[House Report 108-425]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 108-425
======================================================================
COOPERATIVE RESEARCH AND TECHNOLOGY ENHANCEMENT (CREATE) ACT OF 2003
_______
February 24, 2004.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 2391]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 2391) to amend title 35, United States Code, to promote
research among universities, the public sector, and private
enterprise, having considered the same, reports favorably
thereon with amendments and recommends that the bill as amended
do pass.
CONTENTS
Page
The Amendment.................................................... 1
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 3
Hearings......................................................... 7
Committee Consideration.......................................... 7
Vote of the Committee............................................ 7
Committee Oversight Findings..................................... 7
New Budget Authority and Tax Expenditures........................ 7
Congressional Budget Office Cost Estimate........................ 7
Performance Goals and Objectives................................. 8
Constitutional Authority Statement............................... 8
Section-by-Section Analysis and Discussion....................... 8
Changes in Existing Law Made by the Bill, as Reported............ 10
Markup Transcript................................................ 11
The Amendment
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Cooperative Research and Technology
Enhancement (CREATE) Act of 2004''.
SEC. 2. COLLABORATIVE EFFORTS ON CLAIMED INVENTIONS.
Section 103(c) of title 35, United States Code, is amended to read
as follows:
``(c)(1) Subject matter developed by another person, which
qualifies as prior art only under one or more of subsections (e), (f),
and (g) of section 102 of this title, shall not preclude patentability
under this section where the subject matter and the claimed invention
were, at the time the claimed invention was made, owned by the same
person or subject to an obligation of assignment to the same person.
``(2) For purposes of this subsection, subject matter developed by
another person and a claimed invention shall be deemed to have been
owned by the same person or subject to an obligation of assignment to
the same person if--
``(A) the claimed invention was made by or on behalf of
parties to a joint research agreement that was in effect on or
before the date the claimed invention was made;
``(B) the claimed invention was made as a result of
activities undertaken within the scope of the joint research
agreement; and
``(C) the application for patent for the claimed invention
discloses or is amended to disclose the names of the parties to
the joint research agreement.
``(3) For purposes of paragraph (2), the term `joint research
agreement' means a written contract, grant, or cooperative agreement
entered into by two or more persons or entities for the performance of
experimental, developmental, or research work in the field of the
claimed invention.''.
SEC. 3. EFFECTIVE DATE.
(a) In General.--The amendments made by this Act shall apply to any
patent granted on or after the date of the enactment of this Act.
(b) Special Rule.--The amendments made by this Act shall not affect
any final decision of a court or the United States Patent and Trademark
Office rendered before the date of the enactment of this Act, and shall
not affect the right of any party in any action pending before the
United States Patent and Trademark Office or a court on the date of the
enactment of this Act to have that party's rights determined on the
basis of the provisions of title 35, United States Code, in effect on
the day before the date of the enactment of this Act.
Amend the title so as to read:
A bill to amend title 35, United States Code, to promote
cooperative research involving universities, the public sector,
and private enterprises.
Purpose and Summary
H.R. 2391, the ``Cooperative Research and Technology
Enhancement (CREATE) Act of 2003,'' responds to the 1997 Oddzon
\1\ decision of the Federal Circuit Court of Appeals. The
legislation will ameliorate the effects of the decision by
clarifying Congress's intent to permit the patenting of
inventions that result from collaborative or ``team research''
in circumstances not permitted under current law. Enactment of
the CREATE Act will provide collaborative researchers
affiliated with multiple organizations a statutory ``safe
harbor'' similar to the one available under the patent law to
researchers employed by a single organization or who have
established certain types of legal relationships. In so doing,
the CREATE Act will foster improved communication among
researchers, provide additional certainty and structure for
those who engage in collaborative research, reduce patent
litigation incentives, and spur innovation and investment.
