Leahy-Smith America Invents Act

Floor Speech

Mr. GRASSLEY. Mr. President, I rise to rebut the points Senator Sessions made, and I do acknowledge, as he said on the floor, that 2 or more years ago I was on the same page he is on this issue. What has intervened, in the meantime, that causes me to differ from the position Senator Sessions is taking? It is a district court case giving justice to a company--as one client--that was denied that sort of justice because bureaucrats were acting in an arbitrary and capricious way.

Senator Sessions makes the point you get equal justice under the law from the judicial branch of government and that Congress should not try to override that sort of situation. Congress isn't overriding anything with the language in the House bill that he wants to strike because that interest was satisfied by a judge's decision; saying that a particular entity was denied equal justice under the law because a bureaucrat, making a decision on just exactly what counts as 60 days, was acting in an arbitrary and capricious way. So this language in the House bill has nothing to do with helping a special interest. That special interest was satisfied by a judge who said an entity was denied equal justice under the law because a bureaucrat was acting in an arbitrary and capricious manner.

This amendment is not about a special interest. This amendment is about uniformity of law throughout the country because it is wrong--as the judge says--for a bureaucracy to have one sort of definition of when 60 days begins--whether it is after business hours, if something goes out, or, if something comes in, it includes the day it comes in. So we are talking about how we count 60 days, and it is about making sure there is a uniform standard for that based upon law passed by Congress and not upon one judge's decision that applies to one specific case.

I would say, since this case has been decided, there are at least three other entities that have made application to the Patent Office to make sure they would get equal justice under the law in the same way the entity that got help through the initial decision of the judge. So this is not about special relief for one company. This is about what is a business day and having a uniform definition in the law of the United States of what a business day is, not based upon one district court decision that may not be applied uniformly around our Nation.

So it is about uniformity and not about some bailout, as Senator Sessions says. It is not about some ferocious lobbying effort, as Senator Sessions has said. It is not just because one person was 1 hour late or 1 day late, because how do you know whether they are 1 hour late or 1 day late if there is a different definition under one circumstance of when 60 days starts and another definition under other circumstances of when a 60-day period tolls?

Also, I would suggest to Senator Sessions that this is not Congress interfering in a court case that is under appeal because the government lost this case and the government is not appealing. Now, there might be some other entity appealing for their own interests to take advantage of something that is very unique to them.

But just in case we have short memories, I would remind my colleagues that Congress does sometimes interject itself into the appeal process, and I would suggest one time we did that very recently, maybe 6 years ago--and that may not be very recent, but it is not as though we never do it--and that was the Protection of Lawful Commerce Act of 2005, when Congress interjected itself into an issue to protect gun manufacturers from pending lawsuits. It happens that 81 Senators supported that particular effort to interject ourselves into a lawsuit.

So, Mr. President, in a more formal way, I want to repeat some of what I said this past summer when I came to the Senate floor and suggested to the House of Representatives that I would appreciate very much if they would put into the statutes of the United States a uniform definition of a business day and not leave it up to a court to maybe set that standard so that it might not be applied uniformly and, secondly, to make sure it was done in a way that was treating everybody the same, so everybody gets equal justice under the law, they know what the law is, and they don't have to rely upon maybe some court decision in one part of the country that maybe they can argue in another part of the country, and also to tell bureaucrats, as the judge said, that you can't act in an arbitrary and capricious way. But bureaucrats might act in an arbitrary and capricious way, in a way unknown to them, if we don't have a uniform definition of what a business day is.

So I oppose the effort to strike section 37 from the patent reform bill for the reasons I have just given, but also for the reasons that were already expounded by the chairman of this committee that at this late date, after 6 years of trying to get a patent reform bill done--and we haven't had a patent reform bill for over a decade, and it is badly needed--we shouldn't jeopardize the possible passage of this bill to the President of the United States for his signature by sending it back to the other body and perhaps putting it in jeopardy. But, most important, I think we ought to have a clear signal of what is a business day, a definition of it, and this legislation and section 37 makes that very clear.

