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`ALDERSON REPORTING COMPANY
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`HJU104000
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`MARKUP OF H.R. 1249, THE AMERICA INVENTS ACT
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`Thursday, April 14, 2011
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`House of Representatives
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`Committee on the Judiciary
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`Washington, D.C.
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` The committee met, pursuant to call, at 10:35 a.m., in
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`Room 2141, Rayburn Office Building, Hon. Lamar Smith
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`[chairman of the committee] presiding.
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` Present: Representatives Smith, Sensenbrenner, Coble,
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`Gallegly, Goodlatte, Lungren, Chabot, Issa, Pence, Forbes,
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`King, Franks, Gohmert, Jordan, Poe, Chaffetz, Griffin,
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`Marino, Gowdy, Ross, Adams, Quayle, Conyers, Berman, Nadler,
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`Scott, Watt, Lofgren, Jackson Lee, Waters, Cohen, Johnson,
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`Pierluisi, Quigley, Chu, Deutch, Sanchez, and Wasserman
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`Schultz.
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`HJU104000
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`MARKUP OF H.R. 1249, THE AMERICA INVENTS ACT
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`Thursday, April 14, 2011
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`House of Representatives
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`Committee on the Judiciary
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`Washington, D.C.
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` The committee met, pursuant to call, at 10:35 a.m., in
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`Room 2141, Rayburn Office Building, Hon. Lamar Smith
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`[chairman of the committee] presiding.
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` Present: Representatives Smith, Sensenbrenner, Coble,
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`Gallegly, Goodlatte, Lungren, Chabot, Issa, Pence, Forbes,
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`King, Franks, Gohmert, Jordan, Poe, Chaffetz, Griffin,
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`Marino, Gowdy, Ross, Adams, Quayle, Conyers, Berman, Nadler,
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`Scott, Watt, Lofgren, Jackson Lee, Waters, Cohen, Johnson,
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`Pierluisi, Quigley, Chu, Deutch, Sanchez, and Wasserman
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`Schultz.
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` Staff present: Sean McLaughlin, Chief of Staff;
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`Allison Halatei, Deputy Chief of Staff/Parliamentarian;
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`Sarah Kish, Clerk; Perry Apelbaum, Minority Staff Director;
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`and Chrystal Sheppard.
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`Chairman Smith. [Presiding] The Judiciary Committee
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`will come to order.
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`Without objection, the chair is authorized to declare
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`recesses of the committee at any time.
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`The clerk will call the role to establish a quorum.
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`Ms. Kish. Mr. Smith?
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`Chairman Smith. Present
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`Ms. Kish. Mr. Sensenbrenner?
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`Mr. Sensenbrenner. Here.
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`Ms. Kish. Mr. Coble?
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`Mr. Gallegly?
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`Mr. Goodlatte?
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`Mr. Lungren?
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`Mr. Chabot?
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`Mr. Issa?
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`Mr. Pence?
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`Mr. Forbes?
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`Mr. King?
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`Mr. Franks?
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`Mr. Gohmert?
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`Mr. Gohmert. Here
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`Ms. Kish. Mr. Jordan?
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`Mr. Poe?
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`Mr. Chaffetz?
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`Mr. Griffin?
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`Mr. Marino?
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`Mr. Gowdy?
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`Mr. Ross?
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`Ms. Adams?
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`Mr. Quayle?
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`Mr. Conyers?
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`Mr. Berman?
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`Mr. Nadler?
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`Mr. Scott?
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`Mr. Watt?
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`Mr. Watt. Present.
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`Ms. Kish. Ms. Lofgren?
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`Ms. Lofgren. Present.
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`Ms. Kish. Ms. Jackson Lee?
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`Ms. Jackson Lee. Present.
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`Ms. Kish. Ms. Waters?
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`Mr. Cohen?
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`Mr. Johnson?
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`Mr. Pierluisi?
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`Mr. Quigley?
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`Mr. Quigley. Here.
