Patrick Leahy

Mr. LEAHY

Mr. LEAHY. Mr. President, I ask unanimous consent that the Senate proceed to a period for the transaction of morning business, with Senators permitted to speak therein for up to 10 minutes each.

Mr. LEAHY. Mr. President, I suggest the absence of a quorum.

Mr. LEAHY

Mr. LEAHY. Mr. President, American ingenuity and innovation have been a cornerstone of the American economy from the time Thomas Jefferson examined the first patent to today. The Founders recognized the importance of promoting innovation. The Constitution explicitly grants Congress the power to ``promote the progress of science and useful arts by securing for limited times to inventors the exclusive rights to their respective discoveries.'' The discoveries made by American inventors and research institutions, commercialized by American companies and protected and promoted by American patent laws, have made our system the envy of the world. The Senate has before it the America Invents Act. This will keep America in its longstanding position at the pinnacle of innovation. This bill will establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs, while making sure no party's access to court is denied. I was glad to see the overwhelming bipartisan vote in favor of ending debate and invoking cloture that was cast yesterday. Yesterday was one of the rare instances ever in Vermont where snow impeded us and made it impossible for us to get back. I am delighted to be back here for what I hope will be the successful conclusion and vote on our legislation. This is, after all, the product of eight hearings over the last three Congresses, hundreds of meetings, and dozens of briefings. I again thank Secretary Locke and PTO Director Kappos for their involvement, their wise counsel and their support. Last Congress, I introduced the Patent Reform Act of 2009 as a precursor to the America Invents Act today, along with Senator Hatch and others, and our bill was the subject of consideration and amendments over several thoughtful sessions of markups in the Senate Judiciary Committee in March and April of 2009. At that time, Senator Kyl asked that I convene a meeting with the Director of the Patent and Trademark Office to discuss whether there were further changes the office needed in the legislation to improve the office's efficiency. We held those discussions, and we held countless other meetings and briefings with interested parties in an effort to improve the legislation, again on a bipartisan basis. Bruce Cohen in my office, Aaron Cooper, Ed Pagano and others, had meeting after meeting just as predecessors of theirs had. In short, we spent a whole lot of time making sure this was done right and we did it in a bipartisan manner. Bolstering the American economic recovery and strengthening our efforts in global competition should not be matters of partisanship or political advantage. The process of discussions, debates and deliberation has resulted in legislation that is going to be a much-needed boon to our economy. It is also a model for our legislative process. It shows what you can do when you set aside partisan rhetoric and instead negotiate and collaborate together in good faith. I know I speak for Senator Kohl, Senator Whitehouse, Senator Klobuchar, Senator Gillibrand, Senator Coons and the other Democratic cosponsors of the bill when I thank the four senior Republican members of the Judiciary Committee, Senator Hatch, Senator Grassley, Senator Kyl and Senator Sessions for working with us. Innovation and economic development are not uniquely Democrat or Republican objectives, so we worked together to find the proper balance for America--for our economy, for our inventors, for our consumers. It is both a process and a result that should make us all proud. The last time Congress significantly updated the patent system was more than a half century ago. In the intervening decades, our economy has changed dramatically. A patent system developed in our 1952 economy before the Internet, before cell phones, before computers, before photocopiers, even before the IBM Selectric typewriter, needs to be reconsidered in light of 21st century realities, while staying true to the consistent constitutional imperative of encouraging innovation and invention. Our patent laws that were the envy of the world in the 20th century desperately need to be updated if we are going to compete effectively and win the future. China and the European Union are improving their patent laws. We can't remain complacent. If we are going to win the global competition by out-innovating the rest of the world, we need a patent system that works in the 21st century. The array of voices heard in this debate represent virtually all sectors of our economy, all interests in the patent system. They have not been uniform, as expected, but they know the legislative process is one of compromise and accommodation where possible, and it has been that way during the 6 years we have been at work on this bill. Three major areas of concern emerge from this discussion. The America Invents Act addresses each one of them. First, there is significant concern about delays in the patent application process. The Patent and Trademark Office, PTO, currently has a backlog of more than 700,000 unexamined