Case: 17-14849 Doc: 25 Filed: 02/16/18 Page: 1 of 11
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`UNITED STATES BANKRUPTCY COURT
`FOR THE WESTERN DISTRICT OF OKLAHOMA
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`In re:
`YOUTOO TECHNOLOGIES, LLC,
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`Debtor(s)
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`Case No. 17-14849-JDL
`Chapter 7
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`YOUTOO TECHNOLOGIES, LLC’S RESPONSE AND OBJECTION TO
`TWITTER, INC’S MOTION TO LIFT THE AUTOMATIC STAY
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`Youtoo Technologies, LLC (“Youtoo”) hereby responds and objects to the Motion
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`of Twitter, Inc. (“Twitter”) to lift the automatic stay (Doc. 21). The automatic stay does
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`apply to the inter partes review proceedings (“IPR Proceedings”) of the Patent and Trial
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`Appeal Board (“PTAB”) of the United States Patent and Trademark Office (“USPTO”).
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`The IPR proceedings are not an exercise of the PTAB’s regulatory or police power, do
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`not primarily serve a public interest, and are not an exception under 11 U.S.C §
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`362(b)(4). More importantly, lifting the stay upon the IPR Proceedings would defeat the
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`purposes of bankruptcy by damaging the assets and any potential recovery by the
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`creditors. A motion by the U.S. Bankruptcy Trustee for the acceptance of an 11 U.S.C. §
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`363 sale will be before this Court very soon. This sale offers the best chance to give
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`value to the assets and payments to creditors. Lifting the stay on the IPR Proceedings
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`would place Youtoo in a position where it is unable to defend the value of its assets and
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`would likely destroy the sale. Granting Twitter’s Motion would only serve to benefit
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`Twitter at the creditors’ expense. The Motion should be denied.
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`Case: 17-14849 Doc: 25 Filed: 02/16/18 Page: 2 of 11
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`INTRODUCTION
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`Youtoo’s assets are six or more interactive television and gaming patents. Three
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`patents are the subject of patent infringement litigation in the Northern District of Texas,
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`which Youtoo filed against Twitter in order to protect the value of the patents and prevent
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`misuse of their content. Twitter then filed petitions with PTAB for inter partes reviews,
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`which were granted. Without the stay, Youtoo will face immediate deadlines to file
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`responses in the IPR Proceedings, complete with expert testimony and evidence. Youtoo
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`is unable to pay for the services needed to prepare such response and faces the untenable
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`position of being powerless to defend the value of its assets should this Court grant
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`Twitter’s Motion. Twitter has no pecuniary interest in Youtoo or the patents. It’s
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`relationship to this bankruptcy is solely through its involvement in the patent litigation.
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`There are several creditors who do have significant pecuniary interest in Youtoo
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`and the patents, including the two investment funds Covenant Global Alpha Fund, L.P., a
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`creditor, and Covenant Global Alpha Fund, Ltd. (collectively, the “Funds”), and other
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`entities owned by these Funds that are creditors. Youtoo is an asset of the Funds, and a
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`majority of investors are local Oklahoma residents. These Funds acquired ownership of
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`Youtoo and its patents while the Funds were under the management of CFS, LLC and its
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`sole owner Steve Shafer (collectively, “CFS”). Many investors are depending on their
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`investments for retirement, daily living expenses, and medicine, but they have been
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`unable to make any redemptions for more than two years and have suffered significant
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`loss. On April 28, 2017, the Oklahoma County District Court granted the motion of the
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`Funds’ investors for a receiver, and shortly thereafter, CFS resigned. Left with little
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`Case: 17-14849 Doc: 25 Filed: 02/16/18 Page: 3 of 11
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`choice in light of the overwhelming amount of payables dating back to 2013, the new
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`manager of Youtoo filed for bankruptcy in order to protect the remaining value of the
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`assets both for the investors and creditors.
