Howard Coble

Mr. COBLE

Mr. COBLE. Mr. Chairman, I rise in opposition to the amendment offered by my friend, the gentleman from California [Mr. Campbell]. Mr. Chairman, I say to the gentleman from California, I have referred to him on many occasions as one of the most learned, if not the most learned, Member of this august body, and perhaps I was presumptuous when I accused him of committing infirmities of clarity. The gentleman might remind me that it was my inability to interpret. But it appeared to me to be an infirmity of clarity, nothing personal meant by that. The amendment submitted by my friend, the gentleman from California, Mr. Chairman, can be interpreted to require the PTO, Patent and Trademark Office, to complete two substantive office actions in every application filed and still publish all applications in 18 months. The PTO is simply not able to comply with such a requirement at this time with their existing resources. This solution would force the PTO to ask Congress for a fee increase, which comes, guess where, out of the inventor's pockets. It could also affect the quality of patent examinations, causing more examiners to make mistakes through hurried examinations, and therefore exposing inventors to more court challenges, which can cost millions of dollars. That does not propel innovation, it seems to me. The second interpretation of the gentleman's amendment could be to delay the publication of all applications until the second substantive office action determining the patentability of an invention. If this interpretation holds true, the gentleman from California proposes to expand the choice over publication offered only to small businesses in H.R. 400. I repeat, we offer that to small businesses in our bill. But the gentleman from California [Mr. Campbell] would expand that to all applicants, including big business, without granting the inventor a 3-month grace period before publication. This will remove one of the benefits of publishing applications in the United States, the early availability of foreign origin applications in the United States in our language, in the English language. Title II of H.R. 400 requires publication of foreign origin applications within about 6 months after filing in the United States. That means we see their technology 1 year before any of ours is published and protected in the United States. The amendment offered by the gentleman from California delays the publication of foreign origin applications for a year after the date they would otherwise be published in the United States under H.R. 400. Let us not take away that benefit. Moreover, the Campbell amendment would delay the publication of applications by U.S. businesses who are also filing abroad, where their applications are already published 18 months after filing in the United States. Delayed publication of these applications that are also filed abroad deprives American inventors of easy access to the same. Whichever way it is read, the amendment offered by the gentleman from California, it seems to me, favors foreign applicants over U.S. applicants and effectively guts the protections and benefits offered in H.R. 400. Vote no on the Campbell amendment.

Mr. COBLE. I yield to the gentleman from California [Mr. Campbell].

Mr. COBLE. Mr. Chairman, I move to strike the last word to engage in a colloquy with my friend from California [Mr. Campbell], a brief colloquy, if the gentleman is willing. Mr. Chairman, the gentleman and I talked about this in the back of the room earlier, and as best I recall, the gentleman was in agreement, but he may not be able to bind others. I think our colleagues have heard about enough of H.R. 400. Would the gentleman be willing, and it would be unanimous consent, to terminate all debate on this matter at 5 o'clock today?

Mr. COBLE. Mr. Chairman, I thank the gentleman. Mr. Chairman, for what it is worth, I ask unanimous consent that all debate on the bill and any amendments thereto be concluded by 5 o'clock today.

Mr. COBLE

Mr. COBLE. Point of inquiry, Mr. Chairman.

