Mr. President, ingenuity and innovation have been a cornerstone of the American economy from the time Thomas Jefferson issued the first patent to today. The Founding Fathers recognized the importance…
Mr. President, ingenuity and innovation have been a cornerstone of the American economy from the time Thomas Jefferson issued the first patent to today.
The Founding Fathers recognized the importance of promoting innovation, and the Constitution explicitly grants Congress the power to ``promote the progress and science and useful arts, by securing for limited times to . . . inventors the exclusive right to their respective . . . discoveries.'' The discoveries made by American inventors and research institutions, commercialized by our companies, and protected and promoted by our patent laws have made our system the envy of the world.
The legislation I introduce today with Senator Hatch, and many others and from across the political spectrum, will keep America in its longstanding position at the pinnacle of innovation. This bill will establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs, while making sure no party's access to court is denied.
Innovation and economic development are not uniquely Democratic or Republican objectives. I have been working on the Patent Reform Act on a bipartisan basis with Senator Hatch and others for several years--and Senator Hatch and I worked on various patent issues for many years before that.
Last Congress, I introduced, along with Senator Hatch, the Patent Reform Act of 2007, which is the precursor to the legislation we introduce today. That bill was the subject of consideration and amendments over four weeks of mark-up sessions in the Senate Judiciary Committee. After the Judiciary Committee voted to approve the bill in July 2007, we continued to hold numerous meetings, briefings, and stakeholder roundtables--again, on a bipartisan basis.
The legislation we introduce today picks up where we left off in those discussions. We have made some changes from the Committee- approved bill in response to concerns we heard from groups ranging from labor unions to small inventors to manufacturers. We have removed the requirement that all patent applications be published 18 months after they are filed and we have removed the requirement for Applicant Quality Submissions. We have also adopted the House approach to improving the current inter partes reexamination process, rather than creating a new second window post-grant review.
Perhaps the most hotly debated topic in the patent reform debate last Congress was the damages provision. The reasonable royalty language in the bill we introduce today is identical to the language approved by the Judiciary Committee last Congress. While I strongly support this language, I am prepared to continue the conversation and debate from the last Congress in order to find the best language we can.
There have been several positive developments since the Committee voted to report the legislation in July 2007. Senator Specter has made constructive suggestions about a ``gate keeping'' role for the court in damage calculations. The Supreme Court's Quanta decision may offer a useful way of describing the truly inventive feature of a patent. There is much work to do on this provision and I am optimistic that by continuing to work together, we will find the right language.
During consideration of the Patent Reform Act of 2007 in Committee last Congress, I offered an amendment, which was adopted, to codify the inequitable conduct doctrine. Senator Hatch has asked that the provision be removed on introduction this year. I understand that the issue of inequitable conduct is very important to Senator Hatch, and I will work with him to address any statutory changes.
It has been more than 50 years since Congress significantly updated the patent system. In the decades since, our economy has changed dramatically. No longer is the economy defined only by assembly lines and brick-and-mortar production. We are living in the Information Age, and the products and processes that are being patented are changing as quickly as the times themselves.
A patent system developed for a 1952 economy, needs to be reconsidered in light of 21st century realities, while staying true to our constitutional imperative. The patent laws that were sufficiently robust for promoting innovation and economic development are now actually impeding growth, harming innovators and raising prices on consumers.
The array of voices heard in this debate--representing virtually all sectors of the economy and all interests in the patent system--have certainly not been uniform, but three major areas of concern with the current patent system can be distilled from their discussions.
First, there is significant concern that the U.S. Patent and Trademark Office, PTO, is issuing low quality patents. Patent examiners are facing a difficult task given the explosion in the number of applications and the increasing complexity of those applications. When Congress last overhauled the patent system in 1952, the PTO received approximately 60,000 patent applications; in 2006, it received 440,000. Clearly, this puts a strain on the system and understandably affects the quality of patents issued.
Second, the costs and uncertainty associated with patent litigation have escalated in recent years, and are creating an unbearable drag on innovation. Damage awards are inconsistent and too often fail to focus on the value of the invention to the infringing product. This disconnect and uncertainty is a problem that also leads to unreasonable posturing during licensing negotiations.
Third, as business and competition become more global, patent applicants are increasingly filing patent applications in other countries for protection of their inventions. The filing system in the United States, known as ``first-to-invent,'' differs from that in other patent-issuing jurisdictions, which have ``first-to-file'' systems. This causes confusion and inefficiencies for American companies and innovators.
The Patent Reform Act of 2009 promotes innovation, and will improve our economy, by addressing these impediments to growth. As the administration endeavors to guide the economy out of the recession, as payrolls shrink and the jobless rate rises, Congress cannot afford to sit idly by while innovation--the engine of our economy--is impeded by outdated laws.
Our legislation ensures that, in the Information Age, we have the legal landscape necessary for our innovators to flourish. It will improve the quality of patents and remove the ambiguity from the process of litigating patent claims, which will promote innovation stifled by the current system. As innovation is encouraged, and excessive litigation costs are removed, competition will increase and the consumer cost of products will fall. In this way, the bill directly benefits both creators and consumers of inventive products.
Patent reform is ultimately about economic development. It is about jobs, it is about innovation, and it is about consumers. All benefit under a patent system that reduces unnecessary costs, removes inefficiencies, and holds true to the vision of our Founders that Congress should establish a national policy that promotes the progress of science and the useful arts.
When Thomas Jefferson issued that first patent in 1790--a patent that went to a Vermonter--no one could have predicted how the American economy would develop and what changes would be needed for the law to keep pace, but the purpose then remains the purpose today--promoting progress.
As I said when I introduced the Patent Reform Act last Congress: If we are to maintain our position at the forefront of the world's economy, if we are to continue to lead the world in innovation and production, if we are to continue to benefit from the ideas of the most creative citizens, then we must have a patent system that produces high quality patents, that limits counterproductive litigation over those patents, and that makes the entire system more streamlined and efficient.
Now is the time to bolster our role as the world leader in innovation. Now is the time to create jobs at home. Now is the time for Congress to act on patent reform.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.