F. Sensenbrenner

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, unfortunately, the gentlewoman from Texas' argument has nothing to do with her amendment and the examples that she has used has nothing to do with this bill. First, what the amendment does is exactly what the gentleman from Florida (Mr. Keller) has indicated, and that is to say, that a company could sue for getting too fat. Well, a company is a piece of paper that is signed by the Secretary of State of the State of corporation, and has the State seal affixed to it. Companies do not get fat, at least in the physical way that this bill is designed to address. Secondly, the gentlewoman from Texas brings up the case of the lawsuit that was filed against Oprah Winfrey. That was a defamation suit. This bill has nothing to do with allegations of defamation. Anybody who claims to have a cause of action for defamation is perfectly able to go to court and file their case. So I do not understand what relevance the gentlewoman's amendment has to the issues that are presented to this bill, and that is why it should be defeated.

Mr. SENSENBRENNER. Mr. Chairman, I yield myself the balance of my time. Mr. Chairman, I have been listening to this debate since it began and until the gentleman from North Carolina (Mr. Watt) got up and brought in the whole subject of job loss, I did not hear anything about job loss at all. Well, this bill is about preventing job loss because if a franchisee of a major national fast food chain ends up getting sued, he will be out of business, even if he wins his lawsuits because of all the legal fees and deposition fees and expert witness fees that he is going to have to pay. So it seems to me that for once, Congress is getting ahead of the curve on this because we do have the evidence that a bunch of plaintiffs lawyers got together and they required everybody who went to this conference to sign an affidavit of confidentiality and a promise that they would not consult with or represent the food industry until the end of 2006. Now, let us get back to what this bill consists of. This bill consists of imposing personal responsibility. And in my part of the general debate, I quoted Susan Finn, who is the head of the American Council on Fitness and Nutrition. She said, ``If you are obese, do not get a lawyer. See your doctor. See a nutritionist and see a personal trainer, because you made yourself obese. It was not the system that did it or the local fast food chain that did it. You did it yourself.'' And then I quoted the doctor who runs the residential facility in Durham, North Carolina, and he said, ``The worst thing in the world you can do for an obese person is to give them a way out, to let them blame somebody else. They are going to have to look in the mirror if they want to get better and they want to prevent themselves from having all the health problems and lowered life expectancy as a result of eating too much and eating too much of bad stuff.'' So, let us talk about saving jobs before they go. Let us talk about not giving people who are in denial a reason to get themselves off the hook. And let us talk about putting some sense in our legal system because it is not the food industry or those who sell a legal product that make people obese. It is people buying too much and consuming too much of that legal product. That is what this bill attempts to address and that is why it ought to pass.

Mr. SENSENBRENNER. Mr. Chairman, I yield back the balance of my time.

Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentlewoman from Texas (Ms. Granger).

Mr. SENSENBRENNER. Mr. Chairman, I offer an amendment.

Mr. SENSENBRENNER. Mr. Chairman, my amendment does not alter the substance of the bill, it simply clarifies it further. First, to clarify and ensure consistency in interpretation, it simply amends one phrase in the bill's stay provisions in Sec. 3(c) to track language used in the bill's pleading requirements in Sec. 3(d). Second, it replaces Sec. 4(5)(c) with language making it clear that the term ``qualified civil liability action'' does not include an action brought under the Federal Trade Commission Act or the Federal Food, Drug and Cosmetic Act. I believe that this change satisfies the objections that the Committee on Energy and Commerce levied against the bill. I would urge the Members to support my clarifying amendment.

