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PATENT REFORM ACT OF 2007

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

ON

H.R. 1908

APRIL 26, 2007

Serial No. 110–65

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. (BOBBY) 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 

TAMMY BALDWIN, Wisconsin 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

ARTUR DAVIS, Alabama 

DEBBIE WASSERMAN SCHULTZ, Florida 

KEITH ELLISON, Minnesota 

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 

ZOE LOFGREN, California 

HOWARD COBLE, North Carolina 

TOM FEENEY, Florida 

LAMAR SMITH, Texas 

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 

APRIL 26, 2007

Page 

TEXT OF BILL 

H.R. 1908, the ‘‘Patent Reform Act of 2007’’ ......................................................... 2

OPENING STATEMENTS 

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 Howard Coble, a Representative in Congress from the State 

of North Carolina, and Ranking Member, Subcommittee on Courts, the 

Internet, and Intellectual Property .................................................................... 19

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

of Texas, and Member, Subcommittee on Courts, the Internet, and Intellectual Property ........................................................................................................ 28

WITNESSES 

Mr. Kevin Sharer, Chairman of the Board and Chief Executive Officer, 

Amgen Incorporated, Thousand Oaks, CA 

Oral Testimony ..................................................................................................... 32

Prepared Statement ............................................................................................. 34

Mr. Gary L. Griswold, President and Chief Counsel of Intellectual Property, 

3M Innovative Properties, St. Paul, MN 

Oral Testimony ..................................................................................................... 46

Prepared Statement ............................................................................................. 48

Mr. John R. Thomas, Professor of Law, Georgetown University Law Center, 

Washington, DC 

Oral Testimony ..................................................................................................... 63

Prepared Statement ............................................................................................. 65

Mr. William T. Tucker, Executive Director, Research and Administration 

and Technology Transfer, University of California, Oakland, CA 

Oral Testimony ..................................................................................................... 76

Prepared Statement ............................................................................................. 77

Mr. Anthony Peterman, Director, Patent Counsel, Dell Incorporated, Round 

Rock, TX 

Oral Testimony ..................................................................................................... 86

Prepared Statement ............................................................................................. 88

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Prepared Statement of the Honorable Howard L. Berman, a Representative 

in Congress from the State of California, and Chairman, Subcommittee 

on Courts, the Internet, and Intellectual Property ........................................... 17

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 .............................................................. 21

Prepared Statement of the Honorable Lamar Smith, a Representative in 

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

the Internet, and Intellectual Property .............................................................. 30

Page

IV

Prepared Statement of the California Healthcare Institute, submitted by the 

Honorable Darrell Issa, a Representative in Congress from the State of 

California, and Member, Subcommittee on Courts, the Internet, and Intellectual Property .................................................................................................... 137

Prepared Statement of the Honorable Tom Feeney, a Representative in Congress from the State of Florida, and Member, Subcommittee on Courts, 

the Internet, and Intellectual Property .............................................................. 144

APPENDIX 

Material Submitted for the Hearing Record .......................................................... 148

(1)

PATENT REFORM ACT OF 2007

THURSDAY, APRIL 26, 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 2:06 p.m., in Room 

2141, Rayburn House Office Building, the Honorable Howard L. 

Berman (Chairman of the Subcommittee) presiding. 

Present: Representatives Berman, Jackson Lee, Watt, Coble, 

Smith and Issa. 

Staff Present: Perry Apelbaum, Staff Director and Chief Counsel; 

Shanna Winters, Subcommittee Counsel; Rosalind Jackson, Professional Staff Member; Joseph Gibson, Minority Chief Counsel; and 

Blaine Merritt, Minority Subcommittee Counsel. 

Mr. BERMAN. This hearing of the Subcommittee on Courts, the 

Internet, and Intellectual Property will come to order. I will start 

out and recognize myself for a more lengthy opening statement, but 

I will also give great leeway to my Ranking Member and others 

who would like to make opening statements. 

Let me first—I think we are trying to get an overflow room. We 

have got one. Okay. You will have to find out where it is though. 

Let me begin by describing what this hearing is not about. This 

hearing is not about creating a dynamic where all the witnesses 

testifying support the bill H.R. 1908, the Patent Reform Act of 

2007. In fact, while the witnesses have identified some aspects of 

the bill they like, a majority of the witnesses disagree with major 

portions of the bill. And there would have been another witness to 

raise disagreement with the bill, but the independent inventor I invited couldn’t be here today. My goal is to foster the policy discussion to yield the best result. 

This hearing is also not about a perfect bill. I expect over the 

course of the next several weeks, there will be numerous changes 

incorporated into the bill that reflect legitimate concerns over unintended consequences as well as reforms considered that are not 

presently included. For example, the issues of obviousness and 

271(f) are currently before the Supreme Court and are not addressed in the bill. 

Furthermore, as to drafting errors, I have already identified a 

number of necessary corrections that will be made. For example, 

the word ‘‘same’’ should be changed to ‘‘any’’ in the prohibited filing 

section to allow for only one shot at a postgrant proceeding. You 

can’t challenge under this bill—as it will be corrected to require, 

2

that you can’t challenge in the first window and then challenge in 

the second. 

This hearing is not about promoting an agenda for a specific industry. While the media has portrayed the debate as a tech versus 

Pharma battle, I prefer to see it as the inability of current patent 

laws to accommodate the differences of industry business models. 

For the sectors which rely on business method patents or products 

which incorporate many multiples of patents, the proliferation of 

questionable quality patents and the burgeoning of patent speculation prevents the system from promoting innovation. It is one system, and it must work for everyone. 

It is without doubt that most groups who have a stake in the 

patent system recognize the need for reform, but it should be realized that the final makeup of the reforms will certainly require 

compromise by all. 

The intention of this hearing is to move beyond the previous 

rhetoric on patent reform and to address the real and serious problems confronting the U.S. patent system. By bringing to this hearing the cross-section of past patent system users we have here 

today, I expect the discourse and debate on the reforms proposed 

in the bill to be constructive and thoughtful. This bipartisan, bicameral bill draws from many of the issues raised by past legislative attempts, multiple hearings and a slew of reports on patent reform by entities such as the National Academy of Sciences as well 

as the Federal Trade Commission and the United States Patent 

and Trademark Office, among others. 

H.R. 1908 is both long and complex, and, by its terms, not particularly interesting. I do not expect that everyone has had a 

chance to fully digest all of the changes proposed by the bill. However, the Patent Reform Act of 2007 is effectively now our starting 

point, and this hearing, I hope, will propel discussion on where the 

bill should go. I would like to thank the witnesses and especially 

my Subcommittee Members for beginning the process today. 

[The text of the bill, H.R. 1908, follows:]

I 

110TH CONGRESS 

1ST SESSION H. R. 1908

To amend title 35, United States Code, to provide for patent reform. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 18, 2007

Mr. BERMAN (for himself, Mr. SMITH of Texas, Mr. CONYERS, Mr. COBLE, Mr. BOUCHER, Mr. GOODLATTE, Ms. ZOE LOFGREN of California, Mr. ISSA, Mr. SCHIFF, Mr. 

CANNON, and Ms. JACKSON-LEE of Texas) introduced the following bill; which was 

referred to the Committee on the Judiciary 

A BILL 

To amend title 35, United States Code, to provide for patent reform.

3

Be it enacted by the Senate and House of Representatives of the United States 

of America in Congress assembled, 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Patent Reform Act of 2007’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents. 

Sec. 2. Reference to title 35, United States Code. 

Sec. 3. Right of the first inventor to file. 

Sec. 4. Inventor’s oath or declaration. 

Sec. 5. Right of the inventor to obtain damages. 

Sec. 6. Post-grant procedures and other quality enhancements. 

Sec. 7. Definitions; patent trial and appeal board. 

Sec. 8. Study and report on reexamination proceedings. 

Sec. 9. Submissions by third parties and other quality enhancements. 

Sec. 10. Venue and jurisdiction. 

Sec. 11. Regulatory authority. 

Sec. 12. Technical amendments. 

Sec. 13. Effective date; rule of construction. 

SEC. 2. REFERENCE TO TITLE 35, UNITED STATES CODE. 

Whenever in this Act a section or other provision is amended or repealed, that 

amendment or repeal shall be considered to be made to that section or other provision of title 35, United States Code. 

SEC. 3. RIGHT OF THE FIRST INVENTOR TO FILE. 

(a) DEFINITIONS.—Section 100 is amended by adding at the end the following: 

‘‘(f) The term ‘inventor’ means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention. 

‘‘(g) The terms ‘joint inventor’ and ‘coinventor’ mean any 1 of the individuals 

who invented or discovered the subject matter of a joint invention. 

‘‘(h) The ‘effective filing date of a claimed invention’ is—

‘‘(1) the filing date of the patent or the application for patent containing the 

claim to the invention; or 

‘‘(2) if the patent or application for patent is entitled to a right of priority 

of any other application under section 119, 365(a), or 365(b) or to the benefit 

of an earlier filing date in the United States under section 120, 121, or 365(c), 

the filing date of the earliest such application in which the claimed invention 

is disclosed in the manner provided by the first paragraph of section 112. 

‘‘(i) The term ‘claimed invention’ means the subject matter defined by a claim 

in a patent or an application for a patent. 

‘‘(j) The term ‘joint invention’ means an invention resulting from the collaboration of inventive endeavors of 2 or more persons working toward the same end and 

producing an invention by their collective efforts.’’. 

(b) CONDITIONS FOR PATENTABILITY.—

(1) IN GENERAL.—Section 102 is amended to read as follows: 

‘‘§ 102. Conditions for patentability; novelty 

‘‘(a) NOVELTY; PRIOR ART.—A patent for a claimed invention may not be obtained if—

‘‘(1) the claimed invention was patented, described in a printed publication, 

or in public use or on sale—

‘‘(A) more than one year before the effective filing date of the claimed 

invention; or 

‘‘(B) one year or less before the effective filing date of the claimed invention, other than through disclosures made by the inventor or a joint inventor or by others who obtained the subject matter disclosed directly or 

indirectly from the inventor or a joint inventor; or 

‘‘(2) the claimed invention was described in a patent issued under section 

151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the 

claimed invention. 

‘‘(b) EXCEPTIONS.—

‘‘(1) PRIOR INVENTOR DISCLOSURE EXCEPTION.—Subject matter that would 

otherwise qualify as prior art under subparagraph (B) of subsection (a)(1) shall 

not be prior art to a claimed invention under that subparagraph if the subject 

matter had, before the applicable date under such subparagraph (B), been pubVerDate 0ct 09 2002 15:57 Apr 09, 2008 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6621 H:\WORK\COURTS\042607\34929.000 HJUD1 PsN: DOUGA
4

licly disclosed by the inventor or a joint inventor or others who obtained the 

subject matter disclosed directly or indirectly from the inventor, joint inventor, 

or applicant. 

‘‘(2) DERIVATION AND COMMON ASSIGNMENT EXCEPTIONS.—Subject matter 

that would otherwise qualify as prior art only under subsection (a)(2), after taking into account the exception under paragraph (1), shall not be prior art to a 

claimed invention if—

‘‘(A) the subject matter was obtained directly or indirectly from the inventor or a joint inventor; or 

‘‘(B) the subject matter and the claimed invention, not later than the 

effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person. 

‘‘(3) JOINT RESEARCH AGREEMENT EXCEPTION.—

‘‘(A) IN GENERAL.—Subject matter and a claimed invention shall be 

deemed to have been owned by the same person or subject to an obligation 

of assignment to the same person in applying the provisions of paragraph 

(2) if—

‘‘(i) the claimed invention was made by or on behalf of parties to 

a joint research agreement that was in effect on or before the effective 

filing date of the claimed invention; 

‘‘(ii) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and 

‘‘(iii) the application for patent for the claimed invention discloses 

or is amended to disclose the names of the parties to the joint research 

agreement. 

‘‘(B) For purposes of subparagraph (A), the term ‘joint research agreement’ means a written contract, grant, or cooperative agreement entered 

into by two or more persons or entities for the performance of experimental, 

developmental, or research work in the field of the claimed invention. 

‘‘(4) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVELY FILED.—A patent 

or application for patent is effectively filed under subsection (a)(2) with respect 

to any subject matter described in the patent or application—

‘‘(A) as of the filing date of the patent or the application for patent; or 

‘‘(B) if the patent or application for patent is entitled to claim a right 

of priority under section 119, 365(a), or 365(b) or to claim the benefit of an 

earlier filing date under section 120, 121, or 365(c), based upon one or more 

prior filed applications for patent, as of the filing date of the earliest such 

application that describes the subject matter.’’. 

(2) CONFORMING AMENDMENT.—The item relating to section 102 in the table 

of sections for chapter 10 is amended to read as follows:

‘‘102. Conditions for patentability; novelty.’’. 

(c) CONDITIONS FOR PATENTABILITY; NON-OBVIOUS SUBJECT MATTER.—Section 

103 is amended to read as follows: 

‘‘§ 103. Conditions for patentability; nonobvious subject matter 

‘‘A patent for a claimed invention may not be obtained though the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention 

as a whole would have been obvious before the effective filing date of the claimed 

invention to a person having ordinary skill in the art to which the claimed invention 

pertains. Patentability shall not be negated by the manner in which the invention 

was made.’’. 

(d) REPEAL OF REQUIREMENTS FOR INVENTIONS MADE ABROAD.—Section 104, 

and the item relating to that section in the table of sections for chapter 10, are repealed. 

(e) REPEAL OF STATUTORY INVENTION REGISTRATION.—

(1) IN GENERAL.—Section 157, and the item relating to that section in the 

table of sections for chapter 14, are repealed. 

(2) REMOVAL OF CROSS REFERENCES.—Section 111(b)(8) is amended by striking ‘‘sections 115, 131, 135, and 157’’ and inserting ‘‘sections 131 and 135’’. 

(f) EARLIER FILING DATE FOR INVENTOR AND JOINT INVENTOR.—Section 120 is 

amended by striking ‘‘which is filed by an inventor or inventors named’’ and inserting ‘‘which names an inventor or joint inventor’’. 

(g) CONFORMING AMENDMENTS.—

(1) RIGHT OF PRIORITY.—Section 172 is amended by striking ‘‘and the time 

specified in section 102(d)’’. 

5

(2) LIMITATION ON REMEDIES.—Section 287(c)(4) is amended by striking ‘‘the 

earliest effective filing date of which is prior to’’ and inserting ‘‘which has an 

effective filing date before’’. 

(3) INTERNATIONAL APPLICATION DESIGNATING THE UNITED STATES: EFFECT.—Section 363 is amended by striking ‘‘except as otherwise provided in section 102(e) of this title’’. 

(4) PUBLICATION OF INTERNATIONAL APPLICATION: EFFECT.—Section 374 is 

amended by striking ‘‘sections 102(e) and 154(d)’’ and inserting ‘‘section 154(d)’’. 

(5) PATENT ISSUED ON INTERNATIONAL APPLICATION: EFFECT.—The second 

sentence of section 375(a) is amended by striking ‘‘Subject to section 102(e) of 

this title, such’’ and inserting ‘‘Such’’. 

(6) LIMIT ON RIGHT OF PRIORITY.—Section 119(a) is amended by striking ‘‘; 

but no patent shall be granted’’ and all that follows through ‘‘one year prior to 

such filing’’. 

(7) INVENTIONS MADE WITH FEDERAL ASSISTANCE.—Section 202(c) is amended—

(A) in paragraph (2)—

(i) by striking ‘‘publication, on sale, or public use,’’ and all that follows through ‘‘obtained in the United States’’ and inserting ‘‘the 1-year 

period referred to in section 102(a) would end before the end of that 

2-year period’’; and 

(ii) by striking ‘‘the statutory’’ and inserting ‘‘that 1-year’’; and 

(B) in paragraph (3), by striking ‘‘any statutory bar date that may occur 

under this title due to publication, on sale, or public use’’ and inserting ‘‘the 

expiration of the 1-year period referred to in section 102(a)’’. 

(h) REPEAL OF INTERFERING PATENT REMEDIES.—Section 291, and the item relating to that section in the table of sections for chapter 29, are repealed. 

(i) ACTION FOR CLAIM TO PATENT ON DERIVED INVENTION.—Section 135(a) is 

amended to read as follows: 

‘‘(a) DISPUTE OVER RIGHT TO PATENT.—

‘‘(1) INSTITUTION OF DERIVATION PROCEEDING.—An applicant may request 

initiation of a derivation proceeding to determine the right of the applicant to 

a patent by filing a request which sets forth with particularity the basis for 

finding that an earlier applicant derived the claimed invention from the applicant requesting the proceeding and, without authorization, filed an application 

claiming such invention. Any such request may only be made within 12 months 

after the date of first publication of an application containing a claim that is 

the same or is substantially the same as the claimed invention, must be made 

under oath, and must be supported by substantial evidence. Whenever the Director determines that patents or applications for patent naming different individuals as the inventor interfere with one another because of a dispute over the 

right to patent under section 101, the Director shall institute a derivation proceeding for the purpose of determining which applicant is entitled to a patent. 

‘‘(2) REQUIREMENTS.—A proceeding under this subsection may not be commenced unless the party requesting the proceeding has filed an application that 

was filed not later than 18 months after the effective filing date of the application or patent deemed to interfere with the subsequent application or patent. 

‘‘(3) DETERMINATION BY PATENT TRIAL AND APPEAL BOARD.—In any proceeding under this subsection, the Patent Trial and Appeal Board—

‘‘(A) shall determine the question of the right to patent; 

‘‘(B) in appropriate circumstances, may correct the naming of the inventor in any application or patent at issue; and 

‘‘(C) shall issue a final decision on the right to patent. 

‘‘(4) DERIVATION PROCEEDING.—The Board may defer action on a request to 

initiate a derivation proceeding until 3 months after the date on which the Director issues a patent to the applicant that filed the earlier application. 

‘‘(5) EFFECT OF FINAL DECISION.—The final decision of the Patent Trial and 

Appeal Board, if adverse to the claim of an applicant, shall constitute the final 

refusal by the Patent and Trademark Office on the claims involved. The Director may issue a patent to an applicant who is determined by the Patent Trial 

and Appeal Board to have the right to patent. The final decision of the Board, 

if adverse to a patentee, shall, if no appeal or other review of the decision has 

been or can be taken or had, constitute cancellation of the claims involved in 

the patent, and notice of such cancellation shall be endorsed on copies of the 

patent distributed after such cancellation by the Patent and Trademark Office.’’. 

(j) ELIMINATION OF REFERENCES TO INTERFERENCES.—(1) Sections 6, 41, 134, 

141, 145, 146, 154, 305, and 314 are each amended by striking ‘‘Board of Patent 

6

Appeals and Interferences’’ each place it appears and inserting ‘‘Patent Trial and 

Appeal Board’’. 

(2) Sections 141, 146, and 154 are each amended—

(A) by striking ‘‘an interference’’ each place it appears and inserting ‘‘a derivation proceeding’’; and 

(B) by striking ‘‘interference’’ each additional place it appears and inserting 

‘‘derivation proceeding’’. 

(3) The section heading for section 134 is amended to read as follows: 

‘‘§ 134. Appeal to the Patent Trial and Appeal Board’’. 

(4) The section heading for section 135 is amended to read as follows: 

‘‘§ 135. Derivation proceedings’’. 

(5) The section heading for section 146 is amended to read as follows: 

‘‘§ 146. Civil action in case of derivation proceeding’’. 

(6) Section 154(b)(1)(C) is amended by striking ‘‘INTERFERENCES’’ and inserting 

‘‘DERIVATION PROCEEDINGS’’. 

(7) The item relating to section 6 in the table of sections for chapter 1 is amended to read as follows:

‘‘6. Patent Trial and Appeal Board.’’. 

(8) The items relating to sections 134 and 135 in the table of sections for chapter 12 are amended to read as follows:

‘‘134. Appeal to the Patent Trial and Appeal Board. 

‘‘135. Derivation proceedings.’’. 

(9) The item relating to section 146 in the table of sections for chapter 13 is 

amended to read as follows:

‘‘146. Civil action in case of derivation proceeding.’’. 

(10) CERTAIN APPEALS.—Subsection 1295(a)(4)(A) of title 28, United States 

Code, is amended to read as follows: 

‘‘(A) the Patent Trial and Appeal Board of the United States Patent and 

Trademark Office with respect to patent applications, derivation proceedings, and post-grant review proceedings, at the instance of an applicant 

for a patent or any party to a patent interference (commenced before the 

effective date of the Patent Reform Act of 2007), derivation proceeding, or 

post-grant review proceeding, and any such appeal shall waive any right of 

such applicant or party to proceed under section 145 or 146 of title 35;’’. 

SEC. 4. INVENTOR’S OATH OR DECLARATION. 

(a) INVENTOR’S OATH OR DECLARATION.—

(1) IN GENERAL.—Section 115 is amended to read as follows: 

‘‘§ 115. Inventor’s oath or declaration 

‘‘(a) NAMING THE INVENTOR; INVENTOR’S OATH OR DECLARATION.—An application for patent that is filed under section 111(a), that commences the national stage 

under section 363, or that is filed by an inventor for an invention for which an application has previously been filed under this title by that inventor shall include, or 

be amended to include, the name of the inventor of any claimed invention in the 

application. Except as otherwise provided in this section, an individual who is the 

inventor or a joint inventor of a claimed invention in an application for patent shall 

execute an oath or declaration in connection with the application. 

‘‘(b) REQUIRED STATEMENTS.—An oath or declaration under subsection (a) shall 

contain statements that—

‘‘(1) the application was made or was authorized to be made by the affiant 

or declarant; and 

‘‘(2) such individual believes himself or herself to be the original inventor 

or an original joint inventor of a claimed invention in the application. 

‘‘(c) ADDITIONAL REQUIREMENTS.—The Director may specify additional information relating to the inventor and the invention that is required to be included in 

an oath or declaration under subsection (a). 

‘‘(d) SUBSTITUTE STATEMENT.—

‘‘(1) IN GENERAL.—In lieu of executing an oath or declaration under subsection (a), the applicant for patent may provide a substitute statement under 

the circumstances described in paragraph (2) and such additional circumstances 

that the Director may specify by regulation. 

7

‘‘(2) PERMITTED CIRCUMSTANCES.—A substitute statement under paragraph 

(1) is permitted with respect to any individual who—

‘‘(A) is unable to file the oath or declaration under subsection (a) because the individual—

‘‘(i) is deceased; 

‘‘(ii) is under legal incapacity; or 

‘‘(iii) cannot be found or reached after diligent effort; or 

‘‘(B) is under an obligation to assign the invention but has refused to 

make the oath or declaration required under subsection (a). 

‘‘(3) CONTENTS.—A substitute statement under this subsection shall—

‘‘(A) identify the individual with respect to whom the statement applies; 

‘‘(B) set forth the circumstances representing the permitted basis for 

the filing of the substitute statement in lieu of the oath or declaration 

under subsection (a); and 

‘‘(C) contain any additional information, including any showing, required by the Director. 

‘‘(e) MAKING REQUIRED STATEMENTS IN ASSIGNMENT OF RECORD.—An individual 

who is under an obligation of assignment of an application for patent may include 

the required statements under subsections (b) and (c) in the assignment executed 

by the individual, in lieu of filing such statements separately. 

‘‘(f) TIME FOR FILING.—A notice of allowance under section 151 may be provided 

to an applicant for patent only if the applicant for patent has filed each required 

oath or declaration under subsection (a) or has filed a substitute statement under 

subsection (d) or recorded an assignment meeting the requirements of subsection (e). 

‘‘(g) EARLIER-FILED APPLICATION CONTAINING REQUIRED STATEMENTS OR SUBSTITUTE STATEMENT.—The requirements under this section shall not apply to an individual with respect to an application for patent in which the individual is named 

as the inventor or a joint inventor and that claims the benefit under section 120 

or 365(c) of the filing of an earlier-filed application, if—

‘‘(1) an oath or declaration meeting the requirements of subsection (a) was 

executed by the individual and was filed in connection with the earlier-filed application; 

‘‘(2) a substitute statement meeting the requirements of subsection (d) was 

filed in the earlier filed application with respect to the individual; or 

‘‘(3) an assignment meeting the requirements of subsection (e) was executed 

with respect to the earlier-filed application by the individual and was recorded 

in connection with the earlier-filed application. 

‘‘(h) SUPPLEMENTAL AND CORRECTED STATEMENTS; FILING ADDITIONAL STATEMENTS.—

‘‘(1) IN GENERAL.—Any person making a statement required under this section may withdraw, replace, or otherwise correct the statement at any time. If 

a change is made in the naming of the inventor requiring the filing of 1 or more 

additional statements under this section, the Director shall establish regulations under which such additional statements may be filed. 

‘‘(2) SUPPLEMENTAL STATEMENTS NOT REQUIRED.—If an individual has executed an oath or declaration under subsection (a) or an assignment meeting the 

requirements of subsection (e) with respect to an application for patent, the Director may not thereafter require that individual to make any additional oath, 

declaration, or other statement equivalent to those required by this section in 

connection with the application for patent or any patent issuing thereon. 

‘‘(3) SAVINGS CLAUSE.—No patent shall be invalid or unenforceable based 

upon the failure to comply with a requirement under this section if the failure 

is remedied as provided under paragraph (1).’’. 

