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AMERICAN INNOVATION AT RISK:

THE CASE FOR PATENT REFORM

HEARING

BEFORE THE

SUBCOMMITTEE ON COURTS, THE INTERNET, 

AND INTELLECTUAL PROPERTY

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

FEBRUARY 15, 2007

Serial No. 110–8

Printed for the use of the Committee on the Judiciary

(

Available via the World Wide Web: http://judiciary.house.gov 

(II)

COMMITTEE ON THE JUDICIARY 

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

MARTIN T. MEEHAN, Massachusetts 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

LINDA T. SA ́ NCHEZ, California 

STEVE COHEN, Tennessee 

HANK JOHNSON, Georgia 

LUIS V. GUTIERREZ, Illinois 

BRAD SHERMAN, California 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

ARTUR DAVIS, Alabama 

DEBBIE WASSERMAN SCHULTZ, Florida 

KEITH ELLISON, Minnesota 

[Vacant] 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

STEVE CHABOT, Ohio 

DANIEL E. LUNGREN, California 

CHRIS CANNON, Utah 

RIC KELLER, Florida 

DARRELL ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TOM FEENEY, Florida 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio

PERRY APELBAUM, Staff Director and Chief Counsel 

JOSEPH GIBSON, Minority Chief Counsel 

SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

HOWARD L. BERMAN, California, Chairman 

JOHN CONYERS, JR., Michigan 

RICK BOUCHER, Virginia 

MARTIN T. MEEHAN, Massachusetts 

ROBERT WEXLER, Florida 

MELVIN L. WATT, North Carolina 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HANK JOHNSON, Georgia 

BRAD SHERMAN, California 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

HOWARD COBLE, North Carolina 

TOM FEENEY, Florida 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

STEVE CHABOT, Ohio 

CHRIS CANNON, Utah 

RIC KELLER, Florida 

DARRELL ISSA, California 

MIKE PENCE, Indiana 

SHANNA WINTERS, Chief Counsel 

BLAINE MERRITT, Minority Counsel 

(III)

C O N T E N T S 

FEBRUARY 15, 2007

OPENING STATEMENT 

Page 

The Honorable Howard L. Berman, a Representative in Congress from the 

State of California, and Chairman, Subcommittee on Courts, the Internet, 

and Intellectual Property .................................................................................... 1

The Honorable Tom Feeney, a Representative in Congress from the State 

of Florida, and Member, Subcommittee on Courts, the Internet, and Intellectual Property .................................................................................................... 3

The Honorable Lamar Smith, a Representative in Congress from the State 

of Texas, and Ranking Member, Committee on the Judiciary ......................... 5

WITNESSES 

Mr. Adam B. Jaffe, Professor of Economics and Dean of Arts and Sciences, 

Brandeis University, Waltham, MA 

Oral Testimony ..................................................................................................... 7

Prepared Statement ............................................................................................. 9

Mr. Mark B. Myers, Co-Chair of the National Academy of Sciences’ Report 

‘‘A Patent System for the 21st Century,’’ Unionville, PA 

Oral Testimony ..................................................................................................... 15

Prepared Statement ............................................................................................. 16

Ms. Suzanne Michel, Chief Intellectual Property Counsel and the Deputy 

Assistant Director for Policy Coordination, Federal Trade Commission, 

Washington, DC 

Oral Testimony ..................................................................................................... 20

Prepared Statement ............................................................................................. 22

Mr. Daniel B. Ravicher, Executive Director, Public Patent Foundation, New 

York, NY 

Oral Testimony ..................................................................................................... 35

Prepared Statement ............................................................................................. 37

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Sheila Jackson Lee, a Representative 

in Congress from the State of Texas, and Member, Subcommittee on Courts, 

the Internet, and Intellectual Property .............................................................. 83

Prepared Statement of the Honorable Steve Cohen, a Representative in Congress from the State of Tennessee, and Member, Subcommittee on Courts, 

the Internet, and Intellectual Property .............................................................. 84

Federal Trade Commission Executive Summary, ‘‘To Promote Innovation: The 

Proper Balance of Competition and Patent Law and Policy’’ ........................... 85

National Academy of Sciences Executive Summary, ‘‘A Patent System for 

the 21st Century’’ ................................................................................................. 103

Letter from Coalition for Patent Fairness to the Honorable Nancy Pelosi, 

Speaker of the House, United States House of Representatives; and the 

Honorable John Boehner, Minority Leader, United States House of Representatives ........................................................................................................... 111

(1)

AMERICAN INNOVATION AT RISK:

THE CASE FOR PATENT REFORM 

THURSDAY, FEBRUARY 15, 2007

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY, COMMITTEE ON THE JUDICIARY, Washington, DC.

The Subcommittee met, pursuant to notice, at 2:01 p.m., in Room 

2141, Rayburn House Office Building, the Honorable Howard Berman (Chairman of the Subcommittee) presiding. 

Staff present: Perry Apelbaum, Staff Director-Chief Counsel; Joseph Gibson, Minority Chief Counsel; Shanna Winters, Subcommittee Chief Counsel, Blaine Merritt, Subcommittee Minority 

Counsel; and Rosalind Jackson, Professional Staff Member. 

Mr. BERMAN. It has been 12 years, and I forgot how to do this. 

I have only waited 24 years for this. [Laughter.] 

But I thank you all for coming, and I call to order the meeting 

of the Subcommittee on Courts, the Internet, and Intellectual Property. 

Before I begin, I want to apologize to my colleagues for holding 

a hearing when the Ranking Member and a number of other Members couldn’t be here because they are attending Congressman Norwood’s funeral. By the time I realized the conflict between the funeral and the Subcommittee meeting, it was really too late to avoid 

disrupting the travel plans of the witnesses, so I went ahead with 

it. 

And I do want to thank the witnesses who had to come from out 

of the Washington area for traveling through the snow and ice to 

get here to testify. You are sort of essential to the hearing. 

We don’t have too many of them here yet, but I want to welcome 

the new Members to this Subcommittee and both recognize, in his 

absence, I am delighted being able to work with the Ranking Member, who I got to serve with when he was Chair of the Subcommittee several terms ago, Howard Coble, the Ranking Member 

of the full Committee, who I worked with a great deal on so many 

issues over the last years that we have been in Congress, including 

on the issue that is the subject of the hearing today, patent reform. 

Also, the vice Ranking Member—is that the right title—deputy 

Ranking Member, who is going to be serving as Ranking Member 

at the Subcommittee for this hearing, Congressman Feeney, because of Howard Coble’s absence. 

I am going to recognize myself and the deputy Ranking Member 

of the Subcommittee for opening statements. And I know the RankVerDate 0ct 09 2002 10:26 Jun 14, 2007 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6601 F:\WORK\COURTS\021507\33315.000 HJUD1 PsN: 33315
2

ing Member of the full Committee, Congressman Smith, intends to 

give a statement, and then any other Members. 

I also want to welcome someone who has been part of this Subcommittee since she came to this Congress, but who, at least at 

this point in time, is not on the Subcommittee, for coming and participating. As Lamar knows, Congresswoman Lofgren and I and the 

Ranking Member of the full Committee have worked on this issue 

at great length over the past few years, and so it is good to have 

her here. 

Patents are one of the cornerstones of the American economy and 

are the foundation of live-saving drugs and groundbreaking technologies. It is beyond dispute that robust patent protection promotes innovation. 

However, I also believe that the patent system is strongest and 

that incentives for innovation are greatest when the system only 

protects those patents that are truly inventive. 

When functioning properly, the patent system should encourage 

and enable inventors to push the boundaries of knowledge and possibility. If the patent system allows questionable patents to issue 

and does not provide adequate safeguards against patent abuses, 

the system will stifle innovation and interfere with competitive 

market forces. 

The issuance of the one-click patent, the patent for standing in 

line for the bathroom, the patent for a side-to-side swing, and, my 

personal favorite, the patent for the Fosbury Flop—if anyone is old 

enough to remember the Fosbury Flop—and many others generated concern from industry experts on the soundness of our current patent system. While I won’t opine on the validity of these 

patents, many have questioned whether such patents meet the 

standard of patentability. 

Therefore, beginning in 2001, in the 107th Congress and in each 

successive Congress, Congressman Rick Boucher and I have introduced patent reform bills designed to address the need for increasing patent quality. Since our initial attempt at bringing this issue 

to the forefront, a number of people have joined in those efforts. 

Over the course of the last 5 years, there have been numerous 

attempts to define the challenges that face the patent system 

today. For example, the PTO developed its 21st-century strategic 

plan. The Federal Trade Commission released a report entitled ‘‘To 

Promote Innovation: The Proper Balance of Competition in Patent 

Law and Policy.’’

Soon thereafter, the National Research Council published a compilation of articles about a patent system for the 21st century and 

two economists authored a critique of patent law in a book titled 

‘‘Innovation and Its Discontents.’’

These experts make a number of recommendations for increasing 

patent quality and ensuring that the patent system promotes, rather than inhibits, economic growth and scientific progress. I am 

pleased that some of these experts will be our witnesses today. 

The Supreme Court is also recognized the need for greater guidance in the patent system and has recently addressed the issue of 

automatic permanent injunctions in eBay v. MercExchange and 

granted certiorari on both the obviousness issue in KSR v. Teleflex

3

and the issue of interpretation of section 271(f) of the Patent Act 

in Microsoft v. AT&T.

While I acknowledge someone deserving patents will inevitably 

slip through the system, I have concerns about a number of situations. It is inconceivable that a patent application with over 650 

claims would receive a cursory review, ENTP BlackBerry matter, 

and it is worrisome that the PTO can grant a patent for tax strategy which many claim the patent office lacks the requisite expertise to determine whether the particular tax business method is 

novel. 

Therefore, part of any reform to the system begins by strengthening the PTO. The PTO has implemented a number of quality initiatives and has hired additional staff. 

While the continuing resolution would have diverted close to $90 

million, we worked with the appropriators to ensure that the PTO 

could keep all of the fees collected. The Subcommittee should continue its effort to stop the diversion of PTO fees. 

But we need to look further and address the goals and recommendations of the reports I mentioned earlier in an effort to improve patent quality, deter abusive practices by unscrupulous patent-holders, and provide meaningful low cost alternatives to litigation for challenging patent validity. 

Past legislative attempts at achieving more comprehensive patent reform have met with resistance and, for one reason or another, failed to move out of the Subcommittee. 

Now, however, the call for legislative action is loud. The New 

York Times has noted, ‘‘Something has gone very wrong with the 

United States patent system.’’ The Financial Times has stated, ‘‘It 

is time to restore the balance of power in U.S. patent law.’’

I intend, with a number of my colleagues, to introduce a patent 

reform bill soon which will have bipartisan and bicameral support 

in addressing some of the more urgent patent reform concerns. 

But the notion of this hearing was to start at the beginning, explore some of the issues which make the case for patent reform. 

This was not intended as a hearing to get all the different interested parties and people directly involved in these issues to testify 

and give their perspective, but, given my predisposition, to bring in 

some people who make the case to the Members of the Subcommittee and to the public of the need to make that reform a high 

priority on my agenda. 

I now recognize the distinguished gentleman and deputy Ranking Member, the gentleman from Florida, Congressman Feeney, for 

his opening statement. 

Mr. FEENEY. I want to thank the Chairman. It is a real honor 

to be here. 

The Chairman said that he waited 24 years to get into his position. I have been fighting just for 4 years to get on the Subcommittee, but it has felt like 24 years at times because I have had 

a keen interest. 

Having said that, I have only been part of the Subcommittee for 

officially about 9 minutes now, and it didn’t take me long to weasel 

my way into the first fiddle chair, and I am looking forward to 

starting at the beginning. [Laughter.] 

4

It is a great place for a beginner on this Committee to start with 

a wonderful panel. 

I am here today because our good friend, Congressman Coble, is 

at the funeral of Congressman Norwood. And we are very grateful 

that we have colleagues down there representing all of us as we 

send our condolences to the whole family surrounding Congressman Norwood. 

I am also delighted that the Ranking Member of the full Committee, Congressman Smith, who I expect will be recognized in a 

minute, is here. He has a keen interest and an enormous amount 

of experience in the issue that this Subcommittee is interested in, 

having chaired it for some time. 

Mr. Chairman, we all look forward to working with you, my colleagues across the aisle, in both parties, to discuss how the patent 

issuance process can be improved, how patent quality can be reinvigorated, and what types of reforms will best serve not only to 

preserve, but to encourage the innovative spirit that keeps our 

economy strong. 

I love reading the Constitution. Because our founding fathers understood the vital importance of intellectual property rights, they 

included special protections for them in our Constitution. 

Most of my constituents think about property rights in terms of 

their real estate rights. It wasn’t until an afterthought in the Bill 

of Rights, in articles 4 and 5, that the founders got around to clarifying certain aspects of real property rights. 

But right in article 1, section 8, the Constitution states, ‘‘The 

Congress shall have the power to promote the progress of science 

and useful arts for securing, for limited times, to authors and inventors, the exclusive right to their respective writings and discoveries.’’

I have done a quick search of the Constitution. The mechanisms 

that are set out in the Constitution for governance of this great 

country are very clear often. Sometimes they are ambiguous and 

the Supreme Court and others have to resolve them. 

But this may be unique, Mr. Chairman. The only place I can 

find, upon a cursory review, where the founding fathers actually 

explained not just what Congress’s, in this case, power was, but 

why it was important. 

Now, the president has a veto. The founders never explained why 

that was important. Congress has the right to declare war and appropriate, and the founders never, at least in the Constitution, explained why those things were important, but, obviously, it was 

near and dear to the founders to express the importance of protecting intellectual property rights. 

I won’t attempt today to provide an abridged description of all of 

the many topical issues which we are going to find our way in dealing with in this Committee in the near future. We would be here 

until after dinnertime if I tried to do that. 

But I would comment on what I believe is the most important 

point in this debate. Different individuals and companies use the 

patent process in different ways and for different purposes. They 

have different business models and they often clash. 

This has engendered a discussion on whether too many patents 

of poor quality are circulating in the economy, which, in turn, has 

5

generated some questionable lawsuit practices concerning infringement. 

None of us wants to support a system that rewards legal gamesmanship over true creativity and a desire to commercialize an invention that will become a great benefit to the American people. 

But in our zeal to weed out bad lawsuits, we should not proceed 

on the assumption that every patent-holder who wants to license 

an invention or enforce his or her property rights is ill intentioned. 

The drive to innovate and continue fresh, new approaches is a 

standard and time-honored component of the patent system that 

must be protected. 

The topics we will discuss here today have evolved over time, as 

has the contours of the debate have been shaped by recent Supreme Court decisions and litigation across the country involving 

patent issues. 

I hope today’s hearing will mark the starting point in the 110th 

Congress for deliberation on the extent to which comprehensive 

patent reform is required and desirable. 

I am greatly appreciative of the willingness of the panel of some 

distinguished witnesses to be here with us today. 

That concludes my opening remarks. Again, Mr. Chairman, I 

look forward to working with you and all the Members of the Subcommittee for the next 2 years. 

And with that, I yield back the balance of my time. 

Mr. BERMAN. Very interesting, and I thank the gentleman. 

I am pleased to recognize, really, my partner and our partner in 

all of this, the Ranking Member of the full Committee, Congressman Smith. 

Mr. SMITH. Thank you, Mr. Chairman. Mr. Chairman, first of all, 

thank you for your earlier opening comments. 

And, Mr. Feeney, thank you for your gracious remarks, as well. 

Mr. Chairman, I can’t stay long today because of an impending 

conflict, but I did want to come by and congratulate you on your 

first hearing as Chairman of this Subcommittee. 

As you know, because we have worked together in the past, this 

is a wonderful Subcommittee, with great jurisdiction and great responsibilities, as well, and you are an able leader and an able 

Chairman, and I look forward to continuing to work with you on 

patent reform. 

Let me recall to you a quick conversation we had at the end of 

the last Congress, when you and I had a fairly serious discussion 

about the outcome of the election and you and I agreed that one 

of us was going to have to revise and extend our remarks in the 

next Congress depending on the outcome of that election. 

It looks like I am the one revising and extending and you are the 

Chairman of this Subcommittee, and, as I say, congratulations to 

you on that. 

I also want to note, Mr. Chairman, that the interest in patent 

reform continues, witness the number of people in this room and 

the long lines that were standing outside in the hall before the 

doors opened, and that is good to see. 

It reminds me of the times we had hearings and markups last 

year and I think the reason why so many people are here and why 

6

there is so much interest is because this subject matter is so important. 

When we talk about patent reform, we are literally talking about 

the potential to help businesses grow, to help Americans prosper, 

and to help our country remain competitive in the world. 

And when we talk about patent reform, though, we are certainly 

talking about any unanimity of agreement. We are certainly talking about a bipartisan issue and I consider the I.P. Subcommittee 

to sort of be an oasis on the Judiciary Committee, because we are 

all working, I think, for the same goals and that is for better patent quality and, hopefully, an expeditious review of those patents, 

as well. 

Mr. Chairman, one final thought and that is just a little bit to 

paint the picture of the patent reform effort. 

We are literally in our efforts to come trying to help everyone 

from a lone inventor in their garage who has one light bulb idea 

and might get one patent that might involve into a small business 

that employs 20 or 30 people to several high-tech companies today 

that actually apply for over 1,000 patents every year and all companies and business owners in between. 

But that is the breadth that indicates the importance of the 

issue. And if we are successful in accomplishing that patent reform 

that we have been working on for several years, we are going to 

do a lot of people a lot of good. 

And in those efforts, I do look forward to working with you and, 

again, congratulations on being Chairman of the I.P. Subcommittee. 

Mr. BERMAN. Thank you very much for your nice comments, and 

I look forward to working with you. 

If there is no objection, I would like to get unanimous consent to 

recognize our colleague during the questioning period, who is not 

a Member of the Subcommittee, to allow her to participate in the 

questioning of the witnesses, Congresswoman Lofgren. 

Does any other Member of the Subcommittee want to make an 

opening statement? 

Then, our witnesses. 

Our first witness is Adam Jaffe, the dean of arts and sciences 

and Fred C. Heck professor in economics at Brandeis University. 

Since coming to Brandeis in 1994, he has been chair of both the 

economics department and the Intellectual Property Policy Committee. He was previously an assistant and associate professor at 

Harvard University and senior staff economist at the President’s 

Council of Economic Advisers. 

Professor Jaffe’s research focuses on the economics of innovation. 