Mr. SENSENBRENNER. Mr. Chairman, I rise in opposition to the amendment. Mr. Chairman, the gentleman from North Carolina and I have a little bit different view of the role of federalism in our country. All I can say is I am happy that his view did not prevail during the great debates on civil rights that occurred in this Chamber and down the hall in the Senate Chamber during the sixties, seventies and eighties, because the notion of States' rights would not have been agreed to by the gentleman from North Carolina. I think this amendment must be defeated because it would gut the bill and also fail to protect the decisions of State legislatures regarding food policy. I do not think we want to see a single judge in a single State court deciding to establish national policy. We have seen far too much of that, and the Watt amendment would allow that type of judicial misinterpretation to occur in a State court somewhere in this country. This bill is also about protecting the separation of powers and the legislative prerogatives of the elected representatives at the State level. The amendment would gut those provisions. The drive by overeaters' personal injuries attorneys to blame those who serve them food and to collect unlimited monetary damages is an attempt to accomplish through litigation that which has not been achieved by legislation and the democratic process. John Banzhaf, a law professor at George Washington University who helped spearhead lawsuits against tobacco companies, has said, ``If the legislatures won't legislate, then the trial lawyers will litigate.'' National Public Radio, August 8, 2002. Various courts have described similar lawsuits against the firearms industry for harm caused by the misuse of its products by others as an attempt to ``regulate through the medium of the judiciary'' and ``improper attempts to have the court substitute its judgment for that of the legislature, something which the court is neither inclined to nor empowered to do.'' Such lawsuits break down the separation of powers between the branches of government. Large damage awards and requests for injunctive relief have the potential to force the judiciary to intrude into the decision-making process properly within the sphere of another branch of government, namely, State legislatures. That is the intent behind these fast-food lawsuits, to circumvent legislatures, to circumvent the Congress and the popular will of the people who elect us. Further, Congress has the clear constitutional authority and the responsibility to enact H.R. 339. The lawsuits against the food industry H.R. 339 addresses directly implicate core federalism principles articulated by the United States Supreme Court, which has made clear that ``one State's powers to impose burdens on the interstate market is not only subordinate to the Federal power over interstate commerce, but is also constrained by the need to respect the interests of other States.'' Congress can, of course, exercise its authority under the Commerce Clause to prevent a few State courts from bankrupting the food industry. In fast-food lawsuits, personal injury lawyers seek to obtain through the court stringent limits on the sale and distribution of food beyond the court's jurisdictional boundaries. By virtue of the enormous compensatory and punitive damages sought, and because of the types of injunctive relief requested, these complaints in practical effect would require manufacturers of lawfully produced food to curtail or cease all lawful commercial trade in that food in the jurisdictions within which they reside, almost always outside of the States within which the States are brought, to prevent potentially limitless liability. Insofar as these complaints have the practical effect of halting or burdening interstate commerce in food, they seek remedies in violation of the Constitution. Such personal injury attorneys' claims directly implicate core federalism principles articulated by the Supreme Court in BMW of North America v. Gore, 1996. The Gore case makes clear that ``one State's power to impose burdens on the interstate market is not only subordinate to the Federal power over interstate commerce, but is also constrained by the need to respect the interests of other States.''

Mr. SENSENBRENNER. Mr. Chairman, the Supreme Court in Healy v. Beer Institute, 1989, elaborated on these principles concerning the extraterritorial effects as follows: ``The critical inquiry is whether the practical effect of the regulation is to control conduct beyond the boundaries of the State. The practical effect of the statute must be evaluated not only by considering the consequences of the law itself, but also by considering how the challenged law may interact with the legitimate regulatory regimes of other States and what effect would arise if one, but many or every, State adopted similar laws. Generally speaking, the Commerce Clause protects against inconsistent laws arising from the projection of one State regulatory regime into the jurisdiction of another State.'' So this bill is supported by sound federalism principles, there is a national interest involved, and that is why the amendment should be defeated.

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 339.

