The Kaptur-Rohrabacher Amendment

Courtesy of US Inventor

AMERICA INVENTS ACT; Congressional Record Vol. 157, No. 91
(House of Representatives – June 23, 2011)

Amendment No. 14 Offered by Mr. Rohrabacher

The Acting CHAIR. It is now in order to consider amendment No. 14  printed in part B of House Report 112-111.

Mr. ROHRABACHER. Madam Chairman, I have an amendment at the desk.

The Acting CHAIR. The Clerk will designate the amendment.

The text of the amendment is as follows:

       Page 73, after line 2, insert the following new subsection:
       (i) Inapplicability of Post-grant Review to Certain Small Entities.–
       (1) In general.–Notwithstanding any other provision of law, a patent granted to a United States citizen, an individually lawfully admitted for permanent residence in the United States, or a United States company with less than 100 employees shall not be subject to any form of post-grant review or reexamination.
       (2) Rulemaking.–The Director shall issue such regulations as may be necessary to carry out this subsection.

The Acting CHAIR. Pursuant to House Resolution 316, the gentleman from California (Mr. Rohrabacher) and a Member opposed each will  control 5 minutes.

The Chair recognizes the gentleman from California.

Mr. ROHRABACHER. In this debate, Madam Chairman, we have heard over and over and over again about the gridlock at the Patent Office, which  is supposedly what we’re trying to correct with this legislation, H.R.  1249, which I have been contending is not designed to help the Patent  Office, but to harmonize American law with the rest of the world and  make it weaker patent protection for our people.

But what does it do about the backlog, if that’s really what people  are concerned about? H.R. 1249 would actually tremendously add to the  PTO backlog by requiring further post-grant review proceedings at the  Patent Office, proceedings which would consume even more limited  personnel and money. Added procedures add to the gridlock at the PTO,  at the Patent Office, and it will also do what? It will break the back  of small inventors and startup companies who are trying to get a new  product on the market.

It will empower the multinational and foreign corporations who can  grind down the little guy, because what we are doing in this bill is  adding even further procedures they have to go through, even after they  have got their patent issued to them.

This is the big guy versus little guy legislation. That was even  pointed out by the Hoover Institution, which did an analysis of this  bill and said, “The American Invents Act will protect large entrenched  companies at the expense of market challenging competitors.”

  “A patent should be challenged in court, not in the U.S. Patent  Office.”

  “A politicized patent system will further entrench those companies  with the largest lobbying shops on K Street.”

  “The bill wreaks havoc on property rights, and predictable property  rights are essential for economic growth.”

  “If America weakens its patent enforcement at home, it will set a dangerous precedent overseas.”

  “The America Invents Act would inject massive uncertainty into the  patent system.”

This is a travesty. It is an attack on American well-being, because  we depend on our small inventors to come up with the ideas. The Kaptur- Rohrabacher amendment limits this new burden. If we can’t get rid of  it, at least we can limit this new burden of all these post-grant  reviews they are going to add to companies that have more than 100  employees. It frees up the Patent Office personnel to do their job,  helps with that gridlock, and protects the small business man and small  inventors at the same time.

I would ask my colleagues to support the Kaptur-Rohrabacher amendment.

I yield such time as she may consume to the gentlewoman from Ohio  (Ms. Kaptur).

Ms. KAPTUR. I thank the gentleman for yielding and urge my colleagues  to support the Rohrabacher-Kaptur amendment, which ensures fairness for small and independent inventors. Without it, this bill will destroy American job creation and innovation since it throws out 220 years of  patent protections for individual inventors.

Our amendment addresses a major shortcoming of the bill by  eliminating the burden of post-grant reviews and reexaminations on  individual inventors and small businesses with 100 or fewer employees.

The new procedures and regulations in this bill will make it  extremely difficult for the average citizen to ever get a patent or  defend one without our amendment. Our amendment clearly gives the  Patent Office the authority to issue appropriate regulations that ensure that the new regulatory burdens in this bill do not  disproportionately impact individual inventors. This amendment is about  ensuring fairness for small inventors.

