[Congressional Record (Bound Edition), Volume 161 (2015), Part 2]
[House]
[Pages 2028-2034]
[From the U.S. Government Publishing Office, www.gpo.gov]




     TECHNOLOGICAL GENIUS, FREEDOM--AND THE AMERICAN PATENT SYSTEM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2015, the gentleman from California (Mr. Rohrabacher) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. ROHRABACHER. Mr. Speaker, I would like to commend my colleague, 
who has just presented a heartfelt case for scientific and health-
related research by the National Institutes of Health. I concur with 
him that this is a very important part of what we do here. We have 
budgets that we have to meet, but this should be a significant part of 
our budget.
  I would like to also note, as I did when he yielded to me, that, yes, 
the government needs to play a significant part--the National 
Institutes of Health--in trying to find cures and in trying to find 
ways of improving the health of the American people. It is not just up 
to the National Institutes of Health, and it is not just up to the 
government employees. My approach, which I will be talking about 
tonight, is something vital--that the private sector needs to be 
involved not only in this type of health innovation, but in all sorts 
of innovation and technological jumps forward that some people think 
only government can do; but, in fact, it is the private sector and, 
especially, the small, independent inventors who have played such a 
significant role in furthering human progress, in uplifting humankind.

                              {time}  2015

  So while I agree with the government role especially in these health-
related issues, I think that we should dedicate ourselves to making 
sure that private money is going into this.
  In my area, yes, the University of California at Irvine is doing 
exemplary work. Yes, but so are many private companies that have 
invested money in health care technology development. Some of them, I 
might add, have been taxed to death by a 2.5 percent tax on their gross 
simply for being the inventors of health-related technologies.
  This type of medical device tax, which makes the manufacturers of 
devices the most heavily taxed people in this country, is a deterrent 
to having people in the private sector investing in exactly what my 
colleague was trying to suggest--into new approaches to these various 
diseases. That is also true not only of medical technology but of 
technologies across the board that really impact on the well-being and 
on the standard of living of ordinary people throughout our country.
  I rise today to draw attention, my colleagues, to a legislative 
threat to the safety and well-being of the American people. We dodged a 
bullet in the last session of Congress on this very same issue.
  Alerted by our aggressive yet unsuccessful attempt to stop that 
effort--that rancorous legislation in the House, which passed by a 
large majority last time around--we raised such a ruckus that the 
Senate was inundated with a wide spectrum of opposition to this 
supposed reform that had passed the House. There was so much 
opposition, in fact, that the Senate simply refused to bring up the 
bill for consideration.
  What is the issue that is being rammed through the House right now 
and, once we exposed it the last time around, caused the Senate to turn 
back and to not let it go through? Well, there has been an ongoing 
fight here in Washington--one most of the public is totally unaware of, 
and worse than that, most of my colleagues are totally unaware of--that 
for the last 20 years there has been a classic case of crony capitalism 
that plagues our country at play here on a specific issue.
  The big guys--the big crony capitalists--are trying to diminish the 
rights of the little guy in order to make more money. Surprise, 
surprise. And in this case, it will basically undermine America's 
prosperity and security in the long run while hurting the little guys 
while the big guys get their way.
  I am certainly not opposed to the profit motive, but first and 
foremost we need to ensure that powerful forces don't change the 
economic rules in order to enrich themselves unjustly.
  Unseen by most Americans has been the attempt by mega-multinational 
corporations to undermine and yes, destroy a constitutional right of 
our citizens, this in order to fill their pockets at the expense of 
American citizens who don't have the means to defeat such a power play.
  I am referring to an attack on the fundamental constitutional right 
of Americans to own what they have created. This right, written into 
our law at the Constitutional Convention itself, which wrote our 
Constitution, is now under attack. It is a clandestine legal maneuver 
that would neuter our inventors' protections and permit powerful 
multinational corporations to steal what now rightfully belongs to 
American inventors, and thus, ordinary Americans will be hurt, and of 
course, the big corporations will benefit.
  It is not just dispossessing individual inventors; this is a power 
grab that will undermine the prosperity we all have enjoyed as 
Americans. The less than forthright attack on our patent system will 
undermine the economic well-being of our working people who depend on 
the United States for being technologically superior to the working 
people of other societies. People in all these societies work very 
hard. It is not hard work--it is hard work coupled with technology--and 
we have ensured through the patent system that we would be developing 
the technology that would give Americans the edge.
  Our Founding Fathers believed that technology, freedom, and yes, the 
profit motive was the formula that would uplift humankind. As I say, 
they wrote into our Constitution a guarantee of the property rights of 
inventors and authors. It is the only place in the body of our 
Constitution that the word ``right'' is actually used.
  The Bill of Rights was added after the body of the Constitution, but 
in article I, section 8, clause 8 of our Constitution, it states:

       The Congress shall have power to . . . promote the progress 
     and science of useful arts by securing for limited times to 
     authors and inventors the exclusive right to their respective 
     writings and discoveries.

