Case No. IPR2013-00010 - Exhibit 2011
`
`S5402
`
`CONGRESSIONAL RECORD — SENATE
`
`September 8, 2011
`
`America. This transformation is not
`without enormous dangers and chal-
`lenges, but consider how much worse it
`would have been if a pro-bin Laden
`movement were fueling this trans-
`formation.
`It is plain we need more of what we
`had post-9/11 now. I am not naive. I
`know it cannot be conjured up or
`wished into existence. But if we are op-
`timistic, if we are inspired by the
`Americans who died here, if we truly
`understand our shared history and the
`sacred place compromise and ration-
`ality hold at the very center of the for-
`mation of our Nation and the structure
`of our Constitution, then we can again
`take up the mantle of shared sacrifice
`and common purpose that we wore
`after 9/11 and apply some of those be-
`haviors to the problems we now con-
`front.
`The reality of our current political
`climate is that both sides are off in
`their corners; the common enemy is
`faded. Some see Wall Street as the
`enemy many others see Washington,
`DC, as the enemy and to still others
`any and all government is the enemy.
`I believe the greatest problem we
`face is the belief that we can no longer
`confront and solve the problems and
`challenges that confront us; the fear
`that our best days may be behind us;
`that, for the first time in history, we
`fear things will not be as good for our
`kids as they are for us. It is a creeping
`pessimism that cuts against the can-do
`and will-do American spirit. And, along
`with the divisiveness in our politics, it
`is harming our ability to create the
`great works our forbears accomplished:
`building the Empire State building in
`the teeth of the Great Depression, con-
`structing the Interstate Highway Sys-
`tem and the Hoover Dam, the Erie
`Canal, and so much more.
`While governmental action is not the
`whole answer to all that faces us, it is
`equally true that we cannot confront
`the multiple and complex challenges
`we now face with no government or a
`defanged government or a dysfunc-
`tional government.
`As we approach the 10th anniversary
`of 9/11, the focus on what happened that
`day intensifies—what we lost, who we
`lost, and how we reacted—it becomes
`acutely clear that we need to confront
`our current challenges imbued with the
`spirit of 9/11 and determine to make
`our government and our politics wor-
`thy of the sacrifice and loss we suffered
`that day.
`To return to de Tocqueville, he also
`remarked that:
`The greatness of America lies not in being
`more enlightened than any other nation, but
`rather in her ability to repair her faults.
`
`So, like the ironworkers and oper-
`ating engineers and trade workers who
`miraculously appeared at the pile
`hours after the towers came down with
`blowtorches and hard hats in hand,
`let’s put on our gloves, pick up our
`hammers and get to work fixing what
`ails the body politic. It is the least we
`can do to honor those we lost.
`
`I yield the floor and suggest the ab-
`sence of a quorum.
`(Mr.
`The PRESIDING OFFICER
`BROWN of Ohio). The clerk will call the
`roll.
`The assistant legislative clerk pro-
`ceeded to call the roll.
`Mr. SESSIONS. Mr. President, I ask
`unanimous consent that the order for
`the quorum call be rescinded.
`The PRESIDING OFFICER. Without
`objection, it is so ordered.
`
`f
`
`CONCLUSION OF MORNING
`BUSINESS
`
`The PRESIDING OFFICER. Morning
`business is closed.
`
`f
`
`LEAHY-SMITH AMERICA INVENTS
`ACT
`
`The PRESIDING OFFICER. Under
`the previous order, the Senate will re-
`sume consideration of H.R. 1249, which
`the clerk will report by title.
`The assistant legislative clerk read
`as follows:
`
`An Act (H.R. 1249) to amend title 35, United
`States Code, to provide for patent reform.
`
`AMENDMENT NO. 600
`Mr. SESSIONS. Mr. President, I ask
`unanimous consent to call up my
`amendment No. 600, which is at the
`desk.
`The PRESIDING OFFICER. The
`clerk will report.
`The assistant legislative clerk read
`as follows:
`
`The Senator from Alabama [Mr. SESSIONS],
`for himself, Mr. MANCHIN, Mr. COBURN, and
`Mr. LEE, proposes an amendment numbered
`600.
`
`Mr. SESSIONS. Mr. President, I ask
`unanimous consent that the reading of
`the amendment be dispensed with.