patent applications. There are several reasons for this, not the least of which is the PTO is overwhelmed with patent applications and doesn't have the resources necessary to work through that backlog. The Director of the PTO often says the next great invention that may drive our economic growth may be waiting on the shelf, waiting to be granted. Some estimate that each issued patent represents three to 10 jobs. We can ill-afford to keep so many job-creating patents backlogged at the PTO. The America Invents Act authorizes the PTO to set its fees and ensures that the PTO will have access to those fees. We want the PTO to work through its backlog and be current. In his white board presentation on the need for patent reform this week, Austan Goolsbee, the chair of the President's Council of Economic Advisers, illustrated this point by noting that when Alexander Graham Bell applied for a patent that led to the telephone, it was granted in a month. The patent in 1974 that led to the cell phone took less than three years. The average time this year for a patent to be processed is almost three years and several thousand take far longer. I want to commend Austan Goolsbee, the chairman of the Council of Economic Advisers. His white board presentation this week on the importance of patent reform shows we need to help America win global competition and create jobs. The creation of more than 220,000 jobs in the private sector last month, the creation of 1.5 million jobs over the last 12 months, and the unemployment rate finally being reduced to 8.9 percent are all signs that the efforts we have made over the last two years to stave off the worst recession since the Great Depression are paying off and the economic recovery is taking hold. The almost full percent point drop in the unemployment rate over the last three months is the largest decline in unemployment since 1983. Despite interruptions of economic activity in many parts of the country caused by winter weather over the last months and days, despite the extraordinary rise in oil prices, the Dow Jones industrial average has climbed back to over 12,000 from a low point of 6,500. Passage of the America Invents Act should help bolster our economic recovery and keep us on the right path toward business development and job creation. According to an article in the New York Times just a couple of weeks ago, patent applications last year amounted to 2,000 a day. There are currently 1.2 million patent applications in the pipeline. Among them could be the next medical miracle, the next energy breakthrough, the next leap in computing ability, or the next killer app. We should be doing all we can to help the PTO Director. It makes no sense that it takes 2 years for an inventor to get an initial ruling on his or her patent application and another year or more to receive a patent, this during a time when technology changes sometimes by the hour, to say nothing by the year and the 2 year and 3 year. As the New York Times reporter Edward Wyatt notes: ``The delays and inefficiencies are more than a nuisance for inventors . . . . [P]atent delays cost jobs, slow the economy and threaten the ability of American companies to compete with foreign businesses.'' Second, there is a concern about the quality of patents that have issued. Just as high quality patents are the key to innovation, low quality patents are a drag on the economy because they provide monopoly rents over products or processes that were not inventive. Patent examiners are facing a difficult task given the explosion in the number of applications and the increasing complexity of those applications. When Congress last overhauled the patent system in 1952, the PTO received approximately 60,000 patent applications; in 2009, it received more than 480,000. The America Invents Act will improve the quality of patents issued by the PTO in several ways. At the outset, our legislation makes the commonsense change that third parties who see a patent application and know that it is not novel and nonobvious, can assist the PTO examiners by providing relevant information and explaining its relevance. The bill will also create a new post-grant review process for patents that recently issued to improve the quality of patents in the system, as recommended by the National Academy of Sciences, and it will streamline the current ``inter partes'' system so that it will be a more efficient alternative to litigation. The third concern is that as business competition has gone global, and patent applicants are increasingly filing applications in the United States and other countries for protection of their inventions, our system puts American inventors and businesses at a disadvantage. The filing system in the United States differs from that in other patent-issuing jurisdictions, which have ``first-inventor-to-file'' systems. The difference causes confusion and inefficiencies for American companies and innovators. The inefficiencies exist both in the application process and in determining what counts as ``prior art'' in litigation. I ask unanimous consent to have printed in the Record an editorial from today's New York Times, which calls the transition to first-inventor-to-file ``simpler and cheaper'' and says it ``should benefit the little guy.''