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`A motion by U.S. Bankruptcy Trustee’s to accept an 11 U.S.C. § 363 sale will be
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`filed soon. This sale is dependent on the temporary stay of the IPR proceedings in order
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`to protect the value of the patents during the pendency of the sale. Granting Twitter’s
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`motion and lifting the stay when Youtoo is unable to defend the patents in the IPR
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`Proceedings would destroy the sale.
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`ARGUMENTS AND AUTHORITIES
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`I.
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`PURSUANT TO 11 U.S.C. § 362(a)(1), THE AUTOMATIC STAY
`APPLIES TO THE IPR PROCEEDING
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`Youtoo filed a voluntary Chapter 7 bankruptcy under 11 U.S.C. § 301. Pursuant
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`to 11 U.S.C. § 362(a)(1), that petition operates as an automatic stay—applicable to all
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`entities including governmental units (ie. United States’ agencies)—on:
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`the commencement or continuation, including the issuance or employment
`of process, of a judicial, administrative, or other action or proceedings
`against the debtor, that was or could have been commenced before the
`commencement of the case under this title, or to recover a claim against the
`debtor that arose before the commencement of the case under this title;
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`11 U.S.C. § 362(a)(1) (emphasis added); 11 U.S.C. § 101(15) & (27). “The sweep of the
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`automatic stay is broad and ‘serves as one of the most important protections in
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`bankruptcy law.’” Porter v. Nabors Drilling USA, L.P., 854 F.3d 1057, 1061 (9th Cir.
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`2017) (citing Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210, 1214 (9th Cir. 2002)).
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`The PTAB is a part of the Patent and Trademark Office, which is an administrative
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`agency that oversees administrative proceedings, including inter partes reviews. See 35
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`U.S.C. §§ 1, 6. “Inter partes review is a trial proceeding conducted at the Board to
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`review the patentability of one or more claims in a patent only on a ground that could be
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`raised under [35 U.S.C.] §§ 102 or 103, and only on the basis of prior art consisting of
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`patents
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`or
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`printed
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`publications.”
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` USPTO,
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`Inter
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`Partes
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`Review,
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`https://www.uspto.gov/patents-application-process/appealing-patent-
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`decisions/trials/inter-partes-review (last visited Feb. 13, 2018) (emphasis added)
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`(attached as Ex. 1); 35 U.S.C. § 311. It is an administrative process, and its purpose is to
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`resolve patents more quickly and cheaply outside of court and to give courts the benefit
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`of the USPTO’s expertise. See 157 Cong. Rec. S1053 (Mar. 1, 2011) (attached as Ex. 2)
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`(stating “the entire purpose of the transitional program at the PTO is to reduce the burden
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`of litigation” and would “improve administrative processes so that disputes over patents
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`can be resolved quickly and cheaply without patents being tied up for years in expensive
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`litigation”); NFC Tech. LLC v. HTC Am., Inc., Case No. 2:13-CV-1058-WCB, 2015 U.S.
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`Dist. LEXIS 29573, at *12 (E.D. Tex. Mar. 11, 2015) (“Giving the agency the authority
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`to consider the validity of patents in the inter partes review process was designed in large
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`measure to simplify proceedings before the courts and to give the courts the benefit of the
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`expert agency’s full and focused consideration of the effect of prior art on patents being
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`asserted in litigation.”). The inter partes reviews of Youtoo’s patents are adversarial
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`proceedings initiated by Twitter against the Youtoo. They clearly fall under 11 U.S.C. §
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`362(a)(1), and thus, their continuation is automatically stayed.
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`II.
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`IS NOT EXCEPTED FROM THE
`IPR PROCEEDING
`THE
`AUTOMATIC STAY UNDER 11 U.S.C. § 362(b)(4).