`The PRESIDING OFFICER. Without
`objection, it is so ordered.
`The amendment is as follows:
`
`AMENDMENT NO. 600
`
`(Purpose: To strike the provision relating to
`the calculation of the 60-day period for ap-
`plication of patent term extension)
`
`On page 149, line 20, strike all through page
`150, line 16.
`
`Mr. SESSIONS. Mr. President, the
`amendment that I have offered is a
`very important amendment. It is one
`that I believe is important to the in-
`tegrity of the U.S. legal system and to
`the integrity of the Senate. It is a mat-
`ter that I have been wrestling with and
`objecting to for over a decade. I
`thought the matter had been settled,
`frankly, but it has not because it has
`been driven by one of the most fero-
`cious lobbying efforts the Congress
`maybe has seen.
`The House patent bill as originally
`passed out of committee and taken to
`the floor of the House did not include a
`bailout for Medco, the WilmerHale law
`firm, or the insurance carrier for that
`firm, all of whom were in financial
`jeopardy as a result of a failure to file
`a patent appeal timely.
`I have practiced law hard in my life.
`I have been in court many times. I
`
`spent 12 years as a U.S. Attorney and
`tried cases. I am well aware of how the
`system works. The way the system
`works in America, you file lawsuits
`and you are entitled to your day in
`court. But if you do not file your law-
`suit in time, within the statute of limi-
`tations, you are out.
`
`When a defendant raises a legal point
`of order—a motion to dismiss—based
`on the failure of the complaining party
`to file their lawsuit timely, they are
`out. That happens every day to poor
`people, widow ladies. And it does not
`make any difference what your excuse
`is, why you think you have a good law-
`suit, why you had this idea or that
`idea. Everyone is required to meet the
`same deadlines.
`
`In Alabama they had a situation in
`which a lady asked a probate judge
`when she had to file her appeal by, and
`the judge said: You can file it on Mon-
`day. As it turned out, Monday was too
`late. They went to the Alabama Su-
`preme Court, and who ruled: The pro-
`bate judge—who does not have to be a
`lawyer—does not have the power to
`amend the statute of
`limitations.
`Sorry, lady. You are out.
`
`Nobody filed a bill in the Congress to
`give her relief, or the thousands of oth-
`ers like her every day. So Medco and
`WilmerHale seeking this kind of relief
`is a big deal. To whom much has been
`given, much is required. This is a big-
`time law firm, one of the biggest law
`firms in America. Medco is one of the
`biggest pharmaceutical companies in
`the country. And presumably the law
`firm has insurance that they pay to in-
`sure them if they make an error. So it
`appears that they are not willing to ac-
`cept the court’s ruling.
`
`One time an individual was asking
`me: Oh, JEFF, you let this go. Give in
`and let this go. I sort of as a joke said
`to the individual: Well, if WilmerHale
`will agree not to raise the statute of
`limitations against anybody who sues
`their clients if they file a lawsuit late,
`maybe I will reconsider. He thought I
`was serious. Of course WilmerHale is
`not going to do that. If some poor per-
`son files a lawsuit against someone
`they are representing, and they file it
`one hour late, WilmerHale will file a
`motion to dismiss it. And they will not
`ask why they filed it late. This is law.
`It has to be objective. It has to be fair.
`
`You are not entitled to waltz into the
`U.S. Congress—well connected—and
`start lobbying for special relief.
`
`There is nothing more complicated
`about that than this. So a couple of
`things have been raised. Well, they sug-
`gest, we should not amend the House
`patent bill, and that if we do, it some-
`how will kill the legislation. That is
`not so. Chairman LEAHY has said he
`supports the amendment, but he
`doesn’t want to vote for it because it
`would keep the bill from being passed
`somehow.
`
`It would not keep it from being
`passed. Indeed, the bill that was
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`

`September 8, 2011
`
`CONGRESSIONAL RECORD — SENATE
`
`S5429
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`the primary goal of the U.S. Patent
`and Trademark Office.
`Mr. KYL. Madam President, I rise
`today to say a few words about aspects
`of the present bill that differ from the
`bill that passed the Senate in March. I
`commented at length on the Senate
`bill when that bill was before this
`body. Since the present bill and the
`Senate bill are largely identical, I will
`not repeat what I said previously, but
`will simply refer to my previous re-
`marks, at 157 Cong. Rec. 1368–80, daily
`ed. March 8, 2011, which obviously
`apply to the present bill as well.
