this committee for a period of time, and has no peer when it comes to support of the military, he did have one peer that i know, extremely well, and he does as well, and that's ike skelton, who was not re-elected. and we miss ike and the extraordinary service that he put forward on behalf of this country. first as a soldier and then as a congressperson. . we can't come up with the necessary expenditures to keep our military well-equipped, well-trained and superior to any other force, but at the same time we need to devote greater attention to the use of these precious resources. i wish that the republican majority would have devoted as much concern for the nondefense portion of our budget as they do to the vast level of spending contained in this measure. we need to appreciate that spending monday on conflict

prevention -- money on conflict prevention, as my friend mr. lewis pointed out, is far more cheaper in the long run than spending money on conflict engagement. we cut social service programs here at home and around the world at our own peril. for when people lack food, lack resources, lack dignity and lack a future, lack hope, their nations will much more easily succumb to the kind of extremism, violence and instability that we are spending billions fighting. i have no war he will with providing the necessary funding to -- quarrel to provide the necessary funding for our service men and women to carry out their mission. our nation needs a lean and powerful and effective military and we owe a debt of gratitude as has been expressed and likely

will be continuously throughout this appropriations process to the members of the military and their families, for the sacrifices they make and the devotion to duty they demonstrate. when they are set on difficult missions overseas, it's our duty to see that they have our full and complete support. but we also have great needs in this country. and we cannot continue to slash funding for essential programs here at home in favor of ever-increasing funding for wars abroad. we cannot continue spending money overseas that will go to waste when water treatment plants get blown up, we can't continue funding dubious efforts in regions where our money trickles down to the very extremists it is supposed to be defeating. and we cannot keep increasing our military budget year after year while devastating essential programs are left by the wayside

here at home. i do have one concern about this rule and that is the new section that was added to this rule at the last minute. that set forth restrictions on the amendment process. but at this time i will yield back the balance of my time. the speaker pro tempore: the gentleman from florida, mr. hastings, yields back his time. the gentleman from florida, mr. nugent, is recognized. mr. nugent: mr. speaker, i support the rule and the underlying legislation and i encourage my colleagues to support it as well. i know that since i've come to the house i've gotten up here and talked time and time again about our government's core mission. there's no doubt there's nothing more central to the purpose of government than to provide for our nation's defenses. it's in the preamble of the constitution, provide for the common defense. it's in the oath we took when we swore -- when we're sworn into

office to defend the constitution of the united states against all enemies, foreign and domestic. h.r. 2219 fulfills our constitutional duty to provide for our nation's defense. additionally h. house res. 320 ensures it will review the legislation completely in an open and transparent manner that all american people deserve to see. with that i yield back the balance of my time and i move the previous question on the resolution. the speaker pro tempore: the gentleman yields back the balance of his time. all time having expired, the question is on ordering the previous question on the resolution. those in favor say aye. those opposed, no. the ayes have it. mr. nugent: mr. speaker, on that i demand the yeas and nays. i demand the yeas and nays. the speaker pro tempore: the yeas and nays are requested. all those in favor of taking this vote by the yeas and nays will rise and remain standing until counted. a sufficient number having arisen, the yeas and nays are

ordered. members will record their votes by electronic device. this is a 15-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the speaker pro tempore: on this

vote the yeas are 247, the nays are 168, the previous question is ordered. the question is on adoption of the resolution. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. >> mr. speaker. the speaker pro tempore: the gentleman from florida. mr. nugent: i demand a recorded vote. the yeas and nays. the speaker pro tempore: a recorded vote is requested. all those in favor of taking this vote by the yeas and nays will rise and remain standing until counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this is a 15-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the speaker pro tempore: on this vote the yeas are -- on this vote the yeas are 251, the nays are 173. the resolution is adopted. without objection, a motion to reconsider is laid on the table.

the speaker pro tempore: pursuant to house resolution 316 and rule 18, the chair declares the house in the committee of the whole house on the state of the union for further consideration of h.r. 1249. will the gentleman from texas, mr. poe, kindly take the chair?

the chair: the house is in the committee of the whole house on the state of the union for further consideration of h.r. 1249 which the clerk will report by title. the clerk: a bill to amend title 35, united states code, to provide for patent reform. the chair: when the committee of the whole rose on wednesday, june 22, 2011, a request for a recorded vote on amendment 1 printed in part b of house report 112-111 offered by the gentleman from texas, mr. smith, had been postponed. pursuant to clause 6 of rule 18, proceedings will now resume on the amendments printed in part b of house report 112-111 on which further proceedings were postponed.

the unfinished business is on the request for a recorded vote on amendment number 1 printed in part b of house report 112-111 by the gentleman from texas, mr. smith, on which further proceedings were postponed, on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment number 1 printed in part b of house report 112-111 offered by mr. smith of texas. the chair: a recorded vote has been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this is a 15-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote the yeas are 283. the nays are 140. the amendment is agreed to. the house will come to order.

the committee will be in order. will all members take their conversations from the floor. the committee will be in order. the committee will be in order. the committee will come to order. members are asked to please take their conversations from the floor.

it is now in order to consider amendment number 2 printed in part b of house report 112-111. for what purpose does the gentleman from michigan seek recognition? mr. conyers: madam speaker, i have an amendment at the desk. and ask it be reported. the chair: the clerk will designate the amendment. the clerk: amendment number 2, printed in part b of house report number 112-111, offered by mr. conyers of michigan. the chair: pursuant to house resolution 316, the gentleman from michigan, mr. conyers, and a member opposed, each will control five minutes. the house please come to order. the gentleman from michigan deserves to be heard. the chair recognizes the gentleman from michigan for five minutes. mr. conyers: thank you, madam speaker. i ask unanimous consent that i

add the gentleman from california, mr. dana rohrabacher, to this amendment a co-sponsor. the chair: i want to make the gentleman aware the amendment cannot have co-sponsors. mr. conyers: i yield myself 2 1/2 minutes. the chair: the gentleman from is recognized for 2 1/2 minutes. mr. conyers: ladies and gentlemen, this bipartisan amendment adds an important provision to house resolution 1249. it would permit the conversion of the united states to a first to file system only upon a presidential finding that other nations have adopted a similar one-year grace period. this one-year grace period protects the ability of an inventer to discuss or write about his or her ideas for a patent up to a year before he or

she actually files for patent protection. and without this period, an inventor could lose his or her own patent. this grace period provision within h.r. 1249 would grant an inventor a one-year period between the time he first publishes his invention to the time when he's required to file a patent. during this time, this would prohibit anyone else from seeing this publication, stealing the idea, and quickly filing a patent behind the inventor's back. yet the only way for american inventors to benefit from the grace period provision contained in 1249 is to ensure that the foreign countries adopt a similar grace period as well.

the amendment would encourage other countries to adopt a similar period in their patent systems consistent with a recommendation by the national academy's national research council. current law in the united states allows a grace period of one year during which an applicant can disclose or commercialize an invention before filing for a patent. japan offers a limited grace period, and europe provides none. if the first to file provision in the bill is implemented, we must ensure that american inventors are not disadvantaged. small american inventors and universities are disadvantaged abroad in those nations where there is no grace period. the chair: the gentleman's time has expired.

the gentleman from texas. mr. smith: i rise in opposition to the amendment. the chair: the gentleman is recognized for five minutes. mr. smith: madam chair, the conyers amendment to tie the changes proposed in the american invents act to future changes that would be made in foreign law is unworkable. i oppose providing a triggering u.s. law that leaves our patent system at the mercy of actions to be taken at a future date by chinese, russian, french, or any other conterrorism it is our constitutional duty to write the laws for this great land, we cannot delegate that responsibility to the whims of important powers. . i know that this idea has been part of the past. in working in patent legislation in past congresses, especially this one, this type of trigger idea is simply not workable and counterproductive. the move to a first inventor

file system creates a more reliable patent system that benefits all inventors including independent inventors. it provides a more transparent and certain grace period, a key feature of u.s. law and a more definite filing date that enables inventors to promote, fund and market their technology while making them less vulnerable to costly patent challenges that disadvantage independent inventors. an invent should send in an application on how to make it. that with a $10 fee gets them an application and preserves their filing date. this allows the inventor an entire year to complete the application while retaining the earlier filing date. by contrast, the cost of an interference proceeding before the p.t.o. often runs to a half a million dollars. the current first to invent system harms small businesses and independent inventors. former p.t.o. commissioner

conducted a study that proves smaller entities are disadvantaged and p.t.o. interference proceedings that arise in disputes under patten ownership. they lose more often than they win in these disputes. plus, bigger companies are better able to absorb the cost of participating in these protracted proceedings. in addition, many inventors also want protection from their patents outside the united states. if you plan on selling your product overseas, you need to secure an early filing date. if you don't have a clear filing date you can be shut out from the overseas market. a change to first to invent file will help our businesses grow and ensure that american goods and services will be available in markets across the globe. in the last seven years, only one independent inventors out of three million patent applications filed has prevailed over the inventor who

filed first. one out of three million. so there is no need for this amendment. independent inventors lose to other applicants with deeper pockets that are better equipped to explore the legal environment. so the first to file change makes it less complicated for inventors to get patents around the world and helps with the legal bills under the current system. it's a key provision of this bill that should not be contingent upon absent foreign powers and delay what would be positive reforms for independent inventors and our patent system. the first to invent system makes our patent system stronger, increases patent certainty and reduces the cost of frivolous litigation. however, if you support the u.n. having military control over our troops or if you support the concept of an international court at the hague, then you would support this amendment's proposal, the

trigger that subjects u.s. domestic law to the whims of governments in europe, china or russia. it would be unprecedent to have u.s. law held hostage to legal changes made overseas and would completely go against what this great country stands for and what our founders fought for, the independent rights and liberties we have today. for these reasons, madam chair, i'm strongly opposed to the amendment and i yield back the balance of my time. the chair: the gentleman yields back. the gentleman from michigan. mr. conyers: i yield the balance of our time to the gentleman from california, dana rohrabacher. the chair: the gentleman from california is recognized for 2 1/2 minutes. mr. rohrabacher: let's just note that ms. lofgren last night presented a case to this body which i felt demonstrated the danger that we have in this law. a move to first to file system, which is what this bill would do, without a corresponding

one-year grace period in other countries dramatically undermines the patent protection of american inventors. some of us believe that's the purpose of this bill because they want to harmonize american law with the weak systems overseas. well, without this amendment, which we are talking about now, without the conyers-rohrabacher amendment, if an inventors discloses his discoveries perhaps to potential investors his right to patent protection is gone. it's not gone for just americans. yeah, he would be protected under american law, you go from all those people in foreign countries without a similar grace period to what we have here in our system, these people are not restricted. thus, they could once an american inventors discloses it at any time they can go and file a patent and steal our inventor's discoveries. the only way for american inventors to benefit from a grace period here, which this

bill is all about, is to ensure that foreign countries adopt the same grace period. and that's what this amendment would do. it would save our bill which will make our inventors vulnerable to foreign theft, will not go into play until those foreign companies have put into place a similar grace period which would prevent them and their citizens from whole selling, coming in and steal our technology. ms. lofgren detailed that last night in great detail how that would work. i call this basically this bill -- this is the unilateral disclosure fact, if not the patent ripoff act, because we are the disclosing to the world what we've got and our people can't follow up on it because there's a grace period here. but overseas, they don't have that same grace period. so what we're saying to prevent foreigners from stealing american technology is this will not go into effect until

the president has issued a statement varyfying that the other countries of the world have a similar grace period so they can't just at will rip off america's greatest entrepreneurs and inventors. the chair: the gentleman's time has expired. all time has expired. the question is on the amendment offered by the gentleman from michigan. those in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. the amendment is not agreed to. mr. conyers: could we get a record vote, please? the chair: pursuant to clause 6 of rule 18, further proceedings on the amendment offered by the gentleman from michigan will be postponed. it is now in order to consider amendment number 3 printed in part b of house report 112-111. for what purpose does the gentlewoman from wisconsin seek recognition? ms. baldwin: madam chair, i have an amendment at the desk. the chair: the clerk will designate the amendment.