(2) RELATIONSHIP TO DIVISIONAL APPLICATIONS.—Section 121 is amended by 

striking ‘‘If a divisional application’’ and all that follows through ‘‘inventor.’’. 

(3) REQUIREMENTS FOR NONPROVISIONAL APPLICATIONS.—Section 111(a) is 

amended—

(A) in paragraph (2)(C), by striking ‘‘by the applicant’’ and inserting ‘‘or 

declaration’’; 

(B) in the heading for paragraph (3), by striking ‘‘AND OATH’’; and 

(C) by striking ‘‘and oath’’ each place it appears. 

(4) CONFORMING AMENDMENT.—The item relating to section 115 in the table 

of sections for chapter 10 is amended to read as follows:

‘‘115. Inventor’s oath or declaration.’’. 

(b) FILING BY OTHER THAN INVENTOR.—Section 118 is amended to read as follows: 

8

‘‘§ 118. Filing by other than inventor 

‘‘A person to whom the inventor has assigned or is under an obligation to assign 

the invention may make an application for patent. A person who otherwise shows 

sufficient proprietary interest in the matter may make an application for patent on 

behalf of and as agent for the inventor on proof of the pertinent facts and a showing 

that such action is appropriate to preserve the rights of the parties. If the Director 

grants a patent on an application filed under this section by a person other than 

the inventor, the patent shall be granted to the real party in interest and upon such 

notice to the inventor as the Director considers to be sufficient.’’. 

(c) SPECIFICATION.—Section 112 is amended—

(1) in the first paragraph——

(A) by striking ‘‘The specification’’ and inserting ‘‘(a) IN GENERAL.—The 

specification’’; 

(B) by striking ‘‘of carrying out his invention’’ and inserting ‘‘or joint 

inventor of carrying out the invention’’; and 

(2) in the second paragraph—

(A) by striking ‘‘The specifications’’ and inserting ‘‘(b) CONCLUSION.—

The specifications’’; and 

(B) by striking ‘‘applicant regards as his invention’’ and inserting ‘‘inventor or a joint inventor regards as the invention’’; 

(3) in the third paragraph, by striking ‘‘A claim’’ and inserting ‘‘(c) FORM.—

A claim’’; 

(4) in the fourth paragraph, by striking ‘‘Subject to the following paragraph,’’ and inserting ‘‘(d) REFERENCE IN DEPENDENT FORMS.—Subject to subsection (e),’’; 

(5) in the fifth paragraph, by striking ‘‘A claim’’ and inserting ‘‘(e) REFERENCE IN MULTIPLE DEPENDENT FORM.—A claim’’; and 

(6) in the last paragraph, by striking ‘‘An element’’ and inserting ‘‘(f) ELEMENT IN CLAIM FOR A COMBINATION.—An element’’. 

SEC. 5. RIGHT OF THE INVENTOR TO OBTAIN DAMAGES. 

(a) DAMAGES.—Section 284 is amended—

(1) in the first paragraph—

(A) by striking ‘‘Upon’’ and inserting ‘‘(a) AWARD OF DAMAGES.—

‘‘(1) IN GENERAL.—Upon’’; 

(B) by aligning the remaining text accordingly; and 

(C) by adding at the end the following: 

‘‘(2) RELATIONSHIP OF DAMAGES TO CONTRIBUTIONS OVER PRIOR ART.—The 

court shall conduct an analysis to ensure that a reasonable royalty under paragraph (1) is applied only to that economic value properly attributable to the patent’s specific contribution over the prior art. In a reasonable royalty analysis, 

the court shall identify all factors relevant to the determination of a reasonable 

royalty under this subsection, and the court or the jury, as the case may be, 

shall consider only those factors in making the determination. The court shall 

exclude from the analysis the economic value properly attributable to the prior 

art, and other features or improvements, whether or not themselves patented, 

that contribute economic value to the infringing product or process. 

‘‘(3) ENTIRE MARKET VALUE.—Unless the claimant shows that the patent’s 

specific contribution over the prior art is the predominant basis for market demand for an infringing product or process, damages may not be based upon the 

entire market value of that infringing product or process. 

‘‘(4) OTHER FACTORS.—In determining damages, the court may also consider, or direct the jury to consider, the terms of any nonexclusive marketplace 

licensing of the invention, where appropriate, as well as any other relevant factors under applicable law.’’; 

(2) by amending the second undesignated paragraph to read as follows: 

‘‘(b) WILLFUL INFRINGEMENT.—

‘‘(1) INCREASED DAMAGES.—A court that has determined that the infringer 

has willfully infringed a patent or patents may increase the damages up to 

three times the amount of damages found or assessed under subsection (a), except that increased damages under this paragraph shall not apply to provisional 

rights under section 154(d). 

‘‘(2) PERMITTED GROUNDS FOR WILLFULNESS.—A court may find that an infringer has willfully infringed a patent only if the patent owner presents clear 

and convincing evidence that—

‘‘(A) after receiving written notice from the patentee—

9

‘‘(i) alleging acts of infringement in a manner sufficient to give the 

infringer an objectively reasonable apprehension of suit on such patent, 

and 

‘‘(ii) identifying with particularity each claim of the patent, each 

product or process that the patent owner alleges infringes the patent, 

and the relationship of such product or process to such claim, 

the infringer, after a reasonable opportunity to investigate, thereafter performed one or more of the alleged acts of infringement; 

‘‘(B) the infringer intentionally copied the patented invention with 

knowledge that it was patented; or 

‘‘(C) after having been found by a court to have infringed that patent, 

the infringer engaged in conduct that was not colorably different from the 

conduct previously found to have infringed the patent, and which resulted 

in a separate finding of infringement of the same patent. 

‘‘(3) LIMITATIONS ON WILLFULNESS.—(A) A court may not find that an infringer has willfully infringed a patent under paragraph (2) for any period of 

time during which the infringer had an informed good faith belief that the patent was invalid or unenforceable, or would not be infringed by the conduct later 

shown to constitute infringement of the patent. 

‘‘(B) An informed good faith belief within the meaning of subparagraph (A) 

may be established by—

‘‘(i) reasonable reliance on advice of counsel; 

‘‘(ii) evidence that the infringer sought to modify its conduct to avoid 

infringement once it had discovered the patent; or 

‘‘(iii) other evidence a court may find sufficient to establish such good 

faith belief. 

‘‘(C) The decision of the infringer not to present evidence of advice of counsel is not relevant to a determination of willful infringement under paragraph 

(2). 

‘‘(4) LIMITATION ON PLEADING.—Before the date on which a court determines that the patent in suit is not invalid, is enforceable, and has been infringed by the infringer, a patentee may not plead and a court may not determine that an infringer has willfully infringed a patent. The court’s determination of an infringer’s willfulness shall be made without a jury.’’; and 

(3) in the third undesignated paragraph, by striking ‘‘The court’’ and inserting ‘‘(c) EXPERT TESTIMONY.—The court’’. 

(b) DEFENSE TO INFRINGEMENT BASED ON EARLIER INVENTOR.—Section 273 of 

title 35, United States Code, is amended—

(1) in subsection (a)—

(A) in paragraph (1)—

(i) by striking ‘‘of a method’’; and 

(ii) by striking ‘‘review period;’’ and inserting ‘‘review period; and’’; 

(B) in paragraph (2)(B), by striking the semicolon at the end and inserting a period; and 

(C) by striking paragraphs (3) and (4); 

(2) in subsection (b)—

(A) in paragraph (1)—

(i) by striking ‘‘for a method’’; and 

(ii) by striking ‘‘at least 1 year before the effective filing date of 

such patent, and’’ and all that follows through the period and inserting 

‘‘and commercially used, or made substantial preparations for commercial use of, the subject matter before the effective filing date of the 

claimed invention.’’; 

(B) in paragraph (2)—

(i) by striking ‘‘The sale or other disposition of a useful end result 

produced by a patented method’’ and inserting ‘‘The sale or other disposition of subject matter that qualifies for the defense set forth in this 

section’’; and 

(ii) by striking ‘‘a defense under this section with respect to that 

useful end result’’ and inserting ‘‘such defense’’; and 

(C) in paragraph (3)—

(i) by striking subparagraph (A); and 

(ii) by redesignating subparagraphs (B) and (C) as subparagraphs 

(A) and (B), respectively; 

(3) in paragraph (7), by striking ‘‘of the patent’’ and inserting ‘‘of the 

claimed invention’’; and 

(4) by amending the heading to read as follows: 

10

‘‘§ 273. Special defenses to and exemptions from infringement’’. 

(c) TABLE OF SECTIONS.—The item relating to section 273 in the table of sections for chapter 28 is amended to read as follows:

‘‘273. Special defenses to and exemptions from infringement.’’. 

(d) EFFECTIVE DATE.—The amendments made by this section shall apply to any 

civil action commenced on or after the date of enactment of this Act. 

SEC. 6. POST-GRANT PROCEDURES AND OTHER QUALITY ENHANCEMENTS. 

(a) REEXAMINATION.—Section 303(a) is amended to read as follows: 

‘‘(a) Within 3 months after the owner of a patent files a request for reexamination under section 302, the Director shall determine whether a substantial new 

question of patentability affecting any claim of the patent concerned is raised by the 

request, with or without consideration of other patents or printed publications. On 

the Director’s own initiative, and at any time, the Director may determine whether 

a substantial new question of patentability is raised by patents and publications discovered by the Director, is cited under section 301, or is cited by any person other 

than the owner of the patent under section 302 or section 311. The existence of a 

substantial new question of patentability is not precluded by the fact that a patent 

or printed publication was previously cited by or to the Office or considered by the 

Office.’’. 

(b) REEXAMINATION.—Section 315(c) is amended by striking ‘‘or could have 

raised’’. 

(c) REEXAMINATION PROHIBITED AFTER DISTRICT COURT DECISION.—Section 

317(b) is amended—

(1) in the subsection heading, by striking ‘‘FINAL DECISION’’ and inserting 

‘‘DISTRICT COURT DECISION’’; and 

(2) by striking ‘‘Once a final decision has been entered’’ and inserting ‘‘Once 

the judgment of the district court has been entered’’. 

(d) EFFECTIVE DATES.—Notwithstanding any other provision of law, sections 

311 through 318 of title 35, United States Code, as amended by this Act, shall apply 

to any patent that issues before, on, or after the date of enactment of this Act from 

an original application filed on any date. 

(e) POST-GRANT OPPOSITION PROCEDURES.— (1) IN GENERAL.—Part III is amended by adding at the end the following 

new chapter: 

‘‘CHAPTER 32—POST-GRANT REVIEW PROCEDURES 

‘‘Sec. 

‘‘321. Petition for post-grant review. 

‘‘322. Timing and bases of petition. 

‘‘323. Requirements of petition. 

‘‘324. Prohibited filings. 

‘‘325. Submission of additional information; showing of sufficient grounds. 

‘‘326. Conduct of post-grant review proceedings. 

‘‘327. Patent owner response. 

‘‘328. Proof and evidentiary standards. 

‘‘329. Amendment of the patent. 

‘‘330. Decision of the Board. 

‘‘331. Effect of decision. 

‘‘332. Relationship to other pending proceedings. 

‘‘333. Effect of decisions rendered in civil action on future post-grant review proceedings. 

‘‘334. Effect of final decision on future proceedings. 

‘‘335. Appeal. 

‘‘§ 321. Petition for post-grant review 

‘‘Subject to sections 322, 324, 332, and 333, a person who is not the patent 

owner may file with the Office a petition for cancellation seeking to institute a postgrant review proceeding to cancel as unpatentable any claim of a patent on any 

ground that could be raised under paragraph (2) or (3) of section 282(b) (relating 

to invalidity of the patent or any claim). The Director shall establish, by regulation, 

fees to be paid by the person requesting the proceeding, in such amounts as the Director determines to be reasonable. 

‘‘§ 322. Timing and bases of petition 

‘‘A post-grant proceeding may be instituted under this chapter pursuant to a 

cancellation petition filed under section 321 only if—

11

‘‘(1) the petition is filed not later than 12 months after the grant of the patent or issuance of a reissue patent, as the case may be; 

‘‘(2)(A) the petitioner establishes a substantial reason to believe that the 

continued existence of the challenged claim in the petition causes or is likely 

to cause the petitioner significant economic harm; or 

‘‘(B) the petitioner has received notice from the patent holder alleging infringement by the petitioner of the patent; or 

‘‘(3) the patent owner consents in writing to the proceeding. 

‘‘§ 323. Requirements of petition 

‘‘A cancellation petition filed under section 321 may be considered only if—

‘‘(1) the petition is accompanied by payment of the fee established by the 

Director under section 321; 

‘‘(2) the petition identifies the cancellation petitioner; and 

‘‘(3) the petition sets forth in writing the basis for the cancellation, identifying each claim challenged and providing such information as the Director may 

require by regulation, and includes copies of patents and printed publications 

that the cancellation petitioner relies upon in support of the petition; and 

‘‘(4) the petitioner provides copies of those documents to the patent owner 

or, if applicable, the designated representative of the patent owner. 

‘‘§ 324. Prohibited filings 

‘‘A post-grant review proceeding may not be instituted under paragraph (1), (2), 

or (3) of section 322 if the petition for cancellation requesting the proceeding identifies the same cancellation petitioner and the same patent as a previous petition for 

cancellation filed under the same paragraph of section 322. 

‘‘§ 325. Submission of additional information; showing of sufficient grounds 

‘‘The cancellation petitioner shall file such additional information with respect 

to the petition as the Director may require. The Director may not authorize a postgrant review proceeding to commence unless the Director determines that the information presented provides sufficient grounds to proceed. 

‘‘§ 326. Conduct of post-grant review proceedings 

‘‘(a) IN GENERAL.—The Director shall—

‘‘(1) prescribe regulations, in accordance with section 2(b)(2), establishing 

and governing post-grant review proceedings under this chapter and their relationship to other proceedings under this title; 

‘‘(2) prescribe regulations setting forth the standards for showings of substantial reason to believe and significant economic harm under section 322(2) 

and sufficient grounds under section 325; 

‘‘(3) prescribe regulations establishing procedures for the submission of supplemental information after the petition for cancellation is filed; and 

‘‘(4) prescribe regulations setting forth procedures for discovery of relevant 

evidence, including that such discovery shall be limited to evidence directly related to factual assertions advanced by either party in the proceeding, and the 

procedures for obtaining such evidence shall be consistent with the purpose and 

nature of the proceeding. 

‘‘(b) POST-GRANT REGULATIONS.—Regulations under subsection (a)(1)—

‘‘(1) shall require that the final determination in a post-grant proceeding 

issue not later than one year after the date on which the post-grant review proceeding is instituted under this chapter, except that, for good cause shown, the 

Director may extend the 1-year period by not more than six months; 

‘‘(2) shall provide for discovery upon order of the Director; 

‘‘(3) shall prescribe sanctions for abuse of discovery, abuse of process, or any 

other improper use of the proceeding, such as to harass or to cause unnecessary 

delay or unnecessary increase in the cost of the proceeding; 

‘‘(4) may provide for protective orders governing the exchange and submission of confidential information; and 

‘‘(5) shall ensure that any information submitted by the patent owner in 

support of any amendment entered under section 328 is made available to the 

public as part of the prosecution history of the patent. 

‘‘(c) CONSIDERATIONS.—In prescribing regulations under this section, the Director shall consider the effect on the economy, the integrity of the patent system, and 

the efficient administration of the Office. 

‘‘(d) CONDUCT OF PROCEEDING.—The Patent Trial and Appeal Board shall, in accordance with section 6(b), conduct each post-grant review proceeding authorized by 

the Director. 

12

‘‘§ 327. Patent owner response 

‘‘After a post-grant proceeding under this chapter has been instituted with respect to a patent, the patent owner shall have the right to file, within a time period 

set by the Director, a response to the cancellation petition. The patent owner shall 

file with the response, through affidavits or declarations, any additional factual evidence and expert opinions on which the patent owner relies in support of the response. 

‘‘§ 328. Proof and evidentiary standards 

‘‘(a) IN GENERAL.—The presumption of validity set forth in section 282 shall not 

apply in a challenge to any patent claim under this chapter. 

‘‘(b) BURDEN OF PROOF.—The party advancing a proposition under this chapter 

shall have the burden of proving that proposition by a preponderance of the evidence. 

‘‘§ 329. Amendment of the patent 

‘‘(a) IN GENERAL.—In response to a challenge in a petition for cancellation, the 

patent owner may file 1 motion to amend the patent in 1 or more of the following 

ways: 

‘‘(1) Cancel any challenged patent claim. 

‘‘(2) For each challenged claim, propose a substitute claim. 

‘‘(3) Amend the patent drawings or otherwise amend the patent other than 

the claims. 

‘‘(b) ADDITIONAL MOTIONS.—Additional motions to amend may be permitted only 

for good cause shown. 

‘‘(c) SCOPE OF CLAIMS.—An amendment under this section may not enlarge the 

scope of the claims of the patent or introduce new matter. 

‘‘§ 330. Decision of the Board 

‘‘If the post-grant review proceeding is instituted and not dismissed under this 

chapter, the Patent Trial and Appeal Board shall issue a final written decision with 

respect to the patentability of any patent claim challenged and any new claim added 

under section 329. 

‘‘§ 331. Effect of decision 

‘‘(a) IN GENERAL.—If the Patent Trial and Appeal Board issues a final decision 

under section 330 and the time for appeal has expired or any appeal proceeding has 

terminated, the Director shall issue and publish a certificate canceling any claim of 

the patent finally determined to be unpatentable and incorporating in the patent 

by operation of the certificate any new claim determined to be patentable. 

‘‘(b) NEW CLAIMS.—Any new claim held to be patentable and incorporated into 

a patent in a post-grant review proceeding shall have the same effect as that specified in section 252 for reissued patents on the right of any person who made, purchased, offered to sell, or used within the United States, or imported into the United 

States, anything patented by such new claim, or who made substantial preparations 

therefore, prior to issuance of a certificate under subsection (a) of this section. 

‘‘§ 332. Relationship to other pending proceedings 

‘‘Notwithstanding subsection 135(a), sections 251 and 252, and chapter 30, the 

Director may determine the manner in which any reexamination proceeding, reissue 

proceeding, interference proceeding (commenced before the effective date of the Patent Reform Act of 2007), derivation proceeding, or post-grant review proceeding, 

that is pending during a post-grant review proceeding, may proceed, including providing for stay, transfer, consolidation, or termination of any such proceeding. 

‘‘§ 333. Effect of decisions rendered in civil action on future post-grant review proceedings 

‘‘If a final decision has been entered against a party in a civil action arising in 

whole or in part under section 1338 of title 28 establishing that the party has not 

sustained its burden of proving the invalidity of any patent claim—

‘‘(1) that party to the civil action and the privies of that party may not 

thereafter request a post-grant review proceeding on that patent claim on the 

basis of any grounds, under the provisions of section 311, which that party or 

the privies of that party raised or had actual knowledge of; and 

‘‘(2) the Director may not thereafter maintain a post-grant review proceeding previously requested by that party or the privies of that party on the 

basis of such grounds. 

13

‘‘§ 334. Effect of final decision on future proceedings 

‘‘(a) IN GENERAL.—If a final decision under section 330 is favorable to the patentability of any original or new claim of the patent challenged by the cancellation 

petitioner, the cancellation petitioner may not thereafter, based on any ground 

which the cancellation petitioner raised during the post-grant review proceeding—

‘‘(1) request or pursue a reexamination of such claim under chapter 31; 

‘‘(2) request or pursue a derivation proceeding with respect to such claim; 

‘‘(3) request or pursue a post-grant review proceeding under this chapter 

with respect to such claim; or 

‘‘(4) assert the invalidity of any such claim, in any civil action arising in 

whole or in part under section 1338 of title 28. 

‘‘(b) EXTENSION OF PROHIBITION.—If the final decision is the result of a petition 

for cancellation filed on the basis of paragraph (2) of section 322, the prohibition 

under this section shall extend to any ground which the cancellation petitioner 

raised during the post-grant review proceeding. 

‘‘§ 335. Appeal 

‘‘A party dissatisfied with the final determination of the Patent Trial and Appeal Board in a post-grant proceeding under this chapter may appeal the determination under sections 141 through 144. Any party to the post-grant proceeding shall 

have the right to be a party to the appeal.’’. 

(f) CONFORMING AMENDMENT.—The table of chapters for part III is amended by 

adding at the end the following:

‘‘32. Post-Grant Review Proceedings 

321’’. (g) REGULATIONS AND EFFECTIVE DATE.— (1) REGULATIONS.—The Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (in this 

subsection referred to as the ‘‘Director’’) shall, not later than the date that is 

1 year after the date of the enactment of this Act, issue regulations to carry 

out chapter 32 of title 35, United States Code, as added by subsection (e) of this 

section 

(2) APPLICABILITY.—The amendments made by subsection (e) shall take effect on the date that is 1 year after the date of the enactment of this Act and 

shall apply to patents issued before, on, or after that date, except that, in the 

case of a patent issued before that date, a petition for cancellation under section 

321 of title 35, United States Code, may be filed only if a circumstance described in paragraph (2), (3), or (4) of section 322 of title 35, United States Code, 

applies to the petition. 

(3) PENDING INTERFERENCES.—The Director shall determine the procedures 

under which interferences commenced before the effective date under paragraph 

(2) are to proceed, including whether any such interference is to be dismissed 

without prejudice to the filing of a cancellation petition for a post-grant opposition proceeding under chapter 32 of title 35, United States Code, or is to proceed as if this Act had not been enacted. The Director shall include such procedures in regulations issued under paragraph (1). 

SEC. 7. DEFINITIONS; PATENT TRIAL AND APPEAL BOARD. 

(a) DEFINITIONS.—Section 100 (as amended by this Act) is further amended—

(1) in subsection (e), by striking ‘‘or inter partes reexamination under section 311’’; 

(2) by adding at the end the following: 

‘‘(k) The term ‘cancellation petitioner’ means the real party in interest requesting cancellation of any claim of a patent under chapter 31 of this title and the 

privies of the real party in interest.’’. 

(b) PATENT TRIAL AND APPEAL BOARD.—Section 6 is amended to read as follows: 

‘‘§ 6. Patent Trial and Appeal Board 

‘‘(a) ESTABLISHMENT AND COMPOSITION.—There shall be in the Office a Patent 

Trial and Appeal Board. The Director, the Deputy Director, the Commissioner for 

Patents, the Commissioner for Trademarks, and the administrative patent judges 

shall constitute the Patent Trial and Appeal Board. The administrative patent 

judges shall be persons of competent legal knowledge and scientific ability who are 

appointed by the Director. Any reference in any Federal law, Executive order, rule, 

regulation, or delegation of authority, or any document of or pertaining to the Board 

of Patent Appeals and Interferences is deemed to refer to the Patent Trial and Appeal Board. 

14

‘‘(b) DUTIES.—The Patent Trial and Appeal Board shall—

‘‘(1) on written appeal of an applicant, review adverse decisions of examiners upon application for patents; 

‘‘(2) on written appeal of a patent owner, review adverse decisions of examiners upon patents in reexamination proceedings under chapter 30; and 

‘‘(3) determine priority and patentability of invention in derivation proceedings under subsection 135(a); and 

‘‘(4) conduct post-grant opposition proceedings under chapter 32. 

Each appeal and derivation proceeding shall be heard by at least 3 members of the 

Patent Trial and Appeal Board, who shall be designated by the Director. Only the 

Patent Trial and Appeal Board may grant rehearings. The Director shall assign 

each post-grant review proceeding to a panel of 3 administrative patent judges. 

Once assigned, each such panel of administrative patent judges shall have the responsibilities under chapter 32 in connection with post-grant review proceedings.’’. 

SEC. 8. STUDY AND REPORT ON REEXAMINATION PROCEEDINGS. 

The Under Secretary of Commerce for Intellectual Property and Director of the 

Patent and Trademark Office shall, not later than 3 years after the date of the enactment of this Act—

(1) conduct a study of the effectiveness and efficiency of the different forms 

of proceedings available under title 35, United States Code, for the reexamination of patents; and 

(2) submit to the Committees on the Judiciary of the House of Representatives and the Senate a report on the results of the study, including any of the 

Director’s suggestions for amending the law, and any other recommendations 

the Director has with respect to patent reexamination proceedings. 

SEC. 9. SUBMISSIONS BY THIRD PARTIES AND OTHER QUALITY ENHANCEMENTS. 

(a) PUBLICATION.—Section 122(b)(2) is amended—

(1) by striking subparagraph (B); and 

(2) in subparagraph (A)—

(A) by striking ‘‘(A) An application’’ and inserting ‘‘An application’’; and 

(B) by redesignating clauses (i) through (iv) as subparagraphs (A) 

through (D), respectively. 