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, H.R. 2391 will help spur the development of new technologies by making it easier for collaborative inventors who represent more than one organization to obtain the protection of the U.S. patent system for their inventions. The bill achieves this goal by limiting the circumstances in which confidential information which is voluntarily exchanged by individual research team members may be asserted to bar the patenting of the team's new inventions. Today, intellectual property-reliant industries, such as pharmaceuticals, biotechnology and nanotechnology, serve as key catalysts to the U.S. economy, employing tens of thousands of Americans. More often than not, the innovations they develop are not done solely by researchers in-house, but rather, in concert with other researchers who may be located at universities, nonprofit institutions, and other private enterprises. Carl E. Gulbrandsen, the managing director of the Wisconsin Research Alumni Research Foundation, provided an assessment of the value of university research contributions when he testified before the Subcommittee on Intellectual Property last Congress that, ``In 2000, nonprofits and universities spent a record of $28.1 billion on research and development, much of which involved collaborations among private, public, and nonprofit entities.'' Sales of products developed from inventions transferred from those research centers resulted in revenues that approached $42 billion that year, a portion of which was then reinvested into additional research. As significant as this research activity is, the tangible benefits of its application are also worth noting. Inventions such as the MRI and the sequencing of human genome technology were both made possible through collaborative research. In 1984, Congress acted to incentivize innovation by encouraging researchers within organizations to share information. That year, Congress amended the patent law to restrict the use of background scientific or technical information shared among researchers in an effort to deny a patent in instances where the subject matter and the claimed invention were under common ownership or control. This bill will provide a similar statutory ``safe harbor'' for inventions that result from collaborative activities of private, public and nonprofit entities. In doing so, the bill responds to the 1997 OddzON Products, Inc. v. Just Toys, Inc., decision of the Federal Circuit Court of Appeals by clarifying that prior inventions of team members will not serve as an absolute bar of the patenting of the team's new invention when the parties conduct themselves in accordance with the terms of the bill. In the future, research collaborations between academia and industry will be even more critical to the efforts of U.S. industry to maintain our technological preeminence. By enacting this bill, Congress will help foster improved communication between researchers, provide additional certainty and structure for those who engage in collaborative research, reduce patent litigation incentives, and facilitate innovation and investment. Mr. Speaker, the Committee on the Judiciary unanimously approved H.R. 2391 on January 21, 2004. I understand that the Congressional Budget Office considers the bill to have an insignificant effect on the U.S. Patent and Trademark Office's spending, and has found that the bill contains no intergovernmental or private sector mandates. The bill itself is a product of the collaborative efforts of a number of individuals and leading professional patent and research organizations. Among those who contributed substantially to the development of the bill are the USPTO, the Wisconsin Alumni Research Foundation, the American Council on Education, the American University Technology Managers, the Biotechnology Industry Organization, and the American Intellectual Property Law Association. Mr. Speaker, the bill is necessary to ensure that tomorrow's collaborative researchers enjoy a full measure of the benefits of the patent law. I urge Members to support the bill. Mr. Speaker, I reserve the balance of my time.

Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 2391, the bill currently under consideration.

Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.

Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2391) to amend title 35, United States Code, to promote research among universities, the public sector, and private enterprise, as amended.

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 2714, the bill currently under consideration.

Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, Congress established the State Justice Institute as a private nonprofit corporation in 1984. Its purpose is to improve judicial administration in the State courts. SJI accomplishes this goal by providing funds to State courts and to other national organizations or nonprofits that support State courts. SJI also fosters cooperation with the Federal judiciary in areas of mutual concern. Pursuant to oversight legislation passed in the previous Congress, the Attorney General, in consultation with the Federal Judicial Center, conducted review of the SJI operations and reported its findings to Congress late last year. The results are encouraging. The Attorney General noted that the Institute has been effective and has complied with its statutory mission, and observed that support for State court innovation and improvement is a Federal interest. Mr. Speaker, based upon the beneficial work SJI has done, I believe it should be afforded a congressional reauthorization, and that is the purpose of this bill. More specifically, section 2 of the bill authorizes $7 million annually for SJI operations over a 4-year cycle. Appropriated funds under section 2 are to remain available until expended. The last two bills reauthorizing the Institute contain such language which reflects the reality that no grant agency can fully expend all of its funds in the year of appropriation. In addition, section 3 of the bill authorized the Institute to purchase goods and services from the General Services Administration. Because SJI is not a Federal agency, it is not legally authorized to procure goods and services from the GSA. In some instances, this exclusion can create unnecessary hardship. To illustrate, SJI was recently denied the ability to purchase GSA storage boxes to transfer its records to the National Archives. Mr. Speaker, in sum, the bill represents a modest authorization for a small but important organization that assists our State court systems. I urge my colleagues to support this bill. Mr. Speaker, I reserve the balance of my time.

