March 8, 2011
`CONGRESSIONAL RECORD — SENATE
`The assistant bill clerk proceeded to
`call the roll.
`Mr. LEAHY. I ask unanimous con-
`sent that the order for the quorum call
`be rescinded.
`The PRESIDING OFFICER. Without
`objection, it is so ordered.
`
`
`81360
`
`Page 1
`
`So if you vote for H.R. 1, you are cut-
`ting student aid. If you vote for H.R. 1,
`you are going to slash job training pro-
`grams. The House bill that came over,
`H.R. 1, completely eliminates Federal
`funding for adult training, dislocated
`worker assistance and youth training
`programs, completely eliminates it.
`These programs provide job training
`and reemployment services to about 8
`million Americans every year, 8 mil-
`lion. They just do away with it.
`If you vote for H.R. 1, you are voting
`to slash the community services block
`grant. Well, they out about $305 million
`from that. That provides services to
`some of our lowest income people and
`elderly. If you vote for H.R. 1, you are
`voting to cut
`investments in infra-
`structure, highway funding, sewer and
`drinking water funds, and rural eco-
`nomic development
`funding because
`H.R. 1 slashes community development
`block grants by 62 percent.
`Now, I say go out and talk to your
`mayors, talk to your city council, talk
`to your boards of supervisors in your
`counties. Ask them if they can take a
`62—percent cut in their community de—
`velopment block grants and what it is
`going to mean to them.
`Well, I cannot help but also speak to
`my own constituents in Iowa about
`what this means for my own State. If
`H.R. 1, the House bill which passed the
`House, if it were to be passed and en-
`acted into law—well,
`I mentioned
`about the cuts that we are having in
`the Job Corps. It would basically kill
`the Denison,
`IA, Job Corps Center,
`which employs 163 people. It provides
`training to 450 at-risk students each
`year, and we have a new Job Corps Cen-
`ter just being built, just being opened
`in Ottumwa. That will probably just
`come to a screeching halt. It is sup-
`posed to be opening later this year.
`It would shut down at least the com-
`munity health center in Centerville,
`IA. That is H.R. 1. H.R. 1 would be cut-
`ting down the community services
`block grant and would shut down the
`Red Rock Community Action Agency
`serving Boone, Jasper, Warren, Marion,
`and rural Polk County.
`H.R. 1, as I mentioned, would com-
`pletely eliminate funding for job train-
`ing programs, which assisted more
`than 35,000 Iowans in the last year. As
`I mentioned, it would slash Pell grants
`for our kids who go to all of our 001-
`leges in Iowa, the private not-for-prof-
`its and our Regents institutions. Two
`thousand low-income Iowa kids who
`now attend Head Start would be cut
`off.
`Lastly, it is not only just the cuts
`and the slashes to these vital programs
`which will increase unemployment and
`send us back into another recession,
`there are riders in this bill, what we
`call
`legislative riders,
`that are per-
`nicious. They do terrible damage to our
`country.
`For example—just one—there is a
`rider in the bill that says no money
`can be used or spent to continue the
`implementation of the health reform
`
`that we passed last year. Well,
`bill
`what does that mean? Well, that means
`right now,
`in law, because of the Af-
`fordable Care Act we passed last year,
`kids can stay on their parents’ policy
`until they are age 26. That would be
`gone. The question would be, the ones
`who got on before this, will
`they be
`able to stay on? But I can tell you, no
`new kids would ever be allowed to stay
`on their parents’ policy until they are
`age 26.
`We put in—and as you know, it is in
`law right now—that an insurance com-
`pany cannot impose a lifetime limit on
`individuals. That was in the bill last
`year. That would be gone. They can
`start reinstituting lifetime limits and
`annual limits.
`Also we had a provision in the bill
`that provided for a medical loss provi-
`sion. Let me try to explain that.
`In our bill we said insurers and
`health insurance companies have to
`pay at least 80 cents of every dollar of
`premium they collect on health care
`rather than profits, bonuses, overhead,
`fancy buildings, and corporate jets and
`all of that. They had to pay—80 cents
`of every premium dollar has to go for
`health care. It is done away with under
`H.R. 1. We cannot enforce that at all.