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`Unlike the broad language in 11 U.S.C. § 362(a), the language in subsection (b)
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`governing exceptions to the automatic stay is more specific and limited. Subsection
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`(b)(4) only excepts from the automatic stay “the commencement or continuation of an
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`action or proceeding by a governmental unit . . . to enforce such governmental unit’s or
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`organization’s police and regulatory power . . . .” 11 U.S.C. § 362(b)(4) (emphasis
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`added). This exception was enacted to protect public health and safety and includes
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`actions where the government is suing the debtor to stop violations of fraud,
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`environmental protection, and consumer protection—proceedings that bear no similarity
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`to inter partes reviews described above. In re Edison Mission Energy, 502 B.R. 830, 835
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`(Bankr. N.D. Ill. 2013); 11 U.S.C. § 362 House Judiciary Report cmt. to subsection b(4).
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`“This exception requires both that: 1) the proceeding be brought by a governmental unit
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`and (2) the proceeding be brought to enforce . . . police or regulatory power of the
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`governmental unit.” In re Edison Mission Energy, 502 B.R. at 835. In this case, neither
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`element is satisfied.
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`A. THE IPR WAS NOT BROUGHT BY A GOVERNMENTAL UNIT.
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`IPR Proceedings can only be initiated by a third party. 35 U.S.C. § 311. In this
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`case, Twitter brought the proceedings, and Twitter is not a governmental unit. See 11
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`U.S.C. § 101(27). Neither the USPTO nor the PTAB can bring the proceeding or even
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`join in or commence their own proceeding. Despite Twitter’s assertions to the contrary,
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`the PTAB does not have autonomy over the proceedings. Although the PTAB is able to
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`choose to produce a final written decision after a petitioner withdraws from the
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`proceeding it can only do so after an IPR Proceeding has been instituted, and it is still
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`required to terminate the proceeding “upon the join request of the petitioner and patent
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`owner.” 35 U.S.C. § 317(a).
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`The cases Twitter relies on are distinguishable and do not support its arguments.
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`Unlike the case at hand, they involve instances where the proceedings instituted by
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`private parties were allowed to proceed under the “police power exception” and the
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`governmental unit joined in or commenced its own proceeding. See In Re Halo Wireless
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`Inc., 684 F.3d 581 (5th Cir. 2012) (involving Public Utility Commission actions against
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`telephone companies and finding 11 U.S.C. § 362(b)(4) applied only because the
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`proceedings were being continued by governmental units to enforce state laws and
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`regulations); see also United States ITC v. Jaffe, 433 B.R. 538 (E.D. Va. 2010) (finding
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`the International Trade Commission investigation fits within the § 362(b)(4) exception
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`because the ITC independently chose to commence and investigation and controlled the
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`investigation). In the instance case, PTAB is not a party to the inter partes review, did
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`not initiate the proceeding, is not continuing the proceeding independently or as party,
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`and does not control the proceeding. Thus, the Court should find that § 362(b)(4) does
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`not apply. See In re Edison Mission Energy, 502 B.R. at 837 (finding § 362(b)(4) did not
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`apply because the movant had independently initiated the proceeding before the Illinois
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`Pollution Control Board and no governmental unit had or was going to intervene); see
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`also Porter, 854 F.3d at 1062 (finding that private action under the California Labor
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`Code Private Attorneys General Act did not fall within the governmental unit exception
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`because the proceeding remained within the control of the private citizen and the
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`government “did not request, direct, or join in the filing); In re Taylor, Case No. 15-
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`02730-5-SWH, 2017 Bankr. LEXIS 2392, at *4-7 (Bankr. E.D. N.C. Aug. 24, 2017)
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`(rejecting movant’s police powers argument and finding § 362(b)(4) did not apply to
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`private entity).
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`B. IPR PROCEEDINGS ARE NOT BROUGHT TO ENFORCE THE USPTO’S POLICE
`OR REGULATORY POWER AND ARE PRIMARILY A DISPUTE BETWEEN
`PRIVATE PARTIES.
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` Even in cases where IPR Proceedings are brought by a governmental unit, the
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`bankruptcy court must determine whether the proceeding is “brought to enforce … police
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`or regulatory power of the governmental unit.” In re Edison Mission Energy, 502 B.R. at
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`836. Although proceedings that are authorized by Congress “necessarily effectuate the
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`public policy of the United States,” the court must determine whether on balance, the
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`proceeding is in furtherance of public policies or private interests. Chao v. Hospital
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`Staffing Servs., Inc., 270 F.3d 374, 389 (6th Cir. 2001).