We urge our colleagues to support the Kaptur-Rohrabacher amendment so all inventors in America have a chance to realize their dreams, and, in realizing their dreams, assuring that we will have robust innovation  and job creation in our country.

The Acting CHAIR. The gentleman from California has 1\1/2\ minutes remaining.

Mr. ROHRABACHER. Let me just note, our amendment empowers the Director of the Patent Office to extend this 100-employee standard to  other small businesses and individual inventors overseas if this is  required by a treaty; yes, small businesses and individual inventors  overseas. So our amendment does nothing to violate any treaty  obligations by giving our own people special rights over foreign  individuals.

What it does do, however, is prevent foreign corporations from  grinding down our inventors here, like they grind down their inventors  overseas. This is what we are doing to prevent a harmonization of our  laws, because we don’t want weaker patent protection for our people.  They already got it overseas against their foreign corporations that  grind them down. We want to protect our own people.

I reserve the balance of my time.

Mr. SMITH of Texas. Madam Chair, I rise in opposition to the  amendment.

The Acting CHAIR. The gentleman is recognized for 5 minutes.

Mr. SMITH of Texas. Madam Chair, almost everyone in Congress wants to help small businesses. They are the foundation of our economy and are  the primary job creators. But this amendment includes certain terms or phrases that have nothing to do with the underlying goal that it  purports to achieve.

This amendment appears to focus on small businesses, but in reality  the amendment attempts to provide the trial lawyer lobby and patent  trolls with an exemption from PTO reexamination, allowing them to  continue suing job creators using frivolous or questionable patents.  This amendment has nothing to do with small businesses and everything  to do with providing an exemption for some of the worst offenders of  our patent system.

This amendment will not help independent inventors or small  businesses. Small businesses need the PTO reexamination proceedings.  Those proceedings strengthen patents, and strong patents are what  investors look for when making decisions about whether or not to  provide venture capital funding.

The argument that reexam proceedings harass or hurt small businesses  is just plain wrong. The reexam proceedings are a cheaper, quicker,  better alternative to resolve questions of patentability than costly  litigation in Federal court, which can run into the millions of dollars  and last for years. This amendment is an immunity agreement for patent  trolls, those entities who do not create jobs or innovation but simply  game the legal system.

Additionally, this amendment appears to violate our international obligations under the TRIPS agreement. Under TRIPS, we are obligated  not to discriminate against any field of technology or categories of  patent holders. By providing an exemption from all reexamination  proceedings for technological patents granted to patent trolls or  nonpracticing entities, this would create a clear violation of our  legal obligations.

Our patent system should be designed to ensure that it produces  strong patents and patent certainty. The PTO reexamination proceedings  help ensure that these important goals are accomplished. This amendment  bars any form of reexam for U.S.-owned patents and, thus, would also  prevent U.S. inventors themselves from using supplemental examination  to even be able to correct errors in the record about their own  patents.

This amendment creates a huge loophole in our patent system by exempting entities with 100 or fewer employees. This will not help  small businesses but will allow patent troll entities, foreign  companies, and foreign governments to manipulate our patent system. It  would bar use of the business-methods transitional proceeding against  most business-method patents.

This amendment is a recipe for allowing patent trolls and foreign companies and their governments to bypass normal post-grant challenges and enables weak or questionable patents to bypass further scrutiny.  There is no legitimate public policy objective in exempting large  numbers of those who manipulate our patent system from the rules of the  road. It is for these reasons that I strongly oppose this amendment.

I yield the balance of my time to the gentleman from Virginia (Mr. Goodlatte).

The Acting CHAIR. The gentleman from Virginia is recognized for 2 minutes.