`So, again, for those who have seen
`benefits to themselves from the health
`care bill we passed, whether it is keep—
`ing their kids on their policy or elderly
`people now who get free mammograms
`and free
`colonoscopies
`and a free
`health checkup every year with no
`copays, no deductibles, that ends. That
`ends with H.R. 1.
`So the bill passed by the House is
`just, as I said, bad policy, and it is bad
`values. It is not the values of our coun-
`try, and I hope the Senate will re-
`soundingly—resounding]y—defeat H.R.
`1, consign it to the scrap heap of his-
`tory, the history of ill-advised ideas, of
`ill-advised programs. There have been
`a lot of them that have come along in
`the history of this country.
`Fortunately, I think the Congress in
`most instances has turned them down,
`and we moved ahead. We can’t afford to
`go backward. H.R. 1 would do that. It
`would take this country back. We
`would lose jobs. It would cut kids out
`of getting an education, close down
`Head Start centers. It would widen
`that gulf between the rich and the
`poor. We can’t continue to go down
`that road. We don’t want to wind up
`another Third World country where we
`have a few at the top and everybody at
`the bottom and nobody in between. The
`middle class built this country, and we
`cannot continue to erode the middle
`class. That is what H.R.
`1 would do,
`erode the middle class and widen the
`gulf between the rich and poor.
`I hope the Senate will recognize H.R.
`1 for what it is, a detriment, a body
`blow to our recovery efforts. I hope the
`Senate will resoundingly defeat it.
`I yield the floor and suggest the ab-
`sence of a quorum.
`The
`PRESIDING OFFICER. The
`clerk will call the roll.
`
`CONCLUSION OF MORNING
`BUSINESS
`The PRESIDING OFFICER. Morning
`business is closed.
`
`
`PATENT REFORM ACT OF 2011——
`Continued
`Mr. LEAHY. Mr. President, since the
`Senate began this debate on the Amer-
`ican Invents Act more than a week
`ago, I have talked about American in-
`genuity and innovation. As this debate
`comes to a close, I want to emphasize
`that this is legislation that should pro-
`mote innovation, help create jobs, and
`help energize the economy as we con-
`tinue our recovery. This legislation can
`be a key part of a jobs agenda. We can
`help unleash innovation an promote
`American invention, all without adding
`a penny to the deficit. This is common-
`sense, bipartisan legislation.
`Innovation has been a cornerstone of
`the American economy from the time
`Thomas Jefferson examined the first
`patent to today. The Founders recog-
`nized the importance of promoting in-
`novation. A number were themselves
`inventors. The Constitution explicitly
`grants Congress the power to “promote
`the progress of science and useful arts,
`by securing for limited times to .
`.
`.
`in—
`ventors the exclusive right to their re-
`spective .
`.
`. discoveries.” The discov-
`eries made by American inventors and
`research institutions, commercialized
`by American companies, and protected
`and promoted by American patent laws
`have made our system the envy of the
`world. The President has spoken all
`year about the need to win the future
`by out
`innovating our competition.
`This bill can play a key role in that ef-
`fort.
`commended Austan
`I
`Yesterday,
`Goolsbee, the chair of the President’s
`Council of Economic Advisers, for his
`white board presentation this week on
`the importance of patent reform to
`help America win the global competi-
`tion and create jobs. The creation of
`more than 220,000 jobs in the private
`sector last month, the creation of 1.5
`million jobs over the last 12 months,
`and the unemployment
`rate finally
`being reduced to 8.9 percent are all
`signs that the efforts we have made
`over the last 2 years to stave off the
`worst recession since the Great Depres-
`sion are paying off and the economic
`recovery is taking hold. The almost
`full percent point drop in the unem-
`ployment rate over the last 3 months is
`the largest decline in unemployment
`since 1983. Despite interruptions of eco-
`nomic activity in many parts of the
`country caused by winter weather over
`the last months and in recent days, de-
`spite the extraordinary rise in oil
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`81361
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`March 8, 2011
`prices, the Dow Jones industrial aver-
`age has climbed back to over 12,000
`from a low point of 6,500. Passage of
`the America Invents Act should help
`bolster our economic recovery and
`keep us on the right path toward busi-
`ness development and job creation.