Mr. SENSENBRENNER. Mr. Speaker, I yield the balance of my time to the gentleman from Texas (Mr. Smith).

Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2714) to reauthorize the State Justice Institute, as amended.

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Chairman, I offer an amendment.

Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may consume. I have a lengthy statement that I will not read in full, but will insert in the Record. But let me state that a significant part of this amendment deals with the agreement that we have reached with the appropriators that was discussed in the colloquy which I had earlier today with the gentleman from Virginia (Mr. Wolf), the distinguished chairman of the Subcommittee on Commerce, Justice, State, Judiciary and Related Agencies of the Committee on Appropriations. Let me also state that the amendment contains various provisions that the gentleman from Illinois (Mr. Manzullo) and I have agreed upon relative to our previous differences over the treatment of small entities under this bill. And pursuant to this agreement, my amendment applies a 50 percent discount to all searches for small entities, prohibits commercial searches that apply to classified matters, prevents commercial entities from performing searches when they have a financial interest or other conflict at stake, caps the search fee after the 6th year, and requires a joint PTO and Small Business Administration study regarding the effects of the fee structure on small entities. This, I believe, meets the objections that members of the Committee on Small Business had relative to the cost to small business of applying for and hopefully obtaining a patent. I hope that this amendment clears the way for the other body to consider this bill and bring real reform to the PTO. Mr. Chairman, I am delighted to report that this amendment reflects a thoughtful compromise between myself and Mr. Wolf, chairman of the CJS Appropriations Subcommittee, as well as a fair deal between the Judiciary Committee and the chairman of the Small Business Committee, the gentleman from Illinois, Mr. Manzullo. I want to thank both of them for working so steadfastly and productively on this important issue. Mr. Chairman, the heart of my amendment creates a ``refund'' program to eliminate the potential incentive for diverting PTO revenue to non- PTO programs. Briefly, if fee collections in a given fiscal year exceed the amount appropriated to the agency, the excess or overage shall be deposited in a PTO ``Reserve Fund.'' At the end of the fiscal year the Director determines if there are sufficient funds to make payments to persons who paid fees during that year. The Director is empowered to determine which recipients qualify and in what amounts, except that the payments in aggregate must equal the amount of revenue in the Reserve Fund during that fiscal year, less the cost of administering the program. This text is crucial to the bill before us. We have been at loggerheads with the Appropriations committee on this matter for nearly a decade, so I am glad to say that we have struck an acceptable compromise that serves the interests of both committees. I am grateful to the appropriators and the majority leader for working with us on this point. I emphasize that without this language, support for the bill dissipates. In addition, the bill as reported contains a pilot program to determine the efficacy of allowing commercial entities to perform the search function, thereby relieving the agency of the burden and freeing up examiners to do other work. The amendment specifies that participation in the pilot program will be restricted to American businesses and American citizens. We have worked closely with Chairman wolf's staff on this point. Also, in furtherance of the ongoing modernization efforts at PTO, the Director is required to reduce the filing fee for any small entity, independent inventor, or nonprofit organization by 75 percent provided those so qualified file their applications electronically. As I noted a moment ago, Mr. Manzullo, and I have resolve dour differences over the treatment of small entities under H.R. 1561. Pursuant to recently agreed-upon changes, my amendment: Applies a 50 percent discount to all searches for small entities; prohibits commercial searches that apply to classified matters; prevents commercial entities from performing searches when they have a financial interest or other conflict at stake; caps the search fee after the sixth year; and requires a joint PTO-SBA study regarding the effects of the fee structure on small entities. Mr. Chairman, by addressing the fee diversion and other issues, this amendment clears the way for the other body to consider H.R. 1561 and bring real reform to the PTO. I urge its adoption.