  This provision has served America well. It has led to a general 
prosperity

[[Page 2029]]

where we have technological advances that uplift our own people and 
give our own people the chance to outcompete those people who work 
their hearts out overseas but don't have the same technological support 
system in their economic endeavors.
  Well, this provision in America has led to prosperity. It has helped 
our national security. The fact is, we could never dream of trying to 
defeat the enemies of freedom throughout the world on a man-to-man 
basis. It is only our ability to be able to bring technology and our 
genius to play that has given us a leverage over countries that have 
tens of millions of people and, by the way, don't really value human 
life.
  We need to make sure we are technologically superior, and it has been 
our patent system that has given our inventors the chance to invent 
things that will protect all of us from aggression and prevent anti-
democratic forces throughout the world--fanatic forces--from 
overwhelming us and overwhelming our defenses.
  Of course, this having been the country of new ideas, the country 
where we encouraged people to be innovative, we have uplifted the life 
of average people. Average people here are now able to live decent 
lives as compared to the average people in so many countries of the 
world.
  Yes, Americans work hard and, as I say, so do other people. It is the 
technology that makes the difference. Our technology has multiplied the 
results of the hard work of our people. That is the secret of America's 
success. Technology and freedom and our strong patent system is right 
there at the foundation of that principle. It is what has made the 
difference in this vital area to our security and our well-being.
  Yet today, we have these multinational corporations--the same ones 
who run overseas to do business with communist China and with America's 
enemies and people who treat their populations with total disregard--
yes, these multinational corporations want to diminish the patent 
protection of the American people because they don't want to pay 
Americans for their creative new technologies. They don't want to give 
them their share when they create something that will uplift our 
people.
  Over the years, we fought and turned back many efforts to weaken our 
patent system. I doubt whether half the new Members of this Congress 
are fully aware of the aggressive and brutal fights that we have been 
in over patents and the patent system over these last 20 years.
  A little over 20 years ago, they were saying we need to change the 
patent system in order to harmonize it with the rest of the world. Our 
patent system was out of sync with the rest of the world. Well, of 
course. Our constitutional rights are out of sync with the rest of the 
world. We are out of sync as we protect people's right to go to church 
and not be repressed by some other religion. We are out of sync with 
most of the world when we protect people's right to speak and to 
criticize their government or to assemble or to try to join unions or 
other activities in the economic area.
  No, we actually are out of sync with a lot of areas, but they decided 
to say we need to harmonize our law on patents with the rest of the 
world, which has weak patent systems. Their laws have been determined 
by, basically, what is going to help the big guy and what is going to 
get new ideas out into the hands of the big industrialists.
  Well, we have beat back major efforts. The first ones, as I say, were 
on harmonizing the law. They had two big issues. One was to harmonize 
our law with the rest of the world.
  Our system has been that when someone submits their patent, no matter 
how long it takes for that patent to get issued, it is secret. In fact, 
it is a felony, I believe, for someone at the Patent and Trademark 
Office to disclose a patent application. And then, when you get your 
patent, it is published to the world, but you are granted 17 years of 
ownership.
  Well, their goal was what? Their goal was to do it the European and 
Japanese way, which is--aha--after 18 months of applying for your 
patent, it is published. If you don't have it, or even if it takes 
another 5, 10 years to get it, it is published.
  I called it the Steal American Technologies Act. We managed to turn 
that one around.
  The other half of that particular onslaught was that we have now a 
guaranteed protection, as I said, in the Constitution, as I just read. 
For a specific period of time, we were granted a 17-year patent 
protection. That starts at the time when you are issued your patent.
  Well, overseas that is not what it is all about. We are out of sync 
with them because what happens is, the minute that you file, the clock 
starts ticking, and 20 years later you have no patent protection at 
all, but that is from filing. It may take you 10 or 15 years to get 
your patent.
  So they are dramatically reducing the ownership rights of the patent 
of a person who has applied for a patent, all to the benefit, of 
course, of these big guys who are saying, We can speed this up maybe 
with our contacts. And the little guys overseas over and over again get 
beaten up and their material stolen from them by these powerful forces. 
We don't want that to happen here. We protect the rights of the little 
guy here.
  We won those fights that I was just talking about by standing tall 
and tough on the issue. And yes, there were some compromises over the 
years where we beat those first two issues that I talked about, we won 
that case, but over the years there have been several other hard-fought 
patent battles where we compromised and were able to come up with 
something that was acceptable to both sides.
  Well, now, after a few years of preparing the political battleground 
in Washington, and now, after Google has provided more campaign 
contributions than any other corporation in the world on various issues 
and we have other big corporations providing big campaign 
contributions--and I am not saying they are buying votes, but what they 
are buying is attention; and people don't even know about the issue--
but now, Google has been able to explain their case. They don't hear 
the other side.
  That is why it is up to us to make sure every Member of Congress 
knows what the issue is when it comes to the patent fight, instead of 
walking down to the floor unaware of how significant this is.
  There is only one group of people that is going to be able to make 
sure their Congressman is focused on just how significant this issue 
is. The American people have to notify their Congressmen in order to 
let them know we should not be weakening our patent system.
  There is no excuse to undermine the independent inventor when he is 
trying to protect his rights to a patent. We won't have independent 
inventors, and we won't be on the cutting edge of change, as we have 
been.
  After a few years of preparing, as I say, a new onslaught has been 
prepared.
  Now, as I say, they claimed in the beginning that they wanted to 
harmonize our system, but, of course, we don't want to harmonize and 
make our system weaker in order to be the same with other countries.
  So that fight went back over 20 years, but now what they have laid 
the groundwork for and are bringing up is--in the last 3 years we have 
seen this fight for the second round. Three-and-a-half years ago, the 
House passed the America Invents Act, which fundamentally diminished 
our patent system, weakening its protection for ordinary citizens.