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\1\ Oddzon Products, Inc. v. Just Toys, Inc., et al, 122 F.3d 1396,
43 U.S.P.Q.2d 1641 (Fed. Cir. 1997).
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Background and Need for the Legislation
Collaborative research among private, public, and non-
profit entities is an essential pillar of the economy of the
United States.\2\ A 1999 report of the National Research
Council's Committee on Science, Engineering, and Public Policy
found that partnerships among industry, academia, and
governments have contributed significantly to recent
technological successes in the United States. The report
recommended strengthening such partnerships in the future.
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\2\ ``In 2000, non-profits and universities spent a record $28.1
billion on research and development much of which involved
collaborations among private, public, and non-profit entities. The
positive effects of these collaborations on the U.S. economy are
substantial. For example, in 2000, sales from products developed from
inventions that were transferred from university research centers
resulted in revenues of about $42 billion, and U.S. universities,
hospitals, and research institutes realized almost $1.2 billion in
gross license income much of which was used to fund additional
research.'' Patent Law and Non-Profit Research Collaboration, 2002:
Hearing Before the Subcomm. on Courts, the Internet, and Intellectual
Property of the House Judiciary Committee, 107th Cong., 2nd Sess. 60
(2002) (statement of Carl E. Gulbrandsen, Managing Director of the
Wisconsin Alumni Research Foundation).
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Through legislation, Congress has fostered such cooperative
research efforts.\3\ In decisions by the U.S. Court of Customs
and Patent Appeals (CCPA), the predecessor to the Federal
Circuit, the court ruled that 35 U.S.C. Sec. 103 could be
interpreted to mean that earlier inventions by individual
collaborative research team members could render the team's new
invention obvious and therefore unpatentable.\4\ Concerned this
result could chill communication among team members, stifle
cooperative research, and inhibit innovation, Congress enacted
the Patent Law Amendments of 1984.
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\3\ The Bayh-Dole Act and the Stevenson-Wydler Technology
Innovation Act, each enacted in 1980, are representative of
Congressional policy in this area. Bayh-Dole expressly articulates that
one of Congress's policy objectives is ``to promote collaboration
between commercial concerns and non-profit organizations, including
universities.'' 35 U.S.C. Sec. 200.
\4\ See In re Bass, 474 F.2d 1276 (CCPA 1973) and In re Clemens,
622 F.2d 1029 (CCPA 1980).
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Explaining the intent of the new language in Sec. 103 \5\,
the legislative history provides:
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\5\ In 1984, Congress amended 35 U.S.C. Sec. 103 to read:
Subject matter developed by another person, which qualifies as prior
art only under one or more of subsections (e), (f), and (g) of section
102 of this title, shall not preclude patentability under this section
where the subject matter and the claimed invention were, at the time
the invention was made, owned by the same person or subject to an
obligation of assignment to the same person.
Congress redesignated the third sentence of sec. 103 as paragraph (c)
in the Biotechnological Process Patent Act of 1995, Pub.L. No. 104-41,
109 Stat. 351 (1995).
The bill, by disqualifying . . . background [scientific
or technical] information [known within an organization
but unknown to the public] from prior art, will
encourage communication among members of research
teams, and patenting, and consequently public
dissemination, of the results of ``team research.'' \6\
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\6\ See Section-by-Section Analysis: Patent Law Amendments of 1984,
130 Cong. Rec. 28069, 28071 et seq. (Oct. 1, 1984), reprinted in 1984
U.S.C.C.A.N. 5827, 5833.
In amending Sec. 103 to promote collaborative research,
Congress did not expressly limit the benefit of the new law to
circumstances in which the collaboration involved researchers
from within a single organization. Instead, it provided that
researchers from different organizations who had commonly
assigned their rights to a single entity could also benefit
from the ``safe harbor'' created by the law. Research
collaborations between different companies thus could qualify
for the safe harbor, providing that the companies involved
negotiated and resolved a number of issues regarding ownership
of the patent rights in the invention made as a result of the
collaboration.
The effect of the 1984 amendment on inventors from
different organizations was at the heart of the Court of
Appeals for the Federal Circuit's 1997 Oddzon decision.\7\ In
that decision, the court narrowed the possible scope of the
1984 statute.\8\ The court recognized that it was resolving a
question that could have serious repercussions for patent
owners, and invited a Congressional response, stating:
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\7\ See supra note 1.