the clerk: amendment number 3 printed in part b of house report 112-111 offered by ms. baldwin of wisconsin. the chair: pursuant to house resolution 316, the gentlewoman from wisconsin, ms. baldwin, and a member opposed, each will control five minutes. the chair recognizes the gentlewoman from wisconsin. ms. baldwin: thank you, madam chair. i yield myself 3 1/2 minutes. the chair: the gentlewoman is recognized for 3 1/2 minutes. ms. baldwin: thank you. i rise to urge adoption of the baldwin-sensenbrenner amendment that strikes section 5 in the america invents act. section 5 expands the prior user rights dissentence from his present narrow scope to broadly apply to all patents with minimal exceptions. as we work to rebuild our economy, congress should be doing all that it can to foster small business innovation and investment. i believe that section 5 will do just the opposite. expanding prior user rights

will be disastrous for small american innovators as well as university researchers and ultimately slow job creation. despite current challenges, the u.s. patent system remains the envy of the world. since the founding of our nation, inventions have been awarded exclusive rights in exchange for public disclosure. this system also creates incentives for investing in new ideas and fostering new ways of thinking and encouraging further advancements in disclosure. it promotes progress. if proponents have their way with this legislation, they will give new rights to those who have previously developed and used the same process or product even if they never publicly divulged their innovation and never even applied for a patent. it will transform our patent system from one that values transparency to one that rewards secrecy. to understand why expanding

prior user rights runs counter to the public interest, it is important to reiterate how critical exclusive rights are for inventions to gain marketplace value and acquire capital. for startups and small businesses raising necessary capital is vital and challenging. the expansion of prior user rights would only make that task all the more difficult. under the system proposed, in the america invents act, investors would have no way of determining whether anyone had previously developed and used the process or product that they were seeking to patent. in such a scenario, a patent might be valuable or relatively worthless. the inventor and potential investors would have no means of determining which was true. madam chair woman, i'd like to boast for a moment, if i could, of strata-ttack, a woman who

through her research there developed a living human skin substitute. this living skin is a groundbreaking treatment method that we hope will ultimately save the lives of american troops who have suffered burns while serving in iraq and afghanistan. the company was recently awarded nearly $4 million to continue clinical trials for their tissue product. and what can save lives in a desert combat setting abroad will assurededly transform of how doctors hepburn victims in hospitals around our country and around the world. now, i wonder if strat-a-tech would have been able to drive this innovation as far as they have with a patent that provides only conditional exclusivivity. would investors have felt advancing this technology in a system shrouded in secrecy?

what if the patent was subject to the claims of unlimited -- i yield myself 15 additional seconds. the chair: the gentlewoman is recognized. ms. baldwin: if we let section 5 stand, it is unclear to me whether a similar company would ever secure the funding that they need to grow. i urge my colleagues to adopt the baldwin-sensenbrenner amendment, and i reserve the balance of my time. the chair: the gentlewoman reserves. the gentleman from texas. mr. smith: madam chair, i rise in opposition to the amendment. the chair: the gentleman is recognized for five minutes. mr. smith: madam chair, this strikes the prior user rights' provisions in the bill. i strongly oppose this amendment. the bill expands prior user rights a strong pro-job, pro-manufacturing provision. this provision will help bring manufacturing jobs back to this country. it allows factories to continue using manufacturing processes without fear of costly litigation. it is absolutely a key component of this bill. the provision has the strong

support of american manufacturers and the support of all the major university associations and technology transfer associations. these include the association of american universities, american council on education, association of american medical colleges, association of public and land grant universities, association of university technology managers, and the council on government relations representing the vast majority of american universities. prior user rights ensure that the first inventor of a new process or product using manufacturing can continue to do so. this provision has been carefully crafted between stakeholders and the university community. the language provides an effective exclusion for most university patents so this provision focuses on helping those in the private sector. the prior user defense is not over low expansive and will protect american manufacturers from having to patent hundreds or thousands of processes they already use in their plants.

after getting initial input from the university community they recommended that we make the additional changes reflected in this bill, to ensure that prior user rights will work effectively for all private sector stakeholders. prior user rights are important as part of our change to a first to file system. i believe it is important to ensure that we include these rights to help our job-creating manufacturers across the united states. the philosophical objections of a loan tech transfer office in wisconsin should not counter the potential of this provision for job creation throughout america. there are potentially thousands or hundreds of thousands of unplanned parenthood americans who are looking for manufacturing jobs and could benefit were this provision. without this provision, businesses say they may be unable to expand their factories and hire american workers if they are prevented from continuing to operate their facilities the way they have for years. for many manufacturers, the patent system presents a

catch-22. if they have it foreign manufacturers will return of it and in many cases use it in secret without paying licensing fees. the patents on manufacturing processes is -- patenting the ideas means giving the invention away to foreign competitors. on the other hand, if the u.s. manufacture does not patent the process, then under the current system, this he can force the manufacturer from using the process that they used. in recent years it's become easier for an owner to shut down parts of his plants and move jobs overseas rather than risk their livelihood through an interference proceeding before the p.t.o. the america invents act does away with these proceedings and includes the pro-manufacturing and constitutional provision of prior user rights. . this provision creates a powerful incentive to build in the united states. right now all foreign countries recognize prior user rights and

that has played a large role in attracting american manufacturing jobs and facilities to these countries. h.r. 1249 finally corrects this imbalance and strongly encourages businesses to create manufacturing jobs in this country. the prior user rights provision promotes job creation in america. prior user rights will help manufacturers, small business, and other innovative industry strengthen our economy. it will help our businesses grow and allow innovation to flourish. i strongly support prior user rights and so i oppose this amendment. i yield back the balance of my time. the speaker pro tempore: the chair: -- the chair: the gentlewoman from wisconsin. ms. baldwin: i yield to mr. sensenbrenner. the chair: the gentleman is recognized for a minute and a quarter. mr. sensenbrenner: madam chair, this expansion of prior user rights is a step in the wrong direction. it goes against what this house

determined four years ago when we last debated this issue and also it is different than what the senate has done in march of this year. the fundamental principle of patent law is disclosure. the provision in this bill that the amendment seeks to strike goes directly against disclosure and instead encourages people who may invent not to even file for a patent and that will slow down research in expanding the knowledge of humans. the gentleman from texas talks about manufacturing. i'm all for manufacturing. i think we all for manufacturing. what this does is it helps old manufacturing which we need to help, but it also puts new manufacturing in the deep freeze

because they use the disclosures that are required as a part of a patent application. you vote for the amendment for disclosure and advancement of human knowledge, you vote against the amendment if you want secrecy in this process. i yield back the balance of my time. the chair: all time has expired. the question is on the amendment offered by the gentlewoman from wisconsin. so many as are in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. ms. baldwin: madam chair, i seek a recorded vote. the chair: pursuant to clause 6 of rule 18, further proceedings on the amendment offered by the gentlewoman from wisconsin will be postponed. it is now in order to consider amendment number 4 printed in part b of house report 112-111. for what purpose does the gentlewoman from wisconsin seek recognition? ms. moore: madam speaker, i have an amendment at the desk. the chair: the clerk will designate the amendment.

the clerk: amendment number 4, printed in part b of house report number 112-111, offered by ms. moore of wisconsin. the chair: pursuant to house resolution 316, the gentlewoman from wisconsin, ms. moore, will have -- and a member opposed each will control five minutes. the chair recognizes the gentlewoman from wisconsin. ms. moore: thank you, madam speaker. i yield myself such time as i may consume. the chair: the gentlewoman is recognized. ms. moore: my amendment would ensure that we have the proper data to identify and work with sectors of the u.s. economy that are participating in the patent process at significantly lower rates. specifically, my amendment allows usto to develop methods for ways to track the diversity of patent applicants. it also specifically prohibits the office from using any such results for any preferential treatment in the application process.

i certainly do applaud the u.s. p.t.o. for their outreach of the women's chamber of mers and to the national minority enterprise development conferences to try to increase diversity with utilizing the patent process. but some recent data have raised concern that minorities and women-owned businesses are just not keeping up with the patent process. preliminary data from a 2009 survey of new businesses show that minority-owned technology companies hold fewer patents and copyrights after the fifth year of starting. then comparable nonminority businesses. in fact, the data show that minority-owned firms with patents hold only two on average compared with the eight of their counterparts. and another survey uses national science foundation data to suggest that women commercialize

their patents 7% less than their male counterparts. now, the best example i could think of this is the late great george washington carver who we all know discovered 300 uses for peanuts and hundreds more for other plants. he went on to help local farmers with many improvements to their farm equipment, and chemicals. however carver only applied for three patents. some historians have written on whether or not eli whitney was the original inventor of the cotton begin or -- gin or whether the invention could have originated from the slaves communities. at the time slaves were unable to register an invention with the patent office and the owner could not patent on their behalf because of the requirement to be an original inventor. african-americans and women have a long history of inventing some of the most influential products

in our society but we also certainly do not have enough information to further explore and explain these results. and as our government and industry leaders look into these problems and possibly fix for these deficiencies, they run into a major hurdle. currently the patent and trade office only knows the name and general location of a patent application. in most cases the only physical -- only the physical street address that the office collects is for the listed patent attorney on the application. such limited information prevents us from fully understanding the nature and scope of the underrepresentation of minority communities and intellectual property. until we can truly understand the nature of this problem, we cannot address it or do the appropriate outreach. i reserve the balance of my time. i will yield. mr. smith: i want to say to the gentlewoman from wisconsin, i appreciate her offering the amendment and i urge my colleagues to support it. ms. moore: thank you.

i certainly again want to commend efforts from director capas and the patent and trade office, despite their not having to do it they do reach out to women and minority communities to try to get them to utele ice the patent office. -- utilize the patent office. the ability to innovate and create is just one part of the equation. the key to success for minorities in our community as a whole also depends upon the ability to get protection for their intellectual property and i yield back the balance of my time. urge the body to vote for this amendment. the chair: the gentlewoman yields back. the question is on the amendment offered by the gentlewoman from wisconsin. so many as are in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. the amendment is agreed to. it is now in order to consider amendment number 5, printed in part b of house report 112-111. for what purpose does the gentlewoman from texas seek recognition?

ms. jackson lee: i have an amendment at the desk. the chair: the clerk will designate the amendment. the clerk: amendment number 5 printed in part b of house report number 112-111, offered by ms. jackson lee of texas. the chair: pursuant to house resolution 316, the gentlewoman from texas, ms. jackson lee, and a member opposed, each will control five minutes. the chair recognizes the gentlewoman from texas. ms. jackson lee: madam chair, as i rise to offer my amendment, i want to take a moment of personal privilege to say that whatever side members are on on this issue, i know that members want to protect the genius of america. i'd like to thank my ranking member, mr. conyers, for that commitment. as he comes from one of the original genius proponents and that is the auto industry that propelled america into the job creation of the century.