Mr. SENSENBRENNER. I yield to the gentleman from California.

Mr. SENSENBRENNER. Mr. Chairman, I have no further requests for time, and I yield back the balance of my time.

Mr. SENSENBRENNER. If the gentlewoman from Ohio will refresh her recollection, the WTO treaty was ratified by Congress. It was urged upon us and signed by President Clinton. I joined the gentlewoman from Ohio in opposing the WTO treaty when it came up in 1994 but we lost on that and the extension or the change in the patent term from the previous 17 years of the date of granting of the patent by the Patent Office was changed to 20 years from the date of filing. The gentlewoman and I voted against it but it is the law and we have to face up to the fact that the longer the PTO delays in issuing a patent, the less time of patent protection there is for an applicant for a patent who succeeds. Mr. Chairman, I yield 1 minute to the gentleman from Illinois (Mr. Manzullo).

Mr. SENSENBRENNER. Mr. Chairman, I yield 3 minutes to the gentlewoman from Pennsylvania (Ms. Hart).

Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, H.R. 1561 will help implement the Patent and Trademark Office's Strategic Business Plan to transform the agency's operations. The bill incorporates a revised fee schedule previously submitted by the PTO that will generate much-needed additional revenue. The plan also includes a true structural reform of the office, which demonstrates that the PTO is not simply saying give us more money and we will solve the problem. The implementation of the strategic plan is the first step forward toward improving patent and trademark quality while reducing application backlogs and pendency at the agency. These goals are critical to the health of cutting-edge industries in particular and our economy in general. Americans lead the world in the production and export of intellectual property and related goods and services. Time is money in the intellectual property world. If the PTO cannot issue quality patents and trademarks in a timely manner, then inventors and trademark filers are the losers. By granting patents and registering trademarks, the PTO affects the vitality of businesses and entrepreneurs, paving the way for investment in research and development. Industries based on intellectual property, like biotechnology and motion pictures, represent the largest single sector of the United States economy. Approximately 50 percent of American exports depend upon some form of IP protection. While intellectual property protection is increasing in importance, the PTO is collapsing under an increasingly complex and massive workload. Patent pendency, the amount of time of patent application is pending before a patent is issued, now averages over 2 years. Without fundamental changes in the way the PTO operates, average pendency in these areas will likely more than double to 6 to 8 years in the next few years. I would point out that the patent term is 20 years from the date of filing. So if it takes 6 to 8 years before the PTO can decide whether or not an application is indeed patentable and grants a patent, that will be that much less time that the patent is actually good, and, thus, that much less valuable to the person who has successfully invented a new technology or product and patented it. Moreover, the backlog of applications awaiting a first review by an examiner will grow from the current level of 475,000 to over a million. These delays pose a grave threat to American businesses and entrepreneurs. The nature of technology and the nature of the marketplace make these delays unacceptable and unsustainable. And what I would point out to the gentlewoman from Ohio and others who complain about this bill and the fee increases that are contained to modernize the system is that if our competitors in an increasingly globalized economy, in Europe and in Japan and elsewhere, are able to obtain more prompt decisions from their patent offices, that will put American inventors at a disadvantage considerably. To fund the initiatives set forth in the strategic plan, the administration has proposed in H.R. 1561 an increase in patent and trademark fees. The proposed fee changes accurately reflect the PTO's cost of doing business. They will benefit the PTO's customers by reducing application filing fees and allowing applicants to evaluate the commercial value of their inventions and recover the cost of search and examination as the situation warrants. Most importantly, the new fee structure will enable the PTO to reduce pendency time, improve quality and customer service through electronic processing, and pursue greater enforcement of intellectual property rights abroad. For example, the additional revenue provided by the fee bill will allow the PTO to hire an additional 2,900 patent examiners, these are