                              {time}  2030

  It still, even with that weakening, was better than what you had in 
Europe and in Japan. The negative impacts of that legislation are just 
now being felt. They are just now moving through the patent system and 
being implemented by the Patent Office.
  We are going to find out what happens when you undermine the little 
guys in order to help the big guys because you don't--after a few more 
years, where is the innovation coming from?

[[Page 2030]]

  From the big, multinational corporate bureaucracies, from the 
government bureaucracy? No. When we have undermined the small inventor, 
the individual inventor, we have taken the profit motive out of this. 
We have put roadblocks in the way of America moving forward.
  The next wave began in this patent battle just a little more than a 
year ago. Last year, as I said, the onslaught aimed at neutering the 
rights of the small inventor was barely turned back, and that bill came 
forward, and we got it through. Actually, it passed the House with a 
substantial margin.
  When citizens and universities and small businesses across America 
understood because of the great debate that we had here what was at 
stake, they inundated their Senators with calls and visits, and their 
message was: Don't undermine our rights. Don't undermine the rights of 
the small inventor. Don't undermine this constitutional right. It is 
just as precious as the rights of speech and press and religion. Let's 
not undermine that in the name of helping some multinational 
corporation squash an opposition to a guy who has invented something 
and wants to get his rightful payment for the work that he has done.
  Of course, the power brokers don't claim that they must change the 
measure of legal protection that we offer inventors because they don't 
claim that it is because the inventors are bad and need to be deprived 
of longstanding rights or that the Constitution is just outmoded and we 
don't really want to follow it. They don't argue that.
  No, these powerful interests, mega-multinational corporations, well 
heeled here in Washington, these powerful interests have to have a 
bogeyman to try to draw away attention from what they are really trying 
to do.
  The issue won't become diminishing the rights of the small inventor, 
preventing the small inventor from enforcing his patents on people who 
are trying to steal it, who are big mega-multinational corporations.
  No, they don't say that. There is always an excuse, something that 
has to sound very sinister, a sinister force at play, trying to hurt 
these innocent businessmen--unfairly at that.
  We heard it before. About 15 years ago, we heard it was submarine 
patents. That was the real derogatory term, submarine patents. That was 
why we need to change the amount of time that someone is able to 
actually have, as a guarantee for their patent rights.
  The submarine patent was used to say: Oh, so what if after 20 years 
and you haven't had your patent for 15 years, so you have only got 5 
years of protection, so what?
  It is the submarine patenters we are really trying to get at--forget 
the hardship on those little guys, which is the vast majority of people 
who want to get their patent as soon as possible--but the submarine 
patenters, meaning we have got to really restrict those little guys.
  Well, now, the big guys have come up with another sinister label. 
That was a fraud. The submarine patent issue was a fraud, and we fixed 
it very easily, with a very small compromise, without having to have 
all the rights of the little guy eliminated, simply by saying if the 
little guy is--it can be shown that he prevented the issuance of his 
patent, trying to elongate that, well then that clock will start 
ticking during that time period and that time will be taken away from 
him.
  If it is not him, if it is the bureaucracy that is holding off the 
actual issuance of the patent, we shouldn't be doing things that hurt 
the little guy who is trying to get his patent out.
  Well, so we got that covered, but now, the big guys have come up with 
another sinister label because submarine patent doesn't apply anymore. 
We found a way to solve it without hurting the little guy.
  Now, the big guys have come up with this other label which is aimed 
at confusing the public about who gets hurt and who benefits from the 
so-called reforms that are now being shoved through Congress. They are 
insisting that the need for patent change, basic changes in our patent 
system, is because of the so-called patent trolls. Over and over again, 
you will hear this sinister word.
  Now, let me tell you how cynical this is. There is a guy who was a 
top executive at one of the electronic companies who is now on my side, 
on our side, the side of the little guy on this issue, but he was very 
high up in a big company. They got together with their people to decide 
what tactic they should use to get the changes done and passed through 
Congress.
  They knew they couldn't just attack the small inventor. They knew 
they couldn't attack the innovators in our society. What are they going 
to do to diminish their patent rights?
  Well, we have got to make it sound like it is somebody else who is 
going to get hurt, and that person has to be evil. The patent troll is 
what they came up with.
  This gentleman who worked in the business said he was in a room when 
that term was formalized by a number of people in the industry. They 
went around in a circle and said: What is the worst and nastiest 
sounding term we can come up with in order to vilify that, to draw 
people's attention away from this issue?
  He told me he had suggested patent pirate; and, no, patent troll 
sound really much more sinister. That is how cynical these people are. 
It is arrogant, and it is cynical because the patent troll is a 
creation.
  Yeah, there are some people who misuse our system. There are 
frivolous lawsuits that happen in our country. You know what, it is not 
just in the patent issue. It is all across the board. There are lawyers 
that have frivolous lawsuits.
  They are trying to claim that patent trolls are people with patents 
that are not legal patents, and they are trying to threaten lawsuits so 
they will get paid off. Well, that is happening throughout our system. 
They are called frivolous lawsuits.
  There is no need to hurt our small inventors and to phase back their 
rights, as inventors, the rights of their ownership and the rights to 
enforce their patent, in order to get someone a lawyer who is engaged 
in a frivolous lawsuit.
  These patent trolls are patent holders. Remember, when you hear the 
patent troll, just think: someone who owns a patent. Unless it is the 
inventor himself, they say the patent troll is anyone who owns a patent 
who is not the inventor. Patent holders or companies who represent 
patent holders are also people who own patents who get in infringement 
cases, but these are people who did not invent it themselves, and, 
thus, they are called trolls.
  They are engaged in basically defending their rights against the 
infringement of large companies. Yeah, there are a few cases where 
small guys, we are told--that, again, is a front, to try to protect the 
big guys from the little guys, but there has been infringement on the 
patents that they own, these regular people, people who own--and 
patents are what? It is your property, intellectual property.
  Patents should be looked at that the United States Government 
believes it is your right to own, for a given period of time, as I just 
read in the Constitution, your invention or your writing, and you own 
it.
  If someone is infringing and if you want to buy it from someone, 
someone who has invented it but can't afford to basically enforce it, 
well, you have a right to do that. That doesn't make you an evil troll. 
That means you have bought something that is a piece of property.
  By the way, after a number of years--10, 13, 14 years--that will no 
longer be your property because the patent protection lasts only a 
given period of time. Well, these owners are just as valid as any other 
patents that are granted by the Patent Office. We are not talking about 
phony patents.
  They will try to make it sound like it is, Oh, these worthless pieces 
of paper. No, these are real patents and real pieces of paper that show 
you have rights to own this particular technology.
  Huge corporate infringers would have us believe that these patents 
that they are talking about, that the people are

