S. HRG. 111–202 

PATENT REFORM IN THE 111TH CONGRESS: 

LEGISLATION AND RECENT COURT DECISIONS 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

TUESDAY, MARCH 10, 2009 

Serial No. J–111–9 

Printed for the use of the Committee on the Judiciary 

( 

PATENT REFORM IN THE 111TH CONGRESS: LEGISLATION AND RECENT 

COURT DECISIONS 

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

54–059 PDF 2010

S. HRG. 111–202 

PATENT REFORM IN THE 111TH CONGRESS: 

LEGISLATION AND RECENT COURT DECISIONS 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

TUESDAY, MARCH 10, 2009 

Serial No. J–111–9 

Printed for the use of the Committee on the Judiciary 

( 

(II) 

COMMITTEE ON THE JUDICIARY 

PATRICK J. LEAHY, Vermont, Chairman 

HERB KOHL, Wisconsin 

DIANNE FEINSTEIN, California 

RUSSELL D. FEINGOLD, Wisconsin 

CHARLES E. SCHUMER, New York 

RICHARD J. DURBIN, Illinois 

BENJAMIN L. CARDIN, Maryland 

SHELDON WHITEHOUSE, Rhode Island 

RON WYDEN, Oregon 

AMY KLOBUCHAR, Minnesota 

EDWARD E. KAUFMAN, Delaware 

ARLEN SPECTER, Pennsylvania 

ORRIN G. HATCH, Utah 

CHARLES E. GRASSLEY, Iowa 

JON KYL, Arizona 

JEFF SESSIONS, Alabama 

LINDSEY O. GRAHAM, South Carolina 

JOHN CORNYN, Texas 

TOM COBURN, Oklahoma 

BRUCE A. COHEN, Chief Counsel and Staff Director 

NICHOLAS A. ROSSI, Republican Chief Counsel 

(III) 

C O N T E N T S 

STATEMENTS OF COMMITTEE MEMBERS 

Page 

Coburn, Hon. Tom, a U.S. Senator from the State of Oklahoma, prepared 

statement .............................................................................................................. 145 

Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah ............................ 3 

Leahy, Hon. Patrick, a U.S. Senator from the State of Vermont ........................ 1 

prepared statement .......................................................................................... 208 

Specter, Hon. Arlen, a U.S. Senator from the State of Pennsylvania ................. 2 

WITNESSES 

Appleton, Steven R., Chairman and CEO, Micron Technology, Inc., Boise 

Idaho ..................................................................................................................... 4 

Johnson, Philip S., Chief Intellectual Property Counsel, Johnson & Johnson, 

New Brunswick, New Jersey ............................................................................... 5 

Kappos, David J., vice President and Assistant General Counsel, Intellectual 

Property Law and Strategy, International Business Machines Corporation, 

Armonk, New York .............................................................................................. 7 

Lemley, Mark A., William H. Neukom Professor of Law, Stanford Law School, 

Stanford, California ............................................................................................. 13 

Maghame ́, Taraneh, vice President, Tessera, Inc., San Jose, California ............ 9 

Wamsley, Herbert C., Executive Director, Intellectual Property Owners Association, Washington, D.C. .................................................................................... 11 

QUESTIONS AND ANSWERS 

Responses of Stenen R. Appleton to questions submitted by Senators Feinstein, Hatch and Coburn ..................................................................................... 34 

Responses of Philip S. Johnson to questions submitted by Senators Feinstein, 

Hatch and Coburn ................................................................................................ 41 

Responses of David J. Kappos to questions submitted by Senators Feinstein, 

Coburn and Hatch ................................................................................................ 53 

Responses of Mark A. Lemley to questions submitted by Senators Feinstein, 

Hatch and Coburn ................................................................................................ 60 

Responses of Taraneh Maghame ́ to questions submitted by Senators Feinstein, Hatch and Coburn ..................................................................................... 65 

Responses of Herbert C. Wamsley to questions submitted by Senators Feinstein, Hatch and Coburn ..................................................................................... 79 

SUBMISSIONS FOR THE RECORD 

AARP, Consumer Federation of America, Consumers Union, Public Interest 

Research Group, Washington, D.C., letter ......................................................... 85 

Aetna Inc., Apotex Corporation, Generic Pharmaceutical Association Hospira 

Inc., Hospira Inc., Myland Pharmaceuticals, National Association of Chain 

Drug Stores, Teva Pharmaceuticals, Watson Pharmaceuticals, joint letter ... 86 

America’s Specialty Medicines Companies, W. Stephen Cannon, Attorney at 

Law, Constantine Cannon, Washington, D.C., letter ........................................ 87 

Appleton, Steven R., Chairman and CEO, Micron Technology, Inc., Boise 

Idaho, statement .................................................................................................. 89 

Biotechnology Industry Organization, Washington, D.C., statement .................. 98 

Blaxill, Mark and Ralph Eckardt, The Innovation Imperative, report ............... 113 

Computing Technology Industry Association (CompTIA), Oakbrook Terrace, 

Illinois, statement ................................................................................................ 147 

Page

IV 

Jaeger, Kathleen D., President & Chief Executive Officer, Generic Pharmaceutical Association, Arlington, Virginia, statement ......................................... 151 

Johnson, Philip S., Chief Intellectual Property Counsel, Johnson & Johnson, 

New Brunswick, New Jersey, statement and letter .......................................... 154 

Kappos, David J., vice President and Assistant General Counsel, Intellectual 

Property Law and Strategy, International Business Machines Corporation, 

Armonk, New York, statement ........................................................................... 156 

Kaufman, Hon. Ted, A U.S. Senator from the State of Delaware, statement .... 204 

Lemley, Mark A., William H. Neukom Professor of Law, Stanford Law School, 

Stanford, California, statement .......................................................................... 210 

Maghame ́, Taraneh, vice President, Tessera, Inc., San Jose, California, statement’s .................................................................................................................... 240 

National Association of Realtors, Washington, D.C., statement .......................... 263 

Nelsen, Robert T., Co-founder and Managing Director, ARCH Venture Partners, Chicago, Illinois, statement ....................................................................... 264 

Swierenga, Karl, Vice President, FotoTime, Inc., Dallas, Texas, statement ...... 267 

Patent and Trademark Office, Public Advisory Committee, Department of 

Commerce, report ................................................................................................. 269 

Wamsley, Herbert C., Executive Director, Intellectual Property Owners Association, Washington, D.C., statement ................................................................. 322 

Wisconsin Alumni Research Foundation (WARF), Carl Gulbrandsen, Managing Director, Madison, Wisconsin, letter and attachments .......................... 339 

(1) 

PATENT REFORM IN THE 111TH CONGRESS: 

LEGISLATION AND RECENT COURT DECISIONS 

TUESDAY, MARCH 10, 2009 

U.S. SENATE, 

COMMITTEE ON THE JUDICIARY, 

Washington, D.C. 

The Committee met, pursuant to notice, at 10:05 a.m., in room 

SD–226, Dirksen Senate Office Building, Hon. Patrick J. Leahy, 

Chairman of the Committee, presiding. 

Present: Senators Leahy, Feinstein, Cardin, Whitehouse, Klobuchar, Kaufman, Specter, Hatch, Kyl, and Coburn. 

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. 

SENATOR FROM THE STATE OF VERMONT 

Chairman LEAHY. Good morning. I am glad we are having this 

hearing because, as we all know, intellectual property is critical to 

our Nation’s economy. It drives our contemporary economy. It is 

certainly going to fuel the future. Industries that rely on intellectual property protection accounted for roughly half of all U.S. exports and represented an estimated 40 percent of U.S. economic 

growth in 2006. That was the last year in which our economy grew 

in all four quarters. Many of the jobs and expansion that can help 

us begin to recover from this economic recession are going to have 

their origin in the patent- and copyright-based industries. These 

range from computers and software programs, to new agriculture 

products, to our movies and our music. 

My own State is a significant exporter, and the majority of that 

is in intellectual property areas. Even without that, I would still 

be an ardent supporter of strong protection and enforcement of intellectual property rights. Last year, I led the bipartisan effort to 

pass the Prioritizing Resources and Organization for Intellectual 

Property Act to enforce laws against stealing America’s intellectual 

property. The Chamber of Commerce estimates that IP theft costs 

American companies $250 billion a year; it also costs our economy 

750,000 jobs. 

Several of us on this Committee are former prosecutors, and like 

my fellow former prosecutors, I know firsthand how important it is 

to have a full arsenal of legal tools to ensure that justice is done. 

In Vermont, Hubbardton Forge makes beautiful, trademarked 

lamps, sold all over the world. The Vermont Teddy Bear Company, 

like IBM, also relies heavily on intellectual property. SB Electronics needs patents for its film capacitor products. Burton’s 

2 

snowboards and logo are protected by trademarks and patents. 

Every State in the Nation has such companies, and every community in the United States is home to creative, inventive, and productive people. All Americans suffer when their intellectual property is stolen; they suffer when counterfeit goods displace sales of 

their legitimate products, and they suffer when counterfeit products actually harm them, as sometimes happens with fake pharmaceuticals or faulty electrical products. We saw it even with counterfeit brake pads on cars. 

We worked together with 21 Senate cosponsors, Republicans and 

Democrats, our House counterparts. We moved that bill from introduction in July to the President’s desk in October. It was probably 

about the fastest moving bill in the Congress last year. 

This year, we are working to make additional progress by modernizing the United States patent system. Last week, I joined with 

Senator Hatch and, in the House, Chairman Conyers and Mr. 

Smith to reintroduce the bipartisan, bicameral Patent Reform Act 

of 2009, S. 515. This Committee was able to report patent reform 

legislation in the last Congress, and the House passed a companion 

bill. I think this year we need to enact it to help our economy. 

It has been over 50 years since significant reforms were made to 

the Nation’s patent system, and today’s hearing is the eighth this 

Committee has held on patent reform since 2005. But we have seen 

a number of positive movements. Recent decisions by the United 

States Supreme Court and the Federal Circuit have moved the law 

in the direction of our legislation and reflect the growing sense that 

questionable patents are too easily obtained and are too difficult to 

challenge. Senator Specter has made constructive suggestions 

about a ‘‘gatekeeping’’ role for the court in damage calculations. 

There is much work to be done, but I am optimistic that if we continue to work together, we will find the right language. We may 

be closer to reaching consensus on language than ever before. 

The Patent Reform Act of 2009 promotes innovation and will improve our economy. We will work with the administration to help 

pull the economy out of the recession. But while you do that, it 

means that we in Congress have to do what we can. Certainly in 

the area of intellectual property, anything we can do of a positive 

nature helps. 

Senator Specter. 

STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM 

THE STATE OF PENNSYLVANIA 

Senator SPECTER. Thank you, Mr. Chairman, and I join you in 

welcoming this distinguished array of witnesses to help us shed 

some light on this very important subject. 

I congratulate Chairman Leahy and former Chairman Hatch on 

their leadership on this very important subject. The Chairman correctly notes the tremendous importance of intellectual property, innovation, a very important item on our balance of trade and on the 

productivity in the United States. And I do agree that it would be 

highly desirable to legislate in this field and to modernize the patent laws. 

We worked at it very hard last year and could not come to a conclusion essentially on the question of damages. There has been an 

3 

ongoing controversy, really summarized with the high-tech and entertainment industry arguing that the entire market value methodology is undesirable. There ought to be apportionment of damages, 

and traditional manufacturing and pharmaceuticals are in the 

other direction. 

We have a case that is now pending, as you all know, in the 

Court of Appeals for the Federal Circuit captioned Alcatel-Lucent 

v. Gateway, which is going to take up the scope of entire market 

value. We have been struggling with that difference of view, and 

it is of critical importance that whatever we do legislatively, we get 

it right. And if it takes a little more time, we are going to have 

to spend the time. 

Chairman Leahy and Senator Hatch and I spent a lot of time in 

his hideaway last year going over these matters, trying to find the 

magic words. And we did not find them. And in the absence of finding them, the conclusion was that we did not move ahead. 

If we make a mistake and create litigation for a protracted period of time, that is obviously undesirable. No one wants that to 

happen. So we are struggling with it, and we look to this panel, 

you six witnesses, to give us some special insights to show us 

which way to go. 

Thank you, Mr. Chairman. 

Chairman LEAHY. Thank you very much. 

Our first witness—unless, Orrin, you want to say anything. Go 

ahead. 