Mr. LEAHY. The America Invents Act transitions to a first-inventor- to-file process, as recommended by the administration, while retaining the important grace period that will protect universities and small inventors, in particular. We debated this change at some length in connection with the Feinstein amendment. That amendment was rejected by the Senate by a vote of 87 to 13. The Senate has come down firmly and decisively in favor of modernizing and harmonizing the American patent system with the rest of the world. When we began the patent reform debate 6 years ago, there was also a significant concern that the costs and uncertainty associated with patent litigation had been escalating, which was resulting in a drag on innovation. Damage awards had been inconsistent and not always related to the value of the invention. This disconnect and uncertainty was a problem that also led to unreasonable posturing during licensing negotiations. Fortunately, the courts have made great strides in addressing this issue, and there is general consensus that legislation need not and, in fact, should not affect the law of damages as a result. The Senate has before it bipartisan legislation that can lead to long-needed improvements in our patent laws and system. This is a measure that can help facilitate invention, innovation and job creation, and do so in the private sector. This can help everyone from startups and small businesses to our largest, cutting edge companies. The America Invents Act promotes innovation, and will improve our economy, by addressing the impediments to innovation. As the President challenges Americans to win the future, Congress cannot afford to sit idly by while innovation--the engine of our economy--is impeded by outdated laws. Our legislation leverages the ingenuity of our businesses, our universities, and our independent inventors, and creates a system in which that ingenuity can improve our economy. It will create jobs, improve products and reduce costs for American companies and American consumers. I began working on patent reform years ago, along with Chairman Smith in the House, because of my belief that we needed a more efficient and streamlined system. For many years, patent law interested only a niche audience, and developments were reported only in trade publications. Now they are discussed everywhere from the front page of the Wall Street Journal to the New York Times, and all three branches of government have taken an active role. The America Invents Act is about economic development. It is about jobs; it is about innovation; it is about consumers. All benefit under a patent system that reduces unnecessary costs, removes inefficiencies, and holds true to the vision of our Founders that Congress should establish a national policy that promotes the progress of science and the useful arts. When Thomas Jefferson examined that first patent in 1790--a patent that went to a Vermonter--no one could have predicted how the American economy would develop and what changes would be needed for the law to keep pace, but the purpose then remains the purpose today: promoting progress. If we are to maintain our position at the forefront of the world's economy, if we are to continue to lead the globe in innovation and production, if we are to continue to enjoy the fruits of the most creative citizens, then we must have a patent system that produces high quality patents, that limits counterproductive litigation over those patents, and that makes the entire system more streamlined and efficient. Now is the time to bolster our role as the world leader in innovation. Now is the time to create jobs at home. Now is the time for Congress to act on patent reform. I urge all Senators to support the American Invents Act. Exhibit 1 [From the New York Times, Mar. 7, 2011] Patents, Reform and the Little Guy In the last decade, Congress has missed several chances to reform a patent system that is slow, costly and puts the United States at odds with the rest of the industrial world. On Wednesday, the Senate has another opportunity to reform the nation's patent law. The America Invents Act offers a step toward a more effective and transparent patent protection system. This should encourage investment in inventions and faster diffusion of ideas. The bill, which has broad bipartisan support, would boost the patent office's resources by letting it keep all the fees it collects. This would enable it to speed up the review of patent applications--which currently takes almost three years to process--and work through an immense backlog of 715,000 applications. The bill should reduce costly litigation by creating an in- house system to look into claims of patent infringement before they go to court. The bill would also replace the first-to-invent standard prevailing in the United States--which grants formal protection to the creator of an innovation--with the first- inventor-to-file system used in most nations. This change would make it cheaper for American patent holders to get patent protection around the world. But it has been met with vocal opposition from some groups of small businesses and inventors who claim the change would benefit big corporations at their expense. We disagree. The new law would make the process simpler and cheaper. That should benefit the little guy. Small inventors who needed time and money to fully develop and test their ideas could request a provisional patent until they were ready for a full filing. It costs $110. And because it is easy to determine who filed a patent first, the new system would better protect small inventors from challenges by corporations with deep pockets, reducing the chance of costly litigation. Right now, proving who invented something first is difficult and expensive. According to the patent office, it costs $400,000 to $500,000 to challenge a patent on the grounds of a prior invention. Most small inventors don't have that kind of money. Big corporations do. In fact, the current system mostly protects whoever files first for a patent. Of the last three million applications filed, only 113 were granted to entities who filed second but proved they had invented first. In 88 of these cases, the winners were large corporations. The patent system is too cumbersome, and it doesn't protect the small inventor. The America Invents Act is a smart reform.

