Opening Statement

Floor Statement of the Honorable John Conyers, Jr.
H.R. 3309, the “Innovation Act”
December 5, 2013

Madam Speaker:

There are few economic issues this Congress will face that are more important than our patent law system. Intellectual property is responsible for nearly half of our nation’s gross domestic product and one third of all jobs in the U.S. economy.  Our patent system, while not perfect, is the envy of the world.  I believe the issues of non-practicing entities or so-called patent ‘trolls,’ present some unique problems that are worthy of congressional attention.  Without question, there is a serious disconnect when shell corporations – with little or no assets – can systematically abuse the patent system. If we don’t know who these shell companies are, and – if they are able to unfairly threaten hundreds, if not thousands, of unsuspecting retailers –  we have a problem that requires a legislative solution.  Unfortunately, H.R. 3309 goes well beyond the issue of trolls and would weaken every single patent in America.

I say this for several reasons:  First, H.R. 3309 fails to respond to the single most important problem facing our patent system today – the continuing diversion of patent fees.  Nearly $150 million in badly needed user fees have been diverted in fiscal year 2013.  This is in addition to the estimated $1 billion in fees diverted over the last two decades.  By failing to provide patent examiners the resources they need, we are taxing innovation and harming patent quality.

Second, the bill’s heightened pleading requirements will deny legitimate inventors access to the courts in several critical respects:  they will have an unfair impact against patent holders across the board; they are drafted in a one-sided manner; they will prolong litigation; and they are unnecessary because the courts are already addressing pleading standards.

Third, the bill’s fee shifting requirement will favor wealthy parties and chill meritorious claims.  Because this provision is drafted in an overly broad manner, it will apply well-beyond patent infringement actions. In addition, this requirement would prevent courts from exercising discretion, a key hallmark of our nation’s judicial system.  And, this provision is also unnecessary because both the Supreme Court and the Federal Circuit are preparing to rule on the issue.

Fourth, the bill’s discovery limitations are counterproductive.  Limiting discovery prior to holding hearings to construe patent claims and determine their scope will delay litigation and lead to greater expenses for the parties.  This, again, can and should be more properly dealt with by the courts.

Finally, H.R. 3309 mandates that the federal judiciary adopt a series of new rules and judicial changes that will also make it more difficult for inventors to protect their patent rights.  These changes  are strongly opposed by the Judicial Conference of the United States, the principal policymaking body that Congress established to administer our federal court system. I have worked my entire career to help foster an independent judiciary that can resolve disputes between parties on a fair and dispassionate basis based on an evenhanded set of rules.  There is little doubt that the federal judiciary – as evidenced by its exceedingly deliberative rulemaking process – is in a far better position than 535 members of Congress to set the proper rules for their own court rooms on these matters.

By unbalancing the patent system, we send a signal to inventors –  the very people doing the research and developing the cures that we benefit from every day – that their inventions are not worthy of full legal protection. This means that the next cure for cancer or technological breakthrough may be stymied and perhaps never come, or they will be developed abroad rather than in the United States.

We can and should respond to the problem of patent trolls in a fair and targeted manner.  But, we must not do so in a way that punishes our innovators and inhibits innovation.  Accordingly, I strongly urge a no vote.