United States Patent and Trademark Fee Modernization Act of 2004

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, H.R. 1561 will help implement the Patent and Trademark Office's Strategic Business Plan to transform the agency's operations. The bill incorporates a revised fee schedule previously submitted by the PTO that will generate much-needed additional revenue. The plan also includes a true structural reform of the office, which demonstrates that the PTO is not simply saying give us more money and we will solve the problem. The implementation of the strategic plan is the first step forward toward improving patent and trademark quality while reducing application backlogs and pendency at the agency.

These goals are critical to the health of cutting-edge industries in particular and our economy in general. Americans lead the world in the production and export of intellectual property and related goods and services. Time is money in the intellectual property world. If the PTO cannot issue quality patents and trademarks in a timely manner, then inventors and trademark filers are the losers.

By granting patents and registering trademarks, the PTO affects the vitality of businesses and entrepreneurs, paving the way for investment in research and development. Industries based on intellectual property, like biotechnology and motion pictures, represent the largest single sector of the United States economy. Approximately 50 percent of American exports depend upon some form of IP protection.

While intellectual property protection is increasing in importance, the PTO is collapsing under an increasingly complex and massive workload. Patent pendency, the amount of time of patent application is pending before a patent is issued, now averages over 2 years. Without fundamental changes in the way the PTO operates, average pendency in these areas will likely more than double to 6 to 8 years in the next few years.

I would point out that the patent term is 20 years from the date of filing. So if it takes 6 to 8 years before the PTO can decide whether or not an application is indeed patentable and grants a patent, that will be that much less time that the patent is actually good, and, thus, that much less valuable to the person who has successfully invented a new technology or product and patented it.

Moreover, the backlog of applications awaiting a first review by an examiner will grow from the current level of 475,000 to over a million. These delays pose a grave threat to American businesses and entrepreneurs. The nature of technology and the nature of the marketplace make these delays unacceptable and unsustainable.

And what I would point out to the gentlewoman from Ohio and others who complain about this bill and the fee increases that are contained to modernize the system is that if our competitors in an increasingly globalized economy, in Europe and in Japan and elsewhere, are able to obtain more prompt decisions from their patent offices, that will put American inventors at a disadvantage considerably.

To fund the initiatives set forth in the strategic plan, the administration has proposed in H.R. 1561 an increase in patent and trademark fees. The proposed fee changes accurately reflect the PTO's cost of doing business. They will benefit the PTO's customers by reducing application filing fees and allowing applicants to evaluate the commercial value of their inventions and recover the cost of search and examination as the situation warrants. Most importantly, the new fee structure will enable the PTO to reduce pendency time, improve quality and customer service through electronic processing, and pursue greater enforcement of intellectual property rights abroad.

For example, the additional revenue provided by the fee bill will allow the PTO to hire an additional 2,900 patent examiners, these are Federal employees, not outsourced employees, and move to full electronic processing of patent and trademark applications.

The Committee on the Judiciary unanimously approved this bill on July 9, 2003. The administration and private sector strongly advocated the adoption of the fee bill as a necessary means to address the workload crisis at the PTO. Failure to pass the restructuring contained in H.R. 1561 will result in further degrading of PTO operations and increasing the already unacceptable delays to patent and trademark applicants.

Mr. Chairman, I will soon offer a bipartisan compromise amendment on section 5 of this bill. This portion of the bill, as reported, would essentially have taken the PTO off budget, a result that our friends at the Committee on Appropriations strongly opposed. My amendment, developed with their input, as well as that of the majority leader's office, the Congressional Budget Office, and the Committee on the

Budget, would deposit any fees collected in a given fiscal year in excess of that actually appropriated in a Fee Reserve Fund. At the end of the fiscal year, the director would then be empowered to rebate the reserve-fund revenue to users of the agency.

I understand that the CBO and the Committee on the Budget believe this compromise accomplishes the twin goals set forth by the majority leader's office in backing these discussions; that we will have eliminated the incentive to use PTO revenue for non-agency purposes without compromising the ability of the Committee on Appropriations to exercise their oversight prerogatives in providing appropriations for the agency. The mainstream user groups have signaled their intent to support the amendment based on this interpretation.

I appreciate very much the cooperation of the appropriators in working out this compromise, and I would call on them to take this opportunity to fully fund the strategic plan. Full funding will be crucial to achieving the changes that we all want to see at the PTO.

Now, let me say a couple of words of what the consequence will be if this bill is voted down. First, if this bill is voted down, the current fee diversion that occurs, where up to 30 percent of the fees that are collected by the PTO are not spent on PTO activities but instead are diverted into other areas under the jurisdiction of the Subcommittee on Commerce, Justice, State, Judiciary and Related Agencies of the Committee on Appropriations, will continue.

