Prepared Testimony of Rep. Dana Rohrabacher (R-CA).
Re: patent reform and PTO reauthorization.
Hearing: House Courts and Intellectual Property Subcommittee.
Date: March 25, 1999.
Source: House CIP Subcommittee. Hypertext links have been added. This document has been edited for HTML, but not for content.

Testimony of Hon. Dana Rohrabacher
Subcommittee on Courts & Intellectual Property
Committee on the Judiciary
H.R.___, American Inventors Protection Act
March 25, 1999

Mr. Chairman, thank you for the opportunity to address the subcommittee this afternoon on a day of optimism. As many of you in this room know, the Chairman and I have both spent many hours of effort pursuing our respective goals for patent reform the past several years. Echoing the Chairman's sentiments I, too, believe this is a time for cooperation and not the continued competition and polarization so often indicative of the past. I know that the Chairman and I have consistently supported each other on many other crucial votes throughout our terms - in fact I'm sure that our voting records are nearly identical.

Therefore, I am pleased that we have recently made an effort to work together to reach an agreement on the relevant issues of patent reform that have occupied my thoughts for so long. We have an opportunity to strengthen the United States patent system - the very system that continues to secure our technological and economic success, strengthen our defense, and reinforce our global leadership. Together, we can realize this goal.

I applaud the efforts of Acting Commissioner Dickinson, who has been a major force in facilitating communication among both government and industry. He sought out my office to introduce himself and communicate a revised, open approach without the stigma of a past agenda. He is a welcome addition to our discussions and, hopefully, he will continue to embrace a diplomatic role.

Thank you, Mr. Chairman, for sending the initial draft of your proposed bill, the "American Inventors Protection Act," to my office. I appreciate having the opportunity to evaluate the its effects, in hope that it would provide the basis for a unified bill for this Congress.

I should note here that I, and those I rely on for advice, are still analyzing the effects of the committee print, and thus I may have revised or additional comments later for the record. However, I believe that we have come a long way toward reaching an agreement, and although there are still important differences to address, the momentum generated by this hearing may have the power to complete the journey.

Let me begin by expressing the areas that I generally support, after a first blush:

• Title I Inventors' Rights Act
• Title III Patent Term Guarantee Act
• Title VI Patent and Trademark Office Efficiency Act

With that said, there are some remaining concerns and areas of disagreement that I have discovered in my initial review.

Title II - First to Invent Defense Act

As I have always held, due to the constitutional issues involved and Supreme Court precedent, we simply cannot champion trade secret protection over patent protection for clearly patentable subject matter. We cannot betray our Founding Fathers by abandoning the foundation upon which our patent system is based. We cannot allow state-based rights to trump long-standing Federally created intellectual property rights. We cannot openly advocate secrecy when our patent system calls for us to vigorously promote the progress of science through the sharing of critical technology information.

With that said, however, all is not lost. Perhaps there is a way in the context of an overall agreement that I could support a narrow application of a first-to-invent defense.

The defense should be limited to the original, first inventor. This should be so regardless of any business assignment or transfer of the entire enterprise. The only way, perhaps, the right to use this defense should attach to the transfer of the entire business would be if the transfer occurred before the original file-date of the patent subject matter in question (page 21, lines 17-22).

The successful use of this defense should not then allow the defense-user to expand the scope of his or her business in either quantity or volume (20, 20-25).

This defense should not be available in the case of an infringement suit where a Federal judge has ruled that the subject matter of the disputed patent was clearly of a patentable nature. This view is unmistakably supported by Supreme Court precedent (Kewanee Oil v. Bicron, 416 U.S. 470, 489 (1974)).

Title III - Patent Term Guarantee Act

My goal all along has been to assure a minimum patent term of 17 years from the date a patent is granted. Failing that, I have insisted on a guarantee that the PTO will extend the patent term as necessary to assure a term of 17 years from filing for non-dilatory applicants. The language of this draft appears to codify this approach.

This approach effectively eliminates the claimed submarine patent dilemma while providing a specific framework from which the Patent and Trademark Office must monitor and compensate the loss of any patent term time due to delay for which the applicant has no responsibility.

This approach essentially gives back to the non-dilatory patent holder what I have fought so hard for - a guaranteed 17 year patent term. The patentee once again will have the right to exclude the public from his invention for a limited time - a time that is guaranteed and clearly defined.