\8\ See supra note 5.
It is sometimes more important that a close question be
settled one way or another than which way it is
settled. We settle the issue here (subject of course to
any later intervention by Congress . . .).\9\
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\9\ Oddzon, 122 F.3d at 1403.
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THE ODDZON DECISION
In Oddzon, the Federal Circuit found that in the case of an
inventive collaboration that involved researchers from more
than one organization, the sharing of confidential information
by members of a research team could render an invention
``obvious'' within the meaning of Sec. 103, and therefore
unpatentable if the researchers did not have an obligation to
assign their rights to the invention to a single entity in
advance of making the invention. The court wrote:
The statutory language provides a clear statement that
subject matter that qualifies as prior art under
subsection (f) or (g) cannot be combined with other
prior art to render a claimed invention obvious and
hence unpatentable when the relevant prior art is
commonly owned with the claimed invention at the time
the invention was made. While the statute does not
expressly state . . . that Sec. 102(f) creates a type
of prior art for purposes of Sec. 103, nonetheless that
conclusion is inescapable; the language that states
that Sec. 102(f) subject matter is not prior art under
limited circumstances clearly implies that it is prior
art otherwise.\10\
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\10\ Id.
In so ruling, the court addressed the 1984 amendments to
Sec. 103, and stated ``[t]here is no clearly apparent purpose
in Congress's inclusion of Sec. 102(f) in the amendment other
than an attempt to ameliorate the problems of patenting the
results of team research.'' \11\ The court added, ``while there
is a basis for an opposite conclusion, principally based on the
fact that Sec. 102(f) does not refer to public activity, as do
the other provisions that clearly define prior art, nonetheless
we cannot escape the import of the 1984 amendment.'' \12\
---------------------------------------------------------------------------
\11\ Id.
\12\ Id.
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Many view the court's ruling as far-reaching. In essence,
the court found that secret information that qualifies only
under Sec. 102(f) could be combined with other information to
make an invention obvious and nonpatentable where there was no
common ownership or assignment of the invention and ``subject
matter'' at issue. The court found this even though the
information being exchanged was neither publicly known nor
publicly available. The court's ruling was arguably required by
the language of the statute. Nevertheless, Oddzon represents a
significant potential threat to inventors who engage in
collaborative research and development projects.
Put another way, the decision created a situation where an
otherwise patentable invention may be rendered nonpatentable on
the basis of confidential information routinely exchanged
between research partners. Thus, parties who enter into a
clearly defined and structured research relationship, but who
do not (or cannot) elect to define a common ownership interest
in or a common assignment of inventions jointly developed, can
unwittingly create an obstacle to patent protection by simply
exchanging secret information among themselves. Under the
court's interpretation of Sec. 103(c), there is no requirement
that the patent-disqualifying information be publicly disclosed
or commonly known. The potential ``chilling effect'' for
communication and open collaboration has troubled many
academics and researchers.
The holding created a significant problem for many public-
private research and development projects. Many states and the
Federal Government operate under laws and practices that tend
to prohibit the assignment of inventive rights to a private
sector collaborative partner, as Oddzon putatively requires.
Instead, the university, state, or Federal Government typically
retains sole ownership of the invention and licenses its
applications and commercial exploitation to research partners.
These technology transfer efforts generate revenue for
universities and governments, facilitate innovation, and
encourage efficient commercialization of new technologies.
Private enterprises benefit by leveraging scarce research
dollars and by increasing their access to reliable sources of
basic and advanced research expertise. Consumers benefit from
innovation and the availability of new technologies.
THE CREATE ACT
In enacting the ``Cooperative Research and Technology
Enhancement (CREATE) Act of 2003,'' Congress intends to enhance
the effectiveness and security of patent protection for
inventions that arise from collaborative arrangements between
multiple organizations. Specifically, Congress intends that
subject matter developed by another person, which qualifies as
prior art only under one or more of subsections (e), (f), and
(g) of section 102 of title 35, and a claimed invention shall
be deemed to be owned by the same person, or subject to an
obligation of assignment to the same person, where specific
conditions are satisfied. The Act achieves this by eliminating
the use of certain information and prior art in obviousness
determinations in the circumstances addressed in the
legislation.