[[Page 2031]]

trying to enforce, that these big companies have used, knowing that 
there is probably someone who owns that who has developed this new 
technology and just forgetting about them and leaving them behind, 
well, these big corporate infringers would have you believe that all 
these people are that way. They are not.
  Almost all of the infringement cases happen by people who 
legitimately own a legitimate patent, and if not, it should be decided 
in court. There is nothing wrong with bringing this to court if it is a 
legitimate patent or if it is an illegitimate patent.
  This happens all the time. Are you violating someone's property 
rights when they own a piece of property and you have built a road 
across them without asking whether or not you could use their property? 
No, that should go to court.
  In fact, it is not a frivolous lawsuit for someone who owns a piece 
of property and someone who maybe owns a mine or something over here 
and just builds a road across and doesn't ask you about it. No, you 
have a right for compensation.
  That is basically what we are talking about except, in this case, you 
have an inventor who has enriched a big company with something new, but 
the big company doesn't want to give him any of his royalties for 
building this new technology.
  By the way, in the past, big corporations would try to do patent 
searches to make sure they weren't stepping on the little guy, and they 
would try to cut deals with these patent owners to try to make sure 
that they didn't face a lawsuit. They would be able to chart out 
exactly what their expenses were.
  Then they decided, Don't do it, don't even look, don't check to see 
if we are stealing this new idea. You know why? They did that because 
what you have now--and what they have tried to eliminate is that if a 
big company intentionally knows that it is violating the patent rights 
of someone who owns that new technology and infringes upon it, that it 
knowingly does this, there are triple damages that the inventor can get 
in his lawsuit against that big company.
  The big companies, they say, Oh, well, so we won't even look, so they 
can't prove that we knew we were stepping on these little people. They 
don't even look anymore. That is how arrogant they are. Then they worry 
when a small guy comes up and sues them for infringement?
  By the way, why did they want to eliminate the triple damages? 
Because the little guys, regular people, don't have the money to pay 
for the lawyers necessary for these lawsuits. The little guy's ability 
to hire a lawyer on a contingency basis--if you take away the triple 
damages, you have eliminated the right of almost all of the small 
inventors to be able to have the protection they need in court, but 
that was one of their major goals.
  By the way, we turned that one back, thank God, but it keeps going. 
They keep going because this is a way to enrich these powerful, 
multinational corporations in a way that the public isn't seeing it. It 
is just a change in the rules; and the little guys, the wealth that 
should be going to them is extracted and put into the pockets of these 
big corporate entities.
  They have the power, basically, and they are going to use it. They 
have the power in the economy, and they have the power in getting their 
case across to the Members of Congress because they have the ability to 
hire lobbyists again and to give campaign contributions, but not to buy 
votes, and I am not suggesting that.
  When you are here and you have so much time, if you have lobbyists 
that are working just to get the attention of the Member of Congress on 
the issue for a short period of time, you have succeeded. These 
companies can do it, and the little guy can't. The little guy has no 
way of getting people's attention here.
  The fact is that these big corporations--and especially Google--have 
hired the best representatives in town and spent the most money getting 
people's attention.
  The only answer here is to make sure we offset that by making sure 
the American people call their Member of Congress and tell them: Don't 
diminish the patent protection for regular Americans, don't let this 
happen.
  They have won the last couple of fights. Again, like I say, by the 
time it got over to the Senate, some people just started paying 
attention, but we lost it here in the House.
  Well, the patents that we are talking about are patents; they are not 
frivolous lawsuits. These are patents that were issued by the United 
States Patent Office, but huge infringers would have us believe: Of 
course, don't worry, the Congress is just up there trying to protect 
people who really haven't come up with anything and just have frivolous 
lawsuits.
  No, we are talking about tangible, tangible items that these people 
have used without paying the royalty to the man or woman who invented 
that particular item, that particular technology.
  What makes these patents different than the good patents, by the way? 
These same large corporations own thousands of patents--by the way, 
most of these corporations are the megaelectronics industry companies, 
so they own lots of patents.
  What makes the little guy a patent troll for being willing to try to 
get some help to fight these big guys? What makes that little guy's 
patent or the ``troll's'' patent any less real and any less valuable 
and official as these big companies?