Mr. LEAHY. Mr. President, I suggest the absence of a quorum.

Mr. LEAHY

Mr. LEAHY. Mr. President, I suggest the absence of a quorum, with unanimous consent that the time be equally divided.

Mr. LEAHY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr LEAHY

Mr LEAHY. No, the amendment is entirely different from the 2008 amendment related to patents that place on tax on implementation of the Check 21 Act. The Schumer-Kyl program addresses certain business method patents and does not target any specific patents. The Schumer-Kyl program is intended to provide a cost-effective alternative to litigation to examine business-method patents.

Mr. LEAHY

Mr. LEAHY. Mr. President, the managers' amendment to the America Invents Act, adopted 97-2 on March 1, contained a rule of construction that nothing in section 14 of the act should be construed to imply that other business methods are patentable or that other business-method patents are valid. This provision was included merely as a clarification. No inference should be drawn in any way from any part of section 14 of the act about the patentability of methods of doing business. Mr. President, I have discussed this with the Republican leadership, and we are prepared to yield back all time on both the Democratic and Republican sides.

Mr. LEAHY. Mr. President, I ask for the yeas and nays on the bill.

Mr. LEAHY. Mr. President, it has been many years getting to this point. I cannot tell you the amount of pride I have in my fellow Senators, both Republicans and Democrats. I thank the Senator from Iowa who has been here with me and so many others I mentioned earlier. It is nice to finally have this bill through the Senate.

Mr. LEAHY. I move to reconsider the vote.

Mr. LEAHY

Mr. LEAHY. Mr. President, today the Senate will take another step toward completing action on the America Invents Act. This is commonsense legislation that will make the first comprehensive reforms to our Nation's patent system in nearly 60 years. The debate on this bill since its introduction 6 years ago has been long, and the compromises have been many. I am confident that the bill before us today makes the needed changes to bring the U.S. Patent and Trademark Office into the 21st century. The America Invents Act is bipartisan legislation that has resulted from deliberation in both the Senate and House. It has been the topic of more than a dozen hearings and committee meetings in the Senate, and countless hours of meetings and negotiations. I had hoped to complete action on this legislation last week. The additional time has allowed every Senator the opportunity to come to the floor and speak about the important matters encompassed by this bill. We have debated and adopted relevant amendments and debated and rejected other amendments, including some that were not even relevant to this legislation. This is a bill that does not spend a dollar of taxpayer money and does not add to the deficit. It will directly result in millions of dollars being saved, and indirectly in helping unleash American innovation to create jobs and help bolster our economy. Now is the time to act. Now is the time to vote. Now is the time to move forward with this job-creating bill that will help boost our economy and restore America's competitive edge in the global marketplace. Modernizing our patent system through the America Invents Act will make America more competitive. It protects innovators and inventors large and small, from the small independent inventor in Middlesex, VT, to cutting-edge manufacturers and innovators in Ohio and California. It will give the Patent and Trademark Office the tools it needs to process and award the patent for what may be the next life-saving device or life-changing invention. And the America Invents Act will do all of this without spending a dollar of taxpayer money. This is a jobs bill that doesn't add a cent to the deficit. Supporters of this legislation come from both sides of the aisle, from every corner of the country, and from every component of the patent community. This country's first patent was issued to a Vermonter. Thomas Jefferson, the Secretary of State, examined the application, and President George Washington signed it. A lot has changed in the more than 220 years since that first patent was issued. We cannot remain complacent and expect to remain at the forefront of innovation. Enacting the America Invents Act is one way in which we can come together and show the American people that we in Washington are working together with the future of our country in mind. I commend Austan Goolsbee, the chair of the President's Council of Economic Advisers, for his white board presentation today on the importance of patent reform to help America win the global competition and create jobs. The creation of more than 220,000 jobs in the private sector last month, the creation of 1.5 million jobs over the last 12 months, and the unemployment rate finally being reduced to 8.9 percent are all signs that the efforts we have made over the last 2 years to stave off the worst recession since the Great Depression are paying off and the economic recovery is taking hold. The almost full percent point drop in the unemployment rate over the last three months is the largest decline in unemployment since 1983. Despite interruptions of economic activity in many parts of the country caused by winter weather over the last months and days, despite the extraordinary rise in oil prices, the Dow Jones industrial average has climbed back to over 12,000 from a low point of 6,500. Passage of the America Invents Act should help bolster our economic recovery and keep us on the right path toward business development and job creation. I urge all Senators to support the cloture motion on the America Invents Act. The Nation's economy, American inventors and innovators, our competitive edge in the global marketplace all will be helped when we pass this important bill.