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 

THE STATE OF UTAH 

Senator HATCH. Well, thank you, Mr. Chairman and former 

Chairman Specter. I appreciate both of you, and I appreciate the 

leadership you have provided on this bill. 

You know, we have been working on patent reform now for three 

Congresses, and this is the Committee’s seventh hearing on patent 

reform. And I believe Senator Leahy and Senator Specter have covered the materials. I will not take any more time. 

I just am personally appreciative because I think we really do 

need to reform the patent laws, and we want to get it right, no 

question about it. And there are many, many different points of 

view on this. But I just want to tell you how much I have appreciated working with both of you on this, and others as well on the 

Committee. 

Thanks, Mr. Chairman. 

Chairman LEAHY. Well, I think that work demonstrates it is not 

a Republican or Democratic bill. We are going to have to do something. We cannot be in the 21st century with a 50-year-old system, 

and we will bring it up-to-date. 

Steve Appleton is the Chairman and CEO of Micron Technology. 

He joined Micro in 1983 and became Chairman and CEO in 1994. 

In addition to his work with Micron, Mr. Appleton serves on the 

Board of Directors for the Semiconductor Industry Association and 

National Semiconductor, Inc. He received his Bachelor’s degree as 

well as an honorary doctorate from Boise State University. 

Mr. Appleton, good to see you again. Thank you for being here. 

Go ahead. 

4 

STATEMENT OF STEVEN R. APPLETON, CHAIRMAN AND CEO, 

MICRON TECHNOLOGY, INC., BOISE, IDAHO 

Mr. APPLETON. Chairman Leahy, Ranking Member Specter, and 

members of the Committee, thank you for allowing me to testify 

today, and thank you, Senator Hatch, for the special invitation to 

appear. 

I am here today on behalf of Micron Technology and also on behalf of the Coalition for Patent Fairness. The coalition includes a 

broad range of companies and trade associations in various industries. Before I say anything else, I want to emphasize the need for 

patent reform is urgent, and we strongly support Senate bill 515. 

Let me begin by telling you a little bit about Micron. From a 

three-person startup in 1978, Micron has become one of the world’s 

largest and most innovative providers of advanced semiconductor 

memory solutions. We are a global company with headquarters in 

Boise, Idaho. In the U.S., we have large manufacturing facilities in 

Utah, Virginia, and Idaho, and design centers and sales offices 

throughout the country. Although there were at one time 11 major 

U.S. memory manufacturers, today Micron is the sole remaining 

company. 

Micron produces leading-edge memory chips, including D–RAM 

and NAM memory, as well as imaging chips that are used in almost every digital device in the world. In more recognizable terms, 

these products range from the jump drive to the memory card in 

your digital still camera, to the main memory in your computer, to 

the actual camera in your cell phone. 

As one of the most innovative companies in the world, Micron is 

a significant stakeholder in the patent system. Micron holds over 

18,000 U.S. patents, and independent studies have ranked our 

portfolio as one of the strongest. In fact, to give you a sense of our 

creative talent, of the top ten patent holders throughout the world 

that are still living—throughout the world that are still living— 

three of those inventors work at Micron. 

So to emphasize again, Micron is clearly in support of a strong 

patent system. But, unfortunately, the current patent system is 

now becoming a hindrance to innovation. Micron and other technology companies, regardless of size, are the victims of a growing 

wave of patent litigation. The reality is that the laws relating to 

patent enforcement have not kept up with the highly complex advances in technology that have emerged in the last couple of decades. Congress could not possibly have envisioned today’s high-tech 

products and systems when they last revised the Patent Act in the 

1950s. 

Technology products can be very complex. I am holding up a onegigabit memory chip that you can hardly probably see. It is about 

the size of my fingernail. On this chip we can store over 1 billion 

bits of information. There are thousands of patents that relate to 

this one memory device. 

Now, let’s use the BlackBerry or another smartphone, as another 

example. The BlackBerry has a memory chip similar to the one I 

showed. It also has a display, keyboard, software, a camera, and 

other significant chips. Each of these components and functions are 

covered by hundreds or thousands of patents. 

5 

The difficulty is that the current patent litigation system too easily allows damages to be assessed on the value of the whole product 

rather than the contribution of the patent. If we assume thousands 

of patents relate to this device, the resulting damages under current law would result in an amount that would exceed the total 

amount of revenue derived from the product. And to add insult to 

injury, nearly all of the patent claims brought against our technology companies are filed by plaintiffs who do not make or sell 

any of the products they are attacking, and in many cases, using 

patents they purchased from some third-party entity. We often 

refer to those companies as ‘‘patent trolls’’ or I think what is known 

as more politically correct, ‘‘non-practicing entities.’’ 

The increase in patent litigation costs are largely a result of the 

proliferation of the non-practicing entity business model. Balance 

needs to be restored by requiring that damages are based on the 

value of the investor’s contribution to the product. Although there 

are a number of other concerns with the current patent system, in 

consideration of time limitations I want to point out the impact it 

has on jobs. 

Our ability to innovate is being hindered more each day by these patent lawsuits. Last year alone, Micron spent over $30 million defending against unnecessary patent lawsuits. That amount could 

have been spent instead on nearly 450 well-paying jobs at our company. A study being released today by distinguished economist 

Everett Ehrlich shows that in the technology sector alone, 100,000 

jobs would be created over 5 years if Congress fixes the damages 

standard. If we do nothing, he concludes that our economy could 

lose as many as 150,000 jobs over the same period. 

The fact is our outdated patent system is slowing development 

of new products and services and the new jobs they would create. 

The longer we wait to address these widely acknowledged problems, the more we will drain the innovation potential of industry 

and deprive our economy of the resulting job creation and growth. 

It is time for Congress to pass the Patent Reform Act of 2009. 

Thank you. 

[The prepared statement of Mr. Appleton appears as a submission for the record.] 

Chairman LEAHY. Thank you very much. 

Our next witness is Philip Johnson. He is the Chief Intellectual 

Property Counsel for Johnson & Johnson. He advises top company 

management on patent matters related to its 200-plus operating 

companies worldwide. Is that correct, 200? 

Prior to joining Johnson & Johnson in 2000, Mr. Johnson spent 

27 years in private law practice, and he has testified both before 

the House and Senate Judiciary Committees on this issue. He received his Bachelor’s from Bucknell and his law degree from Harvard. 

Mr. Johnson, go ahead, please. 

STATEMENT OF PHILIP S. JOHNSON, CHIEF INTELLECTUAL 

PROPERTY COUNSEL, JOHNSON & JOHNSON, NEW BRUNSWICK, NEW JERSEY 

Mr. JOHNSON. Thank you, Chairman Leahy, Ranking Member 

Specter, and distinguished members of the Committee. I am apVerDate Nov 24 2008 09:14 Jan 06, 2010 Jkt 054059 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54059.TXT SJUD1 PsN: CMORC
6 

pearing here today on behalf of Johnson & Johnson and also the 

21st Century Coalition for Patent Reform, a coalition of nearly 50 

companies who are actively competing in 19 different industry sectors. 

We agree with the Committee and with you, Mr. Chairman, that 

patent reform is all about jobs. Within Johnson & Johnson, we conservatively estimate that the jobs of about 60,000 of our 118,000 

employees depend upon our patents. We estimate that over their 

20-year lives, each of our patents preserves and protects well over 

100 job-years. 

During the past 3 years, Johnson & Johnson companies have invested an average of $7.5 billion a year in R&D, or $15 million on 

average for each patent granted. These R&D expenditures resulted 

in well-paying jobs for thousands of people throughout the United 

States. 

We want to preserve and enhance the patent system’s incentives 

to invest heavily in R&D so we can keep these jobs and hopefully 

create many, many more. But to do so in this challenging economic 

environment, we need to make it clear to inventors and to investors 

alike that the promise of the patent system will be kept. They need 

to know it will protect the deserving inventions that come out of 

R&D and that the resulting U.S. patents will serve as a solid foundation upon which to build future businesses. To accomplish these 

goals, we need to strengthen, not weaken, the value of American 

patents. 

We can do this by improving the quality of the original patent 

examination so that the patents issued by our Patent Office are 

readily and reliably enforceable against those who do not respect 

them. This should be accomplished by harmonizing our patent system with the rest of the world and by giving our Patent Office a 

reliable source of adequate funding to get the job done right. S. 515 

goes a long way toward accomplishing these goals. 

But we should not stop there. A balance should be struck between the public’s interest in questioning a patent’s validity and 

the public’s desire to induce continued investment in the patented 

technology. A system that overly favors continuing third-party patent challenges destroys the quiet title that is needed to stimulate 

further investment. 

Our coalition believes that S. 515 comes close to striking the 

proper balance. It allows an initial period for post-grant opposition, 

followed by life-of-the-patent re-examinations. But contrary to how 

S. 515 is now written, our coalition believes that such re-examinations should be limited, as they are now in the current law, to 

questions based upon prior patents in printed publications. Allegations of prior use or sale are ill-suited for re-examination as patentees will not have the discovery and testimonial tools needed to 

fairly defend against such belatedly raised claims. 

When it comes to patent damages, it makes no sense to base reasonable royalty awards on less than all of the patented invention 

and less than the patentee has shown was infringed. During the 

original examination, opposition, re-examination, and then the validity and infringement phases of the trial, all of the elements of 

the patent’s claims are deemed essential. Having thus proven entiVerDate Nov 24 2008 09:14 Jan 06, 2010 Jkt 054059 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54059.TXT SJUD1 PsN: CMORC
7 

tlement to protection on the entirety of what is claimed, there is 

no justification for awarding damages on anything less. 

Valuation of what the invention contributes, however, is quite a 

different matter. Here the question is what a license to use the invention, as the infringer has, was worth. This is best addressed, as 

the law does now, by discerning what a willing licensee would have 

paid for a license and what a willing patentee would have accepted 

at the time just before the infringement began. Where the licensor 

is a non-practicing entity with no other competitive interest in the 

field, application of the well-established Georgia Pacific factors will 

normally include consideration of the value of using the invention 

by comparing it to not using the invention, or to using its closest 

non-infringing substitute. Such a business-based approach is far 

preferable to any mechanistic approach, especially one that would 

systemically undervalue reasonable royalty damages by subtracting 

out prior-art elements. 

The 21st Century Coalition appreciates the invitation to provide 

our views and looks forward to working with the Committee to improve S. 515 so it will easily and quickly be enacted. 

Thank you very much. 

[The prepared statement of Mr. Johnson appears as a submission 

for the record.] 

Chairman LEAHY. Thank you. 

Our next witness is David Kappos, who is Vice President and Assistant General Counsel for Intellectual Property Law and Strategy 

at the IBM Corporation. Among his many responsibilities at IBM, 

he manages its patent and trademark portfolios, is responsible for 

protecting and licensing IBM’s intellectual property worldwide. He 

received his Bachelor’s degree from the University of CaliforniaDavis; his law degree from the University of California-Berkeley. 

Please go ahead. 

STATEMENT OF DAVID J. KAPPOS, VICE PRESIDENT AND ASSISTANT GENERAL COUNSEL, INTELLECTUAL PROPERTY 

LAW AND STRATEGY, INTERNATIONAL BUSINESS MACHINES 

CORPORATION, ARMONK, NEW YORK 

Mr. KAPPOS. Well, good morning, Chairman Leahy, Ranking 

Member Specter, and members of the Judiciary Committee. My 

name is Dave Kappos. I am IBM’s chief intellectual property lawyer. I am grateful for the opportunity to testify before this Committee in support of patent reform. 

Patent reform is urgently needed. It is achievable, and failure to 

act will harm our Nation’s economy at a time we can ill afford it. 

IBM invests more than $6 billion a year in research and development and generates about $100 billion in revenue annually providing products and services to our customers. We have been the 

leading assignee of issued patents in the United States for 16 consecutive years, and we earn about $1 billion annually in intellectual property-related income. IBM is, therefore, uniquely positioned 

to promote a balanced patent system that will benefit patentees in 

all industries and producers and the public. IBM is not a member 

of any of the coalitions formed to advocate on behalf of particular 

industries; rather, IBM believes these interests are reconcilable 

and meaningful compromise can be achieved so that the patent sysVerDate Nov 24 2008 09:14 Jan 06, 2010 Jkt 054059 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54059.TXT SJUD1 PsN: CMORC
8 

tem will meet the needs of innovators in all industries, most importantly serve the best interests of the American public. 