His book, ‘‘Innovation and Its Discontents: How Our Broken Patent 

System is Endangering Innovation and Progress and What to Do 

About It,’’ a long title, coauthored with Josh Lerner of Harvard 

Business School, was published in 2004. 

Professor Jaffe earned his Ph.D. in economics at Harvard and 

both an S.M. in technology and policy, whatever S.M. is—master’s 

of science, I guess—and a bachelor’s of science in chemistry from 

MIT. 

Our next witness is Dr. Mark Myers, chairman of the board of 

trustees at Earlham College, who has held visiting faculty positions 

7

at the University of Pennsylvania’s Wharton Business School, the 

University of Rochester and Stanford University. 

Dr. Myers retired from the Xerox Corporation in 2000, after a 37-

year career in its research and development organizations. While 

at Xerox, he was senior vice president in charge of corporate research, advanced development, systems architecture and corporate 

engineering. 

In addition, Dr. Myers served on the National Academies’ 

Science, Technology and Economic Policy Board from 1995 to 2005. 

He co-chaired the board study of the patent system resulting in the 

report entitled ‘‘A Patent System for the 21st Century.’’

He holds a bachelor’s degree from Earlham College and a doctor 

in material science from Penn State. 

The next witness is Suzanne Michel, the deputy assistant director for policy and coordination at the Federal Trade Commission 

and the FTC’s chief counsel for intellectual property. She is involved in many of the I.P. and antitrust issues that arise in the 

agency’s enforcement and policy initiatives and speaks frequently 

on those topics. 

She was one of the contributors to the FTC report entitled ‘‘To 

Promote Innovation: The Proper Balance of Competition and Patent Law and Policy.’’ Before joining the FTC 7 years ago, Ms. 

Michel worked in the civil division of the Department of Justice, 

where she defended the U.S. in patent infringement litigation. 

She received her B.S. with honors from Northwestern University, 

her Ph.D. in chemistry from Yale, and her J.D. from Boalt. 

Our final witness is Dan Ravicher, the executive director of the 

Public Patent Foundation. PUBPAT is a not-for-profit legal services 

organization founded by Mr. Ravicher to represent the public interest against harms caused by wrongly issued patents and unsound 

patent policy. 

Mr. Ravicher writes and speaks frequently on patent law and is 

adjunct Professor of Patent Law at Benjamin Cardozo School of 

Law. He received is bachelor’s degree in material science from the 

University of South Florida and his law degree from the University 

of Virginia. 

All your written statements will be made part of the record in 

their entirety. I would ask each of you, if you could, to summarize 

your testimony in about 5 minutes. And to help stay within that 

time, there is a timing light at your table. When 1 minute remains, 

the light will switch from green to yellow and then red when 5 

minutes are up. 

We welcome all of you. 

Dr. Jaffe, would you begin? 

TESTIMONY OF ADAM JAFFE, PROFESSOR OF ECONOMICS 

AND DEAN OF ARTS AND SCIENCES, BRANDEIS UNIVERSITY, 

WALTHAM, MA 

Mr. JAFFE. I have never done this before. 

Mr. BERMAN. Neither have I. [Laughter.] 

Mr. JAFFE. Thank you, Chairman Berman and Congressman 

Feeney and other distinguished Members of the Subcommittee. It 

is a pleasure to be here today. 

8

I will try to just hit some of the highlights of my written testimony that has already been filed. 

You gentlemen have made my job easier because you have already made several of the points that I would have made in my initial statement about the importance of the patent system to the innovation process. 

So let me then go right from that to a follow-up point which I 

think it is important, which is exactly what it is that the patent 

system does from the perspective of economic policy. 

We often think of patents as encouraging invention or innovation 

or creativity. I would submit that that is not actually what the patent system really does that is important, because I think it is 

human nature to be creative and inventive and we would always 

have people coming up with ideas whether we encouraged it or not. 

What the patent system does that is very important is to support 

the next phase of the process, which is the conversion of an idea 

into a commercially useful product or process, which, of course, has 

to happen for that invention to actually be of use to anyone. 

And that process development is an expensive and risky process. 

And what patents do is they mitigate the uncertainty inherent in 

that process by providing some measure of reassurance that someone who develops a commercial product or process from their idea 

will be able to profit from it, and that is very important, because 

if that development is too risky and too expensive, it will be inhibited and we won’t have the innovation that we would like to have. 

Now, they do this in a very powerful way. They allow the owner 

of a patent to exclude competitors, which is something normally we 

think is a bad idea. And it is important here to recognize that there 

is this balance at the heart of the patent system, which is we want 

to protect innovation, but we do it in a powerful way and so we 

have to be careful about it. 

What has happened in the last 2 decades in the United States 

is this balance has gotten out of whack and for a variety of reasons 

that we can talk about more, we have simultaneously made patents 

much easier to get and made them much more powerful and effective competitive weapons, and those two things don’t go well together. 

If you are going to have a very powerful and effective weapon, 

you don’t want to make it too easy to get and you don’t want to 

give it, as the Chairman indicated, to people who haven’t really 

earned it. 

So as a result of this balance getting out of kilter, what has happened is that, in many cases now, instead of being the engine of 

innovation, the patent system is increasingly, we use the metaphor 

in our book of sand in the gears of the innovation system, because 

people who are in the process of bringing new products and processes to market, even if they have their own patents, many of 

whom are themselves holders of patents and users of the patent 

system, increasingly what they find is that they are spending too 

much time and too much money dealing with the risk of litigation 

associated with other people asserting patent claims against their 

products. 

And this fear of litigation and the consumption of revenues and 

time and effort in dealing with it is increasingly perceived in many 

9

sectors of the economy as inhibiting the process of bringing new 

products and processes to market rather than helping it. 

So I think we can go into more details, but there are basically 

two things that fall out of that in terms of thinking about what we 

need to do. 

One is to look at the way patents are granted and to think about 

changing the fundamental model that we use for deciding whether 

or not a patent should be granted to be sure that the information 

that is necessary to make that decision and to make it intelligently 

is actually brought to the patent office, so that the patent office can 

make an effective decision about whether a patent should be granted. That is one side. 

Then the other side is in terms of litigation, because there will 

always be litigation, as the Chairman indicated. Some patents are 

always going to get through that perhaps shouldn’t have been 

granted. 

To ensure that in the litigation process, there is an appropriate 

balance between the needs of patent-holders who hold valid patents 

to enforce those patents and the opportunity of firms who may feel 

that a patent is not valid and needs to be challenged to have a 

forum for doing that. 

And in a variety of ways that I think we will discuss at greater 

length, the existing system is out of balance in that regard. Too 

often, people who are accused of infringement, even if they feel the 

patent is not valid, feel they can’t afford the risk and the expense 

of fighting that in court and making their case. 

So this is all difficult stuff and I am glad to see that there is a 

large crowd here today, because I have been working on this issue 

for about 20 years and, for a long time, you couldn’t get anyone to 

come to a hearing to talk about patent policy. 

I think the Members of this Subcommittee have played a major 

role in the last couple of years of beginning to change that and 

bringing these issues to the forefront and I commend you for your 

persistence in that, and I am now optimistic that this is an issue 

that we are all ready to act on as a country. 

Thank you. 

[The prepared statement of Mr. Jaffe follows:]

PREPARED STATEMENT OF ADAM B. JAFFE

My name is Adam B. Jaffe. I am Fred C. Hecht Professor in Economics and the 

Dean of Arts and Sciences at Brandeis University in Waltham, Massachusetts. I am 

the co-author (with Prof. Joshua Lerner of Harvard University) of Innovation and 

Its Discontents: How our Broken Patent System is Endangering Innovation and 

Progress, and What to do About it (Princeton University Press, 2004). My testimony 

today is on my own behalf, and does not necessarily represent the views of Brandeis 

University or Prof. Lerner. 

Over the course of the nineteenth and twentieth centuries, the United States 

evolved from a colonial backwater to become the pre-eminent economic and technological power of the world. The foundation of this evolution was the systematic exploitation and application of technology to economic problems: initially agriculture, 

transportation, communication and the manufacture of goods, and then later health 

care, information technology, and virtually every aspect of modern life. 

From the beginning of the republic, the patent system has played a key role in 

this evolution. Based in the Constitution itself, and codified in roughly its modern 

form in 1836, the patent system was an essential aspect of the legal framework in 

which inventions from Edison’s light bulb and the Wright brothers’ airplane to the 

cell phone and Prozac were developed. 

10

Much popular discussion of the patent system emphasizes its role in creating an 

economic incentive for the creative act of invention. From an economic perspective, 

this incentive for invention is not paramount, because creativity seems to be inherent in human nature, making a flow of new creative ideas likely under any incentive 

system. But a creative idea does not help society, unless it is taken further and converted to a commercially useful new product or process. And this stage of converting 

inventive ideas into real products and processes is very costly and very uncertain. 

The economic function of the patent system is to provide a measure of predictability 

and protection to this expensive and risky process of product and process development. At such, it lies at the very heart of technological process, which is in turn 

the primary engine of economic growth. 

In the last two decades, however, the role of patents in the U.S. innovation system 

has changed from fuel for the engine to sand in the gears. Two apparently mundane 

changes in patent law and policy have subtly but inexorably transformed the patent 

system from a shield that innovators could use to protect themselves, to a grenade 

that firms lob indiscriminately at their competitors, thereby increasing the cost and 

risk of innovation rather than decreasing it. 

Examples of dysfunctional patent behavior have become staples of the business 

and popular press. They range from the amusing and economically irrelevant, to 

not-so-funny cases that seriously threaten important technologies in important industries:

• Patents on inventions that are trivially obvious, such as the ‘‘Method for 

Swinging on a Swing,’’ ‘‘invented’’ by a five-year-old, and ‘‘User Operated 

Amusement Apparatus for Kicking the User’s Buttocks’’ (‘‘invented’’ by a supposed grown-up);

• Patents in areas new to patenting, but covering purported discoveries familiar 

to practitioners and academics alike, such as Amazon.com’s attempt to prevent Barnesandnoble.com from allowing customers to buy books with a single 

mouse-click, and a bright MBA student’s patents on an option-pricing formula 

published in the academic finance literature two decades earlier;

• Patents that have become weapons for firms to harass competitors, such as 

the decade-long effort by Rambus, a semiconductor designer, to control computer memory technology by making sure that a long string of patents, all 

derived from a single 1990 patent application, incorporated important features of an industry-wide standard developed through a voluntary industry 

standard-setting association;

• Litigation by patent-holders who are not themselves market competitors, that 

hold up or impose huge costs on innovative, commercially successful products, 

such as the $612 million dollar settlement that was necessary to prevent patent litigation from shutting down the Blackberry handheld device.

In the last several years, a variety of groups concerned with different aspects of 

public policy related to innovation have undertaken studies and issued reports calling for major reform of the patent system. These include the Federal Trade Commission (U.S. Federal Trade Commission, 2003, cited hereinafter as ‘‘FTC Report’’), and 

the Board on Science, Technology and Economic Policy of the National Research 

Council (Merrill, Levin and Myers, 2004, cited hereinafter as ‘‘STEP Report’’). After 

the issuance of the FTC Report and the STEP report, the American Intellectual 

Property Law Association (AIPLA) joined with the FTC and STEP Board to sponsor 

a series of ‘‘Town Meetings’’ across the country in 2005, and the AIPLA endorsed 

many of the reform recommendations of the FTC and the STEP Board. This subcommittee has also, of course, been active in this issue, with hearings and proposed 

legislation that has garnered bipartisan support. 

In my testimony today, I will summarize the background for these discussions and 

discuss why patent policy reform is so crucial to our national well-being. Since I understand the subject of this hearing to be the ‘‘Case for Patent Reform’’ rather than 

the details of such reform, I will discuss the substance of reform only in the most 

general terms, but specific reform recommendations are discussed at length in my 

book with Prof. Lerner. 

PATENT POLICY DEVELOPMENTS OVER THE LAST TWO DECADES

The origin of today’s problems goes back to 1982, when the process for judicial 

appeal of patent cases in the federal courts was changed, so that such appeals are 

now all heard by the Court of Appeals for the Federal Circuit (‘‘CAFC’’), rather than 

the twelve regional courts of appeal, as had previously been the case. And in the 

early 1990s, Congress changed the structure of fees and financing of the U.S. Patent 

and Trademark Office (PTO) itself, trying to turn it into a kind of service agency 

11

1http://www.uspto.gov/web/offices/ac/ido/oeip/taf/us—stat.htm 

2See STEP Report, pp 87–94. 

whose costs of operation are covered by fees paid by its clients (the patent applicants). 

It is now apparent that these seemingly mundane procedural changes, taken together, have resulted in the most profound changes in U.S. patent policy and practice since 1836. The CAFC has interpreted patent law to make it easer to get patents, easier to enforce patents against others, easier to get large financial awards 

from such enforcement, and harder for those accused of infringing patents to challenge the patents’ validity. At roughly the same time, the new orientation of the patent office has combined with the court’s legal interpretations to make it much easier 

to get patents. However complex the origins and motivations of these two Congressional actions, it is clear that no one sat down and decided that what the U.S. economy needed was to transform patents into much more potent legal weapons, while 

simultaneously making them much easier to get. 

An unforeseen outcome has been an alarming growth in legal wrangling over patents. More worrisome still, the risk of being sued, and demands by patent holders 

for royalty payments to avoid being sued, are seen increasingly as major costs of 

bringing new products and processes to market. Thus the patent system—intended 

to foster and protect innovation—is generating waste and uncertainty that hinder 

and threaten the innovative process. 

The growth in the shear magnitude of the patent phenomenon has been breathtaking. The weakening of examination standards and the increase in patent applications has led to a dramatic increase in the number of patents granted in the U.S. 

The number of patents granted in the U.S., which increased at less than 1% per 

year from 1930 until 1982 (the year the CAFC was created), roughly tripled between 

1983 and 2001 (from 62 thousand per year to over 180 thousand per year, an annual 

rate of increase of about 6%). The total number of patents granted peaked at about 

187 thousand in 2003, and seems to have leveled off or perhaps declined a bit since 

then (The 2005 total was 158 thousand; the number for 2006 is not yet available.) 

Applications, too, have ballooned, from less than 120 thousand in 1982, to 418 thousand in 2005, with no sign of slowing down.1

While some of this increase appears to reflect real growth in innovation, it is clear 

that a large part of the increase is a response to the increased laxity of the PTO, 

which grants a significantly larger fraction of the applications it receives than do 

its counterparts in Europe and Japan. More worrisome still is a dramatic and inexorable increase since the early 1990s in the rate of litigation around patents. The 

number of patent cases filed has doubled in a decade and continues to rise. And the 

cost of defending a patent suit has risen as well; a patent infringement allegation 

from a competitor can now mean legal fees in the millions. For an under-capitalized 

startup, this prospect creates an overwhelming pressure to settle even frivolous 

complaints. Consumers therefore have less access to new products—from lifesaving 

drugs to productivity-enhancing software—than would be the case if innovative companies were not distracted from innovation by litigation and fear of litigation. 

Much public attention has focused on the expansion of patenting into areas where 

it was previously unimportant or non-existent, such as biotechnology, software and 

business methods. Indeed, some of the worst abuses are in these areas. But concern 

about specific technologies potentially masks the deeper, fundamental problem. The 

incentives in the system now encourage frivolous applications, cursory review of 

those applications by the PTO, and indiscriminate filing of patent infringement suits 

as a generic competitive weapon. To get the system back on track, the system must 

be changed so that its incentives discourage frivolous applications, encourage rigorous patent examination, and discourage patent litigation where there is not a true 

invention to protect. 

GOALS AND OBJECTIVES

While different analysts of the patent landscape have emphasized different aspects of the patent policy problems, there is general agreement on broad goals for 

reform of the system: 

Improve patent quality.2 As illustrated by examples discussed above, people are 

getting patents for inventions that are not new and/or are obvious. One way to solve 

this, of course, would be to make it much harder to get a patent on anything. If 

we did that, the few patents that did issue would be of very high quality, in the 

sense of being very deserved by the applicant. But the objective of patent quality 

has to be more than just making sure bad patents don’t issue. It has to include also 

making sure that inventors do get patents when they have a truly novel, non-obviVerDate 0ct 09 2002 10:26 Jun 14, 2007 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 F:\WORK\COURTS\021507\33315.000 HJUD1 PsN: 33315
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ous invention, that such patents are processed relatively quickly and reliably, and 

that once granted they provide an adequate property right to protect subsequent investment in the invention. 

Reduce uncertainty. A primary objective of reform should be to reduce the uncertainty that now pervades many aspects of the patent system. (Ironically, the only 

aspect of the patent process that has become more certain is the application process 

itself, as the ultimate granting of some patent from each original application has 

become almost a sure thing!) The sand in the gears of the innovation machine is 

that companies and individuals must constantly fear that their research and product development may come to naught, because someone is going to assert an as-yet 

unknown or untested patent against them. Further, when such an assertion of patent infringement is made, the uncertainty about the ability to defend against that 

assertion often leads either to abandonment of the allegedly infringing technology, 

or to an agreement to pay possibly unnecessary royalties. 

Keep costs under control. In FY 2006, the Patent Office spent about $1.7 Billion 

for its operations. In recent years, Congress has increased PTO fees and budgetary 

appropriations, thereby responding to one aspect of the recommendations of groups 

such as the FTC, the STEP Board and the AIPLA. It is important to remember that 

appropriations to the PTO represent only a small fraction of what society spends 

on the patent system. Patent applicants spend several times that amount, and patent litigants billions more. These resources might be well spent, if they achieved a 

reasonably smoothly functioning system. But the system is not working well, and 

it is reasonable to wonder whether we need to invest more of society’s resources in 

the patent process. We need to look for solutions that go beyond throwing money 

at the problem. 

SOME SIMPLE TRUTHS

The next step towards reform is to understand some basic realities about the innovation process. 

Mistakes will always be with us 

Patent examination is never going to be perfect. Examiners are human. More important, there is an essentially irreducible aspect of judgment in determining if an 

invention is truly new. After all, even young Albert Einstein faced challenges while 

assessing applications as a ‘‘Patent Examiner-Third Class’’ in the Swiss Patent Office (Clark, 1973). Therefore, we cannot hope to have a system in which no ‘‘bad’’ 

patents ever issue. What is important is to have a system with fewer bad patents. 

And, since there will always be mistakes, it is important to have a system that functions reasonably well despite the issuance of some bad patents. 