Mr. COBLE. Mr. Chairman, I yield myself such time as I may consume. Rhetoric is conventionally defined as the art of speaking or writing effectively, but it may also be defined as speaking or writing redundantly, deceptively, misleadingly, inaccurately, or untruthfully. All these versions, Mr. Chairman, have surfaced during the debate that has surrounded H.R. 400. Patent law is complex and arcane. It is not sexy or engaging when seriously discussed, especially on television or radio. And when the rhetoric pertaining to such a subject is clearly manipulated and twisted to distort the facts, the complexity of the issue is compounded, and utter confusion is the result. Mr. Chairman, I am not a patent lawyer, but the members of the Subcommittee on Courts and Intellectual Property are not assigned the duty of litigating contested patent cases. Our responsibility is to draft and promote the enactment of responsible legislation as it applies to the patent and trademark community, including the PTO, the Patent and Trademark Office, inventors, small and large, those with limited means and others blessed with more generous resources. The ultimate beneficiary of our work is the American consumer. One need not possess the intellect of a rocket scientist, and incidentally, neither am I a rocket scientist, to conclude that H.R. 400 is sound, fair legislation that will benefit American consumers and American inventors, contrary to some of the aforementioned rhetoric that has been widely disseminated on the subject at hand. Mr. Chairman, title I of H.R. 400 consists of those changes needed to streamline the Patent and Trademark Office into a modern government agency subject to the oversight authority of Congress. Currently, patent filings have greatly increased, but the PTO, as a result of government restrictions may not hire, train, and retain with extra pay additional examiners. This regulatory burden only results in fewer patents being processed expeditiously, which hurts the users of the system who fund the agency. Under H.R. 400, the agency will have the authority to earmark the necessary funds more quickly, to hire more examiners. Another prominent feature of title I is that all application or user fees paid to the PTO will remain with the agency. Last year, $54 million of PTO money was spent elsewhere, and this next fiscal year, $92 million is proposed. This practice will cease under H.R. 400. I should also emphasize that nothing in title I compromises the ability of the PTO employees to discharge their duties in a professional manner. All workers under the bill are protected by the full panoply of title 5 civil service safeguards. Title II of H.R. 400 contains major improvements to our examining procedures for patents. The first of these will require, in most instances, the publication of a patent application after 18 months from the date of filing. Since the entire patent system is predicated on bringing new inventions into the public light for development, no inventor who seeks court-enforced patent protection can credibly assert his inventions should be kept secret based on a personal whim. If so, such an inventor may pursue protection provided by State trade secret and unfair competition statutes. Most patents are granted within a 20- to 22-month timeframe, and all patents under the current system are published upon grant. Why make the change to 18 months? First, it will enable small inventors to advertise or shop their ideas to perspective backers. This is important because small investors lack the necessary venture capital to commercialize an idea. Second, it levels the playing field between our inventors and foreign corporations. Under present law, all other developed countries have an 18-month publication requirement. This means that an American inventor filing for protection abroad, and incidentally, Mr. Chairman, 75 to 78 percent of all patents filed in this country are filed abroad, this means the American inventor filing for protection abroad has his application published after 18 months in the language of the host country, enabling foreign companies to review the latest developments in American technology. In contrast, however, a foreign corporation, filing in the United States, does not have its application published within the same time frame. This is unfair, since the practical effect is that they can study our technology overseas while our inventors are denied the same right to inspect their work in the United States. The 18-month publication provision of H.R. 400 will, therefore, level this playing field between American inventors and their foreign counterparts. Finally, publication at 18 months helps to deter an ongoing abuse in the current system, previously mentioned, ``patent submarining.'' Submarining is appropriately described as those efforts in which a patent filer games the existing system by indulging in dilatory practices. I quoted the words of a country song yesterday entitled ``Playin' Possum and Layin' Low.'' That is precisely, Mr. Chairman, what a submarine patent applicant does. But to what end? Such an ill- intentioned inventor has no desire to help the Patent and Trademark Office process his or her application to secure a patent as quickly as possible. Instead, the submariner waits to identify an unsuspecting inventor who has no knowledge of the unpublished application. Upon locating a company or inventor that has developed its idea independently and which has commercialized it through investment, manufacturing and the creation of jobs, the submariner surfaces and sues the company for infringement. Mr. Chairman, this activity damages the American economy by promoting duplicative research, distorting financial decisionmaking and encouraging unnecessary litigation. The 18-month publication requirement will place the good-faith company and inventor in this illustration on notice that a patent is pending on an invention it wishes to develop. The inventor may then decide how to devote or expend the financial resources to other endeavors. Notwithstanding these benefits that accrue from the publication requirements of title II, a special provision has been inserted in H.R. 400 that will protect the independent inventors and small businesses who are genuinely unsure as to the patentability of an idea. The Manager's Amendment to H.R. 400, which we will discuss later, gives an independent inventor or small business who does not file abroad the option to withdraw his application up to 3 months prior to publication if the PTO has made two determinations that a patent will not issue. The inventor may then refine the application and try again, or seek protection under State trade secrecy law. Most importantly, title II of the bill creates the presumption that any good-faith inventor who has diligently assisted the PTO in prosecuting his application is the victim of unusual administrative delay after 3 years of nonissuance, and at that point, the applicant is granted a day-for-day protection once the patent issues, in other words, a guarantee for a minimum of 17 years of term. Finally, current law affords no protection against any third party which appropriates the subject of a patent and commercializes it before the patent is granted. H.R. 400 corrects this problem by establishing a new inventor entitlement, a provisional right to compensation, which addresses the problem the gentlewoman from Ohio mentioned. This would allow an inventor to receive fair compensation from any third party who commercializes his or her idea between the time of publication and the time the patent issues. Title III of the bill addresses the issue of prior domestic commercial use of a patented technology. I want to speed this up so I can give my chairman some time. Title IV of H.R. 400 is designed to protect novice inventors from unscrupulous invention development firms which often charge unsuspecting clients thousands of dollars for little work that rarely results in a patent or a commercial use of the invention. Title V makes needed but limited changes to PTO reexamination procedures. The existing system was intended to provide an efficient and inexpensive way for the PTO to consider whether an issued patent was violated in light of patents and printed materials which an examiner may have overlooked during the initial examination. H.R. 400 amends the existing reexamination process to provide more due process for a third party. Mr. Chairman, this concludes my general description of the contents of H.R. 400. The legislation will benefit members of the patent and trademark communities as well as the public at large. Mr. Chairman, I reserve the balance of my time.

