A bill to amend title 35, United States Code, to provide a good faith exception to the imposition of fines for false assertions and certifications, and for other purposes.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise in strong support of S. 3960. This legislation makes a minor technical change to give the Patent and Trademark Office the flexibility to decide when to penalize patent applicants for false certifications of eligibility for fee reductions.

When Congress passed the Unleashing American Innovators Act as part of the government funding package for fiscal year 2023, we did so with the intention of making patents no longer the sport of kings but an opportunity for inventors to make a decent living.

Innovators should not have to work for a Big Tech company, major manufacturer, or any other powerhouse of industry to be able to file a patent, but that is exactly what often happens.

Financial hurdles associated with obtaining and owning a patent, from hiring a lawyer to searching for prior art, to paying standard application fees, can prevent individuals from seeking patents for their inventions. Barriers to entry like these hurt everyone, but above all they hurt women, veterans, and minorities who often do not have the resources to go it alone.

The result is that fewer ideas make it out there into the American innovation space. All of our talent becomes siloed in just a few companies and in just a few industries, and prospective creators shelve their ideas for another day.

The Unleashing American Innovators Act sought to disrupt the current state of play by making a series of good-government changes to the way the USPTO works, including by increasing the discount on fees for small and micro entities and by imposing penalties for making fraudulent certifications to obtain a discount.

However, I am sure many out there will be shocked to learn that Congress sometimes makes mistakes, and in creating these new fee waivers and associated penalties for trying to abuse said waivers, we neglected to consider that applicants can make honest mistakes in their applications.

If innovators are too afraid to apply for financial exemptions because penalties for honest mistakes can lose them a chance at a patent, then all of our improvements may as well simply not exist.

S. 3960 would correct this minor error. Under this legislative fix, a USPTO director would no longer be forced to fine a good-faith actor who erroneously asserts that they are entitled to a fee reduction for small- or micro-entity status. By allowing for honest mistakes in the application process, this technical fix will ensure that everyone has a seat at the table.

I thank the chairman of the Courts, Intellectual Property, and the Internet Subcommittee, Mr. Issa, for introducing the House version of this legislation, which I was proud to join along with Congresswoman Ross. I thank Ms. Ross for leading the Unleashing American Innovators Act.

This legislation has already passed the Senate, and I encourage all Members to support it so that we can send it to the President's desk.

Madam Speaker, in closing, failing to account for good-faith mistakes harms the exact same people the Unleashing American Innovators Act sought to help. Individuals and entities that can barely afford filing fees certainly do not have the financial resources to weather a hefty fine.

Moreover, unlike large entities, the prospect of losing a patent associated with an erroneous application could very well mean losing everything. Smaller entities, therefore, are the most likely to avoid the risk of applying for the very programs that exist to help them.

This legislation will ensure that the USPTO director will no longer be forced to fine inventors who make honest mistakes when they apply for a patent, ensuring that the people we were trying to help in creating the program are not chilled from participation.

Again, I support this legislation, I encourage my colleagues to do the same, and I yield back the balance of my time.

Madam Speaker, I move to suspend the rules and pass the bill (S. 3960) to amend title 35, United States Code, to provide a good faith exception to the imposition of fines for false assertions and certifications, and for other purposes.

Madam Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and insert extraneous material on S. 3960.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, this bill is a win for small businesses and small inventors.

Small businesses may qualify for reduced application fees when applying at the United States Patent and Trademark Office. However, under 35 U.S.C. sections 41 and 123, a small business may claim small- entity or micro-entity status. For example, the standard cost of filing a utility patent is $320. A small entity, however, pays just one-half of that, $128; and a micro entity is charged only $64.

When Congress passed the Unleashing American Innovators Act in 2023, the law required the United States Patent and Trademark Office director to impose punitive fines on entities falsely asserting or certifying entitlement to these reduced fees. This was intended to deter unscrupulous actors from claiming the benefit for which they did not qualify.

However, in that bill, we granted no exceptions under existing laws for those who made an honest error in good faith. For example, if an employee is mistakenly categorized as a contractor rather than an employee, a good-faith mistake could cause them to claim the wrong status. Or if there is a mistake in information provided by another company that is a licensee, that could also result in that.

The impact of these punitive fines would be disproportionate to the honest mistake. These harsh fines may deter entities from seeking the benefit of small- or micro-entity status since

the potential cost of the fine would far outweigh the benefit.

To ensure that small businesses can get these reduced fees, in concert with the House, S. 3960 gives the USPTO director the authority to waive punitive penalties when a business demonstrates that it acted in good faith.

Madam Speaker, I urge my colleagues to support S. 3960 which will ensure that small businesses, if claiming incorrectly, have an opportunity to make right their mistake, and I reserve the balance of my time.

Madam Speaker, I yield myself the balance of my time for the purposes of closing.

Madam Speaker, we often get chastised in the House for not admitting our mistakes, but when a technical error could potentially lead to damages to the private sector, it is one of those areas I am proud to say that the Judiciary Committee is bipartisan and quick to recognize. In concert with the Senate, we have done so today.

Madam Speaker, I urge all Members to vote for the bill, and I yield back the balance of my time.

Madam President, I ask unanimous consent that the Committee on the Judiciary be discharged from further consideration of S. 3960 and the Senate proceed to its immediate consideration.

I ask unanimous consent that the bill be considered read a third time and passed and that the motion to reconsider be considered made and laid upon the table.