(b) PREISSUANCE SUBMISSIONS BY THIRD PARTIES.—Section 122 is amended by 

adding at the end the following: 

‘‘(e) PREISSUANCE SUBMISSIONS BY THIRD PARTIES.—

‘‘(1) IN GENERAL.—Any person may submit for consideration and inclusion 

in the record of a patent application, any patent, published patent application 

or other publication of potential relevance to the examination of the application, 

if such submission is made in writing before the earlier of—

‘‘(A) the date a notice of allowance under section 151 is mailed in the 

application for patent; or 

‘‘(B) either—

‘‘(i) 6 months after the date on which the application for patent is 

published under section 122, or 

‘‘(ii) the date of the first rejection under section 132 of any claim 

by the examiner during the examination of the application for patent, 

whichever occurs later. 

‘‘(2) OTHER REQUIREMENTS.—Any submission under paragraph (1) shall—

‘‘(A) set forth a concise description of the asserted relevance of each 

submitted document; 

‘‘(B) be accompanied by such fee as the Director may prescribe; and 

‘‘(C) include a statement by the submitter affirming that the submission was made in compliance with this section.’’. 

SEC. 10. VENUE AND JURISDICTION. 

(a) VENUE FOR PATENT CASES.—Section 1400 of title 28, United States Code, is 

amended by striking subsection (b) and inserting the following: 

‘‘(b) Any civil action arising under any Act of Congress relating to patents, other 

than an action for declaratory judgment or an action seeking review of a decision 

of the Patent Trial and Appeal Board under chapter 13 of title 35, may be brought 

only—

‘‘(1) in the judicial district where either party resides; or 

‘‘(2) in the judicial district where the defendant has committed acts of infringement and has a regular and established place of business. 

‘‘(c) Notwithstanding section 1391(c) of this title, for purposes of venue under 

subsection (b), a corporation shall be deemed to reside in the judicial district in 

15

which the corporation has its principal place of business or in the State in which 

the corporation is incorporated.’’. 

(b) INTERLOCUTORY APPEALS.—Subsection (c)(2) of section 1292 of title 28, 

United States Code, is amended by adding at the end the following: 

‘‘(3) of an appeal from an interlocutory order or decree determining construction of claims in a civil action for patent infringement under section 271 

of title 35. 

Application for an appeal under paragraph (3) shall be made to the court within 10 

days after entry of the order or decree, and proceedings in the district court under 

such paragraph shall be stayed during pendency of the appeal.’’. 

SEC. 11. REGULATORY AUTHORITY. 

Section 3(a) is amended by adding at the end the following: 

‘‘(5) REGULATORY AUTHORITY.—In addition to the authority conferred by 

other provisions of this title, the Director may promulgate such rules, regulations, and orders that the Director determines appropriate to carry out the provisions of this title or any other law applicable to the United States Patent and 

Trademark Office or that the Director determines necessary to govern the operation and organization of the Office.’’. 

SEC. 12. TECHNICAL AMENDMENTS. 

(a) JOINT INVENTIONS.—Section 116 is amended—

(1) in the first paragraph, by striking ‘‘When’’ and inserting ‘‘(a) JOINT

INVENTIONS.—When’’; 

(2) in the second paragraph, by striking ‘‘If a joint inventor’’ and inserting ‘‘(b) OMITTED INVENTOR.—If a joint inventor’’; and 

(3) in the third paragraph, by striking ‘‘Whenever’’ and inserting ‘‘(c) 

CORRECTION OF ERRORS IN APPLICATION.—Whenever’’. 

(b) FILING OF APPLICATION IN FOREIGN COUNTRY.—Section 184 is amended—

(1) in the first paragraph, by striking ‘‘Except when’’ and inserting ‘‘(a) FILING IN FOREIGN COUNTRY.—Except when’’; 

(2) in the second paragraph, by striking ‘‘The term’’ and inserting ‘‘(b) APPLICATION.—The term’’; and 

(3) in the third paragraph, by striking ‘‘The scope’’ and inserting ‘‘(c) SUBSEQUENT MODIFICATIONS, AMENDMENTS, AND SUPPLEMENTS.—The scope’’. 

(c) REISSUE OF DEFECTIVE PATENTS.—Section 251 is amended—

(1) in the first paragraph, by striking ‘‘Whenever’’ and inserting ‘‘(a) IN

GENERAL.—Whenever’’; 

(2) in the second paragraph, by striking ‘‘The Director’’ and inserting ‘‘(b) 

MULTIPLE REISSUED PATENTS.—The Director’’; 

(3) in the third paragraph, by striking ‘‘The provision’’ and inserting ‘‘(c) APPLICABILITY OF THIS TITLE.—The provisions’’; and 

(4) in the last paragraph, by striking ‘‘No reissued patent’’ and inserting 

‘‘(d) REISSUE PATENT ENLARGING SCOPE OF CLAIMS.—No reissued patent’’. 

(d) EFFECT OF REISSUE.—Section 253 is amended—

(1) in the first paragraph, by striking ‘‘Whenever’’ and inserting ‘‘(a) IN

GENERAL.—Whenever’’; and 

(2) in the second paragraph, by striking ‘‘in like manner’’ and inserting ‘‘(b) 

ADDITIONAL DISCLAIMER OR DEDICATION.—In the manner set forth in subsection 

(a),’’. 

(e) CORRECTION OF NAMED INVENTOR.—Section 256 is amended—

(1) in the first paragraph, by striking ‘‘Whenever’’ and inserting ‘‘(a) CORRECTION.—Whenever’’; and 

(2) in the second paragraph, by striking ‘‘The error’’ and inserting ‘‘(b) PATENT VALID IF ERROR CORRECTED.—The error’’. 

(f) PRESUMPTION OF VALIDITY.—Section 282 is amended—

(1) in the first undesignated paragraph, by striking ‘‘A patent’’ and inserting ‘‘(a) IN GENERAL.—A patent’’; 

(2) in the second undesignated paragraph, by striking ‘‘The following’’ and 

inserting ‘‘(b) DEFENSES.—The following’’; and 

(3) in the third undesignated paragraph, by striking ‘‘In actions’’ and inserting ‘‘(c) NOTICE OF ACTIONS; ACTIONS DURING EXTENSION OF PATENT TERM.—

In actions’’. 

SEC. 13. EFFECTIVE DATE; RULE OF CONSTRUCTION. 

(a) EFFECTIVE DATE.—Except as otherwise provided in this Act, the provisions 

of this Act shall take effect 12 months after the date of the enactment of this Act 

and shall apply to any patent issued on or after that effective date. 

16

(b) CONTINUITY OF INTENT UNDER THE CREATE ACT.—The enactment of section 

102(b)(3) of title 35, United States Code, under section (3)(b) of this Act is done with 

the same intent to promote joint research activities that was expressed, including 

in the legislative history, through the enactment of the Cooperative Research and 

Technology Enhancement Act of 2004 (Public Law 108–453; the ‘‘CREATE Act’’), the 

amendments of which are stricken by section 3(c) of this Act. The United States Patent and Trademark Office shall administer section 102(b)(3) of title 35, United 

States Code, in a manner consistent with the legislative history of the CREATE Act 

that was relevant to its administration by the Patent and Trademark Office.

Æ

Mr. BERMAN. In brief the bill contains the following changes: Section 3, in accordance with a number of recommendations, moves 

the U.S. from a first-to-invent system to a first-inventor-to-file system. The U.S. stands alone in the world in awarding patents on the 

basis of first to invent. In making this change, we harmonize this 

aspect of U.S. patent law with other countries, thereby making it 

easier for U.S. inventors to navigate international protection for 

their patents. 

Section 5 contains two important provisions relating to damages: 

(1), apportionment; and (2), willfulness. In order to prevent excessive damages, as some have characterized the damages awarded in 

the Alcatel v. Microsoft case and a number of other cases that came 

down before that case, the apportionment language is designed to 

ensure that in most cases a reasonable royalty will reflect the value 

of the underlying invention. 

As to willfulness, in order to discourage nuisance licensing letters 

that trigger treble damages, the bill requires that a notice be clear 

about the patent and what acts allegedly infringe the patent before 

the infringement can be considered willful. 

Section 6 establishes what will hopefully be a meaningful 

postgrant opposition proceeding. Postgrant will operate as a check 

on the quality of patents issued from the USPTO and will provide 

a less costly and more efficient alternative to litigation. Postgrant 

provides the ability to challenge the validity of a patent and provides mechanisms to prevent harassment. The goal is to provide 

one petitioner one shot at one patent. A drafting error, as I mentioned earlier, allows multiple windows to be opened, but once 

amended, if a petitioner opts to institute a postgrant proceeding, 

the petitioner may not later opt to utilize the postgrant proceeding 

again for the same patent. The USPTO Director must prescribe 

regulations to provide for the Board to issue sanctions for abuse of 

process. During this process, the Subcommittee may want to consider providing additional statutory guidance for the Director of the 

USPTO on the structure of the postgrant proceeding. 

This is the loudest I ever spoke. I will speak louder. 

Section 8 contains a requirement for the Director to conduct a 

study about the interplay and the efficacy of the various reexamination procedures so that Congress will be able to make an informed decision on which proceedings should be phased out or 

eliminated. 

Section 9 permits third parties a limited amount of time to submit to the USPTO prior art references relevant to a pending patent 

application. Allowing such third-party submissions will increase 

17

the likelihood that examiners have available to them the most relevant prior art, thereby constituting a front-end solution for 

strengthening patent quality. 

Section 10 tightens up the venue statute for patent cases and offers the ability to appeal claim construction before a trial is over. 

Section 11 grants the PTO regulatory authority commensurate 

with other agencies. Taken together, and as stated earlier, these 

provisions represent the starting point for this discussion. 

The reason Congressman Rick Boucher and I got involved in this 

issue over 5 years ago was because we identified a number of needed reforms to address patent quality concerns. For me, patent reform is about finding the right balance and maintaining good public policy. Clearly robust protection should be provided for intellectual property, but only for inventions that are truly inventive and 

deserving protection. 

While this bill is based on former iterations of bills I sponsored 

and supported, some with Mr. Boucher, some with the Ranking 

Member of the full Committee Mr. Smith, I am not wedded to 

every word of my proposal; however, I am wedded to finding a solution that works. 

It is easy for groups to support parts of the bill they like or are 

unaffected by; however, the most controversial parts of the bill are 

those that seek to address the most serious weaknesses in our patent system that we began to identify years ago. For any other reforms to move forward, the different industry sectors would be best 

served by coming together to resolve the hard issues. Change is always difficult, but I would hope that those with the most inventive 

spirit will be able to focus on productive ways to address the problems. 

I now conclude my statement and would recognize our distinguished Ranking Member, who is not unfamiliar with patent reform battles in the past, my friend and colleague Howard Coble, for 

his opening statement. 

[The prepared statement of Mr. Berman follows:]

PREPARED STATEMENT OF THE HONORABLE HOWARD L. BERMAN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA, AND CHAIRMAN, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Let me begin by describing what this hearing is NOT about. 

This hearing is not about creating a dynamic where all the witnesses testifying 

support this bill. In fact, while the witnesses have identified some aspects of the 

bill they like, a majority disagree with major portions of the bill—(and there would 

have been another witness to raise disagreement with the bill but the independent 

inventor I invited couldn’t be here today). My goal is to foster the policy discussion 

to yield the best result. 

This hearing is not about a perfect bill. I expect over the course of the next several weeks there will be numerous changes incorporated into the bill that reflect legitimate concerns over unintended consequences as well as reforms considered not 

presently included. For example, the issues of obviousness and 271(f) are currently 

before the Supreme Court are not addressed in the bill. Furthermore, as to drafting 

errors, I have already identified a number of necessary corrections that will be made 

(i.e. the word ‘‘same’’ should be changed to ‘‘any’’ in the Prohibited Filings section 

to allow for only one shot at a post-grant proceeding—you can’t challenge in the 1st 

window and then challenge in the second). 

This hearing is not about promoting an agenda for a specific industry. While the 

media has portrayed the debate as a tech vs. PhRma battle—I prefer to see it as 

the inability of current patent laws to accommodate the differences of industry business models. For the sectors which rely on business method patents or products 

which incorporate many multiples of patents—the proliferation of questionable qualVerDate 0ct 09 2002 15:57 Apr 09, 2008 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 H:\WORK\COURTS\042607\34929.000 HJUD1 PsN: DOUGA
18

ity patents and the burgeoning of patent speculation prevents the system from promoting innovation. It is one system and it must work for everyone. It is without 

doubt that most groups who have a stake in the patent system recognize the need 

for reform. But it should be realized that the final make up of the reforms will certainly require compromise by all. 

The intention of this hearing IS to move beyond the previous rhetoric on patent 

reform and to address the real and serious problems confronting the US patent system. By bringing to this hearing the cross section of patent system users we have 

here today, I expect the discourse and debate on the reforms proposed in the bill 

to be instructive and thoughtful. 

This bi-partisan and bicameral bill draws from many of the issues raised by past 

legislative attempts, multiple hearings, and a slew of reports on patent reform by 

entities such as the National Academy of Science as well as the Federal Trade Commission, and the United States Patent and Trademark Office, among others. 

H.R. 1908 is both long and complex. I do not expect that everyone has had a 

chance to fully digest all of the changes proposed by the bill. However ‘‘The Patent 

Reform Act of 2007’’ is effectively now our starting point and this hearing I hope 

will propel discussion on where the bill should go. I would like thank the witnesses 

and especially my subcommittee members for beginning the process today. 

In brief, the bill contains the following changes: 

Section 3, in accordance with a number of recommendations, moves the US from 

a ‘‘first-to-invent’’ system to a ‘‘first-inventor-to-file’’ system. The U.S. stands alone 

in the world in awarding patents on the basis of first to invent. In making this 

change, we harmonize this aspect of U.S. patent law with other countries, thereby 

making it easier for US inventors to navigate international protection for their patents. 

[Section 4, probably the least controversial portion of the bill, is designed to simplify the process for providing an inventor’s oath.] 

Section 5 contains two important provisions related to damages; 1) apportionment 

and 2) willfulness. In order to prevent excessive damages—as some have characterized the damages awarded in the Alcatel v. Microsoft case and a number of other 

cases—the apportionment language is designed to ensure that in most cases a reasonable royalty will reflect the value of the underlying invention. As to willfulness, 

in order to discourage nuisance licensing letters that trigger treble damages, the bill 

requires that a notice be clear about the patent and what acts allegedly infringe the 

patent before the infringement can be considered willful. 

Section 6 establishes what will hopefully be a meaningful post-grant opposition 

proceeding. Post-grant will operate as a check on the quality of patents issued from 

the USPTO and will provide a less costly and more efficient alternative to litigation. 

Post-grant provides the ability to challenge the validity of a patent and provides 

mechanisms to prevent harassment. The goal is to provide one petitioner one shot 

at one patent (a drafting error allows multiple windows to be opened—but once 

amended—if a petitioner opts to institute a post-grant proceeding, the petitioner 

may not later opt to utilize the post-grant proceeding again for the same patent.) 

Furthermore, the USPTO Director must prescribe regulations to provide for the 

Board to issue sanctions for abuse of process. During this process, the Subcommittee 

may want to consider providing additional statutory guidance for the Director of the 

USPTO on the structure of the post-grant proceeding. 

Section 8 contains a requirement for the Director to conduct a study about the 

interplay and the efficacy of the various re-examination procedures so that Congress 

will be able to make an informed decision on which proceedings should be phased 

out or eliminated. 

Section 9 permits third parties a limited amount of time to submit to the USPTO 

prior art references relevant to a pending patent application. Allowing such third 

party submissions will increase the likelihood that examiners have available to 

them the most relevant ‘‘prior art,’’ thereby constituting a front-end solution for 

strengthening patent quality. 

Section 10 tightens up the venue statute for patent cases and offers the ability 

to appeal claim construction before a trial is over. 

Section 11 grants the PTO regulatory authority commensurate with other agencies. 

Taken together and as stated earlier, these provisions represent the starting point 

for this discussion. 

The reason Congressman Rick Boucher and I got involved in this issue over 5 

years ago was because we identified a number of needed reforms to address patent 

quality concerns. For me, patent reform is about finding the right balance and maintaining good public policy. Clearly, robust protection should be provided for intellecVerDate 0ct 09 2002 15:57 Apr 09, 2008 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 H:\WORK\COURTS\042607\34929.000 HJUD1 PsN: DOUGA
19

tual property but only for inventions that are truly inventive and deserving protection. 

While this bill is based on former iterations of bills I sponsored and supported, 

I am not wedded to every word of my proposal. However, I am wedded to finding 

a solution that works. It is easy for groups to support parts of the bill they like or 

are unaffected by. However, the most controversial parts of the bill are those that 

seek to address the most serious weaknesses in our patent system that we began 

to identify years ago. For any of the reforms to move forward, the different industry 

sectors would be best served by coming together to resolve the hard issues. 

Change is always difficult but I would hope that those with the most ‘‘inventive’’ 

spirit will be able to focus on productive ways to address the problems.

Mr. COBLE. Thank you, Mr. Chairman. Someone said you are 

having difficulty hearing. Can you hear in the back okay? 

Thank you, Mr. Chairman. 

I, too, remember the patent wars we fought together during the 

late 1990’s that actually took about 5 years, you will recall, Mr. 

Chairman, to pass the last omnibus reform measure in 1999, entitled the American Inventors Protection Act. It was a good bill and 

improved patent practice in this country. And if you all will pardon 

my modesty, Chairman Berman and I and several in the audience 

were instrumental in getting that law passed. 

Early on, Mr. Chairman, you will recall we had Democrats fighting Democrats, Republicans fighting Republicans, and, of course, 

that created much interest. I received a call from a reporter in San 

Francisco who said to me, I have been covering patent law matters 

for 13 years. He said, it is the most dull, boring, esoteric assignment I have ever had until now. Keep the fighting going, he said. 

I hope, Mr. Chairman, there will be more harmony in the early 

days this time. 

Some of the issues we attempted to address then were not politically ripe for reform. Nearly 8 years later, as you pointed out, I 

think we are better positioned to review these matters again and 

evaluate other problems that have since evolved in the patent 

world. I will not attempt to provide an abridged description of 

every topical issue that is addressed in H.R. 1908, we would be 

here until suppertime if I did, but I would comment on what I believe is a sticking point to the debate. 

Different individuals and companies use the patent system in differing and varied ways. They have different business models that 

occasionally clash. This has engendered a discussion on whether 

too many patents of poor quality are circulating in the economy 

today, which in turn has generated questionable lawsuits governing infringement. 

None of us wants to support a system that rewards legal gamesmanship over true creativity, but in our zeal to weed out bad lawsuits, I think we need to avoid proceeding on the assumption that 

every patent holder who wants to license an invention or enforce 

his or her property rights is ill-intentioned. This is a standard and 

time-honored component of the patent system and should be preserved. 

Mr. Chairman, we had scant time to review the text of the bill, 

but when it was introduced—and I think it speaks well for you and 

for the Subcommittee that we have five Republican cosponsors at 

this early stage, at this early time, and sometimes unusual on this 

Hill, but not so on this Subcommittee. And I share your concern 

about wanting to enact reform if we can prior to the close of the 

20

calendar year. As we do this, and as we strive to do it, we should 

probably heed the admonition of John Wooden, the great basketball 

coach at your alma mater, UCLA, who exhorted his players to 

move quickly without hurrying. This is an important bill, Mr. 

Chairman, and I look forward to working with you and many in the 

audience and Members of the Subcommittee to its fruition, and I 

yield back. 

Mr. BERMAN. I thank the gentleman. I think Florida perfected 

that this year. 

In the interest of proceeding to our witnesses, and mindful of our 

busy schedules, I plan to recognize the Ranking Member of the full 

Committee Lamar Smith for an opening statement, and then ask 

other Members to submit their statements for the record, to be submitted by the close of business Wednesday. And without objection, 

all opening statements will be placed in the record. 

[The prepared statement of Ms. Jackson Lee follows:]

21

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


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Mr. BERMAN. I recognize the gentleman from Texas, the Ranking 

Member of the Judiciary Committee. 

Mr. SMITH. Thank you, Mr. Chairman. First of all, I want to say 

it is a credit to you that you have invited the witnesses and the 

Ranking Member have invited the witnesses that we have here 

today. As you pointed out earlier, they are not necessarily all enthusiastic supporters of every component of the piece of legislation 

that we are considering; however, they are all credible, and all 

have legitimate points of view, which we look forward to hearing. 

I would like to single out one individual, Mr. Peterman, just because he represents a constituent firm—I guess technically it is a 

former constituent firm since I no longer represent the county that 

the firm is located in, but nevertheless those are still, as far as I 

am concerned, strong ties. 

I would also, speaking to people who are present, like to compliment our colleague from California Mr. Schiff for doubling his 

representation today and for being a good father. My only question 

is is it permissible under our rules for a daughter to yield her father her 5 minutes of time for questions? 

Mr. SCHIFF. She would never yield to me. 

Mr. SMITH. The response was she would never yield to her dad. 

So anyhow, I appreciate his efforts to include other members of the 

family here. 

Mr. Chairman, our Subcommittee is one of the few whose jurisdiction is specifically defined in the Constitution, article I, section 

8. This passage empowers Congress, quote, to promote the progress 

of science and the useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings 

and discoveries, end quote. 

The foresight of the Founders in creating an intellectual property 

system demonstrates their understanding of how patent rights ultimately benefit the American people. Nor was the value of patents 

lost on one of our greatest Presidents, Abraham Lincoln, who actually filed a patent himself. As a young man, Lincoln took a boatload of merchandise down the Mississippi River from New Salem 

to New Orleans. The boat slid onto a dam and was dislodged only 

by heroic efforts. A few years later while crossing the Great Lakes, 

Lincoln’s ship ran afoul of a sandbar. These two similar experiences led him to invent a solution to the problem. The invention 

consists of a set of bellows attached to the hull of the ship just 

below the water line. When a vessel is in danger of getting stuck 

in shallow water, the bellows are filled with air, and the vessel that 

is buoyed floats clear of the obstacle. 

Although Lincoln never profited from his invention, he was a 

strong supporter of the patent system, saying it, quote, added the 

fuel of interest to the fire of genius in the discovery and production 

of new and useful things, end quote. 

It is important to remember the origins of our patent system as 

we deliberate the latest potential addition to it, H.R. 1908. Last 

year we laid a substantial foundation for patent reform, and I am 

pleased that we have continued that momentum this year with the 

introduction of H.R. 1908. The need to enact patent reform in the 

110th Congress is great. This bill represents a good starting point 

for us to work through the remaining issues to complete that task. 

29

Chairman Berman, Ranking Member Coble and I have talked 

about the text of the legislation, and we agree that modifications 

will be made as needed and where appropriate. 

At this time we should focus our discussion on the elements of 

the bill, not other issues that might be the subject of either a Supreme Court decision or, in its absence, another hearing. As we 

proceed in the coming weeks and months, we must also strive to 

create a transparent and inclusive process for Members as well as 

those affected by our work. 

This is the most significant, comprehensive update to patent law 

within the past decade. Arguably it represents the biggest change 

since the 1952 act was written. This Subcommittee has undertaken 

such responsibility because the changes are necessary to bolster 

the U.S. economy and improve the quality of living for all Americans. 

A recent study valued U.S. intellectual property at approximately 

$5 trillion, or about half of U.S. gross domestic product. American 

IP industries now account for over half of all U.S. exports and represent 40 percent of our economic growth. These industries also 

provide millions of Americans with well-paying jobs. When IP industries benefit, so do Americans. 

This bill will eliminate from the current system the legal gamesmanship that awards lawsuit abuses over creativity. It will enhance the quality of patents and increase public confidence in their 

integrity. This will encourage individuals and companies to engage 

in research, commercialize their inventions, grow their businesses, 

create new jobs and offer the American public an array of products 

and services that makes our country the envy of the world. All 

businesses, small and large, should benefit. All industries directly 

or indirectly affected by patents, including finance, automotive, 

manufacturing, high tech and pharmaceuticals, can also profit. 

I am confident that by moving ahead, we will produce a bill that 

protects intellectual property, generates jobs, increases productivity, enhances patent quality and curtailing frivolous lawsuits. 

H.R. 1908 can potentially, as we proceed along the process, benefit 

almost everyone, from the lone inventor in the garage to a hightech company that files 1,000 patents each year, and most businesses in between. 

I look forward to working with you, Mr. Chairman, and the 

Ranking Member and others on this legislation in the weeks ahead. 

Thank you for recognizing me, and I will yield back the balance of 

my time. 

[The prepared statement of Mr. Smith follows:]

30

PREPARED STATEMENT OF THE HONORABLE LAMAR SMITH, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TEXAS, AND MEMBER, SUBCOMMITTEE ON COURTS, 

THE INTERNET, AND INTELLECTUAL PROPERTY


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Mr. BERMAN. I thank the gentleman. 

And now the introduction of witnesses. Our first witness will be 

Mr. Kevin Sharer, who is coming from Thousand Oaks, CA. He is 

chief executive officer and chairman of the board of directors of 

Amgen. Before joining Amgen in 1992, Mr. Sharer served in a variety of executive positions for MCI and General Electric. And in addition to his duties at Amgen, he serves on the board of directors 

for some major companies and also on the Board of the U.S. Naval 

Academy Foundation. He received his bachelor’s degree in aeronautical engineering from the U.S. Naval Academy, a master’s degree in aeronautical engineering from the U.S. Naval Postgraduate 

School, and a degree in business administration from the University of Pittsburgh. 