At current application rates, it would be very expensive to give all patent applications an examination sufficiently thorough to reduce significantly the problems with 

bad patents being issued. Now, the patent system is important, so it is possible that 

spending several billion additional dollars on the PTO would be worthwhile for society. But this kind of dramatic increase in PTO resources does not seem very realistic in the current fiscal environment. Fortunately, it is also not necessary to expend the resources necessary to provide very reliable examination for all patent applications. 

Much more chaff than wheat 

The first step to understanding why greatly increasing the resources for examination is not the best solution to the problem is to understand that most patents are, 

and always will be, worthless and unimportant. This is not a feature of the patent 

office; it is a feature of the innovation process. It is partly due to the human tendency for us each to think that our ideas are better than other people think they are. 

But it also reflects a deeper attribute of the process of technological development: 

the significance of a new idea usually cannot be known when it is first developed, 

because that significance depends on subsequent developments, both technological 

and economic. Many, many, ‘‘good’’ ideas are patented that never actually turn out 

to be worth anything. It is not that they shouldn’t have been patented to begin with. 

It’s just that for every invention with lasting technological or economic significance, 

there will always be dozens or hundreds of ideas that seemed potentially worthwhile, but which eventually proved to be valueless. 

The fact that almost all patents are ultimately worthless has an important implication for the ‘‘patent quality’’ problem. If most patents are doomed to be consigned 

to the dustbin of technological history, it can’t make sense to spend a lot of resources to make sure that they all receive very high quality examination before 

issuing. The legions of inventors and patent attorneys may not like to think about 

this, but for the vast majority of patent applications, it will simply never matter—

13

either to the inventor, her employer, or competitors—whether the patent is allowed 

to issue or not. 

‘‘Rational Ignorance’’

If careful examination is expensive, and the vast majority of patents will never 

matter to anyone, then it would be inefficient to expend society’s resources on careful examination of all patent applications. In the colorful phrase of Mark Lemley 

(2002), we can think of the poor quality of patent examination as representing ‘‘Rational Ignorance,’’ by which he means that society is rationally choosing to remain 

ignorant about which patents really should be granted by the PTO. Lemley argues 

that it is, in fact, reasonably efficient to simply accept that PTO examination will 

be of poor quality, and that the cases that really matter will have to be sorted out 

in the courts. Court cases are expensive, but because only the small fraction of patents that matter will ever get litigated, Lemley argues that the cost of litigation is, 

overall, efficient. 

I agree with Lemley that it would be inefficient to provide thorough examination 

for all applications at the current rate of patent application. I disagree, however, 

that the current situation is acceptably efficient. First, while the out-of-pocket cost 

of litigation may be tolerable, the intangible cost of a system with pervasive lowquality patents is much higher than just the cost of paying lawyers to file and defend patent cases. The uncertainty that the current system creates for all parties 

regarding who can legally use what technologies is a cost that is very hard to quantify, but is surely significant. Talk to anyone involved in trying to commercialize 

new technologies, and you are likely to hear complaints about the headaches and 

uncertainty created by overlapping patent claims. Further, this uncertainty undermines everyone’s incentives to invest in new technology. From the perspective of society as a whole, the loss of new products and processes that never make it to market, or that gain a toehold and are then abandoned after a threatened patent fight, 

is much larger than the visible costs of patent litigation. And, fortunately, there are 

changes that could be made in the system that would improve patent quality without requiring dramatic increases in the resources used in the examination process. 

Inventors respond to how the Patent Office behaves 

The key to more efficient patent examination is to go beyond thinking about what 

patent examiners do, to consider how the nature of the examination process affects 

the behavior of inventors and firms. To put it crudely, if the patent office allows 

bad patents to issue, this encourages people with bad applications to show up. While 

the increase in the rate of patent applications over the last two decades is driven 

by many factors, one important factor is the simple fact that it has gotten so much 

easier to get a patent, so applications that never would have been submitted before 

now look like they are worth a try. Conversely, if the PTO pretty consistently rejected applications for bad patents, people would understand that bad applications 

are a waste of time and money. While some people would still try—either because 

they aren’t smart enough to know they have a bad application, or because they are 

willing to take a roll of the dice—the number of applications would likely be considerably fewer that it has been in recent years. 

Get information to flow into the PTO 

Another important aspect of incentives has to do with information: who has it, 

and what do they do with it? Much of the information needed to decide if a given 

patent application should issue—particularly information about what related technologies already exist—is in the hands of competitors of the applicant, rather than 

in the hands of the PTO. And there are strong incentives for firms to share this 

information. If a competitor of mine has filed a patent application, the last thing 

I want to see is for them to be issued a patent on an application that would have 

been rejected if the PTO had known about my technology. I would thus have a 

strong incentive to provide this information, if only the PTO would give me an opportunity for input, and if taking advantage of such an opportunity does not create 

strategic disadvantages for me down the road. So creating opportunities of this sort 

is another way that the system could exploit the incentives of private parties in 

order to increase efficiency. 

Potential litigants respond to how the courts behave 

When the CAFC issues rulings that increase the chance of the patentee prevailing 

in an infringement suit, the consequences of this change are not limited to possible 

changes in the outcome of specific cases. Such a change in perceived success probabilities changes what disputes are, in fact, litigated. Conversations with attorneys 

involved in patent disputes make clear that the CAFC’s strengthening of the offensive and defensive weapons of the patentee has significantly increased patentees’ 

14

willingness to bring suit. Similarly, the change has significantly decreased the willingness of accused infringers to fight, even when they believe that the patents being 

used to threaten them are not valid. In particular, firms with highly successful 

products—when faced with a jury trial over complex issues of novelty and obviousness, and the risk that defeat might mean large penalties for willful infringement 

and/or an injunction shutting down their product—may feel that they have no rational business choice but to pay a ransom to avoid litigation. When this happens, 

the cost of innovation rises and society is the loser. Constraining the growth in litigation, and the uncertainty created for all innovators by the risk of suit, will require 

a change in these incentives. 

BUILDING BLOCKS OF REFORM

There are three key conceptual pieces for thinking about patent policy reform:

1. Investigate ways to create incentives and opportunities for parties that have 

information about the novelty and obviousness of inventions to bring that information to the PTO when it is considering a patent grant.

2. Consider the possibility for multiple levels of review of patent applications, 

with the time and effort expended escalating as an application proceeds to 

higher levels, so that money is not wasted on unimportant patents, but sufficient care is taken to avoid mistakes where the stakes are high.

3. Address the balance of incentives and opportunities for patent holders and 

alleged infringers in the context of litigation. People with valid patents that 

are being infringed must have opportunity to seek redress, but the current 

system makes it too easy for patent holders to use threatened litigation—

even when based on patents of dubious validity—too risky for alleged infringers to fight.

The first two of these concepts are aimed at making the PTO more effective at 

reasonable cost. The third addresses the reality that the best of all possible PTOs 

will still make mistakes, and so we need a court system that is capable of rectifying 

those mistakes. 

Effective reform must start with the recognition that much of the information 

needed to decide if a given application should be approved is in the hands of competitors of the applicant, rather than the PTO. A review process with multiple potential review levels efficiently balances the need to bring in outside information 

with the reality that most patents are unimportant. Multilevel review, with the barriers to invoking review and the thoroughness of that review both increasing at 

higher levels, would naturally focus attention on the most potentially important applications. Most patents would never receive anything other than the most basic examinations. But for those applications that really mattered, parties would have an 

incentive and opportunities to bring information in their possession before the PTO, 

and the PTO would have more resources to help it make the right decision. Although there is disagreement about the details, implementation of a review procedure or procedures of this kind has been endorsed by the FTC, the STEP Board and 

the AIPLA. 

If bad patents with important consequences were weeded out by the PTO, the incentive to file frivolous applications in the first place would be reduced. This would 

break the current vicious cycle in which inventors are induced to make marginal 

applications by their likelihood of success, and the resulting flood of applications 

overwhelms the patent office and makes it harder to separate the wheat from the 

chaff. 

Breaking the vicious cycle of bad examination and bad applications is the key to 

reform of the patent review process. But there are always going to be mistakes, and 

so it is important that the court system operate efficiently to rectify those mistakes, 

while protecting holders of valid patents. Today, the legal playing field is significantly tilted in favor of patentees. 

Prof. Lerner and I have highlighted the role of juries in deciding patent validity 

questions as a crucial source of undesirable and unnecessary uncertainly in the litigation process. The evidence in a patent case can be highly technical, and the average juror has little competence to evaluate it. Having decisions made by people who 

can’t really understand the evidence increases the uncertainty surrounding the outcome. The combination of this uncertainty with the legal presumption of validity—

the rule that patents must be presumed legitimate unless proven otherwise—is a 

big reason why accused infringers often settle rather than fight even when they 

think they are right. 

For accused infringers, the difficulties associated with the presumption of validity 

and the uncertainty of juries are compounded by the availability of remedies or penVerDate 0ct 09 2002 10:26 Jun 14, 2007 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6621 F:\WORK\COURTS\021507\33315.000 HJUD1 PsN: 33315
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alties for infringement that are far out of proportion to the economic harm that a 

patent holder may have suffered as the result of infringement. While it is important 

that patent holders have the ability to uphold valid patents, remedies that are vastly disproportionate to the economic significance of the patent at issue do not serve 

any legitimate public policy purpose, and create the incentive and opportunity for 

those who would use the patent system for ransom and extortion rather than innovation. 

CONCLUSION

The protection for true innovators created by a workable patent system is vital 

to technological change and economic growth. The problems in the existing U.S. patent system are structural, and the solutions need to be fundamental. As much as 

the USPTO and the Courts can and should address some of the weaknesses of the 

existing system, meaningful reform requires important modifications to the statutory framework. In these days of polarization and ideological divide in Washington, 

patent policy reform offers an unusual opportunity for real action in the public interest. As evidenced by the discussion in the FTC and STEP reports, being pro-reform does not make one anti-patent. On the contrary, the motivation for patent reform derives precisely from the recognition that a well-functioning patent system is 

absolutely crucial to our technological progress and economic health. 

REFERENCES

Ronald W. Clark, Einstein: The Life and Times, London: Hodder and Stoughton, 

1973. 

Cohen, Wesley and Stephen Merrill, Eds., Patents in the Knowledge-Based Economy, National Academy Press, www.nap.edu/catalog/10770.html (2003) 

Adam B. Jaffe, and Josh Lerner, Innovation and Its Discontents: How Our Broken 

Patent System is Endangering Innovation and Progress, and What To Do About 

It, Princeton: Princeton University Press, 2004. 

Mark Lemley, ‘‘Rational Ignorance at the Patent Office,’’ Northwestern University 

Law Review, 95 (2001) 1495–1532. 

Merrill, Stephen A., Richard C. Levin and Mark B. Myers, Eds., A Patent System 

for the 21st Century (Report of the Committee on Intellectual Property Rights in 

the Knowledge-Based Economy), Board on Science Technology and Economic 

Policy, National Research Council (‘‘STEP Report’’), www.nap.edu/html/

patentsystem (2004) 

U.S. Federal Trade Commission, To Promote Innovation, The Proper Balance of 

Competition and Patent Law and Policy, www.ftc.gov/os/2003/10/

innovationrpt.pdf (2003)

TESTIMONY OF MARK B. MYERS, CO-CHAIR OF THE NATIONAL 

ACADEMY OF SCIENCES’ REPORT ‘‘A PATENT SYSTEM FOR 

THE 21ST CENTURY,’’ UNIONVILLE, PA 

Mr. MYERS. Over the past 45 years, we have been in a decidedly 

pro-patent and pro-intellectual property area. As a result, patents 

are being more zealously sought, vigorously asserted and aggressively enforced than ever before. 

There are many indications that firms, as well as universities 

and public institutions are attaching greater importance to patents, 

are willing to pay higher costs to acquire and exercise to defend 

them. 

The workload of the U.S. Patent Office has increased several-fold 

in the last several decades, to the point that it is issuing approximately 100 patents every working hour. 

Meanwhile, the cost of acquiring patents, promoting or securing 

licenses to patenting technology and prosecuting and defending 

against infringements are rising rapidly. 

There have been a number of concerns that have arisen during 

this period. One is decline in patent quality, difficultly in negotiating patent thickets, increasing probability of holdup, especially in 

cumulative technology, increase in defensive patenting, rising 

16

transaction costs, incursions on public domain of ideas, impediments to research and disclosure purpose not being well-served. 

In particular, concerns were raised about patents having chilling 

effects on research tools, cumulative technologies, network systems 

technologies, where open standards are required. 

As we look at evaluating the patent system, our study used seven 

criteria. The patent system should accommodate new technologies. 

The system should reward only those inventions that meet statutory tests of novelty and utility. 

The patent system should serve a second function of disseminating technical information. Administrative and judicial decisions 

should be timely and the costs associated with them reasonable 

and proportionate. 

Access to patent technology is important in research and development of cumulative technologies where one advance builds upon 

another and previous advances. 

Integration or reciprocity of the three major patent systems, 

United States, Japan and Europe, would reduce the public and private transaction costs, facilitating trade, investment and innovation, and there should be a playing field with all intellectual property holders who are similarly situated enjoying the same benefits 

and having the same obligations. 

The Academy study made seven recommendations to improve the 

patent system. Preserve an open-ended unitary flexible patent system, reinvigorate the non-obvious standard, institute a post-open 

review procedure, strengthen U.S. Patent Office capabilities, shield 

some research uses of patented inventions from liability for infringement, modify or remove the subjective elements of litigation, 

and that would include best mode, inequitable conduct and willful 

infringement, and, finally, reduce the redundancies and inconsistencies among the patent systems. 

And particularly we feel that the reforms that we take should 

move us toward a stronger position with respect to having the ability to have successful common practices between the European, 

Japan and U.S. systems. 

And that concludes my remarks. Thank you. 

[The prepared statement of Mr. Myers follows:]

PREPARED STATEMENT OF MARK B. MYERS

Good afternoon, Chairman Berman and members of the subcommittee. I am the 

former senior vice president for research and technology of the Xerox Corporation. 

Together with Richard Levin, President of Yale University, I chaired the Committee 

on Intellectual Property Rights in the Knowledge-Based Economy of the National 

Academies, comprised of the National Academy of Sciences, National Academy of 

Engineering, and the Institute of Medicine, originally chartered by Congress in 1863 

to advise the government on matters of science, technology, and health. 

Although most Academy studies are conducted in response to an agency’s or a 

congressional request, the study I will describe was initiated by the Academies’ 

standing Board on Science, Technology, and Economic Policy (STEP), because it recognized that the breakneck pace of technological change across many industries was 

creating stresses in the patent system that needed to be examined to ensure that 

it continues to be a stimulus to innovation and does not become an impediment to 

it. 

I want to underscore that our panel began work in 2000 and we completed our 

report, A Patent System for the 21st Century, nearly three years ago in the spring 

of 2004. I realize that there has been much discussion of strengths and weaknesses 

of the patent system since then and some legislative activity and considerable judicial attention, and new issues have emerged in the course of that discussion. NeverVerDate 0ct 09 2002 10:26 Jun 14, 2007 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 F:\WORK\COURTS\021507\33315.000 HJUD1 PsN: 33315
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theless, I believe that the concerns that motivated our recommendations, several of 

which were incorporated in bills introduced in the last Congress and paralleled recommendations of the October 2003 Federal Trade Commission report, remain the 

principal reasons for moving forward on patent reform. I may have personal views 

on some of the issues that have become contentious in the past couple of years, but 

of course I cannot speak for the committee or for the National Academies on matters 

we did not consider in depth. 

Since 1980 a series of judicial, legislative, and administrative actions have extended patenting to new technologies (biotechnology) and to technologies previously 

without or subject to other forms of intellectual property protection (software and 

business methods), encouraged the emergence of new players (universities), 

strengthened the position of patent holders vis-a ́-vis infringers domestically and 

internationally, relaxed other restraints on the use of patents (antitrust enforcement), and extended their reach upstream from commercial products to scientific research tools and materials. 

As a result, patents are being more zealously sought, vigorously asserted, and aggressively enforced than ever before. There are many indications that firms in a variety of industries, as well as universities and public institutions, are attaching 

greater importance to patents and are willing to pay higher costs to acquire, exercise, and defend them. The workload of the U.S. Patent and Trademark Office has 

increased several-fold in the last few decades, to the point that it is issuing approximately 100 patents every working hour. Meanwhile, the costs of acquiring patents, 

promoting or securing licenses to patented technology, and prosecuting and defending against infringement allegations in the increasing number of patent suits are 

rising rapidly. 

In spite of these changes and the obvious importance of patents to the economy, 

there had not been a broad-based study of the patent system’s performance since 

the Depression. Accordingly, the Academies assembled a committee that included 

three corporate R&D managers, a university administrator, three patent holders, 

and experts in biotechnology, bioengineering, chemicals, telecommunications, microelectronics, and software, as well as economists, legal scholars, practicing attorneys, 

and a former federal judge. This diversity of experience and expertise distinguished 

our panel from nearly all previous commissions on the subject, as did our study 

process. We held conferences and public hearings and we commissioned original empirical research on some aspects of the system. The resulting report provides a thoroughly researched, timely perspective on how well the system is working. 

High rates of technological innovation, especially in the 1990s but continuing to 

this day, suggest that the patent system is not broken and does not require fundamental changes. Nevertheless, the committee was able to identify five issues that 

should and can be addressed now. 

First, maintaining consistent patent quality is important but difficult in fast-moving fields. Over the past decade, the quality of issued patents has come under frequent sharp attack, as it sometimes has in the past. One can always find patents 

that appear dubious and some that are even laughable—the patent for cutting and 

styling hair using scissors or combs in both hands. Some errors are unavoidable in 

a system that issues more than 160,000 patents annually, and many of those errors 

will have no economic consequence because the patents will not be enforced. Still, 

some critics have suggested that the standards of patentability have been lowered 

by court decisions. Other observers fault the USPTO’s performance in examining 

patent applications, variously attributing the alleged deterioration to inadequate 

time for examiners to do their work, lack of access to prior art information, perverse 

incentives to grant patents rather than carefully evaluate applications, and inadequate examiners’ qualifications. 