and to the chairperson of the committee, mr. smith, who ventured out in efforts to provide opportunities for protecting, again, the opportunities for invention and genius. my amendment speaks, i think, in particular to the population, vast population of start-ups, small businesses, that are impacted by this legislation. in particular it is a reinforcement of congress' position that indicates that the patent system should promote industries to continue to develop new technologies that spur growth and create jobs across the country. which includes protecting the rights of small businesses and inventors from predatory behavior that could be -- could result in the cutting off of

innovation. we recognize that small and minority businesses and women-owned businesses which dominate the landscape of america are really major job creators, small business is thriving in my own home state of texas as well. there are 386,422 small employers in texas in 2006. accounting for 98.7% of the state's employers, and 46.8% of its private sector employment. we know that there are a large number of women-owned businesses, and as well growing african-american and latino. but we need more growth. with asian businesses, small business, hispanic, native american, african-american, all forms of businesses that are part of growing this economy. small businesses make up a large portion of our employer network. it is important to understand how they will be impacted as a result of patent reform. in this first to file, for

example, small businesses may in fact be concerned about trying to get investors. and as they get investors they may have to disclose. and so this sense of congress will put us on notice that we need to be careful that we allow at least the opportunity for these investors that we continue to look at the bill to ensure that it responds to that opportunity. we must recognize again as i said that small businesses create jobs. and the number of new jobs that they have created are 64% net jobs over the past 15 years. my amendment again reinforces the idea that small businesses can survive in this climate. now, i did offer an amendment which provided for a transitional review program for

five years or ask for that to be sunsetted. it was all about trying to protect our small businesses. i believe this amendment with its firm statement gathers congress around the idea that nothing in this bill will inhabit small business from being creative. and we can as well recognize all of the growth that has come about from the ideas of small businesses. i think my amendment also reinforces that we do not wish to engage in any undo takings of property because we indicate that we want to see the innovativeness of american businesses continue. i believe this is an important statement because the bill is about innovation, genius, creation, job creation, and it should be about small businesses. small businesses should be as much comfortable with going to the patent office as our large businesses. and in years to come because of this major reform, we should see

small businesses creating opportunity for growth as they develop not into small and medium size but huge international companies. so i am asking my colleagues to support this amendment and as well i am recognizing that we do have the opportunity to turn the corner and to put a stamp of new job creation on america. with that i yield back. the chair: the gentlewoman yields back. the gentleman from texas. mr. smith: i claim the time in opposition although i support the amendment. the clerk: at is recognized. mr. smith: i understand the underlying point of the member's amendment. i want to make it clear my interpretation of this amendment and intent is to highlight the problem posed by entities that poses financial or many technological businesses but whose sole purpose is not to create but sue. i'm talking about patent trolls, those enknits that vacuum up patents by the hundreds or thousands and whose only innovations occur in the courtroom. this sense of congress shows how

these patent trolls can hurt small businesses before they even have a chance to get off the ground. this bill is designed to help all inventors and ensure small business also continue to be a fountain for job creation and innovation. for these reasons, madam chair, i support the amendment. the chair: the gentleman yields back the balance of his time. the question is on the amendment offered by the gentlewoman from texas, so many as are in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. ms. jackson lee: madam speaker, i'd like a recorded vote. the chair: pursuant to clause 6 of rule 18, further proceedings on the amendment offered by the gentlelady from texas will be postponed. it's now in order to consider amendment number 6 printed in part b of house report 112-111. for what purpose does the gentleman from new mexico rise? mr. lujan: madam chair, i rise today -- i have an amendment at the desk.

the chair: the clerk will designate the amendment. the clerk: amendment number 6 printed in part b of house report 112-111 offered by mr. lujan of new mexico. the chair: pursuant to house resolution 316, the gentleman from new mexico, mr. lujan, and a member opposed, will each control five minutes. the chair recognizes the gentleman from new mexico. mr. lujan: thank you very much, madam chair. i rise today in support of my amendment to h.r. 1246, the american invents act. the american invents act provides for the creation of the united states patent and trade market office, satellite offices. for many small businesses and independent inventors, navigating the patent process can be challenging. small businesses, entrepreneurs and innovators are the foundation of our economy, but do not always have the resources that larger corporations or institutions have to assist them in obtaining a patent. by improving access to the united states patent trademark office, satellite offices have the potential to help small

businesses and independent investors and inventors navigate the patent application process. however, this bill essentially provides no guidance to determine the location of such satellite offices. while the language in the bill contains stated purposes for satellite offices, it does not specify that these purposes be part of the selection process. this amendment makes it explicit that the purposes of satellite offices, which are included in the underlying bill, such as increasing outreach activities to better connect patent filers and innovators with the u.s. p.t.o. to be part of the selection process. it also specifies that the economic impacts of the region be considered as well as the availability of knowledgeable personnel so that the new patent examiners can be hired at minimal recruitment costs, saving taxpayers money. the selection of p.t.o. satellite offices should be done in the way to force economic growth and puts investors and inventors on a

path to success. i think this is a commonsense amendment, and i urge the adoption. thank you, madam chair, reserve the balance of my time. the chair: the gentleman reserves the balance of his time. the gentleman from texas. mr. smith: madam chair, i rise in opposition and claim the time in opposition though i favor the amendment. the chair: without objection, the gentleman is recognized. mr. smith: madam chair, section 23 of the bill requires the p.t.o. director to establish three or four satellite offices in the united states subject to available resources. the provision lists criteria that the director must take into account when collecting each office. this is a good asignificance to h.r. 1246, and i urge my colleagues to support it. i also hoped that one of those offices is in austin, texas. i yield back the balance of my time. the chair: the gentleman from new mexico. mr. lujan: madam chair, i yield back the balance of my time. the chair: all time has yielded back. the question is on the amendment offered by the gentleman from new mexico. those in favor say aye. those opposed, no. in the opinion of the chair,

the ayes have it. the amendment is agreed to. for what purpose does the gentlewoman from texas rise? ms. jackson lee: i rise for unanimous consent. because of the graciousness of the ranking member, mr. conyers, and the chairman, mr. smith, of agreeing to my amendment, jackson lee number 4 that was just debated, i ask unanimous consent to withdraw my request for a record vote. the chair: is there objection to the gentlewoman's request? the request is withdrawn. the chair: it was adopted by voice vote. ms. jackson lee: thank you. the chair: it is now in order to consider amendment number 7 printed in part b of house report 112-111. for what purpose does the gentleman from michigan rise? mr. peters: i have an amendment

at the desk. the chair: the clerk will designate the amendment. the clerk: amendment number 7 printed in part b of house report 112-111 offered by mr. peters of michigan. the chair: pursuant to house resolution 316, the gentleman from michigan, mr. peters, and a member opposed, will each control five minutes. the chair recognizes the gentlewoman from michigan is recognized. mr. peters: thank you, madam chairman. i believe we must do more to help our nation's small businesses compete in the global marketplace. success of the global economy depends more and money on i.p.s.'s. the i.p. industry employ nearly 18 million workers at-on-education skills levels and represents 60% of u.s. exports. while obtaining a u.s. patent is a critical first step in our -- for our innovators towards recouping r&d cost, capitalizing on their inventions and creating jobs, a

u.s. patent only provides protections against infringements here at home. if the inventor does not register in a foreign market, like china, they have no protection if the chinese economy gets their invention. it is necessary to defend american innovators and inventors against foreign lawsuits. high costs along with language and technical barriers prevent many american small business firms from filing foreign patent protection. lack of patent protection both at home and abroad increases uncertainty for innovators and the likelihood of piracy. while we must reduce backlogs at the u.s. p.t.o. to make domestic patent protection available, we must also look forward to finding ways to help our manufacturers and other high-paying intense industries to compete globally.

that's why i am submitting a bipartisan amendment with representative renacci, for working with me on this important issue. it has led a study with the s.b.a. to determine the best method to help small businesses obtain, maintain and enforce foreign patents. the study is to be conducted using existing resources at no cost to the taxpayers and does not alter the score of the bill. i believe our amendment will help congress and the u.s. p.t.o. determine the best ways to help american small businesses protect their i.p. assets, compete globally and boost exports. i'd like to thank chairman smith and ranking member conyers for working with me on this amendment and ask passage for the peters-renacci amendment. i yield to the gentleman from ohio, mr. renacci. the chair: the gentleman from ohio is recognized for 2 1/2 minutes. mr. renacci: thank you, madam chair. i want to thank the gentleman for yielding and thank the gentleman from michigan for his

hard work on the amendment on behalf of american small businesses. i rise today in strong support of the peters-renacci amendment, a commonsense, no cost study to determine the best method for american small businesses to obtain and enforce patent protections in foreign countries. industries that rely on intellectual properties employ nearly 18 million american workers and represent 60% of american exports. as these industries continue to grow globally, foreign patent protection will become increasingly important to protect these workers' jobs, promote exports and expand our economy. our economy is becoming more global by the day with foreign investors testing the outer reaches of imagination and enjoying the strong support of their home nations. china, for example, is becoming increasingly aggressive at protecting their innovators' intellectual property rights and is subsidizing applications for foreign patents.

we must develop a way here at home to make american small businesses equally competitive in the foreign marketplace. in order to compete with china, we have to stand behind our innovators with equal force. our amendment simply directs the u.s. patent and trademark office to conduct a joint study with the small business administration to issue recommendations on how america can do just that. furthermore, this study is to be completed within 120 days giving the 112th congress ample time to implement its recommendations. not only are jobs in the economy -- and the economy pair month, promoting american innovation is important. innovation is about much more than economic growth. it breaks boundaries, connects people from distant lands, fires the imagination and sends a message to those who need it most. americans should be on the cutting edge of innovation and this amendment is a good first step toward that direction.

again, i'd like to thank mr. peters as well as chairman smith and ranking member conyers. i urge support of the amendment, and i yield back. the chair: the gentleman yields back. the gentleman from texas. mr. smith: madam chair, i claim the time in opposition though i support the amendment. the chair: the gentleman is recognized. mr. smith: i understand the underlying point of the gentleman's amendment. even small changes can have unintended consequences unless they have been vetted and gone through the regular committee process. the problem is in the details. this amendment is drafted as a study. i agree with the first part of the amendment but not the second because it is written very much like a piece of legislation. it seeks to create support for a new program whereby taxpayer funds would be used to pay patent fees in foreign countries. i'm strongly committed to helping our small businesses and inventors secure their rights and have a level playing field abroad. but i can't support a result that would have a new

entitlement program, a new bureaucracy and the transferring of taxpayer dollars correctly to the treasuries of foreign governments. we should not use taxpayer funds to pay patent filing fees to foreign governments. i do agree with the first part of this study and i'm anxious to see how the coordination with the p.t.o. and other agencies can help with international patent protection. i hope this will be the focus of the study. the results of this study will show that small business outreach, educational and technical assistance programs are the most effective tools for small business and independent inventors. i think that the p.t.o. needs to continue its efforts to reach out to small businesses and independent inventors. it includes a provision creating a small business ombudsman at the p.t.o. to help them secure their patent rights. the p.t.o. also conducts small business outreach programs throughout the country, teaching small businesses about i.p. enforcement and how to protect their intellectual

property both at home and abroad. though i do not agree with the policy outline in the second part of the study and would strongly recommend that the p.t.o. and s.b.a. determine such a program would not be established, i do support the amendment to initiate the study and hope the bulk of it will better utilize existing government resources for education and technical assistance to help small businesses with international patent protection. before i yield back the balance of my time, i hope that the authors of this amendment might be willing to reassure me and others about the intent and goals of this study. and i yield back the balance of my time. the chair: the gentleman yields back. the gentleman from michigan has 15 seconds remaining. mr. peters: i just appreciate the support for this amendment. it's an important amendment. it gives us information that we can then use to support our small businesses as they're doing business abroad and urge adoption. the chair: the gentleman yields back. the question is on the amendment offered by the gentleman from michigan. those in favor say aye. those opposed, no.

