Bob Goodlatte

Mr. GOODLATTE

Mr. GOODLATTE. Madam Chairman, I reiterate my opposition to the amendment and yield back the balance of my time.

Mr. GOODLATTE. I thank the gentleman for his amendment, and I support it. Contrary to what the previous speaker said, this amendment does exactly that--it helps to determine more fairly and more quickly whether or not there is a valid patent claim. It requires parties sending demand letters who wish to pursue treble damages to disclose their ultimate parent entity. This amendment improves the provision offered by Mr. Chaffetz and Mr. Deutch in committee, and I support its inclusion in the bill.

Mr. GOODLATTE. Madam Chair, I rise in opposition to this amendment.

Mr. GOODLATTE. Madam Chairman, at this time, it is my pleasure to yield 3 minutes to the gentleman from Nebraska (Mr. Terry) for the purpose of engaging in a colloquy with the gentleman from Utah (Mr. Chaffetz) and myself.

Mr. GOODLATTE. Madam Chairman, I thank the gentleman from Nebraska and the Energy and Commerce Committee for their good work on this issue. He has my commitment to work on this important issue, and we must continue to work to rein in the abuses of these demand letters. I also look forward to working with Mr. Chaffetz and Chairman Upton of the Energy and Commerce Committee, and I know that we can produce a good product to further address this issue within that committee's jurisdiction.

Mr. GOODLATTE. Madam Chair, I yield myself 30 seconds to respond. The very provision the gentleman from California references, section 145, is used by these very patent trolls to bypass the process. That is why, working in conjunction with the America Invents Act that has already been passed and this legislation, we will have an effective tool for those legitimate inventors, and we will stop the trolls from getting out from under the bridge. I yield 1 minute to the gentleman from Texas (Mr. Poe), a distinguished member of the Judiciary Committee.

Mr. GOODLATTE. Madam Chair, it is my pleasure to yield 2 minutes to the gentleman from Ohio (Mr. Chabot), a distinguished member of the Judiciary Committee.

Mr. GOODLATTE. Madam Chairman, it is now my very sincere pleasure to yield 3 minutes to the gentleman from Oregon (Mr. DeFazio), the lead Democratic cosponsor of this legislation who came to me with his ideas at the beginning of this Congress and has worked with me throughout this Congress on this legislation.

Mr. GOODLATTE. Madam Chair, may I inquire as to how much time is remaining on each side.

Mr. GOODLATTE. Madam Chair, it is now my pleasure to yield 1\1/2\ minutes to the gentleman from Colorado (Mr. Polis).

Mr. GOODLATTE. Madam Chairwoman, it is my pleasure to yield 1 additional minute to the gentleman from Utah (Mr. Chaffetz).

Mr. GOODLATTE. Madam Chairwoman, I am pleased to yield an additional 30 seconds to the gentleman from Pennsylvania (Mr. Marino), the vice chair of the Intellectual Property Subcommittee.

Mr. GOODLATTE. Madam Chairman, I yield myself the balance of my time. In closing, Madam Chairman, I want to thank my fellow Judiciary colleagues and their staffs who have devoted much time, energy, and intellect to this project. We have worked together for the common goal of comprehensive patent litigation reform for the past decade. While some of us still have differences over individual items, I want these Members to know that I appreciate their contributions to the project and I value their friendship. I also want to particularly thank Representatives Howard Coble, Zoe Lofgren, and Peter DeFazio for serving as lead sponsors of this legislation and, most particularly, Congresswoman Lofgren, who worked so hard with us in the markup process in the Judiciary Committee. In the Senate, we have worked closely with Senators Leahy, Grassley, Cornyn, Hatch, Lee, and others. I want to thank them and their staffs for their contributions to this effort. Furthermore, I would like to thank the White House and the U.S. Patent and Trademark Office for working collaboratively with us and providing important technical assistance. I also want to thank both my full committee and IP subcommittee staff for all of their hard work on this important legislation, and most particularly, Vishal Amin, counsel to the subcommittee. This bill is something I consider central to U.S. competitiveness, job creation, and our Nation's future economic security. The Innovation Act is the product of much negotiation and compromise. This bill builds on our efforts over the past decade. It can be said that this bill is the product of years of work. We have worked with Members of both parties in both the Senate and the House, with stakeholders from all areas of our economy, and with the administration and the courts. To ensure an open, deliberative, and thoughtful process, we held several hearings and issued two public discussion drafts in May and September of this year, which led to the formal introduction of the Innovation Act in October. The Innovation Act takes meaningful steps to address the abusive practices that have damaged our patent system and resulted in significant economic harm to our Nation. This bill will help grow America's innovation economy. Madam Chairman, I urge my colleagues to support H.R. 3309, and I yield back the balance of my time. [Inventors listed on nearly 200 patents call on Congress to pass legislation to fix the patent troll problem, Nov. 19, 2013] Patent Holders Urge Comprehensive Patent Reform San Francisco.--Fifty inventors, technologists and entrepreneurs joined Engine Advocacy and the Electronic Frontier Foundation (EFF) today in requesting that Congress immediately pass meaningful patent reform legislation to curb the growing patent troll problem. The signatories are collectively listed as inventors on nearly 200 patents, many of which cover software inventions. They expressed support for patent reform. Congress is currently pursuing several approaches that have the potential to curb the chilling effect on innovation posed by trolls and improve patent quality. ``Broad, vague patents covering software-type inventions-- some of which we ourselves are listed as inventors on--are a malfunctioning component of America's inventive machinery,'' the inventors write. ``This is particularly the case when those patents end up in the hands of non-practicing patent trolls.'' The inventors believe that ``software patents are doing more harm than good,'' and they urge Congress to pass legislation that would curb patent troll abuses, which pose an immediate threat to innovation and the promise of technology. ``It's time to force these trolls to take responsibility for the damage they cause with their dangerous claims,'' said inventor Derek Parham, who helped organize the letter. ``We need legislation that will put a stop to the patent troll business model once and for all.'' In addition to Derek, many prominent engineers and entrepreneurs signed the letter, including Twitter cofounder Evan Williams; Facebook co-founder Dustin Moskovitz; former Principal Engineer at Qualcomm Ranganathan Krishnan; and Quantcast's co-founder Paul Sutter. ``The time for meaningful reform is now,'' said Julie Samuels, EFF Senior Staff Attorney and the Mark Cuban Chair to Eliminate Stupid Patents. ``We hope Congress will hear these engineers and inventors and so many others and pass legislation that ends the patent troll problem once and for all.'' For the full open letter: https://www.eff.org/ documentinventorslettersupport patentreform Contacts: Julie Samuels, Staff Attorney and The Mark Cuban Chair to Eliminate Stupid Patents, Electronic Frontier Foundation. Eva Arevuo; Engine.