Mr. LEAHY

Mr. LEAHY. Mr. President, I understand we have the Feinstein amendment No. 133 at the desk. I ask unanimous consent that the Feinstein amendment No. 133 be modified with the changes that are at the desk.

Mr. LEAHY. Madam President, at the hour of 12:30 we are supposed to vote. I would ask unanimous consent, so far as my time has been used by those in another position, that Senator Grassley and I have 4 minutes back of our time.

Mr. LEAHY. I ask that it be adopted.

Mr. LEAHY. Madam President, I move to reconsider the vote.

Mr. LEAHY. I yield to the Senator from Michigan.

Mr. LEAHY. Mr. President, I see the distinguished Senator from Delaware who has been so helpful on this legislation on the floor, so I yield the floor. Exhibit 1 [From the Washington Post, Feb. 26, 2011] Patenting Innovation More than 60 years have passed since a major overhaul of the U.S. patent system has taken place. And it shows. The U.S. patent system lags woefully. One example: Patents in the United States are given to those ``first to invent.'' This approach is out of step with the rest of the world's ``first to file'' approach and is highly inefficient. It invites people to come out of the woodwork years after a product has been on the market to claim credit and demand royalties. The secretive and lengthy U.S. process also too often results in patents for products that are neither novel nor innovative. It leaves manufacturers vulnerable to infringement lawsuits and damage awards long after their products have gone to market. The Senate is poised to take up a bill on Monday that would eliminate these defects and bring the U.S. system into the 21st century. The Patent Reform Act, introduced by Sens. Patrick J. Leahy (D-Vt.) and Orrin G. Hatch (R-Utah), would recognize the ``first inventor to file'' standard, creating a bright line-- the date on which a patent application was filed--and bringing certainty to the process. Yet the bill is not inflexible and wisely keeps in place protections for academics who share their ideas with outside colleagues or preview them in public seminars. The bill also would increase protections for those with legitimate gripes. Third parties, currently shut out of the process, would be given clear rules and time limits to challenge patents that have not yet been approved. They'd also have a chance to lodge objections after a patent has been granted; the U.S. Patent and Trademark Office (PTO) would resolve these disputes. This safety valve should reduce the litigation costs associated with court challenges. The PTO has long been overwhelmed and underfunded. The bill would allow the agency to set the amount it charges for filings while providing discounts to solo inventors and small companies. An amendment likely to be introduced by Sen. Tom Coburn (R-Okla.) would allow the agency to keep all of its fees, thereby ensuring it the resources it needs to carry out the bill's mandates. The president made much of ``winning the future'' in his State of the Union address. A patent system that protects innovators and encourages meaningful breakthroughs would help achieve that goal.

