INTELLECTUAL PROPERTY OWNERS time they normally should have expired discourage new product innovation more than they encourage it'. With a term of 20 years from filing, applicants will no longer be able to extend their patent terms through intentional delay in the Patent and Trademark Office. They will find it more often to their benefit to prosecute applications quickly and efficiently. improve the effectiveness and reduce costs of the Patent and Trademark Office. This will The 20-year patent term and Senator DeConcini's pending bill, S.1854, which requires the Patent Office to make applications public 18 months after filing if a patent is not issued by that time, will eliminate the submarine patent problem. IPO recommends adding the 18month publication system of S.1854 to the GATT implementing legislation, and alternatively, supports enactment of an 18-month publication bill as a separate measure. Eighteen-month publication with a provisional right to a reasonable royalty complements the 20-year term measured from filing. A reasonable royalty after publication may compensate the patentee for time lost from the 20-year patent term as a result of any delays in the PTO that are not taken care of by other provisions in the 20-year term legislation. The facts simply do not support the argument that the 20-year term as proposed in S.2368 will shorten patent life. Since the Patent and Trademark Office grants the average patent about a year and a half Forty year pendency is not unheard of. "A submarine patent' surfaces 40 years after the inventor filed his application," by Teresa Riordan, The New York Times, April 4, 1994. 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 'Average 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 6.-STATEMENT BY INTELLECTUAL PROPERTY CREATORS, AUGUST 12, 1994 Intellectual Property Creators The Inventors' Coalition to Strengthen the Patent System Statement by Intellectual Property Creators 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 "We need to use a scalpel, not a meat cleaver." Intellectual Property Creators Page 2 Intellectual Property Creators Intellectual Property Creators is a recently formed group that represents inventors and others who create intellectual property. While other organizations represent the corporate interest of intellectual property owners, Intellectual Property Creators represents the inventors who create the inventions. A recent open letter from Intellectual Property Creators was signed by 50 inventors including 15 inductees into the Inventors Hall of Fame and 2 Nobel Laureates. While other organizations such as the IPO reflect the experience of large companies with a franchise to protect and most of whose research is involved in incremental improvements, the Intellectual Property Creators reflect the experience of inventors whose inventions often create new product classes and even new industries. While we support the rights of individuals and companies of all sizes to have strong intellectual property rights, our particular interest is to ensure adequate intellectual property laws to encourage launching products and new businesses based on substantial new inventions.. Background The issues behind this and other proposed changes in the patent laws involve determining the intellectual property needs of mature industries sector with existing franchises to protect inventors and small companies developing new technology. The US. is more innovative than Japan or Europe. We believe that a major factor in that innovation the difference between US. and other patent laws in their effect on encouraging innovation. We believe the patent proposals under consideration have gotten much of their support from, and, indeed, are promoted by, established companies with franchises to protect. We feel that any changes in the patent laws should be done by using a scalpel. We belive that the 20 year from filing proposal is a meat cleaver approach which will sever the muscle of our patent law and will have the effect of bringing the US. down to the lower level of innovation of foreign countries. We belive that the major reason for the meat cleaver approach of the 20 years from filing is that Commissioner Lehman has made an agreement with the |