Mr. GOODLATTE. Madam Chairman, I yield myself such time as I may consume. This amendment strikes a key provision of the bill for retailers, restaurants, and grocery stores, among others. This provision is the product of years of discussion with stakeholders and the Patent Office. This section codifies and provides for the enforcement of the common law doctrine that infringement suits against a customer, retailer, or user of an infringing product should be stayed in favor of an action against the manufacturer of the allegedly infringing product. Customers and retailers typically are ill-suited to defend against an infringement suit. They often are not familiar with the inner workings of the product and usually have no reason to know whether or not the product infringes a valid patent. Suits against such parties are inherently coercive and have become a tactic employed by patent trolls. As an infamous recent example, one troll has begun suing cafes, restaurants, and shops that provide wireless Internet access to their customers via routers that they bought off the shelf. These small shops have no idea how the routers work or why they infringe, and they have often paid as little as $40 for them. Now they are being sued for using allegedly infringing products and are being asked to pay thousands of dollars. The troll could have sued the manufacturer but chose not to because the manufacturer would have vigorously defended against the suit. Coffee shops and other small businesses, however, are more likely to settle for a few thousand dollars rather than the hundreds of thousands it would cost to fight an infringement suit over technology that the coffee shop did not design or develop, and we see the same situation repeated over and over again. Another troll has sued small businesses, charities, and others just because they use scanners and photocopiers. Again, the troll chose not to sue the manufacturer because the manufacturer understands the technology and would be able to defend against the suit. These types of lawsuits are a little more than a shakedown of small, medium, and large businesses that simply bought technology and are not the true sources of any infringement. This provision is designed to stay actions against customers when the manufacturer, who is the true source of any infringement, is a party to a co-pending action. The provision effectively pushes infringement claims up the supply chain to the true source of infringement. The provision thereby prevents harassment and the abuse of customers when it is unnecessary for the plaintiff to sue customers. Despite the Federal circuit precedent of recognizing the customer suit exception, district courts continue to deny stays of customer suits in a wide array of circumstances in which a stay would be appropriate. The stay under section 5 is voluntary. No stay would be entered unless the customer and manufacturer agreed that the manufacturer most appropriately bore the burden of defending against the infringement litigation. This is a good provision. It is a key provision. It is an essential part of the bill to protect customers and retailers against abusive suits over technology that they did not design or develop. It is for these and many other reasons that I strongly oppose the amendment offered by the gentleman from Kentucky to strike section 5. I would also point out that former Director Kappos, speaking pre- manager's amendment version of the bill, indicated a concern that has been addressed in the manager's amendment, and we made important improvements to this section in coordination with Senators Leahy and Lee. I think that this provision in the bill is very good and that this amendment is not well-founded, and I oppose it. I reserve the balance of my time.

Mr. GOODLATTE. Mr. Chairman, may I ask how much time is remaining on both sides.

