Tuesday, October 29, 2013

Ranking Member Conyers Opening Statement at Full Committee Patent Reform Hearing

(WASHINGTON) – Today, the U.S. House Judiciary Committee held a full committee hearing on, “H.R. 3309: Improving the Patent System to Promote American Innovation and Competitiveness.” This hearing comes on the heels of the introduction of H.R. 3349, the “Innovation Protection Act,” by Ranking Member John Conyers, Jr. (D-Mich.), Congressman Melvin L. Watt (D-N.C.), Ranking Member of the Subcommittee on Courts, Intellectual Property and the Internet, and Congressman Doug Collins (R-Ga.) This legislation ends future diversion of Patent and Trademark Office (PTO) fees, allowing the PTO to employ all of the user fees it receives. During his opening remarks, Rep. Conyers delivered the following statement:

U.S. Representative
John Conyers, Jr.
“There are few economic issues our Committee or this Congress will face that are more important than whether and how to reform our patent laws.  Intellectual property – principally patents – are responsible for nearly one third of all jobs in the U.S. economy.  Our patent system, while not perfect, is the envy of the world and perhaps the most significant driver of growth in our economy. 

“As we consider patent legislation, I would like to offer three points for consideration.  First, I believe the issues of non- practicing entities or so-called patent ‘trolls’ present some unique problems that are worthy of congressional attention.  There is a disconnect when shell corporations -- with little or no assets -- can threaten thousands of small end users with ill-conceived patent litigation over ordinary business practices.  If we don’t know who these shell companies are; if the shell companies have no operating businesses or assets; and if they are given free license to engage in endless and costly discovery, we have a problem that requires legislation.

“But at the same time, we need to be careful in addressing these problems.  Our first rule should be to make sure we do no harm to our patent system or take any actions which unintentionally discourage innovation or increase litigation.  As the former Director of the Patent and Trademark Office David Kappos reminds us, ‘we are not just tinkering with any system here; we are reworking the greatest innovation engine the world has ever known, almost instantly after it has been significantly overhauled.  If there were ever a case where caution is called for, this is it.’

“In this regard, I don’t see any reason we should be considering amending the fee shifting statute when the Supreme Court has just agreed to take up this very issue.  Similarly, I see no rush to expand the use of ‘business method patents’ when the PTO and the courts are just now beginning to review cases brought under the law we just passed.

“Second, any changes we make must be carefully balanced and consistent with our principles and constitutional imperatives.   For 80 years we have asked our federal judges – the experts on litigation – to develop rules for their own court rooms.  That system has worked well and I see no reason to abrogate the principle of separation of powers now.

“And if we are going to consider crafting new rules on discovery, stays, and joinder, we should insist that the rules work the same for all parties – plaintiffs and defendants. Nor should we be crafting a series of special carve outs from the legislation for the pharmaceutical industry.  The last thing we need to do is create two systems of patent law – one for pharmaceuticals and one for everybody else.

“Third, we cannot lose sight of the single most important problem facing our patent system today – the continuing diversion of patent fees.   The most effective step we can take in responding to abusive patent litigation is making sure poor quality patents are not issued to begin with.  To do that we need to give our examiners the resources they need to review and analyze the hundreds of thousands of complex and interrelated patent applications they receive every year.   That is why yesterday, I along with Representatives Watt, Issa and Collins, introduced bipartisan legislation – the Innovation Protection Act – which does exactly that on a permanent, statutory basis.  This will apply regardless of the sequester or any future shut downs. 

“I stand ready, able and willing to work with members on both sides of aisle in tackling these problems.  But I would urge the Chairman to move cautiously, carefully and deliberately.”
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