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Public Statements

Hearing of the Courts, The Internet, and Intellectual Property Subcommittee: Committee Print Regarding Patent Quality Improvement

By:
Date:
Location: Washington, DC


HEADLINE: HEARING OF THE COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY SUBCOMMITTEE OF THE HOUSE JUDICIARY COMMITTEE

SUBJECT: COMMITTEE PRINT REGARDING PATENT QUALITY IMPROVEMENT

CHAIRED BY: REPRESENTATIVE LAMAR SMITH (R-TX)

WITNESSES: JON W. DUDAS, UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY & DIRECTOR OF THE U.S. PATENT AND TRADEMARK OFFICE; RICHARD C. LEVIN, PRESIDENT, YALE UNIVERSITY ON BEHALF OF THE NATIONAL RESEARCH COUNCIL;

DR. NATHAN P. MYHRVOLD, CHIEF EXECUTIVE OFFICER, INTELLECTUAL VENTURES; DARIN E. BARTHOLOMEW, SENIOR ATTORNEY, PATENT DEPARTMENT, JOHN DEERE AND COMPANY ON BEHALF OF THE FINANCIAL SERVICES ROUNDTABLE

BREAK IN TRANSCRIPT

Mr. SMITH. The Subcommittee on Courts, the Internet, and Intellectual Property will come to order.

We appreciate all the interest demonstrated by all the folks today. This is an important hearing. It is the first of several hearings on the subject, but I'm glad for everyone's interest.

Also, let me say that there is a concurrent Members-only briefing on Iraq that is being given by the Secretary of Defense, and I know we've lost several Members to that activity. Nevertheless, it doesn't diminish from what is said nor the importance of the meeting itself.

I'll recognize myself for an opening statement and then recognize the Ranking Member, and then we'll get to our witnesses as soon thereafter as possible.

This hearing is the first of two that we will conduct this month on patent reform. More specifically, today the Subcommittee will explore the merits of a committee print that incorporates a number of changes to improve the quality of patents issued by the U.S. Patent and Trademark Office.

The print also speaks to certain patent practices that disrupt the operations of manufacturers and other businesses.

The Subcommittee will hold its second hearing on the print next week and a third hearing on a bill that I will introduce shortly after that.

While the Subcommittee has documented a steady increase in application pendency and backlogs at the PTO in recent years, the consensus view among agency officials and the inventor community is that efforts to address these problems should not take precedent over improving patent quality.

Patents of questionable scope or validity waste valuable resources by inviting third party challenges and ultimately discourage private sector investment.

Accordingly, our Subcommittee has pursued a number of initiatives over the past decade to improve the operations of the PTO and the patent system. But concern over patent quality and its effect on the economy at large has not been confined to Congress and the PTO.

Comprehensive studies recently issued by the Federal Trade Commission and the National Academies generated much discussion within inventor, industry, and Government circles about the present patent system and how it could be improved.

Critics of the U.S. patent system became more vocal as their ranks swelled. They maintained that the gains of the previous decade were too incremental or otherwise insufficient.

The Subcommittee responded in the last Congress by conducting oversight hearings on seven reform proposals.

While we did not move an omnibus reform bill in 2004, the hearings contributed to the growing sentiment that favors enactment of such legislation in this Congress.

The committee print is a first step in that process. It contains most of the leading recommendations developed by the PTO and a broad cross-section of industry and trade associations that are involved in the formulation of patent policy.

It is expected that small businesses, independent inventors, and other interested parties also will participate in this dialogue and the eventual drafting of a bill based on the print that I expect to move this spring.

I realize many competing interests are affected by our work on this broad topic, With so much on our plate, ours is an ambitious undertaking, at least by my account, but we still expect to succeed.

With that, I'll recognize the Ranking Member for his opening comments as well.

BREAK IN TRANSCRIPT

Mr. SMITH. Thank you all for your encouraging comments as well as your constructive suggestions.

I'm pleased in looking at everybody's testimony that there seems to be so much agreement. Needless to say, that's not surprising that there's going to be some disagreement, and maybe we can talk about two or three of those issues a little bit more extensively.

Let me go through the print and let me know if you disagree with some of my conclusions.

This is section by section. Section 3, the first inventor to file, the first to file, it's my understanding that everyone supports that, although, Mr. LaFuze, I realize you feel that harmonization only goes so far, and I agree with some of the points that you have made there. But just in general I'm talking about here.

On Section 4, the right to a patent, I think generally everyone supports that or doesn't have a position. Same with duty of candor.

Section 6, the right of the inventor to obtain damages. Paragraph 6 I think most support, though there are some changes and some details to be worked out.

Injunctions is an area—let me come back to that in a minute because I know there is some disagreement.

The same thing on continuation applications. On section 9, post-grant proceedings, expansion of 18-month publication, everyone seemed to support.

Let's see on—let's see. Let me jump over to the other part of post-grant opposition. General support with changes, and does anyone disagree with Mr. Lutton's suggestion for the two windows or are you familiar with that. Does anyone have any strong opposition to that? Just a little bit of a variation of a theme?

I don't want to get bogged down on this, but, Mr. Hawley, yes.

BREAK IN TRANSCRIPT

Mr. SMITH. Okay. When it comes right down to it, we're just talking about a few months to differentiate you all, and I don't think in the end that's going to be one of the real areas of disagreement. We'll I suspect be able to work that out.

But another subject that's a little bit more—it's equally if not more critical are injunctions and there is some disagreement there. Mr. Lutton, I think you feel that the current system is not working.

Do you want to explain why? Whereas let's see Mr. Kushan opposes the reform as well. If you'll give your reasons for what' wrong with the status quo as well as whether you see any areas where we can talk more about middle ground?

BREAK IN TRANSCRIPT

Mr. SMITH. Mr. Boucher, thank you for your earlier comments as well as your questions. I might have guessed with all witnesses being lawyers we were going to have a little bit of a problem with time constraints. But we had a lot to discuss today as well.

Let me just make the observation that I think it's evident to anyone who is here that not only is this an important piece of legislation, but we're going to go forward in a bipartisan way and I appreciate the supportive comments on both sides of the podium up here.

We're also serious about going forward in an expeditious way. We have a tentative mark up scheduled for the end of May. That gives us I think a reasonable amount of time to continue our discussions. And we still do have work to do on injunctions and post-grant opposition and a couple of other continuation applications being another area that we need to explore, too.

But we've made a lot of progress, and I appreciate all the agreement and the time that you all have committed to the task.

This is the first, as you know, of a couple of hearings, and we do expect to get to the end with your good help.

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http://commdocs.house.gov/committees/judiciary/hju20709.000/hju20709_0f.htm

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