Mr. GOODLATTE. Mr. Chairman, at this time, it is my pleasure to yield 1 minute to the gentleman from North Carolina (Mr. Coble), the chairman of the Courts, Intellectual Property, and the Internet Subcommittee.

Mr. GOODLATTE. Mr. Chairman, this amendment will considerably harm this bill and the hundreds of organizations and businesses that have supported this bill because they know how important it is that the common law customer stay be applied fairly in jurisdictions across the country. Concerns have been voiced that an injunction could not be obtained because of this provision against a party that is the supplier of the infringing product. However, the bill expressly requires that all parties, both customers and manufacturers, agree to be bound by any issues decided in the suit against the manufacturer. In other words, if the patent is found valid and infringed, an injunction could also be obtained against any supplier of the product because of this requirement. I believe that this amendment should be strongly opposed. I yield back the balance of my time.

Mr. GOODLATTE. Mr. Chairman, I rise in opposition to this amendment.

Mr. GOODLATTE. I yield myself such time as I may consume. Mr. Chairman, this amendment offers a reformulation of section 5 of the bill. The provision, however, is the product of years of discussions with stakeholders and the Patent Office. This amendment unduly restricts the protections offered by section 5 to customers. The amendment has been presented as protecting small business, but the underlying provision already applies to small businesses. What this amendment does is deny protection to larger grocery stores, charities, hospitals, universities, and restaurant chains that are sued on account of technology that they have purchased from others and did not design or develop. This provision would prevent many customers from benefiting from the important protections of section 5. Customer suits against a party that neither manufactures nor develops the product, accused of infringement, are frequent tactics used by trolls because they know that most customers are not sophisticated in patent laws and, thus, are more vulnerable to extortion. This amendment would eliminate a tool the bill provides to customers to protect themselves from truly abusive patent litigation. It is for these and many other reasons that I strongly oppose the amendment. I reserve the balance of my time.

Mr. GOODLATTE. Mr. Chairman, at this time, I yield 1\1/2\ minutes to the gentleman from Pennsylvania (Mr. Marino).

Mr. GOODLATTE. Mr. Chairman, I yield myself the balance of my time. Yes, there is some problem with patent trolls, tens of billions of dollars a year in problems with patent trolls. Fifty-five percent of all the demand letters that are sent by these patent trolls go to small businesses. There are serious problems that require real patent litigation reform, and I am proud that this bipartisan bill, supported by many Members on both sides of the aisle, supported by the administration, and supported by hundreds of organizations that are listed right here-- come by the desk and you can see the huge list of organizations, conservatives, all across the political spectrum support this legislation. American inventors have led the world for centuries. This bill holds true to the Constitution, our Founders, and our promise to future generations that America will continue to lead the world as a fountain for discovery, innovation, economic growth, and job creation. I stand in strong opposition to this substitute amendment, and I urge my colleagues to vote for the underlying bill. Mr. Chairman, I yield back the balance of my time.

Mr. GOODLATTE. Mr. Chairman, let's use a little common sense here. We have a provision in the common law called ``customer stay,'' which says that a customer can ask to join the manufacturer of the product that it is alleged is infringing because that manufacturer knows a lot more about how the product was manufactured, what licenses and patents were used to do that, and is best able to defend a claim by a patent troll or by a legitimate inventor that a claim is valid or not valid. What the gentlewoman from Texas does is she says that any small business above $25 million--say the local hospital, the local university, the restaurant chain of, say, 15 or 20 restaurants, the same thing for a retail store, a grocery store chain--they can't avail themselves. So what happens? The patent troll knows that there are certain jurisdictions in this country where the court will not issue the customer stay, notwithstanding the long historic common law doctrine of customer stay. What we simply say in this bill is that if the customer, regardless of the size, and the manufacturer, regardless of the size, both agree, then the customer stay provision will apply; the manufacturer can come in and defend the case. It is eminently fair to every party involved to get at the core of whether or not the patent is a good patent and a valid patent. And who knows best? The manufacturer. So this provision in the bill is very important and this amendment is harmful to the interest of small businesses, and I urge my colleagues to oppose it. I reserve the balance of my time.

Mr. GOODLATTE. Mr. Chairman, I would just say to the gentlewoman there is a wide array of organizations. We have 4 pages with hundreds of organizations, including Americans for Prosperity, Americans for Tax Reform, Public Knowledge. It crosses the spectrum. Small business innovators like Engine Advocacy that the gentlewoman from California put in their statement, a lengthy statement, listing a whole host of companies that support this legislation. One of the key reasons they support it is because it protects small businesses, both the innovators and the people who are the recipients of these demand letters. I oppose the amendment and urge my colleagues to join me in doing so. I yield back the balance of my time.

Mr. GOODLATTE. Mr. Chairman, I demand a recorded vote.

Mr. GOODLATTE. Mr. Chairman, although I am not opposed to the amendment, I ask unanimous consent to control the time in opposition to the amendment.