Mr. COBLE. Mr. Chairman, to alleviate the problem, I will do that with the understanding that our side has the right to close, which the Chairman just assured me of.

Mr. COBLE. Mr. Speaker, I have been called a puppet of the Japanese industrial complex as a result of this bill. I resent it. I have been called worse than that. We have tried to keep this on an evenhanded course, but alas to no avail. The patent law, Mr. Speaker, as my colleagues know, provides a forum whereby cute, sexy questions can be propounded, but because of the complexity of the subject matters, cute, sexy responses are not that easy to be forthcoming. This is a good bill. In contrast to what our opponents would have my colleagues believe, H.R. 400 has received more process than any patent bill in history. It is developed over a 2-year period and was the subject of more than 50 negotiating sessions with interested parties and the administration. And incidently, Mr. Speaker, in addition to the Clinton administration, the Bush and Reagan administrations heartily endorsed this proposal. During this time over 80 witnesses testified at eight different hearings to help craft its contents. I have no pride of exclusive authorship in H.R. 400 since so many fingerprints cover the bill including those of independent inventors, small and big business, industry groups, universities and research laboratories. Our bill is supported by 75 American companies responsible for 90 percent of the patents issued to American applicants in the United States. Twenty-one CEO's of our Nation's high-technology companies which employ 1.4 million men and women and which hold 55,000 U.S. patents endorse H.R. 400 and oppose the Rohrabacher substitute. Mr. Speaker, pardon my immodesty, but that hardly sounds like a puppet of the Japanese industrial complex. Title I of H.R. 400 would transform the Patent and Trademark Office, or the PTO, into a Government corporation. It would remain a Federal agency subject to congressional oversight and protected by all of the benefits and safeguards afforded any agency and its employees under title V of the U.S. Code. The whole point of title I is to allow the PTO to operate more efficiently on a day-to-day basis. To illustrate, the agency would no longer be required to solicit permission from the General Services Administration each time it wished to buy a box of pencils or note pads. Furthermore, title I would permit the PTO to keep all its funding derived from user fees. Last year alone, $92 million were diverted from those funds, which are exclusively funded by users, and the intent at the time of collection is to use those fees to operate and maintain the Patent and Trademark Office. First, H.R. 400 helps American inventors under title II who file for patent protection overseas. Since all other developed countries which have patent systems require publication after 18 months, American inventors have their applications published in the language of the relative host country at this time. In contrast, foreign companies which seek protection in the United States do not reveal their applications until the U.S. patent issues. This is unfair on its face, since foreign companies are therefore able to study our latest technological developments abroad but are not required to reveal their work to our inventors on these same terms here. Eighteen-month publication, therefore, levels the international playing field. Second, the publication inhibits the practice of patent submarining. My colleagues will hear more about that as this debate develops. A submariner is a bad-faith inventor who attempts to game the existing patent system by indulging in dilatory tactics that prevent the expeditious review of the application. By biding his time, the submariner can eventually identify a company which has independently developed the same idea, then sue for royalties. Quite obviously, this constitutes bad public policy, since the submariner has no intention of using an invention to manufacture a product or create a new job. The motivation of the submariner is to subsist off the work of others, and they do real well at it. I refer my colleagues to a recent article that appeared in last week's Wall Street Journal.