Because the claim that quality has deteriorated in a broad and systematic way 

has not been empirically tested, conclusions must remain tentative. But there are 

several reasons to suspect that more issued patents are substandard, particularly 

in technologies newly subject to patenting. One reason to believe that quality has 

suffered, even before taking examiner qualifications and experience into account, is 

that in recent years the number of patent examiners has not kept pace with the 

increase in workload represented by the escalating number and growing complexity 

of applications. The result, in part, has been longer pendency, but in all likelihood 

there has also been inadequate scrutiny. Second, patent approval rates are higher 

than in some other major nations’ patent offices. Third, changes in the treatment 

of business method and genomic patent applications, introduced in 2000 and 2001 

as a result of criticisms of the quality of patents being issued, reduced or at least 

slowed down the number of patent grants in those fields. And fourth, there does appear to have been some dilution of the application of the non-obviousness standard, 

particularly in biotechnology, and some limitations on its proper application, for exVerDate 0ct 09 2002 10:26 Jun 14, 2007 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 F:\WORK\COURTS\021507\33315.000 HJUD1 PsN: 33315
18

ample to business methods patent applications. Although quality appears to be more 

problematic in rapidly moving areas of technology newly subject to patenting and 

perhaps is corrected over time, the cost of waiting for an evolutionary process to run 

its course may be too high when new technologies attract the level of investment 

exhibited by the Internet, biotechnology, and now nanotechnology. 

What are the costs of uncertainty surrounding patent validity in areas of emerging technology? First, uncertainty may induce a considerable volume of costly litigation. Second, in the absence of litigation, the holders of dubious patents may be unjustly enriched, and the entry of competitive products and services that would enhance consumer welfare may be deterred. Third, uncertainty about what is patentable in an emerging technology may discourage investment in innovation and product development until the courts clarify the law, or inventors may choose to incur 

the cost of product development only to abandon the market years later when their 

technology is deemed to infringe. In sum, greater certainty about patent validity 

would benefit innovators, technological followers, and consumers alike. 

Second, differences among national patent systems continue to result in avoidable 

costs and delays. In spite of progress in harmonizing the U.S., European, and Japanese patent examination systems, important differences in standards and procedures remain, ensuring search and examination redundancy that imposes high costs 

on users and hampers market integration. In 2003 it was estimated to cost as much 

$750,000 to $1 million to obtain comprehensive worldwide patent protection for an 

important invention, and that figure was increasing at a rate of 10 percent a year. 

Important differences include the following: Only the United States gives preference 

to the ‘‘first to invent’’ rather than the ‘‘first to file.’’ Only the United States requires 

that a patent application disclose the ‘‘best mode’’ of implementing an invention. 

U.S. law allows a grace period of one year, during which an applicant can disclose 

or commercialize an invention before filing for a patent, whereas Japan offers a 

more limited grace period and Europe provides none. 

Third, some U.S. practices seem to be slowing the dissemination of information.

In the United States there are many channels of scientific interaction and technical 

communication, and the patent system contributes more to the flow of information 

than does the alternative of maintaining technical advances as trade secrets. There 

are nonetheless features peculiar to the U.S. patent system that inhibit information 

dissemination. One is the exclusion of a nontrivial number of U.S. patent applications from publication after 18 months, an international norm since 1994. A second 

U.S. idiosyncrasy is the legal doctrine of willful infringement, which can require an 

infringer to pay triple damages if it can be demonstrated that the infringer was 

aware of the violated patent before the violation. Some observers believe that this 

deters an inventor from looking at the patents of possible competitors, because 

knowledge of the patent could later make the inventor subject to enhanced damages 

if there is an infringement case. This undermines one of the principal purposes of 

the patent system: to make others aware of innovations that could help stimulate 

further innovation. 

Fourth, litigation costs are escalating rapidly and proceedings are protracted. Surveys conducted periodically by the American Intellectual Property Law Association 

indicate that litigation costs, millions of dollars for each party in a case where the 

stakes are substantial, are increasing at double digit rates. At the same time the 

number of lawsuits in District Courts is increasing. 

Fifth, access to patented technologies is important in research and in the development of cumulative technologies, where one advance builds on one or several previous 

advances. Faced with anecdotes and conjectures about restrictions on researchers, 

particularly in biotechnology, we conducted a modest survey of diverse participants 

in the field to determine whether patent thickets are emerging or access to 

foundational discoveries is restricted. We found very few cases although some evidence of increased research costs and delays and much evidence that research scientists are largely unaware of whether they are using patented technology. During 

our study, the Court of Appeals for the Federal Circuit ruled that university researchers are not shielded by the common law research exception against infringement liability. This combination of circumstances—ignorance of intellectual property 

on the one hand and full legal liability on the other—represents an exposure that 

universities are not equipped to eliminate by the kinds of due diligence performed 

by companies and investors. 

TOWARD A BETTER PATENT SYSTEM

The Academies’ committee supported seven steps to ensure the vitality and improve the functioning of the patent system: 

19

1) Preserve an open-ended, unitary, flexible patent system. The system should remain open to new technologies, and the features that allow somewhat different 

treatment of different technologies should be preserved without formalizing different 

standards; for example, in statutes that would be exceedingly difficult to draft appropriately and equally difficult to change if found to be inappropriate. Among the 

tailoring mechanisms that should be exploited is the USPTO’s development of examination guidelines for new or newly patented technologies. In developing such guidelines, the office should seek advice from a wide variety of sources and maintain a 

public record of the submissions. The results should then be part of the record of 

any appeal to a court, so that they can inform judicial decisions. 

This information could be of particular value to the Court of Appeals for the Federal Circuit, which is in most instances the final arbiter of patent law. To keep this 

court well informed about relevant legal and economic scholarship, it should encourage the submission of amicus briefs and arrange for temporary exchanges of members with other courts. Appointments to the Federal Circuit should include people 

familiar with innovation from a variety of perspectives, including management, finance, and economic history, as well as nonpatent areas of law that bear on innovation. 

2) Reinvigorate the nonobviousness standard. The requirement that to qualify for 

a patent an invention cannot be obvious to a person of ordinary skill in the art 

should be assiduously observed. In an area such as business methods, where the 

common general knowledge of practitioners is not fully described in published literature likely to be consulted by patent examiners, another method of determining 

the state of knowledge needs to be employed. Promising experiments are underway 

to encourage the submission of relevant prior art during the examination, but turning examination into an adversarial process could be counter-productive and very 

likely unacceptable to applicants. Nevertheless, the open review procedure we describe next provides a means of obtaining expert participation if a patent is challenged. 

Gene sequence patents present a particular problem because of a Federal Circuit 

ruling making it difficult to apply the obviousness test in this field. This is unwise 

in its own right and is also inconsistent with patent practice in other countries. 

3) Institute an ‘‘Open Review’’ procedure. Congress should pass legislation creating a procedure for third parties to challenge patents after their issuance in a proceeding before administrative patent judges of the USPTO. The grounds for a challenge could be any of the statutory standards—novelty, utility, nonobviousness, disclosure, or enablement—or the case law proscription on patenting abstract ideas and 

natural phenomena. The time, cost, and other characteristics of this proceeding need 

to make it an attractive alternative to litigation to resolve questions of patent validity. For example, federal district courts could more productively focus their attention 

on patent infringement issues if they were able to refer validity questions to an 

Open Review proceeding. The result should be much earlier, less expensive, and less 

protracted resolution of validity issues than we have with litigation and of a greater 

variety of validity issues than we have with re-examination even if it were used. 

4) Strengthen USPTO resources. To improve its performance, the USPTO needs 

additional resources to hire and train additional examiners and implement a robust 

electronic processing capability. Further, the USPTO should create a strong multidisciplinary analytical capability to assess management practices and proposed 

changes, provide an early warning of new technologies being proposed for patenting, 

and conduct reliable, consistent, reputable quality reviews that address office-wide 

as well as individual examiner performance. Since our report congressional appropriations have approximated USPTO receipts from application and maintenance 

fees. This is a positive development, but additional resources will be needed, for example to operate an efficient open review system. 

5) Modify or remove the subjective elements of litigation. Among the factors that 

increase the cost and reduce the predictability of patent infringement litigation are 

issues unique to U.S. patent jurisprudence that depend on the assessment of a party’s state of mind at the time of the alleged infringement or the time of patent application. These include whether someone ‘‘willfully’’ infringed a patent, whether a patent application included the ‘‘best mode’’ for implementing an invention, and whether a patent attorney engaged in ‘‘inequitable conduct’’ by intentionally failing to disclose all prior art when applying for a patent. Investigating these questions requires 

time-consuming, expensive, and ultimately subjective pretrial discovery. The committee believed that significantly modifying or eliminating these rules altogether 

would increase the predictability of patent dispute outcomes without substantially 

affecting the principles that these aspects of the enforcement system were meant 

to promote. 

20

6) Harmonize the U.S., European, and Japanese patent examination systems. The 

United States, Europe, and Japan should further harmonize patent examination 

procedures and standards to reduce redundancy in search and examination and 

eventually achieve mutual recognition of applications granted or denied. The committee recommended that the United States should conform to practice elsewhere 

by adopting the first inventor to file system, dropping the ‘‘best mode’’ requirement, 

and eliminating the current exception to the rule of publication of an application 

after 18 months. The committee also recommends that the United States encourage 

other jurisdictions to adopt provisions for a grace period for filing an application. 

These objectives should be pursued on a trilateral or even bilateral basis if multilateral negotiations do not progress. 

7) Consider enacting a narrowly drawn exception from infringement liability for 

some research activities. Here we do not propose specific legislative language, but 

we do suggest some principles for Congress to consider in drafting a narrow research exception that would preserve the intent of the patent system and avoid 

some disruptions to fundamental research. 

In making these recommendations, our committee was mindful that although the 

patent law is designed to be uniform across all applications, its practical effects vary 

greatly across technologies, industries, and classes of inventors. There is a tendency 

in discourse on the patent system to identify problems and solutions to them from 

the perspective of one field, sector, or class. Although the committee did not attempt 

to deal with the specifics of every affected field, the diversity of the membership enabled us to consider each of the proposed changes from the perspective of very different sectors. Similarly, we examined very closely the claims made that one class 

of inventors—usually individuals and very small businesses—would be disadvantaged by some change in the patent system. Some of the committee’s recommendations—universal publication of applications, Open Review, and shifting to a first-inventor-to-file system—have in the past been opposed on those grounds. The committee reviewed very carefully, for example, how small entities currently fare in interference proceedings, examination, and re-examination. We also studied how European opposition proceedings impact small businesses. We concluded they enjoy little 

protection and in fact are often at a disadvantage in the procedures we propose to 

change. In short, we believe that our recommendations, on balance, would be as 

beneficial to small businesses and individual inventors as to the economy as a 

whole. 

I appreciate the opportunity afforded by the subcommittee to testify on our conclusions and would be happy to answer any questions.

TESTIMONY OF SUZANNE MICHEL, CHIEF INTELLECTUAL 

PROPERTY COUNSEL AND THE DEPUTY ASSISTANT DIRECTOR FOR POLICY COORDINATION, FEDERAL TRADE COMMISSION, WASHINGTON, DC 

Ms. MICHEL. Chairman Berman and Members of the Subcommittee, I appreciate this opportunity to discuss the findings and 

recommendations of the FTC’s report on the patent system, ‘‘To 

Promote Innovation: The Proper Balance of Competition in Patent 

Law and Policy.’’

Before doing so, please allow me to make this disclaimer. The 

written testimony that we submitted represents the views of the 

Federal Trade Commission. My oral testimony and answers to 

questions today reflect my own views and not necessarily those of 

the commission or any individual commissioner. 

Both competition and patents influence innovation, which drives 

economic growth and increases standards of living. 

To examine the relationship of competition and patent policy, the 

FTC and the Department of Justice held 24 days of hearings involving more than 300 panelists. The report summarizes testimony 

from the hearing and explains the commission’s recommendations 

for improving the patent system. 

Following the release of the report, the FTC cosponsored several 

additional meetings on patent reform. 

21

The FTC report confirms that patents play an important role in 

promoting innovation by providing an incentive to develop and 

commercialize inventions. 

It is important to remember, however, that competition also 

plays an important role in stimulating innovation. The report 

raises concerns that patents of questionable quality cause misalignment of competition and patent policy to the detriment of consumers. 

For instance, questionable patents may discourage firms from 

conducting R&D in areas that the patent improperly covers. If a 

competitor chooses to pursue R&D without a license, it risks expensive and time-consuming litigation. 

If that competitor chooses instead to pay royalties to avoid litigation, the cost of follow-on innovation and commercial development 

increase. 

The FTC report makes 10 recommendations for changes to the 

patent system. I will highlight two today. 

First, post-grant opposition. Once a questionable patent has 

issued, litigation to challenge it is extremely costly and lengthy and 

litigation is not an option unless the patent owner has threatened 

the potential challenger with patent infringement. 

As I described, these problems can lead a competitor to forego an 

area of R&D or pay unjustified royalties. 

Therefore, the FTC report recommends creation of a post-grant 

opposition procedure and identifies several characteristics that 

might contribute to its success. A successful post-grant review 

should be allowed to address all important patentability issues. 

The report suggests several other features that the procedures 

should incorporate to be meaningful and to protect patentees from 

harassment. 

Second, willful infringement. Some hearing participants explained that they do not read their competitors’ patents out of a 

concern for potential treble damages liability based on a finding of 

willful infringement. 

Failure to read competitors’ patents undermines one of the primary benefits of the patent system, the public disclosure of new invention. Moreover, many firms complain that the ease with which 

a patentee can send a notice of a patent to competitors and trigger 

the need for an expensive legal opinion raises competitors’ costs. 

Nonetheless, infringers must not be allowed to profit from knowingly and deliberately using another’s patented invention. 

Therefore, the FTC report recommends that legislation be enacted requiring either actual written notice of infringement from 

the patentee sufficient to confer standing to challenge patent validity or deliberate copying of the patentee’s invention as a predicate 

to willful infringement. 

The FTC’s recommendations would permit firms to read patents 

for their disclosure value, but the recommendation would also retain a viable willfulness doctrine that protects both wrong patentees and competition. 

In conclusion, implementing these and other recommendations in 

the FTC’s report will increase the ability of patents and competition to work together to promote innovation, consumer welfare and 

our nation’s prosperity. 

22

We look forward to working with you on this important issue, 

and I would be happy to answer any questions you may have. 

[The prepared statement of Ms. Michel follows:]

PREPARED STATEMENT OF SUZANNE MICHEL


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Mr. BERMAN. Thank you very much. 

Mr. Ravicher? 

TESTIMONY OF DANIEL RAVICHER, EXECUTIVE DIRECTOR, 

PUBLIC PATENT FOUNDATION, NEW YORK, NY 

Mr. RAVICHER. Chairman Berman and Members of the Subcommittee, despite what most people think, the patent system has 

extremely far-reaching effects on all Americans. 

Although the public undoubtedly benefits from a properly functioning patent system, since patents are Government-created restraints on freedom and competition, the public can also be severely harmed by errors within the patent system. 

As with any body of law that applies to and affects all Americans, patent policy should be made with consideration of all of the 

public’s interests, not just the special interests that benefit from an 

enlarged patent system, namely patent-holders and patent attorneys. 

Thus, I am extremely pleased to have been invited to represent 

the general public’s interests in my testimony today and I applaud 

your commitment to ensuring that all affected interests are represented in patent policy discussions in the future. 

There are several ways to strengthen the patent systems so that 

it benefits all Americans. One of the most important issues on 

which to concentrate is ensuring high patent quality. 

Of the several sources available to help us determine the current 

level of quality for U.S. patents, each paints a very clear picture 

that patent quality today in America is not as high as we would 

all like it to be. 

Poor patent quality has many harmful effects, not the least of 

which is that undeserved patents can impede otherwise permissible, socially desirable conduct and they do this without providing 

any social benefit whatsoever, because what they disclose is not, in 

fact, new or unobvious. 

Poor patent quality also bears much of the blame for the intensive increase in patent litigation, the dramatically higher costs of 

patent litigation, and the rapid rise of patent speculators. 

It also leads to thickets of patents that choke out first inventors 

with countless small improvement patents claimed by others. In 

what is akin to great inflation, by granting too many people too 

many patents, those inventors who legitimately did derive wonderful new technology get less credit than they deserve because of all 

the other patents that are issued in the related field. 

This results in less incentive for the truest of innovators amongst 

us and instead encourages investments in making minor improvements to the inventions of others. 

These are, unfortunately, only a few of the many harmful effects 

that poor patent quality is having on the American public today. 

The problem of poor patent quality is often cast simply in terms 

of the PTO’s inability to find prior art, which would suggest a simple solution of giving the PTO more funding so examiners can 

spend more time searching. 

But the problem with patent quality is much larger than that 

and it cannot be solved by just providing additional resources to 

the PTO. 

36

We have found that there are three interrelated causes for today’s poor patent quality. First, the current examination process 

for patent applications denies examiners the ability to reject patent 

applications of questionable validity because it is crippled by perverse incentives and perspectives. 

Second, the threshold of inventiveness required to receive a patent has been severely whittled down by the court of appeals for the 

Federal circuit. 

Third, patent boundaries are too indeterminate, leading actors to 

make decisions regarding behavior based on their own best guess 

at the scope of a patent’s claims, which too often leads to an avoidance of socially beneficial activity. 

Since there are several causes of poor patent quality, there are 

also several ways to improve and maintain a high level of patent 

quality. First, the improper incentives placed on the patent office 

and its examiner corps to grant patents should be eliminated so 

that the decision of whether to grant or reject a patent application 

can be made on a purely scientific and technological basis, 

uninfluenced by political or financial concerns. 

Second, continuation applications which allow patent applicants 

to get an unlimited number of bites at an unlimited number of apples should be completely eliminated. 

Third, a vigorous obviousness standard for patentability should 

be reinstated. 

Fourth, a post-grant review procedure can be a valuable and efficient tool to perform quality assurance on issued patents, so long 

as the public is enabled to bring an opposition proceeding for a patent whenever they are threatened by not, just within the first 9 or 

12 months of its issuance. 

Fifth, the Federal circuit’s super presumption of validity should 

be negated. 

Lastly, to address the problem of indeterminate patent boundaries, a patent’s validity should always be analyzed according to 

the broadest reasonable interpretation of its claims, a much less 

debatable interpretation and the one used by the patent office in 

reviewing applications. 

And the currently dormant statutory prohibition against indefinite claim language should be awakened and strengthened. 

In addition to patent quality, there are other aspects of the patent system that are in need of reform, as well. 

First, inventions should be made available to the American public as quickly as possible, regardless of whether the patentee does 

so herself or not. 

Second, patents should not be allowed to restrict the exercise of 

constitutional rights or the performance of technological research. 

Third, the statutory limitations on what things may be patented, 

which have been eviscerated by the Federal circuit, should be revived. 

And, lastly, the doctrine of willful infringement no longer services any socially beneficial purpose and, as such, should be abolished. 