The nature of innovation has changed. Today we benefit from inventions made possible through highly collaborative and interconnected technologies. Many of the products consumers demand 

are complex, including contributions from multiple innovations, 

and incorporate hundreds or thousands of patented inventions. At 

the same time, many new innovations require investments of unprecedented size to achieve a new single product protected by a single patent. For the United States to remain competitive, our patent 

system must accommodate all of these innovation models, yet our 

patent laws have not been significantly updated for over 50 years. 

While progress has been made in recent years through judicial 

reform in areas such as obviousness, injunctions, willfulness, most 

recently venue, in patent litigation, much remains to be done to restore the balance of our patent system. 

The problem of poor-quality patents persists. Uncertain patent 

rights create speculation and lead to excessive litigation. IBM supports S. 515’s approach to improving patent quality, enabling 

prompt challenge of questionable patents without resorting to litigation and without subjecting patentees to undue periods of uncertainty. 

A particular point of contention remains the appropriate standard for reasonable royalty damages determinations. As with other 

issues that have been resolved, despite competing interests, IBM 

believes this issue is reconcilable and a balanced solution can be 

achieved. In IBM’s experience, the current legal standard for determining reasonable royalty damages does not provide the certainty 

needed for modern business to operate effectively. As a result, the 

precious time of skilled scientists and engineers is too often spent 

defending against costly and time-consuming litigation instead of 

creating innovations that drive economic growth. 

In reforming the law in this area, we must, nevertheless, be 

mindful of the fundamental importance of ensuring that patentees 

are appropriately compensated, or the patent system will fail to 

provide the incentive innovators require. IBM believes the Supreme 

Court provided critical guidance in its recent unanimous Quanta 

decision. In addressing the related issue of patent exhaustion, the 

Court focused on the essential features of the invention to determine if the patentee had received full compensation. An approach 

using the Quanta standard as a starting point will provide the 

guidance needed to properly compensate the inventor by focusing 

the damages inquiry appropriately. 

For the United States to maintain innovation leadership, our 

patent system must be in the future what it has been in the past: 

the best in the world. The need to act is urgent. The goal is achievable, and failure to act will harm our Nation’s interests. We urge 

passage of the Patent Reform Act of 2009. 

Thank you. 

[The prepared statement of Mr. Kappos appears as a submission 

for the record.] 

Chairman LEAHY. Thank you very much. 

Senator Coburn had to leave for something else. He asked if I 

would put his statement and his questions in the record. Of course, 

9 

that will be done. His statement will be in the record, and his questions will be provided to the witnesses. 

The next witness is Taraneh Maghame ́. She is Vice President for 

Patent Policy and Government Relations at the San Jose-based 

Tessera Incorporated. At Tessera, she is responsible for advising 

company management on various intellectual property and patent 

issues, as well as handling the government relations activities related to intellectual property law and policy. Prior to joining 

Tessera, she served as senior counsel at Hewlett-Packard, managed 

intellectual property litigation at Compaq Computer Corporation, 

worked in private practice. Ms. Maghame ́ received her law degree 

from the Georgetown University Law Center. With full, open disclosure, so did I. 

Please go ahead. 

STATEMENT OF TARANEH MAGHAME ́ , VICE PRESIDENT, 

TESSERA, INC., SAN JOSE, CALIFORNIA 

Ms. MAGHAME ́. Thank you, Chairman Leahy, Senator Specter, 

and members of the Committee. 

Tessera is like thousands of other small to mid-sized companies 

across the United States whose technologies help make consumer 

products faster, better, and cheaper. Based on San Jose, with offices in Charlotte, North Carolina, it is a publicly traded corporation with more than 400 employees, nearly 300 of which are engaged in research and development. Since our founding in 1990 by 

three former IBM technologists, our core mission has been to develop innovative technologies, especially in the field of semiconductor packaging. 

Last year, we spent 461.6 million in R&D. If you have a cell 

phone that fits in your pocket, like the one that Mr. Appleton was 

showing you, then you are using Tessera technology. 

In short, Tessera is in the business of innovation and, by licensing its innovations, has made them widely available to millions of 

consumers. None of this would have been possible without a strong 

patent system to protect our inventions and reward our innovators. 

We hold over 900 U.S. patents or patent applications. Maintaining 

a strong system is essential to our continued success. 

The R&D and licensing model that has made Tessera successful 

is not unique in our country. In fact, small companies generate 

most of America’s innovation and employ more than 80 percent of 

its workers. Many of these would not exist but for a strong patent 

system and cannot survive without such a system. 

Tessera supports improvements to our patent system, provided 

the changes strengthen the system and do not diminish the value 

of patents. We oppose legislation that, while well intended by its 

supporters, will diminish the value or enforceability of valid patents. 

I would like to make three points about the damages section of 

the bill. 

First, the chief argument we hear for the changes in damages 

law is that Congress needs to stop frivolous lawsuits that are based 

on bad patents. But bear in mind that damages are awarded only 

after a patent holder proves in court that a patent is valid and infringed. That is, it is the opposite of a bad patent. Thus, the lawVerDate Nov 24 2008 09:14 Jan 06, 2010 Jkt 054059 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54059.TXT SJUD1 PsN: CMORC
10 

suits in which patent holders get to this point are in almost all 

cases by definition non-frivolous. The proposed change does not 

cure the purported disease. 

Second, we are told that Congress should step in because runaway juries are making extraordinarily large damages awards—an 

assertion that is supported by anecdotes rather than any serious 

data. Patent cases make up about 1 percent of the cases filed in 

our Federal courts; 95 percent of the cases are resolved before trial. 

According to data gathered by Professor Janicke of the University 

of Houston, the median damages award over the past 4 years in 

cases where an award is actually made after trial has been $5 million. If all patent infringement cases resolved at trial are taken 

into account, this number drops to $2 million—not an insignificant 

amount, but clearly not indicative of runaway juries. 

The third and most troubling topic is the impact of the bill on 

the American economy. It is troubling that in this time of grave 

economic uncertainty, Congress is looking to change the basic economic structure of our patent system, which today supports a highly beneficial component of the U.S. economy. As noted in the recent 

book entitled ‘‘The Invisible Edge,’’ thanks to America’s high-performance innovation economy protected by our patent system, the 

lion’s share of the world’s economic value generated by IP now 

flows to American companies and workers. American IP provides 

one of the strongest surpluses in our balance of trade accounts. 

For example, in 2007, America’s IP exports—that is, royalties and license fees we receive from other countries—amounted to $62 

billion. The simple fact is that weakening our patent laws would 

cause a massive and irreversible transfer of wealth from U.S. to 

foreign manufacturers. 

It is vital to understand that the interests of the U.S. economy 

are increasingly different from the interests of the world’s largest 

global companies. Unlike giant multinationals, which can innovate 

anywhere in the world, the U.S. economy needs local innovation to 

thrive. And American innovation, far more often than not, occurs 

at small companies. 

Many of the concerns that led some giant multinational companies to call for a weakening of patent protections have been addressed by the Supreme Court and the Federal Circuit in recent 

years. In several key decisions, the balance of power between patent holders and patent users has shifted. Standards of patentability and patent rights and remedies have been tightened and 

narrowed. 

The recent court decisions embody comprehensive patent reforms. We urge Congress to allow the judicial reforms to ripen and 

not to rush legislation before the full import of these decisions is 

understood. 

In closing, Tessera, along with the Innovation Alliance, of which 

it is a founding member, looks forward to continuing to work with 

Congress to achieve reform that improves the quality, efficiency, 

and procedural predictability of the U.S. Patent Office. Our Nation’s economic recovery and continued global competitiveness depend upon a strong and predictable PTO. 

In our effort to provide constructive comment on this issue, we 

have made proposals to improve the Patent Office, including measVerDate Nov 24 2008 09:14 Jan 06, 2010 Jkt 054059 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54059.TXT SJUD1 PsN: CMORC
11 

ures to enhance patent quality by devoting greater examination resources to complex applications and to improve the current inter 

partes re-examination system. We also believe that PTO should be 

empowered to forgive educational loans carried by its professionals 

in exchange for 5 years or more of service in order to improve retention rates. Investment in the PTO is an investment in America’s 

economic future. 

Thank you. 

[The prepared statement of Ms. Maghame ́ appears as a submission for the record.] 

Chairman LEAHY. Thank you very much. 

Our next witness is Herbert Wamsley. He is the Executive Director of the Intellectual Property Owners Association based here in 

Washington. He has held this position since 1983. He is also the 

editor of the IPO Daily News, a publication that summarizes every 

precedential patent and trademark opinion of the U.S. Court of Appeals for the Federal Circuit. Prior to his work with the IPO, he 

served for 18 years in the U.S. Patent and Trademark Office in a 

number of positions, including Chief of Staff to the Director, and 

was Director of Trademark Examining. He also received his law degree from the Georgetown University Law Center. 

Good to have you here. 

STATEMENT OF HERBERT C. WAMSLEY, EXECUTIVE DIRECTOR, INTELLECTUAL PROPERTY OWNERS ASSOCIATION, 

WASHINGTON, D.C. 

Mr. WAMSLEY. Thank you, Mr. Chairman. I appreciate the opportunity to be here today to speak on behalf of the Intellectual Property Owners Association, or IPO. Our members include companies 

and industries ranging from information technology to consumer 

products to pharmaceuticals and biotechnology. We are proud to 

say that all four of the companies on the panel today—Micron, 

Johnson & Johnson, IBM Corporation, and Tessera—are members 

of our association. Now if we can just get them to agree. 

[Laughter.] 

Chairman LEAHY. Please let me know when that happens. It 

would make my and Senator Hatch’s life a lot easier. 

Mr. WAMSLEY. We congratulate the Chairman on introducing S. 

515 to continue this critically important effort. 

I want to say that information technology, pharmaceuticals, biotechnology are among the most important industries in America, 

and these are the industries that we often think of as the cutting 

edge, most sophisticated technologies. They are very important 

members of our association. 

I do want to put in a word for some other industries. I for one 

am tired of hearing that American jobs and the older manufacturing technologies such as automobiles, aircraft, trains, and consumer products, to name a few, are gone forever. 

Last week, the AFL–CIO Executive Council had this to say about 

the automobile industry: ‘‘The automobile industry accounts for 

fully one-quarter of all American manufacturing jobs and output. 

The industry represents a complex integration of advanced manufacturing processes, technologies, and materials, and is a critical 

driver of innovation across every manufacturing subsector.’’ 

12 

In last week’s statement, the AFL–CIO also put in a strong plug 

for the American patent system. America must have an automobile 

industry and an aircraft industry and a train industry. We were 

the world leaders in these industries for 100 years, and there is no 

reason to give up that leadership. 

Mr. Chairman, the way to create jobs in these industries is so obvious—so obvious—world leading innovation. The patent system, 

made more effective through legislation along the lines of S. 515, 

can help these traditional manufacturing industries as well as the 

high-tech, pharmaceutical, and biotech to leap forward in innovation, leading to more jobs in U.S. industry and new strength in the 

economy. 

IPO strongly supports patent reform and a majority of the provisions in the bill. I will comment very briefly on several sections of 

the bill. 

First of all, we need to keep in mind that two major developments have occurred since Congress began working on patent reform. The courts have rendered decisions that have altered the patent system significantly, and we need to review the legislation in 

light of that. 

Second, the budgets in patent departments of many U.S. companies have been slashed drastically, and we believe companies will 

file fewer patent applications this year. And that needs to be kept 

in mind. 

IPO members are divided over the hotly debated issue of patent 

damages. We support the first-to-file rule, first-inventor-to-file rule. 

We have supported the reform of the law of willful infringement 

and treble damages. It needs to be reviewed in light of the court’s 

subsequent decision in the Seagate case. We generally support establishing a new procedure for a post-grant review in the PTO that 

can be requested within 12 months. 

We think S. 515 is going in the right direction. We have some 

concern about one provision on the post-grant review and inter 

partes reexamination having to do with public use and on sale. 

We have supported changes in the venue statute. We would to 

see a simpler approach. And, again, there has been recent case law 

on the subject that should be reviewed. 

We do not favor the section on interlocutory appeals. We do not 

favor giving the USPTO Director authority to set by rule the user 

fees established by statute. We support adding a provision to the 

bill on inequitable conduct, and we understand that this topic will 

receive further consideration from the Committee. 

And, finally, we favor the section in the previous bill that was 

designed to prohibit permanently the diversion of PTO user fees to 

unrelated Government programs and urge reinsertion in the bill of 

that section, which included extensive annual reporting and notification requirements to the Appropriations Committee. 