Patent and trademark applicants should no longer be required to fund functions of the Federal Government that have no relationship whatsoever to Patent and Trademark Office operations. This bill, and the amendment that I will be proposing at the conclusion of the general debate, will end the fee diversion and will mean that fees that are collected by the PTO will either be used by the PTO or refunded to the applicants and other users.

Second, if this bill gets voted down, instead of having a 2-year delay between the time of the application and the time that the application is acted upon, within the next several years that will expand to 6 or 8 years. And if it is 8 years, that means that the patent will only be good and effective for 12 years, because the patent term is 20 years from the date of application. That puts our successful patent applicants at a considerable disadvantage over those competitors who choose to patent their inventions overseas, where patent and trademark offices will work in a more expeditious manner.

I would point out that the small- and medium-sized enterprises who apply for patents under the compromise that is worked out will get a significant fee reduction from a large corporation that is applying for a patent. So there still is a break for small inventors. But there are fee increases; and we need these fee increases to be able to prevent unacceptably long backlogs from occurring, because it is anticipated that the business of the PTO will double in the next few years.

If we do not give them more money and we do not make this into a user fee, then the constitutional protection that the gentlewoman from Ohio and others are referring to will end up becoming very much debased in terms of their worth. I do not think that we want to see this happen, and that is why this legislation is essential to maintain the competitiveness of American intellectual property inventions and the inventiveness that has marked American society since the beginning days of our Republic.

The amendment that I offer in this bill is necessary for the improved performance of the PTO, and failure to enact this legislation will truly be a disaster for American innovation. I urge Members to support this bill.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 3 minutes to the gentlewoman from Pennsylvania (Ms. Hart).

Mr. Chairman, I yield myself 4 minutes.

Mr. Chairman, I rise today to express my sincere gratitude and appreciation to my good friend, the distinguished chairman of the Subcommittee on Commerce, Justice, State, Judiciary and Related Agencies of the Committee on Appropriations, for his work with me on this bill. Working to reform the PTO to ensure timely and effective intellectual property protection for American inventors and businesses has been a multiyear effort for many of us, authorizers and appropriators, on both sides of the aisle. Today, we see the fruits of these efforts. Thanks to the support of Chairman Wolf and full committee Chairman Young, our committees have come together and reached an agreement on a funding mechanism that will enable the USPTO to fully fund its restructuring and reform activities. It is my understanding that this rebate mechanism would ensure that all revenue from patent and trademark fees would in fact go to the USPTO or would be rebated to those who have paid the fees. As a result, the USPTO, which receives no taxpayer dollars and is fully fee-funded, would now be able to retain its fee revenue and to fully fund their widely supported 5-year strategic plan. Is that the gentleman from Virginia's understanding?

Mr. Chairman, I yield myself 4 minutes.

Mr. Chairman, one of our jobs in Congress is to make the government work. We have heard ample data that has been presented on both sides of the aisle that the PTO is in crisis and unless we pass legislation, things will get worse rather than better. What this bill does is that it allows the PTO to

add an additional 2,900 patent examiners, government employees, so that there will be more people on the government payroll to examine these applications. If the bill goes down, those 2,900 people will not be there.

And we have heard a lot about diversion from the gentleman from California (Mr. Berman), the gentlewoman from California (Ms. Lofgren) and others. This bill ends the diversion. So we will not be using PTO fees for other government programs. If the bill goes down, the diversion will continue. The outsourcing issue, the amendment that has been agreed to will, number one, require that the outsourcing if it is done be done by a U.S. corporation; two, it will be done by American citizens; and, three, it will be done in the United States of America.

If we do not do that, then we are going to further complicate the patent process. I would point out that our patent law is such that if there is an infringement suit the patent holder must prove that the patent is valid. That is not the case under foreign patent laws. So if there is a bad patent that is issued because the PTO is rushed, then it is going to cost the patent holder more when an infringement suit is filed. That does not happen in the case of a patent that is issued by a foreign country. This bill makes the quality of the patents that are issued by the Patent Office better because we have got more people looking at them and they are not as rushed.

I yield to the gentlewoman from Ohio.

The answer to the question is that it speeds up the process. And with the WTO treaty changing the patent term to 20 years from the date of filing, every day that there is a delay in actually determining whether the application results in the patentable invention means that there is one less day of patent protection before that patent expires. So if it takes 8 years for the PTO to act on an application, that means that somebody who has invented something only has got 12 years left. With software technology increasing at such a rapid rate, by the time the PTO acts if we do not do something about it, the invention is going to be practically useless.

If the gentlewoman from Ohio will refresh her recollection, the WTO treaty was ratified by Congress. It was urged upon us and signed by President Clinton. I joined the gentlewoman from Ohio in opposing the WTO treaty when it came up in 1994 but we lost on that and the extension or the change in the patent term from the previous 17 years of the date of granting of the patent by the Patent Office was changed to 20 years from the date of filing. The gentlewoman and I voted against it but it is the law and we have to face up to the fact that the longer the PTO delays in issuing a patent, the less time of patent protection there is for an applicant for a patent who succeeds.