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`Ms. Kish. Ms. Chu?
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`Ms. Chu. Present.
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`Ms. Kish. Mr. Deutch?
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`Ms. Sanchez?
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`Ms. Wasserman Schultz?
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`Chairman Smith. The gentleman from Arizona?
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`Mr. Quayle. Here.
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`Chairman Smith. The gentleman from Illinois? Oh,
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`have you recorded yourself? Okay.
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`Chairman Smith. How is the gentleman from Michigan
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`the gentlewoman from California recorded?
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`Ms. Kish. Not recorded, sir.
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`Chairman Smith. The gentlewoman from California?
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`Ms. Sanchez. Present.
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`Chairman Smith. And the gentleman from Michigan?
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`Mr. Conyers. Present.
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`Chairman Smith. Is present.
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`The clerk will report.
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`Ms. Kish. Mr. Chairman, 15 members responded present.
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`Chairman Smith. A working quorum is present and we
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`will proceed.
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`Pursuant to notice, I now call up H.R. 1249 for
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`purposes of markup. The clerk will report the bill.
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`Ms. Kish. “H.R. 1249, to amend Title 35, United
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`States Code, to provide for patent reform.”
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`Chairman Smith. Without objection, the bill will be
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`considered as read.
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`[The information follows:]
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`Chairman Smith. And I will begin by recognizing
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`myself for an opening statement and then the ranking member.
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`The foresight of the Founders in creating an
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`intellectual property system in the Constitution
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`demonstrates their understanding of how patent rights
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`benefit the American people. Technological innovation from
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`our intellectual property is linked to three-quarters of
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`America’s economic growth, and American IP industries
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`account for over one-half of all U.S. exports. These
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`industries also provide millions of Americans with well
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`paying jobs. Our patent laws, which provide a time-limited
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`monopoly to inventors in exchange for their creative talent,
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`helps create this prosperity.
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`The last major patent reform was nearly 60 years ago.
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`Since then, American inventors have helped put a man on the
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`moon, developed cell phones, and created the Internet. But
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`we cannot protect the technologies of today with the tools
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`of the past. The current patent system is outdated and
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`dragged down by frivolous lawsuits and uncertainty regarding
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`patent ownership. Unwarranted lawsuits that typically cost
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`$5 million to defend prevent legitimate inventors and
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`industrious companies from creating products and generating
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`jobs.
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`One problem with the patent system is the lack of
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`resources available to the PTO. The bill allows the
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`director to adjust the fee schedule with appropriate
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`congressional oversight and authorizes the agency to keep
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`all the revenue it raises. This will enable the PTO to
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`become more efficient and productive. Patent quality will
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`improve on the front end which will reduce litigation on the
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`back end.
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`Inventors, businesses, and other groups interested in
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`patent reform don’t agree on every issue that we have
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`debated for the past 6 years. Our patent system doesn’t
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`affect each individual or company in the same way because
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`they use the patent system in many different ways.
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`The patent system envisioned by our Founders focused
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`on granting a patent to be awarded to the first inventor to
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`register their invention as long as it was not in public use
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`when the inventor conceived of their invention. There are
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`some who look at this bill thinking that it will hurt small
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`business and independent inventors, but this bill was
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`designed to ensure that these inventors are able to compete
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`with the larger companies and globally which the current
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`system does not enable them to do. This bill includes new
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`programs at the PTO that will reduce litigation costs and
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`create true patent certainty.
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`We have also included, at Mr. Griffin’s suggestion, a
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`provision that makes the small business ombudsman at the PTO
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`permanent. That means that small business will always have
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`a champion at the PTO looking out for their interests and
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`helping them as they secure patents for their inventions.
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`This bill not only protects small business and
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`independent inventors, it creates jobs and even helps bring
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`manufacturing jobs back to the United States.
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`I also note that there are some members on the large
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`business side, particularly in the tech community, who still
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`want some more. I have been a consistent ally of theirs
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`since this project began 6 years ago. Given the political
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`context in which we must legislate, I think we have been
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`fair to tech industries and in fact fair to all sides.