Title IV - Publication of Foreign Applications Act

Although I certainly support the overall effect of this section, there are still specific areas that must be addressed.

First, publication in the United States must not be required prior to publication abroad, and the content of the application published in the United States must be no greater than that published by the foreign patent system.

Finally, the expense of early publication should not be applied to filing, issuing, or maintenance fees, since not all applicants will automatically be subjected to this procedure. Unequivocally, a separate publication fee should be charged to those applicants who are published (39, 18-21).

Title V - Patent Litigation Reduction Act

Although I generally support this section, any attempt to reform reexam procedures should in no way expose the PTO to an authentic, adversarial courtroom setting. With that, no oral argumentation should be permitted.

Of course, all reexam procedures should begin with a presumption of patentability if a patent has issued. We must give the reexam requester and respondent the opportunity to submit a written brief to the PTO arguing respective positions, but, again, without permitting an oral argument.

We should continue the impermissibility of pre-issuance third party opposition as an acceptable means for reexam request.

Any issues that were brought during reexam, or reasonably could have been brought, should be barred from separate litigation in a district court. It is important to note that the issue addressed in reexam should be barred and not just the third party requestor who raised the issue.

Most importantly, Mr. Chairman, I would like you consider adding text requires the reexam challenger, other than the patentee himself, to be responsible for any legal fees of the patent holder, if the challenger loses. In this regard, I have attached text from my drafted bill under Attachment A.

Furthermore, I have attached text for your review that pertains to the concept of making reexam a mandatory process before pursuing a patent validity dispute in a district court. This attachment is under the label of Attachment B.

Title VI - Patent and Trademark Office Efficiency Act

I recognize and applaud the intent of this committee print to lift hiring restrictions and to provide for an incentive program to promote long-term career development and guarantee patent examiner training opportunities. As an independent agency, coupled with text reinforcing our intentions, we have ensured that all fees collected by the Patent and Trademark Office will be retained for exclusive use by the Patent and Trademark Office. This is a factor we can all support.

In considering the issue of reorganization, I have always intended to assist the Patent and Trademark Office in operating more efficiently. And I could support the PTO as an independent agency as long as it is subject to all provisions established by the Administrative Procedure Act. The only constraints I've maintained are that the PTO remains as a Federal government entity, and continues to appreciate its own quasi-judicial function in the noble service it provides.

Title VII - Miscellaneous Patent Provisions

I support this section, but I feel we should investigate the potential merits of adding a sub-section that addresses further limitations on the use of technical defenses. I have attached relevant text for your review under the label of Attachment C.

We should also investigate implementing additional fee reductions for small businesses and independent inventors, to ease their financial burdens. This textual attachment is under Attachment D.

Conclusion and Future Considerations

Mr. Chairman, having discussed my concerns, perhaps it is even more evident why I am optimistic that the opportunity for unified legislation can be realized. I am hopeful we can move forward in these areas and reach complete agreement.

On a final note, and possibly the most important, I want to make sure that if we are able to pass a unified bill in the House, we will firmly stand behind the text of this bill in the event of contrary action by the Senate.

Recognizing the oath I took to faithfully serve the people, I know it is up to us to carry on the tradition of Thomas Jefferson, Benjamin Franklin and the will of our Founding Fathers. They provided our newly formed nation with a foundation for freedom and the added security of an exclusive right for American inventors. They have helped perpetuate a society so prosperous that even the common man could own the product of his labor. I, too, want to preserve that society - this has been the very basis of my stance on patent reform.

I want to ensure that our patent system continues to respect the fundamentals of our Founding Fathers while at the same time enhancing its operability in a modern society. We have a chance to finally create a reformed system that better helps all of our nation's inventors receive stronger protection for their achievements. Our patent system always has - and always will - stimulate the creation of jobs, advance our technological leadership, and help to sustain our unprecedented standard of living.

In the Science Committee hearing room there is an old proverb noticeably inscribed on the wall. It says that "Where there is no vision, the people perish." I hope - as we all do - for a unified vision depicting a stronger patent system. Working together, we have the power to achieve a common end that we can all take pride in, knowing our labors have served America and its great people well.

I pledge to continue to work toward an agreement on the issues and hope that a unified bill is a real possibility. I know that these issues have dragged on over the last several years, but perhaps a more resounding success will ultimately result. And as the father of our patent system, Thomas Jefferson, always felt, "Delay is preferable to error."

