Patent Reform Act of 2007
Floor Speech
PATENT REFORM ACT OF 2007 -- (House of Representatives - September 07, 2007)
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Ms. KAPTUR. Mr. Chairman, I thank my good friend from the great State of Michigan, the chairman of the committee, for yielding.
Unfortunately, I have to disagree with him on this bill and urge my colleagues to vote ``no'' on H.R. 1908 because we don't want to weaken the U.S. patent system. This is surely not the time with a trillion-dollar trade deficit to do more selling out of America and to try to harmonize our standards down to some of the worst intellectual property pirates like China.
This bill essentially makes it easier for infringers to steal U.S. inventions, and it is truly sad that we are only given a few seconds to talk about this. That alone should tell our colleagues, vote ``no,'' give us a chance to open this up and talk about how this is going to affect jobs in America.
This bill affects two-thirds to 80 percent of the asset value of all U.S. firms. Most industrial companies in this country oppose it. Over 200 organizations across this country oppose it, including the electronics industry, pharmaceuticals, small inventors, and universities. And, yet, we just get a few seconds here.
Let me tell you what is going on. Mr. Emanuel was down here earlier reading a list of the big semiconductor companies, the high-tech firms. This bill does heavily benefit them because they are some of the worst intellectual property infringers.
What this bill does is it supports those large transnational corporations that repeatedly infringe on the patents of others, and they are looking to reduce what they have to pay in the courts. Now, they have had to pay about $3.5 billion in fines over the last couple of years, and it was deserved. But that represents less than 1 percent of their revenues. What they are trying to do is use this bill to make it harder for small inventors and others to file.
What does this bill change? It says to an inventor, unlike since 1709 in this country, when we say if you are first to invent, that patent belongs to us, they want to change it to first-to-file. In other words, they can file it anywhere else in the world and someone else can take that and infringe on that invention. It is not first-invention anymore, it is first-to-file. Boy, there is a lot more to say and our time should not be squashed in this House on an issue of such vital importance to the industrial and the commercial base of this country.
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Ms. KAPTUR. Mr. Chairman, I yield myself such time as I may consume. I thank the gentleman kindly for yielding me this time.
On the manager's amendment, you know what's really sad about this bill is that it is very complicated, and it's a work in progress as we sit here on the floor. It's too important for America and for the future of our industrial and economic base to be treated this way, and I know that the Chair of the subcommittee and the full committee are listening as I speak today. We shouldn't be drafting this in a manager's amendment on the floor.
There's been some inference that the AFL-CIO supports this bill. The AFL-CIO does not support this bill. They support the fact that it is being improved but they do not support the bill.
In addition to that, there's something very important I was not able to address earlier, and that is that this bill prematurely reveals inventors' secrets. In 1999, the Patent Act required the Patent Office to publish on the Internet a patent application 18 months from the date of filing, but the act also allowed inventors to opt out from that if they agreed not to file for patent in another nation. That's the so-called opt-out provision.
Now, between 20 and 33 percent of U.S.-origin patents opt out of the system. They're small people. They're trying to get the venture capital to start up their company and so forth, and the average time the Patent Office takes to process a patent is 31 months. Thus, all the secrets in all patent applications will be made available to every pirate in the world for more than a year before a small inventor, any inventor has a chance for patent protection.
Now, we're going to be told, well, Mr. Issa's amendment will fix this. No, it will not, and we will argue against that a little bit more down the road.
Several speakers this morning, Mr. Welch of Vermont and Mr. Johnson of Georgia, said, well, we need this reform because we haven't had patent reform since 1952. That's not true. There have been 17 amendments in major bills before this Congress that deal with patent reform in the last 15 years.
The problem with this bill is that it tries to harmonize to lower standards in the world rather than cause other countries to harmonize up to our standards. It takes away the right of first to invent, and it transfers it to first to file. That means an inventor who come here to the Patent Office here in the United States, no matter how small, and file a patent and got the right as an inventor first to invent could be superseded in the international market by someone who happened to catch that invention on the Internet or elsewhere and file it in China first. So it changes it from a first-to-invent to a first-to-file system. This is a substantial change from the system that has been in place in this country since the early 1700s.
You know what I said earlier what's going on here is the big proponents of this, the semiconductor companies, and Mr. Emanuel read some of their names, have been fined substantially for patent infringement over the last several years, about $3.5 billion, and they're trying to get the law changed to make it easier for them. You know what, they have a right to exist. They have a right to function. The problem is they have been taken to court, and there are 15 standards the courts use to ascertain damages. They want to reduce it to one and make the 14 optional. You know what, the Federal judges are saying don't do that; we like the current system. It gives the courts the flexibility that they use.
Why should a few transnational corporations, sort of the big tech companies, have this much power in this Congress? Why don't we have the right of others to be heard here fully rather than having to condense such a serious debate into a few seconds here on the floor?
Why am I opposed to this bill? I'm opposed to this bill because it gives too much power to the big tech transnationals, and it takes away power from the universities that are opposed to this; although, some in California, where so many of these big tech companies are located, are happy. But come to Ohio, come to Wisconsin, come to New York. There are lots of universities that are opposed to this. So it's giving too much advantage to a few companies.
In addition to that, it totally turns upside down the first-to-invent system to a first-to-file system, and it would permit lots of infringements internationally.
It does eliminate the opt-out provision where, if a small inventor doesn't want their invention put up on the Internet, it takes away the opt-out provision from them. Mr. Issa's amendment does not fix it. We want an opportunity to fix that, because we want to protect the third of inventors that do not file internationally, that do not want their patents put out there like that, and they are not the big companies. They're the smaller companies. And why force them to go into court? They don't have the money to defend themselves anyway.
