Lamar Smith

Mr. SMITH of Texas

Mr. SMITH of Texas. I yield 2 minutes to the gentleman from Virginia (Mr. Goodlatte), who is the chairman of the Intellectual Property Subcommittee of the Judiciary Committee.

Mr. SMITH of Texas. Madam Chair, I have an amendment at the desk.

Mr. SMITH of Texas. Madam Chair, I yield back the balance of my time.

Mr. SMITH of Texas. Mr. Chairman, I reserve the balance of my time.

Mr. SMITH of Texas. I yield myself the balance of my time. Madam Chair, let me address some of the criticisms that have been made about the manager's amendment. There are some who want to make more changes to the business method patent provision in the bill. This topic is the primary reason the Judiciary Committee launched patent reform back in 2005. In response to a number of poor-quality, business-method patents issued over the past decade, the bill creates a transitional program within PTO to evaluate these patents using the best prior art available. Bad patents will be weeded out, but good ones will become gold-plated based on their enhanced legal integrity. There are others who have sought changes to the prior art provisions in the First-Inventor-to-File section. The language in our bill which replicates that in the Senate version has drawn support from a large cross-range of industries and investors. Some colleagues have complained during this debate about the treatment of PTO funding in the manager's amendment. The bill that the House Judiciary Committee reported would allow the PTO to keep all the revenue it raises without having to request funding through the normal appropriations process. This is treated as mandatory spending and scored savings in excess of $700 million. Because of concerns raised by the Appropriations Committee members, we worked with them to develop a compromise that eliminates fee diversion while permitting the appropriators to retain oversight through the traditional appropriations process. The manager's amendment accomplishes this goal, but it means that the mandatory spending provisions of the revolving fund become discretionary spending under the reserved fund. Because this change is contrary to CutGo requirements, we need a waiver for consideration of H.R. 1249. I want to emphasize that the bill includes user fees paid by inventors and trademark filers to the PTO in return for services. This isn't the same thing as using tax revenue from the general treasury to fund the agency, so I am not sure that the CutGo rules even apply. Very importantly, there is no impact on the deficit. The manager's amendment is constitutionally sound, improves the base text of the bill, and incorporates a funding agreement approved by the leadership to get this bill to the floor. It's important to pass it and then move on to the other amendments. I urge my colleagues to vote ``aye'' on the amendment.

Mr. SMITH of Texas. It is nice to be able to yield 1 minute to the gentleman from New York (Mr. Nadler), who is the ranking member of the Constitution Subcommittee of the Judiciary Committee.