ATTACHMENT A

SEC. 407. ATTORNEYS' FEES. 1

(a) IN GENERAL.--Chapter 30 of title 35, United States Code, is amended by adding at the end the following new section:

''§ 310. Mandatory award of attorneys' fees

''A third-party requester whose request for a reexamination results in an order under section 304 of this title shall be liable for the reasonable attorneys' fees and cost of the patent owner in connection with the reexamination proceeding if any claim challenged as unpatentable by the third-party requester in the reexamination proceeding is finally determined to be not unpatentable. The Commissioner shall establish a procedure for adjudging and awarding requests for attorneys' fees under this section, except that proceedings on such a request shall not delay issuance of the certificate under section 307(a) of this title.''.

(b) CONFORMING AMENDMENT.--The table of sections for chapter 30 of title 35, United States Code, is amended by adding at the end the following new item:
''310. Mandatory award of attorneys' fees.''.

ATTACHMENT B

SEC. 610. REDUCTION OF INVALIDITY LITIGATION. 16

Section 282 of title 35, United States Code, is amended by adding at the end the following new sub-section:

''(g) Notwithstanding any other provision of law, no person may bring an action under section 2201 of title 28 seeking a declaratory judgment of invalidity of any claim that the person could raise by filing a request under chapter 30 of this title. Nothing in this section shall prevent any person from asserting invalidity of the patent as a defense to a patent-infringement lawsuit.''.

ATTACHMENT C

SEC. 609. LIMITATION OF TECHNICAL DEFENSES. 5

(a) DEFENSES.--Section 282 of title 35, United States Code, is amended--

(1) by designating the first paragraph as sub-section (a);

(2) by designating the second paragraph as subsection (b);

(3) by designating the sentence that begins ''In actions involving the validity'' and the succeeding sentence as subsection (e);

(4) by designating the last paragraph as sub-section (f);

(5) in subsection (b), as so designated, by re-designating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following:

''(4) Absence of sufficient interest by the party plaintiff to bring the action by virtue of a failure to comply with section 116 or 256 of this title, on the grounds that the interest of the party plaintiff derives solely through persons who are not inventors.''; and

(6) by inserting after subsection (b), as designated by this section, the following new sub-sections:

''(c) Except as provided in subsection (b)(4), a defense of invalidity of a patent for failure to comply with section 116 or 256 may be raised only by a person who asserts the right to practice the invention claimed by the patent as an omitted inventor or a licensee of an omitted inventor.

''(d) No patent, once issued, shall be held invalid or unenforceable because of any of the following:

''(1) The presence of any defect, error, or omission in any oath or declaration submitted pursuant to this title, unless clear and convincing evidence is shown that the Patent and Trademark Office would not have issued the patent absent such defect, error, or omission.

''(2) The presence of any defect, error, or omission in any drawing, specimen, or model submitted pursuant to section 112 or 113 of this title, unless clear and convincing evidence is shown that the Patent and Trademark Office would not have issued the patent absent such defect, error, or omission.''.

(b) CORRECTION OF NAMED INVENTOR.--Section 256 of title 35, United States Code, is amended--

(1) by striking ''the Commissioner may'' and inserting ''the Commissioner shall'';

(2) by striking ''may order'' and inserting ''shall order''; and

(3) by inserting after ''in this section.'' in the second paragraph the following new sentences: ''The error of omitting inventors shall not invalidate the patent in which such error occurred if the omitted inventors were, at any time, under an obligation to assign their complete interest in the patent to the patentee. The error of naming persons who are not inventors shall not invalidate the patent in which such error occurred unless such named persons
were, at no time, under an obligation to assign their complete interest in the patent to the patentee.''.

ATTACHMENT D

SEC. 606. REDUCTION OF FEES FOR SMALL ENTITIES.

(a) REDUCTION IN FEES.--Section 41(h)(1) of title 35, United States Code, is amended by striking ''Fees charged under subsection (a) or (b)'' and inserting ''All fees charged by the Patent and Trademark Office in connection with an application for patent or an issued patent''.

(b) EFFECTIVE DATE.--The amendment made by this section shall take effect on the first day of the first fiscal year that begins on or after the date of the enactment of this Act.