There's broad-based opposition to this bill. There are lots of organizations, including the Institute of Electronic Engineers, Medical College of Wisconsin. There are many, many others, Cornell University, all opposed to this.
I thank the gentleman for yielding me the time and allowing me to broaden the record here in the very few short seconds we have been allowed.
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Ms. KAPTUR. Mr. Chairman, I just want to place on the record that Issa's amendment, Issa's choice, is would you rather have the inventor shot with a pistol or a rifle? In either case, he or she ends up dead.
Now, why is that? Because the 1999 Patent Act required the Patent Office to publish on the Internet a patent application 18 months from the date of filing. But the issue really is, it takes an average of 31 months for patent review. Mr. Issa, I think, brings it up to 24 months. Thus, what happens is there's a gap between when it's filed and when it's approved, and you have to go up on the Internet. Under current law, you can opt out of that so you can protect your invention and not have some pirate in China or Japan or somewhere else take it from you. That is not in this bill.
The elimination of the opt-out provision is a terrible, terrible omission and a major change from existing law, and the Issa amendment does not make it better.
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Ms. KAPTUR. Will the gentleman yield further?
Mr. ROHRABACHER. I certainly will.
Ms. KAPTUR. I just would point out, in the area of biology and microbiology, the average amount of time for patent approval is over 40 months. So, in other words, your invention is out there, and you have no way to protect it globally.
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Ms. KAPTUR. Will the gentleman yield on that?
Mr. ROHRABACHER. I certainly will.
Ms. KAPTUR. I would like to defend your labor credentials. You voted against NAFTA on this floor. You were a leader on your side of the aisle. That vote was proven to be right.
What this is going to do, this is going to ``NAFTAtize'' the patent system and allow China to infringe on more of our inventions. We should not permit this to happen. We should be allowed to fully debate this for the people of this country.
Two-thirds of the value of companies, up to 80 percent of our industrial companies value, relate to their patents, and we should be given more respect. We should give our constituents more respect than compressing this debate into such a narrow time slot.
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Ms. KAPTUR. Will the gentleman yield on that?
Mr. ROHRABACHER. I certainly will.
Ms. KAPTUR. I would like to defend your labor credentials. You voted against NAFTA on this floor. You were a leader on your side of the aisle. That vote was proven to be right.
What this is going to do, this is going to ``NAFTAtize'' the patent system and allow China to infringe on more of our inventions. We should not permit this to happen. We should be allowed to fully debate this for the people of this country.
Two-thirds of the value of companies, up to 80 percent of our industrial companies value, relate to their patents, and we should be given more respect. We should give our constituents more respect than compressing this debate into such a narrow time slot.
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Ms. KAPTUR. Would the gentleman kindly yield to me?
Mr. ISSA. I would be glad to yield to the gentlelady.
Ms. KAPTUR. Does your amendment preserve the opt-out provision of existing law?
Mr. ISSA. It does. Under this provision, if you receive your second and usually final rejection and you say, okay, I'm going to take my, within 90 days, I'm going to discard my patent, that wrapper is not available to anyone. It remains a secret and you're allowed to keep your trade secrets.
Ms. KAPTUR. And how many months or years do you have to wait before you get that opt-out provision? Can you do it immediately?
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Ms. KAPTUR. Mr. Chairman, I just wanted to place on the record opposition to Mr. Issa's amendment to try to politicize decision making that is done by professionals over at the Patent Office. But in doing so, also to place on the record who's financing the expensive lobbying campaign on behalf of the bill that is before us today. They are a coalition of companies including transnational corporations: Adobe, Microsoft, Cisco, Intel, eBay, Lenovo, Dell and Oracle.
During the period of 1993-2005, four of them alone paid out more than $3.5 billion in patent settlements. And in the same period, their combined revenues were over $1.4 trillion, making their patent settlements only about one-quarter of 1 percent of those revenues. Now they wish to reduce even those costs, not by changing their obviously unfair and often illegal business practices, but by persuading Congress and also the Supreme Court to weaken U.S. patent protections.
We ought to stand up for American inventors. We should not allow this bill to go forward. It should have sunlight. I know my colleagues are doing the best they can, but they can surely do better than this.
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Ms. KAPTUR. Mr. Chairman, will the gentleman yield?
Mr. ISSA. I yield to the gentlewoman from Ohio.
Ms. KAPTUR. Mr. Chairman, I thank the gentleman very much for yielding.
As I said with Issa's choice, it is either being shot with a pistol or a rifle. It does not guarantee that once the patent is granted that that person can keep their intellectual property, can opt out and not have it published for that 18-month period. So we are taking away that intellectual property protection.
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Ms. KAPTUR. I thank the gentleman for yielding and rise in opposition to the amendment.
I wanted to point out that in every year when patents are granted the very small number of lawsuits that are generated as a result of that. For example, in the year 2006, there were 183,000 patents granted; 1.47 percent actually ended up in some type of lawsuit, and most of those lawsuits were settled before trial.
The current system is working very well for the majority of inventors as lawsuits have represented that smaller percentage going back as far as the eye can see.
I would like to place on the Record those facts that, in fact, lawsuits are a minuscule percent of all patents reviewed and granted. And I would also like to place on the Record from the United States Court of Appeals the following letter from the chief judge who states that the present bill creates a new type of macroeconomic analysis that would be extremely costly and time consuming, far more so than current application of the well-settled apportionment law.
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