Our next witness is Mr. Gary Griswold, president and chief intellectual property counsel of 3M Innovative Properties Company. He 

has practiced intellectual property law at 3M and DuPont for over 

30 years. He is past president of Intellectual Property Owners and 

the American Intellectual Property Law Association, holds a B.S. 

In chemical engineering from Iowa State and M.S. In industrial administration from Duke University, and a J.D. From the University 

of Maryland. 

Our third witness will be Professor Jay Thomas, who, I might 

add, has been an often-used resource by this Subcommittee. Professor Thomas is a professor of law at Georgetown University. He 

recently received a grant from the MacArthur Foundation that will 

allow him to continue to work as a visiting scholar for the Congressional Research Service. Professor Thomas has published five books 

pertaining to patent law, intellectual property law and pharmaceutical patent law. He also previously served as law clerk to Chief 

Judge Helen Nies of the U.S. Court of Appeals for the Federal circuit. 

Dr. William Tucker will be our fourth witness. He is executive 

director of the Office of Technology Transfer, for Research, Administration and Technology Transfer for the University of California. 

Dr. Tucker’s career has focused primarily on agricultural biotechnology research and licensing. Prior to joining the University 

of California, Dr. Tucker worked for a number of biotechnology 

firms including Paradigm Genetics, Celera Genomics, and Applied 

Biosystems; holds a B.S. And Ph.D. in microbiology from Queensland and an B.A. From St. Mary’s College. 

Our last witness is Anthony Peterman. Mr. Peterman is legal director of patents for Dell, where he is responsible for overseeing all 

patent-related legal issues for the company. Prior to joining Dell, 

Mr. Peterman was with the law firm Baker Botts, where he handled a variety of intellectual property litigation and transactional 

matters. Mr. Peterman has a B.S. Degree in electrical engineering 

and a J.D., both from the University of Texas—well, one of the degrees is socially useful. 

It is good to have all of you here, and we will be—your entire 

statements will be included in the record. We ask you to summarize, keep it within the 5-minute time limit. 

And, Mr. Sharer, why don’t you—well let me just mention initially, Mr. Sharer does have to leave in about 45 minutes. So if 

there is an urgent—in the questioning, if there is some urgent need 

32

to ask him a question before he has to leave, after the witnesses 

have finished testifying, we would be willing to entertain that question. But I think by 3:15 or so or soon thereafter he will be gone. 

Mr. Sharer, good to have you here. 

TESTIMONY OF KEVIN SHARER, CHAIRMAN OF THE BOARD 

AND CHIEF ELeeECUTIVE OFFICER, AMGEN INCORPORATED, 

THOUSAND OAKS, CA 

Mr. SHARER. Thank you, Mr. Chairman. It is a real pleasure to 

be here today, and I got the audio-visual system or the mic anyway. 

Amgen is the world’s largest biotechnology company, and we look 

forward to working with the Committee and you, Mr. Chairman, to 

reform the patent laws. We support patent reform. We are committed to working to find a consensus to move ahead. And I think 

in your opening statement you rightly state that there are different 

issues among the various industry groups, and we are committed 

to working with our colleagues in industry and with Congress to 

try to come out with a bill that works best for everyone. 

I think the Committee has a set of slides that my staff has provided that I am going to refer to, and I title the slide or the talk 

Patent Reform and Its Impact on Future Cures. 

I think it is worth noting that what we do at Amgen and our 

brethren in the biotechnology industry is invest huge amounts of 

at-risk capital to try to advance biology to cure the scourges of our 

time, the very worst diseases. Alzheimer’s, Parkinson’s, cancer, diabetes, we are trying to move science and medicine ahead for the 

good of our fellow citizens. 

The second slide says, Why Does the U.S. Lead the World in Biotechnology? This isn’t very well known, but, in fact, as much as 90 

percent of the world’s efforts in biotechnology are concentrated in 

the United States, and that is not because we only are trying to 

develop biotechnology. Every advanced country in the world would 

like to have our position. There are a few reasons for that. We have 

access to capital here, both venture capital as well as capital markets. They are the envy of the world. Government, industry, academia all work together in their support of research and development. The Congress has funded the NIH at high levels. We support—we appreciate that. We have sound, science-based regulation 

in the FDA. The coverage and reimbursement policies of both the 

Government and insurance companies reward innovation. But 

foundationally, and perhaps most importantly, we have a reliable 

intellectual property protection system. That is the foundation 

upon which all of this risk is taken. 

The next slide talks about patents and why they are so important to us, and it kind of refers to the next slide as well. Our industry model is not like the industry model of some of our colleagues 

in the technology industry. It can cost as much as $1.2 billion to 

develop a drug. In fact, the leading drug in our pipeline right now, 

which we think holds real promise for osteoporosis and also bone 

cancer, is going to cost us more than that to develop. It is going 

to take more than 15 years for that product, and we are proud to 

say we invented the science or discovered the science and have the 

intellectual property behind it. 

33

The other thing to point out is that most of what we do results 

in failure. This year Amgen will invest 22 percent of our revenues, 

or $3.4 billion, in basic and clinical research, and I fully expect 

most of those things to advance science, but very, very few of them 

ever to reach the market. 

I pointed out that there are different business models between 

the software technology and the biopharmaceutical industry, and I 

think those are at the root of some of the industry different points 

of view on what is the right way forward. I would only offer that 

our patents are relatively few for a product. Technology have many, 

many. Our product R&D cycle is very long, and the products last 

a long time. 

As I said, we do support patent reform. There are statutory 

changes that you propose that we fully support. I have listed them 

on the slide. In the interest of time, I won’t repeat them here. 

We also urge some thought about some additional changes: diversion of PTO fees, limit inequitable conduct defenses to clear offenses, and eliminate the best mode requirement. 

As the Chairman said, we do have some views on some elements 

of the bill that concern us. There are two. One is postgrant opposition. It expands dramatically the ability to invalidate patents. We 

understand the logic behind it, but we seek a clear and quiet title 

that we can rely on going forward. We are also concerned about the 

ability of the PTO to deal with it. 

Also apportionment of damages as written is of concern to us. 

The right to exclusive use is fundamental to the value of the patent, and with the recent Supreme Court decision in the EBay case, 

the value of damages to us as a defense is very, very important. 

And finally, I would just like to say, we really, really appreciate 

your leadership, and we look forward, Mr. Chairman and Members 

of the Committee, to work with you and our industry colleagues to 

advance this important bill. Thank you. 

Mr. BERMAN. Mr. Sharer. 

[The prepared statement of Mr. Sharer follows:]

34

PREPARED STATEMENT OF KEVIN SHARER


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Mr. BERMAN. And Mr. Griswold. 

TESTIMONY OF GARY L. GRISWOLD, PRESIDENT AND CHIEF 

COUNSEL OF INTELLECTUAL PROPERTY, 3M INNOVATIVE 

PROPERTIES, ST. PAUL, MN 

Mr. GRISWOLD. Yes. Thank you, Chairman Berman, Ranking 

Member Coble and Members of the Subcommittee. I am pleased to 

have the opportunity to present the views of the Coalition for 21st 

Century Patent Reform on H.R. 1908. The coalition’s members 

share an interest in strengthening the country’s competitive position by strengthening the patent system, both in regard to obtaining high-quality patents and providing for their enforcement. 

While I have heard the patent reform debate only involves two 

industry sectors, let me assure you this is wrong. As you noted, Mr. 

Chairman, patents matter to all companies, investors, and institutions involved in R&D. 

H.R. 1908 and all of a number of measures that could improve 

the U.S. patent system, first inventor to file, expanding prior art 

submission to patent examiners, limiting willful infringement and 

extending prior user rights. 

There are several aspects of the bill, however, that we believe 

need to be improved. I will address three: section 5 on apportionment damages; 6 regarding the availability of the second window; 

and the postgrant oppositions in the absence of provisions relating 

to inequitable conduct. 

While we are pleased that a reasonable royalty remains as a 

floor for reasonable damage awards, we are troubled by the proposal to change the law because some believe that the awards 

against adjudicated patent infringers are excessive. Limiting damages tilts the balance in favor of infringers at the expense of American researchers and innovators, and it has a profound implication 

on our system of intellectual property law. 

We are particularly troubled by the language in section 5 requiring a court to exclude or subtract from the award the economic 

value which is properly attributable to prior art. When damages 

are being determined, the defendant has already been held to have 

infringed, and the patent owner is entitled to be made whole. If the 

test for damages becomes one in which the defendant can chip 

away at its liability for infringement by showing that the individual features of the invention were publicly known, the patent 

that needs remedy for infringement will be severely diminished. 

Most of you are familiar with these guys. In fact, we saw some 

calls on them the other day when we were talking to you. They include paper adhesive, both of which are known at the time of the 

invention. These Post-it notes, under the proposed prior art subtraction method for apportioning damages, an infringer of the Postit note patent would be permitted to argue that the value of the 

paper and the adhesive, which are both known, should be subtracted from the value of the infringing notes, leaving essentially 

nothing on which to base the calculation of damages. In fact, this 

would be true of most inventions because individual elements of almost any invention are present somewhere in the world today, but 

it is the creative combination of those elements that results in inVerDate 0ct 09 2002 15:57 Apr 09, 2008 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\042607\34929.000 HJUD1 PsN: DOUGA
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vention. If damage apportionment is codified, it will not allow for 

fair compensation for inventors. 

Turning now to postgrant, the coalition supports an early opportunity for the public to weed out invalid patents, but we oppose allowing third parties unlimited second window opportunities to challenge patents. 3M has had firsthand experience with several attacks on its patents. In 2005, after we won a patent lawsuit on all 

issues at trial, the defendant initiated a reexamination on three 

references that had been known to the defendant before a trial. Six 

months later it initiated the second reexamination on other prior 

art that it had known before trial. We are not alone. Procter & 

Gamble won a patent infringement lawsuit on the elastic leg cuffs 

on the original Luvs diaper. The defendant did not appeal the decision; however, they filed four reexaminations, lost all of them, and 

it cost P&G a lot of money to defend those reexaminations. 

Although the bill would limit somewhat the opportunity to challenge patents and reexamination, it would allow new opportunities 

to challenge patents and postgrant proceedings throughout the life 

of the patent. Providing these repeated opportunities to challenge 

patents is expensive for large companies; can be devastating for 

small companies and start-ups. 

Reform of the law on inequitable conduct is not in the bill, but 

it should be, because incentives in the current system reduce patent quality rather than increase it. Today applicants have an incentive to submit every conceivable relevant piece of prior art and 

PTO to avoid a later charge that the applicant failed to disclose a 

relevant document. Applicants also have an incentive not to discuss 

any of this information with the examiner for fear of a later charge 

that somehow they misled the examiner. As a result the examiner 

is forced to sort through mountains of references without the aid 

of the applicant. 

We advocate adopting a ‘‘but for’’ test as a safe harbor. The patent is enforceable unless the defendant can prove that the PTO 

would have rejected the patent or claim but for the applicant’s 

knowing and willful—but for the applicant’s knowing and willful 

misconduct. This would properly limit the defense, and applicants 

would be freed to work openly with patent examiners to promptly 

issue high-quality patents. 

With regard to four other important issues, best mode, venue, interrogatory appeals and authorize the expanded PTO rulemaking, 

I refer you to my testimony. 

Thank you for the opportunity to express my views—the views 

of our coalition. 

[The prepared statement of Mr. Griswold follows:]

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PREPARED STATEMENT OF GARY GRISWOLD


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Mr. BERMAN. Professor Thomas has been here before and, I 

might point out, has recently finished a paper on apportionment of 

damages, which, if you start in California on the airplane, you can 

finish by about Kansas. 

TESTIMONY OF JOHN R. THOMAS, PROFESSOR OF LAW, 

GEORGETOWN UNIVERSITY LAW CENTER, WASHINGTON, DC 

Mr. THOMAS. Thank you, Chairman Berman, Ranking Member 

Coble and Members of the Subcommittee. I am grateful to have the 

opportunity to come before you today to discuss the Patent Reform 

Act of 2007, and, of course, I testify here on my own behalf only. 

Allow me first to thank each Member of the Subcommittee and 

their staff for their continued travails within the murky world of 

the patent system. I recently attended talks by Chairman Berman 

and Ms. Lofgren on immigration reform that reminded me of the 

breadth and depth of topics that each Member of this Committee 

must address, and all of us in the patent community are grateful 

for your continued efforts here. 

My testimony is going to focus today on two aspects of this bill; 

first, a renewed emphasis upon market-based patent damages, 

which goes under the heading of apportionment; and also postgrant 

opposition proceedings, and in particular the emphasis upon the 

second window. 

Turning first to damages, the fundamental premise of the patent 

system is that the market is the best evaluator of the worth of inventions. Reliance upon market mechanisms allows the Government to promote innovation with relatively modest effort and expense, particularly in comparison to a prize-based system, which is 

the chief alternative to a patent regime. The patent law, therefore, 

aspires to award damages for infringement based on market-based 

rates that are intended to be compensatory, not punitive. 

Evidence is mounting, however, that judicial determinations of 

damages for patent infringement have begun to exceed market 

rates, and that is a trend that is in part due to, first, the increasing 

popularity of the patent system, we have more extant patents 

today than ever before; and also the notion that even everyday consumer products are increasingly high-tech, they embody not a 

dozen, not 20 patented inventions, but sometimes hundreds or 

thousands of them. So in this milieu the prospect that a high-technology firm must obtain some sort of license from multiple patent 

holders in order to market is a virtual certainty. Yet, the case law 

and empirical evidence alike suggest the courts are inclined to 

award damages that far exceed an individual patent’s contribution 

to that particular product. 

I have gathered case law in my written statement. I also cite an 

empirical study by Lemley and Shapiro suggesting that the award 

rate on average exceeds 13 percent of the total market price. As 

Lemley and Shapiro suggest, that figure seems pretty high. 

Damage awards that dramatically exceed the commercial patented invention lead to a number of deleterious practical consequences. First, excessive damage awards may promote patent 

litigation, and they make litigation hard to settle because the parties are very far apart on exactly what the value of that infringement is. Second, it may promote speculation and entrepreneurship 

64

within the patent system. It may also cause patent protection to 

routinely extend beyond the scope of the patent claims, and all of 

these lead to the final concern, the imposition of unreasonable royalty burdens upon high-technology manufacturers. 

As currently worded, the damages reform of the Patent Reform 

Act appear to apply to both measures of damages in the patent 

law, reasonable royalties and lost profits. Because I believe the 

identical concerns over apportionment apply to both manner of 

damages calculations, I believe that application—that methodology, 

I should say, of apportionment to each methodology is appropriate. 

Let me turn quickly to the Patent Reform Act’s provisions on 

postgrant administrative revocation proceedings, which are commonly called oppositions. Though a lot of benefits are said to flow 

from oppositions, concerns nonetheless have been expressed that 

they would inject a great deal of uncertainty into patent title, and 

this is a concern that is especially directed at the second window. 

Let me remind Members of the Committee that there are current 

postgrant proceedings in place that can take place at any time during the life of the patent. One of those, of course, is the reissue proceeding that is effectively as old as the patent system in this country, and under that proceeding any patent holder can go back to 

the Patent Office and seek a tune-up or tighten up the claims at 

any time. They can cancel claims. They can add new claims again 

throughout the life of the patent. So it is with the reexamination 

proceedings. Any member of the public, the Commissioner, the patentee itself can go back to the office and amend the claims. There 

are other provisions such as disclaimers that can occur at any time 

during the life of the patent. 

So I think it is important to the Committee as it hears concerns 

about stability of the right to recognize that the patent instrument 

is already somewhat fluid. There are already opportunities to 

amend claims. Oppositions, in my view, don’t represent a sea 

change, but rather a marginal change to existing patent practice. 

Thank you very much, Mr. Chairman. 

Mr. BERMAN. Thank you very much, Professor. 

[The prepared statement of Mr. Thomas follows:]

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PREPARED STATEMENT OF JOHN R. THOMAS


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Mr. BERMAN. Mr. Tucker? 

TESTIMONY OF WILLIAM T. TUCKER, EXECUTIVE DIRECTOR, 

RESEARCH AND ADMINISTRATION AND TECHNOLOGY 

TRANSFER, UNIVERSITY OF CALIFORNIA, OAKLAND, CA 

Mr. TUCKER. Good afternoon, Chairman Berman and Ranking 

Member Coble and Members of the Subcommittee. I thank you for 

the opportunity to appear before you today and discuss patent law 

reform and offer the university’s preliminary analysis of H.R. 1908, 

the Patent Law Reform Act of 2007. We thank you for your leadership on intellectual property matters and your desire to assure that 

the U.S. patent system is updated and performs well to create robust and reliable patents. 

UC looks forward to working with you and the rest of the Committee as you consider H.R. 1908. As executive director of UC’s Office of Technology Transfer, I oversee functions that coordinate and 

support patenting and licensing activities across UC’s 10 campuses 

and 5 medical centers. For 5 consecutive years, UC has lead the 

Nation in the number of patents issued to universities. In the past 

25 years our technology has resulted in over 700 new products 

being introduced in the market and spawned over 300 start-up 

companies. Over 80 percent of these companies are founded on UC 

technology, remain in business in some form today. These companies are the engines for economic development in California and 

across the Nation. 

Part of our mission as a university is to transfer knowledge created by our faculty, staff and students to benefit the public, and 

the Bayh-Dole Act has been incredibly successful in spawning technology-based companies and creating a return to the taxpayer for 

the Nation’s investment in basic research at our universities. 

Now let me turn to our initial observations about H.R. 1908. The 

university has some concerns that the proposed changes to the U.S. 

patent system in H.R. 1908 will diminish our ability to protect university-created inventions or leverage the economic value of these 

assets to ensure our Nation’s technological leadership. 

UC understands that there are challenges with the U.S. patent 

system and appreciates that this legislation is intended to correct 

some of these difficulties. UC recognizes that many elements of 

H.R. 1908 encourage stronger and better-quality patents including 

the first window in the new postgrant opposition procedure, the 

new derivation procedure, the ability of third parties to submit 

prior art to the Patent Office, and especially the retention of the 

CREATE Act, which encourages research collaborations. We also 

thank the Committee for not including a loser pays attorneys’ fees 

system and language to repeal 271(f). 

However, UC believes some elements of H.R. 1908 weaken our 

ability to achieve the public service mission, especially the transition from first-to-invent to first-inventor-to-file and expanded 

postgrant opposition. We believe that the proposed change from a 

first-to-invent to a first-inventor-to-file system has the potential of 

depriving the U.S. public from the benefit of groundbreaking research carried out at universities. Without patent protection, these 

breakthroughs may simply become publications in journals on 

dusty library shelves. The broad patent coverage for breakthrough 

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discoveries creates intellectual property assets that secure the financial investment needed to transform early-stage research into 

products and services. 

Unlike our scientific colleagues and companies, university research is operated in an open environment where dissemination 

and sharing of research results is encouraged. In the publish or 

perish university environment, if a first-inventor-to-file system is 

not adequately mitigated with an effective grace period, it could result in the loss of patent protection for our inventions. We appreciate the inclusion of a grace period language in H.R. 1908, but 

have concerns it may not adequately address the reality of the academic university environment. 

Also, the rush to the Patent Office mentality created by a firstinventor-to-file system may force researchers to delay publication 

after a patent application is filed. This would slow the public reporting of scientific advances which is antithetical to the fundamental principle of academia and the intent of the patent system. 

We also see a risk that the first-inventor-to-file system could deprive the true inventor of his or her constitutional benefit. 

Now, turning to the new postgrant opposition procedure, while 

UC supports the first window of postgrant review within 12 

months of a patent’s issuance, UC is concerned the second or third 

window included in H.R. 1908 will leave a patent holder open to 

repeated challenges to the validity of an issued patent over its lifetime. UC is concerned that the additional postgrant challenges will 

weaken the strength of issued patents and change the risk-reward 

relationship so that inventors will shy away from companies based 

on university-derived early-stage research. 

Unquestionably the vibrancy of the U.S. economy derives from 

the contribution of small businesses, and our technology-driven industries often begin with start-up companies founded on university-based discoveries. If changes in patent law create roadblocks to 

the formation of such businesses, I fear that the Nation’s technology leadership position will be threatened. I have outlined some 

of our concerns and welcome the opportunity to work with the 

Committee as the legislation proceeds. 

Again, I thank the Chair, the Ranking Member and Members of 

the Committee for your leadership in the matter of patent reform 

and for the invitation to present to you this afternoon. I look forward to answering any of your questions. Thank you. 

Mr. BERMAN. Thank you very much. 

[The prepared statement of Mr. Tucker follows:]

PREPARED STATEMENT OF WILLIAM T. TUCKER

Good afternoon, Chairman Berman, Ranking Member Coble and members of the 

Subcommittee. My name is William (Bill) Tucker and I serve as the Executive Director for Research Administration and Technology Transfer in the University of California’s Office of the President. I am here to testify on behalf of the University of 

California. Thank you for the opportunity to appear before you today to discuss the 

very important issue of patent law reform and specifically to offer our preliminary 

analysis of H.R. 1908, the ‘‘Patent Reform Act of 2007.’’ The University of California 

(UC) appreciates the leadership of the House Judiciary Committee on the issue of 

Patent Reform, particularly in examining improvements that would best serve the 

nation’s continued success at developing inventions that benefit the American public. UC looks forward to working with the Committee as it considers patent reform 

legislation. 

78

My career has spanned both the academic and industrial sectors, starting with 

a postdoctoral research fellowship at Stanford University under Professor Stanley 

Cohen, one of the inventors of gene splicing methods that launched the biotechnology industry, then as part of one of the first companies to explore opportunities for commercial applications of genetic engineering to agriculture. After working 

as a bench scientist during which time I was an inventor on two issued patents, 

I moved into technology management and business development working at various 

technology-based companies before joining UC’s Office of Technology Transfer, 

where I focused on licensing plant varieties bred by UC faculty. I am now the Executive Director overseeing the administration, coordination, and support of technology licensing activities throughout the UC system. My experiences within both 

academia and industry have helped me appreciate the power of the U.S. patent system as a catalyst for creating technological change and economic value. 

I should mention that UC is a member of several higher education associations 

such as the Association of American Universities (AAU), the American Council on 

Education (ACE), the Association of American Medical Colleges (AAMC), the Council on Government Relations (COGR) and the National Association of State Universities and Land Grant Colleges (NASULGC), all of which have been actively reviewing patent reform legislation on behalf of universities. UC concurs with these organizations’ recent joint statement on S. 3818, the ‘‘Patent Reform Act of 2006,’’ which 

was submitted to the House and Senate Judiciary Committees. To the extent that 

the provisions of H.R. 1908 are similar to the provisions in S. 3818, the comments 

offered today by UC are in large measure reflective of the higher education associations’ statement. 

In view of the short time frame between the introduction of H.R. 1908 last week 

and today’s hearing, UC understands that the higher education associations as well 

as individual universities will need to undertake a more thorough review of H.R. 

1908 before reaching any final position on the legislation. My comments today on 

behalf of UC are preliminary; we are continuing our review of the legislation. 

In evaluating H.R. 1908, UC’s perspective is informed by its position in the patent 

community as a leader in technology transfer between academia and private industry, serving companies ranging from start-up ventures to Fortune 500 companies, 

and across all the industry groups who benefit from the innovative work done 

throughout our university system. It has been UC’s experience that the U.S. patent 

system has worked well to foster innovation and to allow University-developed inventions to reach the marketplace for the benefit of the public. 

UC supports many of the patent reform proposals in H.R. 1908, but is also concerned with changes to the U.S. patent system which could weaken the ability of 

patent holders to protect the rights to their inventions, or which could harm university technology transfer efforts. 

I. BACKGROUND ABOUT UC’S TECHNOLOGY TRANSFER PROGRAM

UC is comprised of ten campuses, including five medical schools, and participates 

in the management of three national laboratories, with over 170,000 faculty and 

staff serving 200,000 undergraduate and graduate students. Our many scientists 

and engineers conduct basic and applied research, collaborate with other research 

partners to build on the nation’s scientific knowledge base, educate and train students at all levels, and make discoveries that can be transferred to industry and 

translated into products that benefit the general public. UC’s technology transfer 

program is at the heart of this transition from promising early stage research to 

products and applications that benefits the public. 

UC established its first technology transfer office in the 1970’s and since then has 

played an instrumental role in growing the California and national economy by 

leveraging the U.S. patent system to transform the technologies created by our faculty and staff into patented technologies that become the basis for new companies 

and industries. UC technology transfer encompasses a range of activities carried on 

throughout the system to facilitate this commercialization, including not only 

through traditional patenting and licensing efforts, but also through the development of relationships with businesses, industry, and government, in order to enhance the research and education missions of UC and contribute to the economic 

prosperity of California and the nation. 