Thank you. 

[The prepared statement of Mr. Wamsley appears as a submission for the record.] 

Chairman LEAHY. Thank you very much. 

Mark Lemley is the William H. Neukom Professor of Law at 

Stanford Law School. And just as an aside, Bill Neukom is a friend 

13 

and in past incarnation testified before this Committee on different 

occasions. 

Mr. Lemley teaches intellectual property, computer, and Internet 

law, patent law, and antitrust. An experienced litigator, he has 

written extensively on these subjects. He has been before Congress 

at least a half a dozen times before this. He has received numerous 

accolades, including being named California Lawyers Attorney of 

the Year in 2005, one of the 100 Most Influential Lawyers in the 

Nation by the National Law Journal in 2006. Professor Lemley received his Bachelor’s degree from Stanford University and his law 

degree from the University of California at Berkeley. 

Good to have you back here with us. Please go ahead. 

STATEMENT OF MARK A. LEMLEY, WILLIAM H. NEUKOM PROFESSOR OF LAW, STANFORD LAW SCHOOL, STANFORD, CALIFORNIA 

Mr. LEMLEY. Thank you, Mr. Chairman. 

Unlike the rest of the economy these days, it seems, patent litigation is still a booming business. As data from the Stanford IP 

Litigation Clearinghouse shows, patent owners sued more defendants in 2007 and 2008 than ever before, even though the total 

number of suits remained constant. Patent plaintiffs won the highest median damages awards ever in 2007. Further, research using 

clearinghouse data demonstrates the majority of the most litigated 

patents—the ones that are litigated over and over again—are 

owned by entities that do not make any product but that simply 

enforce patents. 

Now, there is nothing inherently wrong with either the growth 

in patent lawsuits or in patent enforcement by non-practicing entities. But a number of the patent rules have given those plaintiffs 

unfair advantages in litigation, allowing them to enforce dubious 

patents in favorable jurisdictions, and to use the rules of patent 

remedies to obtain more money than their inventions were actually 

worth. Many of those problems resulted from troublesome judicial 

decisions interpreting the Patent Act, not from the Patent Act 

itself. 

Since Congress began debating patent reform 4 years ago, the 

courts have acted to fix a number of these problems—problems that 

were the focus of initial congressional reform. In the eBay case, the 

Supreme Court solved the damages problem in one fell swoop for 

us, creating a rule that allows industry-specific and case-specific 

application. In the KSR case, the Supreme Court ratcheted up the 

standard for obviousness, making it easier to weed out bad patents. 

In the MedImmune case, the Court expanded the use of declaratory 

judgment jurisdiction, and that, coupled with the Volkswagen case 

in the Fifth Circuit and the TS Tech case in the Federal Circuit 

have made the problem of forum shopping less significant. It has 

not gone away, but it is at least more possible for patent defendants to file in other jurisdictions, and it is easier for courts to 

transfer cases out of jurisdictions where there is little or no relationship between the parties in the lawsuit. Finally, in the Seagate 

case, the Court effectively solved the problem of abuse and overuse 

of willfulness. 

14 

I think other areas are likely being solved. Inequitable conduct 

is an example. While there have been cases in which the courts 

have applied an overbroad rule of inequitable conduct, Federal Circuit decisions in the last year or two—most notably, the Star Scientific v. R.J. Reynolds case—have drawn an increasingly careful 

line on inequitable conduct, making it clear both that the law properly does punish people who mislead the Patent Office, but also 

that it is not appropriate to punish people for statements that 

might be read to be misleading in the absence of actual proof. 

The biggest remaining problem to solve, I think, is damages. The 

problem is, as has been identified by a number of witnesses in this 

panel, that courts do not apportion damages based on the contribution of the patentee to the defendant’s technology. Instead, the 

legal rules that we have, the multifactor Georgia Pacific test, are 

open to manipulation. And they are dependent on the way you 

draft your patent claims. 

It should not be the rule that you get more money for the invention of an intermittent windshield wiper if you claim a car with an 

intermittent windshield wiper on it than if you just claim the intermittent windshield wiper. That makes no sense. It is true that one 

has a car and one does not, but you did not invent the car. All you 

invented was the intermittent windshield wiper, and so your contribution, the value you add to the technology, is the value of that 

windshield wiper. But to get that right, courts have to have an 

ability to figure out not just what it is you contributed, but what 

it is that other people contributed to the success of the defendant’s 

product. 

The right rule I think is not a rule that weakens patent damages 

inherently. It is not a rule that strips away anything that the patentees contributed. The right rule is a rule that makes sure that 

patentees get paid, but that what they get paid is, in fact, proportional to what they contributed to the product. 

We have got a number of problems in the court system that allow 

the damages calculations to go awry. One is the application of the 

entire market value rule in reasonable royalty cases. That 

rulemakes sense in the context of lost profits. If my theory is if you 

had not infringed, I would have sold this product, well, then I 

would have made all the sales and I would have sold the whole car. 

But if I am not selling a product, then it does not make sense to 

say that the entire market value of that product comes from my 

technology, however important it might be. And doing so leads to 

a windfall, because once you give 100 percent of the profits from 

the product to patent owner number one, patent owner number two 

comes along and says, well, all right, I did not invent the intermittent windshield wiper, but I added a feature to the tires, or I added 

a feature to the engine, and you have got to pay them, too. 

So a patent damages rule for reasonable royalty cases that 

makes sense, that avoids giving a windfall to patentees, I think has 

to be one that figures out what it is the patentee actually contributed. It is not subtraction of concept. It is not stripping away anything from the patentee. It is asking what did they give us that we 

did not have before and compensating them on that basis. 

Now, I have a number of other views about particular provisions 

in the bill. I have indicated some in my written testimony. I think 

15 

first to file, post-grant opposition are good ideas. I, like Herb, am 

concerned about interlocutory appeal because of the delay and the 

possibility that we will lose settlements of patent cases that we 

currently have. But rather than go into those in detail, I think I 

would probably rather reserve time and let the Senators ask questions. 

Thank you. 

[The prepared statement of Mr. Lemley appears as a submission 

for the record.] 

Chairman LEAHY. Thank you very much. 

Mr. Appleton, when Senator Hatch and I introduced the Patent 

Reform Act last week, I said the Patent Reform Act is about jobs, 

about innovation; it is also about consumers. You discuss preliminary findings indicating modernizing our patent system would create 100,000 jobs. Would you like to elaborate on that, please? 

Mr. APPLETON. Sure. I think, by the way, the study will be available and probably more appropriate for specific detail for other 

companies in some of that analysis. But if you take Micron as an 

example, as I noted, we had spent just last year alone about $30 

million in patent litigation. And in some ways, my perspective is 

that it is almost one of wealth redistribution as opposed to wealth 

creation. And, by the way, I will note, you know—you had noted 

earlier—I do not remember if it was Senator Specter or yourself, 

but I am still trying to figure out when you transition from a traditional manufacturer to a modern manufacturer, because my entire 

career has been in manufacturing, which is now 27 years, and we 

invest billions per year, and we employ lots of people. In fact, 30 

minutes from here, we have a big site, in Manassas. And I do not 

know if we are traditional manufacturer anymore or a modern 

manufacturer, but we make lots of product in this country. For us, 

we invest in both research and development and we invest in manufacturing sites. And when we have to divert dollars to litigation 

that we think is not appropriate, we cannot take those dollars and 

reinvest them into R&D. And a good example is we were in litigation with Rambus for 10 years, and there was a ruling in Delaware 

recently that their document destruction was so great around all 

of their patents and how they acquired the knowledge, et cetera, 

that the judge ruled that it just simply not enforceable. Those patents were not even enforceable by virtue of the conduct around getting those patents. But yet we spent money for 10 years on this 

litigation, and we did not have that money available to reinvest in 

R&D. In our particular case, that $30 million alone would have 

been another 450 to 500 jobs for us. 

Chairman LEAHY. Thank you. I get the point. 

Mr. Kappos, we have opponents of the Patent Reform Act say 

that companies relying on patents would be harmed by the legislation, so let me ask you this: IBM continues to receive more patents 

than any other company. I think nearly 400 patents were issued 

to IBM inventors in Vermont. To put that in perspective, we have 

a population of 660,000 people. So what do you think patent reform 

would do to the value of your company? Would it decrease the 

value, as some opponents say, or would it increase the value? 

16 

Mr. KAPPOS. Thank you for that question, Senator Leahy. Unquestionably for IBM, patent reform will increase the value of our 

company in a number of ways. 

Number one, we are an innovation company. We are a technology 

company at our core. We have inventors making inventions and filing patent applications in every single State represented in this 

Committee, and many of them. We are fully dependent on the patent system, both to commercialize products in the U.S. and all over 

the world. We are fully dependent on the patent system in order 

to license our technologies also. 

We believe that there is a tremendous opportunity in S. 515 to 

increase the value of our company by enabling us, number one, to 

make more innovative products and services, to get more value 

from the patent system, and then, last, to avoid the costly waste 

that we have to make currently on defending abusive litigation. 

And just one more comment on that, if I can. In addition to what 

Mr. Appleton mentioned, abusive litigation costs us tremendously 

in employee time. In every State represented in this Committee 

today, we have employees who are spending their time not inventing and not innovating, but defending litigation, helping outside 

counsel, and it is just a waste of our time. 

Chairman LEAHY. And your company depends on R&D, you mentioned. How much do you spend each year on R&D? 

Mr. KAPPOS. About $6 billion. 

Chairman LEAHY. And, Professor Lemley, let me ask you, also 

following up on that, you argued in reading your testimony that 

the current patent rules give plaintiffs unfair advantage in litigation, including allowing them to obtain more money than their inventions are actually worth. You used some examples. 

Do you want to elaborate a little bit on those rules that give that 

unfair advantage and what courts should be doing if they wanted 

to measure the actual value of an invention? 

Mr. LEMLEY. Certainly. I think part of the reason that courts 

have been reluctant to do it, despite the fact that one of the 15 

Georgia Pacific factors says you could look at this information if 

you wanted to, is that it is hard, and neither judges nor, of course, 

patent owners particularly want this information into the court. So 

if you have a 3-week jury trial, the jury is focused for 3 weeks on 

the inventor, on the inventor’s story, on the contribution the inventor makes to that product. But the jury never hears about the other 

contributions to that product. They do not hear about other patents 

that might have to be licensed. And as a result, it is quite easy for 

a plaintiff’s lawyer to get up and say: Look, the defendant’s product 

is a car. Look, the defendant’s product is Microsoft Windows. All 

I want is 1 percent. That does not sound unreasonable. And, indeed, it does not sound unreasonable unless there are 7,000 different patents that have to be added together at 1 percent each, as 

turns out to be the case with 3G wireless cell phone technology, for 

example. 

So allowing in information about the defendant’s contributions, 

allowing in information about other patents to try to figure out 

what the appropriate measure or balance of the patent damages is 

I think would be a big step in the right direction. 

Chairman LEAHY. Thank you. 

17 

Senator Specter. 

Senator SPECTER. Thank you, Mr. Chairman. 

The critical factors, it seems to me, if we are to succeed with legislation, is the issue of the damages. I think we can handle inequitable conduct and venue and second window and the other issues 

that are presented if we could come to grips and agreement on the 

damage formulation. 

There have been a number of terms used. ‘‘Essential features’’ is 

a comment which was made by Mr. Kappos. Other comments or 

definitions, ‘‘innovatable features.’’ Another is ‘‘specific contribution 

over prior art.’’ And I would like you today to run the gauntlet here 

and ask you what language you would suggest, and I would ask 

you beyond your testimony today to think about it and communicate with the Committee, me personally, with what language you 

would like to have. 

Now, I heard your testimony, Mr. Appleton. You would like to 

have some apportionment. What language would you offer? 

Mr. APPLETON. Well, as probably one of the only non-attorneys 

sitting at this table here, I am not sure that I am the best person 

for the technical language in the bill. But, conceptually—— 

Senator SPECTER. Well, we are starting with you. 

Mr. APPLETON. Yes. 

Senator SPECTER. We will judge whether you are the best person. 

[Laughter.] 

Mr. APPLETON. That is what my mother always told me as well. 

The simple concept that the inventor is due the value that they 

actually contribute to the product is a good concept. And whether 

you define it as apportionment or whether it gets defined as a percentage of the value—— 

Senator SPECTER. You have answered the question: value actually contributed. 

Mr. Johnson. 

