I am pleased to participate in this important Symposium and to see quite a few familiar faces. The American Intellectual Property Law Association and the International Chamber of Commerce deserve our appreciation for providing this opportunity for patent experts from around the world to meet and exchange views on the most important issues confronting the IP profession today. I understand that the discussion have contributed to at least a better understanding -- if not agreement -- on the issues by those attending this Symposium -- the leaders of the world's patent community.
Those of you who know me know that I am not a patent expert. I chair the Subcommittee on Courts, the Internet, and Intellectual Property of the Judiciary Committee in the United States House of Representatives. My Subcommittee has jurisdiction of patent, trademark and copyright legislation as well as jurisdiction over legislation involving the federal courts in the United States.
In the last Congress, we passed the most comprehensive change in the U.S. patent laws in at least fifty years -- since the Patent Act of 1952. I believe -- though not all share my opinion -- that we made a number of improvements in U.S. law: early publication, a prior art defense, inter partes reexamination, and some greater independence for the operations of the United States Patent and Trademark Office (USPTO). Many of the American attendees at this Symposium were very active in that effort -- and as you may have learned from your discussions yesterday, they were sometimes on different sides of certain issues. We did not achieve everything that we wanted to achieve; rarely is that possible in the give-and-take of a legislative process. But I believe these are sound improvements to the patent laws of the United States and that they will greatly benefit inventors and industry.
What I though I would do today is talk a little about the activities of the Subcommittee in the 107th Congress which are just getting underway. One matter that I believe my Subcommittee will take up early in the First Session will be a bill that makes a number of technical changes in the patent legislation we passed in the last Congress, the American Inventors Protection Act. Some of these are clarifications and corrections which are inevitably needed following the passage of major legislation while others would more properly be classified as cosmetic changes such as returning the title of "Commissioner" to the head of the U.S. Patent and Trademark Office rather than "Director."
Also, as indicated in our name change for this new session of Congress, we may explore the implications for the protection of intellectual property of the decision last November by the Internet Corporation for Assigned Names and Numbers, or ICANN, to award seven new top level domains, or TLD's. As you know beter than I, there are significant trademark and copyright issues to be addressed as these new TLD's begin operation. In addition, the information they will make available to consumers and IP owners in their WHOIS systems also raise important questions.
For those of your who, like me, aren't Internet groupies, the WHOIS systems are the databases maintained by domain name registrars and registries that allow a person to learn the identity of a domain name registrant. If you want to know who the registrant of the domain name aipla.com is, you can go to Network Solution's website and ask their system "Who is the registrant of aipla.com?" -- hence the name WHOIS. Having access to complete and accurate WHOIS information is critical to protecting the rights of trademark and copyright owners, and it's not entirely clear that all of the sponsors of the seven new TLDs are planning to make their WHOIS systems fully responsive to these needs.
The Subcommittee was instrumental in enacting the Anticybersquatting Consumer Protection Act in the 106th Congress and we clearly need to keep a close watch as ICANN ushers in these new domains to ensure that trademark and copyright interests are protected.
At this Symposium this morning, a panel discussed the patenting of business methods in different jurisdictions around the world. Certainly the State Street Bank and AT&T v. Excel cases in the United States have stimulated a significant increase in the filing of patent applications for business methods in the USPTO, a development that has not been universally welcomed. Some critics believe that patents for such inventions do not receive the quality examination they deserve, while others have called for changes in the law. In response to these concerns, many of which were expressed at the USPTO oversight hearing last year, the agency developed new guidelines for the purpose of ensuring that business method patent applications receive appropriately careful scrutiny prior to grant.
Late in the last Congress, Representatives Boucher and Berman introduced a bill, H.R. 5364, that would institute special rules for business method inventions, including making it easier to challenge both patent applications and patents for such inventions. This approach -- proposing special legislation for a specific field of technology -- has been criticized by some observers; however, there are a few ideas contained in the bill such as a nine-month, post-grant opposition that have been endorsed, but for all fields of technology. It is my expectation that a similar bill will be introduced at some point in this Congress, so I anticipate that we could very well conduct an oversight hearing to allow Members to gain some background on business method patents as warm-up for considering any legislation in this area.
Another area that the Subcommittee may look at involves the 11th Amendment to the United States Constitution which States have invoked to claim immunity in intellectual property infringement suits. The U.S. Supreme Court ruled in Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank and United States of America that the Patent and Plaint Variety Protection Remedy Clarification Act which Congress enacted to abrogate States' immunity to such suits was unconstitutional. This produces the inequity of the State -- which own patents, trademarks, and copyrights, largely through universities -- using the federal courts to enforce their intellectual property rights while claiming immunity when they are sued for infringement. This question is being studied by the Copyright Office, USPTO, and other interested parties such as the AIPLA, but they have yet to agree on a legislative response that they are certain will pass a constitutional challenge. On the other hand, some argue that any legislation introduce might constitute a solution in search of a problem, as actual documentation of abuse has been difficult to tabulate. These issues need to be explored more thoroughly.