`As we began this debate, I referred
`back to the President’s State of the
`Union address and his challenge to the
`Nation to out-innovate, out-build and
`out-educate our global competitors.
`Enacting the America Invents Act is a
`key to meeting this challenge. Reform-
`ing the Nation’s antiquated patent sys-
`tem will promote American innova-
`tion, create American jobs, and grow
`America’s economy. I thank the Presi-
`dent and his administration for their
`help and support for the Leahy-Hatch-
`Grassley America Invents Act. Com-
`merce Secretary Locke has been a
`strong partner in our efforts, and Di-
`rector Kappos of the Patent and Trade—
`mark Office has been an indispensable
`source of wise counsel.
`The America Invents Act will keep
`America in its longstanding position at
`the pinnacle of innovation. This bill
`will establish a more efficient and
`streamlined patent system that will
`improve patent quality and limit un-
`necessary and counterproductive liti-
`gation costs, while making sure no par-
`ty’s access to court is denied.
`The America Invents Act is the prod-
`uct of eight Senate hearings over the
`last three Congresses. Our bill
`is the
`product of years of work and com-
`promise. The Senate Judiciary Com-
`mittee has reported patent reform leg-
`islation to the Senate in each of the
`last three Congresses, this year, unani-
`mously. And the House has seen efforts
`over the same period led by Congress-
`men LAMAR SMITH of Texas and How-
`ARD BERMAN of California. The legisla-
`tion we are acting on today, in fact, is
`structured on the original House bill
`and contains many of the original pro-
`visions.
`From the beginning, we recognized
`the need for a more effective and effi-
`cient patent system, one that improves
`patent quality and provides incentives
`for entrepreneurs to create jobs. A bal-
`anced and efficient intellectual prop-
`erty system that
`rewards invention
`and promotes innovation through high
`quality patents is crucial
`to our Na-
`tion’s economic prosperity and job
`growth. That is how we win the fu-
`ture—by unleashing the American in-
`ventive spirit. This bill,
`the America
`Invents Act, will allow our inventors
`and innovators to flourish.
`It is important to our country’s con-
`tinued economic recovery, and to our
`successfully competing in the global
`economy. America needs a 21st century
`patent system to lead. The last exten—
`sive reform of our patent system was
`nearly 60 years ago. It is time.
`While the Congress debates spending
`and budget measures in an often too
`partisan manner, the American people
`are craving—and the American econ-
`omy is demanding—bipartisan legisla-
`
`CONGRESSIONAL RECORD — SENATE
`I also thank the many individuals,
`tion that can create jobs and help our
`companies, associations and coalitions
`economy through common sense meas—
`ures. That is what this bill can do. It
`that have helped with this effort. This
`relies on not one dollar of taxpayer
`legislation has been supported by both
`business and labor,
`including the Na-
`money. Let me emphasize, not a dime
`tional Association of Manufacturers,
`in taxpayer money is spent on the Pat-
`the United Steelworkers, the AFL—CIO,
`ent and Trademark Office, PTO,
`re-
`the Association of American Univer-
`forms. They are all funded by patent
`sities,
`the American Bar Association,
`fees, not taxes.
`the Association of Public and Land—
`Innovation drives the Nation’s econ-
`Grant Universities, the Association of
`omy, and that entrepreneurial spirit
`American Medical Colleges,
`the Asso-
`can only be protected by a patent sys-
`ciation of University Technology Man-
`tem that promotes invention and spurs
`agers,
`the American Council on Edu-
`new ideas. We need to reform our pat-
`cation, the Council on Government Re—
`ent system so that these innovations
`lations, PhRMA, BIO, the Intellectual
`can more quickly get
`to market. A
`Property Owners Association,
`the
`modernized patent system—one that
`American Intellectual Property Law
`puts American entrepreneurs on the
`Association, the Coalition for 21st Cen-
`same playing field as those throughout
`tury Patent Reform,
`the Association
`the world—is a key to that success.