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`These inquiries contemplate that the bankruptcy court, after assessing the
`totality of the circumstances, will determine whether the particular
`regulatory proceeding at issue is designed primarily to protect the public
`safety and welfare or represents a governmental attempt to recover from
`property of the debtor estate, whether on its own claim, or on the
`nongovernmental debts of private parties.
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`In re McMullen, 386 F.3d 320, 325 (1st Cir. 2004); see also In Re Halo Wireless Inc.,
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`684 F.3d at 588. The IPR Proceedings are an adjudication of private rights. The very
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`name of reveals that the proceedings are inter partes, or “between the parties.” The
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`primary purpose of IPR Proceedings is not to enforce any police or regulatory power or
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`serve the public interest. Rather IPR Proceedings serve as an alternate forum for patent
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`disputes and are a mechanism by which the USPTO provides expertise to, and relieves
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`the burden on, district courts in patent litigation. See 157 Cong. Rec. S1053 (Mar. 1,
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`2011); NFC Tech. LLC, 2015 U.S. Dist. LEXIS 29573, at *12. The statutory law
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`governing IPR Proceedings specifically contemplates that the proceedings are frequently
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`related to, and intertwined with, ongoing litigation between the parties. 35 U.S.C. § 315.
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`For example, an inter partes review is completed barred if the petitioner, a private actor,
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`has already filed a civil action challenging the validity of the patent. Id. This contradicts
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`any notion that the purpose of IRP Proceedings are for the USPTO to re-examine its own
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`actions or regulate patent monopolies. Id.
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`Furthermore, any potential public interest is significantly outweighed by the
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`pecuniary benefit to Twitter and the potential damage to Youtoo’s creditors. As the
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`defendant in the patent infringement litigation in the Northern District of Texas, Twitter
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`faces potential liability for significant damages. Twitter filed the inter partes review in
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`hopes that the PTAB would find the patents invalid and give Twitter ammunition to
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`defeat Youtoo’s claim. To lift the stay on those proceedings now when Youtoo is unable
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`to pay for the services necessary to defend the value of the patents, which are significant
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`assets of the bankruptcy estate, would only benefit Twitter. “[W]hen the action
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`incidentally serves public interests but more substantially adjudicates private rights,
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`courts should regard the suit as outside the police power exception, particularly when a
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`successful suit would result in a pecuniary advantage.” Chao, 270 F.3d at 390 (finding
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`that suit by Secretary of Labor under the FLSA for same wages and damages primarily
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`benefitted the private rights of the employee and was not excepted from the automatic
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`stay under § 362(b)(4) despite the public interest in enforcing wage laws); see also
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`Missouri v. U.S. Bankruptcy Court for E.D., 647 F.2d 768, 776 (finding State’s attempt to
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`enforce grain laws related to pecuniary interests in the debtor’s property and was
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`therefore outside the police power exception of § 362(b)(4)). An assessment of all the
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`circumstances, the nature of the inter partes review, and the applicable law establishes
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`that the IPR Proceedings are not excepted from the automatic stay under 11 U.S.C. §
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`362(b)(4).
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`III. LIFTING THE STAY WOULD PREJUDICE THE ASSETS AND THE CREDITORS
`AND TWITTER HAS NOT SHOWN SUFFICIENT CAUSE UNDER 11 U.S.C. §
`362(d)(1).
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`Twitter asks this Court to lift the stay under 11 U.S.C. § 362(d)(1), which allows a
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`stay to be terminated only “for cause, including the lack of adequate protection of an
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`interest in property of such party in interest.” 11 U.S.C. § 362(d)(1). This provision
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`contemplates that there are circumstances in which a creditor may not be sufficiently
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`protected by bankruptcy or in which an outside proceeding bears no relation to the
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`bankruptcy or the purpose of the stay, such as a child custody proceeding. See 11 U.S.C.