No discussion of the Subcommittee's activities for the 107th Congress would be complete without my saying a few words about my primary legislative goal: ending the diversion of fees paid by patent and trademark applicants. The previous Symposia co-sponsored by AIPLA and various of the other organizations represented here have focused more than this Symposium on reducing the costs of obtaining and maintaining patents. A number of the governmental organizations represented at this meeting have been quite successful in lowering thier fees -- the European Patent Office, the World Intellectual Property Organization, the Japanese, British, and other national patent offices have taken significant steps. In this regard, I would be remiss if I did not specifically mention the efforts of President Kober for the successes he has achieved at the EPO.
I intentionally did not mention the USPTO because past Congresses and Administrations have prevented them form properly utilizing their resources. your know the story. Since 1992 through this year, rthe President and the Congress have taken more than $650 million in patent fees and used them to fund other programs.
At one point last summer the Congress was on target to take nearly $300 million dollars in user fees from the USPTO for this fiscal year. With patent and trademark application filings up by double digits -- 40% in the case of trademarks, both pendency and quality were at risk. This so concerned me that I once again proved the old adage that "fools rush in where wise men fear to tread" and sought to amend the appropriation measure for the USPTO while it was being considered on the floor of the House.
To put this in context, you must understand that the appropriators are, to say the least, powerful people. If a member of the Congress becomes too aggressive in challenging them, that member may find only a couple of pilings in the middle of a river across which he had requested a new bridge.
Nonetheless, I offered an amendment to restore $134 million of the planned diversion, much to the chagrin of my very nervous staff and some of my supporters in industry and the bar back in the United States. Well, my amendment did not pass, but I would not say it failed. It generated a debate on the funding of the USPTO that lasted over two hours on the floor of the House. It garnered 145 votes in favor -- from both sides of the aisle -- to 223 against. I believe it sent a signal that was heard in the Senate because, at the end of the day, the appropriation of the Office was raised by roughly this amount. But this meant, of course, that the diversion continued, only at a lower amount.
So this Congress I am elevating the end of fee diversion to my number one patent and trademark priority. I have already contacted the Republican leadership in the House, reminded them of the importance of this issue to inventors and high technology companies, and asked that this issue be placed on the High Tech Agenda for the Republican Party in the House. I would expect that the ranking Democrat on my Subcommittee, Howard Berman from California, will likewise seek to have this matter highlighted in the High Tech Agenda of the Democrats.
Another change that bodes well for addressing the diversion of fees issue in this Congress is a change in the Chair of the Appropriations Subcommittee that handles the USPTO account. The previous Chair, Hal Rodgers of Kentucky, is a good friend of mine and occupies the office next to mine in Washington, but the most urgent needs of his constituents in Kentucky are not necessarily aligned with the needs of inventors and patent owners. The new Chair of the relevant Appropriations Subcommittee is Frank Wolf who represents a district in Northern Virginia. Frank's district has over 700 constituents who work for the USPTO and it is home to what is referred to as the "Dulles high tech corridor." In short, the Chairmanship resides in a district which could very well result in a more favorable climate for protecting the fees of patent applicants.
The new Administration will also be a key factor in this equation. I know that former Under Secretary Dickinson tried, behind the scenes, to convince his superiors to end the diversion but, at the end of the day, he had to follow their policies. I am certain that the Acting Under Secretary, Nick Godici, will likewise try to curb the appetite of these same folks at the Department of Commerce for patent fee revenues, but it's a steep uphill struggle.
We now have a new Director at the Office of Management and Budget (OMB) and we will have to wait andsee if he is more sympathetic to our case. But I note that the new Director, Mitch Daniels, was a Senior Vice President of Corporate Strategy at Eli Lilly and Company with an office just down the hall from one of the speakers on yesterday's program, Bob Armitage. Bob, I trust you have discussed this matter with the new OMB Director and have convinced him to join us in ending fee diversion.
Folks, I joke with Bob, but this is no laughing matter. It is about the future strength of the patent system in the United States. Unless we are able to eliminate this unwise and unsound practice, we will all be the losers. I certainly pledge to you that I will do all within my power to stop diversion of fees from the USPTO and know that my friends here, especially those from the United States, will support me each step of the way.
Thank you for the opportunity to speak with you and congratulations on another successful Symposium.