Mr. JOHNSON. I would say that in the simplest form, where you 

do not have competing considerations where the damages are involving taking sales, either by proof of lost profits or the like, that 

what you are looking at is indeed the value contributed by the invention, but that is the entirety of the invention as compared to its 

closest non-infringing substitute. 

Senator SPECTER. Value contributed by the invention. 

Mr. JOHNSON. Compared to its closest non-infringing substitute. 

Senator SPECTER. Well, that would permit some apportionment 

then. 

Mr. JOHNSON. Well, not exactly apportionment. In the example 

that was given by Professor Lemley about the windshield wiper, 

there is not only—— 

Senator SPECTER. Something less than the entire car. 

Mr. JOHNSON. Well, the entire car is improved. It is a better car 

because it has an improved windshield wiper. 

Senator SPECTER. So you want the damages for the entire car? 

Mr. JOHNSON. I want the damages for the value that the car has 

increased because it includes a windshield wiper—— 

Senator SPECTER. OK, value increased. 

Mr. JOHNSON. Yes. 

18 

Senator SPECTER. Mr. Kappos? And pardon me for interrupting, 

but I have got four more witnesses. 

Mr. KAPPOS. OK. I will be quick. I would comment first that this 

is a multi-part problem with a multi-part solution. Gatekeeping, as 

is in the proposed legislation, is clearly part of the solution and it 

is very positive. I do not believe there are any particular magic 

words that are perfect, but I do believe that the essential features 

concept that was articulated in the Quanta case is very powerful. 

Senator SPECTER. You are sticking with essential features. OK. 

Ms. Maghame ́. Ms. MAGHAME ́. We do not agree with the essential features language. I think it causes a whole slew of other problems to try to 

use that language. We believe that the gatekeeper approach, not 

necessarily as it is worded currently in the bill, but one which allows the judge to give better guidance with respect to what factors 

should be used in determining reasonable royalty, because all of 

these concerns that have been raised—— 

Senator SPECTER. So you like the gatekeeper concept. 

Ms. MAGHAME ́. Gatekeeper concept, more direction from the 

judge, correct. 

Senator SPECTER. Mr. Wamsley, I had to step out during your 

testimony. I am sorry to have missed it. But give us the kernel of 

the magic words. 

Mr. WAMSLEY. Well, Senator Specter, while you were out of the 

room, I claimed all these people as my members and explained that 

they do not agree. So I am in kind of a bad place here. 

But, you know, I would say while I do not think there is a magic 

phrase, and I am a little skeptical of my good friend Mr. Kappos 

finding the language ‘‘essential features’’ in the Quanta case, I 

think that to get the language worked out here, we are going to 

have to elaborate on what—maybe right in the statutory language—on what the invention is. We are going to have to define 

the invention, because some people talk about—— 

Senator SPECTER. What the invention is, you have to define the 

invention. Well, you have restated my question. Now, how about 

the answer? 

Mr. WAMSLEY. Well, the question I would ask then is—— 

Senator SPECTER. No, no. No questions. Answers. 

[Laughter.] 

Mr. WAMSLEY. I am answering the question with a question. We 

have to decide whether we’re talking about the claimed invention. 

We have in the U.S. Patent and Trademark Office and in the patent possessive a multi-billion-dollar industry in America grappling 

with the claimed invention. But when we get to determining patent 

damages, it seems we get away from the claimed invention, and 

we’re trying to define the invention in a different way, and I think 

we need to try to come up with a definition—— 

Senator SPECTER. I have got one more witness. I have to read 

that over to understand what you said. 

Mr. Chairman, I ask you to direct the witness, Mr. Wamsley, to 

answer—— 

[Laughter.] 

Chairman LEAHY. I think the Senator from Pennsylvania is probably the best cross-examiner around here. He can handle that OK. 

19 

Senator SPECTER. Mr. Lemley. 

Mr. LEMLEY. Two specific answers with statutory language. 

‘‘Value actually contributed’’ I think is a good standard, but the 

other thing I think that needs to be done is to make it clear that 

the ‘‘entire market value’’ rule applies only in lost profits and not 

reasonable royalty cases. 

Senator SPECTER. Well, thank you all. There is a lot of talent in 

this room besides the people at the witness table. I would exclude 

those of us on the dais. But there is a lot of talent, and I would 

ask that question to everybody here. There are a lot of high-priced 

lawyers and specialists in this room, and if you have a suggestion 

on the language, this Committee would be very appreciative. 

Thank you, Mr. Chairman. 

Chairman LEAHY. Thank you, Senator Specter. 

Senator Feinstein. 

Senator FEINSTEIN. Thank you very much, Mr. Chairman. 

Mr. Chairman, I want to say to you that I held some meetings 

with the patent attorneys involving the different groups. My State 

is very much affected by this bill. There are conflicting interests 

that are major and strong, and, you know, everybody is so genteel 

here, but I will tell you, they were like tigers coming out of a cage. 

And the differences were very crisp and very pronounced. 

This was, I think, almost 2007. We tried to solve some of the 

issues, and I sent out a page and a half of draft language on damages. Not one high-tech company responded. It was sent out in 

April 2007. Intel agreed with it. Amgen, their lawyer, agreed. University of California, the provost, agreed. The 21st Century Coalition agreed. The CEO of Nektar Therapeutics. But high-tech seems 

to feel that they’re going to get whatever they want out of this bill. 

For my vote, we have to take care of the universities. I have got 

great universities in my State. Their patents are extraordinarily 

important to them. I have great biotech. Their patents are extremely important to them. And I have great high-tech, but no one 

element of this, in my view, should rule the roost. 

I think there needs to be some amendments to this bill. I would 

like to send this—the language that was sent out April 7, 2007— 

I would like to send it out again. I would very much appreciate it 

if people could do me the courtesy of at least responding and not 

ignoring it. And there is language on damages, on inequitable conduct, and post-grant review. You know, if you do not like it, please 

say so. If you like it—oh, and venue as well. 

But I must tell you, as somebody who likes to solve problems, I 

feel very concerned because what appears publicly is not what you 

hear behind the scenes when these groups come in and these companies come in one by one by one, or you get their counsel. Mr. 

Johnson was present at one meeting. I mean, wasn’t it—it was 

quite novel. 

Mr. JOHNSON. Yes, it was, Senator. 

Senator FEINSTEIN. This is a very serious matter from my point 

of view, and, candidly, I am not going to vote for a bill unless there 

can be reconciliation between the various interests. And that is 

where I am on it, and I will leave you with that. But if I have a 

minute, let me ask a question. 

20 

On damages, in the most simple terms, high-tech was worried 

about patent trolls and abusive lawsuits; biotech/pharma, the universities, and small inventors were worried about rules that would 

limit the value of their patents. So my question of you: Does anybody here have a middle ground that could treat these different industries and business models fairly on how judges and juries calculate damages? 

My suggestion was to require the judge to serve as the gatekeeper, meaning that he has to determine which of the Georgia Pacific factors go to the jury, and leave all of the Georgia Pacific factors for him to choose from. 

So I would like to go right down the line and have some comments on this, and I hope it would be publicly what you say to people privately. Mr. Appleton, do you want to start? 

Mr. APPLETON. Thank you, Senator. I think that, first of all, the 

intent—and I think people get very emotional about this because 

they care a lot about it. Obviously, it is a passionate subject. And 

as you so noted, there is the individual contributor and trying to 

get fair compensation for their invention, and there is the company 

that has products that have thousands of patents that are applicable to it, and therein lies some of the difficulty. 

We have never been opposed to the individual getting fair compensation for their patent, and I think that the Chairman so noted 

that in our particular case, it is the value of the contribution that 

is the most important thing to measure. And however we get at a 

measurement of that I think will be far superior to what happens 

today. 

Senator FEINSTEIN. So you would agree with the gatekeeper concept and the Georgia Pacific factors all being before the judge and 

allowing him to select those that are most applicable to the case 

at issue. 

Mr. APPLETON. We believe the gatekeeper concept can work. 

Senator FEINSTEIN. OK. Mr. Johnson. 

Mr. JOHNSON. We strongly supported development of the gatekeeper and think that if there is substantial evidence, the judge 

should allow the Georgia Pacific factor that is supported by substantial evidence to go to the jury upon motion of a party, they 

should exclude those factors where there is not substantial evidence or where the theory is not cognizable at law. 

Senator FEINSTEIN. So use the term ‘‘substantial evidence.’’ 

Mr. JOHNSON. Yes. I think the difference there is that the judge 

should not sit and decide for the jury how they should decide the 

case. But he should be sure that the evidence—if it is substantial 

and in keeping with cognizable law—should go to the jury on that 

basis. 

Senator FEINSTEIN. Could we just quickly go down? 

Chairman LEAHY. Quickly. 

Senator FEINSTEIN. Quickly. Mr. Kappos, quickly. 

Mr. KAPPOS. OK, sure. Thank you. So I would comment that the 

gatekeeper concept is a positive one. No question about that. It will 

be helpful. 

As I mentioned before, I believe that an approach that keys off 

of the Quanta decision is good because it does enable focus on the 

economic value contributed by the invention. So take those words, 

21 

we are actually not so far apart. I have heard several other people 

say ‘‘economic value.’’ 

Senator FEINSTEIN. Ms. Maghame ́. Ms. MAGHAME ́. Yes, we support that position, and we do not believe that additional language like ‘‘economic value’’ should be 

added. We think everything is covered in the factors. We just need 

to make sure that there is significant evidence, substantial evidence, as Mr. Johnson said, to support the factors that go to the 

jury. 

Senator FEINSTEIN. Thank you. 

Mr. Wamsley. 

Mr. WAMSLEY. Yes, I agree there is support among a lot of the 

industry, and maybe all of the industries, on the gatekeeper concept. So I think that is a good starting point. 

When we get beyond that to ‘‘essential features’’ or ‘‘claimed invention,’’ as I was saying to Senator Specter, I do not have the answer. 

Senator FEINSTEIN. Mr. Lemley. 

Mr. LEMLEY. I believe it is an important step, but I think it is 

only a partial step. I think it needs to be coupled with more specific 

language on how one does apportionment and coupled with restrictions on the entire market value rule. 

Senator FEINSTEIN. Thank you. 

Thank you very much, Mr. Chairman. 

Chairman LEAHY. Senator Hatch. 

Senator HATCH. Well, thank you, Mr. Chairman, and I appreciate 

the work that you are doing on this and all other members of the 

Committee as well. And we appreciate this illustrious panel for 

coming and sharing your thoughts with us here today. 

Mr. Wamsley, since you represent a pretty large swath of inventors and intellectual property owners, let me just ask you this 

question, because it is a matter of great concern. I am aware that 

the USPTO is currently experiencing serious financial difficulties. 

USPTO has collection projections that are extremely sobering. 

Under the worst scenarios, the agency projects a loss of up to 

$130 million in lost collections for fiscal year 2009. I recognize the 

importance of getting patent applications examined and granted, 

which in turn produce high-paying, high-quality jobs. 

Where is the wisdom of having an omnibus bill that takes close 

to $12 million worth of fees from the agency’s fees, mind you, that 

are paid by the applicant and should go directly to the expeditious 

prosecution of the application? Not only are we not willing to once 

and for all end fee diversion, but now we are trying to take more 

money from the agency when they have got a serious financial situation on their hands. 

I would just like your viewpoint on that. 

Mr. WAMSLEY. Well, we support the proposal for a revolving fund 

that has been made in the past to try to put a lockbox around the 

fees. 

I do not have the latest number from the Patent Office, but with 

the declining income they have right now, it may be that Congress 

will have to look at a fee increase. We would be concerned about 

the effect of a fee increase on our members during this time, but 

it is something that should be considered. But we believe that is 

22 

a decision that should be made by the Congress if there is a fee 

increase. That is the way it works now. The main fees are set by 

statute. 

But, in any event, the Patent and Trademark Office needs to 

have access to every penny of its user fees. 

Senator HATCH. Thank you. This is a particularly distinguished 

panel. I wish I had time to ask all of you questions. 

Mr. Johnson and Mr. Kappos, you both have strong opinions 

about how we should address the damages provision. Mr. Johnson, 

you stated that the recent Supreme Court decision in Quanta is not 

the answer, if I understand what you said, because the case deals 

with the doctrine of patent exhaustion. Mr. Kappos, you recognize 

the Quanta case deals with patent exhaustion, but state that it 

provides critical guidance needed to properly compensate the inventor by focusing the damages inquiry appropriately. 