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`§ 362 House Judiciary Report cmt. to Subsection d. A decision under this statute lies
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`within the Court’s discretion. In re Towner Petroleum Co., 48 B.R. 182, 186 (Bankr.
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`W.D. Okla. 1985). “The power to modify or vacate the stay is exercised by the
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`bankruptcy court ‘according to the particular circumstances of the case and is to be
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`guided by considerations that under the law make for the ascertainment of what is just to
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`the claimants, the debtor and the estate.” Id. (citing Foust v. Munson Steamship Lines,
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`299 U.S. 77, 83 (1936)). The most important factor is the effect of the outside litigation
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`on the administration of the estate. Id. at 190. Another part of that consideration is the
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`purpose of the automatic stay, which is to give the debtor “a breathing spell” from
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`creditors and to protect the creditors by preventing the diminution or dissipation of the
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`estate’s assets. 11 U.S.C. § 362 House Judiciary Report cmt.; In re Towner Petroleum
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`Co., 48 B.R. at 185.
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`Lifting the stay could significantly damage Youtoo’s assets and destroy the 11
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`U.S.C. § 363 sale that represents the best opportunity to bring value to the estate and
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`payment to the creditors. It would not be just to Youtoo or its creditors, would not
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`benefit the administration of the estate, and would defy the very purpose of the automatic
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`stay. The harm posed to estate and creditors far outweighs any potential harm caused by
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`preserving the status quo. Importantly, Twitter itself admits the inter partes review will
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`eventually be completed and does not assert that it will suffer any harm from the delay.
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`Twitter’s has failed to establish cause, and its motion should be denied.
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`IV. WAIVING THE 14-DAY STAY UNDER FEDERAL RULE OF BANKRUPTCY
`PROCEDURE 4001(A)(3) WOULD PREJUDICE THE ASSETS AND CREDITORS.
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`Rule 4001(a)(3) provides that the effect of an order granting relief from an
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`automatic stay is stayed for 14 days after entry of the order. Twitter’s only argument in
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`support of its request that the Court waive this stay is its false assertion that the
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`continuing IPR Proceedings will not prejudice the estate. As set forth above, the
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`continuation of that proceeding would harm the estates’ assets and creditors, and
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`Twitter’s request should be denied.
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`CONCLUSION
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`WHEREFORE, Youtoo Technologies, LLC requests that the Court deny Twitter,
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`Inc.’s Motion (Doc. 21) in its entirety and award such further and equitable relief as the
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`Court deems proper.
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`YOUTOO TECHNOLOGIES, LLC
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`
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`By: /s/ O. Clifton Gooding
`
` O. CLIFTON GOODING (OBA #10315)
`
`OF THE FIRM:
`
`GOODING LAW FIRM
`A Professional Corporation
`204 North Robinson Avenue, Suite 650
`Oklahoma City, Oklahoma 73102
`405.948.1978 – Telephone
`405.948.0864 – Telecopier
`cgooding@goodingfirm.com - Email
`
`Attorney for YOUTOO TECHNOLOGIES, LLC
`
`NOTICE OF HEARING
`
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`You are hereby notified that a hearing on Twitter, Inc.’s Motion for Order Holding
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`Automatic Stay does not Apply and for Relief from the Automatic Stay is set for preliminary
`hearing on Thursday February 22, 2018 at 9:30 a.m., with a Final Hearing to be held on
`Wednesday March 21, 2018 at 1:30 p.m., all before the Honorable Janice D. Loyd, 2nd Floor
`Courtroom, US Bankruptcy Court, 215 Dean A. McGee, Oklahoma City, Oklahoma.
`
`
`CERTIFICATE OF SERVICE
`
`
`I hereby certify that on the 16th day of February, 2018 copies of the above referenced
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`document were forwarded via the Court's Electronic Filings System to the following, and all
`parties receiving notice thereon:
`
`Douglas N. Gould, Esq.