Mr. SMITH of Texas. I yield myself such time as I may consume. Mr. Chairman, the foresight of the Founders in creating an intellectual property system in the Constitution demonstrates their understanding of how patent rights benefit the American people. Technological innovation from our intellectual property is linked to three-quarters of America's economic growth, and American IP industries account for over one-half of all of our exports. These industries also provide millions of Americans with well-paying jobs. Our patent laws, which provide a time-limited monopoly to inventors in exchange for their creative talent, helped create this prosperity. The last major patent reform was nearly 60 years ago. During this time we have seen tremendous technological advancements, going from computers the size of a closet to the use of wireless technology in the palm of your hand. But we cannot protect the technologies of today with the tools of the past. The current patent system is outdated and dragged down by frivolous lawsuits and uncertainty regarding patent ownership. Unwarranted lawsuits that typically cost $5 million to defend prevent legitimate inventors and industrious companies from creating products and generating jobs. And while America's innovators are forced to spend time and resources defending their patents, our competitors are busy developing new products that expand their businesses and their economies. According to a recent media report, China is expected to surpass the United States for the first time this year as the world's leading patent publisher. The more time we waste on frivolous litigation, the less time we have for innovation. Another problem with the patent system is the lack of resources available to the PTO. The average wait time for a patent approval is 3 years or more. These are products and innovations that will create jobs and save lives. Inadequately funding the PTO harms inventors and small businesses. The bill allows the Director to adjust the fee schedule with appropriate congressional oversight and prevents Congress from spending agency funds on unrelated programs. This will enable the PTO to become more efficient and productive, reducing the wait time for patent approval. Patent quality will improve on the front end, which will reduce litigation on the back end. The patent system envisioned by our Founders focused on granting a patent to the first inventor who registered their invention. This is similar to the first-inventor-to-file provision in H.R. 1249. This improvement makes our system similar to the international standard that other countries use, only it is better. We retain both a 1-year grace period that protects universities and small inventors before they file, as well as the CREATE Act, which ensures collaborative research does not constitute prior art that defeats patentability. There are some who think this bill hurts small businesses and independent inventors, but they are wrong. It ensures that independent inventors are able to compete with larger companies, both here and abroad. American inventors seeking protection here in the United States will have taken the first step toward protecting their patent rights around the world. The bill also makes the small business ombudsman at the PTO permanent. That means that small businesses will always have a champion at the PTO looking out for their interests and helping them as they secure patents for their inventions. This bill protects small businesses and independent inventors by reducing fees for both. This bill represents a fair compromise and creates a better patent system than exists today for inventors and innovative industries. Patents are important to the United States and the world. For example, during the War of 1812, American troops burned the Canadian town of York, known today as Toronto. In retaliation, the British marched on Washington in the summer of 1814 to put the capital city to the torch. Dr. William Thorton, the Superintendent of the Patent Office, delivered an impassioned speech to the British officer commanding 150 Redcoats who were tasked to burn Blodgett's Hotel, where the Patent Office was located. Thorton argued that the patent models stored in the building were valuable to all mankind and could never be replaced. He declared that anyone who destroyed them would be condemned by future generations, as were the Turks who burned the library in Alexandria. The British officer relented and Blodgett's Hotel was spared, making it the only major public building in Washington not burned that day. American inventors have led the world in innovation and new technologies for centuries, from Benjamin Franklin and Thomas Edison to the Wright Brothers and Henry Ford. But if we want to foster future creativity, we must do more to encourage today's inventors. Now is the time to act. I urge the House to support the America Invents Act. Mr. Chairman, I reserve the balance of my time.

Mr. SMITH of Texas. Madam Chair, I continue to reserve the balance of my time.

Mr. SMITH of Texas. Madam Chair, I demand a recorded vote.

Mr. SMITH of Texas. Madam Chair, I yield 2\1/2\ minutes to the gentleman from Virginia (Mr. Goodlatte).

Mr. SMITH of Texas. I yield myself the balance of the time. Madam Chair, in closing, I want to thank the patent principles who devoted so much time, energy and intellect to this project. We've worked together for the common goal of comprehensive patent reform for the better part of 6 years. While some of us still have differences over individual items, I want these Members to know that I appreciate their contributions to the project. This includes, among many others, Mr. Goodlatte, Mr. Watt, Mr. Issa, and Mr. Berman. In the Senate we've worked closely with Senators Leahy, Grassley, Kyl, Hatch and others; and I want to thank them as well. Also, we would not be at this point tonight without the support of Commerce Secretary Locke and PTO Director Kappos. Our country needs this bill. We can't thrive in the 21st century using a 20th-century patent system. At a time when the economy remains fragile and unemployment is unacceptably high, we must include the patent system and the PTO, an agency that has been called an essential driver of a pro-growth job-creating agenda. This bill will catapult us into a new era of innovation and enhanced consumer choice. I urge my colleagues to support H.R. 1249.

Mr. SMITH of Texas. Madam Chair, I yield 2 minutes to the gentleman from Arizona (Mr. Quayle), who is also the vice chairman of the Intellectual Property Subcommittee of the Judiciary Committee.