                              {time}  2045

  They have their patents, too. If the small inventor doesn't have the 
resources to enforce his or her patent in the limited time--they only 
have owned this now. Remember, once you own a patent, you own it for 17 
years, and then it is done; everybody owns it.
  In the limited time they are granted for ownership, if they don't 
have the resources to basically enforce their rights, an individual or 
company can buy their rights and can create--or they can create a 
partnership with a small inventor, and they can see to it that way to 
see that there isn't a theft of this little guy's property, and they 
call it an infringement. There is nothing wrong with someone coming in 
and saying: Well, listen. If you can't enforce this, we think it is a 
good idea, you have 10 more years of patent protection. We will buy 
that patent right, just like buying a parcel of land. We are going to 
speculate that that land is going to go up in value or whatever. There 
is no difference at all. It is a piece of property. It is a property 
right. It is intellectual property.
  This effort to change our patent law is an attack on the very nature 
of intellectual property.
  Okay. So the small inventor can't do it. What is wrong with somebody 
coming in and offering to buy that patent right from him for those 10 
years or to go into partnership with him?
  Well, I have consulted with a number of outside individual inventors 
and groups, and they have reaffirmed that the legislation now being 
proposed disadvantages the little guy against deep-pocketed 
multinational corporations. This has been achieved in the guise, as I 
say, of targeting patent trolls.
  You are not vilifying this poor little inventor, this guy who works 
his heart out in his garage, quits his job because he has got an idea, 
puts all of his money and sells his home in order to build something 
new, a new technology. No, I am sorry. That guy is a hero. And under 
the guise of getting patent trolls, whatever that is, they are going to 
smash this little guy that I just described because they are going to 
prevent anybody from helping him because that person who is helping him 
is a patent troll. This person and company who has contracted with the 
inventor to see that his or her rights are respected, I consider them 
to be a positive economic and also a moral force within the concept of 
determining ownership in our society.
  How horrible, making a business--which some of these companies have 
done--of helping a business out of helping small inventors see to it 
that their patent rights are enforced. Oh, how horrible. Or how 
horrible it is for them to be buying patent rights from them.

[[Page 2032]]