For twelve consecutive years, UC has led the nation in the number of patents 

issued by the U.S. Patent and Trademark Office (USPTO) to universities, receiving 

390 patents during 2005 alone (the latest date for which we have information). Indeed, in the recent Milken Institute report ‘‘Mind to Market: A Global Analysis of 

University Biotechnology Transfer and Commercialization,’’ UC was listed as one of 

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pends more than $4 billion on research activities, two-thirds of which comes from 

the federal government through contracts and grants. UC faculty disclosed a total 

of 1,314 inventions to UC in 2005. Since the inception of UC’s technology transfer 

program, over 700 inventions have been translated into products with many more 

in the pipeline, and the ensuing royalties have been distributed to investors and the 

campuses to be reinvested in education and research. The American public reaps the 

benefits of the federal investment when products reach the marketplace for general 

use. 

UC’s technology transfer successes contribute to important advances in scientific 

research and have a significant impact on the quality of lives of people in the U.S. 

and worldwide. Among UC’s inventions that have been successfully commercialized 

are:

• a vaccination for the potentially-fatal Hepatitis B disease;

• the Cohen-Boyer recombinant DNA patent held jointly by UC and Stanford 

University that helped to spawn the development of the biotechnology industry;

• lung treatments for respiratory problems associated with premature births;

• a laser/water Atomic Force Microscope that helps scientists to better view and 

analyze different properties of matter at the nanoscale;

• a dynamic skin cooling device that allows more effective laser surgery with 

less pain and less post-operative scarring;

• the minimally invasive Guglielmi Detachable Coil used to treat brain aneurysms;

• the Cochlear Ear Implant to assist those with hearing loss;

• glucose monitoring techniques useful for diabetics; and

• the Nicotine Patch that assists smoking cessation, among many others.

Inventions developed at UC and other U.S. universities have provided significant 

benefit to society, improving the health of people throughout the world. Some of 

these discoveries from universities are highlighted in a recent report from the Association of University Technology Managers (AUTM), the ‘‘Better World Project,’’ 

which is available at: http://www.betterworldproject.net/. 

A university’s ability to ensure that these technologies are successfully translated 

into useable products is predicated on having strong, reliable patents that encourage 

industrial partners and private equity funding sources to invest resources and commit to moving a laboratory-based discovery through the arduous and often risky development and commercialization process. Having a strong U.S. patent system 

where patent holders can depend on the certainty of their patents helps to ensure 

that technology transfer can occur. 

II. UNIVERSITY PATENT LICENSING

A. The Bayh-Dole Act and University Technology Transfer 

To understand UC’s view of patent reform legislation, some background on university patent licensing is helpful. Before 1980, approximately 25 universities across 

the nation had established technology transfer offices. These offices were granted 

only a handful of patents and the ability to assert title to these patents was hampered by the uncertainty surrounding the timing and scope of agency approvals. 

There was no uniform federal patent policy at the time. In addition, universities 

were forced to file patent applications before their value could be assessed, and before they knew if they would be permitted to own the patent at all. Companies were 

disinclined to license these technologies given their uncertain legal status, and as 

a result, many potentially-promising inventions were left to languish. 

Today, more than 230 U.S. universities have technology transfer offices, evidence 

of the success of the groundbreaking Patent and Trademark Amendments Act, commonly known as the ‘‘Bayh-Dole Act,’’ legislation passed in 1980 under the leadership of the House Judiciary Committee and the House Science Committee. The 

‘‘Bayh-Dole Act’’ allows universities to retain title to patents made under federal 

funding in exchange for their commitment to work diligently with private industry 

to develop those inventions into useful products for the U.S. economy. The BayhDole Act has been called one of the most successful pieces of legislation of the twentieth century and has been instrumental in furthering universities’ paramount goal 

of creating and disseminating knowledge in an open academic environment while 

ensuring that the benefits of that research can be shared by the public. 

UC appreciates the Committee’s continued commitment to preserving the BayhDole Act with the Sense of Congress Resolution to honor the 25th Anniversary of 

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the Bayh-Dole Act, which passed in the House of Representatives on December 6, 

2006. 

B. Small Businesses Need Strong Patents to Thrive in the U.S. Economy 

Universities are engines for innovation, but must rely on industrial partners to 

bring early stage ideas to the marketplace. As this Committee considers patent reform legislation, it is critically important to consider the implications such legislation will have on start up companies, other small businesses and the nation’s economy. In particular, startup companies depend on strong patent protection to attract 

the venture capital and other financing necessary to launch a new enterprise. 

As encouraged by the Bayh-Dole Act, UC honors a preference to license its federally-funded inventions to small businesses. For example, in 2005, UC ranked second 

only to MIT in the number of licenses entered into with new startup companies during 2003–2005, as reported by the AUTM U.S. Licensing Survey (http://

www.autm.net/surveys/dsp.Detail.cfm?pid=194). UC’s licensed technologies can be 

linked to approximately 300 existing startup companies which use technology ranging from medical compounds and devices to electronics to biotechnology to semiconductors/nanotechnology. (See Figure 1.) 

Over the past 20 years, on average over 80 percent of companies founded based 

on a license to UC technologies are still in operation, either as stand-alone entities 

or through merger and acquisition. This observation is not unique to UC, but common among university based startups. These resilient university-based startup companies create long-term jobs and lead to sustainable regional economies. (See Figure 

2.) 

Such an innovation ecosystem, in which the universities, inventors, entrepreneurs 

and investors interact, has the potential to reinvent local economies. By way of example, such an innovation ecosystem helped the San Diego economy transition to 

one of the nation’s leading high tech and biotechnology centers after the downsizing 

of the U.S. military presence there. 

The types of relationships and the stimulation of the regional economy exemplified by San Diego’s example are replicated throughout the nation with many other 

universities. University research and licensing programs touch various aspects of 

the economy and it is extremely important that universities continue to play an instrumental role in supporting and growing the economy, creating jobs, encouraging 

American ingenuity and entrepreneurship, and making discoveries that are transferable to companies that are able to translate them into useful products. 

III. UC PRELIMINARY ANALYSIS OF H.R. 1908, THE ‘‘PATENT REFORM ACT OF 2007’’

UC applauds Chairman Berman, Ranking Member Coble and all of the Members 

of the Committee for their leadership on intellectual property matters, their stewardship of the intellectual property system and their care and concern for ensuring 

that the U.S. patent system is updated and performs well. 

UC understands there are challenges with the current U.S. patent system and appreciates that patent reform legislation is intended to correct some of these difficulties, especially as they relate to patent quality and patent validity. In making 

changes to the U.S. patent system, however, UC urges the Committee to pay careful 

attention to the unintended consequences that could negatively impact the technology transfer efforts of universities. 

In moving toward a more robust patent system, it is critical for Congress to ensure that the U.S. Patent and Trademark Office (USPTO) will have the sustained 

and sufficient fiscal resources to allow the USPTO to continue to provide timely and 

high quality service to American innovators while implementing any changes resulting from the legislation. It is also important to consider whether any reforms will 

add additional burdens to the USPTO’s workload that would lead to delays in the 

already lengthy patent pendency process. The escalating workload at the USPTO 

demonstrates the high rate of American innovation and inventiveness. However, the 

USPTO has been challenged both financially and administratively, resulting in increased pendency of applications and perceived lapses in the quality of examination. 

A. UC Supports Many of the Proposed Reforms in H.R. 1908

Upon an initial review of H.R. 1908, UC supports many provisions, including:

• the proposed new derivation proceedings to determine appropriate 

inventorship in proceedings before the USPTO;

• the creation of a procedure for third parties to submit prior art to the USPTO 

concerning pending patent applications;

• changes to the patent venue and jurisdiction procedure statutes;

• the creation of a Patent Trial and Appeal Board;

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• a review of the existing reexamination procedure to determine its effectiveness;

• some of the language to create a new Post Grant Opposition procedure;

• the retention of the ‘‘best mode’’ requirement;

• that the legislation does not change the current state of the law on patent 

unenforceability;

• the retention of the CREATE Act, an important bill which encourages research collaborations in academic settings; and

• the retention of many provisions of the current prior art rules.

Many of these provisions of H.R. 1908 will help to encourage the issuance of 

stronger and better quality patents from the USPTO. 

UC also wishes to thank the drafters for not including:

• a ‘‘loser pays’’ attorneys fee system for patent cases which had been included 

in S. 3818;

• language to repeal 35 U.S.C. § 271(f); or

• additional restrictions on injunctions or the filing of continuation applications.

UC would also have supported the inclusion of several additional provisions in 

H.R. 1908, including:

• a requirement that all patent applications be published after 18 months of 

their filing with the USPTO, and

• language to change the inequitable conduct defense so that findings are made 

by a court and only on appropriately-limited grounds of truly severe misconduct before the USPTO.

While UC supports many elements of H.R. 1908 as outlined above, UC remains 

concerned about certain other elements of H.R. 1908 as currently drafted. 

B. The Impact of the First-Inventor-To-File Proposal on University Technology 

Transfer Programs (Section 3) 

H.R. 1908 would require the U.S. to shift its patent system to award patents not 

to the first person to invent a new invention, but rather, to the first person who 

filed a patent application with the USPTO for that invention. This is unprecedented 

in American history, though consistent with patent law in Europe and Asia. 

UC believes that the strength of the U.S. patent system has in large part been 

the result of the existing patent rules, including the current first-to-invent system. 

In reviewing the situation, it is not unreasonable to posit that the first-to-invent 

system, with its public policy intent to reward innovation, collaboration and public 

discourse, is at least partly responsible for the historical strength of the U.S. commitment to the individual inventor. 

UC is continuing to review the first-inventor-to-file system. However, we are in 

agreement with the points made in the statement of the higher education associations on S. 3818, that encouraged the Committee to ensure that any first-inventorto-file system includes an effective grace period, a robust provisional patent application procedure, and a strong Inventor’s Oath requirement. 

1. The First-Inventor-To-File System Proposed by H.R. 1908 Is Likely To Heavily Burden Academic Licensors and Researchers 

UC’s primary concern with the proposed first-inventor-to-file system is that it will 

reward with a patent the person who has the means and ability to file patent applications as quickly as possible over the first person to conceive a groundbreaking 

idea and realize it in a working invention. UC strongly believes that this is likely 

to have a profound adverse impact on university technology transfer offices. 

Under the current first-to-invent system, researchers at American universities 

have had the ability to develop their ideas, and have a one year grace period to get 

to the USPTO to file a patent application after disclosing their idea. This one-year 

grace period has allowed universities the time to evaluate the commercial potential 

and patentability of an invention and allowed universities to focus on locating the 

best licensing partner to develop the technology. 

In a first-inventor-to-file system, inventors would not have rights to their inventions until they file a patent application with the USPTO before another party filed. 

There would be no one year grace period available with regard to third party publications and past patent filings. The result may be that university researchers lose 

their ability to obtain patents for inventions. In a first-inventor-to-file system, universities would have to act quickly to file applications in order to preserve their inventors’ rights, often before conducting a reasoned analysis of the merits of an inVerDate 0ct 09 2002 15:57 Apr 09, 2008 Jkt 000000 PO 00000 Frm 00085 Fmt 6633 Sfmt 6621 H:\WORK\COURTS\042607\34929.000 HJUD1 PsN: DOUGA
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vention. Unless a quick filing occurs, a university could risk losing rights to those 

inventions altogether. And because research universities like UC receive such a 

large number of inventor disclosures in a wide variety of fields, this would be a huge 

burden for universities to undertake. 

The first-inventor-to-file system may also create an incentive for others to profit 

at the expense of universities. Because university researchers typically publish the 

results of their research as soon as possible, others could theoretically review publications, speed up their own efforts to develop similar technology based on the ideas 

generated by research institutions, and then file with the USPTO as the first inventor to file. This situation is at odds with the university’s goals of creating an open 

academic environment, which emphasizes the publication of research results in journal articles and the sharing of information with scientific colleagues. To date, universities have been able to do so without the fear of losing the right to protect an 

invention if the invention is not first registered and filed with the USPTO before 

it is disclosed to anyone else. 

It has been UC’s experience that the interference proceeding available under current law has provided an important safeguard to ensure that only a true inventor 

gains patent rights. The interference procedure would be repealed by H.R. 1908. UC 

suggests that any patent reform legislation continues to provide a strong mechanism 

to allow true inventors to challenge an earlier filing by another party. The new derivative procedure created by H.R. 1908 may help to fill such a void. 

C. The Potential Problems For Academia Created by a First-Inventor-to-File System 

May Be Compounded by the ‘‘Absolute Novelty’’ Requirements and Lack of Broad 

One Year Grace Period in H.R. 1908 (Section 3) 

UC thanks the Committee for including some form of grace period in H.R. 1908, 

under the proposed first-inventor-to-file system. While we are carefully evaluating 

the new language, we are concerned that it may be insufficient to effectively replace 

the protections of the one year grace period available under current law. 

1. ‘‘Absolute Novelty’’ May Impair the Public Disclosure of Inventions 

As discussed previously, public disclosure and collaboration are crucial in the academic setting, where, unlike in the private sector, the emphasis is on publishing and 

sharing research results to advance the science rather than keeping new developments secret until patent applications can be filed. As UC interprets the legislation, 

under the ‘‘absolute novelty’’ proposal, if anyone other than the inventor discusses 

the proposal in public before a patent application is filed, the inventor would lose 

the right to obtain a patent on the invention because the public disclosures of any 

party other than the inventor would be considered prior art. 

The removal of the current one-year grace period in conjunction with the first-inventor-to-file system will essentially force universities to either move immediately 

to file patent applications before a researcher’s articles can be published or even discussed in public (causing potential delay to the researcher’s work as a result), or 

to simply risk losing the right to patent the invention at all. While private companies can bind their employees to confidentiality agreement to avoid this risk, such 

an arrangement would be unacceptable to researchers working in academia, and 

thus places them at a disadvantage in terms of the potential commercialization of 

their work. 

Rather than remove the current grace period, UC recommends that Congress retain the current grace period law and encourage other countries to adopt a similar 

grace period in their patent systems, consistent with the recommendation included 

in the National Academies’ National Research Council report, a ‘‘Patent System for 

the 21st Century.’’

While UC has not taken a final position on switching to a first-inventor-to-file system, UC has concerns and is not certain that the benefits of switching to a firstinventor-to-file system would outweigh the potential negative consequences. 

D. The Patent System Must Be Supported by a Strong Inventor’s Oath Requirement 

(Section 4) 

UC is in agreement with the higher education associations’ statement on S. 3818 

which asks for a strong inventor’s oath requirement to be included in any patent 

reform bill. At the heart of the U.S. patent system historically is the certainty that 

the named inventor is the one that truly made the invention, not someone who has 

learned of it from someone else. An oath requirement also favors the independent 

inventor and the open environment of universities by encouraging honesty and full 

disclosure in the patent process. 

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couraged to disclose the full extent of their inventions to the public and that they 

are bound by the statements they have made. 

However, as currently drafted, H.R. 1908 would permit a would-be inventor to 

avoid the requirement of attesting under oath that they truly invented the invention 

in question by submitting a ‘‘substitute statement’’ instead, which does not need to 

be made under oath. This further endangers inventors’ rights. UC looks forward to 

working with the Committee to strengthen the inventor’s oath requirement. 

E. Courts Should Be Given Discretion to Determine the Apportionment of Damages 

in Litigation (Section 5) 

UC is in agreement with the higher education associations’ statement on S. 3818 

which suggested that trial judges already have ample discretion under Georgia-Pacific and the current case law to assess the relative economic value of a patented 

technology in determining damages for patent infringement, and thus does not believe that any statutory language is necessary to codify the apportionment of damages available for infringement. Since damages calculations in particular must be 

based on the circumstances between the parties in the lawsuit and the marketplace 

in which they operate, UC believes it would be best to continue to allow judges and/

or juries to make these determinations on a case-by-case basis instead of introducing a new process for calculating the apportionment of damages. 

F. UC is Concerned that the Prior User Rights Expansion in H.R. 1908 May Be Too 

Vague (Section 5) 

Under current law, ‘‘prior user rights’’ provides a limited defense from infringement for a party who actually ‘‘commercially uses’’ a patented technology before a 

patent application is filed by another party. By contrast, Section 5(d) in H.R. 1908 

would significantly expand the ‘‘prior user rights’’ defense to include ‘‘substantial 

preparations for commercial use’’ of an invention, prior to the filing of a patent application. UC, consistent with the higher education associations’ statement on S. 

3818, opposes the expansion of ‘‘prior user rights’’ included in H.R. 1908. 

G. UC Believes One Post-Grant Cancellation Procedure is Sufficient (Section 6) 

1. UC is Concerned that the Two Additional Windows of Post-Grant Review 

May Lead to Gamesmanship 

H.R. 1908 sets forth three ‘‘post-grant review’’ procedures, known as ‘‘cancellations,’’ by which a petitioner can move to cancel a patent after it has been issued:

1) within 12 months of the patent’s issuance (the ‘‘first window’’),

2) upon a showing of ‘‘substantial economic harm’’ caused by the patent, at any 

time (the ‘‘second window’’), and

3) upon the receipt of notice of a possible claim of patent infringement under 

the patent (the ‘‘third window’’).

While UC, consistent with the higher education associations’ statement, supports 

the ‘‘first window’’ of post-grant review, UC opposes the ‘‘second’’ and ‘‘third’’ window 

proposals as potentially burdensome to legitimate patent holders seeking to enforce 

their legitimate rights. 

As currently drafted, the open-ended nature of the ‘‘substantial economic harm’’ 

opening of the ‘‘second window’’ may lead to strategic challenges to legitimate patents by free-riding competitors in an attempt to hamper a patent holder’s ability to 

ascertain certainty that their patents are valid. This would be especially problematic 

for patent holders with limited resources. It could also lead to gamesmanship by 

parties with no real concern about the patent’s validity but rather, simply wishing 

to impede the true inventors ability to enforce that patent against them. In addition, 

because the patent grant of exclusivity is only for a limited amount of time, abuse 

of the ‘‘second window’’ process would hamper the value of legitimately-obtained 

patents in the marketplace. 

All of these concerns loom even larger in the new ‘‘third window’’ cancellation proposed in H.R. 1908. As a matter of practice, UC only notifies parties of infringement 

or files patent litigation as a last resort when UC’s rights under a strong patent 

have been egregiously violated. Under the ‘‘third window,’’ a patent infringer could 

then place UC’s patent into post-grant review, not because of any real concern over 

the validity of the patent, but rather, simply to delay the enforcement of UC’s valid 

patent rights and to buy itself more time to infringe in the marketplace. Given the 

very high stakes in patent enforcement and litigation, UC fears that the ‘‘third window’’ will simply become another way for parties who do not respect intellectual 

property rights to abuse the system. 

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2. Any Post-Grant Review Process Must Ensure Validity and Promote Finality 

UC is concerned about the addition of language in H.R. 1908 which appears to 

leave a patent holder open to repeated challenges over the validity of an issued patent over the lifetime of a patent based only on a ‘‘preponderance of the evidence’’ 

standard presumption that a patent is valid. Such open ended opposition procedures 

could discourage companies, especially startups from investing in university technologies because they could not rely on a strong patent to protect their position in 

the marketplace. By weakening the presumption of validity, fewer university technologies will be licensed and developed into products that can be made available to 

the general public. 

The new Post-Grant Opposition procedure also appears to operate separately from 

the existing challenges available through the USPTO and through litigation. UC believes that these existing procedures plus a first window of post-grant review would 

provide sufficient opportunities for opposers to challenge a patent and that allowing 

opposers to challenge a patent throughout its life undermines the economic usefulness of the patent. In order to give patent holders, such as UC, confidence in the 

validity of their properly-reviewed patents, there must be some assurance that once 

the patent has survived a rigorous post-grant review process, it would not be subject 

to repeated attacks by the same party solely for strategic purposes. 

G. UC Suggests Minor Changes in the Venue and Jurisdiction Proposals (Section 10) 

While UC generally supports the proposed amendments to the patent venue and 

jurisdiction statutes, the Committee may wish to consider adding a separate venue 

provision for nonprofit educational institutions. A provision allowing nonprofit educational institutions to file suit in patent litigation in any district in which the defendant is subject to the personal jurisdiction of the court would be a helpful addition to H.R. 1908. 

In addition, H.R. 1908 permits parties in a patent litigation to file an immediate 

appeal to the Federal Circuit appellate court of any order from the district court 

that construes the claims of the patent as a matter of law, known as a ‘‘Markman 

order,’’ and requires in such cases that the trial court’s proceedings be stayed while 

the appeal is pending. UC agrees that permitting interlocutory appeals of claim construction rulings to the Federal Circuit could be potentially useful to litigants, and 

could serve to preserve judicial economy and encourage the strength of issued patents. However, UC is concerned that the interlocutory appeals process could also be 

used as a delay tactic in the litigation process, and proposes that the stay of the 

district court’s ruling be made discretionary with the trial court judge. 

H. UC Does Not Believe the USPTO Needs Additional Regulatory Authority (Section 

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H.R. 1908 would provide the USPTO the ability to engage in substantially broader 

substantive rule making than provided under current law. UC, along with the higher education associations’ statement on S. 3818 expressed concern about granting 

the USPTO expanded rule making authority since this could lead to opportunities 

for the USPTO to act beyond the scope of what Congress intends through the statutory process. The USPTO already holds fairly broad rule making authority that 

should be sufficient to engage in the rule making process. 

I. UC Requests that H.R. 1908 Not Apply Retroactively (Section 13) 

UC is concerned that the ‘‘effective date’’ in Section 13 would make H.R. 1908 applicable to any patents issued after the effective date. UC is concerned that the effective date in H.R. 1908 could be made to apply retroactively to patent applications 

that are still pending at the USPTO at the time the effective date occurs. UC would 

appreciate it if the drafters would revisit the language of the effective date in H.R. 

1908 to specify that it would not to be applied retroactively. The USPTO should also 

be given adequate time to implement the legislation in an effective and thoughtful 

manner. 

Conclusion 

Chairman Berman, Ranking Member Coble and members of the Subcommittee, 

thank you again for your leadership, time and attention. We appreciate the opportunity to provide our preliminary comments on H.R. 1908 and look forward to working with the Committee as it considers the legislation.

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ATTACHMENT


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Mr. BERMAN. Mr. Peterman. 

TESTIMONY OF ANTHONY PETERMAN, DIRECTOR, PATENT 

COUNSEL, DELL INCORPORATED, ROUND ROCK, TX 

Mr. PETERMAN. Mr. Chairman, Members of the Committee, my 

name is Anthony Peterman. I am the legal director for patents at 

Dell, and I really appreciate the opportunity to be here and talk 

about this important issue today. Most importantly, on behalf of 

Dell, the Business Software Alliance and all the members of the 

Coalition for Patent Fairness, we want to thank all of you who 

have sponsored and introduced this bill. You, Mr. Chairman, Ranking Member Coble, Chairman Conyers, and Ranking Member 

Smith and Representatives Boucher, Goodlatte, Jackson Lee, 

Schiff, Cannon, Issa and Lofgren, we thank each of you for your 

work in this area. We hope that the other Members of the Subcommittee and of the full Committee will come to join and support 

this legislation. 

Dell and our coalition supports H.R. 1908 because it addresses 

the major areas where we believe reform is needed, and that is improve quality in the Patent Office and an improved balance of fairness for all litigants in patent litigation. While to some this may 

seem like an obscure issue, enactment of this patent reform legislation is needed, and it is needed now, to help sustain America’s 

growth and vitality. At first this need was probably noticeable only 

to those of us dealing with patents and patent law every day, but 

over the last 5 years, even neutral observers, including the National Academy of Sciences and the Federal Trade Commission, 

have all noted that our patent system needed attention and modernization. 

How do we get to this point? Two reasons, we believe. First, the 

number of patent applications have soared, and the PTOs, hardworking patent examiners, are doing their best to keep up. But the 

result is that a greater number of lower-quality patents are slipping through the system. 

Second, plaintiffs are exploiting litigation rules and seeking artificially high damages. It is litigation as a business, and these cases 

cost a lot, and they take a long time to resolve, even when the defendant has a straightforward defense. Businesses faced with these 

claims have two options: defend the patent in court, agree to pay 

settlement fees. And with the cost of legal defense significant, the 

risk of irrational damage high, a growing number of companies 

agree to settle even when they believe they would have won on the 

merits. 

But this harm is not about any one company. The problem hurts 

American competitiveness and the U.S. economy. Fundamentally, 

businesses have to stop innovating, absorb the increased costs or 

pass the cost onto customers. Either way we all lose. 

Let me be clear in this: We support a strong patent system, and 

we support the inventor’s right to assert its patents and get a reasonable compensation for any infringement. Dell itself is a market 

innovator. We have lots of patents. Many of the members of our 

BSA and our coalition are very significant patent holders. We want 

a strong patent system, but we think these changes are needed as 

well. 

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Specifically, this bill will promote the issuance of higher-quality 

patents. It increases the ability of examiners to consider prior art, 

and it enables third parties to share vital information with the examiner. The bill also establishes a postgrant process after a patent 

has been issued and gives a PTO a second chance to apply its expertise. And as part of this, we believe that the second window, 

based on the showing of economic harm, is very important to a 

meaningful postgrant process. 

Secondly, the bill makes key changes to restore the balance in 

patent litigation. The bill clarifies that a patent holder is entitled 

to claim damages based on their specific contribution. Today too 

many plaintiffs are claiming and too often getting excessive damages based on the value of an entire product line. 