`for Competitive Technology, the Coali-
`This is an idea that cuts across the po-
`tion for Patent and Trademark Infor-
`litical spectrum.
`mation Dissemination,
`IBM, General
`During Senate debate over the last
`Electric, Eli Lilly and Company, Bose
`week our bill has been improved by a
`Corporation, Johnson and Johnson, 3M,
`number of Senators who have contrib-
`General Mills, Honeywell, Monsanto,
`uted amendments. Senators BENNET,
`Motorola, Cargill,
`Inc., Caterpillar,
`COONS,
`SCHUMER, MENENDEZ, PRYOR,
`Enventys, Abbott, Astra
`Zeneca,
`STABENOW, BAUCUS, BINGAMAN, COBURN
`AdvaMed, Air Liquide, Bayer, Beckman
`and KIRK have all contributed, and I
`Coulter,
`Boston
`Scientific,
`BP,
`thank them for working with us. Sen-
`Bridgestone American Holdings,
`Inc.,
`ator CARDIN attempted to offer ger-
`Bristol-Myers Squibb,
`the California
`mane amendments, and I regret that
`Healthcare Institute, the Colorado Bio-
`these were blocked.
`Science Association, Cummins, The
`I thank our ranking Republican on
`Dow Chemical Company, DuPont, East-
`the committee and the comanager of
`man Chemical Company, ExxonMobil,
`this measure, Senator GRASSLEY, and
`Genentech, Genzyme, GlaxoSmith-
`his staff, Kolan Davis and Rita Lari,
`Kline, the Healthcare Institute of New
`for their dedication to this effort.
`I
`Jersey, Henkel Corporation, Hoffman—
`commend Senator HATCH for sticking
`LaRoche, Illinois Tool Works, Inter-
`with it for these many years, and Sen-
`national Game Technology, Kodak,
`ator KYL for helping get this done.
`Medtronic, Merck
`&
`Co.,
`Inc.,
`I also extend my personal thanks, as
`Millenium Pharmaceuticals, Milliken
`well,
`to Senator KLOBUCHAR of Min-
`and Company, Northrop Grumman,
`nesota who was active during com-
`Novartis, PepsiCo., Inc., Pfizer, Procter
`mittee consideration and helped man-
`& Gamble,
`SanDisk Corporation,
`age this legislation effort in the Sen-
`Sangamo BioSciences,
`Inc., United
`ate. She has been outstanding.
`Technologies, USG Corporation,
`the
`The Senate’s action today could not
`Virginia Biotechnology Association,
`have been accomplished without
`the
`Weyerhaeuser, the American Institute
`hard work of many dedicated staffers. I
`for CPAs,
`the American Institute of
`would like to thank in particular the
`Certified Public Accountants, the Tax
`steadfast work of Aaron Cooper of my
`Justice Network USA, the New Rules
`Judiciary Committee staff. Aaron has
`for Global Finance, the American Col-
`spent countless hours in meetings and
`lege of Tax Counsel, Consumer Action,
`briefings, with Members, other staff,
`The American College of Trust and Es-
`and interested parties, working to help
`tate Counsel, the Partnership for Phil—
`me ensure that the America Invents
`anthropic Planning, Global Financial
`Act preserved the meaningful reforms
`Integrity,
`the International Associa-
`we have been working toward since
`tion for Registered Financial Consult-
`2005.
`I would also like to thank Ed
`ants, the National Association of En-
`Pagano, my chief of staff, and Bruce
`rolled Agents, USPIRG,
`the Certified
`Financial Planner Board of Standards,
`Cohen, my chief counsel, who have
`worked on this issue since the start, as
`the Financial Planning Association,
`well as Susan Davies who served as my
`the American Association of Attorney-
`Certified Public Accountants, the Citi-
`chief
`Intellectual Property counsel
`zens
`for Tax Justice,
`the National
`through the formative stages of this
`Treasury Employees Union,
`the Inde-
`legislative effort. Erica Chabot, Curtis
`LeGeyt and Scott Wilson of my Judici-
`pendent Community Bankers of Amer-
`ica, and numerous other organizations
`ary Committee
`staff
`also
`deserve
`thanks for their committed work on
`and companies representing all sectors
`of
`the patent community that have
`this legislation.