Oh, my goodness, a guy with money says: You can't afford to enforce 
your rights; I think it is a great idea; I will pay you for this. The 
fact that that happens and is able to happen in our society means that 
that little guy now has something of value.
  If we take that away and say: Oh, these people buying them are all 
trolls--sounds sinister--oh, when you do that, the value of our patents 
for all of our inventors goes down. We are undercutting the wealth that 
is available to our independent inventors because we are devaluing what 
they have if they can't enforce it themselves, they can't sell it to 
somebody who is not going to commercialize it, thus you have got a 
situation where the patent value, we are taking wealth out of the 
pockets of the least able people in our society in the technology 
arena, the least able to weather that, and we are putting that money 
and that power into the pockets of the big mega-multinational, not just 
American companies, multinational companies. It is sinful.
  The proponents of this legislation are covering the fact that someone 
has stolen someone else's patent rights, someone else's intellectual 
property, and now they want to change the system so they can get away 
with this theft. That is what it is all about. The big companies have 
been stealing. They want to get away with it. They need to change the 
rules of the game so they can get away with it, and the little guy will 
just give up because he can't go through all the steps now.
  They would have us believe that all the lawsuits against these 
companies are frivolous. As I say, that is not the case. Well, the vast 
majority of them are not. The vast majority of patent infringement 
cases have very legitimate areas of concern, and they need to be 
decided by the court, not to have Congress step in and make it more 
difficult for someone to take someone to court who has stolen his 
intellectual property. Yes, there are frivolous lawsuits throughout our 
system. Why are these guys just focusing on patents? They are doing 
that because that is what these megacorporations will benefit from.
  Tonight I draw the attention of the American people to H.R. 9, the 
Innovation Act, introduced by Chairman Goodlatte with 19 bipartisan 
cosponsors. The last Congress, the House Committee on the Judiciary 
held a hearing on this same bill. The same bill that came in last time, 
this bill that is being proposed now, H.R. 9, is exactly the same bill, 
except maybe with one provision that is taken out, which is a provision 
that I was able to get out of the bill on the floor in the debate and 
in the amendment process.
  By the way, that provision was going to prevent inventors, if they 
believed they were treated unfairly by the Patent Office, that 
provision would deny them the right to take it to court. They would 
have to settle the issue with an ombudsman from the Patent Office. Get 
that? The right to use court of a U.S. citizen was going to be denied 
them, and the proponents of this legislation just let it drip off their 
back like water off a duck's back. Give me a break. That is a huge 
violation of rights of Americans, but it is just as huge a violation 
for us to try to diminish their ability to enforce the rights of their 
own property.
  So I draw attention to H.R. 9. Last Congress the House Committee on 
the Judiciary held a hearing on this almost very same bill. The 
witnesses at that hearing, including former Patent Office Director 
Kappos, made it clear that we should move slowly and with great care in 
making any changes to the patent law, especially in light of the fact 
that no one yet understands the implication of a similar patent law 
that was passed 2 years ago, the America Invents Act.
  The process from that act is just now being implemented. I think it 
is going to have a very negative impact, and we need to know that that 
is what is going to happen, and we need to work that into our calculus 
of whether we should pass even more restrictions like are in that first 
bill.
  So everybody says: Take it easy; go slow; make sure you are right 
before you go ahead. Well, we haven't even digested the last bite 
Congress has taken out of the patent law. We haven't even digested that 
at all, and now they want us to gobble down a few more apples. We need 
to make sure that we know what we have already gotten ourselves into by 
biting into this apple, but, no, we have got to now commit to having 
even more and more change before we even know whether that apple is 
going to turn sour in our stomach and cause us to be sick.
  In and of itself, this legislation is too broad, H.R. 9, the same 
thing they tried to pass through here last year, rammed it through, too 
broad, its implications too unclear, its effects unknowable. That is 
what witnesses and other experts have indicated. The conclusion, as I 
say, is move forward with these fundamental changes in our patent 
system, and if you do so, you might be undermining that system.
  We need not to move forward quickly on this, see what the impact of 
the past law changes are. That is what now has been indicated, but that 
is not what has happened. That is not what we have seen happen here on 
Capitol Hill. The House was railroaded into passing this new proposal 
on top of the previous legislation before we have a chance to see 
whether it is going to have a negative or positive effect, and it is 
not even being fully implemented yet. But yet we were pushed. This 
thing was rammed down our throats. It seems like some multinational 
corporations really wanted action now: Do it now.
  Well, what is going on here? This congressional ramrodding 
exemplifies the battle to diminish America's patent system that has 
been going on for 25 years. This isn't something new. What I am 
describing to you is just one more hit, one more attempt by people to 
harmonize American law with the rest of the world.
  We need to be more like the rest of the world. We have a strong 
protection of intellectual property rights. Oh, we should be more like 
the rest of the world--baloney. The fact is America should stand tall. 
If we want harmony with the rest of the world, they should harmonize 
with our stronger protection for the individual, for our caring for 
ordinary people.
  This law and these changes are going to change the way we do business 
in America, all right. We are not going to have the creative and the 
cutting edge as these very same mega-multinational corporations go to 
countries like China in order to get cheap labor to accomplish their 
mission rather than using the technology of Americans, giving them the 
royalty for it, at least, in order to make sure our country and our 
countrymen are safe, our countrymen are secure and our well-being of 
our people economically, they have good jobs producing competitive 
products that they can sell overseas. No. No. These companies, they 
just want that power for themselves. They want to harmonize with the 
rest of the world so they can run roughshod over all of us.
  According to the sponsors of H.R. 9, it is an attempt to combat the 
problem of patent trolls. That is it. You look at their arguments, it 
is all patent trolls, patent trolls, patent trolls, even though the 
study mandated by Congress shows that this much-heralded problem is not 
a major driver of lawsuits. It has not caused, as they claim, a surge 
of new lawsuits. In fact, the most recent data shows that patent 
lawsuits dropped dramatically in 2014 compared to previous years.
  The provisions of this legislation are designed to make it much more 
complicated. Now, this is what it is. This legislation, H.R. 9, is 
designed to make it much more complicated, costly, and challenging to 
bring a lawsuit for patent infringement, thus hurting the little guy, 
the infringement that is taking place. That means the victim is the 
little guy. We are helping the big guy, the guy who is committing the 
crime.
  By the way, if these people wanted to impact frivolous lawsuits, if 
they say, ``Oh, there are too many frivolous lawsuits with patents,'' 
they should just make it simpler and cheaper to defend against baseless 
infringement cases. Somebody that is accused of infringement and it is 
baseless, let's make it easier for these companies to defend themselves 
against that charge in court.
  But, no, no, making it more easy to defend themselves, no, no, no. We 
are

[[Page 2033]]