`Tami J. Hines, Esq.
`Steven W. Soule, Esq.
`Office of the UST
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`/s/ O. Clifton Gooding
`O. Clifton Gooding
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`2/13/2018
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`Case: 17-14849 Doc: 25-1 Filed: 02/16/18 Page: 1 of 1
`Inter Partes Review I USPTO
`
`Inter Partes Review
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`Inter partes review is a trial proceeding conducted at the Board to review the patentability of one or more claims in a
`patent only on a ground that could be raised under§§ 102 or 103, and only on the basis of prior art consisting of patents
`or printed publications. For first-inventor-to-file patents, inter partes review process begins with a third party (a person
`who is not the owner of the patent) filing a petition after the later of either: (1) 9 months after the grant of the patent or
`issuance of a reissue patent; or (2) if a post grant review is instituted, the termination of the post grant review. These
`deadlines do not apply to first-to-invent patents. The patent owner may file a preliminary response to the petition. An
`inter partes review may be instituted upon a showing that there is a reasonable likelihood that the petitioner would prevail
`with respect to at least one claim challenged. If the proceeding is instituted and not dismissed, a final determination by
`the Board will be issued within 1 year (extendable for good cause by 6 months). The procedure for conducting inter partes
`review took effect on September 16, 2012, and applies to any patent issued before, on, or after September 16, 2012.
`
`• 35USCCh.31 C1'§311-§319
`Inter Partes Review Rules c? (37 CFR Ch. 42, Subpart B)
`•
`•
`Inter Partes Review FAQs
`• To search for an IPR, click on the system link for PTAB E2E. Additional information is located on the PTAB E2E
`information page.
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`https://www.uspto.gov/patents-application-processfappealing-patent-decisions/lrials/inter-partes-review
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`Case: 17-14849 Doc: 25-2 Filed: 02/16/18 Page: 1 of 2
`81053
`March 1, 2011
`CONGRESSIONAL RECORD-SENATE
`beyond the jurisdiction of the Judici(cid:173)
`permitted to speak therein for up to 10
`the PTO as prior art and bad patents
`ary Committee and as a result was not
`minutes each.
`are issued. The holders of business
`considered previously, but I trust it
`The PRESIDING OFFICER. Without
`method patents then attempt to ex(cid:173)
`will win the support of our colleagues
`objection, it is so ordered.
`tract settlements from the banks by
`Mr. MENENDEZ. Mr. President, I
`on the floor. I am glad that this provi(cid:173)
`suing them in plaintiff-friendly courts
`suggest the absence of a quorum.
`sion has been included in the man(cid:173)
`and tying them up in years of ex(cid:173)
`The PRESIDING OFFICER. The
`agers' amendment, of which I am a co(cid:173)
`tremely costly litigation.
`clerk will call the roll.
`sponsor.
`This is not a small problem. Around
`The assistant legislative clerk pro(cid:173)
`My conversations with Rhode Island
`11,000 new applications for patents on
`ceeded to call the roll.
`inventors also made clear that the fear
`business methods are filed every year,
`Mr. SCHUMER. Mr. President, I ask
`of protracted litigation also dampens
`and financial patents are being liti(cid:173)
`unanimous consent that the order for
`innovation. Unfortunately, numerous
`gated almost 30 times more than pat(cid:173)
`the quorum call be rescinded.
`poor-quality patents have issued in re(cid:173)
`ents as a whole. This is not right, it is
`The PRESIDING OFFICER. Without
`cent years, resulting in seemingly end(cid:173)
`not fair, and it is taking desperately
`objection, it is so ordered.
`less litigation that casts a cloud over
`needed money and energy out of the
`patent ownership. Administrative proc(cid:173)
`economy and putting it into the hands
`esses that should serve as an alter(cid:173)
`of a few litigants. So I am very pleased
`native to litigation also have broken
`Congress is going to fight it.
