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Hearing Reveals Bitter Division On Patent Term Legislation rama is perhaps the last thing to expect at a hearing on a subject as dry as patent law. But at a recent standing-room-only hearing on patent terms, some witnesses were calm, cool, and collected, while others invoked God, bashed Japan, aired conspiracy theories, and shook their fists— in the name of patent protection. All of this was in response to H.R. 359, a bill introduced by Rep. Dana Rohrabacher (R-Calif.), which attempts to overturn changes in patent protection that took effect earlier this year. Panels of the bill's supporters and detractors came prepared with numbers supporting their points of view and tales of dire consequences should the other side prevail. The House Judiciary Committee's Subcommittee on Patents & Intellectual Property provided the forum for their debate. The term of a patent in the U.S. now ends 20 years from the earliest effective filing date claimed in the patent application. Prior to June 8, patents had offered protection for 17 years from the date a patent was granted, with some extensions possible for delays caused by the Patent & Trademark Office (PTO). The June 8 change, part of the implementing legislation for the most recent global trade pact negotiated under the General Agreement on Tariffs & Trade (GATT), means the patent term is now 20 years minus whatever time is spent processing the application. If H.R. 359 were to become law, and that is far from certain, it would effectively roll back patent protection to the way it used to be. The language of the bill complies with the letter, if not exactly the spirit, of GATT, which requires a minimum amount of protection based on the earliest filing date. This may not seem like a big deal, but a lot is at stake. If it takes more than three years for a patent to be granted, patentees start losing protection time. And time is money. 'The patent term reform in GATT was a necessary and important step for-
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American Chemical Society. ACS, however, also urges Congress to publish pending applications at 18 months. The Rohrabacher bill calls for publication at 60 months. GATT patent law changes "are trying to fix something that not only is far from 'broke/ but that has been stunningly thriving," testified Robert H. Rines, a longtime patent lawyer and inventor. 'They are eroding away these wellproven rights and stimulations to small inventive businesses." ' 'Small start-up companies view a patent as a means of protecting their position while creating a new industry/' said Paul B. Crilly, an electrical engineer at the University of Tennessee, Knoxville, and a former member of Rohrabacher's staff. Diane L. Gardner, of Molecular BioSystems, San Diego, speaking for Biocom, a biotechnology trade association, fears that eliminating the guarantee of 17 years of protection from patent issue will dry up the venture capital that is so necessary for the biotechnology industry. Supporters of H.R. 359 said the GATTrelated changes will deprive them of the protection they are due because of constant delays in the patent office. They noted it frequently takes much longer than three years to get a U.S. patent—particularly for pioneering inventions. According to PTO, delays in its shop aren't a problem, because "the average pendency is 19.4 months from the filing of the application to grant." Not so, said Crilly. He maintained: "The PTO-published 19-month application pendency is misleading. It does not take into account the original filing date." For example, he explained, "a patent is filed for in 1980, continuations are applied for in 1982 and 1984, and the patent issues in 1986. PTO counts the 1982 and 1984 refilings as two different applications. Thus, a process that took six years is counted as three applications averaging two years each." Mark A. Lemley, law professor at the Rohrabacher: reinstate 17-year term University of Texas, Austin, testified
ward into harmonizing laws in a global economy/7 said subcommittee Chairman Carlos J. Moorhead (R-Calif.). To further that end, he has introduced a bill (H.R. 1733) that would require early publication of patent applications, an idea also opposed by Rohrabacher. A lot of folks agree that the trade agreement was a good deal for the U.S. Among them are five past PTO commissioners, the Chemical Manufacturers Association, the National Association of Manufacturers, and virtually all major U.S. industrial concerns. So, if GATT is so great, who's complaining? Rohrabacher casts the battle as the little guy versus the big, bad corporate lobby in cahoots with Patent Commissioner Bruce Lehman and the Japanese. He says the patent term change was "snuck into GATT/7 In effect, Lehman and his boss, Commerce Secretary Ronald H. Brown, sold U.S. inventors down the river—sold them to Japan, according to Rohrabacher. Most of those testifying on behalf of Rohrabacher's bill had valid reasons for doing so. They believe that H.R. 359 protects their interests, which were damaged by GATT. The bill is supported by a number of groups, including the
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BATCH PROCESSORS: against H.R. 359. He came armed with a preprint of his paper, "An Empirical Study of the 20-Year Patent Term/' which will be published in the Novem ber issue of American Intellectual Property Law Association Quarterly Journal. Lemley studied 2,081 U.S. patents whose issuance was recorded in the Dec. 27,1994, issue of the weekly Official Ga zette of the U.S. Patent & Trademark Office. That issue was randomly selected for study. He said, "The data show that the average patent owner gets significantly more protection under the 20-year term than under the old law. To be precise, the average patent owner in [the] sample receives 253 days more protection than [he or she] would under the old law/7 Lemley found that chemical patents don't benefit quite as much from GATT as general, mechanical, and electrical patents do. But they still benefit, receiv ing an average 136 more days of protec tion. "Under the old law, the chemical patents had an average term of 6,168 days. The average time spent in prosecu tion was 1,001 days, giving the average patent in the chemical group a total of 6,304 days of protection under the new law." Out of the total sample of 604 chemical patents, 402 (67%) would have gained patent term under the new law because they were issued in less than three years. Biotechnology patents are another matter. Small sample size (25 of 2,081) prevented Lemley from getting statisti cally significant data, but it appears that biotech patents will receive less than the 17 years of protection they would have received under the old law. Moorhead's bill calls for publication of patent applications 18 months after fil ing. This provision replaces the long standing secrecy of a patentee's applica tion until it is granted. It shakes out like this: Generally, the folks who love H.R. 1733 hate H.R. 359, and the folks who love H.R. 359 hate H.R. 1733. "Under H.R. 1733, we're in effect going to hang a huge neon sign in front of the patent office that says, 'Come and steal our technology,' " insisted Rohrabacher. Proponents of H.R. 1733 said secrecy is way overrated in a global economy and pointed out that early publication avoids duplication of effort and ad vances technology. No action has been taken on either of these bills to date, and none is expect ed until next year. Linda Raber
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