being asked to raise the bar for the inventor to bring lawsuits to 
defend his or her rights rather than lowering the bar to allow small 
businesses and others to defend themselves against frivolous lawsuits. 
When we weaken the little guy--that is what we are doing. They want us 
to weaken the little guy to protect the big guy from frivolous 
lawsuits.
  Well, who gets hurt and who is helped? You have a sinister cover-up 
there, the trolls, and who is getting helped by that? These big 
megacorporations. And who is getting hurt? The little guys who can't go 
through all these extra steps; they can't afford to protect themselves. 
And we are going to side with the big guys, the big guys again who take 
their work to China without blushing? This legislation, H.R. 9, is 
consistent with the decades-long war being waged on America's and 
against America's independent inventors.
  Here are a few provisions of this Innovation Act we have just 
submitted:
  It would create new requirements for a patent holder, when a patent 
holder must, once filing a claim for infringement, provide information 
about all the parties who are involved with this; and, thus, you 
basically have the accused infringer is going to know everybody who is 
involved and, thus, be able to basically attack all of the people, not 
just the guy who has lost his intellectual property rights, but 
somebody who backed him up now will become a target of big 
corporations. This means the elimination of privacy for major business 
dealings.
  The little guy no longer has that right of privacy. The little guy is 
totally exposed, as his friends and suppliers will be. The patent 
holder will be forced to provide a list of potential bank accounts to 
raid, and those bank accounts and all of that information will be made 
available to the bad guys, the people who are infringing. The big 
companies who are beating him down will now have all this information 
to use against him.
  In addition, once the requirement has been invoked, the patent holder 
must maintain a current record of the information on file at the Patent 
Office or forfeit the rights.

                              {time}  2100

  What that means is the patent holder now has huge new bureaucratic 
reporting requirements, dramatically increasing his cost and 
vulnerability.
  Now, you do that to a small investor or a small inventor, what does 
that say? You are increasing their costs dramatically. And why are we 
increasing their requirements for bureaucratic reporting? Because they 
have actually reported an infringement of their intellectual rights; 
thus, they have got to pay the price; they have got to have the burden 
on them. We are going to put the burden on them for saying, Somebody 
just stole my property. We are increasing the burden on them.
  If they do that, from then on, they have a whole new obligation, a 
bureaucratic obligation.
  In addition, the patent holder gains a new bureaucratic fee--not just 
a bureaucratic requirement but a fee--and is forced to pay record 
keeping fees to maintain the current record at the Patent Office.
  More fees, more bureaucratic requirements. These are minor 
inconveniences to multinational corporations, these corporations with 
hundreds, if not thousands of employees. It is not going to cost them 
anything. In fact, when they go to court, they have a whole stable of 
attorneys, so it won't cost them much money there either.
  So for these multinational corporations, this isn't even an 
inconvenience. But for the little guy, all of these new requirements 
are killers because they don't have $100,000 that they can just drop 
into keeping better books over here or getting a hold of all of these 
people or exposing anybody who has invested in their patent.
  The Innovation Act also enables large multinational 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. So they say: Well, we will just do all of 
our business with this technology, through that company, so if we get 
sued, they can't get at us--no way. While the first court case moves 
through the system, we are going to shield these big guys who are 
stealing.
  This process could keep an infringing process in place for a decade 
or more while the inventor is trying to find ways to stop that 
infringement.
  The Innovation Act authorizes the Patent Office director to create a 
patent troll database--how about that--and to create a strategy to 
teach small business how to defend themselves against patent trolls.
  We are encouraging the director of the Patent Office to create an 
enemies list and a strategy guide for people who are infringing on 
other people's patent rights. That is what we are talking about.
  They are trying to basically vilify a group of people who are 
involved in a perfectly legal and moral economic activity, helping out 
small business guys, buying small patent owners' rights to their 
patents. If they can't enforce it themselves, they are going into 
partnership with them.
  No, no. Now we are going to have a list of these people who are going 
to be on an enemy's list mandated by the Patent Office, according to 
this legislation.
  So we are encouraging this enemies list strategy. Instead of just, 
okay, if there is a frivolous lawsuit, let's just make it easier for 
someone to defend themselves in court.
  The ultimate results of this legislation will be:
  Increased patent infringement. Have you got that? This legislation, 
H.R. 9, will increase the amount of theft in our society because now we 
have made it easier.
  Reduced legal remedies. We have basically reduced the legal remedies 
for the victim, for those who have been infringed.
  We have reduced the investment in small business. Why are people 
going to invest in a new patent if they think it can be infringed upon, 
and this guy isn't going to get his money back? So we have dramatically 
hurt the amount of money that is going to be invested in the new 
technology, in the brilliant ideas that come from our students from 
university. You know, they come out and they have great ideas. We want 
them to go into small business and follow their dream. Oh, no, no. This 
would make it almost impossible for people like that. Our young people 
and small businessmen, people with a dream.
  Irreparable damage will be done to our research universities, to our 
inventors and entrepreneurs. All of these people are going to be hurt.
  Let me put it this way: our colleges and universities, they know that 
if this bill passes--the one that was going through the Senate passed--
there would be a dramatic reduction in the value of all the patents 
that they own, and that is a major, major asset to our universities.
  Each part of this so-called reform is detrimental to the patent 
owners, especially damaging to individual small inventors. Every 
provision bolsters the patent thieves, the infringers, at the expense 
of the legal owners.
  No, no. Let's not talk about that. Let's talk about patent trolls, 
how evil they are. ``Troll'' is a bad word. You don't want to be on the 
side of the trolls.
  No, no. Everything they are proposing in the name of stopping the 
trolls, using that as cover, hurts the little guy and helps these big 
guys who are financing this campaign to undermine our patent system.
  This approach assists thieves because they are powerful corporations 
versus little guys. The only hope for the little guy has always been 
that America stands for the God-given rights and that those rights are 
protected by our government, recognized and protected by it, as it was 
in the Constitution.
  To all people, rich and poor, their rights are protected in this 
country, and we should not be about to let big corporate interests step 
on the little guy.
  If a guy owns a piece of property and a big corporation wants to 
build a road across it, to build a whatever it is on