This past June, I addressed this issue in a floor statement, and I want to quote from that because I wanted my colleagues to understand why I hoped the House-passed bill would contain section 37 that was not in our Senate bill but that was passed out of the House Judiciary Committee unanimously. Speaking as ranking member of the Senate Judiciary Committee now and back in June when I spoke, I wanted the House Judiciary Committee to know that several Republican and Democratic Senators had asked me to support this provision as well.

Section 37 resulted from a recent Federal court case that had as its genesis the difficulty the FDA--the Food and Drug Administration--and the Patent Office face when deciding how to calculate Hatch-Waxman deadlines. The Hatch-Waxman law of the 1980s was a compromise between drug patent holders and the generic manufacturers. Under the Waxman-Hatch law, once a patent holder obtains market approval, the patent holder has 60 days to request the Patent Office to restore the patent terms--time lost because of the FDA's long deliberating process eating up valuable patent rights.

The citation to the case I am referring to is in 731 Federal Supplement 2nd, 470. The court found--and I want to quote more extensively than I did back in June. This is what the judge said about bureaucrats acting in an arbitrary and capricious way and when does the 60 days start.

The Food and Drug Administration treats submissions to the FDA received after its normal business hours differently than it treats communications from the agency after normal business hours.

Continuing to quote from the decision:

The government does not deny that when notice of FDA approval is sent after normal business hours, the combination of the Patent and Trademark Office's calendar day interpretation and its new counting method effectively deprives applicants of a portion of the 60-day filing period that Congress expressly granted them ..... Under PTO's interpretation, the date stamped on the FDA approval letter starts the 60-day period for filing an application, even if the Food and Drug Administration never sends the letter ..... An applicant could lose a substantial portion, if not all, of its time for filing a Patent Trademark Extension application as a result of mistakes beyond its control ..... An interpretation that imposes such drastic consequences when the government errs could not be what Congress intended.

So the judge is telling us in the Congress of the United States that because we weren't precise, there is a question as to when Congress intended 60 days to start to toll. And the question then is, If it is treated one way for one person and another way for another person, or if one agency treats it one way and another agency treats it another way, is that equal justice under the law? I think it is very clear that the judge said it was not. I say the judge was correct. Congress certainly should not expect nor allow mistakes by the bureaucracy to up-end the rights and provisions included in the Hatch-Waxman Act or any other piece of legislation we might pass.

The court ruled that when the Food and Drug Administration sent a notice of approval after business hours, the 60-day period requesting patent restoration begins the next business day. It is as simple as that.

The House, by including section 37, takes the court case, where common sense dictates to protect all patent holders against losing patent extensions as a result of confused counting calculations. Regrettably, misunderstandings about this provision have persisted, and I think you hear some of those misunderstandings in the statement by Senator Sessions.

This provision does not apply to just one company. The truth is that it applies to all patent holders seeking to restore the patent term time lost during FDA deliberations--in other words, allowing what Hatch-Waxman tries to accomplish: justice for everybody. In recent weeks, it has been revealed that already three companies covering four drug patents will benefit by correcting the government's mistake.

It does not cost the taxpayers money. The Congressional Budget Office determined that it is budget-neutral.

Section 37 has been pointed out as maybe being anticonsumer, but it is anything but anticonsumer. I would quote Jim Martin, chairman of the 60-Plus Association. He said:

We simply can't allow bureaucratic inconsistencies to stand in the way of cutting-edge medical research that is so important to the increasing number of Americans over the age of 60. This provision is a commonsense response to a problem that unnecessarily has ensnared far too many pharmaceutical companies and caused inexcusable delays in drug innovations.

We have also heard from prominent doctors from throughout the United States. They wrote to us stating that section 67 ``is critically important to medicine and patients. In one case alone, the health and lives of millions of Americans who suffer from vascular disease are at stake ..... Lives are literally at stake. A vote against this provision will delay our patients access to cutting-edge discoveries and treatments. We urgently request your help in preserving section 37.''