Mr. Chairman, I yield 1 minute to the gentleman from Illinois (Mr. Manzullo).

Mr. Chairman, I yield 5 minutes to the gentleman from Texas (Mr. Smith), who is the chairman of the subcommittee.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I offer an amendment.

Mr. Chairman, I yield myself such time as I may consume.

I have a lengthy statement that I will not read in full, but will insert in the Record. But let me state that a significant part of this amendment deals with the agreement that we have reached with the appropriators that was discussed in the colloquy which I had earlier today with the gentleman from Virginia (Mr. Wolf), the distinguished chairman of the Subcommittee on Commerce, Justice, State, Judiciary and Related Agencies of the Committee on Appropriations.

Let me also state that the amendment contains various provisions that the gentleman from Illinois (Mr. Manzullo) and I have agreed upon relative to our previous differences over the treatment of small entities under this bill. And pursuant to this agreement, my amendment applies a 50 percent discount to all searches for small entities, prohibits commercial searches that apply to classified matters, prevents commercial entities from performing searches when they have a financial interest or other conflict at stake, caps the search fee after the 6th year, and requires a joint PTO and Small Business Administration study regarding the effects of the fee structure on small entities.

This, I believe, meets the objections that members of the Committee on Small Business had relative to the cost to small business of applying for and hopefully obtaining a patent. I hope that this amendment clears the way for the other body to consider this bill and bring real reform to the PTO.

Mr. Chairman, I am delighted to report that this amendment reflects a thoughtful compromise between myself and Mr. Wolf, chairman of the CJS Appropriations Subcommittee, as well as a fair deal between the Judiciary Committee and the chairman of the Small Business Committee, the gentleman from Illinois, Mr. Manzullo. I want to thank both of them for working so steadfastly and productively on this important issue.

Mr. Chairman, the heart of my amendment creates a ``refund'' program to eliminate the potential incentive for diverting PTO revenue to non- PTO programs. Briefly, if fee collections in a given fiscal year exceed the amount appropriated to the agency, the excess or overage shall be deposited in a PTO ``Reserve Fund.'' At the end of the fiscal year the Director determines if there are sufficient funds to make payments to persons who paid fees during that year.

The Director is empowered to determine which recipients qualify and in what amounts, except that the payments in aggregate must equal the amount of revenue in the Reserve Fund during that fiscal year, less the cost of administering the program.

This text is crucial to the bill before us. We have been at loggerheads with the Appropriations committee on this matter for nearly a decade, so I am glad to say that we have struck an acceptable compromise that serves the interests of both committees. I am grateful to the appropriators and the majority leader for working with us on this point. I emphasize that without this language, support for the bill dissipates.

In addition, the bill as reported contains a pilot program to determine the efficacy of allowing commercial entities to perform the search function, thereby relieving the agency of the burden and freeing up examiners to do other work. The amendment specifies that participation in the pilot program will be restricted to American businesses and American citizens. We have worked closely with Chairman wolf's staff on this point.

Also, in furtherance of the ongoing modernization efforts at PTO, the Director is required to reduce the filing fee for any small entity, independent inventor, or nonprofit organization by 75 percent provided those so qualified file their applications electronically.

As I noted a moment ago, Mr. Manzullo, and I have resolve dour differences over the treatment of small entities under H.R. 1561. Pursuant to recently agreed-upon changes, my amendment: Applies a 50 percent discount to all searches for small entities; prohibits commercial searches that apply to classified matters; prevents commercial entities from performing searches when they have a financial interest or other conflict at stake; caps the search fee after the sixth year; and requires a joint PTO-SBA study regarding the effects of the fee structure on small entities.

Mr. Chairman, by addressing the fee diversion and other issues, this amendment clears the way for the other body to consider H.R. 1561 and bring real reform to the PTO. I urge its adoption.

I yield to the gentleman from California.

Mr. Chairman, I have no further requests for time, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, H.R. 1561 is a wonderful illustration of the principle that something does not have to be interesting to be important.

This bill is of critical importance to the health of our information economy. Intangible property, such as patents, trademarks and copyrights, now constitute well over 50 percent of the assets of U.S. corporations, both large and small. Most of the great advances in pharmaceuticals, telecommunications, biotechnology, and Internet fields began as patented inventions. Patent protection played a critical role in the creation and dissemination of inventions from the telephone to fiberoptics, from injectable insulin to laser eye surgery.

The Patent and Trademark Office, which issues both patents and trademarks, has a critical role to play in creating and securing these assets. By facilitating many needed reforms, H.R. 1561 ensures that the PTO plays a positive role in stimulating our information economy, rather than becoming an obstacle to it.