in the opinion of the chair, the ayes have it. the amendment is agreed to. it is now in order to consider amendment number 8 printed in part b of house report 112-111. for what purpose does the gentleman from colorado seek recognition? mr. polis: i have an amendment at the desk. the chair: the clerk will designate the amendment. the clerk: amendment number 8 printed in part b of house report 112-111 offered by mr. polis of colorado. the chair: pursuant to house resolution 316, the gentleman from colorado, mr. polis, and a member opposed, will each control five minutes. the chair recognizes the gentleman from michigan -- excuse me -- the gentleman from colorado. mr. polis: thank you, madam chair. h.r. 1249 correctly changes the policy involving tax strategy patents. under current law, though it was current law that was never contemplated by lawmakers, tax

strategy patents -- now, they have complicated the tax filing process and allowed commonsense filing techniques to be patentable. so h.r. 1249 removes this complication by saying they're deemed insufficient to differentiate a claimed invention from the prior art. i strongly support this provision. now, however, there are a number of folks that are currently involved with the process of applying for tax strategy patents and in effect we risk changing the rules of the game retroactively for them , a form of takings. there are currently 160 tax strategy patent applications in the process. many of the inventors have decided to devote thousands of hours of time to disclose their innovations. again, has this window of patentability hadn't been opened this would not have been an issue because these inventors would have retained

their inventions as trade secrets. however, you can't blame them saying there is a window of patentability. i will disclose so i can have the 17-year exclusive. and now the risk is that that calculation that they made to disclose is being changed retroactively insofar as they won't be able to protect their innovation as a trade secret in their applications they've described how to make and use their inventions. many have even provided computer programs, including code, to carry them out. the applications have been published and some have been pending for many years. changing the law mid stream fundamentally hurts these applicants who did all was proper under the law at the time they filed their patent application. the underlying bill as drafted would make those applications useless. because the applications have been published, the patent applicants will get nothing for disclosing their secrets except for pursuing the patent and others to replicate their innovation. competitors will be free to use

their disclosures in the patent application process. changing the law midstream simply sends the wrong message to inventors that one cannot trust the law that is in place when they file a patent. congress will be sending a message, unless my amendment is incorporated in the underlying bill, that all inventors on any subject matter may have their disclosures taken away from them after they have made the decision to apply for a patent. by retroactively negating the possibility of them receiving a patent. tax strategy patents should never have been allowed under the law. i think there's broad agreement among all of us in this chamber on that topic. it's unfortunate that there was a window, however rational inventors making a conscious choice that, hey, in favor of this closing i will then accept a 17-year monopoly and they're now being penalized for making what was a very reasonable decision. restore equity to the america invents act by supporting my amendment. i hope members on both sides of the aisle will support this

which effectively addresses only those 160 applications that are in effect now and certain certainly continues in the support of the ban on future patents for tax strategies but there seem to be very few terms or remedies to the take -- alternatives or remedies to the takings that would otherwise occur under this bill unless my amendment is incorporated. i strongly urge a yes vote on the amendment and i yield back the balance of my time. the chair: the gentleman yields back the balance of his time. the gentleman from texas. mr. smith: i claim the time in opposition. the chair: the gentleman is recognized for five minutes. mr. smith: i yield two minutes to the gentleman from virginia, mr. goodlatte, who is the chairman of the intellectual property subcommittee of the judiciary committee. the chair: the gentleman from virginia is recognized for two minutes. mr. goodlatte: i rise in strong opposition to this amendment. increasingly individuals and companies are filing patents to protect tax strategies. when one individual or business is given the exclusive right to a particular method of complying with the tax code, it increases the costs and complexities for every other citizen or tax

preparer to comply with the tax code. it is not difficult to foresee a situation where taxpayers are forced to choose between paying a royalty in order to reap the best tax treatment and complying with the tax code in another less favorable way. tax strategy patents add additional costs and complications to an already overly complex process and this is not what congress intended when it passed the federal tax laws or the patent laws. the problem with tax strategy patents has been growing -- a growing concern for over a decade. over 140 tax strategy patents have already been issued and more applications are pending. tax strategy patents have the potential to affect millions of everyday taxpayers, many who don't even know these patents exist. this amendment would allow any tax strategy patent that was filed after the date of enactment of the bill to move toward issuance by the p.t.o. however tax strategy patents are a bad public policy whether they were filed date before or the

day after this bill happens to be enacted. the effective date of the underlying bill rightly applies to any patent applications pending on the date of enactment. in order to reduce the cost of filing taxes for all americans and to restore common sense to our patent system, i urge my colleagues to oppose this amendment. and yield back the balance of my time. the chair: the gentleman from texas. mr. smith: i yield one minute to the gentleman from california, mr. shernl. the chair: the gentleman from california is recognized for one minute. mr. sherman: i have tremendous respect for the gentleman from colorado but i rise in opposition to this amendment. this amendment would cover not only those patent applications that were on file yesterday but, as i understand, also those that are filed tomorrow. tax strategy patents are a bad idea. as the american institute of certified plim public accountants states, it's bad public policy.

no one should be granted a form of monopoly. this amendment is opposed not only by the american institute of certified public accountants but also by my colleague, the co-chair of the c.p.a. caucus, mike conaway, and a majority of the caucus, together with the american college of trusts and estate council and the certified financial planner board of standards. keep in mind, the purpose of a patent is to encourage innovation. what interest does the federal government have in encouraging innovative ways to avoid paying taxes to the federal government? it is now time to draw a line against patents on tax compliance. i yield back. the chair: the gentleman from texas. mr. smith: madam chair, i yield myself the balance of my time. the chair: the gentleman has 2 1/2 minutes remaining. the gentleman is recognized. mr. smith: i oppose the amendment to change the effective date for the tax strategy method of the bill. it is possible to patent tax strategy methods but it is bad

policy. it is not fair to permit patents on techniques regularly used to satisfy a government mandate such as the one that requires individuals and businesses to pay taxes. tax preparers, lawyers and planners have a long history of sharing their knowledge regarding how to file returns, plan estates and advice clients. they maintain that allowing the patentability of tax strategy methods will complicate the tax filing process and inhibit the ability of preparers to provide quality services for their clients. the effective date applies to any patent application that is pending on or filed on or after the date of enactment. and any patent that is issued on or after that date. the gentleman's amendment eliminates the application of this provision to those applications pending on the date of enactment. these applications have not been approved, so i disagree with excluding these patents. it is a mistake for the p.t.o.

to issue these patents in the first place, given their potential to harm individual taxpayers and individual tax preparers. we shouldn't leave the door ajar by allowing more applications in. this just compounds the very problem we're trying to solve. i oppose the gentleman's amendment and i urge my colleagues to vote against it and i yield back the balance of my time. the chair: the gentleman yields back the balance of his time. all time has been yielded back. the question is on the amendment offered by the gentleman from colorado. those those -- those in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. the amendment is not agreed to. it is now in order to consider amendment number 9 printed in part b of house report 112-111. for what purpose does the gentleman from michigan seek recognition? mr. conyers: madam speaker, i have an amendment at the desk. the chair: the clerk will designate the amendment. the clerk: amendment number 9 printed in part b of house report 112-111 offered by mr. conyers of michigan. the chair: pursuant to house

resolution 316, the gentleman from michigan, mr. conyers, and a member opposed each will control five minutes. the chair recognizes the gentleman from michigan. mr. conyers: thank you. i have a bipartisan amendment that makes a technical revision to h.r. 1249. it addresses the confusion regarding the calculation of the filing period for a patent term extension amcation under the hatch-waxman act. by eliminating confusion regarding the deadline for patent term extension applications, this amendment provides the certainty necessary to encourage costly investments in life-saving medical research. it also is consistent with the only court case to address this

issue entitled the medicines company vs. cam pose. the result of this -- campos. the result of this amendment, all applications and cases will be treated henceforth in the same manner. i also want to point out that this compact language has passed the house -- exact language has passed the house overwhelmingly on a voice vote in the past and a prior version of the provision was unanimously passed by the house on two previous occasions and was also in another instance voted out by the senate judiciary committee on a bipartisan basis. the results were accepted in the voice vote by the house judiciary committee and a markup earlier this year.

madam speaker, i'll reserve the balance of my time. the chair: the gentleman reserves the balance of his time. the gentleman from texas. mr. smith: i claim the time in opposition. the chair: the gentleman is recognized for five minutes. mr. smith: madam chair, in 2001 biotech entity called the medicines company or med could he submitted an application -- medco submitted an application that the patent company said was a day late. in august, 2010, a u.s. district court ordered the p.t.o. to use a more consistent way of determining whether the patent holder submitted a timely patent extension application. the p.t.o. is implementing that decision and believes the course decision resolves the problem for medco. because of this ongoing litigation, the manager's amendment struck language pertaining to medco, the conyers amendment seeks to reinsert that provision. it essentially codifies the district court's decision but it ignores the fact that this case

is on appeal. we need to let the courts resolve the pending litigation. it is standard practice for congress not to interfere when there is ongoing litigation. if the federal circuit rules against medco, generic manufacturers of the drug could enter the marketplace immediately rather than waiting another five years. this has the potential to save billions of dollars in health care expenses. while the amendment is drafted so as to apply to other companies similarly situated, as a practical matter this is a special fix for one company. finally it would be more appropriate for this to be considered as a private relief bill. private relief bills were designed to provide benefits to a specific individual or corporate entity. the house and the judiciary committee have procedures in place to ensure that such bills are properly vetted. this amendment ignores those procedures and denies members the opportunity to know the consequences of what they are voting on.

to summarize, madam chair, we should not interfere with ongoing litigation which may be unprecedented and we should give this issue regular process in the judiciary committee. i oppose the amendment and urge my colleagues to defeat it and i yield back the balance of my time. the chair: the gentleman yields back the balance of his time. the gentleman from michigan. mr. conyers: i'd like to yield to the distinguished gentleman from massachusetts, ed markey, of the energy committee one minute. the chair: the gentleman from massachusetts is recognized for one minute. mr. markey: thank you, mr. chairman. this amendment eliminates confusion regarding the deadline for filing patent term extensions under the hatch-waxman act and provides the certainty needed to encourage critical medical research. it also promotes good government by ensuring that the patent office and the f.d.a. adopt consistent interpretations of the very same statutory language. and finally this amendment is

consistent with the only court decision addressing this issue. the court stated that the interpretation that is reflected in this amendment, this is from the court, i quote, is consistent with the statute's text, structure and purpose. right now america's next lipper to or prozac could be bottled up at the patent office and never made available because of uncertainty regarding the patent term extension process. in order to uncork american innovation and invention, we need a patent extension process that is clear, consistent and fair. that's exactly what the conyers amendment does. it enjoys broad bipartisan support and it confirms and clarifies existing law. it is cost neutral. i urge support for the amendment. the chair: the gentleman from michigan. mr. conyers: i yield my good friend also from massachusetts, mr. richard neal, unfortunately 75 seconds.

the chair: the gentleman from massachusetts is recognized for 75 seconds. mr. neal: thank you. i understand mr. smith's position here but the truth is that when he suggests that we're doing things that interfering with ongoing court tests, there have been a series of votes about the health care law and are more coming in this institution. so i'm not going to spend a lot of time on that suggestion, but i rise today in support of the amendment. it addresses the deadline for filing patent term extension applications under hatch-waxman. by adopting a clear standard, the amendment would provide the opportunity and certainty needed to allow innovators to conduct time-consuming expensive medical research necessary to bring new life-saving drugs to market. the amendment clarifies the law in a manner that tracks the only court decision to have addressed this particular provision. it will ensure that all applications in all cases are treated the same. because the amendment nearly confirms the existing law, it is budget neutral. the amendment enjoys broad

support on both sides of the aisle, i hope that my colleagues will join me in supporting it. the chair: the gentleman from michigan. mr. conyers: madam speaker, i am proud now to recognize mike pompeo, the distinguished gentleman from kansas, for 30 seconds. the chair: the gentleman from kansas is recognized for 30 seconds. mr. pompeo: thank you. as a former business own, compliance with senseless government regulations was one of my biggest frustrations and obviously one of the reasons i ran for congress. but it's impossible to comply with regulations when you get two different interpretations from two different agencies. that's what we have this intellectual property rule. the p.t.o. and f.d.a. had established two different standards and this amendment simply seeks to fix that, to give an identical outcome from two different agencies that resulted from different interpretations of the hatch-waxman act of 1984.

