this 
bill would have a serious impact on the development of new medicines 
and new health care technologies. These people need to be protected in 
their creation and encouraged, not controlled and not have their rights 
for ownership of what they created be trimmed.
  Mr. Speaker, I yield back the balance of my time.

                          ____________________