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`For example, at their request, the bill doesn’t
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`address many litigation reform issues because the courts are
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`addressing these issues through decisions on damages, venue,
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`and other subjects. In a response to a request from tech
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`firms, this bill lengthens the filing deadlines for post-
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`grant opposition and inter partes reexam and enhances prior
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`user rights in ways that manage to preserve the support of
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`the other stakeholders.
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`It is impossible for any one group to get everything
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`they want. This bill represents a fair compromise, in my
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`judgment, and creates a better patent system than exists
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`today for inventors and innovative industries.
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`Now is the time to act and I urge my Judiciary
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`Committee colleagues to support the America Invents Act.
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`That concludes my opening statement. We will look to
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`the gentleman from Michigan, the ranking member of the full
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`committee, for his opening statement.
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`Mr. Conyers. Thank you, Chairman Smith and members of
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`the committee.
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`I want the record to show that I agree with much of
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`what you have said, particularly about the importance of
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`patent reform and how increasingly important it is to the
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`country. We are now turning into an information-based
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`economy, and intellectual property is key to the success of
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`that kind of economic system.
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`Now, we have been working on patent reform for 6
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`years, and it is important that we come here today with as
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`open minds to the issues that will be taken up as possible.
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`There have been a lot of work and innumerable meetings and
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`subgroup sessions and after-voting-hours activity devoted to
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`how we approach and deal with these issues.
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`I must say to my surprise we have made some progress
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`in this area -- in a number of areas on the bill in general.
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`But there is a concern that I would like to raise.
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`The director of the Patent and Trade Office’s
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`authority to set fees sunsets after 4 years. Now, no
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`business can do any long-term planning with such a
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`restriction. And so I would like every member of this
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`committee to apply their business experience to a
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`restriction such as that. The foundation of the Patent and
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`Trademark Office is crumbling. It is the front line in our
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`effort to improve patent quality, and one way to help secure
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`the foundation is to provide a mechanism for the Trade
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`Office to coordinate fees with the actual expenses that are
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`required to review the patents. So providing the office
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`with the authority to set fees and to take that authority
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`away after 4 years is self-defeating. The authority has
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`significant congressional and stakeholder oversight. So I
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`see no reason for that limitation.
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`Now, the next issue I would like to raise is the
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`expansion of the transitional business method patent post-
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`grant provision from 4 years to 10 years. This provision, I
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`think after the discussion today, will show that it moves in
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`the wrong direction. And I remain concerned about the
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`retroactive application of the provision, and the manager's
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`amendment compounds the problem by putting patent owners
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`under a cloud of litigation for 6 additional years, even
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`those patent owners who have already gone through prior
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`reexamination or court proceedings and have been found to
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`have valid patents. And so representatives from
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`influential, nonfinancial services, and entities such as
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`Procter & Gamble have publicly stated that this is not a
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`good provision.
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`Mr. Chairman, could I receive an additional 1 minute?
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`Chairman Smith. Of course. The gentleman is
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`recognized for an additional minute.
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`Mr. Conyers. Thank you, sir.
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`Finally, the final thing that is of concern to me is
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`the creation of a 3-year safe harbor for companies accused
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`of falsely marking their products. This provision, prior to
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`the manager's amendment, already harmed settled expectation
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`because it applied retroactively. Providing a safe harbor
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`for expired patents only compounds the retroactivity problem
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`by ensuring that almost all ongoing litigation will be
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`eliminated by amendments.
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`And so I approach this hearing with some hopefulness.
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`For years, this committee, which is known for its diverse
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`points of view, has been able to resolve a number of major
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`issues across the years. And I think, Chairman Smith, with
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`your leadership and our cooperation, we can add to what has
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`been accomplished here. We have passed milestone
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`legislation out of Judiciary before: the Satellite Home
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`Viewer Act, the Digital Millennium Copyright Act, the PRO-IP
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`Act. And I hope today we will be able to add another such
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`important piece of legislation.