`As I mentioned earlier, Mr. SMITH ne-
`gotiated his bill with Senators LEAHY,
`GRASSLEY, and me as he moved the bill
`through the House of Representatives.
`The final House bill thus represents a
`compromise, one which the Senate sup-
`porters of patent reform have agreed to
`support in the Senate. The provisions
`that Mr. SMITH has added to the bill
`are ones that we have all had an oppor-
`tunity to consider and discuss, and
`which I fully support.
`Section 19(d) of the present bill adds
`a new section 299 to title 35. This new
`section bars joinder of accused infring-
`ers as codefendants, or consolidation of
`their cases for trial, if the only com-
`mon fact and transaction among the
`defendants is that they are alleged to
`have infringed the same patent. This
`provision effectively codifies current
`law as it has been applied everywhere
`outside of the Eastern District of
`Texas. See Rudd v. Lux Products Corp.,
`2011 WL 148052. (N.D. Ill. January 12,
`2011), and the committee report for this
`bill at pages 54 through 55.
`H.R. 1249 as introduced applied only
`to joinder of defendants in one action.
`As amended in the mark up and in the
`floor managers’ amendment, the bill
`extends the limit on joinder to also bar
`consolidation of trials of separate ac-
`tions. When this change was first pro-
`posed, I was skeptical that it was nec-
`essary. A review of legal authority,
`however, reveals that under current
`law, even if parties cannot be joined as
`defendants under rule 20, their cases
`can still be consolidated for trial under
`rule 42. For example, as the district
`court held in Ohio v. Louis Trauth
`Dairy, Inc., 163 F.R.D. 500, 503 (S.D.
`Ohio 1995), ‘‘[e]ven when actions are
`improperly joined, it is sometimes
`proper to consolidate them for trial.’’
`The same conclusion was reached by
`the court in Kenvin v. Newburger, Loeb
`& Co., 37 F.R.D. 473 (S.D.N.Y. 1965),
`which ordered severance because of
`misjoinder of parties, concluding that
`the claims against the defendants did
`not arise out of single transaction or
`occurrence, but then suggested the de-
`sirability of a joint trial, and expressly
`made its severance order without prej-
`udice to a subsequent motion for con-
`solidation under rule 42(a). Similarly,
`in Stanford v. TVA, 18 F.R.D. 152 (M.D.
`Tenn. 1955), a court found that the de-
`fendants had been misjoined, since the
`claims arose out of independent trans-
`actions, and ordered them severed. The
`
`court subsequently found, however,
`that a common question existed and
`ordered the defendants’ cases consoli-
`dated for trial.
`That these cases are not just outliers
`is confirmed by Federal Practice and
`Procedure, which comments as follows
`at § 2382:
`Although as a general proposition it is true
`that Rule 42(a) should be construed in har-
`mony with the other civil rules, it would be
`a mistake to assume that the standard for
`consolidation is the same as that governing
`the original joinder of parties or claims. . . .
`[M]ore than one party can be joined on a side
`under Rule 20(a) only if there is asserted on
`behalf of or against all of them one or more
`claims for relief arising out of the same
`transaction or occurrence or series of trans-
`actions or occurrences. This is in addition to
`the requirement that there be some question
`of law or fact common to all the parties. But
`the existence of a common question by itself
`is enough to permit consolidation under Rule
`42(a), even if the claims arise out of inde-
`pendent transactions.
`If a court that was barred from join-
`ing defendants in one action could in-
`stead simply consolidate their cases for
`trial under rule 42, section 299’s pur-
`pose of allowing unrelated patent de-
`fendants to insist on being tried sepa-
`rately would be undermined. Section
`299 thus adopts a common standard for
`both joinder of defendants and consoli-
`dation of their cases for trial.