Furthermore, H.R. 1561 does not saddle the U.S. taxpayer with the cost of these reforms. The PTO is fully funded by fees from the patent and trademark applicants, and this bill raises some of those fees to enable those reforms. H.R. 1561 pays for other reforms by ending the innovation tax. Throughout the last decade, over $650 million in fees paid to PTO by American inventors and small businesses have been diverted to unrelated agencies. H.R. 1561 stops this tax on innovators by ending diversion once and for all.

The PTO is in a crisis that threatens the stability and usefulness of our patent and trademark systems. At congressional urging, the PTO has crafted a 21st-century strategic plan to address this crisis, but it needs this legislation to implement that plan.

H.R. 1561 is necessary because the patent system is coming apart at the seams. A perfect storm of sorts has hit the PTO, which administers the patent system. This storm threatens to make the patent system dysfunctional. This perfect storm involves a tremendous growth in the amount and complexity of PTO workload, matched by a decreasing ability to handle that workload. The number of patent applications received annually by the PTO doubled between 1992 and 2003 to a figure of over 350,000 last year. What is more, the number of applications continued to grow throughout our recent recession and is expected to increase another 5 percent this year. This growth is fed in part by the expanding scope of patentability. Due to a string of court opinions, patentable inventions now include software, business methods, and anything else made under the sun by man.

The technology boom in the United States has also resulted in applications for patents on inventions in areas of technology that did not exist just a few years ago. On a daily basis, PTO is asked to review applications for patents on such things as genetic tests and laser vision technologies.

The numerical growth, and the expanding scope, are matched by a growth in complexity. For instance, some biotechnology patents covering genetic sequences can occupy the equivalent of 10,000 pages. The PTO must hire new examiners with the requisite skills in these areas or fund extensive retraining for current examiners.

The PTO's decreasing ability to deal with this increasing workload is the result of several factors. Most responsible is the cumulative effect of more than a decade of fee diversion. The PTO is entirely funded by user fees. Patent and trademark holders and applicants pay the PTO a variety of fees to obtain and retain their patent and trademark rights. The fees are supposed to reflect the cost of services provided by the PTO; but between 1992 and 2003, Congress denied the PTO the ability to spend $654 million of the fees paid to it. Instead, Congress appropriated these fees for unrelated programs. This will stop as a result of this bill.

As a result of that diversion, the PTO has been forced to gradually cannibalize itself. It has deferred critical information technology upgrades. It has squeezed every ounce of possible productivity out of examiners, and appears now to be asking them to review applications in an unrealistic time frame. It even laid off almost one-third of its trademark examining corps. Despite these drastic measures, the PTO only managed to delay, not avert, a train wreck. By all objective measures, that train wreck is upon us.

I could go through, and my the statement in the Record will contain a full

statistical explanation of the incredible increase in the backlog for patent applications, but in conclusion, it takes more than 2 years now for a patent application to be granted or disposed. In many cases, more than 60 months is the pendency for a patent application.

Why does this pendency matter? Why do we care about these backlogs? It affects both the patent applicants and society at large. Patent ownership enables individual inventors and small businesses to obtain capital. Patent ownership gives prospective financiers, such as venture capitalists and banks, important reassurance that investment in a small entity is sound.

Long patent pendency also negatively affects society at large. Long patent pendency and patent backlogs creates substantial uncertainty in the marketplace and thus makes it difficult for all businesses to operate. A backlog of 500,000 patent applications may cover business methods now common in the financial service business, software contained in every personal computer, or a type of computer chip that will cost billions to manufacture.

As troubling as the lengthy patent pendencies are, they are not the gravest problem facing the PTO. Even greater concern should be given to the quality of the patents granted by PTO. When PTO grants patents in error to things that are not true inventions, many negative side effects occur. Low-quality patents can deter scientific research, create obstacles to legitimate commercial activities, and create opportunities for illegitimate rent-seeking. A bad patent on a pharmaceutical drug means that consumers cannot obtain a cheaper generic version. A bad patent on Web browser technology may force the redesign of every piece of software interoperating with current Web browsers.

Using a random sampling methodology, the PTO estimates its error rate for patents issued in fiscal year 2003 at 4.4 percent. That means more than 7,000 patents were issued in error. That means that at any given time given the 7-year pendency term for patents, there are over 120,000 bad patents in force.

Enactment of this legislation will enable the PTO to substantially improve patent quality. It will also enable the PTO to hire 750 new patent examiners a year between 2004 and 2006, and additional numbers in subsequent years. It will take time to train these new examiners. They will eventually be able to shoulder some of the patent examination workload that threatens to swamp the current examining corps. With an expanded examining corps, the PTO will be able to give patent examiners more flexibility in the amount of time they spend on any one application.