Now, Mr. Johnson, why can’t the Quanta case be used as a starting point, as Mr. Kappos suggested? I understand that you believe 

Congress should wait for the Federal Circuit to issue an opinion in 

the Lucent case. Obviously, if the law were clearer, there would not 

be any need for a delay. But I believe the legislative body should 

be providing clear direction on what the law is, especially when the 

underlying law is not clear. 

So I would like your best advice on this, both of you. 

Mr. JOHNSON. Senator, the problem with using an essential features approach is that it results in a subtraction from what is 

claimed, what the Patent Office has granted as the definition of the 

invention. After the definition of the invention as approved by the 

Patent Office has survived all of the post-grant challenges and has 

been used in the test for validity and has, in fact, been used to 

prove infringement, essential features elements would award damages only on a portion of what was proved. 

Now, you might ask Mr. Kappos, if I could suggest, would he be 

happy if the plaintiffs in his cases were able to prove infringement 

against him by showing only that he used the essential features? 

Usually not. And the lack of parallelism makes it very unfair to 

patent owners because they are held to a higher standard to prove 

liability, and then instead of getting what they are entitled to, it 

would be taken away by parsing the invention down to something 

less. 

That is not to say they should be overcompensated, but it is to 

say that redefining the patent claim to be something smaller than 

it is is not the right methodology to use. 

I think on the broader concept, there is much more agreement, 

but that broader concept does not—the right way to do it is not to 

redefine the invention. 

Senator HATCH. OK. Thank you. 

Mr. Chairman, could I just ask a question of Mr. Appleton? 

Chairman LEAHY. Of course. 

Senator HATCH. It will be a short question. 

Mr. Appleton, I appreciated your comments about the post-grant 

review provision and that you accept the current approach as a 

reasonable compromise. But could you tell me why you preferred 

what you called the ‘‘stronger post-grant review provision’’ that we 

had in the prior bill last year or last Congress? 

23 

Mr. APPLETON. I am having a little bit of trouble hearing you, 

Senator. 

Senator HATCH. Sorry. This microphone is not working well, but 

I was wondering—you know, you have agreed to the post-grant review. You have said you can accept that. But could you tell me why 

you thought the prior post-grant review language was better that 

we had in the last bill? 

Mr. APPLETON. Well, I would have to go back and recall the last 

bill to think about it. I think predominantly it had stronger language about the process of the post-grant review, and we think 

that it would have, I think, a more in-depth process of looking at 

that post-grant review, and as a result be a more robust process. 

Senator HATCH. Sure, OK. 

Thank you, Mr. Chairman. I appreciate it. 

Chairman LEAHY. Thank you very much, Senator Hatch. 

Senator Klobuchar. 

Senator KLOBUCHAR. Thank you very much, Mr. Chairman. 

Thank you to all the witnesses. I come from Minnesota, a State 

that cares about our patent system. We gave the world everything 

from the pacemaker to the Post-it Note. And so like Senator Feinstein, we have many different interests in our State when it comes 

to this. 

One of the questions, as I listened to all this, we have not really 

discussed the fact that we are in something of an economic crisis 

here, and I was just wondering if the changing economy has 

changed any of your positions, if it has the potential of bringing 

people closer together on this issue, and just your view of the effect 

of the economy on this issue. Maybe, Mr. Appleton and Mr. Johnson, you want to answer that question. 

Mr. APPLETON. Thank you, Senator, and we have a design center, 

by the way, in Minneapolis as well. 

I think what the current economy has done more than anything 

else, it has brought focus—— 

Senator KLOBUCHAR. If you have designed something that begins 

with a P, I will bring it up with pacemaker. 

[Laughter.] 

Mr. APPLETON. I think that the current economy has more than 

anything else brought focus to the dollars that are spent around 

our companies, and in particular, the dollars that we now spend on 

patent litigation as opposed to being able to spend those in a manufacturing plant or on R&D. 

As we try to readjust for the economics of the company—in other 

words, we are all trying to restructure to deal with falling demand 

and a tough environment—what becomes more apparent is that the 

dollars that are attributed to this issue are rising in comparison to 

the rest of our expenditures. And that is how it gets highlighted. 

Senator KLOBUCHAR. Mr. Johnson. 

Mr. JOHNSON. I think it has made a tremendous difference in 

how we look at it because it highlights the fact that the patent system drives jobs. It is important to look at the efficiency of the system, the cost of litigation and the like. But that is dwarfed by the 

amount of private capital that the patent system can attract to 

generate new jobs. 

24 

We had experience like this back in the 1970s when we were in 

a malaise, and Congress passed several pieces of legislation, including the ones establishing the Federal Circuit, and the result of that 

was that business realized patents were going to be valuable. They 

invested a tremendous amount of additional capital in R&D, and 

we had a sustained period of prosperity. We can do the same now 

and we need to do the same now because markets are shrinking, 

it is riskier than ever. What we need to do is step forward and tell 

American business that they can count on investing in R&D because their investments will be protected and lead to fairer returns 

in the long run. 

Senator KLOBUCHAR. And are you concerned that any of these 

changes could lead to more foreign companies coming in and infringing? 

Mr. JOHNSON. Absolutely. Some of the damages provisions that 

have been proposed have been cited in some articles published in 

China and India where they look forward to growth in jobs because 

they think it will be easier to come in and copy our patented American technology. And that concerns me greatly because, much as we 

would like the global economy to grow, we really would like the 

American economy to grow. We think that is critical for everyone. 

Senator KLOBUCHAR. Mr. Lemley, you talked about some of the 

court decisions, like the Volkswagen case with the venue issue, and 

I just wanted a response from maybe you, Mr. Appleton, or someone, if you think that Mr. Lemley pointed out that he felt that that 

helped to resolve some of those issues related to that. Do you think 

that that is true? Or do we need to do more? 

Mr. APPLETON. OK. Can you be more specific in your question? 

Senator KLOBUCHAR. Well, Mr. Lemley pointed out a court decision, a recent court decision, that talked about how it placed some 

limitations—maybe you want to describe it more—on the forum 

issue, which made it more difficult for people to bring cases in a 

certain area, and they had to show more connection to the area. Is 

that right? 

Mr. LEMLEY. Yes, the cases in question are a Fifth Circuit en 

banc case called Volkswagen and then a Federal Circuit case called 

TS Tech, both of which make it clear that courts in the Fifth (Couple,) most notably the Eastern District of Texas, the largest patent 

forum, have an obligation to transfer cases out to other jurisdictions if there is no strong connection to the forum. 

Senator KLOBUCHAR. And I was unfair to ask you, the non-lawyer, this very legal question. I really did not mean to set you up. 

I can see that Mr. Kappos wants to answer as well. 

Mr. KAPPOS. I would be glad to help with that. Our observation 

coming off of the Volkswagen case and the Federal Circuit cases 

and district court cases that are going on on top of it is that does 

point the venue statute in the right direction, interpretation of 

venue. And we think that law can further develop by court decisions in a positive direction, reducing the need for legislation in 

that area. 

Senator KLOBUCHAR. That is good. And I guess just along those 

lines, my last question would be of you, Mr. Wamsley. You know, 

you are in a difficult position with such dynamic members with differing points of view, and I appreciate your association’s willingVerDate Nov 24 2008 09:14 Jan 06, 2010 Jkt 054059 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54059.TXT SJUD1 PsN: CMORC
25 

ness to work with this Committee to try to find some potential consensus language. Have you seen instances—I am trying to get us 

there with the forum issue, but have you seen instances where 

your members have been able to agree on some of these things that 

should lead you to believe that we could try to develop the kind of 

consensus that Senator Feinstein was referring to? 

Mr. WAMSLEY. On a note of optimism, Senator, I believe that 

damages at this point still seems to be the intractable issue. And 

I believe that every one of these other issues can be worked out. 

Some of them, I believe with a little more discussion, there will be 

a consensus that we still need the provision in the bill. A couple 

of the issues, possibly venue would be one, in light of the recent 

court cases, we don’t need anymore. 

But as you can see, until we can find the answer on damages, 

we cannot get all these others to fall in line. But I think they can. 

Senator KLOBUCHAR. I understand. And, again, where I am coming from here is just the economic difficulties we are facing right 

now. The more that we can do to try to put American interests first 

here and to try to make sure that we do everything we can to try 

to come up with a consensus that would help our business community as a whole and American innovation would be a good thing. 

So thank you to all of you. 

Chairman LEAHY. Thank you. 

Senator Kyl. 

Senator KYL. Thank you, Mr. Chairman. I think all of us share 

Senator Klobuchar’s concerns, and I would also associate myself 

with Senator Feinstein’s comments. My objective, like Senator 

Feinstein’s, is not to take sides, but to try to get a rational and equitable result that is good for American industry. 

As most of you know, I introduced my own legislation to try to 

bridge some of the differences, and I think Mr. Wamsley is correct 

that a lot of it boils down to the question of damages. That is the 

intractable, very difficult situation. 

I also wanted to comment that I think most of us share Senator 

Hatch’s view that we have to find a good source of funding for the 

Patent Office in order to protect all of our industry. 

My question, first of all, is actually for Mr. Kappos and Mr. 

Lemley since you have endorsed the essential features standard. 

One of the benefits of using case law is the precedential value of 

the application of articulated law in the cases to specific facts, and 

this is a very fact-intensive kind of dispute that we are involved 

in here. So I am concerned, since there has been an acknowledgment that the Quanta computer case had nothing to do with valuation of a patent or damages, calculation of damages, that it is easily used for this purpose. 

Are there any cases—I would address that, first of all, to the two 

of you. Are there any cases in either the Federal Circuit or other 

Federal circuits or the district courts or the Supreme Court that 

use the essential features test to calculate damages in patent infringement cases? Do you know of any? 

Mr. KAPPOS. Sure. I would be glad to help with that question. 

First of all, I would say that the Quanta case in the exhaustion 

doctrine does actually deal with valuation of a patent. It is all 

about determining whether the patent holder has been paid his or 

26 

her due for the patent, which is fundamentally a question of valuation. 

Going beyond Quanta, though, you only have to look within the 

last few days for a Federal Circuit case, the Nortron decision out 

of the Federal Circuit, that involves assessing whether a person 

who was alleged to be an inventor actually was an inventor. And 

in that case, the Federal Circuit again looked at the claim and the 

portions of the claim that the inventor claimed to have invented 

and whether those were central to the invention or not, and judged 

that the person was not an actual inventor. 

I do not believe the words ‘‘essential features’’ were used in that 

case, but that is application of the essential features doctrine very 

clearly without using those precise words. 

If you go back in time, there are many Supreme Court cases, 

Federal Circuit cases, and other cases that use the essential features doctrine. This is not a new doctrine. It is well known in the 

law. 

Senator KYL. If I could, I asked my staff to see if they could find 

any, and I have got a pretty good staff, and they could not. So I 

would appreciate your citations for the record, if you would, please. 

You said there are many cases that use the essential features doctrine for calculating damages. My staff could find none. So if you 

have those citations, it would be useful. Would you please provide 

them to us? 

Mr. KAPPOS. Sure. We would be happy to do that. 

Senator KYL. Are there any other comments on that point? 

[No response.] 

Senator KYL. Let me just ask how it would relate to the Georgia 

Pacific list that does have a substantial amount of case law, applying it to different fact patterns. If you had an essential features 

doctrine set forth in the statutory law, if we were to adopt that as 

a baseline standard for valuing a patent, how would it affect the 

use of the Georgia Pacific factors? And I would just ask maybe 

starting with Mr. Johnson and then down through Mr. Kappos. 

Mr. JOHNSON. Well, it would not be good for the application of 

Georgia Pacific at all. One of the problems in talking about this, 

as you point out, is it is factually very complex. And it is easy to 

think about a simple example, but in the real world there are not 

simple examples. And the beauty of the Georgia Pacific approach 

is it takes into account the business realities that we face out in 

a complex world. If you start pulling out one factor and try to write 

some type of statutory language, you might handle the particular 

problem that you have in mind but create a myriad of other problems, which right now are being handled very well by the case law. 

Senator KYL. Are you saying there would be essentially a conflict 

between the factors set forth in the Georgia Pacific case if you were 

to also overlay that with an essential features method for calculating—— 

Mr. JOHNSON. Absolutely. 

Senator KYL. Would that be correct, Mr. Kappos? 