The CREATE Act provides a simple means of extending the
``safe harbor'' provisions of current law that treats
inventions of a common owner similarly to inventions made by a
single person. To promote collaborative research within
organizations, Congress enacted the Patent Law Amendments of
1984, which, inter alia, exempt ``common owner'' inventors from
the application of certain types of prior art and information
in obviousness determinations, subject to the exercise of the
same double patenting principles that apply when inventions are
made by a single inventor. By enacting this legislation,
Congress intends to extend this exemption to ``joint research
agreement'' inventors, who may represent more than one
organization, again subject to the same double patenting
principles. Parties to a joint research agreement who seek to
benefit from the Act must identify themselves in the
application for patent or a valid amendment thereto.
The revised standard will permit one party to a joint
research agreement who owns an invention to claim the benefit
of 35 U.S.C. Sec. 103(c) without requiring the potentially
disqualifying subject matter and the invention be owned by a
single entity or subject to an obligation of common assignment.
The revised standard, comparable to current law, requires the
invention be made after the date of an eligible joint research
agreement
Patents issued under this Act shall be enforceable in the
same manner, to the same extent, and for the same term as when
patents are issued to a common owner or are subject to common
assignment. The doctrine of ``obviousness-type double
patenting,'' a judicial doctrine used by courts to prevent
patentees from obtaining an unjustifiable extension of the
amount of time to exercise a patent's right to exclude, shall
apply to such patents. See, e.g., In re Berg, 140 F.3d 1428, 46
U.S.P.Q.2d 1226 (Fed. Cir. 1998); In re Goodman, 11 F.3d 1046,
1052, 29 USPQ2d 2010, 2015 (Fed. Cir. 1993); In re Longi, 759
F.2d 887, 892-93, 225 USPQ 645, 648 (Fed. Cir. 1985); In re Van
Ornum, 686 F.2d 937, 943-44, 214 USPQ 761, 766 (CCPA 1982).
Further, a ``terminal disclaimer'' of the type required
when double patenting is determined to exist for two or more
claimed inventions must be filed for any such patent claiming
the benefit of Sec. 103(c). Such a terminal disclaimer is
sufficient if it disclaims the ability of the patent owner to
separately enforce the patent that, but for this Act, would
have been invalid for obviousness-type double patenting.
Congress intends that parties who seek to benefit from this
Act to waive the right to enforce any patent separately from
any earlier patent that would otherwise have formed the basis
for an obviousness-type double patenting rejection. Further,
Congress intends that parties with an interest in a patent that
is granted solely on the basis of the amendments made pursuant
to this Act to waive requirements for multiple licenses. In
other words, the requirements under current law for parties to
terminally disclaim interests in patents that would otherwise
be invalid on ``obviousness-type'' double patenting grounds are
to apply, mutatis mutandis, to the patents that may be issued
in circumstances made possible by this Act.
Congress intends the CREATE Act to be applied prospectively
to any patent granted on or after the date of enactment. The
prospective nature of the Act's application is not intended to
prohibit an extension of the benefits of the Act to
collaborative arrangements that existed prior to enactment and
that otherwise meet the terms of the Act.
Congress intends the Act to apply to any reissue patent
granted on or after the date of enactment, subject to the
reissue recapture doctrine, which prevents a patentee from
obtaining claims to subject matter that were surrendered in the
original application for patent.
To implement the CREATE Act, the Committee anticipates that
the U.S. Patent and Trademark Office will promulgate such
regulations as are necessary including, but not limited to,
requirements that applicants file amendments and corrections in
accordance with regulations that the Director may promulgate.
Subject to such exceptions as the Director may prescribe, a
failure to comply with such regulations may constitute a waiver
of benefits under this Act.