`I also commend the hardworking
`been urging action on patent reform
`Senate floor staff, Tim Mitchell and
`proposals for years.
`The America Invents Act will accom-
`Trish Engle, as well as Dave Schiappa,
`and the staffs of other Senators,
`in-
`plish 3 important goals, which have
`been at the center of the patent reform
`cluding Tim Molino, Joe Matal, and
`debate from the beginning: It will im-
`Matt Sandgren, for their dedicated ef-
`forts.
`prove and harmonize operations at the
`
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`Page 2
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`

`is as
`
`PTO; it will improve the quality of pat-
`ents that are issued; and it will provide
`more certainty in litigation. In par-
`ticular, the legislation will move this
`Nation’s patent system to a first-in—
`ventor-to—file system, make important
`quality enhancement mechanisms, and
`provide the PTO with the resources it
`needs to work through its backlog by
`providing it with fee setting authority,
`subject to oversight. The America In-
`vents Act provides the tools the PTO
`needs to separate the inventive wheat
`from the chaff, which will help business
`bring new products to market and cre-
`ate jobs.
`Innovation has always been at the
`heart of America and American suc-
`cess. From the founding of our Nation,
`we recognized the importance of pro-
`moting and protecting innovation, and
`so the Constitution explicitly grants
`Congress the power to “promote the
`progress and science and useful arts, by
`securing for limited times to .
`.
`.
`in-
`ventors the exclusive right to their re-
`spective .
`.
`. discoveries.” The patent
`system plays a key role in encouraging
`innovation and bringing new products
`to market. The discoveries made by
`American inventors and research insti-
`tutions, commercialized by our compa-
`nies, and protected and promoted by
`our patent laws have made our system
`the envy of the world.
`High quality patents are the key to
`our economic growth. They benefit
`both patent owners and users who can
`be more confident
`in the validity of
`issued patents. Patents of low quality
`and dubious validity, by contrast, en-
`able patent trolls who extort unreason-
`able licensing fees
`from legitimate
`businesses, and constitute a drag on in-
`novation. Too many dubious patents
`also unjustly cast doubt on truly high
`quality patents.
`After 6 years of debate and discus-
`sion, more than a dozen hearings and
`mark up sessions, and countless hours
`of member and staff meetings with two
`presidential administrations and inter-
`ested parties across the spectrum, the
`Senate is finally acting to make the
`first meaningful, comprehensive re-
`forms to the nation’s patent system in
`nearly 60 years. The Senate debate has
`now extended for more than a week.
`Passage of the America Invents Act
`demonstrates what we can accomplish
`when we cast aside partisan rhetoric,
`and focus on working together for the
`American people and for our future.
`It has been almost
`6 years since
`Chairman
`SMITH and Congressman
`BERMAN introduced the first version of
`patent reform legislation in 2005, but
`the structure and guiding principles of
`the legislation remain the same. The
`bill will speed the process by which the
`Patent Office considers applications
`and should improve the quality of pat—
`ents it issues.
`Innovation and economic develop-
`ment are not uniquely Democratic or
`Republican objectives,
`so we worked
`together to find the proper balance for
`America—for our economy, for our in-
`
`March 8, 2011
`CONGRESSIONAL RECORD — SENATE
`The PRESIDING OFFICER. Without
`ventors,
`for our consumers. Working
`objection, it is so ordered.
`together, we can smooth the path for
`Mr. REID. Mr. President, with this
`more
`interesting—and great—Amer-
`ican inventions. That is what this bi-
`agreement, I ask unanimous consent
`that the cloture vote with respect to
`partisan, comprehensive patent reform
`bill will do. No one claims that ours is
`the motion to proceed to H.R. 1 be viti-
`ated.
`a perfect bill. It is a compromise that
`The PRESIDING OFFICER. Without
`will make key improvements in the
`patent
`system. Having coordinated
`objection, it is so ordered.