Let me give you an example that Dell has faced. Many of our 

LCD monitors have a music stand feature where you can lift them 

and tilt them. We faced a patent litigation on that feature. The 

damages that were alleged were not based on the music stand feature, not even based on the monitor, but based on the entire revenue from our systems and the monitor. And we believe this bill 

will refocus that analysis back on the music stand feature where 

it should be. 

In addition, this bill provides that punitive damages for willful 

infringement should apply only to truly reprehensible conduct, and 

it won’t be asserted in every situation like it is now. 

The bill also attempts to address the venue problem. This is the 

problem of making sure patent suits are brought in courts that 

have some nexus to the parties and their business and not in 

courts that are chosen simply for an advantage. Now, we would, 

from our perspective, like a few changes to the venue provision. We 

would also like the 271(f) provision addressed if the Supreme Court 

doesn’t fix that. 

In conclusion, let me say that we truly appreciate all the effort 

on this Committee that went into developing this bill. We know 

that it was a balance of interests. We strongly support the bill. We 

think its introduction will help American innovation and competitiveness. And we appreciate your leadership and your guidance in 

this area. Thank you. 

[The prepared statement of Mr. Peterman follows:]

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PREPARED STATEMENT OF ANTHONY PETERMAN


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ATTACHMENT


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Mr. BERMAN. Thank you all very much. Very interesting. We 

have a lot of issues to follow up on. 

If it is all right with the Subcommittee, what I would like to do 

is initially just recognize myself to ask Mr. Sharer a question, because he does have to leave in 15 minutes. I know at least two 

other Members of the Subcommittee want to ask him a question, 

anybody else who wants to as well, and then we will go back to a 

more regular process. 

Mr. Sharer, you acknowledge that the software and financial 

services industries have raised legitimate problems in the way the 

system impacts business activities in those sectors. Since the system has to work for all industries, could I have your commitment 

as CEO of Amgen, as an active participant, both pharma and bio, 

to work with us in addressing their concerns, especially as related 

to challenging validity for patents already issued, the second window, and excessive damage awards, the apportionment issue? 

Mr. SHARER. Yes, sir, Mr. Chairman. I think it is incumbent 

upon industry leaders to come together and try to resolve our differing views for the good of all. I happily commit to you that I will 

and am pursuing that course now. We seek to have conversations, 

and I am sure we will soon, with leaders in other industries to try 

to find common ground here. I know they have legitimate issues. 

I think we do, too, but I look forward to finding common ground. 

Mr. BERMAN. Very good. 

I now recognize Mr. Coble for a question to Mr. Sharer. 

Mr. COBLE. Thank you, Mr. Chairman. And again, good to have 

all of you with us this afternoon. 

Mr. Sharer, as you know, the bill extends additional rulemaking 

authority to the Director of the PTO. Is it your belief that we may 

be ceding excessive authority to the executive branch to create or 

make patent law? 

Mr. SHARER. I am not a patent lawyer, sir. I am not specifically 

familiar with that provision. If you would allow me, I would like 

to ask my colleagues to be able to submit a written testimony on 

that point. 

Mr. COBLE. I could ask subsequently after you leave to the other 

Members. 

Mr. SHARER. Yes, sir. 

Mr. BERMAN. I know that the gentleman from California Mr. 

Schiff has a question for Mr. Sharer. 

Mr. SCHIFF. Thank you, Mr. Chairman. I will be very quick. 

Mr. Sharer, I am inclined to think there is a lot of force and validity behind the proposal that you and others have made to add 

a ‘‘but for’’ provision to deal with the inequitable defense doctrine, 

inequitable conduct doctrine. But you also suggest in your written 

testimony that the standard be changed to require one or more patent claims to be declared invalid by the court prior to the use of 

this doctrine. 

I am not sure exactly what you are proposing there. Are you proposing that there be other patents in other cases that have been 

held to be invalid with respect to that party? Are you proposing 

there has to be with respect to the same case or invention? How 

would that work? And would those have to be other cases of invalidity because of some kind of inequitable conduct, or would the 

112

fact that maybe there was prior art or rather problems with the 

patent be sufficient to constitute a prior strike? 

Mr. SHARER. That is a level of detail that I am not prepared to 

answer today, Congressman. I would like to let our patent counsel 

give you and the Committee written testimony that more expansively defines that and specifically answers the question. What I 

can say is for us, what is really, really important is once the patent 

is issued, we can have confidence that it is going—issued, have confidence it is going to persist, and that when we have a case where 

an infringer is found to infringe, we can get appropriate claims and 

damages. I am concerned in some parts of the bill, particularly apportionment of damages, that it is going to be less expensive for infringers. That worries me. 

Mr. SCHIFF. Well, if you could have somebody provide some further information, I am interested in knowing what that means. 

Mr. SHARER. We will. 

Mr. SCHIFF. And also there was a suggestion that the standard 

be raised for making that claim. I didn’t know if that was separate 

and apart from ‘‘but for’’ causation or whether you are referring to 

the ‘‘but for’’ causation by that, but thank you. 

Thank you very much, Mr. Chairman. 

Mr. BERMAN. Thank you. 

Another question for Mr. Sharer. Mr. Issa. 

Mr. ISSA. This is truly California day. You are getting it from the 

dais. And thank you for coming from California. 

Mr. Sharer, you talked about specifically your quiet title, how important that was to your investment, both from those who invest 

in your company, but also from your investment in the product. 

That is kind of one of those elements that is a line in the sand for 

you, isn’t it? 

Mr. SHARER. Yes, sir, Congressman. We have to have confidence 

in the patent to invest the amount of money over the years, and 

with the uncertainty, I am really concerned about that. 

Mr. ISSA. So as the postgrant has something piled on to or in addition to the historic reexamination, looking at all the other items 

we can talk about and perhaps the others as well, that is the item 

that keeps you from sleeping at nights in this proposal to a certain 

extent, doesn’t it, the idea that you would have bite after bite after 

bite in trying to invest while knowing your patent is continually 

being attacked outside the court process? 

Mr. SHARER. If that provision were to go into effect in kind of our 

worst concern way, you are right, Congressman, that we would be 

concerned that we would never really have a quiet title. I am optimistic and hopeful, though, that we can find common ground and 

find a way to meet the needs of all the parties. But you are right, 

that general area does concern us. 

Mr. ISSA. And I am concerned about this because I think it cuts 

badly on both your industry and on the tech industry, so perhaps 

that is the one place in which this isn’t going to be characterized 

as a battle between bio and tech. If we were—and this is certainly 

up to the Chairman to first think of—if we were to say there is 

only one bite, period, only one postgrant, period, new invention, but 

that it did two things, one, we left in place some sort of a reexamination as it currently is known, that being the second bite, but it 

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is a bite you have lived with for a long time; and two, if that 

postgrant raised your likelihood of willfulness as a matter of having to go through that examination of the most unpleasant type, 

would those be balances that you believe from your business model 

would be well worthwhile to both narrow the claims, make the patent stand on its own better, and at the same time have a benefit 

for having gone through the process, perhaps—in my opinion, willfulness now being much more in play because, quite frankly, a neutral third party other than the PTO has now looked at your patent, 

and the world has had an opportunity to pile on, and two, because 

that window has closed. Would that work for you? And really I 

would like to focus on you and your industry. 

Mr. SHARER. I think, Congressman, that anything we can do to 

absolutely limit, make very specific and define if there is going to 

be another look, that would be much preferable to some continuous 

look, and that may be a compromise that we have to make. I am 

not prepared to say that today, but it certainly goes in the right 

direction, and we would be willing to talk about that for sure. It 

would be helpful. 

Mr. ISSA. The last thing, which is strictly reexamining, this is the 

if, if, if. If postgrant is a single window, if there is under the same 

basic principles today, do you believe reexamination needs to be 

improved; that inherently it has not served your industry, to be 

honest, on either side well, and that is why it is not used except 

in some of the—I think we are almost pejorative in the way they 

had been used—meaning of that reexam, is that something we 

should consider in this legislation? 

Gaming of that reexamine, is that something we should consider 

in this legislation. 

Mr. SHARER. I can’t specifically comment on that in a broad way. 

I can say from an Amgen point of view we have certainly benefited 

from the current patent system and have been able to found a company 27 years ago and grow because of it. 

I don’t know of any cases in our experience where that has been 

a problem. But again I don’t have comprehensive knowledge about 

our entire patent experience. 

Mr. ISSA. Thank you. And thank you for your continuing investment in California. I yield back. 

Mr. BERMAN. Thank you. 

The unfairness of this aspect is, there are other views on the 

issue discussed, but the rest of the process will give you a chance, 

without Mr. Sharer up there to hear them, so you can even be more 

aggressive in your response to his comments. 

We want to you sleep well at night, and my guess is—or you 

wouldn’t go so far as to say a good night’s sleep is worth eliminating the ability of someone to challenge the validity of an patent 

in an infringement lawsuit, would you? 

Mr. SHARER. No, sir. 

Thank you for hosting me today. And I look forward to working 

with you and other Members of the Committee and my industry 

colleagues to get a good bill that will serve the whole country. 

Mr. BERMAN. Thank you for being here. 

All right. We will start the 5-minute rule on questions. 

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Mr. Griswold, let me tell you the problem I have initially with 

sort of your opposition to this second window and get your response. What prompted me to get into this issue was a glut of 

questionable quality patents issued, a lot of them, from about 1998 

through 2003; patents that wouldn’t qualify for the first window 

now if we eliminated this second window. 

How would you address those patents in a less costly and more 

efficient alternative to litigation? 

Mr. GRISWOLD. Well, one of the opportunities that is provided is 

opening up post, the reexamination process. 

Mr. BERMAN. What do you mean ‘‘opening up’’? It is open. No one 

uses it. 

Mr. GRISWOLD. Yes, but the inter partes’ reexamination process. 

One of the reasons was because of the estoppel language in that 

process, so that is one of the pieces of that that would be used 

more. And that is the idea of making it better, by reducing the estoppel. 

Mr. BERMAN. Would you go along with more robust discovery in 

the inter partes reexam process, so that people can actually get 

some information to utilize in reexamine? 

Mr. GRISWOLD. Relative to postgrant oppositions, as you know, 

relative to the postgrant opposition, which we support, which is a 

first window——

Mr. BERMAN. But these are patents for which the first window 

is gone. They have already been issued. I am talking about 

that——

Mr. GRISWOLD. The existing body of patents. 

Well, one question you have there, one of the issues on that is, 

do we change all the rules forever to put—to allow for these continual attacks on patents—another—throughout the life of the patent to accommodate to a concern relative to an existing body of patents? That is a question. 

Mr. BERMAN. It is a question. Is your answer to that question, 

we don’t change any rules, notwithstanding? 

Mr. GRISWOLD. We have made proposals relative to that that 

would provide an integrated system relative to postgrant, that 

would provide an opportunity after the initial opportunity that 

would—but it would be limited so that you wouldn’t have—so 

you—so Mr. Sharer could sleep better at night, but—not probably 

as nice as he would like, but it would help him. 

Mr. BERMAN. But with the clear and convincing standard that 

you recommend for that window, what is the incentive for a person 

to take advantage of—who first learns about the claim of a patent 

long after either an existing patent, or long after the first window 

has been shut by virtue of the passage of time, he first learns of 

it with a clear and convincing standard to upset the validity of that 

patent? Why not just go to court? 

Mr. GRISWOLD. Well, I guess there are two questions there. One 

is, if we are talking about patents that are—where there would 

have been a first window, then we would like—our view is, we 

should be driving people to the first window for newly issued patents. 

If you are talking about patents that are in existence today, then 

that is a different question, and as I said before, a proposal we put 

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together, which is very—which is integrated between postgrant as 

well as reexamination; it brings it all together—would provide an 

opportunity. 

Mr. BERMAN. Thank you. 

Let’s just turn, still with Mr. Griswold. I do intend to have a second—I intend to be here for as many windows as I can open; and 

when all the Members and witnesses have left, I will probably close 

the last window. 

But—so there are a number of questions of other witnesses as 

well, but just on the last time, remaining time, on inequitable conduct, I understand the concern. And we have to think about addressing that issue here. But what about a little quid pro quo? 

Would you be prepared to endorse or get those changes in the inequitable conduct sort of defense that you want with a requirement 

that mandates that applicants for patents conduct a search for 

prior art, submit the search statement and any prior art found 

with a list of relevance and meaning of the prior art? In other 

words, the applicant, do more to help bring information to the examiner that ensures that only things that should be patented are 

patented? 

Mr. GRISWOLD. Well, the answer to that is, if the hovering of inequitable conduct ceases or is substantially diminished, the willingness of applicants to focus in on prior art, and talk about the prior 

art will be substantially enhanced. That is the question and——

Mr. BERMAN. What if we codify that substantial enhancement 

with a requirement? 

Mr. GRISWOLD. We need to take a hard look at that. That, we 

would take a very hard look at. 

Mr. BERMAN. My time has expired. I recognize the Ranking 

Member of the Subcommittee, Mr. Coble. 

Mr. COBLE. Thank you, Mr. Chairman. And, gentlemen, I will 

put the same question, if you will permit me to, directed to Mr. 

Sharer, regarding the bill extending additional rule-making authority to the director of PPO. 

Does either of you have any heartburn about that, that we may 

be ceding excessive authority to the executive branch to create or 

make patent law? 

Anybody want to weigh in on that? 

Mr. PETERMAN. I will just say quickly, we don’t—I think the patent office needs that rule-making authority and can handle it. 

Mr. COBLE. Mr. Griswold. 

Mr. GRISWOLD. My concern is that, as we know from the last 

number of years, when we have been trying to change the laws 

here, there has been tremendous debate involving people from all 

sorts of industries. And we think that kind of debate needs to take 

place in this kind of a forum, as opposed to the PPO. 

So we would be concerned about expanding the rule-making to 

get into substantive rights in the way that this could with the 

Chevron deference, I believe, that would be provided by that activity to that activity. 

Mr. COBLE. Professor? Dr. Tucker? 

Either of you? 

Mr. THOMAS. Thank you. The USPTO stands among the oldest 

administrative agencies in this Republic, and when I first learned 

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that the USPTO was not considered a full-fledged agency that enjoyed regulatory authority, I was rather surprised. The USPTO has 

already promulgated a number of rules, such as rule 56 pertaining 

to inequitable conduct, that arguably are substantive patent law 

rules. 

I also believe that there is no complaint that the USPTO has 

gone beyond the notice of opportunity for comment rule-making 

procedures of the APA, and in fact, has been very outgoing with 

town hall meetings soliciting input ad nauseam from a patent bar, 

which you have probably become aware is not shy about commenting upon proposals. 

So I certainly would have no problems with the USPTO being 

formally granted to some degree what it has already assumed. 

Mr. COBLE. Dr. Tucker. 

Mr. TUCKER. From the university’s perspective, we think the 

USPTO has sufficient rule-making authority already, and that to 

grant extra rule-making authority would take away from the role 

of the Congress. And we are very much aligned with Mr. Griswold’s 

position on this. 

Mr. COBLE. Let me ask you a very general question prior to the 

illumination of the red light. How does H.R. 1908 benefit the public? I am sure there is benefit. 

Dr. Tucker. 

Mr. TUCKER. We see it as benefiting the public if it creates 

stronger patents and it doesn’t take away from our ability as a university, as the research engine of this Nation in general, to create 

the inventions that lead to new companies. Anything that happens 

in 1908 that puts a road block in the way, as I said, of us creating 

companies and creating inventions is going to do a disservice to the 

U.S. economy. 

We would like to see strong patents. We want to see robust patents. We understand problems exist with certain business method 

patents that are obvious on their face to us in the working world, 

so to speak, but somehow manage to get too obvious in the standards of the USPTO; and we would like to have mechanisms in 

place that either improve the examination or give the ability for 

people to comment and have those patents not issued. 

But—so that is my comment. Thanks. 

Mr. COBLE. Thank you, Dr. Tucker. 

Mr. Griswold. 

Mr. GRISWOLD. There are certain pieces of the 1908—you were 

asking generally if—are there pieces in 1908 generally, or parts of 

it, that would be very helpful? 

Mr. COBLE. ‘‘Generally’’ was my question. 

Mr. GRISWOLD. Generally, I guess I have to go from generally to 

specifically. 

There are pieces that I mentioned, like first inventor to file, expanding prior arts submissions and limiting willful infringement, 

extending prior user rights, those would be positive. Having a onewindow opposition could be positive to weed out patents. So that 

would help the public because the public would not have to live 

with those patents for their entire term if we had a single window 

opposition system. 

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Mr. COBLE. I thank you, sir. I see my yellow light, Mr. Chairman, so I yield back. 

Mr. BERMAN. The other gentleman from North Carolina. 

Mr. WATT. Thank you, Mr. Chairman. 

I don’t have the benefit of being as conversant with this subject 

as my colleague from North Carolina since this is my first term on 

this Subcommittee. But I want to start by doing a couple of things, 

first of all, by applauding your effort to bring together—I just noticed for the first time today the divergent cosponsors of the bill 

that you adopt. It is a broad, broad cross-section of——

Mr. BERMAN. Of the universe. 

Mr. WATT [continuing]. Of the intellectual property universe of 

this House. And I know, having worked with some of those folks, 

that if you have that many people on a bill at its inception and 

they are already working together, that is a wonderful, good start. 

So I want to applaud that first. 

And then, second, I want to applaud that notwithstanding that, 

in your opening statement you made it absolutely clear that you 

don’t perceive this to be the final product. It is a work in progress, 

despite the broad bipartisan and broad bi, tri, philosophical cosponsorship that you have. So I think this is great. 

And I am happy to be a part of the process and I hope none of 

my questions seem so basic as to embarrass myself. 

Third, I want to just say to Mr. Peterman, because this is the 

first opportunity I have had—the opportunity in public to say, since 

the death of your colleague and my wonderful friend, Thurman 

Woodard, I want to extend my personal condolences to you. I know 

that was a tremendous loss to your corporate family. 

And for those who us who believe in really, really true diversity 

in the corporate community, it is a tremendous loss to all of us because we know that he stood for that, first and foremost—well, not 

first over at Dell, but it was a high priority. 

Now, having said all of that, let me ask a couple of questions because I am in only the first window. Some of us have to get on an 

airplane and so—and I am approaching that time, so I won’t be 

around for the second window. 

This is strange to me that we are talking about first and second 

windows here. 

I come from a legal background that has statutes of limitation 

on everything, and I am wondering—maybe this is such a basic, 

stupid question: What would be the problem of establishing some 

kind of reasonable statute of limitation on first and second windows with exceptions for people who have gamed the system to get 

their patents—or maybe that is what the first and second windows 

already do, and I just don’t know enough about it. 

Perhaps I could have you all comment on just that basic, elementary, perhaps stupid question, why this part of the law is so different that it has to have an almost totally separate set of rules 

for us? 

Mr. THOMAS. Mr. Watt, as you know, statutes of limitations 

serve the notion that quiet and tranquility from litigation is also 

a just solution in many cases. But statutes of limitations in many 

circumstances are based upon knowledge of a wrong. So knowledge 

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that crimes have been committed, that is when the statute of limitation is triggered. 

Mr. WATT. Wouldn’t it be just as reasonable to think about when 

a person knew or reasonably should have known—which is a standard proposition. I mean, that would be consistent with what you 

just said, wouldn’t it? 

Mr. THOMAS. It is certainly an alternative solution. 

I think that the current proposals have decided to have set periods of time based on the period the patent grants, and then other 

set periods based on knowledge of the patent or awareness of the 

patent will have commercial significance. 

One thing to remember, Mr. Watt, is that the value of many patent inventions is not realized until many years after the patent 

issues. So, although the patent has come out, its commercial value 

is not implicated until much later down the road. So if we impose 

short second windows——

Mr. WATT. I am not talking about—I didn’t say anything about 

short, because I think you will find that my definition of a statute 

of limitation might be a lot longer than—so don’t impute the word 

‘‘short’’ to me. I am just trying to figure out philosophically why 

some different system that puts some reasonable time limits on 

this won’t be a reasonable proposition. 

Mr. THOMAS. I think everybody is in agreement, reasonable time 

limits are appropriate, but we may differ on what is reasonable. 

Mr. WATT. I am sorry, Mr. Chairman. I ran out of time and I 

never got to do anything, other than praise you, so——

Mr. BERMAN. The gentleman is given an additional minute. 

Mr. WATT. Well, I will use that 1 minute to raise the second 

issue that I have, rather than belaboring this one. 

The race to the patent office argument, the grant to the first person to file obviously has some appeal to it, but I could see how it 

might have some substantial problems for a small, noncorporate 

university—although I suspect most of them are getting a lot more 

sophisticated in this area, also. 

Does the current system or does this bill provide enough protection in either first, second window or even under the theory that 

I was talking about, for that kind of just totally unsophisticated inventor? 

Mr. TUCKER. Certainly, from the university’s perspective, yes, the 

race to the patent office is a problem. We generally are not as well 

resourced as perhaps a corporation, and it is an incredible burden 

on us. 

But I think one of the issues is getting the patent right, and a 

race to the patent office may, in fact, end up getting a less wellcrafted patent, which gives less protection for the invention and, 

therefore, less ability for people to get to invest in it. 

So, I mean, the race to the patent office, in my belief, is that we 

should—we need to really think about it and especially the university where the invention is so early staged that it takes a little bit 

of time to understand what, indeed, the invention is and how best 

to leverage that and how best to protect it to get the advantage we 

need. 

Mr. WATT. Mr. Griswold, I think you would have the opposite 

side of that coin. I suspect so. 

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Mr. GRISWOLD. We support first-inventor-to-file, but because I 

am part of a coalition with many large companies doesn’t mean we 

are the fast—we have the fastest hounds in the race, I can tell you. 

Oftentimes somebody else is there first. 

But we believe that—and actually there are studies done by a 

former Commissioner of Patents Gerry Mossinghoff which shows 

that interference—today, it is first-to-invent, whoever is the first to 

invent is supposed to get the patent, but the party who was first 

to file is presumed to be the first inventor. They have an inference 

process that determines that, and as it turns out, the first inventor, 

first to file, typically wins those cases. So we are, in effect, on a 

first-to-file system anyway, and the rest of the world is on a firstto-file system. 

One of the things that is really discouraging for people like us, 

for us, is if we have someone who operated on a different basis and 

they come to us and they haven’t protected themselves relative to 

filing outside the United States, they work in a different system 

which is on a first-to-file—first-to-file basis. So we think first-to-file 

is the best system for the world, actually. 

Mr. BERMAN. The time of the gentleman has expired. 

Mr. WATT. Thank you, Mr. Chairman. 

Mr. BERMAN. I might add, apart from the notion of how you can 

get extra time around here, on the statute of limitations problem—

I guess we could have this as a private conversation. But I don’t 

know that Professor Thomas got into the limitations on how far 

back you can go for damages. You can’t file near the end of the patent period and then collect lost profits or damages from the day 

that your patent was infringed. In that sense there are some limits. 

And on the first-to-file issue, torn between the loyalty to my 

home State university and alma mater and the fact that no other 

university is as resistant to my bill as the University of California, 

I think you will find that the inclusion of the grace period in the 

first-to-file and the maintenance of the CREATE Act, which Mr. 

Tucker did reference, many of the universities don’t feel quite as 

passionately about this as the University of California seems to 

feel. 

I recognize the gentleman from, okay, gentleman from Ohio then, 

yielded by the gentleman from California. 

Mr. CHABOT. Thank you, Mr. Chairman. And sorry I was a little 

bit late. I am Ranking Member of the Small Business Committee, 

so—we had a hearing going on and so I missed a little of the testimony and apologize for that. 

In that capacity, Professor Thomas, we did have the opportunity 

to hear you testify there, and I want to thank you for that testimony. We thought you did a very good job there. 

Let me ask one question, and I will just go down the panel and 

you can all take a shot at it. Could you comment on whether or 

not H.R. 1908 encourages innovation and investment that businesses, particularly small businesses—and as I mentioned we have 

a particular interest in that on the Small Business Committee—

need in order to grow in the future, as many of the companies represented here have already experienced? And will the changes proposed by H.R. 1908 provide the quality of patents in certainty and 

predictability needed across all industry sectors? 

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And, Mr. Griswold, if you want to go first, please. 

Mr. GRISWOLD. Yes. Well, there are pieces, as I said earlier, to 

1908 that I think would do that. There are pieces that would stimulate invention and assist in the process for more high-quality patents. There are other pieces, however—for example, if compensatory damages are reduced, I don’t think that is a stimulus to invention; I think that is a negative. I think if you open up an opportunity, another opportunity for serial attacks on patents, I don’t 

think that is a positive either for promoting invention. 

When we are talking about innovation, sometimes in this discussion about innovation, we hear different groups talking about innovation promoting innovation. Innovation that was constitutionally 

supported with the patent system is the kind which incents people 

because of the period of exclusivity to invest and make inventions. 

And that is the kind of innovation and investment that the patent 

system is supposed to protect. 

So when you do things like reduce the compensation, or reduce 

the ability to get an injunction or any of the other rights, or somehow diminish the patent right, then that reduces that type of innovation. So you have to be really careful to mess with the system 

because at the end of the day you may be—and we won’t know 

right away. 