So section 37 improves our patent system fairness through certainty and clarity, and I urge my colleagues to join me in voting to preserve this important provision as an end in itself, but also to make sure we do not send this bill back to the House of Representatives and instead get it to the President, particularly on a day like today when the President is going to be speaking to us tonight about jobs. I think having an updated patent law will help invention, innovation, research, and everything that adds value to what we do in America and preserve America's greatness in invention and the advancement of science.

In conclusion, I would say it is very clear to me that the court concluded that the Patent and Trademark Office, and not some company or its lawyers, had erred, as is the implication here. A consistent interpretation ought to apply to all patent holders in all cases, and we need to resolve any uncertainty that persists despite the court's decision.

I yield the floor.

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Madam President, I urge my colleagues to oppose all three amendments to the patent bill so we can send this important jobs bill to the President of the United States for his signature.

I then urge my colleagues to support final passage of the Leahy-Smith America Invents Act. This is a strong bipartisan bill that will enhance America's innovation and give us economic growth. It will protect inventors' rights and improve transparency and third-party participation in the patent review process. It will strengthen patent quality and reduce costs and will curb litigation abuses and improve certainty for investors and innovators.

The Leahy-Smith America Invents Act will also help small entities with their patent applications and provide for reduced fees for micro entities and small businesses. It will help companies do business more efficiently both here and abroad.

The bill includes a provision that will prevent patents from being issued on claims of tax strategies. These strategies can add unwarranted fees on taxpayers for attempting to comply with the Tax Code.

Finally, the bill will enhance the operations of the Patent and Trademark Office with administrative reforms, give the Patent and Trademark Office fee-setting authority which we hope will then lead to a reduction of backlog and improve the ability of the Patent and Trademark Office to manage its affairs.

I thank Chairman Leahy and Senator Hatch, the lead sponsors of this legislation, for the tremendous amount of work they put into this America Invents Act, not only for this Congress but over the past 3 to 4 years that this bill has been worked on. This has been a long process spanning those several Congresses, and without the leadership of these two Senators on patent reform we wouldn't be ready to cross the finish line today.

In addition, I thank the staff of the Judiciary Committee: Bruce Cohen, Aaron Cooper, Curtis LeGeyt of Chairman Leahy's staff, Matt Sandgren of Senator Hatch's staff, and Joe Matal of Senator Kyl's staff. I would like to thank the floor staff for their help in processing this bill in an efficient manner, and I would like to especially thank Kolan Davis and Rita Lari Jochum of my staff for their hard work on the bill.

So for a third time I urge my colleagues to vote for the Leahy-Smith America Invents Act and to oppose the three amendments we are going to be voting on so we can keep the bill clean and send it to the President without delay.

Senator Leahy has made it very clear to all 100 Senators that, if we support this bill, it is a gamble to say it will be law if we have to move it beyond the Senate to the House. This bill will help American inventors create innovative new products and services and stimulate job creation. The bill will upgrade and strengthen our patent system and keep America competitive in an increasingly global economy. This is a good bill, and I urge all of my colleagues to support it.

Madam President, how much time do I have?

The PRESIDING OFFICER. There is 1 minute remaining.

Mr. GRASSLEY. I would urge my colleagues--because I rebut Senator Sessions' amendment--to keep in mind that when somebody tells us this is to bail out one company, understand that one company has gotten justice from the judicial branch of our government because a judge has said for that company that they were denied their rights under the 60-day rule to file for an extension of patent. So what that judge said was bureaucrats in our agencies acted in an arbitrary and capricious manner by not having the same rules that designate when the 60-day period of time starts.

So we have a judge that says so, so maybe people can refer to that opinion and get what they want. But we ought to have it in the statute of what is uniform, and that is what the bill does, and the Sessions amendment would strike that.

I yield the floor.

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