Mr. COBLE. Mr. Chairman, I yield myself such time as I may consume and say, before I get into this, that I want to extend what the gentleman from Illinois [Mr. Hyde] said to the gentlewoman from Ohio earlier about being muzzled and having their hands tied. We have, in the ultimate sense of fairness and comity, agreed to give 7\1/2\ minutes to the gentleman from California [Mr. Rohrabacher] to manage as he sees fit, but that in no way binds the gentleman from Michigan [Mr. Conyers]. That was an agreement on this side, and the gentleman from Michigan may do as he likes. I just wanted to get that on the table, Mr. Chairman. Mr. Chairman, I ask unanimous consent to yield 7\1/2\ minutes to the gentleman from California [Mr. Rohrabacher] and that he be permitted to control that time.

Mr. COBLE. Mr. Chairman, my point of inquiry is that I assume I have the right to close debate; is that correct?

Mr. COBLE. Mr. Chairman, I yield 6\1/2\ minutes to the gentleman from the Roanoke Valley of Virginia [Mr. Goodlatte] who has been very helpful in the movement of this bill, H.R. 400.

Mr. COBLE. Mr. Chairman, I have only one speaker remaining. As I have the right to close, I will reserve the balance of my time.

Mr. COBLE. Mr. Chairman, as I said previously. I only have one speaker left, and I have the right to close. Mr. Chairman. I reserve the balance of my time.

Mr. COBLE. Mr. Chairman, will the gentleman from Michigan [Mr. Conyers] yield 2 minutes to me?

Mr. COBLE. Mr. Chairman, I had not planned to, but it is tough to remain silent here. As my friend, the gentleman from Michigan, said, there has probably been more excitement surrounding the law of patents than has happened in the last 15 years. But the gentleman from New York stood in the well and said, this is not about submarine patenting. Mr. Chairman, it is about submarine patenting. I direct the gentleman's attention to the front page of the Wall Street Journal, to which the gentleman from Michigan previously alluded, indicating in broad print that it is a big-time problem, submarine patenting. For the benefit of the uninformed, the last time I checked, the Wall Street Journal is not a yellow journalistic sheet, so I think there is some authenticity behind that. I say to my good friend, the gentleman from California [Mr. Campbell], one of the most learned people in this body, he mentioned the university system. He will recall that in the dialog in which he and I engaged we made amendments in order, and the manager's amendment reflects some of that, that satisfies the university community. They came back to me, and perhaps to others on the committee, telling us that it is far better than it was earlier. I think they are taking no position on either bill. So we did do some good work on that.

Mr. COBLE

Mr. COBLE. Mr. Chairman, I rise in opposition to the amendment.

Mr. COBLE. Mr. Chairman, I yield 30 minutes to the gentlewoman from California [Ms. Lofgren], and I ask unanimous consent that she be allowed to control the time.

Mr. COBLE. Mr. Chairman, I yield 5 minutes to the gentleman from the Roanoke Valley in Virginia [Mr. Goodlatte].