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`And I thank you for your generosity.
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`Chairman Smith. Thank you, Mr. Conyers for that
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`statement.
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`Our chairman of the IP Subcommittee is at another
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`markup and will be here shortly. Meanwhile, we will
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`recognize the ranking member of that IP Subcommittee, the
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`gentleman from North Carolina, Mr. Watt, for his statement.
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`Mr. Watt. Thank you, Mr. Chairman, and I thank the
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`chairman for taking me up on my suggestion 13 days ago to
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`convene various stakeholders in yet another attempt to
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`reconcile divisions that have persistently paralyzed
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`progress on getting a bill on patent reform. At his
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`request, representatives from several industries came
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`together and constructively hashed out some of the remaining
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`differences that they had.
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`Today we will have before us a manager's amendment
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`that moves in the right direction toward the appropriate
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`balance to ensure the health of our patent system. I
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`applaud Chairman Smith for his leadership, but we are not
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`there yet.
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`Like the stakeholders who answered our call for them
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`to convene, collaborate, and compromise, the members of this
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`committee must now forge ahead in meaningful partnership to
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`enact comprehensive patent reform. Thus far, the process
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`has not been perfect. Yet, many of the major chokepoints
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`that have strangled progress have been opened or at least
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`unstrangled, and there may be a path to getting a bill out
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`of our committee and moving the process forward.
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`Innovation and creativity are the cornerstones of
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`American enterprise. Our Nation’s economy is on the mend,
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`but we have an unique opportunity to breathe new life into
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`the economy and make it stronger.
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`During the course of this markup, we will, no doubt,
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`be summoned to the House floor to take some contentious
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`votes on the budget. There, as here, the end game is to put
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`in place effective reforms that will help America prosper
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`economically. Unfortunately there, the parties are still
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`screaming at each other with little hope for meaningful
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`compromise and opportunity to move forward. But here in
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`this room, I am hopeful that we can find common ground for
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`the American people and deliver a win that will foster
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`growth and create jobs by updating and modernizing our
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`ailing patent system.
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`Providing the PTO with resources it needs by
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`permanently ending the practice of fee diversion and
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`guaranteeing access to all of its user-generated fees has
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`almost universal support.
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`I believe the manager's amendment reflects a
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`reasonable accommodation on prior user rights. Providing a
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`defense for innovators to reduce a product to prior domestic
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`commercial use while maintaining the exclusionary rights
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`that inure to a subsequently filed patent is good policy,
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`and I am happy to see it in the bill. Virtually every other
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`country that operates under a first-to-file system
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`recognizes the benefits to the public from prior user
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`rights.
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`Significant progress has been made on inter partes
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`reexamination and I trust that moving forward we will strike
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`the right balance there as well.
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`Preservation of the grace period, the establishment of
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`a new, robust post-grant review process, submission of third
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`party prior art, and a supplemental examination proceeding
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`are other core features of the measure before us.
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`I reiterate that the underlying bill, the manager's
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`amendment, and what we have and will agree to today haven’t
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`gotten us across the finish line yet, but we are closer to
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`enacting meaningful, comprehensive patent reform than we
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`have ever been. We must act responsibly to finish the job.
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`I look forward to a productive markup and yield back the
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`balance of my time.
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`Mr. Conyers. Mr. Chairman?
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`Chairman Smith. Just a minute. I want to thank Mr.
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`Watt for his statement. For what purposes does the ranking
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`member wish to be heard?
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`Mr. Conyers. An inquiry, please. If it pleases the
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`chairman, we would like to bring forward the business method
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`amendment before the manager's amendment, which has at least
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`a half a dozen amendments, and we would like to get that out
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`of the way first. If it doesn’t displease the chairman, I
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`323
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`would like to offer that amendment if I could.
`
`324
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`Chairman Smith. I appreciate the gentleman’s request.