See, one of the things that bothers me and one of the things I 

talk to people in our company about is that we are the stewards 

of the patent system. We are the stewards of how things operate 

today in our company today relative to the patent system. And I 

am really concerned that if you make changes that are too dramatic, you will wind up effecting something that we will see the 

impact on 15 years from now because that is the way these things 

play out. 

Mr. THOMAS. Thank you. 

I think it is certainly important to be mindful of concerns that 

might arise in the future. I think it is also important to address 

existing concerns that are very prevalent right now. And in that 

vein, I believe that this bill has a number of features that are in 

the interests of small businesses. 

The oppositions we have talked about, one thing to remember, 

the patent that is one person’s incentive is another person’s limitation. So it will also give the ability of small firms to challenge patents of their competitors without having to pay the extraordinary 

resources that patent litigation will consume. 

Obviously, the grace period is perceived as favoring small business. Assignee filing will make a more streamlined process for all 

firms, including small businesses, to obtain patent rights. 

Venue reform would prevent small businesses from being hauled 

in in far reaches of the country in order to defend themselves from 

charges of patent infringement. 

And, finally, having a better base of damages, a more defined 

sense of what damages are, rather than very divergent figures 

based either on one feature or the whole system, I think will promote efficient bargaining in the shadow of the law, which also will 

benefit small business. Thank you. 

Mr. CHABOT. Mr. Tucker. 

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Mr. TUCKER. Congressman Chabot, when I sit in my office at the 

university and we think about, you know, what we do, and as we 

start to form companies, you know, some of the people that we talk 

to very early on are the first-stage investors in technology; and one 

of the things they need from us to do a deal, to put their first one—

$5, $10, $15 million—is, they come to us and ask about the intellectual property, because they need that to ensure that investment. So 

anything in the bill that takes away from their ability to enjoy that 

intellectual property asset is going to impact the startup of businesses. And that is where we see it. 

Bryan Lord from AmberWave, who was a licensee of the University of California, testified quite eloquently, I believe, at the Small 

Business subcommittee hearing about the impact of changes in the 

patent law on small businesses. And we—I would like to reiterate 

his testimony. And I think he very aptly stated the concerns that 

universities have with regard to changes. 

That being said, as Mr. Griswold said, there are lots of things in 

this legislation that we believe will help to create stronger patents. 

And in that sense, that is why we are here. We want to cooperate 

with the Subcommittee to get to legislation that will work for us 

as universities and for businesses. And we know we are all very 

different. 

Mr. CHABOT. Mr. Peterman. 

Mr. BERMAN. Time is almost expired, so finish your answer—

start your answer. 

Mr. PETERMAN. In terms of promoting innovation, I don’t think 

the intent here is to harm patents or to weaken the patent system. 

We all still want a strong patent system. The targeted changes that 

would improve litigation, I think are beneficial for small business. 

They are more susceptible to patent attacks. They have few resources to defend themselves against these expensive litigations. 

I think there is a letter from several farmers groups that this 

Committee has received that sort of express that concern. 

The second thing on the quality of patents, I agree there are 

things in here that will improve the quality of patents. I think one 

of the things that small businesses would need is this second window. If we are going to have postgrant opposition, they are not 

going have to have the resources to attack every patent they see 

coming out of the patent office. They will need the second window 

to attack those that come up and may be asserted against them. 

Mr. BERMAN. The gentleman from Tennessee has returned. Mr. 

Cohen. 

Mr. COHEN. Thank you, Mr. Chairman. I will ask the panel, 

what is not in this bill that you think ought to be in it? 

Mr. GRISWOLD. A couple of things that I mentioned. One is a fix 

on inequitable conduct. And the Chairman and I had a discussion 

about—he was trying to negotiate a deal here, and since he has all 

the power, I don’t know that I want to do that. 

But anyway, that is something that is missing, a fix on inequitable conduct, which at the end of the day, leads to lower-quality 

patents because of the failure—the inability of the applicant and 

the patent office to have the kind of open communication you would 

like to have without the hovering of inequitable conduct. 

122

Another thing is elimination of the best-mode requirement, which 

is kind of a duplicative requirement which is—a litigation reform 

that was recommended by the National Academy of Sciences report, that we eliminate the best-mode requirement. That is not in 

the bill. 

Those are a couple of key pieces that are not in the bill. 

Mr. COHEN. Let me ask the other three panelists. 

Do you all agree those components should be in the bill? Or do 

you disagree? 

Mr. THOMAS. I agree with Mr. Griswold. 

Mr. TUCKER. I agree with Mr. Griswold with respect to inequitable conduct, but we prefer to have the best-mode in. We believe 

it is incumbent on the person disclosing invention to disclose the 

best way to do it. 

We would like to see a requirement that all patent applications 

get published after 18 months. Right now, this legislation doesn’t 

include language that was present, I believe in other versions, that 

allows—so that, now, you are allowed to exempt certain applications from publication; and we believe that making that consistent 

for all applications is important. 

Mr. BERMAN. Just to interject on that point. If it is the way you 

say it is, it isn’t the way we intended it. In other words, the bill 

calls for publication of all patents in 18 months. 

Mr. PETERMAN. I guess I will be the only one to disagree on the 

three features that Mr. Griswold mentioned. 

We think it is very important to have rules in place that encourage inventors to be as honest as possible to the patent office. And 

we think changes to those would need to be looked at very carefully. 

The two things, I guess, we would see changed: We like the 

venue provision, but we think it could be improved and we would 

like to work on that. And I mentioned, although the Supreme 

Court is addressing the 271(f) issue, if that is not fixed, we would 

like to see that there as well. 

Mr. COHEN. Tell me about the venue portion. I understand this 

is going be greatly damaging to the prosperity of Marshall, Texas. 

Mr. PETERMAN. I like Marshall, Texas. I am from Texas. 

Mr. COHEN. You have been there, I take it. I haven’t. Not on my 

list. 

Mr. PETERMAN. You know, in the way it is written now, it allows 

the plaintiff to incorporate or to sue where the plaintiff resides. So 

that is one issue. 

We have many cases where there is certainly a shell entity and 

a storefront that is located in one of these districts, and that is the 

basis for the venue there. There may be others. I don’t want to get 

into a lot of it, but I think one of the ones that is fairly apparent 

is that one where it says the plaintiff can sue where it resides. 

And we see shell corporations who acquire patents and sue, and 

they will just incorporate in that city and sue there.

Mr. COHEN. And Marshall, Texas, is the place they do this? 

Mr. PETERMAN. It is one of the places. There are others. 

Mr. COHEN. What are the others? 

Mr. PETERMAN. I think there is a court in Minnesota, maybe the 

Central District, but there are other courts where plaintiffs sue in 

123

order—because they think they have an advantage, and they will 

get moved quickly to trial without seeing anything finished on 

summary judgment. 

Mr. COHEN. How does the bill improve upon that? 

Mr. PETERMAN. I think the bill is the start. It starts by saying, 

first of all, you can only sue where the plaintiff or defendant resides. Currently, the law is pretty much anywhere a product is 

sold, they can be sued. So that is, for most of us, anywhere in the 

U.S. 

The second feature is that it would say that you can otherwise 

sue where the defendant has, I think, business contacts and some 

nexus there. And I think that also limits to some extent where you 

can sue. Many companies, certainly Internet companies, don’t have 

a business presence in many places. 

Mr. COHEN. And are there parties that should be represented 

here with issues that are not? 

You don’t think so? Yes, sir. Doctor? Professor? 

Mr. GRISWOLD. I am not a professor, but I am from Minnesota, 

so I am a little nervous. 

Mr. COHEN. You read your paper like you are. 

Mr. GRISWOLD. Well, that is all right. If that is good then, I am 

a professor. 

The problem with venue is this. Yes, there are concerns with 

where lawsuits are brought. One of the—it is one of the overall 

issues with trying to get legislation together. 

If you go too far to do some of the things that my colleague on 

the end here would like to do, you really harm other people because 

they can’t—like us, we spend a billion and a half dollars on R&D, 

you get patents on the fruits of that investment, and we want to 

be able to bring patent litigation to prevent infringement where we 

would like to bring patent infringement litigation. And I don’t 

think he wants to impact that. 

But what he does, but any fix that we talk about does and will 

impact our ability to sue and that is a big issue for us. So that is 

a problem. 

The other problem with it is, I don’t think—I don’t think I am 

clever enough, and maybe everybody else is, but I don’t think we 

are clever enough to figure out how to write something that will 

work for people like us, but will not be avoidable—or, well, our 

friend from Dell—and not be avoidable by people that want to 

avoid it. 

There are different ways to do it. For example, as he pointed out, 

if you want to set up a company around one patent, people do that. 

So whatever rules you set up, you will find—people find a way to 

move around it. 

So I think venue is one that is probably something that should 

be left out of the bill totally. That is our view. 

Mr. COHEN. Thank you, sir. 

And thank you, Mr. Chairman. 

Mr. BERMAN. Thank you. 

The gentleman from California, Mr. Issa, a cosponsor of the bill 

and a holder of patents, high-quality patents. 

124

Mr. ISSA. They were the earlier ones, before it was so busy at the 

patent office, which unfortunately means they are starting to expire. 

Why are you laughing? I am crying. You know, in 1994 in order 

to deal with GAAP, we said, well, we are going to make our patents 

20 years from application. So at least there is one Member on the 

dais who was once sued on a patent that had never been litigated 

until it was in the extension period; and then only against me, even 

though it was one of my customers, for more than a decade, but 

he had then retired and decided this patent that was 17, 18, 19 

years old, was suddenly valuable. 

I tend to have a little trepidation when people say, do it like Europe. Just so you understand. 

Mr. Griswold, when you talk about the harm we could do with 

a second window for everything to deal with the body of existing 

patents, if we had a single postgrant window that began after enactment of this, would you think that we should do something rather than just ignore the thousands of—millions of patents that are 

out there now? Or could we have, realistically, two standards, one 

for patents about to be granted, one which would allow for the use 

of postgrant on a much more limited basis for those patents that 

are already out there, recognizing that there is no court, no patent 

office, that can handle 2 million claims in 1 day if we said, you 

know, you have 90 days to deal with every patent out there? 

Do you see that as something that we can finesse? Or do you 

say—do you see that as some problem that is bigger than what you 

talked to me about before? 

Mr. GRISWOLD. I would be concerned with setting up a special 

program for a certain body of patents. I think that there are a couple of things, one I had mentioned already, that reexam, because 

of the change in inter partes reexam that is more likely to be used, 

at least with the proposal on the table. 

Mr. ISSA. Are you talking about the boards they are going to do, 

taking it away from——

Mr. GRISWOLD. And making the estoppel provisions less onerous. 

That is one piece. 

And the other piece would be this, that the proposal that I mentioned earlier in my response to a question—it is called a 

‘‘postissuance revocation proposal’’—would help in this regard. It is 

not in this bill, but it is something that we have put together that 

would bring together——

Mr. ISSA. I appreciate that. 

But in the 5 minutes-plus, whatever time, I commend the Chairman for bringing this fine piece of legislation to the forefront. And 

as I continue adding time, Mr. Chairman, thank you so much; this 

really was wonderful of you to do and particularly today. 

But in your opinion, the body of existing—if for a moment we 

just left it alone and only concentrated on the new, you would be 

more or less happy with a single postgrant window at this point 

as part of the enactment language? 

Mr. GRISWOLD. Yes, we would be fine with A because we think 

the number one thing is to weed out patents shortly after they are 

granted——

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Mr. ISSA. I will tell you, in my notes the number one thing is, 

do no harm because—that is why I asked the question. This would 

assure less harm then hypothetically dealing with the body of millions that were out there under another system. 

The conversion to first-to-file seems to be more controversial than 

I would have expected. I am somebody—I am an old guy. I am used 

to—I grew up in this whole thing of 1 year and swear behind and 

reduction to practice, but realistically aren’t we sort of in a position 

where the transition to first-to-file is pretty inevitable, and we just 

have to decide the terms under which we want to do it? 

Is there anyone that sees that as somehow not something that 

if we don’t deal with it now, we are going to deal with it in all likelihood in the future? 

I guess I will go the grand State of Texas. 

Mr. PETERMAN. Thanks. I would like to say, you know, maybe 

that is right. I think one of the important things in first-to-file, 

though, is that we maintain protection rights which I believe this 

bill does for first-user and first-to-market in terms of prior art, but 

we wouldn’t want to see that go away in terms of a first-to-file system. 

Mr. ISSA. Okay, I appreciate that. 

Last, the last in my time: The Georgia Pacific, 15 points of tests 

that have historically led to a big factor in determining the importance of a patent, et cetera, the damages, in your opinion, if we are 

able to capture that accurately as uniform guidance to the courts, 

is that a meaningful goal when we are trying to—and I will use 

the word one more time—‘‘finesse’’ the differences in opinions on 

this issue? 

Can I get somebody that hasn’t answered? 

Mr. THOMAS. Mr. Issa, I believe that the case law and empirical 

evidence show that courts are having a very difficult time reliably 

measuring damages in apportionment situations. And because, 

both theoretically and practically, the patents damage system 

should be based upon the market measure of damages, I believe it 

is a reform very much worth pursuing. 

Mr. ISSA. And then, as to Georgia Pacific, as to that standard, 

that is the standard most are trying to come to, right? 

Mr. THOMAS. Yes, I think Georgia Pacific has, one of those 15 

factors has reflected that concern——

Mr. ISSA. The 13? 

Mr. THOMAS. Yes, the 13th factor reflects the concern that courts 

are encountering today. 

Mr. ISSA. Thank you, Mr. Chairman. I hope for a second round. 

Yield back. 

Mr. BERMAN. The gentleman from Georgia, Mr. Johnson. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Mr. Peterman, we have heard from the other witnesses that a 

postgrant review process with a second window would be harmful. 

And you state in your testimony that such a second window is essential. Why is it essential for Dell? 

Mr. PETERMAN. Sir, for a postgrant opposition proceeding to be 

helpful just having it be within, say, the first year after a patent 

grant, if there are too many patents, it is not possible to really oppose all the patents. 

126

The other thing I would like to highlight is, there are situations 

where the way a patent comes out of the patent office, if we were 

to look at it that day, it wouldn’t look like one that would ever be 

an issue for us. And then, maybe later, maybe 6 years later or further down the line in the life of the patent, something changes and/

or—and now, today, what is happening is, sometimes litigants will 

get a hold of these patents and look at them creatively. 

We have an example—and I don’t want to say too much about 

this case because it is still pending—but we have a situation where 

there is a patent that has been asserted against us for any Internet 

transaction that crosses an international border. As we looked at 

the patent when we were sued, if we had had this short postgrant 

opposition period, we wouldn’t have opposed the patent, because it 

didn’t look like anything we did. Yet this patent later was asserted 

against us. 

I think in situations like that, where the patent is asserted later 

and it is not something you could have thought of opposing in that 

first period, I think we all believe there needs to be that second 

window for challenging the patent or, otherwise, the postgrant procedure is not that helpful. 

Mr. JOHNSON. Let me ask Mr. Griswold, are there any industries 

where it would be appropriate to have more than a 12-month period? 

Are there any industries that you——

Mr. GRISWOLD. The problem with a second window, as we talk 

is, it gives just another opportunity for a patent to be attacked, 

which is a major, major concern. So you can wind up with—I gave 

some examples on reexamination, how it was used serially, inappropriately in our opinion. 

And so I think, generally speaking, it is not good to have a patent owner be subjected to a continuous attack. 

Mr. JOHNSON. Generally speaking, there may be some instances 

where there should be more than a 12-month window of opportunity? 

Mr. GRISWOLD. I wouldn’t say that. I would say that if—as I 

mentioned before, there may be, if you integrated all of the reexamine and postgrant into one process and then put a lot of limits on 

it, it may be possible to come up with a system that would approach something that would give the patent owners some peace in 

the valley while giving another opportunity. 

Mr. JOHNSON. I notice that Dell’s position on patent reform is 

supported by a broad array of industries, including media companies that own movie studios and publishing, financial service companies, and energy companies and farmers. 

What brings all of these diverse industries together on the patent 

issue? 

Mr. Peterman. 

Mr. PETERMAN. I would say it is the two things we believe this 

bill addresses. And one is that all these industries are seeing problems with quality patents, and we believe the bill goes a long way 

to helping us have more quality patents. 

I think the other is that all these industries are seeing problems 

with speculative patent litigation, litigation just for the sake of litiVerDate 0ct 09 2002 15:57 Apr 09, 2008 Jkt 000000 PO 00000 Frm 00130 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\042607\34929.000 HJUD1 PsN: DOUGA
127

gation. And we believe this bill does a lot to help with that problem 

as well. 

Mr. JOHNSON. Mr. Griswold, why shouldn’t the Patent and 

Trademark Office, which, quite frankly, has the best expertise in 

both law and technology, in that area where they examine these 

processes, why shouldn’t they be given broad rule-making authority 

over patent matters? 

Mr. GRISWOLD. Well, the concern is—as I was mentioning earlier, 

was the concern with setting standards on what is or is not patentable, basically getting into what you can patent or not patent. 

Rules like that we are real concerned with, because we will not 

have the opportunity for this kind of debate, and eventually they 

can directional process to decide whether or not that is the best direction. 

There are, as was pointed out by Professor Thomas, some hearings and things like that. But it is not the same process. At the 

end of the day, they decide and it is not a vote of over 400 people 

to make this decision, so that is a concern. And they have—and 

they carry a lot of weight if they have substantive rule-making authority. 

Mr. JOHNSON. All right. But now the fact that you have got a 

435-person Congress to vote on these, I guess you could say micro 

issues versus a Federal agency that deals in this area of the law 

day in, day out, 24/7. 

But you would hold that it would be better for the entire legislature to make those kinds of decisions? 

Mr. GRISWOLD. The kind of rules we are talking about, they really have substantial impact on the basic rules around rice. We believe that is correct. 

Mr. JOHNSON. Doesn’t the Administrative Procedure Act enable 

you to be able to challenge the rule-making authority or the rulemaking of the agency? Wouldn’t that be sufficient? 

Mr. GRISWOLD. I don’t think it would be sufficient, but I will say 

that I am not an expert in that area of the law, the Administrative 

Procedure Act. 

But I don’t believe so. I think we have to force the kind of debate 

like we are having here. And I think Chairman Berman is doing 

a good job of forcing that kind of debate, as we speak. 

Mr. BERMAN. He would like not to do it every month for the rest 

of his congressional life. 

The gentleman from Virginia, Mr. Goodlatte. 

Mr. GOODLATTE. Thank you, Mr. Chairman. And thank you for 

holding this hearing and for introducing this legislation, which I 

am pleased to cosponsor and glad to see you are forcing this debate. I think it is a good thing. 

And I might focus in again on the second window. That seemed 

to be—since the courts took care of, for the most part, the injunctive issue that held us all up last year, second window seems to be 

the number one issue that we are all looking at at this time. 

And, Mr. Peterman, if I might just characterize—and correct me 

if I’m wrong—the difference between you and Mr. Griswold is in 

the companies that you are working for. Dell manufactures and 

sells products that contain many different patents, many of which 

I assume you license from other people; and when you put that 

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product on the market, you don’t know whether there is a challenge to any of what could be hundreds of patents in a particular 

product that you are offering. 

And Mr. Griswold, 3M manufactures—is that your company, 3M? 

Mr. GRISWOLD. Yes. 

Mr. GOODLATTE. You are a major company that invents and has 

a long history of inventing a lot of innovative products, and often 

manufactures the same products that you invent. And they often 

do not contain hundreds of patents, but a more limited number. 

And your concern in moving forward here is that when you develop 

a product and put it on the market, you want to make sure you 

have the ability to protect it, enforce it all the way through. And 

the less often you have to do that, the better off you are. 

So, Mr. Peterman, let me—if I have characterized that correctly, 

Mr. Griswold—let me ask you to tell us how you would address Mr. 

Griswold’s concerns that you face, moving forward. What do you 

say to him in terms of the problems that he has presented to us? 

And I am going to do the same thing to you, Mr. Griswold, with 

his problem. 

Mr. PETERMAN. Yes. I would say—and it is our position that if 

we are going to have—I have said this, if we are going to have 

postgrant, we don’t see that it makes sense to stop it at a year, 

that it ought to be the life of the—there ought to be a second window. 

I guess my response is that there are already several procedures 

that put a patent at risk or, you know, avoid quiet title during the 

life of the patent—the reexamine process, which they have talked 

about, the fact that any time you assert in litigation it is open to 

a validity challenge. 

I think where we struggle is understanding how this postgrant 

procedure is so different from the existing reexam——

Mr. GOODLATTE. What is the issue with preponderance of the evidence with—this new second window that has been proposed uses 

a preponderance of the evidence standard; and you are in favor of 

that standard, is that correct? 

Mr. PETERMAN. We are in favor of that standard, and certainly 

the difference is that, currently, in patent litigation, the standard 

for proving invalidity is clear and convincing. That is certainly a 

difference. 

Preponderance is a lower——

Mr. GOODLATTE. Why do you favor that difference? 

Mr. PETERMAN. We believe in challenging a patent. And typically 

this would be a challenge over something that wasn’t fully considered, or considered at all, by the patent office, that there shouldn’t 

be a presumption of validity in that case. 

Mr. GOODLATTE. Do you have any words of comfort for Mr. Griswold? 

Mr. PETERMAN. I am not sure that I do, unless I have said them 

already. 

Mr. GOODLATTE. Let’s see if he can do a better job for you. 

Mr. Griswold, first of all, where are you on this preponderanceof-the-evidence issue? And secondly, how would you solve their 

problems since you don’t like the solutions in the bill? 

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Mr. GRISWOLD. Actually, we share some—and we have some software businesses, so you characterized us, maybe, not quite the way 

we are. 

Mr. GOODLATTE. But you have at least part of a foot in one camp 

and part of it in the other. 

Mr. GRISWOLD. Not only us, but remember I am here for the Coalition of 21st Century Patent Reform, which is 42 companies that 

all over the place, diverse companies from every industry. And our 

company is a very diversified technology company. 

So let me address a couple of your questions. The first one is relative to clear-and-convincing versus preponderance. 

If you want people to come into a first window and go after a patent to weed it out early on, if you have a preponderance of the evidence, later on, they are not going to do that. So if you are going 

to drive them to a first window, you need to have a clear-and-convincing standard. Otherwise, they are better off going to the patent 

office at a lower standard than district court. So that is one piece 

of the equation. 

Another thing that I would say relative to Peterman’s business, 

or Dell’s business versus ours and how we operate, we have historically been comfortable with clearing our products no matter what 

they—no matter what is in them. We clear products before we put 

them on the market. 

We also file oppositions against patents in other countries. We 

also look at patents to see what they might cover versus what they 

say they do cover. And we take all that into account. And that is 

the kind of—that is the way we operate. 

I can’t give him comfort that he should do that. But I can tell 

you that is how we operate relative to our overall businesses, no 

matter what industry we are in. And I have discussed this kind of 

issue with the rest of the people—some of them; not everybody 

here, of course, but a number of the companies—and that is the 

process they use. 

So they would be trying to weed out patents early on in their life 

during the first window. They would also be clearing their products 

to make sure they didn’t have problems before they put them on 

the market. 

Mr. GOODLATTE. And do you think that is as easy to do when you 

have a product that has hundreds of licensed patents involved, as 

opposed to one that has fewer? Do you have very many products 

on the market that contain hundreds of patents? 

Mr. GRISWOLD. We have products that have many—we have tens 

of patents, hundreds of patents; I have to go down the list. Probably if you talk to a lot of people, we do, but we have very complicated——

Mr. GOODLATTE. Do you have greater difficulty clearing those 

than you do one that just has a few patents attached to it? 

Mr. GRISWOLD. It is more of a challenge if you have a more complex product or that could implicate a number of different types of 

patents. But we do it anyway. 

Mr. GOODLATTE. Thank you, Mr. Chairman. And I apologize to 

the other two gentlemen for leaving you out of that discussion, 

but——

Mr. BERMAN. I thank the gentleman. 

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The gentlelady from Texas. 

Ms. JACKSON LEE. Thank you very much. 

I will take a moment and pause to reflect upon what I hope will 

be a continued discussion. I hope the Chairman will hold additional 

hearings. I think in order for us to get our hands around the many, 

many issues, and frankly, to create a legislative document that answers the Chairman’s questions and many of our own—even 

though I think we have a very good vehicle to operate from, I am 

pleased to have been able to join Chairman Berman on this 

thoughtful journey including the legislation that is partly underlying this particular hearing. 

But probably representing many innovative countries—companies, rather, in Houston and claiming Dell, I am interested in making sure that this is the kind of vehicle that does what we would 

like it to do and continues to put America at the cutting edge of 

invention and technology. 

This past week we passed legislative initiatives dealing with 

teaching math and science and engineering, providing scholarships, 

getting people back into the creativity that creates work. 

I am going to start with you, Professor Griswold, because it is 

interesting that I am an original cosponsor of this legislation, and 

I am pleased to be so. But as my good friend from North Carolina 

said, there are a lot of us who are like apples and oranges on this 

bill. And when I hear some of the commentary about stymieing—

stymieing litigation, closing the courthouse door, you sort of raised 

the hairs on back of my neck. I happen to believe in the opportunity of the small guy to get in the door. 