Federal employees, not outsourced employees, and move to full electronic processing of patent and trademark applications. The Committee on the Judiciary unanimously approved this bill on July 9, 2003. The administration and private sector strongly advocated the adoption of the fee bill as a necessary means to address the workload crisis at the PTO. Failure to pass the restructuring contained in H.R. 1561 will result in further degrading of PTO operations and increasing the already unacceptable delays to patent and trademark applicants. Mr. Chairman, I will soon offer a bipartisan compromise amendment on section 5 of this bill. This portion of the bill, as reported, would essentially have taken the PTO off budget, a result that our friends at the Committee on Appropriations strongly opposed. My amendment, developed with their input, as well as that of the majority leader's office, the Congressional Budget Office, and the Committee on the Budget, would deposit any fees collected in a given fiscal year in excess of that actually appropriated in a Fee Reserve Fund. At the end of the fiscal year, the director would then be empowered to rebate the reserve-fund revenue to users of the agency. I understand that the CBO and the Committee on the Budget believe this compromise accomplishes the twin goals set forth by the majority leader's office in backing these discussions; that we will have eliminated the incentive to use PTO revenue for non-agency purposes without compromising the ability of the Committee on Appropriations to exercise their oversight prerogatives in providing appropriations for the agency. The mainstream user groups have signaled their intent to support the amendment based on this interpretation. I appreciate very much the cooperation of the appropriators in working out this compromise, and I would call on them to take this opportunity to fully fund the strategic plan. Full funding will be crucial to achieving the changes that we all want to see at the PTO. Now, let me say a couple of words of what the consequence will be if this bill is voted down. First, if this bill is voted down, the current fee diversion that occurs, where up to 30 percent of the fees that are collected by the PTO are not spent on PTO activities but instead are diverted into other areas under the jurisdiction of the Subcommittee on Commerce, Justice, State, Judiciary and Related Agencies of the Committee on Appropriations, will continue. Patent and trademark applicants should no longer be required to fund functions of the Federal Government that have no relationship whatsoever to Patent and Trademark Office operations. This bill, and the amendment that I will be proposing at the conclusion of the general debate, will end the fee diversion and will mean that fees that are collected by the PTO will either be used by the PTO or refunded to the applicants and other users. Second, if this bill gets voted down, instead of having a 2-year delay between the time of the application and the time that the application is acted upon, within the next several years that will expand to 6 or 8 years. And if it is 8 years, that means that the patent will only be good and effective for 12 years, because the patent term is 20 years from the date of application. That puts our successful patent applicants at a considerable disadvantage over those competitors who choose to patent their inventions overseas, where patent and trademark offices will work in a more expeditious manner. I would point out that the small- and medium-sized enterprises who apply for patents under the compromise that is worked out will get a significant fee reduction from a large corporation that is applying for a patent. So there still is a break for small inventors. But there are fee increases; and we need these fee increases to be able to prevent unacceptably long backlogs from occurring, because it is anticipated that the business of the PTO will double in the next few years. If we do not give them more money and we do not make this into a user fee, then the constitutional protection that the gentlewoman from Ohio and others are referring to will end up becoming very much debased in terms of their worth. I do not think that we want to see this happen, and that is why this legislation is essential to maintain the competitiveness of American intellectual property inventions and the inventiveness that has marked American society since the beginning days of our Republic. The amendment that I offer in this bill is necessary for the improved performance of the PTO, and failure to enact this legislation will truly be a disaster for American innovation. I urge Members to support this bill. Mr. Chairman, I reserve the balance of my time.

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on the bill H.R. 1561, soon to be considered.