Hearings
The Committee's Subcommittee on Courts, the Internet, and
Intellectual Property held a hearing on H.R. 2391 on June 10,
2003. Testimony was received from four witnesses, representing
one organization, with additional material submitted by one
organization. In addition, the Subcommittee on Courts, the
Internet, and Intellectual Property held an oversight hearing
entitled ``Patent Law and Non-Profit Research Collaboration''
on March 14, 2002. Testimony was received from four witnesses,
representing two organizations, with additional material
submitted two organizations.
Committee Consideration
On July 22, 2003, the Subcommittee on Courts, the Internet,
and Intellectual Property met in open session and ordered
favorably reported the bill H.R. 2391, with an amendment, by a
voice vote, a quorum being present. On January 21, 2004, the
Committee met in open session and ordered favorably reported
the bill H.R. 2391 with amendments by voice vote, a quorum
being present.
Vote of the Committee
In compliance with clause 3(b) of Rule XIII of the Rules of
the House of Representatives, the Committee notes that there
were no recorded votes during the Committee consideration of
H.R. 2391.
Committee Oversight Findings
In compliance with clause 3(c)(1) of Rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of Rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of Rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of Rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 2391, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 4, 2004.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2391, the
``Cooperative Research and Technology Enhancement (CREATE) Act
of 2004.''
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Melissa E.
Zimmerman, who can be reached at 226-2860.
Sincerely,
Douglas Holtz-Eakin.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 2391--Cooperative Research and Technology Enhancement (CREATE) Act
of 2004.
H.R. 2391 would make changes to patent law regarding
collaborative work by researchers from multiple organizations.
Based on information provided by the United States Patent and
Trademark Office, CBO estimates that implementing H.R. 2391
would have an insignificant effect on that agency's spending,
which is subject to appropriation. Enacting the bill would not
affect direct spending or revenues.
H.R. 2391 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of State, local, or tribal
governments.
The CBO staff contact for this estimate is Melissa E.
Zimmerman. This estimate was approved by Robert A. Sunshine,
Assistant Director for Budget Analysis.
Performance Goals and Objectives
H.R. 2391 does not authorize funding. Therefore, clause
3(c)(4) of Rule XIII of the Rules of the House of
Representatives is inapplicable.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8 of the Constitution.
Section-by-Section Analysis and Discussion
Unless otherwise noted, the following discussion describes
the bill as reported by the Committee.
Section 1. Short Title. Section 1 of the bill as introduced
provides that the Act may be cited as the ``Cooperative
Research and Technology Enhancement (CREATE) Act of 2003.'' The
Committee adopted an amendment in the nature of a substitute
that, among other things, changed the date to 2004.
Section 2. Collaborative Efforts on Claimed Inventions.
Section 2 amends Sec. 103(c) of title 35, United States Code,
to provide collaborative researchers affiliated with more than
one organization a new way to avail themselves of the ``safe
harbor'' defined in Sec. 103(c).
In particular, Sec. 103(c) is amended to add a new
paragraph that permits reliance on the provisions of
Sec. 103(c) by parties that have not commonly assigned their
rights to subject matter and the invention at the time a
claimed invention was made. It does so by construing the phrase
``owned by the same person or subject to an obligation of
assignment'' in newly redesignated Sec. 103(c)(1), to include
circumstances in which the parties have entered into a
qualifying joint research agreement before to making the
invention. The amendments made in this Act do not alter
existing law governing inventions under Sec. 103(c) where the
invention and the subject matter at issue are commonly owned or
subject to an obligation of common assignment.
A party who seeks to gain the benefit of the amended
Sec. 103(c) must comply with certain conditions. First, the
invention and the subject matter (i.e., prior art or
information qualifying solely under 35 U.S.C. Sec. 102(f)) that
is being excluded must be owned by, or otherwise subject to the
control of, one or more of the parties to the joint research
agreement. While the subject matter being excluded may pre-date
the joint research agreement, the claimed invention must be
made after the date of such agreement. Second, the invention
must arise from work performed by or on behalf of the natural
or legal persons that are party to the eligible joint research
agreement. Third, the identities of the parties to the joint
research agreement must be disclosed in the patent. This
information may be included in the original application,
through an amendment to the application, or added by an
amendment to the patent (e.g., by a certificate of correction)
pursuant to the amended law. The omission of the names of
parties to the agreement is not an error that would justify
commencement of a reissue or reexamination proceeding.