`The Schumer-Ky! amendment, which
`down, resulting in further delay, cost,
`was included in the managers' package
`and confusion.
`we just adopted, will allow companies
`The America Invents Act will take
`on these problems by ensuring that
`that are the target of one of these friv(cid:173)
`higher quality patents issue in the fu(cid:173)
`olous business method patent lawsuits
`ture. This will produce less litigation
`to go back to the PTO and dem(cid:173)
`onstrate, with the appropriate prior
`and create greater
`incentives
`for
`art, that the patent shouldn't have
`innovators to commit the effort and re(cid:173)
`sources to create the next big idea.
`been issued in the first place. That way
`Similarly, the bill will impr:ove admin(cid:173)
`bad patents can be knocked out in an
`efficient administrative proceeding,
`istrative processes so that d!ilsputes
`avoiding costly litigation.
`over patents can be resolved quickly
`One of the most critical elements of
`and cheaply without patents being tied
`this amendment has to do with the
`up for years in expensive litigation .
`stay of litigation while review of the
`This ootly must not pass up this
`patent is pending at the PTO. The
`chance to enhance innovation and en(cid:173)
`amendment includes a four-factor test
`ergize our economy. We must see this
`for the granting of a stay that places a
`bill through the Senate, and we must
`very heavy thumb on the scale in favor
`work with the House to see it passed
`of the stay. Indeed, the test requires
`promptly into law. It is true that the
`the court to ask whether a stay would
`bill is a compromise and may not re(cid:173)
`reduce the burden of the litigation on
`flect all of everyone's priorities. Im(cid:173)
`the parties and the court. Since the en(cid:173)
`provements to the bill may still be pos(cid:173)
`tire purpose of the transi!tional pro(cid:173)
`sible. To that end, I expect a produc(cid:173)
`gram at the PTO i.s to reduce the bur(cid:173)
`tive debate on the floor and a construc(cid:173)
`den of Htiigation, i
`is nearly impos(cid:173)
`tive dialog with the House. I look for(cid:173)
`sib e to dmagJne a scenario in which a
`ward to continuing to work with the
`district court would no isstle a stay.
`chairman, my colleagues, and all inter(cid:173)
`In response to concerns that earlier
`ested parties to craft a bill that gen(cid:173)
`versions of the amendment were too
`erates the broadest consensus possible.
`broad, we have modified it so it is nar(cid:173)
`But we must not lose sight of the
`rowly targeted. We want to make sure
`need for action. Our patent system has
`to capture the business method patents
`gone 60 years without improvements. It
`which are at the heart of the problem
`needs repair. Now is the time to ener(cid:173)
`and
`avoid
`any
`collateral
`cir(cid:173)
`gize our innovation economy, to create
`cumstances.
`jobs, and to secure continuing Amer(cid:173)
`In conclusion, I believe the amend(cid:173)
`ican leadership in the fields of medi(cid:173)
`ment takes an important step in the
`cine, science, and technology. Hard
`direction of eliminating the kinds of
`work and ingenuity long have been the
`frivolous lawsuits the jurisprudence on
`backbone of this country. Let's not get
`business method patents have allowed.
`in their way.
`I am very grateful to the chairman and
`Mr. President, I suggest the absence
`the ranking member, Senator KYL, and
`of a quorum.
`I support the managers' amendment
`The PRESIDING OFFICER. The
`and the America Invents Act as a
`clerk will call the roll.
`whole.
`The assistant legislative clerk pro(cid:173)
`Finally, I would like to say a few
`ceeded to call the roll.
`words about Senator COBURN's proposal
`Mr. MENENDEZ. Mr. President, I ask
`on fee diversion. I think his idea, which
`unanimous consent that the order for
`is
`incorporated
`in
`the managers'
`the quorum call be rescinded.
`amendment, makes a lot of sense; that
`The PRESIDING OFFICER (Mr. BEN(cid:173)
`is, to let the PTO keep the fees they
`NET). Without objection, it is so or(cid:173)
`charge so they are self-funded and we
`dered.