`Another set of changes made by the
`House bill concerns the coordination of
`inter partes and postgrant review with
`civil litigation. The Senate bill, at pro-
`posed sections 315(a) and 325(a), would
`have barred a party or his real party in
`interest from seeking or maintaining
`an inter partes or postgrant review
`after he has filed a declaratory-judg-
`ment action challenging the validity of
`the patent. The final bill will still bar
`seeking IPR or PGR after a declara-
`tory-judgment action has been filed,
`but will allow a declaratory-judgment
`action to be filed on the same day or
`after the petition for IPR or PGR was
`filed. Such a declaratory-judgment ac-
`tion, however, will be automatically
`stayed by the court unless the patent
`owner countersues for infringement.
`The purpose of allowing the declara-
`tory-judgment action to be filed is to
`allow the accused infringer to file the
`first action and thus be presumptively
`entitled to his choice of venue.
`The House bill also extends the dead-
`line for allowing an accused infringer
`to seek inter partes review after he has
`been sued for infringement. The Senate
`bill imposed a 6-month deadline on
`seeking IPR after the patent owner has
`filed an action for infringement. The
`final bill extends this deadline, at pro-
`posed section 315(b), to 1 year. High-
`technology companies, in particular,
`have noted that they are often sued by
`defendants asserting multiple patents
`with large numbers of vague claims,
`making it difficult to determine in the
`first few months of the litigation which
`claims will be relevant and how those
`claims are alleged to read on the de-
`fendant’s products. Current law im-
`poses no deadline on seeking inter
`
`partes reexamination. And in light of
`the present bill’s enhanced estoppels, it
`is important that the section 315(b)
`deadline afford defendants a reasonable
`opportunity to identify and understand
`the patent claims that are relevant to
`the litigation. It is thus appropriate to
`extend the section 315(b) deadline to
`one year.
`The final bill also extends inter-
`vening rights to inter partes and post-
`grant review. The bill does not allow
`new matter to be introduced to support
`claims in IPR and PGR and does not
`allow broadening of claims in those
`proceedings. The aspect of intervening
`rights that is relevant to IPR and PGR
`is section 252, first paragraph, which
`provides that damages accrue only
`from the date of the conclusion of re-
`view if claim scope has been sub-
`stantively altered in the proceeding.
`This restriction applies even if the
`amendment only narrowed the scope of
`the claims. See Engineered Data Prod-
`ucts, Inc. v. GBS Corp., 506 F.Supp.2d
`461, 467 (D. Colo. 2007), which notes that
`‘‘the Federal Circuit has routinely ap-
`plied the intervening rights defense to
`narrowing amendments.’’ When patent-
`defeating prior art is discovered, it is
`often impossible to predict whether
`that prior art will be found to render
`the entire invention obvious, or will
`only require a narrowing amendment.
`When a challenger has discovered such
`prior art, and wants to practice the in-
`vention, intervening rights protect him
`against the risk of gong forward—pro-
`vided, of course, that he is correct in
`his judgment that the prior art at least
`requires a substantive narrowing of
`claims.
`The final bill also adds a new sub-
`section to proposed section 257, which
`authorizes supplemental examination
`of patents. The new subsection pro-
`vides that the Director shall refer to
`the U.S. Attorney General any ‘‘mate-
`rial fraud’’ on the Office that is discov-
`ered
`during
`the
`course
`of
`a
`Supplemental Examination. Chairman
`Smith’s explanation of this addition, at
`157 Cong. Rec. E1182–83 (daily ed. June
`23, 2011), clarifies the purpose and ef-
`fect of this new provision. In light of
`his remarks, I
`find the addition
`unobjectionable. I would simply add to
`the Chairman’s remarks that, in evalu-
`ating whether a fraud is ‘‘material’’ for
`purpose of referral, the Director should
`look to the Federal Circuit’s decision
`in Therasense, Inc. v. Becton, Dickinson
`and Co., llF.3dll, 2011 WL 2028255
`(May 25, 2011). That case holds, in rel-
`evant part, that:
`[T]he materiality required to establish in-
`equitable conduct is but-for materiality.
`When an applicant fails to disclose prior art
`to the PTO, that prior art is but-for material
`if the PTO would not have allowed a claim
`had it been aware of the undisclosed prior
`art. Hence, in assessing the materiality of a
`withheld reference, the court must deter-
`mine whether the PTO would have allowed
`the claim if it had been aware of the undis-
`closed reference.
`Finally, perhaps the most important
`change that the House of Representa-
`tives has made to the America Invents
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