I am convinced that H.R. 1561 is an important part of the solution to the pendency and quality problems. It is a first absolutely necessary step to reforming the PTO. There are other legislative proposals that deal with a number of these issues, but this is the key first step. I urge my colleagues to approve H.R. 1561.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 3 minutes to the gentlewoman from California (Ms. Lofgren), a member of the Committee on the Judiciary and the first articulator of the principle ``no end to diversion, no fee increase.''

Mr. Chairman, notwithstanding the difference of view we have on this issue, I yield 3 minutes to the gentlewoman from Ohio (Ms. Kaptur), a tenacious fighter for that in which she believes.

Mr. Chairman, I yield myself 30 seconds.

The gentlewoman argued in favor of her position, take more time. There is no problem with taking time. The fact is we want a thorough investigation. We want a good quality patent. But simply taking more time, the argument against that is not simply the one made by the chairman about the patent term and how much of it will be left, it is that in that backlog that is getting longer and longer and longer are lifesaving medical devices, new drugs, new technologies to make America more productive and efficient, fascinating and important inventions that need to be disseminated and distributed and will not be until that patent issues.

That time is costing our economy and our people both in terms of quality of life, health care, and economic efficiency.

Mr. Chairman, I yield 2 minutes to the gentleman from Florida (Mr. Wexler), a member of the subcommittee.

Mr. Chairman, I yield 2 minutes to the gentleman from Washington (Mr. Inslee).

(Mr. INSLEE asked and was given permission to revise and extend his remarks.)

Mr. Chairman, I yield myself such time as I may consume.

I have no further requests for time, but I do want to address this issue of outsourcing just to get the record straight here. As a general principle, I am opposed. I share the feelings of the gentlewoman from Ohio regarding the general proposition, the farming government responsibilities and jobs out to private entities and particularly when we are dealing with core government functions; and I think searches performed by patent examiners may be such core functions. But in H.R. 1561 what we took was an open-ended proposal from the Patent Office to allow outsourcing of searches, and working with the gentleman from Texas (Chairman Smith), with other committee members, with the PTO, with PTO employee unions, and with all the various industry groups, we put constraints on the ability to outsource allowed by the bill. Together with the gentleman from Texas (Chairman Smith), we developed a limiting amendment that was accepted with essentially no opposition in the Committee on the Judiciary; and the bill, as so amended, was reported out with Democrats and Republicans expressing just about unanimous support for the bill.

H.R. 1561 prohibits the PTO from outsourcing until all of the following criteria are met: the PTO conducts a pilot project of limited scope for not more than 18 months to test the efficacy of outsourcing patent searches; secondly, that the pilot program must demonstrate that the searches performed by commercial entities are accurate and at least meet or exceed the standards conducted and used by the PTO; the director, third, must submit a report to Congress detailing the methodology of the pilot and containing a comparative evaluation of outsourced and patent examiner searches, addressing factors such as productivity, costs, and quality; fourth, and very importantly, the Patent Public Advisory Committee, an independent entity consisting of patent union representatives and PTO user groups, has to submit a report to Congress with a detailed analysis of the pilot project.

And even after that, if that independent committee, all that concludes that it makes sense to outsource patent searches, nothing can happen until after 1 year so that Congress has a year to decide whether or not to continue to prohibit search outsourcing despite the results of these reports.

H.R. 1561 prohibits the PTO from outsourcing searches unless all of these criteria are met. The National Treasury Union, every patent user organization that I know of, large companies, small companies, universities, nonprofits, all of them involved in the patent process all think this bill does not destroy the Patent Office. This bill is the most important thing to saving the whole patent process. And the whole point of even entertaining the idea of outsourcing is simply to deal with better quality, better productivity, and more time. I urge that H.R. 1561 be passed.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, will the gentleman yield?

Mr. Chairman, I thank the gentleman for yielding.

Mr. Chairman, I simply want to express my strong support for this amendment. If I were a betting man, I would have bet a lot of money that the chairman would not have been able to deal with the end of diversion in the fashion that he was able to without at least 25 or 30 appropriators on the House floor. I congratulate both him and the subcommittee chairman for their excellent work, and I urge the manager's amendment be adopted.

Mr. Speaker, I rise for the purpose of inquiring of the majority leader the schedule for the House next week.

I yield to the gentleman from Texas.

Mr. Speaker, I thank the gentleman for the information he has given to the Members and for the schedule.

Mr. Leader, you indicate there will be a short-term extension of the highway reauthorization bill scheduled for next week. Can you tell us as to when the full reauthorization, the permanent reauthorization, will be ready for consideration on the floor?

I thank the gentleman for those comments. To reiterate, the extension will be until May 30 or 31?

I thank the gentleman for that information.

For Members' planning purposes, does the gentleman expect to have votes next Thursday? I know we have it on the schedule, but I am wondering whether or not the leader has any insight into whether or not we will need next Thursday or not.