`with the leaders in the House through
`even
`Mr. REID. Mr. President,
`this process, I hope that the House will
`though there have been a few turns in
`look favorably on our work and adopt
`the road, we are at the place where we
`this measure so that it can be sent to
`need to be. We need to be able to show
`the President without delay and its im-
`the American people where we are on
`provements can take effect in order to
`these two measures. I express my ap-
`encourage American innovation and
`preciation to my friend, the Republican
`promote American invention.
`leader. As I said, things don‘t always
`I suggest the absence of a quorum.
`work smoothly around here, but they
`The PRESIDING OFFICER. The
`usually work. Now we are at a point
`clerk will call the roll.
`where we can vote on these two meas-
`The assistant bill clerk proceeded to
`ures which is what we need to do.
`call the roll.
`The PRESIDING OFFICER. Under
`Mr. REID. I ask unanimous consent
`that the order for the quorum call be
`the previous order, amendment No. 152
`is withdrawn.
`rescinded.
`The PRESIDING OFFICER. Without
`Under
`the previous order, amend-
`ment No.
`143
`is modified with the
`objection, it is so ordered.
`Mr. REID. Mr. President, I ask unan—
`changes at the desk.
`imous consent
`the Reid amendment
`The amendment, as modified,
`No. 152 be withdrawn;
`that the Reid
`follows:
`amendment No. 143 be modified with
`(Purpose: To include public institutions of
`the changes at the desk;
`the Senate
`higher education in the definition of a
`micro entity)
`proceed to vote on the amendment, as
`modified, with no amendments in order
`On page 93, before line 18, insert the fol-
`prior to the vote; that there then be 30
`lowing:
`minutes of debate equally divided be-
`“(d) STATE INSTITUTIONS OF HIGHER EDU-
`CATION.—
`tween the two managers or their des-
`ignees; that S. 23 be read a third time;
`“(1) IN GENERAL—For purposes of this sec—
`tion, a micro entity shall include an appli-
`that a budgetary pay—go statement be
`cant who certifies that—
`read; the Senate then proceed to a vote
`“(A) the applicant’s employer, from which
`on passage of the bill, as amended; and
`the applicant obtains the majority of the ap-
`the motions to reconsider be consid-
`plicant’s income,
`is a State public institu-
`ered made and laid upon the table with
`tion of higher education, as defined in sec—
`no intervening action or debate.
`tion 102 of the Higher Education Act of 1965
`Further,
`I ask unanimous consent
`(20 U.S.C. 1002); or
`that at 12 noon Wednesday, March 9,
`“(B) the applicant has assigned, granted,
`the Senate proceed to the consider-
`conveyed, or is under an obligation by con-
`ation of Calendar No. 14, H.R. 1, the De—
`tract or law to assign, grant, or convey, a li—
`cense or other ownership interest in the par—
`fense appropriations
`long-term con-
`ticular application to such State public in-
`tinuing resolution for fiscal year 2011;
`stitution.
`that there be 3 hours of debate on H.R.
`“(2) DIRECTOR’S AUTHORITY.—The Director
`1 and the Democratic alternative, the
`may, in the Director’s discretion, impose in-
`Inouye substitute amendment No. 149,
`come limits, annual filing limits, or other
`with the time equally divided between
`limits on who may qualify as a micro entity
`the two leaders or their designees prior
`pursuant to this subsection if the Director
`determines that such additional limits are
`to a vote on passage of H.R. 1; that the
`vote on passage be subject to a 60-vote
`reasonably necessary to avoid an undue im-
`threshold; that if the bill achieves 60
`pact on other patent applicants or owners or
`are otherwise reasonably necessary and ap—
`affirmative votes,
`the bill be read a
`propriate. At least 3 months before any lim-
`third time and passed; that if the bill
`its proposed to be imposed pursuant to this
`does not achieve 60 affirmative votes,
`paragraph shall
`take effect,
`the Director
`the majority leader be recognized to
`shall inform the Committee on the Judiciary
`offer the Inouye substitute amendment
`of the House of Representatives and the
`No. 149; the Senate then proceed to a
`Committee on the Judiciary of the Senate of
`vote on the substitute amendment;
`any such proposed limits".