Thus, by entering into a joint research agreement before
making the claimed invention, disclosing the names of the
parties in the patent application or amendment, and ensuring
that the claimed invention resulted from activities under the
agreement, subject matter developed by another person and the
claimed invention will be deemed to be commonly owned.
Section 2 also defines the term ``joint research
agreement'' as a ``written contract, grant, or cooperative
agreement.'' By doing so, Congress does not intend to prescribe
the specific form of the agreement parties must use to benefit
from this Act nor to require the writing be contained in a
single instrument. Congress does intend the writing to
demonstrate that a qualifying collaboration existed prior to
the time the claimed invention was made and that the claimed
invention was derived from activities performed by or on behalf
of parties that acted within the scope of the agreement.
The term ``joint research agreement,'' used in section 2 of
the Act, is not limited to joint research agreements under the
Bayh-Dole Act (Sec. 200 et seq. of the Patent Code), but also
includes other governmental or private sector cooperative
research agreements, development agreements, and other
transaction agreements, including Government Cooperative
Research and Development Agreements (15 U.S.C. Sec. 3701a), and
Department of Defense or National Aeronautics and Space
Administration (NASA) ``other transaction'' agreements (10
U.S.C. Sec. 2371, 42 U.S.C. Sec. 2473).
Section 3. Effective Date. Section 3 provides for
prospective application of the Act by requiring that the
amendments apply only to patents granted on or after the date
of enactment, including a patent from an application filed on
or before the date of enactment.
Section 3 contains a special rule that prohibits the
amendments from: 1) affecting a final decision of a court or
the United States Patent and Trademark Office (USPTO) rendered
before the date of enactment; and 2) provides that the
amendments shall not affect the right of any party in any
action pending before the USPTO or a court on the date of
enactment to have their rights determined on the basis of the
provisions of the patent law in effect on the day before
enactment. Thus, the CREATE Act will extend benefits of the new
standard to applications pending at the USPTO before the date
of enactment but the special rule will ensure that the changes
made by this Act will not confer rights in existing
proceedings--including those that involve such applications--
before the USPTO or a court. The rationale is to prevent
parties in a proceeding who may have conformed their conduct to
pre-existing patent law from either benefitting from, or being
punished by, unanticipated revisions to this title.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of Rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
SECTION 103 OF TITLE 35, UNITED STATES CODE
Sec. 103. Conditions for patentability; non-obvious subject matter
(a) * * *
* * * * * * *
[(c) Subject matter developed by another person, which
qualifies as prior art only under one or more of subsections
(e), (f), and (g) of section 102 of this title, shall not
preclude patentability under this section where the subject
matter and the claimed invention were, at the time the
invention was made, owned by the same person or subject to an
obligation of assignment to the same person.]
(c)(1) Subject matter developed by another person, which
qualifies as prior art only under one or more of subsections
(e), (f), and (g) of section 102 of this title, shall not
preclude patentability under this section where the subject
matter and the claimed invention were, at the time the claimed
invention was made, owned by the same person or subject to an
obligation of assignment to the same person.
(2) For purposes of this subsection, subject matter
developed by another person and a claimed invention shall be
deemed to have been owned by the same person or subject to an
obligation of assignment to the same person if--
(A) the claimed invention was made by or on behalf
of parties to a joint research agreement that was in
effect on or before the date the claimed invention was
made;
(B) the claimed invention was made as a result of
activities undertaken within the scope of the joint
research agreement; and
(C) the application for patent for the claimed
invention discloses or is amended to disclose the names
of the parties to the joint research agreement.
(3) For purposes of paragraph (2), the term ``joint
research agreement'' means a written contract, grant, or
cooperative agreement entered into by two or more persons or
entities for the performance of experimental, developmental, or
research work in the field of the claimed invention.
* * * * * * *
Markup Transcript
BUSINESS MEETING
WEDNESDAY, JANUARY 21, 2004
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m., in
Room 2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner, Jr. [Chairman of the Committee] presiding.