Unemployment insurance, as the gentleman knows, has been a real concern, I think, of all of ours but particularly we have raised this issue in terms of the extension. When Congress adjourned last year, it failed to extend, as the gentleman knows, the emergency unemployment compensation program which left 90,000 American workers and their families every week, which now is approximately 375,000 workers by the end of last month, in the lurch, off of unemployment benefits.

We have just passed, in my perspective at least, a very significant amendment which will give some hope and relief to these folks whose families have lost at least some type of floor for their maintenance of their families, the purchase of food and payment of rent and mortgages and things of that nature. I know we just passed it, but I would be very interested in whether the leader has any thoughts as to whether or not it would be possible to accelerate this matter so that we could get it back here so that we could give relief to these families that we have been talking about for many months.

Reclaiming my time, and I appreciate the leader's observation of my cleverness or the cleverness at least of the gentleman from California (Mr. George Miller) and our side of the aisle. The most clever thing, though, that we did was to get 229 people in the House of Representatives to say, we need to give relief to these folks who have lost their unemployment insurance. That was the most clever. The gentleman did not vote on that side of the proposition, I understand that, but 229 Members did, Republicans and Democrats. I would respectfully suggest to the leader that his observation may be correct, that the way in which this was done, because the rules required us to do it this way, may not be the best way to do it. There is a best way to do it and it can be done immediately, hopefully even by unanimous consent; simply extend, as we have been requesting for the last 4 months, to extend unemployment benefits so that these folks, these 375,000 who have lost their unemployment benefits, would be covered. The gentleman and I may agree. This may not be the best way to do it. It may have been a clever way, as the gentleman observes, for us to get this issue up, but as I say, the more clever thing was to get 229 Members of the House, a majority of the House, to say that we ought to be doing this.

Reclaiming my time, apparently the leader believes the 39 Republicans who voted for it voted for it as a political maneuver. I do not think that is the case. I do not think it was a political stunt.

There were 39 Republicans who joined over 190 Democrats to say that we need to give unemployment insurance to those families who have lost it. To assert that that was a political stunt, with all due respect, Mr. Leader, is incorrect. It was a conviction, a belief, strongly held, long advocated, that we give relief to those who have lost their unemployment insurance benefits, just as it has been our belief for a long period of time that we give that child tax credit to those 6.5 million families, those 12 million children, those 200,000 service personnel who are not covered by the child tax credit.

Reclaiming my time, surely the majority leader jests. Surely the majority leader knows that Secretary Snow said that the administration was going to create 200,000 jobs per month. Surely the gentleman knows that last month the economy created, in December, the last month we have figures for, 1,000 jobs. That is one-half of a percent of the performance that the Secretary of Treasury said was going to be accomplished, 1,000 out of 200,000. Surely the gentleman knows that during the time period in which he talks, the Clinton years, the 8 years, 22 million jobs were created. This administration has lost 2.5 million jobs over the last 3\1/2\ years.

Mr. Speaker, there is a commitment on this side of the aisle. There was the commitment in the Reagan recession, there was a commitment in the first Bush recession to extend. In fact, as the leader must know, we extended unemployment benefits more frequently with Democratic votes in the Reagan administration and in the first Bush administration than we have done in this recession, with Democratic not only support but leadership on those extensions. With all due respect, Mr. Leader, I would say that the assertion that somehow that Democrats are not for extending unemployment benefits when we have families in trouble is simply inaccurate.

I would be glad to yield to the gentleman.

Reclaiming my time, Mr. Leader, I want to make this comment. I make it as an interesting comment, that during the Clinton years, the gentleman claims that it was the Republicans who created those jobs. Is it not ironic, Mr. Leader, that the Republicans cannot do that when they not only have the House, the Senate, but also the Presidency? Could it be that perhaps the difference was President Clinton? Because with total control, as your friend Dick Armey noticed last time, you own the town and have for the last 3 years. Is it not ironic that you claim credit for doing it before but you cannot do it now?

Reclaiming my time, I know that the leader believes that. He has said it before. He has voted that way. We understand that. There is very little confusion.

I noted that by the President's own admission when he spoke to the House and the Senate, he was saddled with a $5.6 trillion surplus. He has successfully turned that into a $4 trillion deficit, an almost $10 trillion turnaround the wrong way. So in terms of being saddled, Mr. Leader, the recession, by the admission of the administration, was over some many months ago and we still find ourselves in a place where not only do we have 2.5 million people unemployed but we have some 3 million people who are discouraged and are no longer on the rolls because they are no longer seeking employment.

I guess we could go on all night on this. We have a different view. But I really believe and would hope, as we did in the child tax credit, that we could certainly pass an extension to take care of those 375,000 people who have lost their unemployment insurance over the last 3 months.