inventors should not have to guess. we give a clean deadline. i ask my colleagues to support this amendment. the chair: the gentleman from michigan has 45 seconds remaining. mr. conyers: i yield all the rest of my time to scott garrett, the distinguished gentleman from new jersey. the chair: the gentleman from new jersey is recognized for the remaining time. mr. garrettette: it covers drugs and products that must be approved by the f.d.a. with the extension we're talking about here, the patent office and f.d.a. has interpreted it in two different ways, creating uncertainty that has led to miscalculation. it is consistent with the court ruling that when the f.d.a. approves -- provides final approval after normal business hours, that 60-day clock begins on the next day. by ensuring that patent holders does not -- it will not only resolve a long-standing problem but will encourage new drug products.

i urge adoption of this very commonsense amendment. i do yield back. the chair: all time has expired. the question is on the amendment offered by the gentleman from michigan. those in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. the amendment is -- mr. conyers: madam speaker, may i have a record vote? the chair: pursuant to clause 6 of rule 18, further proceedings on the amendment offered by offered by the gentleman from michigan will be postponed. it is now in order to consider amendment number 10 printed in part b of house report 112- is 11. for what purpose does -- house report 112-111. for what purpose does the gentlewoman from california seek recognition? speier speier madam chair, -- ms. speier: madam chair, i have an amendment at the desk. the chair: the clerk will designate the amendment. the clerk: amendment number 10 printed in part b of house report 112-11 offered by ms. speier of california. the chair: pursuant to house resolution 316, the gentlewoman from california, ms. speier, and a member opposed, each will

control five minutes. the chair recognizes the gentlewoman from california. ms. speier: thank you, madam chair. as we know, the u.s. patent office is vital to the if a -- facilitates universities and businesses of all sizes, to turn ideas and discoveries into successful products. having said that, we must ensure that our patent system provides strong and predictable intellectual property protections. this act creates a new process called dare vation by which -- darivation which which they can show the invention in the earlier application was derived from the party's invention or concept. the bill requires a party to support a darivation. the darivation proceedings in this must be a process that's fair, reliable and permits the patent and trademark office to make a decision based on solid record of relevant evidence. this amendment helps to accomplish this by requiring

the p.t.o. to provide rules for the exchange of relevant information by both parties. the substantial evidence threshold at the petition stage of the proceedings may not be reasonable in some circumstances. for example, consider a situation where an inventor discloses an invention to a capitalist who declines to invest in it. the venture capitalists has skferingses with several other people about the invention and eventually a company funded by one of those files a patent application for something very much like the original invention. if the company funded by the original v.c. has filed the application, they would be able to show substantial evidence of derivation through disclosure of the v.c. and the link between the v.c. and the company filing the application. in the instance when an inventor did not disclose it would be difficult for the inventor to show substantial evidence. particularly relevant

disclosures about which the inventor is unaware. the public's interest in fostering innovation requires that the derivation proceedings be equityible to both parties and that they have a complete evidence on which to make the decision. inventors must have a fair chance to provide their claim. this amendment accomplishes these goals by requiring the p.t.o. to have rules for the exchange of relevant information and evidence by both parties. madam chair, i reserve the balance of my time. the chair: the gentlewoman reserves the balance of her time. the gentleman from texas. mr. smith: madam chair, i rise in opposition -- to claim time in opposition but i support it. the chair: the gentleman is recognized. mr. smith: i support it and i yield back. the chair: the gentlewoman from california. ms. speier: i yield whatever time i have remaining to the gentleman from maryland, mr. hoyer. the chair: the gentleman from maryland is recognized for 2 1/2 minutes. mr. hoyer: i thank you very

much. madam chair, thank you for yielding. i rise in support of this legislation. i am a strong supporter, as many of you know, of what we call it our make it in america agenda. make it in america simply means we are going to provide jobs, we are going to provide opportunities and we are going to build the manufacturing sector of our economy. in order to do that we also need to enhance the inventive, innovative and development phases of our economy. this bill, i think, will facilitate this. i congratulate the gentlelady from california for this amendment as well. which i think improves this bill. i rise in strong support and urge my colleagues to support this piece of legislation. i congratulate all of those who have worked on this legislation. it is obviously not perfect, but then again no piece of legislation that we adopt is perfect. it is, however, a significant step forward to make sure that america remains the inventive,

innovative development capital of the world. in order to do that we need to manufacture goods here in america. manufacture the goods that we invent, innovate and develop it, because if we continue to take them to scale overseas, then the inventors, innovators and developers will themselves move overseas. so i thank mr. smith, thank mr. watt. i thank others who have worked so hard on this legislation. ms. lofgren as well. who have dedicated themselves to trying to make sure that we have a context and environment in america which will facilitate the innovative sector of our economy. and i yield back the balance of my time. the chair: the gentleman yields back the balance of his time. all time has been yielded back. the question is on the amendment offered by the gentlewoman from california. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it.

the amendment is agreed to. it is now in order to consider amendment in 11 printed in part b of house report 112-111. for what purpose does the gentlewoman from california seek recognition? the chair: does the gentleman from north carolina seek recognition? mr. watt: madam chair, we were expecting congresswoman waters. i'd ask unanimous consent that this amendment be delayed until we can determine whether she's still planning to offer it. the chair: the committee of the whole is unable to reorder the amendments. mr. watt: well, in that case, i will ask unanimous consent to

offer the amendment in her place. the chair: is gentleman a designee of the gentlewoman from california? mr. watt: yes. the chair: the clerk will designate the amendment. colin powell amendment -- the clerk: amendment number 1 printed in part b of house report 112-111 offered by mr. watt of california. the chair: pursuant to house resolution 316, the gentleman from north carolina, mr. watt, and a member opposed, each will control five minutes. the chair recognizes the gentleman from north carolina. mr. watt: thank you, madam chair. i yield myself such time as i may consume. the chair: the gentleman is recognized. mr. watt: solely to say that this is a straightforward amendment that provides that if one part of the bill is determined to be unconstitutional it can be

severable from the rest of the bill and doesn't bring the rest of the provisions down. that's a standard policy put in most legislation, and with that i reserve the balance of my time. the chair: the gentleman reserves the balance of his time. the gentleman from texas. mr. smith: madam chair, i rise in -- to claim the time in opposition although i support the amendment. the chair: the gentleman is recognized. mr. smith: madam chair, i thank the gentleman for offering the amendment and urge my colleagues to support it and i yield back the balance of my time. the chair: the gentleman yields back. the gentleman from north carolina. mr. watt: i've just been advised that we were mistaken in that the desire of ms. waters to offer the amendment so she didn't want me to offer

it in her stead and that's why she didn't show up. i'm not sure what the appropriate procedure is to -- i would just ask unanimous consent to withdraw the amendment unless the chair has objection. the chair: without objection, the amendment is withdrawn. it is now in order to consider amendment number 12 printed in part b of house report 112-111. for what purpose does the gentleman from wisconsin seek recognition? mr. sensenbrenner: madam chair, i have an amendment at the desk made in order under the rule. the chair: the clerk will designate the amendment. the clerk: amendment number 12 printed in part b of house report 112-111 offered by mr. sensenbrenner of wisconsin. the chair: pursuant to house resolution 316, the gentleman from wisconsin, mr. sensenbrenner, and a member opposed, each will control five minutes. the chair recognizes the gentleman from wisconsin. mr. sensenbrenner: madam chair, i yield myself a minute and a half. the chair: the gentleman is recognized for a minute and a half. mr. sensenbrenner: madam chair, section 3 of this bill has a

first to file patent system. the sponsors believe the united states should harmonize with other countries first to file system. there's no reason to do that. our patent system is the strongest in the world, and it's based upon the first recognition of the constitution in any country that inventors should be protected. i think that the constitution empowers congress to give patents only to inventors. we had a significant constitutional argument on this issue yesterday. if the amendment is not adopted, the issue will be litigated all the way up to the supreme court. the current first-to-invent system has been key in encourage entrepreneurial innovation and evens the playing field for individual inventors who are not represented by a major industry. the first inventor-to-file system violates the constitution because it would

award a patent to the winner of the race to the p.t.o., and not the actual inventor who makes the first discovery. if we change to a first-to-file system, inventors who believe they do not have sufficient resources to win the race to the p.t.o. will not have any motivation at all to continue developing the new invention. this will stifle innovation and given the current state of our economy that's the last thing we need. i yield myself an additional 15 seconds. first-to-file also invites excessive filing and will add to the burden of the u.s. p.t.o. i will increasing the examiner's workload. we already have financing problems there. if this amendment is not adopted, it will be worse. i reserve the balance of my time. the chair: the gentleman reserves. the gentleman from texas. mr. smith: i claim the time in opposition. the chair: the gentleman is recognized for five minutes. mr. smith: madam chair, the

gentleman's amendment strikes -- the move to a first-to-file inventor system benefits all inventors including independent inventors. this proinvestigation provides a more transparent and certain grace period, a key feature of u.s. law and a more definite filing date that enables inventors to promote, fund and market their technology while making them less vulnerable to costly patent challenges and disadvantage independent inventors. the first-to-invent filing system is part of the constitutional requirements that patents are rewarded to the first inventor. the provision is constitutional and helps assure that the patent laws of this country accomplish the goals set forth in the constitution to promote the progress of science and useful arts, end quote. under first inventor to file,

patents are reserved to those before it was in the public domain. in the constitution that is what is required to be an inventor. in fact, earlier american patent law, that of our founders' generation, did not concern itself with who was the first to invent. the u.s. operated under a first inventor to register system for nearly half a century starting in 1790. the first to register system is the like first to file, a system the founders supported earlier in our nation's history. the courts did not even concerns themselves of who was the first person to invent until 1870 with the creation of interference proceedings. those proceedings are the ones that disadvantage independent inventors and small businesses. over the years and in subsequent revisions of the law, those proceedings have morphed into a costly litigation tactic.

under first inventor to file, an inventor submits an application to the patent office that describes their intention and how to make it. that along with just $110 fee gets them a provisional application and preserves their filing date. this allows the inventor an entire year to complete the application while retaining the earlier filing date. by contrast, the cost of an interference proceeding in today's law could run an inventor $500,000. accusations that the bill doesn't preserve the one-year grace period are simply false. this bill provides a stronger, more transparent and certain one-year grace period for disclosures. this enhances protection for inventors who have made a public or private disclosure their intention during the grace period. the grace period protects the ability of an inventor to discuss or write about their ideas for a patent up to one year before they file for patent protection. these simple requirements create a priority date that is fixed and public so that everyone in

the world can measure the patent against competing applications in patents and relative prior art. in addition, many inventors also want protect for their patents outside the united states. if you plan on selling your product overseas, you need to secure an early filing date. if you don't have a clear filing date, you can be shut out from the overseas market. a change to a first inventor to file system will help our businesses grow and ensure that american goods and services will be available in markets across the globe. the current first to invent system seriously disadvantages small businesses and independent inventors. for p.t.o. commissioner conducted a study that proves smaller entities are disadvantaged in p.t.o. interference proceedings that arise from disputes over patent ownership under the current system. in the last seven years, only one independent inventor out of three million patent applications filed has proved in

earlier date of invention than the inventor who filed first. let me repeat that. in the last seven days only one independent inventor out of three million patent applications filed has proved an earlier date of invention than the inventor who filed first. independent inventors lose to other applications with deeper pockets that are better equipped to exploit the current complex legal environment. so the first inventor to file change makes it easier and less complicated for u.s. inventors to secure their patent rights. and it protects their patents overseas. and it eliminates the legal bills that come with interference proceedings under the current system. it is a key provision of this bill. madam chair, the amendment should not be approved and i urge my colleagues to vote against it and i'll yield back the balance of my time. the chair: the gentleman yields back the balance of his time. the gentleman from wisconsin. mr. sensenbrenner: i yield a minute to the gentleman from california, mr. schiff. the chair: the gentleman from california is recognized for one minute.