`
`325
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`Normally we would have amendments to the manager's amendment
`
`326
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`and then take up amendments to the underlying bill, and that
`
`327
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`is the normal --
`
`328
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`Mr. Conyers. Well, that is why I am asking for your
`
`329
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`consent to do it differently.
`
`330
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`Chairman Smith. We are checking now with the
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`331
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`parliamentarian to see if what the gentleman has requested
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`332
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`is possible under the rules, and we will suspend for about
`
`333
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`15 seconds like we are checking that answer.
`
`334
`
`Mr. Sensenbrenner. Mr. Chairman, I have a couple of
`
`335
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`parliamentary inquiries as well.
`
`336
`
`Chairman Smith. Let me dispose of this one first, Mr.
`
`337
`
`Sensenbrenner, and then we will get to yours.
`
`338
`
`339
`
`[Pause.]
`
`Chairman Smith. Mr. Conyers, I am advised by the
`
`
`
`HJU104000 PAGE 18
`
`340
`
`parliamentarian that we have to take up my manager's
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`341
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`amendment first or it may not be in order. So we will need
`
`342
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`to go through the manager's amendment and dispense with
`
`343
`
`those amendments, and then your amendment will be the first
`
`344
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`amendment up after we dispose of the amendments to the
`
`345
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`manager's amendment.
`
`346
`
`347
`
`Mr. Watt. Will the chairman yield?
`
`Chairman Smith. I had an inquiry from the gentleman
`
`348
`
`from Wisconsin. Is this on the same subject?
`
`349
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`Mr. Watt. Well, I thought it might help if the
`
`350
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`chairman would talk some about the process. I thought we
`
`351
`
`had understood that all amendments would be in order. And
`
`352
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`if the chairman explains that, it might clarify some issues
`
`353
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`Mr. Sensenbrenner is raising.
`
`354
`
`Chairman Smith. If the gentleman will yield. The
`
`355
`
`fact that we are taking up the manager's amendment initially
`
`356
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`does not preclude anyone from offering an amendment. There
`
`357
`
`are going to be two opportunities to offer an amendment.
`
`358
`
`One will be when we are dealing with the manager's
`
`359
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`amendment, and one will be subsequent to that. And those
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`360
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`amendments will be to the underlying bill. There is no
`
`361
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`intention to shut off any debate or the opportunity for
`
`
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`HJU104000 PAGE 19
`
`362
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`anybody to offer an amendment, if anybody is concerned about
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`363
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`that.
`
`364
`
`365
`
`Mr. Sensenbrenner. Mr. Chairman?
`
`Chairman Smith. The gentleman from Wisconsin, Mr.
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`366
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`Sensenbrenner, is recognized --
`
`367
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`Mr. Sensenbrenner. Mr. Chairman, I have two
`
`368
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`parliamentary inquiries at minimum.
`
`369
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`Chairman Smith. The gentleman will state his first
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`370
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`parliamentary inquiry.
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`371
`
`Mr. Sensenbrenner. Well, the first parliamentary
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`372
`
`inquiry is that many of the amendments that have been
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`373
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`drafted to the manager's amendment have also been drafted to
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`374
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`the underlying bill. Does this mean that we will have to
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`375
`
`debate the amendments that are similar or identical two
`
`376
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`times rather than one, particularly if the manager's
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`377
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`amendment is voted down?
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`378
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`Chairman Smith. I am advised that if the gentleman
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`379
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`offers an amendment to the manager's amendment and it is
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`380
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`defeated, he can then offer that same amendment in
`
`381
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`consideration of the underlying bill. That is at his
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`382
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`discretion.
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`383
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`Mr. Sensenbrenner. A further parliamentary inquiry.
`
`
`
`HJU104000 PAGE 20
`
`384
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`Does this mean that if the amendment to the manager's
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`385
`
`amendment is defeated, then the amendment can be offered to
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`386
`
`the underlying bill, or it means that if the manager's
`
`387
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`amendment is defeated, the amendment can be offered to the
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`388
`
`underlying bill?