`that the substitute amendment be sub-
`The
`PRESIDING OFFICER. The
`ject to a 60-vote threshold; if the sub-
`question is on agreeing to amendment
`stitute amendment achieves 60 affirma-
`No. 143, as modified.
`tive votes,
`the substitute amendment
`The amendment (No. 143), as modi-
`be agreed to; the bill, as amended, be
`fied, was agreed to.
`read a third time and passed;
`if the
`Mr. COBURN. I wish to express my
`substitute amendment does not achieve
`opposition to Reid amendment No. 143,
`60 affirmative votes, H.R. 1 be returned
`as modified. I do not believe public in—
`to the calendar;
`that no motions or
`stitutions of higher education, or any
`amendments be in order to the sub-
`stitute amendment or to the bill prior
`entity, should be carved out of the defi-
`nition of micro entity in the under-
`to the votes; further, that all of the
`above occur with no intervening action
`lying legislation. Had a rollcall vote
`or debate.
`occurred, I would have voted no.
`
`$1362
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`$1363
`
`March 8, 2011
`Mr. LEAHY. Mr. President, I suggest
`the absence of a quorum, with unani-
`mous consent that the time be equally
`divided.
`The PRESIDING OFFICER. Without
`objection, it is so ordered.
`The clerk will call the roll.
`The assistant bill clerk proceeded to
`call the roll.
`I ask
`Mr. LEAHY. Mr. President,
`unanimous consent that the order for
`the quorum call be rescinded.
`The PRESIDING OFFICER. Without
`objection, it is so ordered.
`CHECK 21 ACT PATENTS
`Mr. PRYOR. I would like to clarify
`some concerns I have about the Schu-
`mer—Kyl program that was included in
`the managers”
`amendment
`to the
`America
`Invents Act,
`adopted
`on
`March 1. I am specifically concerned
`that this provision revives an amend-
`ment that had been included in pre-
`vious versions of the bill—ethat amend-
`ment specifically targeted patents re-
`lated to the Check 21 Act and elimi-
`nated the ability of the holder of such
`patents to collect damages. Is that the
`purpose of the Schumer-Kyl language?
`Mr LEAHY. No,
`the amendment
`is
`entirely different from the 2008 amend-
`ment related to patents that place on
`tax on implementation of the Check 21
`Act. The Schumer-Kyl program ad-
`dresses certain business method pat-
`ents and does not target any specific
`patents. The Schumer-Kyl program is
`intended to provide a cost-effective al-
`ternative to litigation to examine busi-
`ness-method patents.
`Mr. PRYOR. Am I correct then that
`the Schumer-Kyl program is simply
`trying to address the problem of busi-
`ness method patents of dubious valid-
`ity that are commonly associated with
`the Federal Circuit’s 1998 decision in
`State Street Bank v. Signature?
`Mr. LEAHY. That is correct. It is
`still unclear whether the subject mat-
`ter of these patents qualifies as patent-
`able subject matter under current law.
`Patents of low quality and dubious va-
`lidity, as you know, are a drag on inno-
`vation because they grant a monopoly
`right for an invention that should not
`be entitled to one under the patent
`law.
`Mr. PRYOR. Can the Senator de-
`scribe how the program would work in
`practice?
`If a peti—
`Mr. LEAHY. Certainly.
`tioner provides evidence to the PTO
`and the PTO determines that the pat-
`ent is on a “covered business method
`patent" then the PTO would institute a
`post-grant
`review of that patent.
`In
`this review,
`the PTO could consider
`any challenge that could be heard in
`court.
`Mr. PRYOR. Is it correct then that
`the Schumer proceeding would only
`have an effect if the PTO determines it
`is more likely than not that a claim of
`the patent is invalid and, even then,
`the proceeding would have no effect on
`a patent unless the petitioner can dem-
`onstrate that under current
`law the
`patent is not valid?
