United States Patent and Trademark Fee Modernization Act of 2003

UNITED STATES PATENT AND TRADEMARK FEE MODERNIZATION ACT OF 2003 -- (House of Representatives - March 03, 2004)

The SPEAKER pro tempore (Mr. Linder). Pursuant to House Resolution 547 and rule XVIII, the Chair declares the House in the Committee of the Whole House on the State of the Union for the consideration of the bill, H.R. 1561.

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Mr. BERMAN. Mr. Chairman, I yield 3 minutes to the gentlewoman from California (Ms. Lofgren), a member of the Committee on the Judiciary and the first articulator of the principle "no end to diversion, no fee increase."

Ms. LOFGREN. Mr. Chairman, I thank the ranking member of the subcommittee and the chairman. Yes, it is true that we have been objecting to the diversion of fees from the Patent and Trademark Office for some time. In fact, since 1962 some $6 million has been diverted from the PTO and put to other uses; and according to the Patent Public Advisory Committee, this has created a crisis at the PTO. There is inadequate funding, and there is also a significant increase in patent and trademark applications.

The diversion of fees is not the cause of the problems in the Patent Office. It is the cause of the inability to deal with the problem in the Patent Office. We know that we have to spend more to implement the plan that Jim Rogan, our prior colleague, headed up when he was at the Patent Office. We need to upgrade the computer system so we have a priority search that really is worthy of our country. We know that the amount of time that each patent examiner has to examine a patent is insufficient. It is impossible to do the kind of job that we want them to do and they want to do in the time available.

Because of the problems in the act and the diversion of fees, I think we have had some problems with some of the patents that have been generated in recent times. There have been substantial questions generated about some of them. We hear a lot about the business methods patents, but it is not just about those patents; and it is important that we do not grant a patent that cannot withstand a court challenge. It is costly and wastes valuable resources; but more importantly, it grants unwarranted rights of exclusivity that deter otherwise lawful activity and impedes competition and innovation.

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Furthermore, the pendency for patents is now averaging 24.7 months, which is an unbelievable delay. When we think about the pace of technological change that a patent should on average take, 24.7 months is really not a good thing for the innovation high-tech economy. To quote a former First Lady, those of us on the Committee on the Judiciary believe we should just say no to patent fee diversion. Patentors and inventors do not object to being taxed on their income just the way other Americans are taxed on their income but to divert patent fees to general purposes is basically a tax on innovation, a special tax on innovation. That is something that we should object to.

I believe that the bill before us with the compromises that have been made is one that I can support. I think in the end it will well serve our country. It will well serve our economy. Because as someone from Silicon Valley, I know as well as anyone that it is innovation that really grows the American economy and by making the Patent Office better, by precluding the diversion of fees, we will help that innovation economy.

I would note further that in all of my dealings with innovators in Silicon Valley and really around the country, not one has objected to the increase in fees. Not a single one. What they object to is the diversion of fees. I recommend this bill.