[Intervening business.]
Chairman Sensenbrenner. The next item on the agenda is H.R.
2391, the ``Cooperative Research and Technology Enhancement Act
of 2003.'' The Chair recognizes the gentleman from Texas, Mr.
Smith, the Chairman of the Subcommittee on Courts, the
Internet, and Intellectual Property.
Mr. Smith. Thank you, Mr. Chairman. The Subcommittee on
Courts, the Internet, and Intellectual Property reports
favorably the bill H.R. 2391, with a single amendment in the
nature of a substitute, and urges its adoption.
Chairman Sensenbrenner. Without objection, the bill will be
considered as read and open for amendment at any point. And the
Subcommittee amendment in the nature of a substitute which the
Members have before them will be considered as read, considered
as the original text for purposes of amendment, and open for
amendment at any point.
[The amendment in the nature of a substitute follows:]
Chairman Sensenbrenner. The Chair recognizes the gentleman
from Texas for a brief 5 minutes to strike the last word.
Mr. Smith. Mr. Chairman, today the forces of competition
and the rapid pace of scientific advancement require companies
and research institutions to engage in an increasing number of
multidisciplinary research efforts.
But continued technological progress demands continued
improvements in communication, coordination, and cooperation
among researchers.
To encourage such efforts, Congress enacted a series of
patent law amendments in 1984. One of these measures was
codified by 35 USC section 103. This provision created a safe
harbor for inventions that result from the collaborative
efforts of researchers by prohibiting the use of nonpublic
information or secret prior art to deny patent protection.
Two conditions had to be met. First, such information must
relate to a prior invention developed by one or more of the
research partners; and, second, the researchers must have
exchanged the information voluntarily.
In the 1997 Oddzon case, the Federal Circuit ruled on the
scope of this safe harbor. Despite finding ``the existence of a
basis for an opposite conclusion,'' the court ruled that
Congress had limited the scope to circumstances where a joint
invention was developed by researchers within a single
organization. The court went on to invite Congress to clarify
its intent, writing ``We settle the issue here, subject of
course to later intervention by Congress.''
Put another way, the Oddzon decision created a situation
when an otherwise patentable invention may be rendered
nonpatentable on the basis of information routinely exchanged
between research partners who represent more than one
institution. Thus, parties who enter into a clearly defined and
structured research relationship can create obstacles to
obtaining patent protection by simply exchanging information
among themselves. There is no requirement that the information
be publicly disclosed or commonly known. All that is required
is that the collaborators exchange the information.
The court attempted to determine the level of protection
from secret prior art challenges by focusing not on the intent
of the researchers who comprised the inventive entity, but
instead simply on whether the researchers represented more than
one institution. While many believe the court applied the law
as written by Congress, there is considerable doubt that
Congress intended this discrimination.
The CREATE Act, a product of several hearings, much
discussion and considerable review, is narrowly tailored to
permit all collaborative researchers to enjoy the same
protections from the use of secret prior art as are enjoyed by
those who happen to work for a single enterprise.
I will offer an amendment in the nature of a substitute
that makes technical changes to the text reported by the
Subcommittee. I urge my colleagues to support the legislation.
Chairman Sensenbrenner. Does anybody wish to make a brief
statement on the Democratic side?
Ms. Baldwin. Mr. Chairman.
Chairman Sensenbrenner. The gentlewoman from Wisconsin is
recognized for an equally brief 5 minutes.
Ms. Baldwin. Mr. Chairman, I want to strongly commend this
process in Ranking Member Berman's absence today. He and the
Chairman of the Subcommittee were very thorough with this bill.
I particularly felt that concerns raised among my constituents
were addressed very well in this process. I commend the bill,
commend the process, and urge its adoption by this Committee, a
favorable recommendation by this Committee.
Mr. Chairman, I yield back the balance of my time.
Chairman Sensenbrenner. Without objection, all Members may
insert opening statements at this point in the record.