mr. schiff: i thank the gentleman for yielding and i find myself in reluctant opposition to my colleague from texas, in support of the sense brenner amendment. section 3 shifts our patent system from the unique first to invent system to a first to file system. as i speak to inventors, startup, venture capitalists, i'm convinced that the proposed transition to first to file would be harmful to innovation and burden sovepl to the most die a number -- burt sod to the most dynamic and innovative sector of our economy. the rush to the patent office will lead to new cothses -- costs for small businesses as they prepare applications for inventions that they may ultimately find impractical. for small startups, the cost of retaining outside counsel for this purpose will be a drain on their limited resources and be less money for hiring. supporters of first to file argue inventors can turn to provisional applications to protect their patent rights, but from talking to small inventors, i have learned that good provisional applications require substantial legal fees and time investment on the part of the

inventor to make them sufficiently detailed to be of use. i appreciate the hard work but -- mr. sensenbrenner: i yield another 15 seconds. mr. schiff: i appreciate the hard work that has gone into the bill by the gentleman from texas, however i remain convinced that this will have lasting negative consequences for the investors and i urge the house to approve the bill by adopsing the sensenbrenner amendment. mr. sensenbrenner: i yield to ms. lofgren. ms. lofgren: i rise in support of the sensenbrenner amendment. actually, i don't agree that first to file is unconstitutional and i in general am not opposed to the idea of first to file, but unfortunately the bill is flawed and you cannot have first to file without robust prior user rights and a broad prior user

rights used in the grace period. we don't have that in this bill. and so what we will have are established businesses having to either reveal trade secrets or be held up, have to license their own trade secrets. for star scrt -- startups this is a very serious problem. coming from silicon valley, i'll tell you, i've heard from a lot of startups in the venture world that supports them that this provision is defective. there were other remedies, they were not adopted. all we can do now is to strike the first to file provision. i do that without any reluctance. it will serve our economy best and i thank the gentleman for offering his amendment. the chair: the gentleman from wisconsin has one minute remaining. mr. sensenbrenner: i yield myself the balance of the time. the chair: the gentleman is recognized. mr. sensenbrenner: madam chair, the reason that first to invent is important is that allows an inventor to talk to investors, conduct trial and error innovations and deal with leaks

because commercially important patent rights are determined by ordinary nonburdensome business activities. where this hurts the ordinary inventor, by going to first to file, is that he needs to get his venture capital together and then go ahead and file for a patent. with first to file he has to put all of the money up front to file in order to protect himself and what that will do is have a chilling effect on the small inventor who needs to get capital in order to perfect a patent and in order to market it. that's why this amendment should be adopted. i urge the members to do so and i yield back the balance of my time. the chair: the gentleman yields back the balance of his time. the question isen on the amendment offered by the gentleman from wisconsin. those in favor say aye. those opposed, no. in the opinion of the chair, the noes have.

it the amendment is not agreed to. mr. sensenbrenner: i ask for a recorded vote. the chair: pursuant to clause 6 of rule 18, further proceedings on the amendment offered by the gentleman from wisconsin will be postponed. it is now in order to consider amendment number 13 printed in part b of house report 112-111. for what purpose does the gentleman from illinois seek recognition? mr. mcmahon: i have an amendment at the desk -- mr. manzullo: i have an amendment at the desk. the clerk: amendment number 13 printed in part b of house report 112-111 offered by mr. manzullo of illinois. the chair: pursuant to house resolution 316, the gentleman from illinois, mr. manzullo, and a member opposed each will control five minutes. the gentleman from illinois is recognized for five minutes. mr. manzullo: madam chair, there are a lot of problems with this bill, as we have heard about already. in fact, on the wall of my office here in washington i have two pictures, among many. one is a picture of w. edwards democratting and myself taken just before he passed away in

1993, the real inventor of lean manufacturing. the other of dr. ray demadium, the inventor of the m.r.i., who examining this legislation said if the new changes had taken place in the patent law, had they been part of the patent system when he invented the m.r.i., the m.r.i. never would have been invented. he knows more than anybody how flawed this bill is. i want to focus the particular section 10 of the bill which allows the director of the patent office to set fees. i'm very concerned about this because in the last patent fight in 2004 when i chaired the house install business committee, in return for supporting higher fees with reduced rate structure for small businesses, the provision in that bill allowing the p.t.o. director to set fees was removed. this new bill abrogates that hard-won compromise and allows

the director of the p.t.o. to set the fees. it is not wise for the legislative branch to give up more power and authority to the executive branch. i note it's inconvenient to have congress set fees but that's the job of congress. not the job of an unelected bureaucrat. when i chaired the house small business committee, i continued the tradition of preventing the s.b.a. from unilaterally being able to set fees to another level they sought. i don't see why we have to do this with the p.t.o. now, in the present bill, section 11 actually lowers fees for small business people. and it has a good patent fee structure. however, section 10 would allow the p.t.o. director to proceed with administrator process to eviscerate that section and impose his own fees. to compound the problem, the patent office has been saying for years that if they had the authority to raise fees, they would.

in 2002 the p.t.o.'s strategic plan said they need to have a fee-based upon -- fee based upon a progressive system aimed at limiting applications. at 2010 the paper on patent reform, they said the same thing. the patent office's idea of cutting back on the backlog is to raise fees. that doesn't make sense. but let's eliminate that authority from the patent office, let's leave that authority with the united states congress. i reserve the balance of my time. the chair: the gentleman reserves the balance of his time. the gentleman from texas. mr. smith: i rise in opposition to the amendment. the chair: the gentleman is recognized for five minutes. mr. smith: madam chair, i oppose the gentleman's amendment to strike the p.t.o. fee-setting authority from h.r. 1249. although the p.t.o. has the ability to set certain fees by regulation, most fees are set by congress. history has shown that such a scheme does not allow the p.t.o. to respond to the challenges that confront it. the p.t.o., most stakeholders

and the judiciary committee have argued for years that the agency must have fee-setting authority to address its growing work load. this need is critical. the agency's backlog exceeds one million patent applications. this means it takes three years to get a patent in the united states, far too long. the wasted time leads to lost commercial opportunities, fewer jobs and fewer new products for american consumers. moreover the new fee structure will not only retain the 50% desk count for small businesses, it creates a new 75% discount for microentity. this benefit helps independent inventors and small businesses. the bill allows the p.t.o. to set or assess all of its fees, including those related to patents and trademark, so long as they do no more than reasonably compensate the agency for the services performed. the choice that we are abandoning the oversight of our process, i urge the members to review the oversight mechanisms in the bill.

for example, prior to setting such fees, the director must give notice to and receive input from the patent or trademark public advisory committee. the director may also reduce fees for any given fiscal year, but only after consultation with the advisory committee. the bill details the procedures for how the director shall consult with the advisory committees which include provides for public hearings and the dissemination to the public of any recommendations made by either advisory committee. fees shall be prescribed by rule. any proposed fee change shall be published in the federal register and include the specific rationale and purpose for other purposes the proposed change. the director must seek public comments for no less than 45 days. the director must also notify congress of any final decision regarding proposed fees. congress shall have no more than 45 days to consider and comment on any proposed fee, but no proposed fee shall be effective prior to the expiration of this 45-day period.

congress will remain part of the process. but p.t.o. is better age to respond to their own resource -- is better able to respond to their own resource needs which after all will benefit patent holders and subsequently the economy. so i urge my colleagues to oppose the amendment and i yield yield -- i yield the balance of moove my time to the gentleman from virginia, mr. goodlatte. the chair: the gentleman from virginia voiced for 2 1/2 minutes. mr. goodlatte: i thank the chairman for yielding and, madam chairman, i rise in opposition to this amendment. the senate-passed patent bill granted the p.t.o. fee-setting authority in the pert fought to. senate the -- the senate's goal was laudable. it wanted the p.t.o. to have control over the fees it charges so it have have more certainty about hiring new examiners to deal with patent fee and quality issues. we have, as you know, a very long backlog, three years, one million patents. however, i had strong concerns with granting this much authority to a government agency.

currently the p.t.o. must come before congress to request any fee increases. this forces the p.t.o. to use its current resources in the most efficient manner and also strengthens congress' hand when it comes to oversight over the agency. thus i worked to get a provision into the house bill that would sunset the p.t.o.'s fee-setting authority. the bill now terminates the fee-setting authority after seven years unless congress proactively acts to extend it. this will allow the p.t.o. sufficient time to structure its fees but will ensure that congress continues to have a strong influence over that process. and i might add that the manager's amendment to the bill also strengthens congress' hand and limits the objective of the p.t.o. to arbitrarily raise its fees because the congress still appropriates the funds and can only escrow funds, can't divert them, to another purpose, but escrows them. p.t.o. will have to come back to the congress and justify additional funds it receives. i believe the bill, as written right now, strikes the right

balance and i urge members to oppose this amendment which would altogether eliminate p.t.o. fee-setting authority. the chair: the gentleman from illinois. mr. manzullo: madam chair, you don't strike the right balance between inventor's constitutional right to file for an invention and giving a patent czar the authority to keep them out of the box by allowing them to raise the fee. mr. smith from texas sed it himself. he coupled patent backlog with the ability of the patent director to set the fees. that can lead to one conclusion, they are going to raise the fees in order to cut down on a patent backlog. it doesn't make sense. this is the people's house. the patent office is the people's house for the little inventor. he must have every opportunity to exercise his constitutional right and file that patent. but if congress sees the authority to set those fees to a new authority of the patent

director, call him now the patent czar, that patent czar will control for seven years at the minimum the flow of traffic coming through his office. you know who gets slowed, you know who gets hurt? it's the little guy. the purpose of my amendment is to protect the little guy to make sure those fees are not raised and also to make sure that the people in this country , -- in this country elect representatives to set the fees, and i would urge my colleagues to vote for the manzullo amendment to support the little inventor, to support the spirit of entrepreneurship in this country. the chair: does the gentleman yield back? mr. manzullo: i yield back. the chair: the question is on the amendment offered by the

gentleman from illinois. those in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. the amendment is not agreed to. mr. manzullo: madam chair, i request a recorded vote. the chair: pursuant to clause 6 of rule 18, further proceedings on the amendment offered by the gentleman from illinois will be postponed. it is now in order to consider amendment number 14 printed in part b of house report 112-111. for what purpose does the gentleman from california seek recognition? mr. rohrabacher: i have an amendment at the desk. the chair: the clerk will designate the amendment. the clerk: amendment number 14 printed in part b of house report 112-111 offered by mr. rohrabacher of california. the chair: pursuant to house resolution 316, the gentleman from california, mr. rohrabacher, and a member opposed, each will control five minutes. the chair recognizes the gentleman from california. mr. rohrabacher: thank you very much. in this debate, madam chairman, we have heard over and over and over again about the gridlock at the parent office which is supposedly -- at the patent

office which is supposedly what we're trying to correct with this legislation, h.r. 1249, which i have been contending it does not help the patent office but to harmonize american law with the rest of the world and make it weaker patent protection for our people. what does it do about the backlog if that's really what people are concerned about? h.r. 1249 would actually tremendously add to the p.t.o. backlog by requiring further postgrant review proceedings at the patent office. proceedings which would consume even more limited personnel and money. added procedures at the p.t.o., at the p.t.o., at the patent office, and it would also do what? it would break the backs of small inventors and startup companies who are trying to get a new product on the market. it would empure power the multinational -- empower the multinational and foreign

corporations. we are adding more procedures to go through even after they get their patent issued to them. this is the most -- this is the big guy versus little guy legislation. that was even pointed out by the hoover institution which did an analysis of this bill and said, and i quote, the american invents act will protect large entrenched companies at the expense of market-challenging competitors, end of quote. this is a travesty. it's an attack on america's well-being because we depend on our small inventors. the kaptur-rohrabacher limits this new burden. if we can't get rid of it we can decrease some of it to companies who have more than 100 employees. it frees up the patent office person toll do their job. helps with that gridlock and protects the small business man and small inventors at the same time. i would ask my colleagues to

support the kaptur-rohrabacher amendment and yield the balance of my time to ms. kaptur. the chair: the gentlewoman from ohio is recognized for 2 3/4 minutes. ms. kaptur: i thank the gentleman, mr. rohrabacher, for yielding. i ask my colleagues to support the kaptur-rohrabacher amendment. this legislation throws out 220 years of patent protections for individual inventors. our amendment addresses a major shortcoming of the bill by eliminating the burden of re-examinations on individual -- individual inventors and small businesses with 100 or fewer employees. the new procedures and regulations in this bill will make it extremely difficult for the average citizen to ever get a patent or defend one without our amendment.