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`389
`
`Chairman Smith. I am told that if the portion of the
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`390
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`manager's amendment that was amended successfully -- that
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`391
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`can not be amended again under the underlying bill.
`
`392
`
`393
`
`394
`
`Mr. Sensenbrenner. A further parliamentary inquiry.
`
`Chairman Smith. The gentleman will proceed.
`
`Mr. Sensenbrenner. Since the manager's amendment is
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`395
`
`being offered as an amendment and not as an amendment in the
`
`396
`
`nature of a substitute, that would make any amendments to
`
`397
`
`the amendment to the manager's amendment a third degree
`
`398
`
`amendment and consequently out of order. Am I correct in
`
`399
`
`that?
`
`400
`
`Chairman Smith. The gentleman is correct. Third
`
`401
`
`degree amendments are not in order.
`
`402
`
`Mr. Sensenbrenner. Then, Mr. Chairman, I would ask
`
`403
`
`unanimous consent, notwithstanding any rule to the contrary,
`
`404
`
`that there can be third degree amendments offered to the
`
`405
`
`amendment to the manager's amendment.
`
`
`
`HJU104000 PAGE 21
`
`406
`
`Chairman Smith. And I would object to that unanimous
`
`407
`
`consent request.
`
`408
`
`Mr. Watt. Mr. Chairman? Reserving the right to
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`409
`
`object, without objecting --
`
`410
`
`411
`
`Chairman Smith. The gentleman from North Carolina.
`
`Mr. Watt. I honestly had understood that that was the
`
`412
`
`procedure that you had agreed to. As I understood it, that
`
`413
`
`the process by which you were offering the manager's
`
`414
`
`amendment, being a little bit our of kilter, I thought you
`
`415
`
`had agree to basically do what Representative Sensenbrenner
`
`416
`
`has just suggested.
`
`417
`
`Chairman Smith. Let me restate what I understand to
`
`418
`
`be the case. All members are able to offer second degree
`
`419
`
`amendments but third degree amendments are out of order.
`
`420
`
`Members have an opportunity to amend the manager's amendment
`
`421
`
`if those amendments are germane, and then we will have
`
`422
`
`another opportunity to offer amendments to the underlying
`
`423
`
`bill when we dispense with the amendments to the manager's
`
`424
`
`amendment.
`
`425
`
`Mr. Watt. Further reserving the right to object, Mr.
`
`426
`
`Chairman. Well, I yield back.
`
`427
`
`Chairman Smith. The gentleman from New York, Mr.
`
`
`
`HJU104000 PAGE 22
`
`428
`
`Nadler, is recognized.
`
`429
`
`Mr. Nadler. A parliamentary inquiry. Was I correct
`
`430
`
`in understanding the previous parliamentary inquiry response
`
`431
`
`that if an amendment was offered successfully to the
`
`432
`
`manager's amendment, that if the manager's amendment was
`
`433
`
`then defeated, the amendment that had been offered to the
`
`434
`
`manager's amendment could not then be offered to the
`
`435
`
`underlying bill?
`
`436
`
`Chairman Smith. No. The gentleman did not understand
`
`437
`
`correctly. If an amendment is offered to the manager's
`
`438
`
`amendment and defeated, that amendment --
`
`439
`
`Mr. Nadler. No, no. If the amendment is offered to
`
`440
`
`the manager's amendment and is successful, but the manager's
`
`441
`
`amendment is then defeated, could the amendment then be
`
`442
`
`offered to the main bill?
`
`443
`
`444
`
`445
`
`Chairman Smith. The answer is yes.
`
`Mr. Nadler. Thank you.
`
`Mr. Sensenbrenner. Mr. Chairman, a further
`
`446
`
`parliamentary inquiry.
`
`447
`
`Chairman Smith. The gentleman from Wisconsin is
`
`448
`
`recognized.