Mr. COBLE. Mr. Chairman, I want to express appreciation to all who participated in today's debate and to thank the Chair as well. Mr. Chairman, I yield the balance of my time to the gentleman from Illinois [Mr. Hyde], chairman of the House Committee on the Judiciary.

Mr. COBLE. Mr. Chairman, I move that the Committee do now rise.

Mr. COBLE. Mr. Chairman, I yield myself such time as I may consume. We have heard a lot of talk this afternoon about secrecy, how important secrecy is. Mr. Chairman, if I may paraphrase the Constitution, what the Constitution conveyed to all of us Americans and patent applicants in particular is this: You get a limited monopoly with protection in exchange for society being able to see your secret. Illumination, light on the subject. I am told, Mr. Chairman, that mushrooms thrive in dark cellars. Submariners thrive in high weeds and below the water. We have been told today, the gentleman from Illinois [Mr. Hyde] mentioned as have others, and the answer was, oh, this is not about submarine patenting. Mr. Chairman, to say that is not unlike saying that war is not about killing. I was born in the morning, but not yesterday morning. You all sell that submarine story to somebody else. Let me review that with my colleagues. Under the Rohrabacher substitute, applications filed in the United States only may not be published sooner than 5 years after they are filed, and then not if the application is under appellate review. One of the many ways a submariner delays its own application is to file spurious appeals. In addition, and most importantly, under the Rohrabacher substitute, the director of the Patent and Trademark Office must find that the application is not being diligently pursued by an applicant before publication can occur. As my colleagues can imagine, it is virtually impossible to identify maneuvers by patent lawyers to delay the processing of their applications. This is a sham provision that is impossible to enforce. Can you imagine telling a judge that he or she can only allow the public to see court documents relating to a case when a finding was made as to whether the merits were diligently pursued? All judges, including patent judges, must give the benefit of the doubt to the filers that they are proceeding in good faith and they are pursuing their claims legitimately or our whole system would collapse. The Rohrabacher substitute demands a presumption of guilt in order to require publishing. This presumption probably could never be established. The Rohrabacher substitute further provides for publication of any amendment to an application, called a continuing application, which is filed more than 6 months after the application it amends, unless the applicant can demonstrate that the amendment was filed for any reason other than to achieve a delay in the time of publication. What does this mean? Any lawyer wanting to delay can claim that the amendment is necessary to reflect the full richness of further developments of the invention in the application. While this may be totally spurious, it would be virtually impossible to prove. This is the way it works in real patent law practice. Here is another way to gain the system under the Rohrabacher substitute: An applicant can file appeals to the Board of Patent Appeals, which, while unlikely to succeed, are not so frivolous as to draw sanctions. There are many ways to delay which simply cannot be uncovered. Submarine patenting, my colleague, is serious. And the Rohrabacher substitute, in my opinion, goes out of its way to create smoking mirrors around this burgeoning business of litigation. The real question is: Why does the Rohrabacher substitute go out of its way to protect submariners? I want someone to answer that question for me before the end of this session. The claim of the gentleman from California [Mr. Rohrabacher] that his bill puts a stop to the practice of submarining in the real world is false. Just ask one of the lawyers mentioned on the front page of the Wall Street Journal last week who are joining the new, currently legal, cottage industry of suing those who invest in our economy. I ask my colleagues to vote no on the Rohrabacher substitute and to support the bipartisan Judiciary Committee bill, H.R. 400. I reserve the balance of my time, Mr. Chairman.

Mr. COBLE. Mr. Chairman, am I correct in concluding that we have the right to close?

Mr. COBLE. Mr. Chairman, I have a parliamentary inquiry.

Mr. COBLE. Mr. Chairman, I yield 7 minutes to the gentleman from Utah, [Mr. Cannon]. (Mr. CANNON asked and was given permission to revise and extend his remarks.)

Mr. COBLE. Mr. Chairman, I yield the balance of my time to the gentleman from Illinois [Mr. Hyde], the distinguished chairman of the Committee on the Judiciary.