Chris Cannon

Mr. CANNON

Mr. CANNON. Mr. Chairman, I take the podium at the far right, the farthest right we can go here in the room as a Republican and a conservative. And may I be the first Republican to welcome my colleague, the gentlewoman from California, [Ms. Lofgren], and at her suggestion, also our colleague from Massachusetts, [Mr. Frank], into the conservative wing of the party of the House.

Mr. CANNON. I yield to the gentlewoman from California.

Mr. CANNON. Mr. Chairman, reclaiming my time, I say to the gentlewoman she is always welcome over here. I do want to speak to those conservatives in the House, Mr. Chairman, about why I support H.R. 400. Before I do so, I want to establish my credentials on this issue. I am a businessman and have invested in numerous companies, some large, mostly small. I have also funded several high-tech new ventures and my district is a high-tech center. We have biomedical companies, software companies, computer hardware companies and a host of innovative start-ups, start-ups based on innovative ideas, some of which have been patented, some which have not. Many of them have been commercial successes and many of those people who have been successful have, in fact, helped out in the commercialization of other technologies. But I do not know, in my district at least, of a distinction between commercializers and inventors. The heart of my district, Utah County, has been compared to Silicon Valley, with Route 128 in Boston, with North Carolina's Research Triangle. The small town of Provo always shows up on these maps of where the technological centers in America are. I am also a member of the Subcommittee on Courts and Intellectual Property. As many know, in the last Congress there was vigorous debate on patent reform, and as a new member, my staff and I took time carefully to review the arguments. After that review, I chose to cosponsor H.R. 400, and I want to detail why. First, we conservatives support the use of a reasoned, thoughtful process of public policy. The development of H.R. 400 easily passes that test. Over the past couple of years the provisions of H.R. 400 have been subject to 8 full hearings over 10 days, involving 80 witnesses. The gentleman from California, [Mr. Rohrabacher], has testified four times. Every side of every view has had the chance to be heard, not once but many times on this issue. Second, conservatives, in particular Republican conservatives, hate bureaucracy. H.R. 400 takes the Patent Office out of the Commerce Department and gives it the flexibility to serve those seeking patent and trademark protection. Third, conservatives support property rights. H.R. 400 expands the scope of protection afforded patent seekers. H.R. 400 guarantees diligent patent owners at least, let me emphasize at least, 17 years of patent term. But that is not all. In many cases, under H.R. 400, patent owners will receive even more than 17 years of patent term, in many cases about 18\1/2\ years of patent protection. This is both more protection than is available currently and more than available under Mr. Rohrabacher's alternative. Fourth, conservatives oppose giving individuals, corporations or foreign interests the ability to play games with our legal system. We believe in a system of laws. H.R. 400 is the only bill that drives a stake in the heart of submarine patents, an expensive, manipulative patent-seeking technique. While there is some debate over the number of submarine patents, the evidence is clear that submarine patents hurt both American industry and consumers. Submarine patents deserve to be permanently sunk, and H.R. 400 does the job. Fifth, conservatives want U.S. companies to have a level playing field with their foreign competitors. That brings me to one of the most controversial provisions of the bill, the concept of publication. Frankly, this is a provision that is little understood and is easily misunderstood. Let me provide some context by talking about what happens today to U.S. inventors who seek patent protection around the world. The three primary places most inventors seek protection are Japan, the United States and Europe. A U.S. inventor who files in all three areas is published in 18 months in Japan and in Europe in a variety of European languages and in Japanese. Of course, that makes it easy for U.S. inventors' foreign competitors to read the American inventors' patent application in their own language and in their own country. The U.S. inventor lacks the same advantage. Because the United States does not publish patent applications, an American inventor must go to Japan or Europe to find out about the activities of his or her foreign competitors. This hurts small American businesses which cannot afford travel or translation. Publication in the United States simply helps our own people keep an eye on their oversees competitors. Some have argued that publication is great for big U.S. companies, but it might hurt small U.S. inventors. That brings me to my sixth point. Conservatives should argue about real issues. The fact is, the current version of H.R. 400, based upon concerns previously raised by small inventors, effectively exempts small inventors from publication. My last point is that conservatives should respect fellow conservatives. The driving forces behind this bill are conservatives, particularly the gentleman from North Carolina, [Mr. Coble], and the gentleman from Illinois, [Mr. Hyde]. These are men of great integrity, great thoughtfulness and great judgment and should be accorded due deference. Mr. Chairman, I encourage Members to pause before they vote today. I know patent law seems like a black art, but our decisions today are important. As a conservative, my considered opinion is that H.R. 400 is a balanced, rational package that strengthens our patent system, encourages high-tech innovation, and protects U.S. economic interests, including my favorite sector, the small business sector.