Thank you, Chairman Berman and Members of the Subcommittee, once again for inviting me to make the remarks about 

our current patent system and the need for patent reform. 

37

I and others in the public interest community look forward to 

continuing to assist your efforts to ensure the patent system 

achieves its constitutional purpose of advancing technology. 

[The prepared statement of Mr. Ravicher follows:]

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Mr. BERMAN. Well, thank you very much. 

It is the Chair’s intent to recognize, as a general matter, for the 

future, people who are here in the order of seniority at the beginning of the hearing and then as they come in, in that order. 

Assuming the witnesses don’t have flights to catch, I am hoping 

to have at least two rounds of questions and, if everyone else 

leaves, maybe six or seven rounds for myself. [Laughter.] 

But I yield myself 5 minutes. 

Dr. Myers, in your testimony, you list a number of reasons for 

declining patent quality. One of the reasons you list, without elaborating, is that patent approval rates are higher than in some other 

major nations’ patent offices. 

First, I might add that I have been told recently that actually the 

U.S. Patent Office rate of approval is starting to go down. 

But why do you think the U.S. PTO issues more patents than 

other offices and just what is the problem with that? 

Mr. MYERS. I am not certain of the differences between the European patent and the United States, because, in fact, there are actually so many different patent systems within Europe and Japan, as 

well. 

What I think, though, is we had a great expansion of patenting 

in the technology period of the 1990’s. At the same time, we did 

not increase the number of patent examiners proportionate to the 

workload and it is, frankly, seen, in part, as productivity, that is 

to say, yielding more patents for the amount of examiner hours. 

And I think what Mr. Ravicher, I think it was, referred to the 

incentive to——

Mr. BERMAN. The grant. 

Mr. MYERS. Yes. There is a high incentive to grant in that period 

and I think that that was at play within the United States system. 

Mr. BERMAN. If both Mr. Ravicher and Professor Jaffe could comment on this. Much opposition to an additional re-examine or a robust post-grant opposition proceeding, a lot of the opposition to the 

post-grant opposition is that it would impact on the ability for a 

patent-holder to maintain quiet title. 

Mr. Ravicher, you addressed this issue in your testimony. I 

would appreciate if you could expand on that. 

And, Mr. Jaffe, I would also be curious about you commenting on 

the economic impact of the instability in the market resulting from 

that kind of a review process. 

Mr. RAVICHER. I understand the desire of patent-holders to want 

quiet title. It is important and valuable to them and their investors, and I believe they can provide it for themselves. 

If they are willing to agree to not assert their patent against the 

public, then there is no reason for the public to be worried about 

the existence of the patent. 

But so long as the patent is issued, the current Patent Act says 

that all the public must abide by it and avoid infringing it. 

Mr. BERMAN. I don’t understand. Why would you want a patent 

that you couldn’t assert? 

Mr. RAVICHER. Well, you can change your perspectives on that. 

Cisco is one large company that generally is known to have a no 

first strike policy. IBM has licensed hundreds, if not thousands of 

56

their patents for free use, so long as no one sues them for patent 

infringement. 

A lot of large companies, Microsoft, et cetera, sign these crosslicensing agreements which are, in effect, agreements not to assert 

against one another, because of the transaction costs that would be 

involved if they did have these numerous fights of patent challenges. 

So the same principal, why would someone do that amongst their 

large competitors, why wouldn’t they do it, generally speaking, 

there are the same incentives. 

But so long as a patent is issued, the public must abide by it and 

respect it. So, therefore, if there are questions about its validity, a 

post-grant review procedure which is efficient and fair should be eligible at any time of its validity. 

Mr. BERMAN. Dean Jaffe? 

Mr. JAFFE. I think I have a slightly different perspective on this 

and I am going to talk about this like an economist, not a lawyer, 

because I am not a lawyer. 

I think there is a tension here. On the one hand, it is vital that 

holders of valid patents can, in some sense, in an economically 

meaningful sense, rely on the patent protection that they believe 

that they have gotten. 

And, therefore, that is why, for example, I don’t agree with the 

recommendation that the Federal Trade Commission made about 

changing the fundamental notion of the presumption of validity, because I think once a patent really has been issued, if it has been 

subjected to a process that we are confident in to ensure that it 

should have been granted, I think it is important that patent-holders have that presumption of validity so that they can rely on that 

in investing in their technology. 

But I think the flipside of that then is if you are going to have 

a presumption of validity, we have to have a review process that 

is a logical basis for presuming that these things really are valid 

once they have been issued. 

And I think given that we have hundreds of thousands of applications a year, it is simply not practical to have an examination 

process which, in the first instance, is sufficiently thorough to guarantee the level of validity that would, as a logical matter, not as 

a legal matter, but as a logical matter, would support a presumption of validity. 

So in my view, some kind of post-grant review is the logical resolution of that tension. Once it ultimately comes out of the patent 

office, we need to be able to presume that it is valid. 

But on the other hand, we can’t afford to have the kind of thorough review of every patent that would guarantee that. 

And so to say we will review the patents, if someone wants to, 

in some way, ask for re-examination, there will be that re-examination and, therefore, patents which have either survived such a reexamination or for which no one has asked for it, there will be a 

logical basis for presumption of validity. 

And that is why I do think, again, I would disagree with Mr. 

Ravicher at this point. It is not unreasonable for there to be some 

time period in which that post-grant review or re-examination or 

whatever you are going to call it ought to occur, because that is the 

57

way in which people who really do have a valid patent can in some 

way get to the point where they can rely on the fact that their patent has been granted, either has been challenged and survived or 

it has not been challenged, and, therefore, they can go about their 

business and rely on then protection that the patent offers. 

Mr. BERMAN. The time has expired. 

Mr. JAFFE. That is because I am longwinded, I am sorry. 

Mr. BERMAN. No, no, no. It was very interesting. 

I recognize the gentleman from Florida, Mr. Feeney, for 5 minutes. 

Mr. FEENEY. Thank you, Mr. Chairman. 

First, Professor Jaffe, as an economist, I remember one wit, and 

it may well have been an economist, once saying that there was a 

direct correlation and he could give you a prediction of the relative 

prosperity of a nation based on the number of patents that issued 

in that country. 

And he specifically cited, for example, that the number of scientists born in India that came to America and established patents 

far exceeded by multiples of hundreds or thousands the number of 

patents that had been issued at that time, which was some years 

ago, in India. 

Number one, if that historical correlation was roughly accurate, 

if it ever was, when did we get to the point where the concerns 

were more about the quality and the mechanisms for enforcement 

as opposed to the raw number of patents issued, telling us how 

prosperous we are likely to be? 

Mr. JAFFE. I don’t know if I can give you a comprehensive answer to that, but I would say from 1836, which was the time that 

the patent system, in roughly its current form, was established in 

this country, until 1985, the number of patents granted in the U.S. 

increased at about 1 percent a year, quite steadily, which is less 

than the population. 

So over the entire 19th and first three-quarters of the 20th century, a time of tremendous technology development in this country, 

we were actually producing fewer and fewer patents every year relative to the population. 

And then what happened is 1985, almost to the day, there was 

a radical upward shift in that trend. So that the number of patents 

has increased dramatically since 1985, at a rate of more like 6 percent a year. 

Now, my colleagues and I in the scholarly profession have actually wasted a lot of computer time and a lot of paper trying to dissect that increase into the portion that may be attributable to a 

true acceleration in innovation and the portion that seems to be attributable to a change in the practice at the patent office and the 

answer seems to be it is some of both. 

So I think the last 2 decades, something really has changed and 

what we have seen—I am not claiming innovation has stopped, obviously. There is still a lot of innovation in this country and much 

of it is patented and some of it is supported by the patent system. 

But what we have seen is an increasing loosening of the connection and an increase in the amount of patenting that is not connected to true innovation. 

58

Mr. FEENEY. Well, I think that is the best you can do about a 

comprehensive question. 

I wanted to know, of all the witnesses, and I will just be brief 

here, but there are some key issues. 

Could anybody raise their hand if they do not agree with the following statement, because there seems to be unanimity that all the 

witnesses agree that resources at PTO is a problem. 

Raise your hand if you disagree. 

There seems to be unanimity that the obviousness standard 

needs to be reinvigorated or reinserted. There seems to be some 

agreement that the Federal circuit’s decisions have impacted the 

effective mechanism for enforcement. 

Now, there is disagreement that the willfulness standard has 

utility. 

Mr. Ravicher, you don’t believe it has any meaningful utility. 

Anybody else agree with Mr. Ravicher? 

Mr. Myers? 

Mr. MYERS. In our report, we did not believe that the willfulness 

was useful at this stage. 

Mr. FEENEY. So there are some differences in the panel on that. 

I also wanted to ask Dr. Myers, you talk about harmonizing Europe, the Japanese and the American patent examination system 

and that will be an interesting subject for a whole variety of reasons. 

But one of the things I would like to ask you is how would that 

impact some of the more egregious countries that fail to protect 

property rights in an increasingly flat global world? I am thinking 

especially China and Russia, but there are many more. 

I mean, the fact that we harmonize, does that put us at a relative advantage or disadvantage with people that aren’t doing a 

good job at all? 

Mr. MYERS. Well, those are, in fact, interrelated, but separable 

issues. In fact, if we take a look at the weight of the innovation 

processes at the present time, that Europe, Japan and the United 

States are, in fact, by far the most innovative of these economies. 

Clearly, China is coming up, but still is far behind. And what we 

argue is that as we make changes in our system, we should, in fact, 

make them in such a way to make a harmonization possible and 

not to put remedies in place that remove us away from harmonization. 

I have worked for years for our global corporation, Americanbased global corporation, of which we produce products in 41 different economies in the world and that having a common base of 

intellectual property to be able to move our products in the world 

would be an extraordinary benefit to American-based corporations. 

Mr. BERMAN. The time of the gentleman has expired. 

The gentleman from Virginia, Mr. Boucher. 

Mr. BOUCHER. Thank you very much, Mr. Chairman. I want to 

commend you, Mr. Chairman, for your leadership in this very important policy area. 

It has been my privilege to work for what has now been 5 years 

with Chairman Berman as we have constructed now two separate 

bills in two separate Congresses to address the need for better patent quality. 

59

We started 5 years ago out of a concern about business method 

patents and the fact that some of the ones issued were so broad 

that they were effectively walling off entire areas to commerce and 

instead of enhancing innovation, actually retarding innovation, because fewer people could get involved in the business and in the 

process of innovation. 

And the more we looked into the matter, the more we decided 

there were really deeper problems and those deeper problems were 

the need for better patent quality. 

So now, over two Congresses, we have introduced two bills and, 

under the Chairman’s leadership and sponsorship, we will be putting a third one in very shortly, hopefully within the next month. 

But I am still concerned about business method patents. I read 

in the New York Times back in the fall that now business method 

patents are being awarded for tax strategies. 

And I know the CPA profession is very concerned about this and 

I guess all of us, as taxpayers and clients of the advising profession 

on tax strategies should be worried about it, too. 

And I am worried about it generally in terms of whether or not 

this fact and the award of patents like that perhaps means that the 

patent office is not doing what they represented to us they were 

doing. 

They told us a couple of years ago that they had instituted something called the second look policy and that the second look policy 

was designed to apply a tighter screen and greater care on the patent examiners in reviewing and passing on business method patents and they have talked about a decline in the relative awards 

of business method patents as compared to the numbers of applications filed. 

But if they are issuing awards for things like tax strategies, I 

have to question how effective that screen and that new second 

look really is. 

So what I would ask each of you is to give me your thoughts on 

business method patents generally. Is the second look at the patent 

office working? Are we seeing business method patents that are too 

broad being issued? 

And while our bill doesn’t address that, because we were relying 

on this second look to solve the problem, do you think we perhaps 

ought to go back to where we started and add to our patent quality 

bill provisions addressing business method patents, either restricting the scope of them or, as a few people have suggested, eliminating them all together? 

Who would like to begin? 

Mr. JAFFE. Well, I have thoughts on that. 

Mr. BOUCHER. Mr. Jaffe? 

Mr. JAFFE. I think I share many of your concerns, but I think 

that at the end of the day, I would like to encourage you to stay 

where you are as opposed to go back to where you started or something like that. 

I think that the problem with business method patents is the 

fundamental problem of the obviousness standard and the operation of the patent office and its inability to get the appropriate information from the people who really know about what really is 

novel and what really is obvious. 

60

I think that the danger with trying to, from a statutory perspective, somehow create a special standard for business method patents or, alternatively, remove patent protection from that category 

is that it is very difficult once you go down the road of trying to 

have a patent system that is different for different kinds of inventions to make that work in the public interest, and the example 

that you cite of the extra look is a case in point. 

My coauthor, Josh Lerner, has actually done some empirical 

work looking carefully at what has actually happened to patents 

that generally relate to business since the patent office implemented this second look approach. 

And what he has shown is that there has, in fact, been a significant decline in patents in what are categorized as business methods and a corresponding increase in patents in closely related fields 

that are not subject to the second look. 

Basically, what applicants have figured out how to do is, at least 

to some extent, to craft their applications so that they get around 

the tighter scrutiny that is imposed on business methods. 

Mr. BOUCHER. Sounds like campaign finance reform. 

Mr. JAFFE. I have no opinion on campaign finance reform. 

I would submit that that same kind of difficulty would crop with 

intensity with the statutorily, which is to say the world out there 

is just too complicated. 

Mr. BOUCHER. I don’t disagree with you. We basically decided not 

to put provisions in our bills relating to business methods for many 

of those reasons. 

I will have to confess, though, some measure of concern seeing 

the kinds of broad business method patents, such as tax strategies, 

that now apparently are getting through the screen. 

Let me just quickly, and I know my time has expired, see if anyone else wants to comment on business method. 

Mr. RAVICHER. I would actually like to argue that expanded patentable subject matter was not caused by the PTO. 

In fact, if you look at the PTO’s history, they have generally 

fought very hard against the expansion of patentable subject matter. 

It has been the Federal circuit that has actually done all the——

Mr. BOUCHER. I am aware of the State Street Bank case. 

Mr. RAVICHER. And I am very concerned about introducing patents in a field where they have no economically positive effect. 

Mr. BOUCHER. So your recommendation? 

Mr. RAVICHER. Is that software should not be patentable subject 

matter and neither should business method. 

Economists have studied his and found that it doesn’t enlarge investments and it actually increases the costs, transaction costs of 

patent litigation and hiring patent attorneys. So there is a negative 

effect on the industry. 

Mr. BOUCHER. Mr. Chairman, it is up to you as to whether we 

carry this on. There are others who want to respond. 

Mr. BERMAN. Let’s take an additional minute. 

Mr. MYERS. Both software and business method patents, I treat 

them the same way. What I find is the European thinking on this 

subject attractive, is that there has to be an inventive step and I 

61

generally look for technical advances in the underlying inventive 

step. 

Then it becomes less ambiguous to me that it actually should be 

a patent. 

Mr. BERMAN. Let’s move on to the gentleman from Virginia, who 

has also been very involved in this, Mr. Goodlatte. 

He is gone, all right. I think Mr. Cannon was here next. 

Mr. CANNON. Thank you, Mr. Chairman. 

First of all, I appreciate your having this hearing. It is a very important topic, and we spent a lot of time last year working on it, 

and I hope we make some progress this year. 

It is a complicated debate, and I believe what we are doing intellectually is the most important production in America today, and 

we need to take care of that. 

One of the issues we dealt with extensively last year was venue. 

And, of course, there are a number of articles about venue and 

about the issues and about the filing of patent cases in Marshall, 

Texas, as a way to game the system. 

I am supportive of the language that would limit the ability of 

true patent trolls to pick forums with which neither party has any 

connection and where no evidence concerning the case could be 

found. 

So I would like to ask the panelists generally, each of them, do 

you perceive any problems of having venue language expressly establishing a de minimis context standard for the filing of a patent 

suit, while the limiting the ability to game the system by, for example, assigning the patent to a shell entity located in a particular 

forum, or should these disputes be heard where the real parties of 

interest are located? 

And what would be the benefits or problems of attempting to create such a standard? 

I am not sure if all of you have—you have various backgrounds 

here, and, frankly, an economics approach to this is as important 

to me as the legal approach. 

But I suspect that, Ms. Michel, you were making notes and you 

are a lawyer and you might want to take a first cut at that. 

Ms. MICHEL. Actually, Congressman, I am aware of the debate 

surrounding the venue issue. However, it was not part of the FTC’s 

study or part of the FTC’s report. So I won’t be able to comment 

on that. 

Mr. CANNON. Thank you. 

Do we have any comments on venue from others? 

Well, it is sort of a legal technicality. I hate to bug you with this, 

but what it really does is it distorts the market by having judges 

chosen by people whose interests may not be as substantial and 

getting into a long process that never gets booted out of court and, 

in fact, the party may win. 

Mr. BERMAN. Would the gentleman yield? 

Mr. CANNON. Certainly. 

Mr. BERMAN. It has been a great boon to the hotel and restaurant industry in the area. 

Mr. CANNON. I know. I am trying to figure out where this argument was going, because maybe we can do something in Utah 

along those lines for economic development. 

62

Although I hasten to add that because we have a lot of intellectual property, our unemployment rate is like 2.6 percent, 2.7 percent in Utah. So we are not complaining we don’t need this industry. 

Mr. Ravicher, do you have any ideas on this issue? 

Mr. RAVICHER. Well, my only concern is that everyone gets a fair 

day in court and that right is deserved by patent-holders as much 

as defendants. 

So a venue statute, a change in venue may work to balance more 

fairness in the playing field, but I would just want to encourage 

that we don’t go too far and make the court of choice determined 

by the venue statue to be too favorable to defendants. 

It should just be fair. And I agree with you, there are lots of concerns about the eastern district of Texas at this point. Hopefully, 

that will work itself out over time, but a venue statute might also 

help address that more quickly. 

Mr. CANNON. You know, the fact is that it is very complicated. 

If you go too far, you really foul up. And so that is the key to be 

balanced. But we have had some excesses and people with no—I 

don’t know how you even describe what we often call trolls, getting 

an exceedingly great advantage based upon a choice of venue. 

Mr. Myers, do you have comments on that? 

Mr. MYERS. No. That was not part of our study and I do not have 

personal knowledge to contribute to this. 

Mr. CANNON. Mr. Jaffe, do you have an input? 

Mr. JAFFE. Sorry, I really haven’t looked at it. 