`
`449
`
`Mr. Sensenbrenner. Does the chair’s prior response to
`
`
`
`HJU104000 PAGE 23
`
`450
`
`my parliamentary inquiry mean that if during debate on an
`
`451
`
`amendment to the manager's amendment, there is an agreement
`
`452
`
`that the manager's amendment can be modified or amended in
`
`453
`
`order to lessen the controversy of it, there is no way that
`
`454
`
`such amendment can be offered?
`
`455
`
`Chairman Smith. To address the gentleman’s inquiry, I
`
`456
`
`can entertain those amendments on a case-by-case basis and I
`
`457
`
`will be happy to do so.
`
`458
`
`Mr. Sensenbrenner. Mr. Chairman, I would once again
`
`459
`
`state my unanimous consent request that notwithstanding any
`
`460
`
`rule to the contrary, that third degree amendments may be
`
`461
`
`offered to amendments to the manager's amendment.
`
`462
`
`Chairman Smith. I do object to that unanimous consent
`
`463
`
`request. As I explained, we will take them up on a case-by-
`
`464
`
`case basis.
`
`465
`
`466
`
`Ms. Lofgren. A parliamentary inquiry, Mr. Chairman?
`
`Chairman Smith. The gentlewoman from California, Ms.
`
`467
`
`Lofgren.
`
`468
`
`Ms. Lofgren. I am seeking to understand this because
`
`469
`
`this is not the way we usually proceed, and I am sure that
`
`470
`
`the chairman wishes to have as free an exchange as possible
`
`471
`
`because we have worked on a bipartisan basis and the
`
`
`
`HJU104000 PAGE 24
`
`472
`
`divisions are really not along party lines on these issues.
`
`473
`
`We really have been working on this since 1997. Even though
`
`474
`
`I think Mr. Sensenbrenner is offering some amendments I
`
`475
`
`don't agree with, but I would hope that he would be given
`
`476
`
`the opportunity to pursue them. I think that we will have a
`
`477
`
`greater degree of success here as a committee if we allow
`
`478
`
`that to occur.
`
`479
`
`And here is the question. Mr. Sensenbrenner, for
`
`480
`
`example, has an amendment number 4 to the manager's
`
`481
`
`amendment. I would not support number 4, but should his
`
`482
`
`amendment number 6 prevail on the underlying bill, I would.
`
`483
`
`Chairman Smith. Would the gentlewoman yield for a
`
`484
`
`minute? I expect, if such amendments are offered, to be
`
`485
`
`generous in recognizing those individuals, but as a rule,
`
`486
`
`third degree amendments are not in order and frankly are
`
`487
`
`sometimes dilatory, and I want to be able to maintain the
`
`488
`
`process.
`
`489
`
`490
`
`The gentleman from North Carolina is recognized again.
`
`Mr. Watt. Mr. Chairman, I want to reiterate. I don't
`
`491
`
`think anybody is doing this for dilatory purposes. I think
`
`492
`
`we would be better served to have a freer discussion of
`
`493
`
`these issues if we just agreed to the unanimous consent
`
`
`
`HJU104000 PAGE 25
`
`494
`
`request. I thought that is what the chairman had indicated
`
`495
`
`he was planning to do, and I will state that on the record
`
`496
`
`again. We had this discussion yesterday. I thought we had
`
`497
`
`gone beyond this point and that we were going to be able to
`
`498
`
`allow everybody who has been involved in this, everybody
`
`499
`
`being of good will, there being no partisan gamesmanship
`
`500
`
`going on, and very little likelihood of anybody abusing this
`
`501
`
`for dilatory purposes, to allow amendments to be offered
`
`502
`
`freely so that the committee could work --
`
`503
`
`Chairman Smith. I thank the gentleman for his
`
`504
`
`comments. My guess is that the gentleman is going to be
`
`505
`
`very satisfied with the way we proceed, and I would expect
`
`506
`
`to be able to entertain those amendments.