Mr. SMITH of Texas. Madam Chair, I yield 2 minutes to the gentleman from Arkansas (Mr. Griffin), who is also a member of the Intellectual Property Subcommittee of the Judiciary Committee.

Mr. SMITH of Texas. Madam Chair, I yield 3 minutes to the gentleman from Virginia (Mr. Goodlatte), as I mentioned awhile ago, the chairman of the Intellectual Property Subcommittee of the Judiciary.

Mr. SMITH of Texas. Madam Chair, I yield back the balance of my time.

Mr. SMITH of Texas. Madam Chair, I yield 1 minute to the gentleman from New Hampshire (Mr. Bass) for purposes of a colloquy.

Mr. SMITH of Texas. I yield myself 30 seconds. Madam Chair, contrary to current precedent, in order to trigger the bar in the new 102(a) in our legislation, an action must make the patented subject matter ``available to the public'' before the effective filing date. Additionally, subsection 102(b)(1)(B) is designed to make a very strong grace period for inventors that have made a disclosure that satisfies 102(b). Inventors who have made such disclosures are protected during the grace period not only from their own disclosure but from other prior art from anyone that follows their disclosure. This is an important protection we offer in our bill.

Mr. SMITH of Texas. Madam Chair, I yield 3 minutes to the gentleman from Ohio (Mr. Chabot), who is the senior member of the Constitution Subcommittee and a senior member of the Intellectual Property Subcommittee of the Judiciary Committee.

Mr. SMITH of Texas. Madam Chair, I yield 3 minutes to the gentleman from North Carolina (Mr. Coble), the chairman of the Courts, Commercial, and Administrative Law Enforcement Subcommittee of the Judiciary Committee.

Mr. SMITH of Texas. I yield the gentleman an additional 30 seconds.

Mr. SMITH of Texas. Madam Chair, I yield 5 minutes to the gentleman from Virginia (Mr. Goodlatte), who is the chairman of the Intellectual Property Subcommittee of the Judiciary Committee.

Mr. SMITH of Texas. I yield myself such time as I may consume. Madam Chair, the manager's amendment consists of numerous technical edits and other improvements to the bill. Some of the highlights include the following provisions: Expansion and clarification of prior-user rights under section 273 of the Patent Act. Institutions of higher education qualify for ``micro-entity'' status when paying fees. In other words, an inventor who works for a university or who assigns or conveys an invention to a university qualifies for lower micro-entity fee status. Consolidation of numerous PTO reporting requirements. Inclusion of ``Weldon amendment'' language that forbids the patenting of inventions ``directed to or encompassing a human organism.'' This language has been part of the CJS appropriations legislation for years. It's directed as preventing the PTO from approving inventions related to human cloning. And deletion of a provision that provides special treatment to one company that wants to get additional patent term protection from the PTO. These and other changes in the manager's amendment smooth out a few rough edges and improve the overall bill. I reserve the balance of my time.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and include extraneous materials on H.R. 1249.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Chairman, I appreciate the remarks of the gentleman from Alabama and his endorsement of the REAL ID Act. The risk to not implementing REAL ID is great. Perhaps most recently this was evidenced by the facts surrounding the February arrest of Khalid al- Dawsari in Texas on a Federal charge of attempted use of a weapon of mass destruction. According to the arrest affidavit, when the FBI searched his residence, they found his journal in which he wrote of the need to obtain forged U.S. birth certificates, multiple driver's licenses, and a U.S. passport. He planned to use those driver's licenses to rent several cars, each with a different license specifically to avoid detection. So terrorists are still planning to exploit the weaknesses in our driver's license issuance processes in order to attack us. If we don't do everything in our power to prevent that from happening by fully implementing REAL ID, we set ourselves up for another attack. Mr. Chairman, I look forward to working with the gentleman from Alabama as this bill moves forward and on future appropriation bills to support States as they move toward full implementation of REAL ID.

Mr. SMITH of Texas. I thank the gentleman for that statement, and I ask him if he would further yield.