Mr. CANNON

Mr. CANNON. Mr. Speaker, I represent Utah's Third Congressional District. Most Americans know a little bit about my district. Last fall, on September 18, President Clinton stood across the State line in Arizona, on the other side of the Grand Canyon, and with a few quick words and the stroke of a pen created the Grand Staircase-Escalante National Monument. The fully understand the scale of this new monument, you must understand how big the average U.S. monument is currently. The average is 30,500 acres. The new southern Utah monument at 1.7 million acres is more than 55 times larger. It is bigger than both Delaware and Rhode Island combined. The monument is extremely rugged, and parts are truly beautiful. The issue is really not that the land should be protected. The issue is process. That is why Utahans are angry. If this had been done through an open and thoughtful process, I think Utahans could have embraced something in the area. But that is not what happened. Instead this monument was done without discussion, without consultation and without consideration. The first time anyone in Utah, including my Democratic predecessor, ever heard about the possibility of a monument was in the pages of the Washington Post, a mere 7 days before the actual creation of the monument. During the week before September 18, Utah's congressional delegation and Governor were told repeatedly that nothing was imminent. Of course, something was. On the day of the President's proclamation, I was in southern Utah in the town of Kanab, which is on the west edge of the monument. Kanab is a small pioneer town. The residents are solid people, ranchers, farmers and the people who make their living by supporting those who work on the land. On that day they held a rally at Kanab High School. The entire town closed down and everyone gathered to express their frustration at a President who in another State on the other side of the Grand Canyon was making a decision that would greatly affect their lives. The people were hurt and, yes, justifiably angry. They asked over and over again why their government would do such a thing to them in such a manner. I can remember standing outside the high school and watching as dozens of black balloons were released as a symbol of what had happened to southern Utah. Given this history, is it any wonder that the citizens of Utah today feel bruised and battered on the public land issues? I think my colleagues can understand why I say that Utahns are suspicious of anyone from outside the State who would try to impose additional restrictions on Utah's public lands. And that brings me to H.R. 1500, a bill that will be shortly introduced into Congress. This is a bill sponsored by one of my colleagues from New York. It would designate a staggering 5.7 million acres of BLM land in Utah as wilderness. This is an area three times the size of this enormous monument. Utahns are still reeling from the blow by President Clinton's monument proclamation, and H.R. 1500 amounts to rubbing salt in still- open wounds. To have outsiders introduce this bill at this time is not only highly inappropriate but offensive to the dignity of the people of Utah. Now, Utah has a lot of beautiful land. Some of it should be designated wilderness. But additional wilderness is terribly, terribly divisive as an issue in Utah. Utahns are split and deeply divided over how much of any acres of BLM land in Utah should be designated as wilderness. There is absolutely no consensus on this issue. That is why I went and met with the sponsor of H.R. 1500, the gentleman from New York, a few days ago and asked him for a cooling-off period on this issue of wilderness in Utah. I told him if he introduced his bill it would be hurtful rather than helpful because of the anger over the monument. Any bill right now would have the effect of pitting Utah's political leaders, environmentalists, rural residents, and public land users against each other. It would dramatically and directly hurt the cause of bringing Utahns together over the issue of wilderness. I proposed a 2-year period during which no one in the Congress would propose Utah wilderness legislation. Utahns could then use the time to deal with the monument and seek consensus on the issue of wilderness. Despite my appeal, my colleague from New York told me he is compelled to move forward. Frankly, I found this pretty offensive. My colleague from New York has a district some 2,200 miles away from mine. His district has no Federal lands, none at all. Surely he has more pressing environmental concerns in his own district. Remember that H.R. 1500 is not about protecting public lands in Utah, it is about showing disregard for the people of Utah and the Utah congressional delegation. I ask my colleagues, as a matter of courtesy, please do not cosponsor H.R. 1500.

Mr. CANNON

Mr. CANNON. Mr. Speaker, I would like to address an issue today that is very important to me and, in particular, to America's small family farms and businesses, the repeal of the estate tax or, as many like to refer to it, the death tax. Yesterday I met with Mr. And Mrs. Mouskondis, the owners of Nicholas & Co., a family-owned and operated food distributing company in my home State of Utah. About 40 years ago, Mr. Mouskondis' father passed on his business to his son Bill. While a small company at the time, Nicholas & Co. today is steadily expanding and diversifying, and Bill now works with more than 250 employees and is constantly working to improve his company by using new technology and streamlining his service. Yet in order to prepare to pay the estate tax, Bill is facing steep costs and may have to sell off assets or, worse yet, release employees. This is something Bill has not done since he became the owner of the company. When the owner of a family business or farm dies, the value of the enterprise is added to the owner's estate and is taxed after exemptions. While the owner of this business has spent his entire life working hard to contribute to society, provide for his family and to establish his own American dream, in the end his family must endure the loss of him and cover the cost of his commendable life's efforts. Not only is the tax a burden, the rates currently run between 37 and 55 percent, but the costs involved in dealing with this tax are exorbitant as well. The average family business spends $20,000 in legal fees, $11,900 for accounting fees, and $11,200 for other advisers just to pay the taxes. But dollars do not tell the real story. Family businesses are exactly that, businesses for families. But the Small Business Administration reports that a full 33 percent of grieving relatives must sell all or part of the family business to pay the estate tax. Is it any wonder why only 30 percent of family businesses are passed on to the second generation? This is simply wrong, wrong because America was founded and its government established to protect the life, liberty, and pursuit of happiness of each American citizen. We here in Washington are not fulfilling our duties when we penalize Americans for working hard. It is time to repeal the estate tax. I encourage each of you to support H.R. 902, the Cox-Kyl Family Heritage Preservation Act.