INTELLECTUAL PROPERTY OWNERS after filing2, a term of 17 years after grant equates to a term of 18 1/2 years after filing. A term of 20 years after filing will give an average applicant who has not filed continuing applications 1 1/2 years more protection than the applicant receives under current law. If an application is pending for three years, a term of 20 years after filing will give the same patent life as a term of 17 years after grant. Applicants in nearly all cases can obtain a patent within three years. Moreover, S.2368 contains a provisional application/domestic priority procedure that is designed to assist particularly smaller U.S. inventors by allowing them to file an inexpensive provisional application for $75. The provisional application, which can remain on file for a year before the filing of a complete application, is not counted in measuring the term of twenty years from filing. In other words, the patent life may extend for up to 21 years from the filing of a provisional application. A party filing a provisional application or other domestic priority application can have a pendency of four years from the first filing and obtain the same patent life as with the current 17-year term after grant. For these reasons, very few applicants will experience any term shortening, even with the examining and prosecution procedures followed by the Patent and Trademark Office and applicants currently. For the very few applications that require more than three to four years to grant now, changes in Office procedures and the procedures followed by 2Average pendency time in the Office for all applications was 19.5 months in 1993. According to the 1995 Budget Submission of the President, average pendency for all applications in 1995 will be 18.9 months. Average pendency for biotechnology applications will be 18.9 months in 1995. Average pendency for computer-related applications will be 24.9 months in 1995. INTELLECTUAL PROPERTY OWNERS applicant's attorneys can shorten the time to grant.' For instance, applicant's attorneys can change their almost universal tradition of taking 3 to 6 months to respond to every Patent Office letter. Applicants and their attorneys can start presenting a range of patent claims, from broad to narrow, as a part of the initial filing. Twenty years measured from filing is a basic reform that has been discussed in numerous public hearings for decades". The Administration already has made a commitment to support separate legislation, H.R.4505, which includes a term of 20 years from filing. It would be complicated and confusing to users of the patent system to change the term to the longer of 17 years from grant or 20 years from filing now in order to comply with GATT, and then change it again in the next Congress in order to achieve the benefits explained in this statement and to harmonize laws with other countries. We urge including in the GATT implementing legislation the 20-year patent term measured from filing as proposed in S.2368. # # # 3The Administration's bill provides extensions for patent owners who are delayed by interference proceedings and secrecy orders. About 200 interferences are declared each year, involving around 400 patents or patent applications, out of more than 150,000 applications a year filed. About 50 percent of the interferences are pending for a year or less. About 10 percent are pending for more than three years. A single interference of 592 studied was pending for more than 5 years. See I.A. Calvert and M. Sofocleous, "Interference Statistics for Fiscal Years 1989 to 1991, " 74 Journal of the Patent and Trademark Office Society 822 (1992). "The Bureau of National Affairs, Inc. reported as follows on the Patent and Trademark Office public hearings of Oct. 7 and 8, 1993, at which dozens of witnesses testified: "Spokespersons for both large companies and small inventors expressed virtually unanimous support for a 20-year term measured from filing." 46 BNA's Patent, Trademark & Copyright Journal 511, Oct. 14, 1993. APPENDIX 5.-STATEMENT BY INTELLECTUAL PROPERTY OWNERS (IPO), AUGUST 12, 1994 IPO INTELLECTUAL STATEMENT BY INTELLECTUAL PROPERTY OWNERS (IPO) FOR THE RECORD OF JOINT HEARINGS ON AUGUST 12, 1994 SENATE JUDICIARY SUBCOMMITTEE ON AND HOUSE JUDICIARY SUBCOMMITTEE ON INTELLECTUAL PROPERTY AND JUDICIAL ADMINISTRATION ON LEGISLATION RELATING TO GATT IMPLEMENTING LANGUAGE "... The 20-year patent term from filing will provide at least as much patent life as the existing term of 17 years from grant for U.S. companies, inventors, and universities in virtually all cases. At the same time, the new measure of patent life will help eliminate abuses of the patent system that are harming U.S. industry and the consuming public...." INTELLECTUAL PROPERTY OWNERS Subcommittee Chairmen and Members of the Subcommittees: Intellectual Property Owners (IPO) is a non-profit association that represents companies and individuals who own patents, trademarks, copyrights, and trade secrets. IPO members are responsible for a substantial portion of the private research and development performed in the United States. During 1993 IPO members were granted about 12,000 United States patents, 23 percent of all U.S. patents granted to U.S. nationals. IPO strongly supports the 20-year patent term measured from filing as it is proposed in S.2368, the Administration's draft legislation for implementing the Trade Related Aspects of Intellectual Property Rights (TRIPS) portion of the GATT agreement. The 20-year patent term from filing will provide at least as much patent life as the existing term of 17 years from grant for U.S. companies, inventors, and universities in virtually all cases. At the same time, the new measure of patent life will help eliminate abuses of the patent system that are harming U.S. industry and the consuming public. A 20-year patent term from filing was recommended as early as 1966, by President Johnson's Commission on the Patent System. The same type of 20-year term was recommended, in the context of patent law harmonization, by the Commerce Department's Advisory Commission on Patent Law Reform in 1992. IPO has supported a 20-year term from filing as a part of patent law harmonization and in separate legislation. The current term of 17 years measured from patent grant is interfering with the patent system's objective of stimulating progress INTELLECTUAL PROPERTY OWNERS in technology. A term measured from grant encourages applicants to file too many successive continuing applications on the same invention. The result is "submarine" patents, kept alive through continuing applications, that remain submerged in the Patent and Trademark Office in secrecy year after year and cause a great deal of mischief. Large and small companies and independent inventors sometimes have abused the system by obtaining submarine patents. Such patents delay dissemination of technological information to the public and prolong the period of uncertainty about the status of legal rights in inventions. Submarine patents can be a brutal surprise to companies who manufacture in the U.S. One IPO member spent tens of millions of dollars to launch a new product that turned out to be very successful. Unfortunately, within a year after launch, another party obtained a U.S. patent covering the product after a pendency period of 22 years in the Patent and Trademark Office. In that case, the corresponding foreign patents had expired before the U.S. patent issued. No patent should remain in the Patent and Trademark Office that long and then commence a term of exclusivity. U.S. companies that invest in product development and commercialization and find they are blocked from the market by a submarine patent ultimately pass on their costs to consumers. Patents that continue 10, 15, and in some cases more than 20 years beyond the |