Mr. CANNON. One of the problems here with, if I can just give 

my own perception here for the record, one of the problems with 

this issue is this is a very complicated issue and how you do what 

you said, Mr. Ravicher, how you balance this so you don’t go too 

far in any direction is very, very important, involves many things 

that some parties would like that are dramatically opposed by 

other parties. 

Some of the simple rules may be the best way to actually deal 

with that. 

Maybe, Mr. Jaffe, you could address this to some degree. We 

have had this proliferation of patent cases on the Supreme Court 

docket. 

Does that signal a need for us to do more here in Congress to 

clarify things? 

Mr. JAFFE. From my perspective, I don’t think the Supreme 

Court taking these cases signals one way or the other. I think that 

a number of the cases that they have taken offer the potential for 

them to do some good on some of the issues that we have talked 

about, but I don’t think anyone thinks that those cases are going 

to solve all the problems. 

So I think the issues that we have talked about are neither—that 

neither makes them more urgent nor less urgent. They are there 

and they need to be dealt with. 

Mr. CANNON. The rumbling in the background, we hope someday 

somebody will invent a round wheel to solve that problem. 

I see that my time has expired, Mr. Chairman. I yield back. 

Thank you, Mr. Chairman. 

63

Mr. BERMAN. If the Subcommittee will allow me, I am going to 

go out of order and recognize the gentlelady from California. 

Ms. LOFGREN. Thank you, Mr. Chairman. 

I really want to commend you for scheduling this hearing and I 

am really very excited about the prospects for successful action in 

this Congress on a bipartisan, bicameral basis. 

I just sense that we are going to be able to achieve a useful reform in this Congress and that is good news. 

It has been interesting to hear you, Mr. Ravicher. I have not run 

into you before. 

But just thanks to all the witnesses. What you have done, actually, all of you, has helped to bring us here today. I mean, the National Academy report really had a profound influence on my thinking and I think the thinking of all of us. 

And, Professor Jaffe, your book came out and we are all reading 

it and it really was a major impact on helping us to understand 

issues. 

Obviously, we may not agree on every single recommendation, 

but it was a very useful publication. And, certainly, the FTC report, also, very, very helpful. 

I was interested, when I read your book, Professor Jaffe, about 

the impact—I wasn’t in the Congress when the Federal circuit 

court was devised, but certainly the impact was different than anybody intended. 

And I am thinking about how all of you are familiar with the 

various things that we have had in the various bills. I am haunted 

by the fact that really the best of intentions had unintended consequences in terms of the Federal circuit. 

Do you see any of the various remedies that we have considered 

in the various bills having that kind of unintended outcome, such 

as the circuit court? 

Is that fair to ask, Professor, or any of you? 

Mr. JAFFE. Well, it is always fair to ask. I always tell my students there are no bad questions, there are only bad answers. 

I guess what I would say is, obviously, you could never know for 

sure. I think what I would urge you to try to think about to avoid 

that, I think with the benefit of hindsight, but I think perhaps 

there could have been foresight there, what went wrong with the 

court of appeals for the Federal circuit is that Congress viewed the 

problem as purely an administrative one and thought about it as 

an issue of what will make the administrative system, the court 

system, work best on its own terms. 

And what an economist would say is what you always need to 

think about is how the people out there are going to respond. What 

incentives are you creating for them to act differently than they 

were acting before? 

And I think that if you try to keep in the front of your mind the 

incentives that you are creating for the people in the economy, inventors, lawyers, companies, and how you are changing their incentives, I think you at least increase the chances that you will avoid 

some unintended consequences. 

I do think there is a danger; we have already talked about it, so 

it is not like it is unseen. Congress is right to be concerned that 

the changes that it makes to deal with patent quality will create 

64

opportunities for people who simply want to make trouble for those 

who really have invented something and are trying to get a valid 

patent to make it harder for them. 

I think we all recognize that there is a balance there and that 

is something that we need to be conscious of in designing these 

changes. 

Ms. LOFGREN. Dr. Myers? 

Mr. MYERS. Well, the unintended consequence that I would hope 

that we would avoid is to take acts of reform that, in fact, would 

make harmonization more difficult. 

Ms. LOFGREN. Well, I was wondering, I was intrigued by your 

comment and I think of all the things that we might want to do, 

directly stepping up on harmonization is probably politically one of 

the more difficult things to achieve. 

Mr. MYERS. Yes. 

Ms. LOFGREN. But are there any of the remedies, and they are 

really litigation remedies more than anything else, that you think 

we should look at and probe as a potential barrier to eventual harmonization? 

Mr. MYERS. Well, one of those that we need to act on is to align 

ourselves with the rest of the world and to resolve the issue of first 

to invent versus first to file. 

Ms. LOFGREN. That may be one of the harder things to do. 

Mr. MYERS. That is one of the hardest. But if we cannot get 

there, we never can get started. 

Ms. LOFGREN. I agree with you and actually I agree with where 

we need to be ultimately on that, but are there any set of remedies 

that, if we were to adopt them, that we have considered, would put 

us farther away rather than closer to eventual harmonization? 

Mr. MYERS. Yes. To the extent that we tailor remedies to specific 

industries, we will make it harder to, in fact, have a uniform harmonization. 

Ms. LOFGREN. The TRIPS issue. 

Mr. MYERS. Right, and the TRIPS issue. I might just add, with 

respect to your comment, one of the things, though, that the importance of the Supreme Court acting on a number of these cases, to 

the extent that they consider the obviousness standard, that is not 

something that we can achieve through legislation. 

And the obviousness standard could be treated at the Supreme 

Court, which would have significant impact on the——

Ms. LOFGREN. My time is over. 

I agree, I am eager to see. Of course, we will know probably before we act what the court is going to do on that. 

I recall Mr. Berman saying, I think in the last Congress, on the 

injunctive issue, maybe we should just re-enact the statute and say 

this time we mean it. 

So some of this is really not as easily subject to legislation. 

And I appreciate the gentleman for recognizing me. 

Mr. BERMAN. It is funny you should raise that, because we 

looked at that statute, we were all talking and we said, ‘‘This is 

what we think it says,’’ even though the Federal circuit has said 

something else and then the Supreme Court, in its infinite wisdom, 

said it did say what we thought it said. 

Mr. Issa? 

65

Mr. ISSA. Thank you, Mr. Chairman, and thank you for continuing the work begun so many years ago and with new vigor. 

It is not often that I have local inventors and people interested 

in a hearing so much that we have endless e-mails requesting that 

I ask specific questions. 

So I have culled through the many questions to just one, which 

you can respond to very, very quickly and/or in writing, then I will 

have met my obligation at least in one part of many. 

That is that I have a constituent who is convinced and says that 

the 30 to 35 percent invalidity that is found on patents when they 

are litigated today is actually lower than the 55 percent or so that 

had all or part struck down in the 1970’s and 1980’s. 

I couldn’t find validity in that. Is there anyone that has knowledge that could give me the fact that apparently we are actually 

lowering the amount of striking of claims in current litigation 

versus previous litigation? 

Mr. RAVICHER. Those numbers are absolutely correct. There was 

a much higher rate of finding patents invalid in litigation prior to 

the creation of the Federal circuit and that was one of the reasons 

for the creation of the Federal circuit. 

Mr. ISSA. Okay, so we are not going to pooh-pooh the Federal circuit anymore today. They have done at least that amount of good. 

Let me move on to a few of my own questions and some of them 

also mirror constituent questions. 

I guess, first of all, let’s establish something maybe as a common 

ground. What this Committee has looked in legislation at is the 

question of post-grant re-examination or post-grant opposition. 

But can we all agree that today the patent office, during the entire life of a patent, has an unlimited amount of time in which it 

can re-examine based on submittals of ex parte information or information it obtains directly, it can choose to re-examine patents? 

Is that correct? Am I missing something? 

So those would argue that they want certainty don’t have it 

today. Is that correct? 

Second question—and that is a ‘‘yes,’’ by the way, for the notetaker. 

Mr. BERMAN. Yes, it sounds like yes. 

Mr. ISSA. The second question would be, do we all agree that reexamination, as it is today, is not well-appreciated or regarded by 

the outside world and that that has at least partially led to the 

PTO changing from the examiner re-examining oneself to the board 

that they are now beginning to implement? 

Is that pretty well-agreed that it was dissatisfaction with the 

quality of re-examinations that led to this? It is okay not to have 

an opinion, but if I have missed something, I want to know. 

Mr. RAVICHER. Well, I will agree that there is a general—not a 

lot of safe in the re-examination process being as successful for 

challengers to patents as other methods of challenging the patent. 

Mr. ISSA. Then because I have draft legislation that we have 

been working on in our office, I am going to ask the next question, 

because I really want the answer. 

Is there any reason that any of you can find that we wouldn’t try 

to combine post-grant, which was in the previous two Congresses, 

and the re-examination process and make a robust workable sysVerDate 0ct 09 2002 10:26 Jun 14, 2007 Jkt 000000 PO 00000 Frm 00069 Fmt 6633 Sfmt 6601 F:\WORK\COURTS\021507\33315.000 HJUD1 PsN: 33315
66

tem that recognizes that if there is significant new information in 

the current re-examination, we already have the ability to look as 

many times as an independent body believes that there is significant new material to be re-evaluated, if we hybrid that, in a sense, 

with post-grant, but make it have higher certainty and higher 

credibility, is that ultimately an acceptable goal for legislation this 

body may come up with? 

Ms. MICHEL. If I could address that, Congressman. 

There are other concerns, though, with the current inter parte 

re-examination procedure that we think a post-grant opposition 

procedure might remedy, that being, for instance, the current inter 

parte procedure before the patent office doesn’t allow the challenger to raise some important issues of validity. 

Mr. ISSA. Right, and I have no problem with—and I would like 

to have that in writing, because as we craft, assuming that no one 

has any objection to the idea that you have a post-grant re-examination process. 

People just don’t like it or believe in it or feel that it is fair or 

feel that it has the certainty and they don’t like that it isn’t really 

truly effectively binding on the court. 

So it doesn’t resolve anything if you are proceeding to a district 

court. It doesn’t necessarily bring you the finality you would like 

to have and it certainly doesn’t bring you an automatic appeal to 

the fed circuit. 

Assuming many of those things might be in the follow-on legislation, I would ask each of you that has information on how you 

would like to see it, please submit it in writing. 

My reason for it and the reason I am sure the Chairman will 

look forward to seeing it is that the hope is that there is something 

between one of the biggest stumbling blocks we had in the previous 

two Congresses on this legislation, which was everyone—if you will 

indulge me for a second, Mr. Chairman—believing, wait a second, 

post-grant, that is somehow new, when I said it and said, ‘‘No, wait 

a second.’’

I have done a re-examination of a patent against my own company that was more than a decade old. Actually, it was near expiring and we succeeded. It is not uncommon. 

So knowing that that existed is why I hope that all of you could 

respond with if we assume we are going to consolidate into one effective system in our legislation, if the Chairman allows it to be entered, that we would like to have as much information into it. 

If you will, the theme of it is ‘‘mend it, don’t end it.’’

Thank you, Mr. Chairman. I yield back, even though I have 

4,000 more questions. 

Mr. BERMAN. Thank you very much. 

The gentleman from California, Mr. Schiff? 

Mr. SCHIFF. Thank you, Mr. Chairman. 

Thank all of you for being here. This has been a struggle for us 

for a number of years to get a bill that we could all agree on. But 

I am confident that our Chairman, who is a master of the legislative process, will find a way to make it happen. 

Mr. BERMAN. Mastery of the legislative process? 

Mr. SCHIFF. If it can be done, you are the person who could do 

it. I am sure it will be correctly placed in the record. 

67

One of the obstacles, on a very kind of macro level, we had and 

still have is disagreement among industries about the proposed reforms. Since they use the patent process in different ways, the 

technology and software industries, patents having many sub-patents in them. 

Pharmaceuticals may be relying on one patent for a drug or a 

small number of patents. 

Do you have any suggestions about how to reconcile those conflicts, since there have to be reforms in order—to any inventor and 

legitimate patent-holder’s benefit, there ought to be a common 

ground that we can find that don’t have either unintended consequences or reduce the potential for unintended consequences or 

that represent simply a tradeoff of one industry’s advantage for another. 

Do you have any thoughts on how to bridge that problem that 

we have wrestled with? 

Ms. MICHEL. I will take a stab. It is the $64,000 question here. 

But I actually believe that there is quite a bit of common ground 

between both industries, that they are both—I don’t mean to say 

both industries, there are certainly more than two involved. 

But certainly I think all industries that use the patent system 

are deeply committed to improving patent quality. There is a wide 

range of agreement that there ought to be some kind of post-grant 

opposition procedure and that the disagreement really comes down 

to the details on that one. 

I can’t give you an answer on how to reconcile their disputing 

views, but they do agree there should be some kind of procedure 

there. 

The other big area of disagreement was the injunction issue and 

I think, at this point, with the Supreme Court’s eBay decision and 

with the district courts dealing with that decision right now and 

approaching it, the Federal circuit has not yet taken a case, that 

probably the best procedure there, in my view, would be to just 

wait and see what happens. 

So that area of disagreement is off the table and that leaves a 

lot less. 

Mr. SCHIFF. Thank you. 

Anyone else care to jump in? 

Mr. MYERS. The big difference that has been, say, between the 

pharmaceutical industry and the electronics industry, the pharmaceutical industry still is built around the notion of blockbuster patents, a single patent creating an entire drug, and the electronic industry, as Intel might have thousands of patents that would be 

composed of a single product. 

Where I see that all of these technologies are going will be complex systems. And so the drug industry will, in fact, I think move 

into what looks very much like what the electronics information industry is today. 

And so when we talk about bioinformatics, it is biology, traditional pharmaceutical, but informatics is information technology. 

And so I think it is going to become an increasingly shared space. 

Mr. SCHIFF. So we are going to see in this area what we have 

seen in the entertainment industry with content providers becoming tech providers becoming pipeline companies. 

68

Mr. MYERS. Yes. 

Mr. SCHIFF. Let me ask you, since you mentioned the post-grant 

opposition being one of the remaining potential issues, what are 

the unintended consequences? 

For the people out there, Professor, as you describe them, how 

are they either going to take advantage of a post-grant opposition, 

game a post-grant opposition or otherwise make good economic use 

out of post-grant opposition? 

How should we look at the incentives that would create with an 

eye to preventing abuse? 

Mr. JAFFE. Well, from my perspective, I guess, as Suzanne said, 

the details do matter and people are going to argue over the details 

and it may be difficult to know exactly how that is going to play 

out or how that is going to affect people. 

But conceptually, from my perspective, what the post-grant opposition is about is creating a system in which people who have information about the novelty and obviousness of patents that have 

been applied for and recently granted are induced to bring that information to the patent office, because the patent office itself, no 

matter how much you give it resources, if it remains in a mode of 

operating in Washington and interacting with the applicant and 

the applicant’s representatives and trying to decide what technology is new and what technology is not obvious, is not going to 

be able to do a good job at that. 

The world is just too complicated and changing too fast. 

Mr. SCHIFF. And what is the nature of an incentive you would 

suggest? 

Mr. JAFFE. The incentive is that if my competitor is about to get 

a patent on something that I don’t think is really new, that is going 

to hurt me and if I really have the information that shows that it 

is not new, what we need to do is create an environment in which 

I am not so handicapped by sharing that information with the patent office that it is not in my interest to do so. 

My understanding of the current inter partes re-examination procedure is that people in the world feel that the way the procedure 

is established, that given what they might hope to get out of it relative to the disadvantages it creates for themselves in later litigation if they bring information to the patent office, just choose not 

to use it, because the lawyers advise them that you are better off 

waiting and seeing the guy in court. 

So what we need to do is we need to create an environment in 

which they don’t feel that way, in which everybody recognizes that 

if there is a true dispute about the potential validity of a patent, 

it is in everyone’s interest to get it resolved early so that the uncertainty can go away and people can go on with the real business of 

innovating. 

So that is the key is to have a process where people who are the 

holders of the relevant information feel that it is in their economic 

interest to bring that information forward and give it to the patent 

office, so that it can be brought to bear at that stage, rather than 

having the patent issue, having a lawsuit, having lots of uncertainty and lots of expense to resolve that issue in Federal court 

with a jury who doesn’t really have a clue what these guys are actually arguing about. 

69

Now, the balance to that is you don’t want to create an incentive 

or competitors to say, ‘‘A-ha, Mr. Schiff is about to get this great 

patent on a really good idea that is going to make my life difficult, 

let me muck up the works for him. Let me come in and throw all 

kinds of mud at the wall and see what sticks.’’

Mr. SCHIFF. Thank you, Mr. Chairman. 

Mr. BERMAN. The gentleman from Florida, Mr. Wexler? 

Mr. WEXLER. Thank you very much, Mr. Chairman. 

I was wondering if I could ask Dr. Myers and any of the other 

panelists, if they wish. 

The Committee that you chaired identified, of course, that the 

second compelling issue that should be addressed, the harmonization issue, and you have talked about it a good bit this afternoon, 

I was curious if you have had an opportunity to familiarize yourself, maybe very much so, with Chancellor Merkel’s proposal to 

harmonize the regulatory schemes between the United States and 

Europe and create a far-reaching economic non-tariff-based agreement between the United States and Europe, which obviously is 

much broader than patents, so even just intellectual property. 

But Germany has identified this as one of their key principals of 

their E.U. presidency, and I was curious if you had any thoughts 

as to whether or not this presents a rather unique opportunity to 

potentially harmonize patent issues with Europe. 

And if you do, what role do you think Congress should seek to 

play in that process? 

Mr. MYERS. This was not part of our study. First is I think harmonization will be difficult with or without some overriding impetus such as this. 

But the impetus that I feel at this moment that Congress should 

place is to move in such a direction in reform which will not make 

unintended consequences of making harmonization more difficult. 

That, I think, would be the first prudent direction for Congress 

to consider. 

Mr. WEXLER. If I may, Mr. Chairman, just quickly, I think just 

in hearing the comments and so forth and given what appears to 

be the relative degree of importance of harmonization, we have this 

extraordinary, I think, opportunity where, arguably, the most important leader in Europe has come forth with a proposal to harmonize regulatory schemes, one of which would be the patent 

scheme, and it is being debated all over Europe as a major proposal 

and not a peep in America, which maybe says something about us. 

I don’t know. 

But I think it would probably be a worthy topic at least to think 

about what role we might be able to play, what you might be able 

to lead on this Committee, given the environment that exists in 

Europe in terms of the energy that is being put behind the issue. 