Mr. GOODLATTE. Madam Chairman, I rise in strong opposition to this amendment, which is a bad idea. Post-grant review is one of the most important provisions in this bill. It allows third parties, for a  limited window of 9 months after a patent is issued, to submit evidence  that the patent should not have been granted in the first place.

This allows third parties, many of whom will be small businesses themselves who are familiar with the subject matter, to provide a check  on patent examiners. If the evidence shows that the patent is indeed  invalid, then the patent applicant should never have received the  patent in the first place. If the evidence shows that the patent is  valid, then the patent is made stronger and more certain by surviving a  post-grant review.

The amendment would exempt small businesses from the post-grant opposition proceeding. However, the quality of a patent examination  does not hinge on the size of the applicant, whether it was a small  business, an independent inventor, or a large corporation. It hinges on  the PTO job of scrutinizing that patent. A bogus patent held by an  independent inventor is no less deserving of a second look than a bogus  patent held by a Fortune 500 company.

For these reasons, I urge opposition to this very bad amendment.

The Acting CHAIR. The gentleman from California has 30 seconds remaining.

Mr. ROHRABACHER. I yield the balance of my time to the gentlewoman from Ohio (Ms. Kaptur).

Ms. KAPTUR. I would like to refute Mr. Smith’s argument. In fact, he  has manufactured an argument against our amendment that says it will  violate WTO obligations, specifically citing TRIPS. He seems to object  to the use of references to American citizens and U.S. companies, but  obviously failed to read the entire amendment which allows the Patent  Office to issue relevant regulations for properly implementing this  amendment. And if he was so concerned about WTO compliance, he should  strike section 18 of his own bill which is clearly WTO noncompliant  because it creates a special class for only one industry, the banking  industry.

I urge my colleagues to vote against the bill and for the  Rohrabacher-Kaptur amendment.

The Acting CHAIR. The question is on the amendment offered by the gentleman from California (Mr. Rohrabacher).

The question was taken; and the Acting Chair announced that the noes appeared to have it.

Mr. ROHRABACHER. Madam Chair, I demand a recorded vote.

The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further  proceedings on the amendment offered by the gentleman from California  will be postponed.

Amendment No. 14 Offered by Mr. Rohrabacher

The Acting CHAIR. The unfinished business is the demand for a  recorded vote on the amendment offered by the gentleman from California  (Mr. Rohrabacher) on which further proceedings were postponed and on  which the noes prevailed by voice vote.

The Clerk will redesignate the amendment.

The Clerk redesignated the amendment.

                             Recorded Vote

The Acting CHAIR. A recorded vote has been demanded.

A recorded vote was ordered.

The Acting CHAIR. This will be a 2-minute vote.

The vote was taken by electronic device, and there were–ayes 81, noes 342, not voting 8, as follows:

                             [Roll No. 488]

                                AYES–81

Akin
Bachmann
Baldwin
Bartlett
Barton (TX)
Benishek
Bilbray
Bilirakis
Bishop (UT)
Brady (PA)
Burgess
Coffman (CO)
Cole
Conyers
Costello
Duncan (SC)
Duncan (TN)
Edwards
Ellison
Emerson
Fattah
Filner
Flake
Franks (AZ)
Frelinghuysen
Garamendi
Gibson
Gohmert
Gosar
Green, Gene
Grijalva
Hall
Harris
Hartzler
Hirono
Holt  
Huelskamp
Huizenga (MI)
Hultgren
Hunter
Inslee
Jones
Kaptur
King (IA)
Kingston
Kissell
Kucinich
Landry
Latham
Lipinski
Manzullo
Markey
McCotter
McNerney
Miller (FL)
Pastor (AZ)
Paul
Pearce
Petri
Polis
Posey
Rehberg
Reyes
Rohrabacher
Royce
Ryan (OH)
Sanchez, Loretta
Schilling
Scott, Austin
Sensenbrenner
Southerland
Stutzman
Sutton
Thompson (PA)
Tonko
Turner
Walsh (IL)
Waters
Webster
West
Wolf