Mr. LEAHY

Mr. LEAHY. I will yield so my colleague can speak, and then the Senator from Iowa will be back, and we can continue with our other business.

Mr. LEAHY. Madam President, I ask unanimous consent to set aside the pending amendment.

Mr. LEAHY. I ask unanimous consent to bring up and agree to amendment No. 132, the Cardin-Landrieu amendment.

Mr. LEAHY. Madam President, I ask unanimous consent that we revert to the pending amendment, which I believe was the Leahy amendment.

Mr. LEAHY. Madam President, I suggest the absence of a quorum.

Mr. LEAHY. Madam President, since this debate began, we have heard a lot about how the America Invents Act will help unleash the American inventive spirit. As a matter of personal pride, I point out that Vermonters have a long history of innovation and invention, and it is that creative spirit which has given rise to some interesting and even revolutionary inventions. Few people may know that Vermont is issued the most patents per capita of any State in the country. Fewer still may know that the first-ever patent issued in the United States, which was reviewed by Secretary of State Thomas Jefferson and signed by George Washington, was granted to a Vermonter in 1790. It was Samuel Hopkins of Pittsford who began the great tradition of American innovation. Throughout America's history, Vermont has contributed to our economic prosperity with inventive ideas. Thaddeus Fairbanks of St. Johnsbury patented the platform scale in 1830, which revolutionized the way in which large objects were weighed. Charles Orvis, of Manchester, the founder of the well-known sporting goods retailer Orvis, patented the open fly fishing reel in 1874. Many other inventions originated from Vermont in the early years of America, including an electric motor, an internal combustion engine, and the paddle wheel steamship. Today, that innovative Vermont spirit continues. Vermonters have been contributing to the American economy through innovation and invention every year. Exploring new ways to modify existing products to limit the environmental impact is a quintessentially Vermont idea. Researchers at the University of Vermont have developed and are now seeking a patent for a wood finish that releases fewer toxins into the air than standard finishes. They do it by utilizing whey protein instead of petroleum. In the State of the Union Address, President Obama noted that advances in green technology will be a key driver of our economy in the 21st century. Vermont inventors have been and will continue to be out in front in this area. Computer technology will also be a driver of our 21st-century economy. Vermonters are active in producing the next generation of this technology as well. Viewers across the country were fascinated by the recent appearance of IBM's Watson supercomputer on ``Jeopardy.'' Components used to power Watson were invented by IBM researchers in Vermont, and I am sure those Vermonters watched proudly as Watson defeated Jeopardy legends Ken Jennings and Brad Rutter in the recent man-versus-machine matchup. Modernizing the patent system will help to ensure Vermont inventors will still be able to compete, not just on a national stage but in the international marketplace. Much has changed since Samuel Hopkins received the first U.S. patent in 1790, but the need for a flexible and efficient patent system has remained constant. Inventors from Burlington to the Bay Area require the appropriate incentives to invest in the research required to create the next platform scale or the next Watson computer or the next lifesaving medical device. Over the last 6 years, I have worked on meaningful, comprehensive patent reform legislation. During that time, I have kept in mind the tradition of great Vermont innovators such as Thaddeus Fairbanks and Charles Orvis. I was also pleased that we had key Republicans and Democrats working together to get this legislation before the Senate. The next generation of Vermonters is as eager as the last to show America and the world what they can produce. Vermont may be one of the smallest States in our Nation, but it is busting with creativity. The America Invents Act will ensure that the next Samuel Hopkins can flourish well into the 21st century. Senator Grassley and I had a couple of matters we were going to take care of. I see a distinguished colleague seeking recognition. Before I yield the floor, might I ask my friend how much time he may need?