Hearing of the Senate Judiciary Committee - "Implementation of the Leahy-Smith America Invents Act"

Statement

The America Invents Act took six years to negotiate and represents the most comprehensive change to American patent law in 175 years. The new law improves our patent system and demonstrates that Congress can successfully work on a bipartisan and bicameral basis.

While the America Invents Act is a noteworthy achievement, it's a complex statute that the Patent and Trademark Office (PTO) labors to implement. Today's hearing allows us to receive updates from PTO Director Kappos and representatives of a broad cross-section of patent owners and users affected by the law.

The America Invents Act directs the PTO to initiate a number of rulemakings on a variety of subjects and to publish studies on other important patent issues. Is PTO making satisfactory progress on these projects? Is the agency complying with congressional intent? And does the law need some tweaks?

The America Invents Act matters because technological innovation from our intellectual property (IP) is linked to three-quarters of America's economic growth, and American IP industries account for over one-half of all U.S. exports and more than a third of our GDP.

These industries also provide millions of Americans with well-paying jobs. Our patent laws, which provide a time-limited monopoly to inventors in exchange for their creative talent, helps create this prosperity.

The Commerce Department released a report in April that further documents the importance of IP to the American economy. The report focuses on those industries that produce or use significant amounts of IP and rely most intensively on these rights.

The updated figures are stunning. There are 75 industries that qualify as being "IP-intensive." Direct employment in these industries exceeds 27 million jobs, with indirect activities associated with these industries providing another 13 million jobs. This means that 40 million jobs in the American economy -- about 28% of all jobs -- are linked to our IP system.

So you don't have to be Thomas Edison to understand why Congress should be concerned about maintaining the health of our IP sector.

Senator Leahy and I decided to pursue patent reform six years ago because our system hadn't been comprehensively updated for 60 years.

During this time, we've seen tremendous technological advancements, with the transition from computers the size of a closet to the use of wireless technology in the palm of your hand. But we cannot protect the technologies of today with the tools of the past.

The old patent system was outdated and was dragged down by frivolous lawsuits and uncertainty regarding patent ownership. Unwarranted lawsuits that typically cost millions of dollars to defend prevent legitimate inventors and companies from creating products and generating jobs.

And while America's innovators are forced to spend time and resources to defend their patents, our competitors are busy developing new products that expand their businesses and grow their economies.
The more time we waste on frivolous litigation, the less time we have for innovation.

American inventors have led the world in innovation and new technologies for centuries, from Benjamin Franklin to the Wright brothers to Steve Jobs. But if we want to foster future creativity, we must do more to encourage today's inventors. That's what the patent reform bill is all about -- it fixes modern-day patent problems and liberates modern-day inventors.

While we didn't succeed in making every stakeholder 100-percent happy, the goal was more realistic--to make most of the stakeholders content most of the time. And I hope that's the case with the members of our two witness panels today.

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