`
`507
`
`In fact, we will proceed now, and I will recognize
`
`508
`
`myself for a manager's amendment to the underlying bill.
`
`509
`
`The clerk will report the amendment.
`
`510
`
`Ms. Kish. “Amendment to H.R. 1249, offered by Mr.
`
`511
`
`Smith of Texas. Page 2, insert the following before line 1
`
`512
`
`and redesignate succeeding sections and reference thereto
`
`513
`
`accordingly.”
`
`514
`
`Chairman Smith. Without objection, the amendment is
`
`515
`
`considered as read.
`
`
`
`HJU104000 PAGE 26
`
`516
`
`517
`
`[The information follows:]
`
`
`
`HJU104000 PAGE 27
`
`518
`
`Chairman Smith. And I will recognize myself for
`
`519
`
`purposes of explaining the amendment.
`
`520
`
`The manager's amendment was developed based on
`
`521
`
`discussions with a cross-range of industry stakeholders.
`
`522
`
`The amendment also reflects personal requests made by
`
`523
`
`individual members.
`
`524
`
`Mr. Watts. Mr. Chairman, I am having trouble hearing
`
`525
`
`down on this end for some reason.
`
`526
`
`Chairman Smith. Let me have a mic check and I know we
`
`527
`
`are working on it.
`
`528
`
`The manager's amendment was developed based on
`
`529
`
`discussions --
`
`530
`
`531
`
`[Pause.]
`
`Chairman Smith. The manager's amendment was developed
`
`532
`
`based on discussions with a cross-range of industry
`
`533
`
`stakeholders. The amendment also reflects personal requests
`
`534
`
`made by individual members.
`
`535
`
`The main provisions include the following: a
`
`536
`
`clarification that the 1-year grace period protects any
`
`537
`
`disclosure to the public by the inventor; a GAO study about
`
`538
`
`patent litigation; a narrowing of the prior use defense by
`
`539
`
`limiting it to process patents, restricting its application
`
`
`
`HJU104000 PAGE 28
`
`540
`
`to the United States, and eliminating possible conflict
`
`541
`
`between an inventor’s use of the grace period and the
`
`542
`
`potential for prior use rights arising from the grace period
`
`543
`
`publication; an extension of the inter partes reexamination
`
`544
`
`time line from 9 months after service of a complaint to 12
`
`545
`
`months while raising the threshold to a reasonable
`
`546
`
`likelihood that the petitioner would prevail; a provision
`
`547
`
`that sunsets the PTO director’s authority to adjust the fee
`
`548
`
`schedule after 4 years so that Congress can evaluate it; a
`
`549
`
`clarification that a petitioner may file a written response
`
`550
`
`during an inter partes proceeding; deletion of the venue,
`
`551
`
`cost-shifting, and mandatory de novo review provisions that
`
`552
`
`apply to litigation of because method patents in U.S.
`
`553
`
`district court; and creation of a joinder provision that
`
`554
`
`authorizes a Federal court to stay a patent infringement
`
`555
`
`action brought against the non-manufacturing party under
`
`556
`
`prescribed conditions.
`
`557
`
`I urge members to support the amendment which
`
`558
`
`accommodates input from many members of the committee, as
`
`559
`
`well as various stakeholders, and improves the bill.
`
`560
`
`I will now recognize members who have amendments to
`
`561
`
`the manager's amendment, and once again, once we get through
`
`
`
`HJU104000 PAGE 29
`
`562
`
`these amendments, we will go to amendments to the underlying
`
`563
`
`bill. I will now recognize the gentleman from Wisconsin,
`
`564
`
`Mr. Sensenbrenner.
`
`565
`
`566
`
`567
`
`Mr. Sensenbrenner. Mr. Chairman, I have --
`
`Chairman Smith. If the gentleman will suspend.
`
`The gentleman from Michigan, the ranking member, Mr.
`
`568
`
`Conyers, is recognized to speak on the manager's amendment
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