`don't have to spend taxpayer money to
`fund them every year.
`Last year, when we were debating the
`Wall Street reform bill, Senator JACK
`REED and I made a similar proposal for
`the SEC, which ultimately didn't make
`it into the final bill. I just wanted to
`
`AMERICA INVENTS ACT
`Mr. SCHUMER. Mr. President, I rise
`to speak in support of the America In(cid:173)
`vents Act generally and about the
`managers'
`amendment
`specifically.
`The America Invents Act, also known
`as the patent reform bill, has been
`pending for many years and has been
`the subject of extensive debate, nego(cid:173)
`tiation, and revisions. In its current
`draft, it does much needed good to help
`protect the American innovation econ(cid:173)
`omy by updating and modernizing our
`patent system.
`The patent system in the United
`States is designed to protect innova(cid:173)
`tion and inventions and investment.
`But over the last several decades, the
`Patent and Trademark Office has be(cid:173)
`come bogged down and overburdened
`by inefficient process and outdated
`law. The result is a heavy burden on
`the innovative work that is the engine
`of our economy.
`I wish to commend Senator LEAHY.
`He has gone the extra mile for this bill
`for many years. I am proud and glad he
`is seeing his work come to fruition as
`we finally debate the bill on the floor.
`Passage of the bill is in sight. I also
`wish to commend the ranking member
`of the Judiciary Committee, Senator
`GRASSLEY, who worked with him, as
`well as Senator KYL, who has taken a
`leading role on the Republican side, for
`their hard work in crafting a bill that
`effectively modernizes the patent sys(cid:173)
`tem, while paying attention to the
`many and varied demands different
`sectors of the economy exert upon it.
`I am particularly pleased the chair(cid:173)
`man has decided to adopt the Schumer(cid:173)
`Kyl amendment on business method
`patents into
`the managers' amend(cid:173)
`ment. It is a critical change that this
`bill finally begins
`to address
`the
`scourge of business method patents
`currently plaguing the financial sector.
`Business method patents are anathema
`to the protection the patent system
`provides because they apply not to
`novel products or services but to ab(cid:173)
`stract and common concepts of how to
`do business.
`Often, business method patents are
`issued for practices that have been in
`widespread use in the financial indus(cid:173)
`try for years, such as check imaging or
`one-click checkout. Because of the na(cid:173)
`ture of the financial services industry,
`those practices aren't identifiable by
`
`MORNING BUSINESS
`Mr. MENENDEZ. Mr. President, I ask
`unanimous consent that the Senate
`proceed to a period for the transaction
`of morning business, with Senators
`
`Page 13 of 14
`
`Page 13 of 14
`
`

`

`Case: 17-14849 Doc: 25-2 Filed: 02/16/18 Page: 2 of 2
`81054
`March 1, 2011
`CONGRESSIONAL RECORD- SENATE
`3. Taking testimony. For the purpose of
`2. ADDITIONAL MEETINGS.-The Chairman,
`take this time to make a few points
`taking testimony, other than sworn testi(cid:173)
`after consultation with the Ranking Minor(cid:173)
`about this commonsense proposal.
`ity Member, may call such additional meet(cid:173)
`mony, by
`the Committee or any sub(cid:173)
`First, for the last 15 years, the SEC
`ings as he deems necessary.
`committee, one member of the Committee or
`hasn't spent a dime of taxpayer money.
`3. SPECIAL MEETINGS.-Special meetings of
`subcommittee shall constitute a quorum.
`For 15 years, the SEC has had no im(cid:173)
`the Committee may be called by a majority
`For the purpose of taking sworn testimony
`pact on the deficit. This is because
`of the members of the Committee in accord(cid:173)
`by the Committee, three members shall con(cid:173)
`ance with paragraph 3 of Rule XXVI of the
`Congress, in 1996, amended the securi(cid:173)
`stitute a quorum, and for the taking of
`Standing Rules of the Senate.
`ties laws to provide that 100 percent of
`sworn testimony by any subco