`
`CONGRESSIONAL RECORD — SENATE
`ods of conducting business, unlike in-
`Mr. LEAHY. That is correct. The pro—
`formation about other patents, is often
`ceeding has a higher threshold than
`current reexamination before the PTO
`not documented in patents or published
`will even undertake a review of the
`in journals. This means a patent exam-
`iner has significantly less opportunity
`patent. So as a practical matter, a pat—
`than he might with a traditional pat-
`ent without any serious challenge to
`ent to weed out undeserving applica-
`its validity would never be subject to a
`tions. Unfortunately,
`that means the
`proceeding.
`Mr. PRYOR. Would the Senator agree
`burden falls on private individuals and
`that in a case in which the validity of
`an expensive court process to clean up
`the mess.
`the patent has been upheld by a dis-
`trict court but the case remains on ap—
`The ability to easily obtain business
`method patents without a rigorous and
`peal, that this amendment would likely
`thorough review in the Patent Office
`not affect the pending appeal?
`has created a flood of poor quality
`Mr. LEAHY. I would. The patent may
`business method patents and a cottage
`still be subject to the proceeding, but
`since the court did not hold the patent
`industry of business method patent
`invalid or unforceable,
`it would not
`litigation. The Federal courts have rec-
`likely have an effect on the pending ap-
`ognized this problem, and indeed even
`peal.
`the Supreme Court has begun to ad-
`Mr. SCHUMER. Mr. President, I want
`dress it. In KSR Intl Co. v. Teleflex,
`Inc. and Bilski v. Kappos, the Court ar—
`to take the opportunity to explain fur-
`ticulated a new standard for obvious-
`ther a few elements of the Schumer-
`ness and made clear that abstract busi-
`Kyl provision in the patent bill. The
`Transitional Program for
`business
`ness methods are not patentable. While
`these legal developments are impor-
`method patents addresses a critical
`tant, the leave in limbo the many pat-
`problem in the patent world, and it is
`crucial that it be administered and im-
`ents that were issued by the PTO since
`State Street that are not in fact valid.
`plemented appropriately by both the
`Patent and Trademark Office and the
`Litigation
`over
`invalid
`patents
`courts.
`places a substantial burden on US.
`courts and the US. economy. Business-
`Business method patents are the
`method inventions generally are not
`bane of the patent world. The business
`and have not been patentable in coun-
`method problem began in 1998 with the
`tries other than the United States. In
`US. Court of Appeals for the Federal
`Circuit decision in State Street Bank 81,
`order to reduce the burden placed on
`Trust Co.
`v. Signature Financial
`courts and the economy by this back-
`and-forth shift
`in judicial precedent,
`Group, Inc. State Street created a sea-
`the Schumer-Kyl
`transitional
`pro-
`change in the patentability of business-
`methods, holding that any invention
`ceeding authorizes a temporary admin-
`istrative
`alternative
`for
`reviewing
`can be patented so long as it produces
`business method patents.
`a “useful, concrete, and tangible re-
`sult” and meets other requirements of
`It is important
`to clarify two ele-
`ments of the Schumer-Ky] program’s
`the patent laws.
`State Street launched an avalanche
`operation in particular. First, there is
`the issue of how a district court should
`of patent applications seeking protec-
`tion for common business practices.
`treat a motion for a stay of litigation
`in the event the PTO initiates a pilot
`The quality of these business method
`patents has been much lower than that
`program. Second, there is the issue of
`how the Federal circuit will treat in-
`of other patents, as Justice Kennedy
`noted in his concurring opinion in eBay
`terlocutory appeals from stay deci-
`Inc. v. MercExchange. Justice Kennedy
`sions. Finally,
`there is the issue of
`wrote about the “potential vagueness
`which patents should be considered to
`be covered business method patents.
`and suspect validity” of some of “the
`The transition program created by
`burgeoning number of patents over
`business methods.” Commentators like
`the Schumer-Kyl amendment
`is de-
`signed to provide a cheaper, faster al-
`Rochelle Dreyfuss have also lamented
`ternative to district court
`litigation
`“the frequency with which the Patent
`over the validity of business-method
`Office issues patents on shockingly
`mundane business inventions.” Malla
`patents. This program should be used
`instead of, rather than in addition to,
`Pollack pointed out that “[M]any of
`civil
`liti