Mr. BERMAN. You are seeing the convergence of a long-time and 

interested Member of the Intellectual Property Subcommittee and 

the Chairman of the Europe Subcommittee of the House Foreign 

Affairs Committee talking about an issue that I was—I was in Germany last weekend and their vision of sort of the dynamic direction 

of the trans-Atlantic relationship, at least on economic issues, was 

very much this regulatory harmonization, which very much included within it the intellectual property and patent area. 

70

Thank you, Mr. Wexler, and we will think about how to do that. 

Do you think the Commerce Committee will let us? 

Mr. WEXLER. They don’t know about it yet. 

Mr. BERMAN. I recognize the gentleman from California, Mr. 

Sherman. 

Mr. SHERMAN. Harmonizing with Europe is probably easier than 

harmonizing with the Commerce Committee. 

I am new to this Committee, new, of course, to this Subcommittee and just learning at this point. I look forward to reading 

some of the materials. 

I have served on the Financial Services Committee and talked to 

a number of those engaged in financial services, banking, mortgage 

lending, et cetera, where they describe a particular horrible scenario. 

They, over the years, develop business procedures and eventually 

they end up with an organization chart to lend mortgages with 50 

different State laws, et cetera, and then somebody becomes aware 

of what their paper flow or information flow system is and patents 

it. 

Now, it strikes me that it is unlikely to be novel if you learned 

about it by talking to friends at a mortgage lending company. 

There is also this discussion of first to invent versus first to file. 

Is the current patent system to the point where I can file for a patent on somebody else’s business system and then have them pay 

me royalties if they want to keep doing business the way they have 

been doing business? 

Professor Jaffe? That is what you get for being the one nodding 

while I was asking the question. 

Mr. JAFFE. Right. It is not supposed to be. As you indicated, in 

the scenario you described, the patent application is for something 

which is not novel. 

And without going into the details of first to file versus first to 

invent, that is actually not directly relevant here. I mean, the fact 

that the organization has not filed for a patent on its organization 

doesn’t bear on the fact that it is still not novel, if they, in fact, 

have been doing it for a period of time. 

The difficulty is, and I am not going to speak to the specifics that 

you have addressed, because I don’t know, but I think the generic 

difficulty the patent office has is in these new areas, it is harder 

for them than in other areas to learn as to whether things really 

are novel, because there aren’t patents for them to go look at to see 

what has been done before. 

And that is why I think the problem is not patents on financial 

services or business models, the problem is a system where things 

that are not novel won’t get through because people will make sure 

the patent office knows that. 

Mr. SHERMAN. Now, some experts perceive a problem with the 

way damages are calculated in patent infringement cases. Their 

concern is that courts will award to a patent-holder damages 

amounting to the entire market value or entire profit of a good, 

even when the producer of that good has infringed the patent unintentionally and, in fact, the patent that they have unintentionally 

infringed represents just one aspect of the patent. 

71

Should we allow courts to determine awards based upon the entire product and the entire profit to be generated in selling that 

product and is there some other measure of damages that would 

be more fair? 

Mr. RAVICHER. Well, the Patent Act says that the damages you 

are entitled to are equal to the higher of either reasonable royalty 

or your lost profits and there is very well-documented case law on 

how you calculate lost profit. 

Sometimes you get a hybrid result. So the statute is quite fair 

in its language. It has been interpreted by some courts, including 

the Federal circuit, to be a little bit larger, a little bit more favorable for patent-holders and perhaps that statute should be clarified 

to better define the term ‘‘reasonable royalty’’ and that that royalty 

is not based off the value of the entire product of which one small 

component infringes your patent, but the reasonable royalty related 

to that component which you added. 

Mr. SHERMAN. So it is the higher of your reasonable royalty or 

what was the other standard? 

Mr. RAVICHER. Lost profit. 

Mr. SHERMAN. Lost profit. Well, my lost profit is you have to conjure up the idea that I somehow went from the patent to having 

the whole product, the factory, the marketing plan, et cetera. 

Do the courts engage in that kind of fantasy or do they look in 

a situation like that to some sort of fair royalty? 

Mr. RAVICHER. Well, to get your lost profits, you have to come 

in with some good evidence of what is called convoyed sales, that 

you actually lost sales to the infringer. 

So it is not as ephemeral as your——

Mr. SHERMAN. So if I don’t even have a product that I am marketing, I focus only on the royalty. 

Mr. RAVICHER. But the real penalty in damages is the trebling 

of damages under willfulness and the right to get attorney’s fees. 

That is where you are really exposed and that is where you increase your likelihood of being willing to pay even more than you 

should pay because of your extra exposure provided by the willfulness doctrine. 

Mr. SHERMAN. So you might end up setting for well more than 

is fair because you are afraid that a court will determine that you 

infringed intentionally, even though, in fact, it was unintentional. 

Mr. RAVICHER. Absolutely. 

Mr. SHERMAN. I yield back. 

Mr. BERMAN. Thank you. 

We will have a second. I will recognize myself for 5 minutes. Just 

a couple of loose strands here. 

Mr. Issa raised the issue of findings of invalidity in court cases 

in the 1970’s compared to now. I think to properly look at it in context, you would also have to deal with the issue of settlements that 

came as a result of litigation to get a comparative handle on that. 

Just two other notions. One, the notion that injunctions now off 

the table, post-grant is a big issue. There are other issues. Mr. 

Sherman just raised one. 

The National Academy of Sciences has talked about these what 

they call sort of subjective tests, best mode, inequitable conduct, 

72

willfulness and all those are going to sort of come into play in what 

changes we make in all of this. 

But I would like to ask a few questions. Maybe I will start again 

with Dr. Myers and Ms. Michel. 

The obviousness issue, do you think the KSR case is going to 

have the potential to resolve your concerns? 

I guess this is a bit of a speculative question, but at least conceivably could or do you think we in Congress are going to have 

to deal with that? Although let me also just interject here, and I 

guess this is really for the whole panel. 

Do notions like formalizing sort of third-party submission of prior 

art, aren’t those the kinds of things that are going to reduce mistakes on the obviousness issue and the novelty issue or at least 

have the potential to reduce it, as well as post-grant? 

Mr. MYERS. Well, first is that when the Supreme Court, as it 

considers the KSR case and obviousness is part of that determination, I think that is vitally important to the lower courts with respect to standard-setting. It will have an influence. 

Now, the specific concerns that we had raised were a couple biotechnology cases and certain areas such as business methods, 

which are not exactly at issue in this particular case. 

Generally, though, we do not propose a legislative action to deal 

with the obviousness. I think that that is a court and probably the 

PTO administrative process that will have to deal with that. 

Mr. BERMAN. And would the submission of prior art, giving the 

examiner more information——

Mr. MYERS. Giving the examiner more information is clearly 

helpful, yes. 

Ms. MICHEL. Chairman Berman, I think you have identified two 

very important issues related to patent quality, but it is also helpful to keep them separated. 

One is what is the standard of obviousness, and that is the issue 

that the KSR case is dealing with. I would agree that that case 

does have the potential to address many of the concerns the FTC 

talked about in its report with the obviousness standard. 

The FTC participated in formulating the Government’s position 

and the VSG put in a brief to the Supreme Court arguing that the 

standard of obviousness was currently too low in the way that the 

Federal circuit was interpreting it. 

Mr. BERMAN. Now, the word ‘‘too low’’ means? 

Ms. MICHEL. Too easy to get a patent, that is right. The Government did argue before the Supreme Court——

Mr. BERMAN. Too high to find obviousness. 

Ms. MICHEL. Too high, that is correct. It is too easy to get a patent under the current standard of obviousness. 

The other related issue, the patent quality, is does the patent office have the information it needs to make a good determination. 

Now, the patent office needs to follow the law as set out by the 

Federal circuit. And so even when the PTO has all the right information, if the standard of obviousness makes getting a patent too 

easy, just not getting the information to the PTO won’t fix everything. 

So we do need to attack this other issue. 

73

And you mentioned a couple of mechanisms for getting the right 

information to the PTO, because the way the system is set up, only 

the patent applicant is dealing with the patent office and it is 

sometimes competitors of the patent applicant that will really have 

the best information on prior art. 

So one way to do that is post-grant opposition. Another way to 

do that would be to allow third parties to submit prior art to the 

patent office during prosecution. 

The FTC did look at this issue in its report. We heard some comments at the hearings that perhaps third parties would not use 

that procedure as much as we would like if it were available, because when a third party just submits the art to the patent office, 

without any ability to make a comment and point out the significance of the art to the patent examiner, there is concern that if the 

examiner then allows the patent in spite of that prior art, that 

competitor is then in a weaker situation later in litigation. 

So although it could be a useful mechanism, I think it is unclear 

how much it would be used. 

Mr. BERMAN. And, of course, the problem is you end up creating 

a pre-grant opposition that certainly doesn’t go in the way of harmonization. 

Mr. RAVICHER. Mr. Chairman, may I just make two quick comments. 

On KSR, legally, it will not resolve the problems with obviousness. Politically, it might. 

Legally, it won’t, because it only addresses one of the so-called 

secondary considerations that the Federal circuit has made preeminent on the obviousness inquiries, specifically the suggestion, 

motivation or teaching to combined secondary consideration. 

There are other secondary considerations, such as commercial 

success, failure of others, teaching, that the Federal circuit has 

made preeminent. 

All those secondary considerations need to be relegated back 

down to the correct level, that they are not the preeminent focus 

of an obviousness inquiry. 

Politically, they may see the signals on the wall that they have 

gone too far in lowering the obviousness bar. So they may fix that 

on their own, but I still think legislative action would be merited. 

On prior art for examiners, the examiners do a really good job. 

They find good prior art. 

The problem is continuations allow the applicant, even when the 

examiner has made a rejection, made it final, the applicants can 

just pay a fee and keep the argument going. I have seen examiners 

do it six, seven, eight, nine times in a row, rejecting, with good 

prior art. 

But the availability of filing continuations just defeats their ability to actually end the case, end the matter, and get it over. 

Mr. BERMAN. Mr. Feeney? 

Mr. FEENEY. Thank you, Mr. Chairman. 

Again, for the witnesses, we are really grateful. 

We heard about the problem, I am sure this maxim is in the public domain of unintended adverse consequences. I have to tell you 

that I have had dozens of individuals and groups come to me in my 

74

office and talk about patent reform and they are all in favor of it, 

as long as they get to write the details. 

I would like to copyright one of Feeney’s maxim about legislating, 

and that is, that no situation is so bad that Congress can’t make 

it worse and I think all of us want to be careful that we do the 

best we can to think about what reforms we do put in place and 

what the consequences will be. 

One of the issues that hasn’t been talked about a lot here today, 

but is talked a lot about when you speak to people that are trying 

to be creative and put useful products out on the market, is, after 

all, Professor Jaffe said it is not the innovation and creativity so 

much as the usefulness of that to our consumers that is the goal 

of the patent process. 

We hear a lot about patent trolls out. I am a real estate lawyer 

by background and if Bill buys Black Acre from Mary, Bill has the 

same bundle of rights under real estate theory as Mary did, and 

that is part of Mary’s bundle, what makes it valuable. 

Presumably, when Michael Jackson writes and sings a song and 

has the ownership rights, he has the same interest when the guys 

the Beatles’ music and the rights to it as the stuff that he created, 

and that is important to the Beatles and other would be music creators. 

The problem with patent trolls that has been identified, and I 

would like to ask you whether this is fair, is that you have somebody who is not an inventor, is or knows some very successful and 

capable litigators, that buys existing technology, puts it on a shelf 

somewhere, and denies the use of that, as a practical matter, to 

anybody that would put it out on the streets, because he warehouses it, hoping that he or she, I am talking about the patent 

troll—do we need to define what a patent troll is? 

Is the problem of patent trolling real? And what are your 

thoughts about what patent reform ought or ought not to do about 

so-called patent trolls once we define them? 

Mr. JAFFE. I will go on that. And at some point, you will decide 

you don’t need to keep asking me questions, because I give the 

same answer to every question, which is to say I don’t think that 

patent trolls, in and of themselves, are a problem. 

I agree with you, someone who buys a patent from someone else 

has the same stature and ought to have all of the same rights to 

enforce that patent as an inventor has. 

The problem that——

Mr. FEENEY. Why do you assume that that person is called a patent troll? 

Mr. JAFFE. Well, different people use the word in different ways. 

I think to the extent that there is a problem with patent trolls, the 

problem is patents that people think are invalid and a legal system 

that doesn’t create the right incentives for people to be able to oppose——

Mr. FEENEY. But, Professor, on those incentives—if I could, I will 

let you continue. 

Would it make sense if we would adopt Mr. Ravicher’s suggesting 

of getting rid of treble damages? Would that diminish the incentive 

for somebody to take some small piece of technology that could be 

75

useful on the streets later as part of a big product and then just 

dumping it in a warehouse and hoping he gets lucky? 

Would it reduce the incentive to warehouse technological pieces 

or components if we adopted Mr. Ravicher’s suggestion? 

Mr. JAFFE. Yes. And I think more generally, if you have good 

quality patents and you have a balanced litigation system——

Mr. FEENEY. We are all in favor of that. 

Mr. JAFFE. I am just saying then there isn’t a separate problem 

of patent trolls. People can call people trolls if they want to, but 

from a public policy perspective——

Mr. FEENEY. Does Dr. Myers or anybody else want to comment? 

Mr. MYERS. Yes. First is that I think that there will be a market 

in intellectual property, that is to say, which will mean that the 

originator of the intellectual property will sell that and it can be 

sold multiple times. 

I don’t think that will be harmful. In fact, I think that can be 

helpful. 

But we do have to keep in mind that this, though, is a grant to 

the public to, in fact, innovate. So that just withholding intellectual 

property from the public good, I think at some point, has a negative impact, because, in fact, as we are offering a monopoly right 

so that people will pursue the development of a needed value to society. 

So it is not just an economic collection right, it is a right to serve 

the public in some beneficial way. 

Ms. MICHEL. If I could address the question, also. 

I think the problem is not so much a patent-owner warehousing 

its technology, because then the patent-owner is not making any 

money. 

The business model is actually to go out and seek licenses to obtain royalties on those patents and the complaint is more based in 

that firms feel they are paying unjustified royalties on poor quality 

patents. 

So, then, again, we always get back to patent quality. But reason 

they do that is because of the high cost of litigation and the uncertainty of litigation. 

Therefore, a post-grant opposition procedure that serves as a 

faster, less expensive alternative to litigation is one possible way 

to address the problem. 

The other big problem you hear in this context is that you have 

a patentee coming after a firm and that patent might cover only 

one little tiny piece of the chip, the computer chip or whatever, and 

the accused infringer can’t take that risk of being completely shut 

down because of this one patent. 

And, therefore, even though maybe the chance of being shut 

down if it is a poor quality patent, the result would be catastrophic 

and, therefore, you get the firm paying, again, perhaps unjustified 

royalties and raising its cost. 

Mr. BERMAN. Mr. Issa? 

Mr. ISSA. Thank you, Mr. Chairman. 

Boy, so much. I am a little perplexed on two things, many things, 

but these two in particular. 

76

First of all, the idea that it seems like this panel tends to agree 

that we should let the court continue to legislate, continue to 

change the rules, for example, as to obviousness. 

The Constitution gives a very broad simple statement to what it 

means and, after that, it leaves it all to this body to create laws 

as to how to promote. 

So it appears as though the House, with the acquiescence of the 

Senate, we trust, and the president, we are supposed to promote 

these inventions and works of art and we have done that repeatedly and the Supreme Court, in copyright, showed incredible deference to us making the inducement of 100 years or so on Michael 

Jackson’s portfolio, if he lives a little longer. 

So I am a little confused on why in the world we would say that 

figuring out what the obviousness standard is, in other words, figuring out what is patentable as useful and promoting that should 

be left to the courts. 

Why in the world shouldn’t we change the standard if the standard has been ambiguous and difficult? And you seem to all agree 

that basically they are producing poor patents and then doing a 

relatively difficult job of running it through the courts. 

What am I missing? 

Ms. MICHEL. I will take a stab at that. Any determination of patentability is necessarily going to involve a judgment call where you 

are applying inherently ambiguous language to a highly technical 

question. 

Mr. ISSA. But let’s take a stab at it for a second. Right now, we 

look at the case law that is built up on 102 and 103 and we look 

at an incredible amount of what has been objected to by the PTO, 

which is combinations of combinations of combinations of combinations of unpatentable material. 

And I just call them combination patents, because you will find 

5,000 claims that put together different things that individually are 

not patentable and each and every single one is granted another 

claim, sometimes dependent, sometimes independent. 

Now, if we take the standard or the bias of the PTO and buy legislative act change that bias, which I think is the only way you are 

going to do it effectively, and we say, look, as the courts have done 

for us in the case of discovery, they say, look, you—I watch ‘‘Law 

and Order,’’ like most of America seems to. 

If there is inevitable discovery that I would have discovered the 

smoking gun in the bad guy’s house, then it is admissible, even if 

I originally got it another way, because I can show I would have 

gotten it anyway. One standard. 

We could change it to that. We could also change it to likely discover, likely if there are two patents that include all the claims and 

all the elements and they reference each other in the patents and 

then somebody comes up with these claims and puts them together 

in a different way and gets another patent. 

Certainly, if we gave a likely discoverable standard, we would 

dramatically reduce the court’s job and the PTO’s job of limiting 

the amount of things which are patentable. 

Do you all agree with that? And isn’t that something that would 

require us to say there is a different standard? Because the courts 

had a bunch of whacks at it. 

77

Okay, I like the nodding heads, that is always good. And before 

the Chairman nods——

Mr. BERMAN. I am just wondering, is there a reaction to that? 

Mr. JAFFE. I confess to having nodded my head. I am not a lawyer. 

Mr. ISSA. Did you think nodding your head doesn’t count if you 

are not a lawyer? 

Mr. JAFFE. No, I was just going to say I was similarly puzzled 

at the notion that Congress can’t write the statute, but I can’t tell 

you how to do it. 

Mr. ISSA. We provide guidance for a lot of other things. 

Ms. MICHEL. I didn’t mean to suggest, Congressman, that Congress could not write the statute. Certainly, absolutely, that guidance would be welcomed. 

Mr. BERMAN. We are not talking about war powers here. 

Ms. MICHEL. No. My point was only that I think any written 

standard which will be general enough to apply to all technologies 

will never eliminate the individual judgment calls for an individual 

patent. 

And so we will always have——

Mr. ISSA. Sure, I can agree that if we seek to reduce the amount 

of patents by making obviousness more likely to be declared, then 

we will only reduce the number, we will not eliminate the in 

betweens. 