Mr. KAPPOS. Well, let me take a different view of that. I do not 

think that application of essential features does violence to Georgia 

Pacific at all. I think essential features runs across a number of 

the factors in the Georgia Pacific case, including the famous apporVerDate Nov 24 2008 09:14 Jan 06, 2010 Jkt 054059 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54059.TXT SJUD1 PsN: CMORC
27 

tionment factor that has been much debated, but not only that factor. 

Senator KYL. Mr. Wamsley, what do you think? 

Mr. WAMSLEY. Well, I think essential features—obviously, we 

have a disagreement. Going back to whether it is the claimed invention, which is the definition in the patent document, often a 

very technical definition, or whether it is parts of that claimed invention that are essential features, I do not think the Georgia Pacific case really addresses that, and I do not have the answer. 

As far as going beyond the gatekeeper language, there has been 

some talk about trying to codify the 15 features of the Georgia Pacific case by actually putting them in the statute then perhaps 

grafting something else onto it. But that is so complex that I do 

not think that is a promising approach. 

Senator KYL. Mr. Chairman, the time flies when you are having 

fun. If any of the other witnesses had a comment on that, that 

would be fine with me. 

Chairman LEAHY. Please go ahead. I am trying to be very flexible 

with time on this subject. 

Senator KYL. Sure. Thank you. 

Mr. Lemley, you did not have a chance yet. 

Mr. LEMLEY. If I may, Senator, I am not sure whether essential 

features is the right answer or not. I will say that I think the Georgia Pacific factors as something that is simply handed to the jury 

does not work. It does not work because if you give the jury a 15- 

factor test with no explanation of the factors, which is the way it 

normally works, the jury has the freedom to do essentially whatever it wants. 

So more specific guidance I think both in the form of a gatekeeper role, but also in the form of the language that Senator Specter elicited from most of us, the value actually contributed, would 

be substantially—— 

Senator KYL. The more traditional guidance I think—I mean, I 

think everybody is unanimous with respect to that. 

Mr. LEMLEY. Absolutely. And then I agree with you, Senator, 

that allowing that sort of general language to then be articulated 

in court decisions is the right way to go. 

Senator KYL. Thank you, Mr. Chairman. I will not indulge my 

colleagues with—but I did have some other questions for the 

record, and, in particular, I skipped over you, Ms. Maghame ́, but 

you are the only witness that represents a small startup company, 

and I really wanted to get your views on how all of this would affect you. I will ask those questions for the record unless the Chairman would let you give me a 30-second answer. 

Chairman LEAHY. You have got a question. I want to submit my 

further questions for the record, but if you want to ask one, go 

ahead. 

Senator KYL. Well, just if you had a thought as to how applying 

an essential features kind of damage calculation would have on 

small startup companies like the ones that you represent? 

Ms. MAGHAME ́. Well, I do not see that essential features language to be any different than what we have seen in the bills before in terms of prior art subtraction, inventive contribution. I 

think it causes all the same problems, and I think essential feaVerDate Nov 24 2008 09:14 Jan 06, 2010 Jkt 054059 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54059.TXT SJUD1 PsN: CMORC
28 

tures does not add anything to the Georgia Pacific calculation that 

can be done using the factors that are supported by the evidence, 

as we discussed in the concept of the gatekeeper language. 

Basically what it would do is it would, as I mentioned in my 

opening statement, diminish the value of patents by artificially reducing the damages that would be awarded. 

Senator KYL. Mr. Chairman, I thank you for holding this hearing, and I want to thank each of the panelists. And I would like 

to submit some questions to you. I appreciate that what we derive 

from all of this is that these are very complex and difficult questions, that there has to be some room for agreement here, and that 

we need to work together to try to find that with the good work 

and advice of the experts you have assembled here. 

Thank you. 

Chairman LEAHY. Thank you, and you know we have talked 

about Georgia Pacific. I think at a Federal Trade Commission hearing on patent reforms we heard from a professor at the University 

of Houston questioned why we are allowing the court to use the 15- 

factor Georgia Pacific test. He said that may be why we are getting 

such erratic results. Senator Klobuchar was here earlier, but a 

University of Minnesota Law School professor also said it is time 

to update that. 

I think, Mr. Appleton, you wanted to add something further on 

the question of valuing patents, putting an economic value. Am I 

correct? 

Mr. APPLETON. Yes, I think just to emphasize, I think clearly the 

damages, as already noted by Mr. Wamsley, is the significant issue 

for us. 

You know, with respect to Senator Feinstein’s asking earlier 

about the gatekeeper language and does that work, our coalition, 

I think for the record, historically has been opposed to prior language, but predominantly because it did not have enough guidance 

or parameters around contribution of the patent to whatever the 

product was. And, you know, we still feel that way. Whether you 

call them a gatekeeper or whether it is a judge or some other entity 

making those decisions, clearly we think something can work so 

long as there was sufficient guidance around that it needed to be 

in relationship to the contribution of the patent to the value of the 

product. 

Chairman LEAHY. Mr. Appleton, you also said in your testimony 

that nearly 90 percent—and tell me if I am reporting this correctly. 

With the increase in the number of licensing demands and lawsuits 

against technology companies, 90 percent of those demands are 

coming from non-practicing entities. Is that correct? 

Mr. APPLETON. Yes, that is correct. 

Chairman LEAHY. And our patent law and patent system was 

put together long before anybody thought up a business model 

based on patent infringements from those types of entities. Is that 

not correct? 

Mr. APPLETON. Yes, that is correct. 

Chairman LEAHY. Is it time to update? 

Mr. APPLETON. That is correct. We need to update, and I think 

in concert with what Mr. Lemley said, that often in this case, the 

majority in our particular case of the patent litigation come from 

29 

companies that do not make our products, have never made our 

products, and have often been using patents that they have acquired with which to go after patent litigation. 

Chairman LEAHY. I will withhold my time. Senator Whitehouse 

has rejoined the panel. 

Did you have questions, Senator? 

Senator WHITEHOUSE. Very briefly. 

Chairman LEAHY. Then I know Senator Feinstein will have questions following you. 

Senator WHITEHOUSE. First of all, let me thank you, Chairman, 

for holding this hearing. This is a very important piece of legislation of those who have lived through it. You have lived through it 

longer than I have, but over the past 2 years, we certainly saw a 

lot of heavy slugging being done, and I am glad we are taking it 

up again under your leadership. 

I would like to ask Mr. Appleton and Mr. Kappos if you could describe what you think this bill would do in terms of the atmosphere 

for innovation in the tech sector and if there is any way you are 

capable of quantifying that, even if it is a little or a lot, versus the 

hard number. I would appreciate kind of a scaling answer to the 

question as well as the description of what the sort of atmospheric 

change would be. 

Mr. APPLETON. Thank you, Senator. As I had noted earlier, I 

apologize, in your absence, we I think from two different perspectives and others on the panel have responded in this way: 

First of all, we had noted that last year alone we had spent over $30 million on just patent litigation, and I would note that I am 

a member of the High-Tech CEO Council which is comprised of the 

eight leading American technology companies, and that includes 

IBM and Motorola, Intel, HP. And, collectively, when we looked at 

this data, last year alone, the ten of us combined spent over $300 

million on patent litigation. Clearly, those dollars do not go into 

manufacturing jobs. We are a large manufacturer in the United 

States. They do not go into research and development. And I would 

note that probably over 95 percent of all of our research and development by Micron is done here in the United States. But those dollars are simply not available. They are going to attorneys and litigation. 

Senator WHITEHOUSE. Is that your litigation expense number? 

Mr. APPLETON. That is just our litigation expense number. 

Now, in addition to that, when we do the calculations on the jobs 

that would be created if just we had those dollars, we would have 

created another 450 to 500 jobs by having those dollars available 

for us to invest in our manufacturing or R&D operations. And that 

number gets very large, according to other studies. In fact, I had 

noted earlier there was a study that was released today that goes 

to that issue, and we would be happy to submit that as well for 

your review. 

Senator WHITEHOUSE. Thank you. 

Mr. Kappos. 

Mr. KAPPOS. Yes, thank you, Senator Whitehouse. I would just 

add to that that I believe that for IBM the atmosphere for innovation will be clearly improved by S. 515. It will leave us with more 

opportunity to innovate, more opportunity to create and capture 

30 

that innovation. By adding clarity to the patent system, it will increase the value of patents in aggregate, not decrease the value of 

patents. And by increasing the value by having clarity around the 

system, it will make it possible for us to capture more value out 

of innovation and not less value out of it. So I think that there is 

a win all around. 

Now, relative to quantifying numbers of jobs, that is, of course, 

a very hard thing to do. I think Mr. Appleton already provided the 

best data I know of, which is measured in many thousands of jobs 

across the country. 

Then the last thing I would comment on that I noticed for IBM 

is the time that employees spend supporting wasteful litigation, 

much of which could be liberated. In addition to all the litigation 

time that Mr. Appleton mentioned, if we can get our employees innovating, creating inventions, rather than spending time assisting 

lawyers in defending litigation, we will be a long ways ahead. 

Senator WHITEHOUSE. And in the context of international competition, how does that play out? 

Mr. KAPPOS. In the case of IBM, we do the vast majority of our 

innovating right here in the U.S., essentially across all 50 States, 

many thousands of inventions, I think probably more than represented by all the other companies on this dais combined. And in 

doing that, the vast majority of it is in the U.S., so that the value 

of additional innovation for us largely comes right back into this 

country. 

Senator WHITEHOUSE. And that would confer an advantage to 

U.S.-based companies in international competition, correct? 

Mr. KAPPOS. Absolutely. 

Senator WHITEHOUSE. Thank you, Chairman. 

Chairman LEAHY. Thank you very much, Senator Whitehouse. 

Senator Feinstein, you said you had one more question you wanted to ask? 

Senator FEINSTEIN. I do, Mr. Chairman. 

Chairman LEAHY. Please go ahead. 

I am just reading the 15 Georgia Pacific factors. I actually think 

they are pretty good, and I think it is you, Mr. Johnson, I am going 

back to something you said in 2007 about an inhaler for—what was 

it?—— 

Mr. JOHNSON. I believe it was an insulin inhaler. 

Senator FEINSTEIN. Okay. That just by changing a few molecules, 

you can aerosolize insulin, which then means that somebody does 

not have to make injections perhaps several times a day. Now, that 

is an enormous advance for insulin users for diabetes. 

If you compare that with the windshield wiper, the intermittent 

windshield wiper, I mean, maybe that is a huge thing. I do not 

think it is. But I understand the high-tech concern that somebody 

comes along and over-emphasizes the value of their little addition, 

and it differs from your industry’s concerns because it is the health 

and welfare of people, and very often the slightest change makes 

a major difference. 

So it seems to me, as I look at these Georgia Pacific factors— 

which I actually think we should codify. I think they are excellent. 

Then it is sort of set, and maybe give the judge the choice. But 

there clearly ought to be one factor that points out the relative difVerDate Nov 24 2008 09:14 Jan 06, 2010 Jkt 054059 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54059.TXT SJUD1 PsN: CMORC
31 

ferences that can happen, particularly in medicines, which increase 

greatly their value as opposed to something that is part of a 

microchip and relatively minor. 

I would love to have some commentary on that. Maybe I am all 

wet, but that is the way I look at it. 

Mr. JOHNSON. Senator, the fact that a small change can have a 

major difference is not limited to biotechnology or medicines. A 

small change can have a dramatic effect in all fields. It can also 

have a very minor effect in all fields. It depends on the invention, 

and it depends on the setting. 

You are absolutely right. You gave us two very good examples. 

But, for example, a small change in semiconductors that perhaps 

increased their speed by 10 times could, in fact, have a very big financial impact. 

So it seems to me that the best thing to do is to look at the economic impact of that change. It may, indeed, not be very large in 

the windshield wiper added to the car, and, in fact, in real life, the 

amount of damages awarded were less than $1 per car. They 

were—— 

Senator FEINSTEIN. Let me just quickly—because I got your point 

and it is a good point. So you would say that number six of the 

Georgia Pacific factors is adequate? 

Mr. JOHNSON. I am sorry. I do not have them memorized by 

number. 

Senator FEINSTEIN. ‘‘The effective selling the patented specialty 

in promoting sales of other products . . .; the existing value of the 

invention to the licensor as a generator of sales of his non-patented 

items; and the extent of such derivative or convoyed sales.’’ 

Mr. JOHNSON. Yes, I believe—— 

Senator FEINSTEIN. Is that sufficient? 