our amendment clearly gives the patent office the authority to issue appropriate regulations that ensure that the new regulatory burdens on this bill do not disproportionately impact individual inventors. this is about ensuring fairness for small inventors. we urge our colleagues to support the kaptur-rohrabacher amendment so that everyone in america can realize their dreams. in realizing their dreams, assuring that we will have robust innovation and job creation in our country, and i'd like to yield back my remaining time to the fine gentleman from california. mr. rohrabacher: how much time is left, madam chair? the chair: the gentleman has 1 1/2 minutes remaining. mr. rohrabacher: let me note, this amendment empowers our amendment empowers the director of the patent office to have this 100-employee standard to other small businesses and individual inventors overseas. if it requires -- if this is

required by a treaty, yes, small businesses and individual inventors overseas. so our amendment does nothing to violate any treaty obligations by giving our own people special rights over foreign individuals. what it does do, however, is prevent foreign corporations from grinding down our inventors here like they grind down their inventors overseas. this is what we're doing to prevent a harmonization of our laws because we don't want weaker patent protection for our people against -- they already got it overseas against their foreign corporations that grind them down. we want to protect our own people, and i reserve the balance of my time. the chair: the gentleman reserves the balance of his time. the gentleman from texas. mr. smith: madam chair, i rise in opposition to the amendment. the chair: the gentleman is recognized. mr. smith: madam chair, almost everyone in congress wants to help small businesses. they have a foundation of our economy and the primary job creators. but this amendment includes certain terms or phrases that have nothing to do with the

underlying goal that it purports to achieve. this amendment appears to focus on the small businesses, but in reality the amendment attempts to have the trial lawyer and lobby with exemption from p.t.o. re-examination, allowing them to continue suing job creators using frivolous or questionable patents. this amendment has nothing to do with small businesses and everything to do with providing an exemption from some of the worst offenders of our patent system. this amendment will not help independent inventors or small businesses. small businesses need the p.t.o. re-examination proceedings. those proceedings strengthens patents and they are what they look for when deciding whether or not to provide capital venture funding. it harasses or hurts small businesses is just plain wrong. the re-examined proceedings are a quicker, cheaper way.

if is run into the millions of dollars and last for years. this amendment is an immunity agreement for patent controls, those entities who do not create jobs or innovation but simply gain the legal system. additionally, this amendment appears to violate our international obligation under the trips agreement. we are said to not discriminate of any categories of patent holders. by providing an exemption from all re-examination proceedings for tech knowinglogical patents or nonpracticing entities this would create a clear violation of our legal obligations. our patent system should be designed to ensure that it produces strong patents and patent certainty. the p.t.o. re-examination proceedings help ensure that these important goals are accomplished. this amendment bars any form of re-examine for u.s.-owned patents and thus would also prevent u.s. inventors themselves from using supplemental examination to even be able to correct errors

in the record about their own patents. this amendment creates a huge loophole in our patent system by entity with 100 or fewer employees. this would not help small businesses but will allow patent trol entities, foreign companies and foreign governments to manipulate our patent system. it would bar use of the business method's transitional proceedings against most patents. this amendment is a recipe for allowing patent trols and foreign companies and governments to bypass normal, postgrant challenges and enables weak or questionable patents to bypass further scrutiny. there is no legitimate public policy objective in exempting large numbers of those who manipulate our patent system from the rules of the road. it is for these reasons that i strongly oppose this amendment. and, madam chair, i'll now yield the balance of my time to the gentleman from virginia, mr. goodlatte. the chair: the gentleman from virginia is recognized for two minutes.

mr. goodlatte: madam chairman, i rise in strong opposition to this amendment which is a bad idea. postgrant review is one of the most important provisions in this bill. it allows third parties for a limited window of nine months after a patent is issued to submit evidence that the patent should not have been granted in the first place. this allows third parties, many of whom will be small businesses themselves who are familiar with the subject matter to provide a check on patent examiners. if the evidence shows that the patent is indeed invalid, then the pant applicant should have never -- then the patent applicant should have never received the patent in the first place. it is made stronger by surviving a postgrant review. the amendment would exempt small businesses from the postgrant opposition proceeding. however, the quality of a patent examination does not hinge on the size of the applicant. whether it's a small business, an independent inventor or a large corporation. it hinges on the p.t.o.'s job of scrutinizing that patent.

a bogus patent held by an independent inventor is no less deserving of a second look than a bogus patent held by a fortune 500 company. for these reasons i urge opposition to this very bad amendment. and i reserve the balance of my time. mr. smith: i yield back. the chair: the gentleman yields back. the gentleman from california has 30 seconds remaining. mr. rohrabacher: i yield 30 seconds to ms. kaptur. the chair: the gentlewoman is recognized. ms. kaptur: i'd like to refute mr. smith's argument. it says it will violate w.t.o. obligations, specifically citing trip. he seems to object to the use of references to american citizens and u.s. companies, but obviously failed to read the entire amendment which allows the patent office to issue relevant regulations. and if he was concerned about w.t.o. compliance he should strike a section of his bill which is w.t.o. noncompliant

because it creates a special class for only one industry, the banking industry. i urge my colleagues to vote against the bill and for the rohrabacher-kaptur amendment. the chair: all time has expired. the question is on the amendment offered by the gentleman from california. those in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. the amendment is not adopted. mr. rohrabacher: i'd ask for a recorded vote. the chair: pursuant to clause 6 of rule 18, further proceedings on the amendment offered by the gentleman from california will be postponed. it is now in order to consider amendment number 15 printed in part b of house report 112-111. for what purpose does the gentleman from illinois rise? mr. schock: thank you, madam chair woman. i have an amendment at the desk. the chair: the clerk will designate the amendment. the clerk: amendment number 15 printed in part b of house report 112-111 offered by mr. schock of illinois. the chair: pursuant to house resolution 316, the gentleman from illinois, mr. schock, and a member opposed, each will

control five minutes. the chair recognizes the gentleman from illinois. mr. schock: thank you, madam chair woman. well, i thought when we started this congress we'd agree to no more earmarks, no more handouts, no more special privileges for any specific industry. based on reading house resolution 249, it's obvious to see it includes controversial language which does just that. section 18, which sets forward a new and different process for certain business method patents for any other patent seeking approval. section 18 carves out a niche of business method patents covering technology used specifically in the financial industry and would create a special class of patents in the financial services field subject to their own distinctive postgrant administrative review. this new process allows for retroact of reviews of already proven patents that have

undergone initial scrutiny, review and have even been upheld in court. now these patents will be subjected to an unprecedented new level of interrogation. now, the other side will argue that somehow magically a number of these financially related patents breeze through the patent office and thus must be reviewed. well, nothing could be further from the truth. in fact, the allowance rate for these business method patents is the smallest of any of the art forms. in fact, roughly 10% of those business patents applied for are actually approved. at a time when these small entrepreneurs and innovators need to be dedicating the resources and new advancements to innovation, they will instead because of section 18 be required to divert research funds to lawyers to fight the deep pockets of wall street who will now attempt to attack their right to hold these financially related patents. with that, madam chair, i would

reserve the balance of my time. the chair: the gentleman reserves the balance of his time. the gentleman from texas. mr. smith: i claim the time in opposition to this amendment. the chair: the gentleman is recognized for five minutes. mr. smith: madam chair, let me yield myself one minute. the chair: the gentleman is recognized for one minute. mr. smith: i strongly oppose this amendment. it strikes a useful provision that would provide a way to review the validity of certain business patents. the proceeding would create an inexpensive and faster alternative to litigation, allowing parties to resolve their disputes rather than spending millions of dollars that litigation now cost. in the process, the proceeding would also prevent nuisance or extortion lawsuits. this provision is strongly supported by community banks, credit unions and other institutions that are an important source of lending to homeowners and small businesses. finding this bill only creates a new mechanism for reviewing the validity of business method patents. it does not alter the validity

of those patents. under settled precedent, the transitional review program is absolutely constitutional. i now yield one minute to the gentleman from new york, mr. grimm, who is a member of the financial services committee. the chair: the gentleman from new york is recognized for one minute. mr. grimm: thank you. i rise today to encourage my colleagues to oppose the schock amendment. a crackdown on low quality business method patents which have weakened the patent system and cost companies and their customers millions of dollars. infamous patent petroleums, people who aggressively try to enforce patents through courts and friendly venues have made business method patents their specialty in recent years. these same patent trolls have funded an elaborate propaganda. let us simply set the record straight, section 18 allows patent experts to re-examine

through temporary pilot programs legally questionable business method patents. a problem that the patent office has already said it is ready and willing to tackle. opponents have asserted that the measure would help only the banks. this isn't true. national retail federation and the u.s. chamber of commerce have endorsed this provision. companies impacted include mcdonald's, wal-mart, costco, home dee toe, best buy and lows -- lowes. these don't sound like banks to me. opponents also claim this section is unconstitutional. mr. smith: i yield the gentleman an additional 15 seconds. the chair: the gentleman is recognized for an additional 15 seconds. mr. grimm: thank you. again, there has been a tremendous propaganda campaign basically to sell untruths that we simply need to get past. the truth is this is best for the small guy. if we really care about the small inventors that create innovation in this country, then we should oppose this amendment. thank you and i yield back. the chair: the gentleman's time

has expired. the gentleman from illinois. mr. schock: i yield one minute to my friend, the co-sponsor of this amendment, ms. waters from california. the chair: the gentlewoman from california is recognized for one minute. ms. waters: thank you very much, madam chair. as a member of the judiciary committee, i rise in strong support of the schock- boren-waters-sensenbrenner-frank s-capture amendment. for years the banks have tried to eliminate abilities to smaller companies and invents that are had patented financial services related business method patents. they are now coming to congress in hopes that you will help them steal a specific type of innovation and legislatively take other financial services related business method patents referenced in h.r. 1249, section 18. this is simply wrong. eelected members of congress should not allow the banks to use us to steal legally issued and valid patents. financial services related