But at the same time I think what we are trying to accomplish 

is to ensure some safeguards so that innovativeness and the inventiveness that creates the churning of the economy and jobs and 

prominence for this economic aspect of this country goes fairly 

smoothly. So I want to try to explore this issue of the unlimited 

time period for filing postgrant proceedings, because I assume what 

that means for some is that the door is not closed on what they 

have been awarded. 

Professor Griswold, what does that mean, and what is the basis, 

if I am correct, of your opposition? What does that mean to the 

smaller entity that maybe does not have a period of closure around 

the grant that they have received. 

Mr. GRISWOLD. Excuse me. So your question relates to a small 

entity who is a patent owner and what will happen. Well, what 

happens is that this will give—a second window would give the 

people that want to take on the validity of that patent, or challenge 

the validity of that patent, another opportunity to attack the patent. And so there would be another opportunity—another situation 

where that small business would have to defend itself in the Patent 

and Trademark Office. 

Ms. JACKSON LEE. How would you fix that? 

Mr. GRISWOLD. Well, our fix is to have a single window so that 

you have one chance right after the patent issues and that is when 

we do the weeding process with the postgrant opposition system. 

There would still be the reexamination opportunities, both ex parte 

as well as inter partes reexamination that would still be available 

for people to attack the individual, the small business patents. 

131

They exist today. Frankly, under this bill, they would be more 

available. I know parties would be more available, because of the 

estoppel would be less onerous. 

Ms. JACKSON LEE. Thank you, Mr. Tucker. 

How does this bill impact university inventors and scientists? 

You obviously are doing a lot of research in the pharmaceutical industry. What does this bill do in its overall perspective? 

Mr. TUCKER. I think for us the biggest change that this bill 

brings into place is the change from first-to-invent to first-inventorto-file. And for us that is the biggest issue that we really face from 

a practical standpoint. Our open academic environment has—as I 

said, the pressure to publish is intense. So faculty members are out 

there talking about their inventions. They are publishing their inventions. It is the way they get recognition. It is the way they get 

more grants. 

You know, as a practical matter, they don’t all come up to the 

technology transfer office in their university before they go out 

there and describe their next fabulous invention. And we have to—

you know, in the current system, we are able to seek patent protection for that disclosure because we have that 1-year grace period 

after the filing. 

Ms. JACKSON LEE. So would you go back to the present system 

or would you see a fix in the present bill? 

Mr. TUCKER. We are not formally opposed to the change, and we 

respect the Committee’s and the drafters’ attempt to create this 

grace language. We don’t—we are still analyzing the grace language, and we would like to be able to work with the Committee 

to get grace language that gives us the protections that we have 

today in the first-to-invent system. So, you know, it depends how 

that grace language looks. It depends on the stance the University 

of California would take. 

And we know, and the Chairman has pointed out, we are perhaps more aggressive on this matter than some of our other colleagues. We have been involved in the patenting and licensing of 

technology for a very long time. So our opinion is colored by our 

experiences, and so that is it. 

Ms. JACKSON LEE. Well, let me if I might, Mr. Chairman, ask a 

question to Mr. Peterman. I know my time has elapsed. Could I 

ask an additional 1 minute? 

Mr. Peterman, first of all, welcome; and we proudly say welcome 

to a wonderful civic and corporate friend of Texas and obviously 

our neighbor. 

Let me add my same deep sympathy to the loss of Thurman and 

to his family for what he has represented to many of us on promoting diversity but also promoting technology. 

And I have had the opportunity to visit Dell. At the same time, 

I know that Michael Dell could be considered an inventor. We all 

start somewhere. I still hear the legions of tales, if you will, tall 

tales or short tales, about Bill Gates at Harvard; and I think every 

Harvard student and every other student thinks they are on the 

verge of doing the same thing as probably Bill and Michael did at 

one time. 

You are now a big company and you have indicated that this legislation, as many of us wanted to consider, restores a balance in 

132

the litigation and a balance between defendants and plaintiffs and 

it limits the punitive damages. But why don’t you try to project 

yourself and answer the question, do you think it damages too 

much, not renders damages, that innovativeness that is important, 

and how do you see that the bill balances your concerns as a large 

company and the concerns of what had to be the beginnings of your 

company? 

Mr. PETERMAN. Thank you. 

First, I would like to thank you for your condolences and also Mr. 

Watts. We really appreciate that. 

I think that it is our view that this bill strikes the right balance, 

that it establishes a more fair process. I mean—and I guess the 

damages issue is the one we have talk about the most. We certainly do not intend to take away anybody’s access to the courts or 

take away their right to a decision on the merits and adjust rewards for their patents. 

I think that the changes in this bill will not impact somebody 

like Mr. Dell in the way he started his business. I think that it will 

actually in some ways help that innovation. It will clear up any 

chances or help some of the chances that those small companies if 

they are attacked on patents can defend them properly and that if 

there are damages that the damages are appropriate. 

Ms. JACKSON LEE. Thank you, Mr. Chairman. I just want to 

thank you, and I hope as you continue—and I apologize for having 

to leave—that we will possibly be able to have another hearing and 

we might be able to listen to inventors—and I know there may be 

some here—but inventors who will be, from whatever range, be impacted by the legislation. I think we are on the right direction, 

going in the right direction, and I think look forward to going to 

a good legislative initiative. 

I yield back. 

Mr. BERMAN. Thank you. That could be requested. It conflicts 

with a good night’s sleep, but certainly we are going to discuss collaboratively what more we need to do. 

I have a couple questions. But let me just say initially, Mr. Tucker, I appreciated your comments in response to the gentlelady from 

Texas’ question. Because if we start focusing on what the grace period protects and what it needs to protect, perhaps there is some 

useful language—a look at this that can deal with the university’s 

problem in this area, and not particularly right now but between 

now and the signing ceremony, we should——

Mr. TUCKER. Well, yeah, Mr. Chairman, we are committed to 

work with you and the Committee on crafting language; and my esteemed colleagues in the room here, my attorneys, et cetera, are 

looking at how best to look at the language that is in the bill and 

how we might be able to work with you on getting something that 

supports university innovation. 

Mr. BERMAN. And just to my questions, Professor Thomas, you 

wrote a paper that I referenced earlier which—part of why I actually finished it was because it was well written—I almost understood it—and had wonderful examples. 

Now, take Mr. Griswold’s example, the Post-It. You had paper, 

and you had adhesives, and they just combined these two items 

which were both prior art and patented something. Now they are 

133

in court against someone who has infringed that patent, and the 

defendant says paper, adhesive—they get a little bit for the idea 

of thinking of sticking the adhesive on the paper. But how would 

you address that in terms of them getting some value for an idea 

that I happen to like a lot? I use them all the time. 

Mr. THOMAS. Well, I have observed that Mr. Griswold is more 

than capable of defending himself and would probably be able to 

do so in a courtroom. 

Mr. BERMAN. What would he say, though? Because he apparently 

thinks under our apportionment language he is out of the ballpark, 

right? 

Mr. GRISWOLD. Right. 

Mr. THOMAS. I would respectfully agree with Mr. Griswold. 

Mr. BERMAN. Be his lawyer for a second. 

Mr. THOMAS. I would certainly argue that it is the synergy of 

those two ingredients placed together. Obviously, there were paper 

clips, there were glues that would attach paper to objects. But they 

would have a fixed attachment, not a removable attachment, as 

patent lawyers who draft claims like to say. So that is not a feature 

presented by the prior art and not in that combination. 

I believe the bill language as it exists is flexible enough to account for both situations, situations where there is one patented invention that is part of a larger system, that has other unrelated 

components. On the other hand, inventions that rely really on that 

combination—the example I give in my paper is a combination 

therapy for the pharmaceutical industry, claiming that should not 

be apportioned because it is the aggregation of those two medicines. 

Mr. BERMAN. That produces the cure. 

Mr. THOMAS. That is correct. 

Similarly, it is the aggregation of the paper and that particular 

adhesion that produces. 

So I agree with you and with Mr. Griswold. Those are situations 

where apportionment would not be appropriate. And I also find 

nothing in the language of this bill that actually says you must 

subtract everything that existed in the prior art and leaving essentially no damages for any of that to work. 

Mr. BERMAN. I would like to say case matter over, but you sound 

like you want rebuttal time. 

Mr. GRISWOLD. Well, I don’t think that is the way our opponents 

would say somehow in this language. I think what they would say, 

they would go to that language and the provision that says ‘‘shall 

exclude what is in the prior art,’’ and they would exclude my piece 

of paper and my releasable adhesive. So that leaves us with nothing. 

So I am happy to hear Professor Thomas—and, Professor, I will 

call you Professor—Professor Thomas say that there should be no 

apportionment in that situation, but I don’t think it is clear at all 

that that would be the outcome if you had a bill and a piece of legislation like this, no way. 

Mr. BERMAN. Well, now that issue is framed, isn’t it? We just 

have to look at that language. 

134

Mr. GRISWOLD. Yeah. And what I would say, that is exactly 

right, Mr. Chairman, and that is what we should do if we are going 

to talk about damages legislation and look at the language. 

Mr. BERMAN. All right. This may not be the perfect place to get 

terribly more detailed in dissecting the language. 

So let me go to another question, to Mr. Griswold. National Academy of Sciences says—first, you accept our new postgrant within 

the certain number of days after the issuance of the patent, and 

you say you actually think it might be helpful in strengthening patent quality, right? It is the second window that is the focus of your 

concern. 

Mr. GRISWOLD. Conceptually, a postgrant opposition system that 

had a single window right after grant, that had a very carefully 

laid out process, including limitations on discovery and all those 

things, would be a system that we have supported, yes. 

Mr. BERMAN. All right. ‘‘like’’ is too strong a word. 

Mr. GRISWOLD. Okay. Well, we have to define ‘‘like,’’ because we 

have to be cautious. 

Mr. BERMAN. All right. Ah, yes. You don’t concede much in these 

exchanges. 

What about a second window that would only be triggered—or 

maybe we would call it a second trigger—where an infringement 

case is brought and the district court has the ability, if the validity 

of the patent becomes an issue, to refer back to this existing 

postgrant procedure as a quicker, cheaper more efficient way of determining validity? 

Mr. GRISWOLD. The way the——

Mr. BERMAN. As sort of like the National Academy of Sciences report recommended. 

Mr. GRISWOLD. Yeah. I don’t think that actually that works that 

well for this reason, at least the way it is laid out in this bill, because of the openness of the discovery. It is cheaper and quicker 

in some courts that were referred to in previous dialogue, are as 

fast or fast as this postgrant procedure we are talking about. You 

can get to trial, you can get a judgment as fast as you could in 

postgrant. So that is one piece. 

Another thing is——

Mr. BERMAN. What is the open review proceeding that the National Academy of Sciences made reference to in making this recommendation? 

Mr. GRISWOLD. Yeah. They were focused on——

Mr. BERMAN. They didn’t say it was just the existing reexamine 

procedure? 

Mr. GRISWOLD. No. They were talking about a——

Mr. BERMAN. More robust. 

Mr. GRISWOLD. They were talking about a more robust. I don’t 

know the metes and bounds of robust, but our view is that in your 

hypothetical, for example, that you would have a whole bunch of 

issues that come up, one—with this proposal, for example, you 

have preponderance of the evidence is a standard. That is a different standard than is used in the district court. So people would 

go—may want to go to the patent office because they have a lower 

standard on validity. 

135

Mr. ISSA. Would the Chairman enter into a colloquy on that 

point? 

Mr. BERMAN. Scary thought, but——

Mr. ISSA. Mr. Chairman, this is the first you brought that idea 

up; and, to continue my earlier statements, I think it is brilliant. 

I think it hits on exactly the point many of us have been wrestling 

with, which is if we eliminate the second window except as to certain circumstances—and I might add that your concept with the caveat that a first window never was opened would clearly allow one 

window in that first year unless at a later date, as Dell was speaking, Mr. Peterman was saying, unless later on, 10 years later, 

somebody asserts a patent has never gone through a postgrant. 

Your way of finessing it may make this new right more palatable 

to everybody, since one of my concerns is this is a new tool and how 

big do you have to make a new tool that never existed in American 

law before? But I think it is brilliant, Mr. Chairman. 

Mr. BERMAN. Well, in order to avoid any problems of inequitable 

conduct, I should say there was prior art on that ingenious idea. 

But if you are talking about patents already issued—boy, we are 

changing procedures here, aren’t we? If we are talking about patents already issued, should the guy have to wait until he is sued 

to get that review? 

I was more thinking of this—the issue of already issued patents 

that were never tested is one group of things. But the notion of the 

referral by the Federal judge in an infringement case on the validity issue—I guess it is worth more thought. 

Mr. ISSA. Thank you, Mr. Chairman. 

Mr. BERMAN. Thank you for opening up the issue. 

All right, my friend from North Carolina. 

Mr. COBLE. Thank you, Mr. Chairman. 

I think it has been a productive hearing, and I have just one 

question. My friend, Mr. Griswold, mentioned peace in the valley; 

and hopefully at the end of this exercise—not today of course, Mr. 

Berman—we will all realize at least some fragment of peace in the 

valley. And I want to ask a question just for my edification, admitting that I don’t know. 

The Eastern District of Texas was mentioned earlier, and I think 

that district is popularly known as a rocket docket district, so 

named because of the accelerated pace by which patent cases flow 

or move along very quickly. And it was mentioned earlier that this 

is not the only rocket docket district. How many rocket docket districts are there? Mr. Griswold? 

Mr. GRISWOLD. I can’t say with certainty how many, but there 

are a couple of others that people would indicate are rocket dockets. Perhaps Professor Thomas may have studied this more than I 

have, would say so, but I know there are at least two more besides 

Texas that are rapid. 

Mr. COBLE. Are you comfortable in identifying them, Mr. Griswold? 

Mr. GRISWOLD. Well, somebody said Minnesota. 

Mr. COBLE. I heard that earlier. 

Mr. GRISWOLD. But it is not Minnesota. But that is what happens with people from Texas sometimes. 

Mr. COBLE. Okay. 

136

Mr. GRISWOLD. They confuse people from Minnesota with people 

from Wisconsin. And what happens is—I really confuse people because I work in Minnesota, but I live in Wisconsin, and that rocket 

docket we are talking about is in Wisconsin. 

Mr. BERMAN. Now that I know Dell is in Houston and Minnesota 

is in Wisconsin. 

Mr. GRISWOLD. Yes. That is more than the other—the other—by 

the way, we have one of our headquarters in Texas. So everybody 

who was giving all the accolades to Texas, we have a southern 

headquarters in Texas. So thank you for not mentioning that. But 

we appreciate—well, we like being in Texas, too. But, anyway, the 

other one would be Virginia. 

Mr. COBLE. Which district? 

Mr. GRISWOLD. The Eastern District of Virginia. 

Mr. COBLE. I am asking just for my information. 

Mr. GRISWOLD. These guys may have more on that. 

Mr. COBLE. Anybody know any additional information on this? I 

am asking just for my own information. 

Mr. Chairman, thank you for a good hearing. Thank you all for 

being with us. 

Mr. BERMAN. Thank you all, Mr. Coble. Some of us think it is 

not only a rocket docket but that the rocket only points one way. 

Mr. Issa. 

Mr. ISSA. Thank you, Mr. Chairman. And I know Judge Ellis will 

be happy that you did get to the Eastern District of Virginia. He 

is very proud of the work they have done there, and their rocket 

points many ways—they believe always the right way—as to the 

successful and appropriate decisions. 

Mr. Chairman, I would like to ask unanimous consent the statement from the California Health Care Institute be included in the 

record in its entirety. 

Mr. BERMAN. Sure. It is included. 

Mr. ISSA. Thank you. 

Mr. BERMAN. Assuming it is about patent reform. 

Mr. ISSA. Don’t we have need for extraneous? 

Yes, it is their statement to the Committee relevant to today’s 

hearing. 

[The information referred to follows:]

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PREPARED STATEMENT OF THE CALIFORNIA HEALTHCARE INSTITUTE, SUBMITTED BY

THE HONORABLE DARRELL ISSA, A REPRESENTATIVE IN CONGRESS FROM THE STATE

OF CALIFORNIA, AND MEMBER, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY


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Mr. ISSA. Could you restart my time now? 

Mr. Peterman, I think that you can see that the Chairman has 

been thinking and trying to find ways to make this work. I don’t 

want this hearing to be all about postgrant, but wouldn’t you agree 

that postgrant by definition—because we are not eliminating reexamination as it currently existed in this bill. Postgrant is a new 

right by those who want to reduce or eliminate claims of a patent 

that does not exist in law today. 

Mr. PETERSON. Yes, that is true. 

Mr. ISSA. And if it is a new—by the way, you do really well if 

you just make short quick answers, because then I look like I knew 

what I was asking. But if you add a new right and you are up here 

on the dais and you want to do no harm, isn’t it reasonable that 

one of the goals we have—and you can see the Chairman struggling for it—is to make sure that right is narrow enough or small 

enough that if it fails or it doesn’t accomplish what we want, we 

haven’t been too expansive? 

And isn’t that one of the reasons that, on one hand, you want to 

deal with 10 years down the road when some guy who had a patent 

that didn’t look at all like what you are doing asserts it, you want 

to have this capability, but you don’t want to simply throw mountains of paperwork at every new patent simply for the sake of trying to protect your rights. Is that about where I see Dell’s position? 

Mr. PETERSON. Yeah, I think that is true. I think, actually, it is 

one concern that we have that, if we only have a short window, 

that it would only be used to throw mounds of paper at patents and 

it wouldn’t really be that helpful. 

Mr. ISSA. So if we assume for a moment that Mr. Griswold takes 

advantage of company Lee 1 year for postgrant and if you would 

be barred from later bringing it, we are not going to give you a second window, if there is a first window used in the first year, that 

you would then be a little more willing to look at the details of ones 

that seemed extraneous and take advantage of that. In other 

words, would you be more comfortable than you presently are if 

you were eclipsed once there was a postgrant? 

But if nobody submitted a postgrant, it was never published, 

your patent counsels didn’t say, here is the 175 for this month that 

are up here to look at and we are going to go over them, would you 

be comfortable if that was the only universe you had to worry 

about? Such that the unproven, untested patent by the inventor 

who just did it because he had an idea, Abe Lincoln sounding a little bit that way since he never made the product, would you be 

comfortable instead of looking at a hundred thousand you are only 

looking at 175 that are up for postgrant, that is that middle ground 

that your company in the abstract would be more comfortable with? 

Mr. PETERSON. I think I will first say that I think we are hoping 

and looking at any proposals, and I don’t want to foreclose anything. 

Mr. ISSA. But look at mine most favorably, please. 

Mr. PETERSON. We will certainly do that. 

I am not sure—I am sorry. I am not sure I understand the proposal. But I think what you are saying is that there will be sort 

of a rolling window of the patents that are sort of up in the first 

grant. 

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Mr. ISSA. Well, basically, we are only talking for a moment about 

new patents being granted tomorrow. Tenthousand new patents 

are granted tomorrow. Mr. Griswold would like to have one shot 

and then quiet title. You would like to have a shot 10 years from 

now when it is asserted against you. If I see the middle ground to 

be discussed in this legislation, there is only one shot, but if it is 

not asserted in that first year, then the patent is then asserted 10 

years later, it triggers that window. If it is——

And, conversely, if it is triggered, even if it is triggered to be honest by 3M, they have a patent and they go ahead and throw it into 

the postgrant themselves with some information that was sent to 

them by somebody, then you are on constructive notice that you are 

not going to get a second window. Will you use this window? Does 

that give you a middle ground where your company would not be 

burdened by every patent, only those that were going through a 

postgrant? 

Mr. PETERSON. Yeah. I understand what you are saying. I think 

we would be concerned about that. 

I think one reason would be——

Mr. ISSA. But less concerned than you——

Mr. PETERSON. Well, I think one of the difficulties with this is 

that——

Mr. ISSA. Can I make you less unhappy, is what I am asking. 

Mr. PETERSON. I guess it concerns me that one party could trigger this opposition and might foreclose challenge later by all parties. And if that party doesn’t do a good job or doesn’t put its full 

effort into it, perhaps it is too much of an advantage for the patent 

holder. 

Mr. BERMAN. Would the gentleman yield? 

Mr. ISSA. Of course, Mr. Chairman. 

Mr. BERMAN. But given the hypothetical you used where 3M or 

its agent could trigger that first window on its own in order to stop 

any future challenge, isn’t that a little bit like the presiding officer 

of the House after a bill that he or she supported has passed saying, and the motion for reconsideration is laid upon the table? In 

other words, stopping the ability to come back to that bill sometime 

in the future. Is that prone to a kind of setup which sort of undermines the—it allows sort of a fake opposition to—even where you 

are dealing with companies that are aware of what patents are 

being issued today? 

Mr. ISSA. You know, Mr. Chairman, I am very aware of that; and 

that was one of the challenges that we were both facing, both of 

us, in the last Congress. The concept being, though, that the vast 

majority of patents, many of them are the ones that really hook 

companies 10 years later. They are thrown out there. They really 

don’t want to notify the world that they are out there, and this is 

what they mean, and they don’t want it. So many patents would 

never get looked at as a result in a postgrant because companies—

it would be burdensome to go after all of them. 

Dell has put out a good point, which is what happens if it isn’t 

re-examined? I look and say—and if Amgen were still here, they 

would be the first to say, but, my goodness, you know, we can’t be 

hit five times. The idea of postgrant, as I understand it in your legVerDate 0ct 09 2002 15:57 Apr 09, 2008 Jkt 000000 PO 00000 Frm 00146 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\042607\34929.000 HJUD1 PsN: DOUGA
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islation, is once a postgrant is opened, it is not opened as to one 

party. Everybody gets to pile on. 

So the fair notice that there is a postgrant, and therefore, you 

look at it and you see if you have anything in your library of information would appear to be part of the process. 

And from my history of reexamination, that is what was wrong 

with reexamination in the current, is that it wasn’t open enough 

and people didn’t gather their information, and it is one of the reasons that sequential reexaminations occur, is that you can have 

five different companies each submit slightly different information 

over a period of time to the PTO. 

Mr. BERMAN. Professor Thomas, what do you think about this? 

Mr. THOMAS. I continue to prefer a symmetry of access to the 

patent office between the patentee and concerned members of the 

public. 

Many of the firms that are coming to you now and telling you 

that they will be severely disadvantaged if their patent instruments are changed or modified through an opposition process of 

course are the ones who are filing reissue applications at any time 

during the life of the patent, are filing any number of continuation 

applications which seems to have virtually no time limit and there 

is an infinite number apparently available. 

Now that latter situation might change. But, again, I think it is 

important to use the door analogy. To open the door to the patent 

provider itself throughout the entire term, it seems unjust to allow 

members of the public not to have the same access to the expertise 

of the patent office to the same term. In my opinion, the debate 

should not be whether we have a second window. The debate 

should be why are we having just a second window and not allowing the symmetry of access to members of the public throughout 

the entire life of the patent. 

Thank you. 

Mr. ISSA. Yeah. Mr. Chairman, the only question that brings up 

is, since your bill does not eliminate the reexamination process and 

even though I have said I would like to have us make it a little 

more robust, ultimately that is the public’s access for the life of the 

patent is the current PTO reexamination process. 

Mr. BERMAN. Well, since we are just talking among friends——

Mr. ISSA. Since we have asked unanimous consent, at least the 

votes on the dais. 

Mr. BERMAN. You are right, and we made the reexamine process 

a little better by getting rid of this estoppel. But should it be more 

robust?That is all we have done to make it better. The whole issue 

of gathering information, limited forms of discovery, other things 

like——

I mean, in a way, if we are trying to achieve the same goal, I 

am open to a lot of different ways of skinning the cat; and so I 

think we should take seriously what you are throwing out here as 

a more robust reexamine that could be used at any time. I mean—

yeah. 

Mr. ISSA. I look forward to working with this, Mr. Chairman. 

Mr. BERMAN. Anybody else? Mr. Coble, do you have more questions? 

144

Mr. COBLE. Mr. Chairman, I have a very belated request. Mr. 

Feeney, the distinguished gentleman from Florida, whose schedule 

precluded him to be here, wanted to ask unanimous consent to 

have his statement entered into the record. 

Mr. BERMAN. It will be included in the record. 

[The prepared statement of Mr. Feeney follows:]

PREPARED STATEMENT OF THE HONORABLE TOM FEENEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA, AND MEMBER, SUBCOMMITTEE ON COURTS, 

THE INTERNET, AND INTELLECTUAL PROPERTY


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Mr. BERMAN. I think we will close this. 

I just want to ask—it is the Chair’s intent to talk with the Subcommittee, apart from the substantive questions of what we go forward with, about whether there should be a second hearing, whether there should be some informal discussions, a working group 

thing with people, a little flexibility on what we might do. But, at 

this point, it is my notion to try and move to a mark-up mid-May, 

something like that; and I think the parties should think of that 

as the time frame for a mark-up, subject, of course, to the will of 

the Subcommittee. 

So if there is nothing else, then the hearing is adjourned. Thank 

you all very much. You really were a great help, I thought. 

[Whereupon, at 4:38 p.m., the Subcommittee was adjourned.] 

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