Mr. JOHNSON. I believe that that is one of the factors that should 

be considered. Yes, I agree with you, the Georgia—depending on 

the competitive setting, one or more of the Georgia Pacific factors 

need to be considered, and I think normally it is more than one. 

Senator FEINSTEIN. I see a couple of others. So you all feel that 

is adequate? 

Ms. MAGHAME ́. If I may, Senator? 

Senator FEINSTEIN. Please. 

Ms. MAGHAME ́. I was just looking at the factors, and I think even 

number 9, the utility and advantage of the property, and a number 

of other factors, which is exactly why we have been advocating for 

the flexibility that you are talking about and we totally agree with; 

because I think the key here is—two points I would like to make. 

First of all, when we are talking about determining the contribution, we also need to be conscious of the fact that there is a royalty 

rate that is associated. Whether you take the entire market value 

or the value of some component, you still need to use a percentage 

of that, and that is why I have an issue with the premise of—— 

Senator FEINSTEIN. Just quickly, because others want to—— 

Ms. MAGHAME ́. Sure. 

Senator FEINSTEIN. Would you give the judge the ability to decide which factors to submit to the jury? 

Ms. MAGHAME ́. Yes, because those factors need to be supported. 

32 

Senator FEINSTEIN. Would everybody agree with that or not? Everybody looks nonplussed. 

Mr. JOHNSON. If supported by substantial evidence, I think they 

should go to the jury. 

Senator FEINSTEIN. If supported by substantial—and who would 

determine the substantial—— 

Mr. JOHNSON. Well, in the typical case, you would have an expert 

or a party propound their damages contentions, and then it would 

be subject to a motion to keep one or more of the contentions from 

going to the jury. The judge would look at the contentions, see if 

they are supported by substantial evidence; and if they are not, the 

judge would exclude those from going to the jury. 

Senator FEINSTEIN. Thank you. 

Thank you, Mr. Chairman. 

Chairman LEAHY. Thank you. 

Senator Cardin, did you have any questions? 

Senator CARDIN. No, Mr. Chairman. I just really want to thank 

you for conducting this hearing. This is an extremely important 

subject, and you have been extremely patient in allowing for the 

record to continue to develop. And I am hopeful that we can move 

legislation, and I hope that we get it right. And I think today’s 

hearing will help us achieve those goals. 

Chairman LEAHY. Thank you. I have talked with both Republicans and Democrats in the Senate, and I think there is a consensus we will move legislation this year, the earlier the better. I 

have also talked with the White House with the broad outlines of 

what we are talking about, and I am convinced the President will 

sign it. I do not think we can continue with a 50-year-old system. 

There are a number of good things in it, but a lot has to be brought 

into this century. Along with that are ways to find out how the office can also pay for itself and do this. 

So we will keep the record open if anybody wishes to add—Ms. 

Maghame ́? 

Ms. MAGHAME ́. If I may, can I make one point? 

Chairman LEAHY. You wish to add. You do not want to wait for 

the record. Go ahead. 

Ms. MAGHAME ́. One point I would like to make because I think 

it is so critical on the jobs issue. That has been kind of our focus 

in this hard economic time. I am interested to see the study that 

Mr. Appleton refers to that they have commissioned, but would 

hope that other studies that have come out recently also be taken 

into account in terms of what an apportionment-based system of 

damages could do in terms of loss of manufacturing jobs. 

Chairman LEAHY. I understand that, but I also understand that 

we are going to—I wear another hat, and that is as Chairman of 

the Foreign Operations Subcommittee on Appropriations. And I am 

adding money and pushing hard for the Department of State to 

have more experts in our embassies around the world on intellectual property matters. We have agricultural attaches, we have our 

intelligence people, our military attaches, we have others—all important. But I think if we are going to continue our ability to compete with the rest of the world, we have also got to be able to take 

steps on intellectual property and enforcing our own laws abroad, 

but also getting our trading partners to understand that it is in 

33 

their best interests to have a system that actually works to enforce 

not only our patents but for us to enforce theirs. 

At a time of a worldwide economic crisis—and it is—there is a 

tendency, I believe, for countries and for leaders in the countries 

to develop short-term protectionism. In my mind, that is the worst 

thing we could possibly do, certainly for the largest economic engine in the world, in the United States. Protectionism can come in 

many different ways. It can come, among other things, by other 

countries using their courts and their patent forums to block us because they feel we are not being consistent, or can at least make 

that claim. At the same time, we have got to be able to say not only 

are we consistent in what we do, but we expect the same from the 

people we trade with. 

That is not something that is going to be settled today by any 

means, but we have to have a very clear law in our country. We 

have got to have something where it is inventors who are protected 

and not just litigators. And it has got to be done in such a way that 

we continue to innovate. But then we have got to be able to protect 

our innovations worldwide, as other countries can be expected to 

protect theirs. 

We have a number of countries that will enforce their own intellectual property laws when it suits them, and not otherwise. I 

think of one major trading partner who made a big thing of having 

bootlegged—whether it is movies or recordings or computer programming, they make a big thing of having—out in front of the factory, having road graders go and crush all this to say, ‘‘See how we 

are enforcing,’’ while the 18-wheelers are in the back of the place 

loading up with their latest shipment of the exact same bootlegged 

equipment. That has got to stop. In the long term, it is in their best 

interests to stop it. It is all ours to do it. 

I realize that is not the subject of what we are doing here, but 

I just want—you know, it is—to ensure we will get—there will be 

new patent legislation with these hearings and why I appreciate so 

much all of you testifying, is that we know that there are differing 

views of what should be in there. But ultimately there has to be 

just one piece of legislation, and we are trying every way we can 

to hear all of you. But then we have got to make sure that overseas 

our patents are also protected, our patents and our copyrights and 

our trademarks are all protected, because every one of you has represented and spoken and worked with people whose patents are not 

just used here in the United States, they are used worldwide. And 

we have a lot of inventors in my State. We have a lot of companies 

that are heavily involved—in fact, I think on a per capita basis we 

export more than any State in the Union. But I know how much 

they are frustrated by countries that do not uphold our patents and 

try to point to loopholes in our patent laws. We will close those 

loopholes, but then they are going to have to do the same. 

We stand in recess. 

[Whereupon, at 11:55 a.m., the Committee was adjourned.] 

[Questions and answers and submissions for the record follow.] 

34 


54059.001
35 


54059.002
36 


54059.003
37 


54059.004
38 


54059.005
39 


54059.006
40 


54059.007
41 


54059.008
42 


54059.009
43 


54059.010
44 


54059.011
45 


54059.012
46 


54059.013
47 


54059.014
48 


54059.015
49 


54059.016
50 


54059.017
51 


54059.018
52 


54059.019
53 


54059.020
54 


54059.021
55 


54059.022
56 


54059.023
57 


54059.024
58 


54059.025
59 


54059.026
60 


54059.027
61 


54059.028
62 


54059.029
63 


54059.030
64 


54059.031
65 


54059.032
66 


54059.033
67 


54059.034
68 


54059.035
69 


54059.036
70 


54059.037
71 


54059.038
72 


54059.039
73 


54059.040
74 


54059.041
75 


54059.042
76 


54059.043
77 


54059.044
78 


54059.045
79 


54059.046
80 


54059.047
81 


54059.048
82 


54059.049
83 


54059.050
84 


54059.051
85 


54059.052
86 


54059.053
87 


54059.054
88 


54059.055
89 


54059.056
90 


54059.057
91 


54059.058
92 


54059.059
93 


54059.060
94 


54059.061
95 


54059.062
96 


54059.063
97 


54059.064
98 


54059.065
99 


54059.066
100 


54059.067
101 


54059.068
102 


54059.069
103 


54059.070
104 


54059.071
105 


54059.072
106 


54059.073
107 


54059.074
108 


54059.075
109 


54059.076
110 


54059.077
111 


54059.078
112 


54059.079
113 


54059.080
114 


54059.081
115 


54059.082
116 


54059.083
117 


54059.084
118 


54059.085
119 


54059.086
120 


54059.087
121 


54059.088
122 


54059.089
123 


54059.090
124 


54059.091
125 


54059.092
126 


54059.093
127 


54059.094
128 


54059.095
129 


54059.096
130 


54059.097
131 


54059.098
132 


54059.099
133 


54059.100
134 


54059.101
135 


54059.102
136 


54059.103
137 


54059.104
138 


54059.105
139 


54059.106
140 


54059.107
141 


54059.108
142 


54059.109
143 


54059.110
144 


54059.111
145 


54059.112
146 


54059.113
147 


54059.114
148 


54059.115
149 


54059.116
150 


54059.117
151 


54059.118
152 


54059.119
153 


54059.120
154 


54059.121
155 


54059.122
156 


54059.123
157 


54059.124
158 


54059.125
159 


54059.126
160 


54059.127
161 


54059.128
162 


54059.129
163 


54059.130
164 


54059.131
165 


54059.132
166 


54059.133
167 


54059.134
168 


54059.135
169 


54059.136
170 


54059.137
171 


54059.138
172 


54059.139
173 


54059.140
174 


54059.141
175 


54059.142
176 


54059.143
177 


54059.144
178 


54059.145
179 


54059.146
180 


54059.147
181 


54059.148
182 


54059.149
183 


54059.150
184 


54059.151
185 


54059.152
186 


54059.153
187 


54059.154
188 


54059.155
189 


54059.156
190 


54059.157
191 


54059.158
192 


54059.159
193 


54059.160
194 


54059.161
195 


54059.162
196 


54059.163
197 


54059.164
198 


54059.165
199 


54059.166
200 


54059.167
201 


54059.168
202 


54059.169
203 


54059.170
204 


54059.171
205 


54059.172
206 


54059.173
207 


54059.174
208 


54059.175
209 


54059.176
210 


54059.177
211 


54059.178
212 


54059.179
213 


54059.180
214 


54059.181
215 


54059.182
216 


54059.183
217 


54059.184
218 


54059.185
219 


54059.186
220 


54059.187
221 


54059.188
222 


54059.189
223 


54059.190
224 


54059.191
225 


54059.192
226 


54059.193
227 


54059.194
228 


54059.195
229 


54059.196
230 


54059.197
231 


54059.198
232 


54059.199
233 


54059.200
234 


54059.201
235 


54059.202
236 


54059.203
237 


54059.204
238 


54059.205
239 


54059.206
240 


54059.207
241 


54059.208
242 


54059.209
243 


54059.210
244 


54059.211
245 


54059.212
246 


54059.213
247 


54059.214
248 


54059.215
249 


54059.216
250 


54059.217
251 


54059.218
252 


54059.219
253 


54059.220
254 


54059.221
255 


54059.222
256 


54059.223
257 


54059.224
258 


54059.225
259 


54059.226
260 


54059.227
261 


54059.228
262 


54059.229
263 


54059.230
264 


54059.231
265 


54059.232
266 


54059.233
267 


54059.234
268 


54059.235
269 


54059.236
270 


54059.237
271 


54059.238
272 


54059.239
273 


54059.240
274 


54059.241
275 


54059.242
276 


54059.243
277 


54059.244
278 


54059.245
279 


54059.246
280 


54059.247
281 


54059.248
282 


54059.249
283 


54059.250
284 


54059.251
285 


54059.252
286 


54059.253
287 


54059.254
288 


54059.255
289 


54059.256
290 


54059.257
291 


54059.258
292 


54059.259
293 


54059.260
294 


54059.261
295 


54059.262
296 


54059.263
297 


54059.264
298 


54059.265
299 


54059.266
300 


54059.267
301 


54059.268
302 


54059.269
303 


54059.270
304 


54059.271
305 


54059.272
306 


54059.273
307 


54059.274
308 


54059.275
309 


54059.276
310 


54059.277
311 


54059.278
312 


54059.279
313 


54059.280
314 


54059.281
315 


54059.282
316 


54059.283
317 


54059.284
318 


54059.285
319 


54059.286
320 


54059.287
321 


54059.288
322 


54059.289
323 


54059.290
324 


54059.291
325 


54059.292
326 


54059.293
327 


54059.294
328 


54059.295
329 


54059.296
330 


54059.297
331 


54059.298
332 


54059.299
333 


54059.300
334 


54059.301
335 


54059.302
336 


54059.303
337 


54059.304
338 


54059.305
339 


54059.306
340 


54059.307
341 


54059.308
342 


54059.309
343 


54059.310
344 


54059.311
345 


54059.312
346 


54059.313
347 


54059.314
348 

Æ 


54059.315