business method patents have saved financial services companies billions of dollars but that's not enough for the banks. because the banks have failed at every attempt to void these patents, they're attempting to use their power to write into law what they could not achieve at p.t.o. or in the court. don't be tricked, don't be fooled and don't be used. i urge my colleagues to listen to the floor debates. i yield back the balance of my time. the chair: the gentleman from texas. mr. smith: i yield 1 1/2 minutes to the gentleman from new york, mr. crowley, who is a member of the ways and means committee. the chair: the gentleman from new york is recognized for a minute and a half. mr. crowley: thank you. i thank the gentleman for yielding me such time. madam speaker, i rise in strong opposition to the amendment that would eliminate section 18 of the underlying patent reform bill. section 18 empowers the patent and trademark office to review the validity of so-called business method patents. this language was drafted in close cooperation with the patent and trademark office and the department of commerce. it also enjoys the wide bipartisan support of the judiciary committee which

defeated the similar amendment during committee consideration of this bill. further, this amendment does not hurt any legitimate inventors. it only allows for the review of abstract patents issued since 1998, when the federal court ruled that business methods could be patented. a ruling which the u.s. supreme court limited significantly last year. were these -- what are these methods i'm talking about? in one case a business method patent was issued for a data pact transferring computer network. once obtained, the patent holder sued the red cross for soliciting charitable contributions on the internet. another example, a patent was granted covering the printing of marketing materials on building statements. these patents and others in this space are not legitimate patents that help advance america. they are nuisance patents used to seal legitimate businesses and nonprofit organizations like the red cross or any other merchants who engage in normal activity that should never be

patented. in fact, this language will not go after any legitimate patent, only allow a review of the illegitimate patents like those looking to patent the office water cooler discussion. no legitimate inventor needs to worry about a post grant review and i submit the rest of my statement for the record. thank you. the chair: without objection. the gentleman's time has expired. the chair recognizes the gentleman from illinois. mr. schock: thank you, mr. chairman. i yield 30 seconds to my friend and co-sponsor of this amendment, mr. boren of oklahoma. the chair: the gentleman from oklahoma is recognized for 30 seconds. mr. boren: mr. chairman, i rise today in support of the amendment that i have co-authored with mr. schock. during my time in congress i have been a consistent supporter of small businesses. here on the house floor we are told nearly every day that small businesses are the engine of our nation's economy. and there's no discounting that fact. if included in the final bill, i believe section 18 will pose a devastating threat to america's

small business community. business method patents already endure a lengthy approval process. and section 18 would only make it more difficult for inventers to defend their patents. i ask my colleagues to support this amendment and i yield back. the chair: the gentleman's time has expired. the chair recognizes the gentleman from texas. mr. smith: mr. chairman, i yield the balance of my time to the gentleman from virginia, mr. goodlatte. the chair: the gentleman from virginia is recognized for 1 1/2 minutes. mr. goodlatte: -- the chair: 1 1/4 minutes. mr. goodlatte: i rise in opposition to this amendment. there's no doubt that the p.t.o. has issued business method patents of questionable merit over the years. many of these patents are still on the books. unfortunately many of these patents are being used by aggressive trial lawyers to extort money from deep pockets. section 18 of the bill simply creates a process that allows experts at the p.t.o. to re-examine the types of business method patents that the p.t.o. believes to be of the poorest quality. this section was drafted in close coordination with the u.s.

p.t.o. and is a pilot program that allows them to review certain business method patents against the best prior art in a re-examination process. why would anyone oppose a process that allows low quality patents to be reviewed by the experts? business method patents on financial activities are the type of patents that are the subject of lawsuits and abuse most often. they are litigated at a rate 39 times greater than any other patent. section 18 is designed to correct a fundamental flaw in the system that is costing consumers millions each year. the provision is supported by a broad bipartisan coalition that includes the u.s. chamber of commerce and i urge members to reject this amendment which strikes an important litigation reform provision of the underlying bill. the chair: the gentleman yields back the balance of his time. mr. smith: marriage, i yield back the balance of my time. the chair: the gentleman from texas yields back the balance of his time. the chair recognizes the gentleman from illinois.

mr. schock: i'd like to inquire about my time remaining. the chair: the gentleman from illinois has 1 1/2 minutes remaining. mr. schock: thank you. i would now yield one minute to my friend from california, mr. lungren. the chair: the gentleman from california is recognized for one minute. mr. lungren: thank you very much, mr. chairman. i might just say that in answer to the question raised by my friend from virginia, why would anybody oppose this, it is because of the constitution. this provision, section 18, is clearly vialtive of the constitution. it would have you believe that you can go to court, go to court , an article 3 court, and have a final decision, a final judgment rendered by a court, including a jury, and then after that, not an appeal to an appellate court but an appeal somehow back to the administrative agency? does anybody sense there's a violation of the separation of powers? does anybody understand what the court said in the plout case which said the constitution gives the federal judiciary the power to not merely rule on cases but decide them subject to

review only by superior courts in article 3 hierarchy? you can argue all you want, but that's what the supreme court says. this is an obvious platent violation of the constitution -- platent violation of the constitution. that's the answer to my friends who say we have to have this provision. yes, it may be that the u.s. constitution is the inconvenient truth here. we're not allowed to violate it even though we do it with best of intentionings. the chair: the gentleman's time has expired. the gentleman from illinois is recognized. mr. schock: thank you, mr. chairman. i yield myself the balance of the time. the chair: 30 seconds. mr. schock: mr. chairman, for so many reasons, this provision of the bill is flawed. i ask my colleagues to join me in supporting the repeal of section 18 and simply ask this. regardless of where your support lies on the underlying portion of this bill, the underlying bill, why are we doing something separate for financial services patents?

why are we doing something separate for the business method patents? shouldn't all reforms affect all patents and all industries? i would argue that this is an earmark and a special provision for one industry and for so many reasons would ask for a yes vote on my amendment. i yield back the balance of my time. the chair: the gentleman yields back the balance of his time. all time having expired the question is on the amendment offered by the gentleman from illinois. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. the amendment is agreed to. the gentleman from illinois. or the gentleman from texas. pursuant to clause 6 of rule 18, further proceedings on the amendment offered by the gentleman from illinois will be postponed. pursuant to clause 6 of rule 18, proceedings will now resume on those amendments printed in part b of rouse report 11-111 on which further proceedings were postponed in the following order. amendment number 2 by mr. conyers of michigan. amendment number 3 by ms. baldwin of wisconsin. amendment number 9 by mr.

conyers of michigan. amendment number 12 by mr. sensenbrenner of wisconsin. amendment number 13 by mr. manzullo of illinois. amendment number 14 by mr. rohrabacher of california. amendment number 15 by mr. schock of illinois. the chair will reduce to two minutes the time for any electronic vote after the first vote in the series. the unfinished business is the request for a recorded vote on amendment number 2 printed in part b of house report 112-111 by the gentleman from michigan, mr. conyers, on which further proceedings were postponed and on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment number 2 printed in part b of house report 112-111 offered by mr. conyers of michigan. the chair: a recorded vote has been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this is a 15-minute vote.

[captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote the yeas are 105, the nays are 316, the amendment is not adopted. the committee will come to order. the committee will come to order. the committee will come to order. the committee will come to

order. choich the committee will come to order -- choipt committee will come to order. the committee will come to order. the chair recognizes the gentlewoman from missouri. >> thank you, mr. chairman. i am happy to have an announcement that's not quite as exciting as that which we've just been watching. however, this is the congressional women's softball team. and we're very excited and joe

baca is an honorary member of the team. he's one of our coaches. anyway, debby wasserman schultz and i who are the co-captains, wanted to, number one, tell you all that we will be playing the washington news media tonight at 7:00 at watkins recreation park up at 12th and d street southeast and we invite everybody to come and cheer us on. mrs. emerson: we are going to win this year. we're good. and probably more than anything else, this has been a wonderful opportunity for us to really bond as friends and as colleagues, not in any partisan way, and we're just very excited and happy that we're playing tonight. we need your all's support. ms. wasserman schultz: mr. speaker, i want to thank all the women and our male coaches who have been practicing for three

months two, or three times a weeks, at 7:00 in the morning, all to raise money for a great cause, for the young survival coalition which helps young women who are struggling with breast cancer or who have survived breast cancer. all of you know that i am a breast cancer survivor along with sue myrick on the other side of the aisle, but this game is our opportunity to come together as women, as sisters, as a bipartisan representation in the fight against breast cancer. we invite you all out to come to the game tonight. 7:00 p.m., watkins recreation center and watch us beat the capitol press core silly. mrs. emerson: mr. chairman, we yield back. the chair: without objection, for what purpose does the gentleman from wisconsin rise? mr. sensenbrenner: i ask for roll call on the next amendment. the chair: without objection, two-minute voting will continue. the unfinished business is the request for a recorded vote on

amendment number 3 printed in part b of house report 112-111 by the gentlewoman from wisconsin, ms. baldwin, on which further proceedings were postponed, under which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment number 3 printed in part b of house report 112-111 offered by ms. baldwin of wisconsin. the chair: a recorded vote has been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote, the yeas are 81, the nays are 342, the amendment is not adopted.

the unfinished business is the request for a recorded vote on amendment number 9 printed in part b of house report 112-111, by the gentleman from michigan, mr. conyers, on which further proceed wrgs postponed and on which the yeas and nays were requested. the clerk: amendment number 9, printed in house report 112-111 offered by mr. conyers of michigan. the chair: a recorded vote is requested. those in favor of a recorded vote will rise and be counted. a a sufficient number having risen, a recorded vote is ordered. members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote the yeas are 208, the nays are 209, the amendment fails. the unfinished business is the request for a recorded vote on amendment number 12 printed in house report -- part b of house report 11-111 by mr. sensenbrenner on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment number 12 printed in house report 112-111 offered by mr. sensenbrenner of wisconsin. the chair: the gentleman from

illinois is recognized. the gentlelady was in the well -- >> the gentlelady was in the well, attempting to cast her vote. the speaker did not acknowledge the gentlelady was in the well and continued to conclude the vote. i think it's appropriate that the house of representatives, consistent with its rules and lord knows i've been in your position many times and i have had to stop the vote because a member is in the well,s the tradition of the house to acknowledge a member in the well when they are casting their ballot and it does not get shut off. i'd like to make a motion that we reconsider the vote.

the chair: in consideration of the gentleman's motion the chair is constrained to advise the gentleman a motion to

reconsider is not available in the committee of the whole. the chair recognizes the gentlewoman from california. >> i ask unanimous consent that the vote be retaken. ms. lofgren: we had a tremendous effort, consumed money and time for a similar incident in a previous congress. the smart thing to do would be to recognize this was ap error and retake the vote so we can move forward in comity. mr. cantor: mr. speaker. the chair: the majority leader. mr. cantor: i request the the -- i agree with the request for

retaking the vote. the chair: without objection, the question will be put de novo. the clerk will redesignate the amendment. the clerk: amendment number 9 printed in part b of house report 112-111 offered by mr. conyers of michigan. the chair: the question is on adoption of the amendment. those in favor say aye. those opposed, no. in the opinion of the chair the noes have it. the motion is not adopted. the chair recognizes the gentleman from maryland. mr. hoyer: i ask for a recorded vote. the chair: a recorded vote is requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having risen, a recorded vote is

ordered. without objection, this will be a two minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

yeas are 223, the nays are 198, the amendment is adopted. the unfinished business is the request for a recorded vote on amendment number 12 printed in part b of house report 112-111 by the gentleman from wisconsin plmbing sensenbrenner on which further proceedings were postponed and on which the noes spre pre-vailed by voice vote chesm the clerk will

redesignate the amendment. the clerk: amendment number 12 offered in part b of house report 112-111 by mr. sensenbrenner of wisconsin. the chair: those in support of the request for a recorded vote will rise and be counted. a sufficient number having risen, a recorded vote is ordered. members will record their votes by electronic device this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]