Mr. Chairman, first of all, I would like to personally thank the gentleman from Wisconsin (Chairman Sensenbrenner); the gentleman from Illinois (Chairman Manzullo); the gentleman from Florida (Chairman Young); the gentleman from Virginia (Chairman Wolf); and also the gentleman from California (Mr. Berman), ranking member, for their help in pulling this bill together. They helped to iron out the wrinkles. They helped resolve the differences between many parties, and it is much appreciated.

Mr. Chairman, this legislation that I authored modernizes the U.S. Patent and Trademark Office. It was inspired by two principles essential to a democracy: the protection of intellectual property rights and the freedom to exchange goods and services.

The Patent and Trademark Office does not receive the attention of other government agencies such as the Department of State and Department of Justice, but it should. The Patent and Trademark Office is crucial to the health of our economy and to the lives of millions of Americans.

The Patent and Trademark Office protects the rights of all American inventors. From the lone individual working in their garage to the small business owner with a breakthrough idea to the large high-tech company that applies for hundreds of patents, all rely on a responsive Patent and Trademark Office. Without a strong PTO, our economy would be devastated, our quality of life would be diminished, and jobs would be lost or never created in the first place.

Mr. Chairman, this bill prevents the diversion of Patent and Trademark Office fees paid by inventors to fund government programs unconnected to the agency. The diversion of fees to the office is unfair, counterproductive, and an obstacle to sustained economic

growth. Approximately $750 million has been diverted from the PTO in the last decade alone. Such a large revenue loss has deprived the Patent and Trademark Office of the resources it must have to serve the patent and trademark holders of the United States. At a time when the office is struggling to pay its examiners enough and to keep up with applications, particularly in high-tech areas, Congress should take an interest in protecting our economy by keeping patents and trademark fees within the Patent and Trademark Office.

This bill enables the Patent and Trademark Office to hire 2,900 new patent examiners. Today the average time to process a patent exceeds 2 years. Without the new examiners, agency delays will soon reach 3 or even 4 years. If this fee bill does not become law, it is estimated that 140,000 patents will not be issued over the next 5 years. That is 140,000 missed opportunities for the American people.

If nothing is done, if the status quo continues, it means new products will not make it to the market, jobs will not be created, and the inventors who came up with new ideas and products will not have their intellectual property protected and so will not market their inventions.

This bill helps small businesses and nonprofit institutions. It provides a 50 percent discount on most services to small businesses, universities, and other nonprofit entities. The benefits of an improved and streamlined PTO will help small businesses and universities and encourage new research and innovation.

Mr. Chairman, I would like to again thank the gentleman from Wisconsin (Mr. Sensenbrenner), chairman of the Committee on the Judiciary, for making this issue a priority for our committee and working with the appropriators to resolve our differences on PTO funding.

Since U.S. Patent No. 1 was issued in 1837 for traction wheels, the patent system and the creativity, genius, and talent that defined it have benefited all Americans. From the revolutionary electric light bulb to the latest software technology, patents reflect America and contribute to our economic prosperity.

This bipartisan bill is supported by these organizations: the Information Technology Industry Council, Chamber of Commerce, the National Association of Manufacturers, the Intellectual Property Owners, the International Trademark Association, the Association of American Universities, and the Association for Competitive Technology, as well as many others.

Mr. Chairman, this bill is good for innovation, good for the economy, and good for the American people. The PTO has rarely been more important than it is today. It must have the resources it needs to professionally and expeditiously process patent and trademark applications. American jobs, profits, and the future of entrepreneurial capitalism are literally at stake.

Mr. Chairman, I strongly support this amendment, which is the result of careful negotiations between the Judiciary and Appropriations Committees.

The two goals of the underlying bill are to improve PTO operations and to end fee diversion. This amendment makes sure those goals are achieved.

In order to eliminate the incentive to divert fees from the PTO, the amendment establishes a rebate program that will deposit any fee collections that exceed the amount of money appropriated to the PTO in a ``reserve fund.'' At the end of each year, the PTO Director will determine whether there are sufficient funds to make payments to users who paid applicant fees that year. By ending fee diversion and allowing the PTO to keep the fees its users pay each year, the agency will be able to make many much-needed reforms to increase its efficiency and productivity.

This amendment also contains provisions that will ensure the PTO will operate effectively. It establishes a pilot program to allow

private entities to perform the search function associated with obtaining a patent. This will free up patent examiners to focus on other work.

Some have mischaracterized this provision as ``outsourcing'' that will cut American jobs and send work overseas. In fact, this amendment specifies that participation in the pilot program is restricted to American businesses and American citizens. By allowing patent searches to be performed by commercial entities, this pilot program will simply allow the private sector to take some of the load off of an already overburdened patent evaluation system at the PTO.

Twenty-five to thirty percent of the 355,000 patent applications the PTO receives each year come from small businesses. The Sensenbrenner amendment has many provisions to help small businesses obtain patents.

