PATENT REFORM ACT OF 2007 -- (House of Representatives - September 07, 2007)
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Mr. GOODLATTE. I thank the gentleman, and I thank him for his leadership on the Judiciary Committee and for years of leadership on this legislation, along with Howard Berman, the chairman of the Intellectual Property Subcommittee, and their staffs for this legislation.
Madam Chairman, article I, section 8 of our Constitution lays the framework for our Nation's patent laws. It grants Congress the power to award inventors, for limited periods of time, exclusive rights to their inventions. The Framers had the incredible foresight to realize that this type of incentive was crucial to ensure that America would become the world's leader in innovation and creativity.
These incentives are just as important today as they were at the founding of our country. It is only right that as more and more inventions with increasing complexity emerge, we should examine our Nation's patent laws to
ensure that they still work efficiently and that they still encourage, and not discourage, innovation, so America will remain the world's leader in innovation.
The solution involves both ensuring that quality patents are issued in the first place and ensuring that we take a good hard look at patent litigation and enforcement laws to make sure that they do not contain loopholes for opportunists with invalid claims to exploit. H.R. 1908 addresses both of these concerns.
First, the bill helps ensure that quality patents are being issued by the U.S. Patent and Trademark Office. The PTO, like any other large government agency, makes mistakes. H.R. 1908 creates a post-grant opposition procedure to allow the private sector to challenge a patent just after it is approved to provide an additional check on the issuance of bogus patents. Better quality patents mean more certainty and less litigation for patent holders and businesses.
In addition, H.R. 1908 contains important litigation reforms to rein in abusive lawsuits and forum shopping so that aggressive trial lawyers do not make patent litigation their next gold mine like they did for asbestos lawsuits, class action lawsuits and the like. Specifically, the bill tightens the venue provisions in the current patent law to prevent forum shopping.
H.R. 1908 also prohibits excessive damage awards. Believe it or not, there is no current requirement that damage awards in patent cases be limited to the value the patent added to the overall product. The courts have created a virtual free-for-all environment in this area. H.R. 1908 contains provisions to help ensure that damages are proportional to the value the invention added to the product, which will inject certainty into this area and allow businesses to devote their resources to R&D and innovating.
The bill also creates clearer standards for ``willful infringement'' by requiring greater specificity in notice letters alleging infringement of patent claims and requiring courts to include in the record more information about how they calculate damage awards.
Furthermore, the bill contains an important amendment that Congressman Boucher and I added during the Judiciary Committee markup to prevent individuals and companies from filing patents to protect tax strategies. Since 1998, when the Federal Circuit Court of Appeals held that business methods were patentable, 51 tax strategy patents have been granted covering such topics as estate and gift tax strategies, pension plans, charitable giving and the like. Over 80 additional tax strategy patents are pending before the USPTO.
When one individual or business is given the exclusive right to a particular method of complying with the Tax Code, it increases the cost and complexity for every other citizen or tax preparer to comply with the Tax Code. No one should have to pay royalties to file their taxes. H.R. 1908 renders these tax strategy patents unpatentable so that citizens can be free to comply with the Tax Code in the most efficient manner without asking permission or paying a royalty.
Our patent laws were written over 50 years ago and did not contemplate our modern economy where many products involve hundreds and even thousands of patented inventions. H.R. 1908 provides a much-needed update to these laws, and I urge my colleagues to support this litigation.
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