Let me go on to a couple more questions, because I know the 

Chairman has limited indulgence. 

I am hearing, look, eBay says you got a license, essentially, if it 

stands the way it is, and, Daniel, you basically said you want to 

give it willfulness. 

To me, isn’t that catch me if you can and pay me only what you 

would have paid, at most, if I had taken a license to begin with? 

Mr. RAVICHER. I agree with you that actual damages, if you 

eliminate willfulness, as I propose, you may need to modify actual 

damages by some factor in order to create the sufficient disincentive that you want to, such as in antirust law, where the actual 

damages are trebling whatever actual harm there was. 

So you may want to up actual damages if you eliminate willfulness damages to try to make it the right amount. 

Mr. ISSA. So it is ‘‘mend it, don’t end it’’ on that. I was a little 

concerned that we were simply going to tell everyone, ‘‘Don’t bother 

until you are done in court.’’

Since this is the last round, if I can just ask one more quick 

question. 

Mr. RAVICHER. I am sorry. Just to go back to your Federal circuit 

issue. 

Without politically opining about it, the Federal circuit, in my 

opinion, is quite a judicially activist court and part of that is because they historically have seen themselves as being asked by 

Congress to do that. 

They seem themselves as having been created in order to build 

out a good patent policy for whatever reason. So they feel that that 

is part of their charter is to be slightly more aggressive with their 

interpretation and implementation of policy than your regular circuit courts of appeals. 

78

Mr. ISSA. I think Justice Breyer would agree with you. 

And as a general rule, I don’t think we disagree that we like the 

fact that they look at this and go a little further than some courts 

will as technology advances. 

The last question, though, is if we change the standard, if you 

will, to inevitable discovery, that these things would have come out, 

and we changed the bias and, at the same time, we improved the 

courts, which this Committee has moved out a piece of legislation 

we hope the Senate will take up quickly, then my real question still 

comes back to how really hurt are we going to be if we don’t make 

the huge changes, but rather pick up a couple of significant 

changes? 

Improve the existing patents by literally reducing the likelihood 

of getting as many claims, particularly combination claims, coming 

up with a post-grant re-examination that effectively is, if you will, 

fixing the non-functional re-examination process, improving the 

courts they go before, including administrative remedies, if possible, that dramatically reduce the burden to the court, but are appealable to the fed circuit, because the Chairman, rightfully so, 

wants to move a very large piece of legislation. 

But if we do this relatively small things, do you believe that we 

can do a wait-and-see or do you believe there are dramatic other 

ones that are in the major legislation that still absolutely need to 

be done, is the broad question. 

But it begs the question of we talk about little things that mean 

a lot. Do you need other bold ones and are there unintended consequences? 

Mr. RAVICHER. I think one of the most critical problems to address that wasn’t enumerated in your list is the fuzziness of patent 

boundaries or the indeterminateness of patent boundaries, because 

there is incentive to have arguable or ambiguous language in your 

claims, because you want to be able to argue at the patent office 

that it is narrower than the prior art. 

Then once it is issued, you want to have that freedom as a plaintiff to argue that it is much broader. 

So there is this incentive to have ambiguous claim terms and it 

is hard to know whether I am trespassing or not if I don’t know 

where the border is between what is in the public domain and what 

is covered by the patent. 

Mr. ISSA. I certainly agree with you, but when the courts really 

limited considerably means plus function and said, ‘‘Look, you only 

get what is there’’ and the walls are very hard and you can’t break 

through them, they did a lot to one type of statement of what I am 

doing. 

Again, if we take measures to provide language to the PTO and 

ultimately to the courts that similarly restricts the four walls, in 

other words, it is an invalid patent if it is ambiguous, therefore, if 

you want to re-expand what you narrowed, you, by definition, invalidate your patent, would that get past your concern? 

Because, again, we are looking at patent quality on this Committee as much as we are looking at every other part of the patent 

process. 

79

Mr. RAVICHER. Section 112’s prohibition against indefiniteness I 

think has been missed and should be reawakened, as I said in my 

opening statement. 

Mr. ISSA. Anyone else? Mr. Chairman is being indulgent. 

Thank you. 

Mr. BERMAN. I think for my last sort of questions, I would like 

to go back to the underlying picture. What is large versus what is 

small is sort of in the eyes of the beholder. 

I have a feeling, for maybe 400 Members of Congress, this is all 

pretty small. It is certainly not exciting in the traditional sense of 

the word, or in almost any other sense of the word. 

But is it important? Can you, in some terms—perhaps quantifying is not the thing to do. 

If we just walk away from this issue and leave the system sort 

of as it is, what are the costs for not dealing with issues of an alternative less expensive quicker procedure for determining validity, 

gathering more prior art, clarifying things which are now perhaps 

not serving any particular useful purpose, but are leading to lots 

of litigation and controversies, creation of these sort of settlements 

that maybe aren’t based on real issues, but just on avoiding the expense of litigation? 

What are the costs in terms of the economy as a whole as opposed to a particular company or individual? Is there a real cost 

here? It is sort of why should we care? 

Mr. MYERS. First is that increasingly our standard of living will 

be dependent upon how innovative we are as a society and we are 

talking about a key part, not the only part, but a key part of our 

innovation system is the intellectual property system. 

What we have to keep in mind is we have talked about validity, 

to actually determine validity today takes about 12 years. It is the 

12 years it takes to go through the court processes to finally determine the validity of a patent going through all the legal challenges. 

Under any circumstance, in a shortening time constant of technology life cycles, that is just totally inconsistent with respect to an 

innovation process. 

I can’t quantify what the impact of that is, but we know that we 

have a system that is now out of synch and that this is what I 

think we have to—all of the panel members and the questions I 

have heard, there is a recognition that that problem exists. 

Mr. BERMAN. Anybody else? 

Ms. MICHEL. Well, we certainly know we are living in the knowledge-based economy, where innovation is an extremely powerful 

driver in the economy and the ability to increase standards of living. 

I wouldn’t say the sky would fall, but on the other hand, this is 

an extremely important area and it is difficult to quantify the benefits of patent reform, and, yet, I think the FTC has made a case 

that they would be there. 

Mr. BERMAN. By the way, just to interrupt myself, some people 

say FTC, they are focused on competition issues and don’t like monopolies and concentrations of power and here we have, as Mr. 

Feeney indicated, the beginning of a constitutionally mandated system of exclusivity. 

80

The FTC is a biased source to be opining on this issue, because 

they are coming from a perspective that is really about challenging 

what the founding fathers wanted to do. 

What say you? 

Ms. MICHEL. Well, thank you for allowing me to clarify. I think 

there is a misconception in that competition policy, antitrust policy 

really shares the same goal as the patent system and that is to enhance consumer welfare. 

And the antitrust law and competition policy have done an excellent job in the past stretch of time, past few years, of taking the 

power of innovation to enhance consumer welfare into account 

when formulating competition policy. 

And, therefore, I don’t see really any conflict between the patent 

laws and the antitrust laws, because they are both aiming for that 

goal. 

I think what the FTC brings to this discussion is the viewpoint 

of consumers and what consumers want is to maximize innovation, 

because that is the way that we are going to do the best job at enhancing consumer welfare. 

And this is not about being contrary to the patent system. It is 

really about maximizing innovation. 

Mr. BERMAN. Anything else? 

Mr. JAFFE. Can I mention one thing? I actually think what Dr. 

Myers and Dr. Michel mentioned are the most important things, 

but I wanted to mention one other thing we haven’t talked about 

today. 

Coming down on the plane, I read the PTO’s new strategic plan, 

which talks about hiring over 1,000 new examiners a year basically 

every year and contemplates that despite that, by 2010, they might 

have a million patents at any given time in the pendency pool. 

And what is going on here is this is basically unsustainable, that 

we can’t throw enough—we have all agreed with Mr. Feeney that 

they need more resources, but we can’t give them enough resources 

to deal with the system under the existing rules. 

And one of the things we haven’t talked about is part of that increase in the number of applications is precisely the fact that it has 

gotten easier to get a patent, which encourages people to apply for 

patents that they wouldn’t otherwise be applying for. 

So if we can recalibrate this system, we will eventually discourage those frivolous applications and deal with what otherwise is 

going to eventually become a just completely unmanageable system. 

Mr. BERMAN. So your notion basically is people aren’t applying 

for patents for the fun of it, they are applying for it because they 

think they can get it pretty easily and make it a more rigorous 

test. 

The other way is just to raise the fee so high no one could afford 

to apply for a patent. 

Mr. JAFFE. I would not support that. 

Mr. ISSA. Mr. Chairman, that was already tried two Congresses 

ago. We fought that, remember? 

Mr. Chairman, if I could make one closing statement, just 10 seconds, just to opine on the 1985 increase. 

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After considerable research, I realized that it was the advent of 

the PC, IBM and others, that created the ability to so easily make 

so many claims and submit them and I would only suggest that if 

we go back to requiring IBM Selectrics with the courier element on 

it, that it be hand-typed, we could easily roll back this growth. 

With that, I would yield back. 

Mr. BERMAN. The downside of innovation. 

Mr. ISSA. Yes. 

Mr. BERMAN. Mr. Feeney? 

Mr. FEENEY. Well, thanks. And, again, thanks for participating 

in the hearing. 

Congressman Issa has indicated he has some 40,000 questions 

for the panel and, by my count, that means he has still got 39,900-

some to go. 

But I will make these my last questions, but I really do appreciate it. This certainly has been helpful, in my first hearing, in formulating some of the key issues in front of us. 

I do want to raise a constitutional issue and this is not the Constitution Subcommittee, but we are the Judiciary Committee and 

now and then we touch on the Constitution here and there. 

Dr. Myers brought up the interest in harmonizing U.S. patent 

law. Again, article 1 gives plenary authority to the Congress to establish patent protections and I guess it would be an interesting 

constitutional query. 

Could we delegate, temporarily or otherwise, to some international organization and if the 110th Congress does decide to delegate some organization to, say, the E.U. and Japan and the U.S. 

and other appropriate parties, whether or not the 111th Congress 

would have the power, treaty or otherwise, just to simply ignore it, 

given the fact that protecting patent rights is not something that 

the three branches share equally in. 

It is a plenary authority, the way I read article 1, that vests in 

the Congress. 

So, anyway, it is a question. As we talk about harmonizing, we 

will have to get some better constitutional minds than myself involved in thinking about it. 

I want to go back, because there was a discussion about 

Congress’s role versus the role of the courts here. 

Clearly, each individual court case where these matters are ultimately resolved is a decision where the courts are going to have to 

apply between parties A and B and maybe multiple parties, but 

Congress can go as far as we like in terms of establishing what 

those criteria are. 

And the question is where to draw those lines, in my view. 

Dr. Myers, you suggest, on number five of your proposals, that 

we ought to modify or remove the subjective elements of litigation, 

including things like obviousness. 

And when we talk about standards like new and obvious, it 

seems like reasonable minds could agree on what is new or obvious 

and we could have an objective as opposed to a subjective standard. 

But I guess I would suggest that reasonable minds can differ 

over what issues reasonable minds might different over and, in 

fact, we have had now the Federal circuit court differ about what 

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is or isn’t new or obvious from reasonable minds on the U.S. Supreme Court. 

So I think probably is appropriate for Congress to at least explore the advantages of giving additional guidance on these and 

other issues and certainly leaving the courts to a vacuum. 

Sometimes it works, if you can establish a clear standard and 

give everybody guidance, but ultimately it is our prerogative to decide whether things are working well or not and I think, for the 

most part, people agree that things are not working as well as they 

could. 

Does anybody want to comment? Because I know we had a discussion about this earlier, but in light of all that. 

Mr. MYERS. What basically our first point of maintaining a unitary patent system, which is really the legislative level, and that 

whatever is legislated we believe should apply to all of the sectors, 

the business sectors that the patent system covers. 

The courts will make differentiations around individual cases 

and I think that that would be appropriate because of the circumstances of those cases. 

But I think we would not recommend making individual obviousness standards with respect to pharmaceuticals versus electronics 

in a legislative way, try to maintain the legislation. 

Mr. FEENEY. But you think the courts can differentiate. 

Mr. MYERS. The courts, on an individual case, or the PTO, in 

some of their procedures, to adapt to peculiar or special situations. 

Mr. FEENEY. Thank the witnesses. 

I will yield back the balance of my time. 

Mr. BERMAN. Thank you. 

And I want to thank all of you for your testimony. It did occur 

to me, given the gentleman’s comments about harmonization and 

sovereignty, that the other alternative is to try to extend U.S. patent law extraterritorially and impose sanctions on anyone who 

doesn’t go along. 

I want to thank the witnesses for the testimony. 

Members may have additional written questions to you, for 

which we will forward them to you and ask that you answer them 

as promptly as possible. 

And the hearing record, because of the upcoming recess, will remain open until the close of business next Thursday, February 22, 

for submission of any additional materials. 

This has been a helpful hearing for me and, I think, for the other 

Members. 

And with that, the hearing is adjourned. Thank you. 

[Whereupon, at 4:15 p.m., the Subcommittee was adjourned.] 

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A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON LEE, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF TEXAS, AND MEMBER, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Mr. Chairman, I move to strike the last word. 

Thank you, Mr. Chairman for holding this hearing. Let me congratulate you also 

on your election as Chairman of this very important subcommittee. Congratulations 

also to you Mr. Coble, on assuming leadership of this panel for the minority. I am 

confident that working together, we can achieve great things for the American people. We have much work to do and I look forward to working with all members of 

the subcommittee to address the real challenges facing our country in the areas of 

patent reform and protection of intellectual property. 

Let me also welcome each of our witnesses. I look forward to their testimony. 

The subject of today’s hearing is ‘‘American Innovation at Risk: The Case for Patent Reform.’’ This hearing could not be more timely, Mr. Chairman. 

This hearing will explore the necessity of comprehensive patent reform is required, and will address whether inadequacies in the current patent system hamper 

innovation and hurt the American economy. As the Blackberry litigation demonstrated, deficiencies in the current system have the ability to paralyze America. 

Indeed, the New York Times noted that ‘‘[something] has gone very wrong with the 

United States patent system.’’ The Financial Times opined that ‘‘[i]t is time to restore the balance of power in U.S. patent law.’’

The Constitution mandates that we ‘‘promote the progress of science and the useful arts . . . by securing for limited times to . . . inventors the exclusive right to 

their . . . discoveries.’’ In order to fulfill the Constitution’s mandate, we must examine the system periodically to determine whether there may be flaws in the system 

that may hamper innovation, including the problems described as decreased patent 

quality, prevalence of subjective elements in patent practice, patent abuse, and lack 

of meaningful alternatives to the patent litigation process. 

One important place to look is U.S. Patent and Trademark Office (‘‘PTO’’). In 

order to determine whether to grant a patent, PTO examiners must ascertain 

whether a discovery is of patentable subject matter, useful, novel, nonobvious, and 

accompanied by an adequate description. The PTO requires an adequate number of 

examiners and easy access to information resources in order to process the high 

number of patent applications filed each year. Because each year the PTO must 

wait to see whether it will be appropriated all of the funds it collects, it cannot plan 

the hiring of staff or the implementation of quality initiatives in advance. While the 

quick efforts of the Subcommittee averted the fee diversion this year, there is no 

guarantee that the PTO will receive its user fees next year. 

Some attribute the lack of resources at the PTO as the cause of the deterioration 

of patent quality, which has wasted valuable resources by sanctioning frivolous 

third-party court challenges and ultimately discouraging private-sector investment. 

As the world’s technology leader and center of innovation, America must set a higher bar to ensure that undeserving inventions to not pass through the patent process. 

To that end, the PTO needs more guidance so that it only issues patents to discoveries that are truly inventive. 

Once the PTO issues a patent of questionable quality, it is easier for unscrupulous 

patent holders to engage in abusive practices that hurt the economy. American inventors should no longer receive threatening licensing letters containing vague patent infringement accusations from patent holders, raising the specter of treble damages if they do not give in to the senders’ demands. In striking a proper balance 

between patent holder rights and the prevention of abusive practices, a rejuvenated 

patent system would protect and reward the hard work of American inventors, but 

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would also ensure that ‘‘patent trolls’’ do not stop the American economy in its 

tracks. 

The availability of meaningful and low-cost alternatives to litigation for challenging patent validity would provide an additional quality check. Such alternatives 

could include giving third parties a window to submit ‘‘prior art’’ to patent examiners before the issuance of a patent, creating a post-grant opposition procedure that 

would allow administrative challenges to patent validity instead of the current option of going to court, and by relaxing estoppel and inter-partes re-examination requirements to make them more available as options for opposing patent validity. 

Taken together, these improvements would bring the American patent system up 

to speed for the twenty-first century and may also harmonize American law with 

that of foreign countries. Instead of remaining a hindrance to innovation and economic growth, the patent system should work for inventors and with competitive 

market-forces, ensuring America’s patent system remains the best in the world and 

prevents risks to innovation. 

Again, thank you Mr. Chairman for holding this hearing. I look forward to hearing from our distinguished panel of witnesses. I yield back my time. 

PREPARED STATEMENT OF THE H

fONORABLE STEVE COHEN, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TENNESSEE, AND MEMBER, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Today the Subcommittee considers a matter that is of critical importance to the 

nation’s intellectual and commercial development. Most agree that some degree of 

patent reform is needed, though I recognize that there is disagreement concerning 

the nature and extent of the changes that are necessary. In considering all arguments regarding any specific patent reform proposal, I will keep my focus on what 

is best for the public interest. In serving the public interest, any reform in the patent system will also be what is best for business interests, regardless of the specific 

industry at issue. I look forward to hearing from the witnesses today to help us obtain a better grasp of the issues at stake.

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FEDERAL TRADE COMMISSION EXECUTIVE SUMMARY TO PROMOTE INNOVATION: THE

PROPER BALANCE OF COMPETITION AND PATENT LAW AND POLICY


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NATIONAL ACADEMY OF SCIENCES EXECUTIVE SUMMARY,

‘‘A PATENT SYSTEM FOR THE 21ST CENTURY’’


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LETTER FROM COALITION FOR PATENT FAIRNESS TO THE HONORABLE NANCY PELOSI, 

SPEAKER OF THE HOUSE, UNITED STATES HOUSE OF REPRESENTATIVES; AND THE

HONORABLE JOHN BOEHNER, MINORITY LEADER, UNITED STATES HOUSE OF REPRESENTATIVES


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Æ


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