[The prepared statement of Mr. Conyers follows:]
Prepared Statement of the Honorable John Conyers, Jr., a Representative
in Congress From the State of Michigan, and Ranking Member, Committee
on the Judiciary
I rise in support of this legislation. I cannot overstate the
importance of encouraging collaboration when it comes to developing new
technologies, particularly in the medical field. That is why Congress
amended the patent laws in the mid-1980's to allow the patenting of
inventions even when the inventions were not developed by a single
person.
Unfortunately, the Federal courts have interpreted the law in a way
that vitiates our intent in enacting it in the first place. The Federal
Circuit ruled in the OddzOn case that an inventor's knowledge of
``secret prior art'' could prevent the issuance of a patent unless the
inventor basically worked in the same organization that developed the
prior art.
This ruling is having a detrimental impact on innovation. Because
many universities and other non-profits do not enter into the formal
structures envisioned by OddzOn when they work to develop drugs and
other technologies, they are losing patent protection and an incentive
to work together. We will see a decline not only in collaborations but
also in the development of life-saving drugs and other inventions.
That is why I am pleased we are marking up this bill, of which I am
an original cosponsor. H.R. 2391 reiterates the importance of research
collaborations by allowing them to obtain patent protection without
entering into formal relationships. This legislation will encourage
collaboration and spur innovation.
I urge my colleagues to vote ``Yes'' on this legislation.
Chairman Sensenbrenner. Are there amendments?
Mr. Smith. Mr. Chairman, I have an amendment at the desk.
Chairman Sensenbrenner. Is this an amendment in the nature
of a substitute?
Mr. Smith. Yes.
Chairman Sensenbrenner. The Clerk will report the amendment
in the nature of a substitute.
The Clerk. Amendment in the nature of a substitute to H.R.
2391 offered by Mr. Smith of Texas.
[The amendment in the nature of a substitute follows:]
Chairman Sensenbrenner. Without objection, the amendment is
considered as read and open for amendment at any point.
The gentleman from Texas is recognized for what I hope will
be a briefer 5 minutes.
Mr. Smith. Mr. Chairman, very briefly, this amendment makes
technical and other changes in the current statute and text
that was reported by the Subcommittee. The Members have the
amendment in front of them. If they have any questions, I will
be happy to address their questions. I believe they are
noncontroversial.
Mr. Chairman, I yield back the balance of my time.
Chairman Sensenbrenner. Are there any amendments to this
amendment in the nature of a substitute? If not, the question
is on agreeing to the amendment in the nature of a substitute
just offered by the gentleman from Texas, Mr. Smith. Those in
favor will say aye. Opposed no. The ayes appear to have it. The
ayes have it.
The amendment in the nature of a substitute is agreed to.
The Chair notes the presence of a reporting quorum.
The question now occurs on the motion to report the bill
H.R. 2391 favorably, as amended. All those in favor will say
aye. Opposed no. The ayes appear to have it. The ayes have it.
The motion to report favorably is agreed to.
Without objection, the bill will be reported favorably to
the House in the form of a single amendment in the nature of a
substitute incorporating the amendments adopted here today.
Without objection, the Chairman is authorized to move to go
to conference pursuant to House rules.
Without objection, the staff is directed to make any
technical and conforming changes. All Members will be given 2
days as provided by House rules in which to submit additional
dissenting supplemental or minority views.
The Chair would like to thank all of the Members for their
patience. We have gotten through four bills that are pretty
meaty in nature. We have seven bills and resolutions left on
this Committee notice. The Chair will recess this markup until
10 a.m. on Wednesday next week, January 28. We will conclude
the rest of the bills on this schedule that day. Members should
be prepared to be here as long as it takes to get through the
remaining seven measures on the agenda. I would say that there
are several measures that are much less controversial. They are
commemorative in nature, and it is my hope that if we get here
on time and get to work we will be out of here by lunchtime or
shortly thereafter. Please be prompt next Wednesday and I think
we can get another seven measures out and then we can give the
Rules Committee and the majority leader some of our things to
schedule.
The Committee stands recessed.
[Whereupon, at 2:11 p.m., the Committee was adjourned.]