[[Page 2034]]

the other side--an oil derrick or whatever it is--they have to pay that 
man's price because he owns that property. And in this case, we are 
talking only about an ownership for 17 years, granted to somebody who 
has actually come up with something that is of great value to our 
people.
  No. We need to make sure that we remain the country where we protect 
everybody's rights and that the big guys can't get away with stepping 
on the little guys.
  The rights of ownership are the same as all of our other rights: 
speech, religion, assembly. And this has been what we are seeing now in 
H.R. 9--the last couple of years have been a blatant power grab by the 
big guys to diminish the rights of the little guy.
  When the bill identical to this one was previously submitted, 
opposition emerged to it, as people figured out what I am telling you. 
What I am saying tonight--finally some people, when they heard the 
debate over here, they mobilized. And when they found out what was 
about to be foisted upon them, we were speaking with loud voices.
  Here is a list of some of those people who opposed or expressed major 
concerns over that act, a bill that was identical to H.R. 9, which is 
now perched and ready to be shoved through Congress:
  The Association of American Universities; American Council on 
Education; Association of American Medical Colleges; Association of 
Public and Land-grant Universities; Association of University 
Technology Managers; Council on Governmental Relations; Eagle Forum; 
Club for Growth; American Bar Association; Patent Office Professional 
Association; Judicial Conference Committee on Rules of Practice and 
Procedure; American Intellectual Property Law Association; Intellectual 
Property Owners Association; National Association of Patent 
Practitioners; National Venture Capital Association; the Biotechnology 
Industry Organization; Pharmaceutical Research and Manufacturers of 
America, PhRMA; Innovation Alliance; Coalition for 21st Century Patent 
Reform; Institute of Electrical and Electronics Engineers.
  Let's just note, all of these groups were opposed or were very 
concerned about that act because:
  It creates more paperwork for everybody, increasing the cost for 
anybody who wants to defend their rights.
  It forces patent holders who file claims of infringement to maintain 
new bureaucratic reporting requirements and to pay new recordkeeping 
costs. It just complicates their lives and their expenses.
  It eliminates the independent judicial review of patent applicants by 
striking section 145 of title 35. This is very important in order to 
keep the Patent Office honest. There should be an independent judicial 
review. That is what they tried to foist off on us last time.
  And it dramatically increases the financial risks for anybody filing 
an infringement lawsuit.
  We need to make sure that our country stays true to the American 
people, to what will give us security for our people. We need to be on 
the cutting edge of technology. We need to be ahead of our potential 
enemies. We can't defend our country man for man. We have got to have 
the best equipment and the high technology that comes from the creative 
thinking of our people. We need to make sure that our working people 
are producing more wealth with every hour of work they do; thus, we can 
afford to provide the services and the standard of living for ordinary 
people.
  Every time there is a new idea, if we actually permit that to be 
stolen by multinational corporations, that is not going to improve the 
well-being of our people.
  We have seen this going on in the past. This is not the first time. 
This is just in the last 25 years of onslaught. And what we have now in 
H.R. 9 is just the latest salvo in the effort to destroy the patent 
system that we have got.
  But this happened a long time ago. We have had to reaffirm the rights 
of the little guy over and again.
  There is a statue in our Congress, in our Capitol, of Philo 
Farnsworth. Do you know who Philo Farnsworth was? Philo Farnsworth was 
the inventor of the picture tube for the television.
  Philo was a farmer and an engineer in Utah, a man with not many 
resources at all. But he figured out something that RCA, one of the 
biggest corporations in the country at the time, was trying to find 
out: How do you create a picture tube?
  Well, he wrote them and said, I found the secret. And what do you 
know, they sent their top engineer over. Philo actually showed them 
what he had done. And they said, We are going to get back to you, and 
we are going to work with you as your partner. You know what they did? 
He could never get a hold of them again.
  David Sarnoff, one of the richest, most powerful men in the United 
States, set out to steal the right to the patent for the picture tube 
from this lone American, this guy who had a small farm in Utah. And he 
led--Philo Farnsworth didn't give up. He led a struggle for 20 years to 
get his rights to own that technology, that intellectual property.
  And when he was fighting this huge corporate interest that was trying 
to just squish him like a bug, he stood up there, and he couldn't have 
stood alone. People invested in his lawsuit. People invested with him 
so that justice would come and that inventors in the United States 
would know that when they invent something, they have a right, and the 
American people will stick by them.
  In the end, the Supreme Court made the decision, and they decided 
with the little guy. They decided with Philo. What a great affirmation 
of our country. And there is a statute today of Farnsworth in the 
Capitol, the man who advanced communications in our country. You will 
never find a statue to David Sarnoff or any of these big moguls who 
tried to squish him, these multinational corporations.
  Let's remember the heart of America, patriotism. Let's be loyal to 
our regular people. They will be loyal to us. That is what the American 
Revolution was all about.
  I ask my colleagues to join me in opposing H.R. 9. And I invite 
people to talk about it and to talk to their Congressmen and their 
Senators and to make sure that they don't come in here for a vote not 
knowing how important this vote is on H.R. 9.
  With that, I yield back the balance of my time.

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