The PTO is one of the most important agencies in the country. It is the agency behind the innovation and invention that drives our economy. We must give it the funding it needs to implement meaningful reform and improve its operations.

This amendment strengthens the underlying bill and I urge my colleagues to support it.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, the House will convene on Tuesday at 12:30 p.m. for morning hour debates and 2 p.m. for legislative business. We will consider several measures under suspension of the rules. A final list of those bills will be sent to Members' offices by the end of this week. Any votes called on these measures will be rolled until 6:30 p.m.

On Wednesday, the House will convene at 10 a.m. We plan to consider the Senate amendment to H.R. 743, the Social Security Protection Act. In addition, we plan to consider H.R. 1561, the U.S. Patent and Trademark Fee Modernization Act and a short extension of the highway program as well. The current extension expires at the end of February, so we must consider a short-term extension while we are working actively on TEA-LU.

Finally, I would like to remind all Members that we do not plan to have votes on Friday, February 13. I will be happy to answer any questions.

Mr. Speaker, I think that the committee should be prepared to mark up this very important legislation very shortly after the Presidents' Day district work period. The 4-month extension that we are talking about doing next week should not in any way indicate that we want to postpone the completion of this very important bill until June. The 4-month extension that we are talking about is simply to give highway administrators, especially in the northern States, the predictability that they need to let contracts for the spring and summer construction season.

In discussions with the chairman of the Committee on Transportation and Infrastructure, he informs me that he is working as hard as he can to get the TEA-LU bill up as quickly as possible. And once they get it marked up, it goes through the Committee on Ways and Means. After that, we will bring it to the floor as quickly as possible.

I have not seen the actual language. That is being consulted with your side. The last I was advised, it would probably be June 30.

We do not have a busy week on the floor for next week, but at this point we are inclined to work through Thursday, not through Thursday but at least Thursday morning to early afternoon. This will give committees an opportunity to hold hearings and get some markups completed so we will have legislation ready for the end of February and through March. But I do not expect to have a long day Thursday.

My friend considers that amendment a very significant amendment. I have a different point of view. As the gentleman is surely aware, the provision that he refers to that just passed is a completely new, unfunded program in a new agency with no experience or competence to handle this issue. Frankly, it was a very clever political stunt and I have to hand it to

the gentleman, but if you look at the substance of this, I cannot imagine any member of the conference committee actually voting to allow that to come out of conference.

I would remind the gentleman that the unemployment rate today is lower than it was when President Clinton and a Democrat-controlled Congress cut off extended unemployment benefits, and in my opinion the way to help the working class is not to grow the government but to grow the economy and create jobs.

If the gentleman will yield, he did not use all of my quote. I said it was a clever political stunt. Members do vote sometimes, without questioning anybody's motive, do vote for political reasons or whatever reason they may. But the truth still remains, and our side of the aisle feels very strongly that it is more important to provide jobs than unemployment. We understand the gentleman's point of view. We respect his point of view. We have a different point of view. If this was a substantive amendment that had real teeth in it, I do not think the vote would have been the same.

That is not what I said.

If the gentleman will yield, I have to correct the gentleman. He says a long-held belief. I do not understand what the gentleman's definition of ``long-held belief'' is. When his party was in control in 1993 and the unemployment figures were higher than they are now, the economy was not as good as it is now, his party brought to this floor the cutting off of long-term unemployment benefits. Yet now when the economy is even better, when the unemployment rate is almost to full employment, the gentleman feels very strongly, and it is not for politics, I am sure, very strongly that now we have to extend. So long-held beliefs are in the eyes of the beholder.

I appreciate the gentleman yielding to me. It is not inaccurate to state that in 1993, before the Clinton administration took credit for an economy that was created by a Republican Congress, the Democrat-controlled House cut off extended benefits. The gentleman knows that we can use figures all over the place. The gentleman is right, only 1,000 jobs were created in December, but it was very interesting to note that 146,000 long-term unemployed went off the rolls and went to work in December alone. The trends are that jobs are going up, the trends are that unemployment is going down, that jobs are being available and the long-term unemployed will be able to find jobs.

I lived this history. I very much remember that the Balanced Budget Act of 1996 and 1997 was vetoed twice by President Clinton and then signed by President Clinton with very little changes. The restraint on spending through the whole process, the Welfare Reform Act that was vetoed two or three times if I remember, all of the issues that actually got to the President's desk in those years were resisted by the President while he took credit after he signed it for everything, including the economy.

Then we find ourselves coming into a new administration when the recession started in the old administration, and this administration was saddled with a recession as it came in and did exactly what needed to be done, along with the Republican House and Senate and, that is, give the types of tax relief and economic policies that now we see are working and a growing economy that the American people are experiencing, not the economy described by the other side of the aisle. Unemployment is going down, jobs are going up, people are finding jobs. I see no reason to extend after 26 weeks unemployment benefits.