I appreciate the ability to go ahead. I rise today to speak in support of the America Invents Act, a bill to revamp our patent system. As a member of the Judiciary Committee, I worked on this bill. I was one of the cosponsors and helped manage the bill the last time, when it was on the floor. I'm here today to make sure that we get it over the finish line.
It is without dispute that intellectual property is one of our nation's most valuable assets, and our patent system plays a vital role in maintaining the value of our intellectual property.
In fact, the Commerce Department estimates that up to 75% of economic growth in our nation since World War II is due to technological innovation, innovation that was made possible in part by our patent system.
I see firsthand the importance and success of a robust patent system whenever I am visiting Minnesota companies and talking with business leaders in our states, as I did many times over the past month. Minnesotans have brought the world everything from the pacemaker to the post-it note. These innovations would not have been possible without the patent system. This is why our state ranks sixth in the nation if patents per capita and we are number one per capita for fortune 500 companies.
Companies like 3M, Eco Lab, and Medtronic need a patent system. It is also companies that rely on patents to grow their companies and create jobs in America.
From 1990 to 2001 all the net job growth in our country came from companies that were less than five years old. It's the person in the garage building a mousetrap or in the case of Medtronic, the first battery-powered pacemaker that drives our economy forward and creates the products that Americans can make and sell to the world.
I truly believe that to get out of this economic rut, we need to be a country that makes stuff again, that invents things, that exports to the world and that is why it is so critical that we pass the America Invents Act.
Unfortunately, our patent laws haven't had a major update since 1952. The system is outdated and is quickly becoming a burden on our innovators and entrepreneurs. Because of these outdated laws, the patent and trademark office faces a backlog of over 700,000 patent applications, and many would argue that all too often the office issues low-quality patents. One of these 700,000 patents maybe the next implantable pacemaker or new and improved hearing aid.
Our current patent system also seems stacked against small entrepreneurs. I've spoken to small business owners and entrepreneurs across Minnesota who are concerned with the high cost and uncertainty of protecting their inventions.
For example, under the current system, when two patents are filed around the same time for the same invention, the applicants must go through an arduous and expensive process called and interference to determine which applicant will be awarded the patent.
Small inventors rarely, if ever, win interference proceedings because the rules for interferences are often stacked in favor of companies with deep pockets. This needs to change.
Our current patent system also ignores the realities of the information age that we live in. In 1952 the world wasn't as interconnected as it is today. There was no internet. People didn't share information like they do in this modern age. In 1952 most publicly available information about technology could be found either in patents or scientific publications. So patent examiners only had to look to a few sources to determine if the technology described in the patent application was both novel and the word non-obvious.
Today there is a vast amount of information readily available everywhere you look. It is unrealistic to believe that a patent examiner would know all of the places to look for this information. And even if the examiner knew where to look, it is unlikely he or she would have the time to search in all these nooks and crannies.
The people that know where to look are the other scientists and innovators that also work in the field. But current law does not allow participation by third parties in the patent application process, despite the fact that third parties are often in the best position to challenge a patent application.
Without the benefit of this outside expertise, an examiner might grab a patent for technology that simply isn't a true invention. And those low-quality patents clog up the system and hinder true innovation.
Our nation can't afford to slow innovation anymore.
While China is investing billions of dollars in its medical technology sector we're still bickering about the regulations.
While India encourages invention and entrepreneurship we're still giving our innovators the runaround playing red light, green light with stop-and-go tax incentives.
The truth is that America can no longer afford to be a country that simply exists on churning money and shuffling paper, a country that consumes, imports and spends its ways to huge trade deficits. What we need to be is that nation that invents again, that thinks again, that exports to the world, a country where you can walk into any store and pick up a product and turn it over and it says "Made in the USA". That's what our country needs to be.
It's what Tom Friedman who writes for The New York Times and is a Minnesota nation wrote called nation building in our nation.
As entrepreneurs across America told me, we need to rejuvenate our laws to ensure that our patent system supports the needs of a 21st century economy. The America Invents Act does just that.
First, the America Invents Act increases the speed and certainty of the patent application process by transitioning our patent system from a first to invent system to a first inventor to file system. This change to a first-inventor-to-file system will increase predictability by creating brighter lines to guide patent applicants and patent office examiners.
By simply using the filing date of an application to determine the true inventor, the bill increases the speed of the patent application process while also rewarding novel cutting-edge inventions. To help guide investors and inventors, this bill allows them to search the public record to discover with more certainty whether their idea is patentable, helping eliminate duplication and streamlining the system.
At the same time, the bill still provides a safe harbor of a year for inventors to go out and market their inventions before having to file for their patent. This grace period is one of the reasons our nation's top research universities like the University of Minnesota support the bill. The grace period protects professors who discuss their inventions with colleagues or publish them in journals before filing their patent application.
The grace period, along with prior user rights, will encourage cross pollination of ideas.
This legislation also helps to ensure that only true inventions receive protections under our laws. By allowing third parties to provide information to the patent examiner, the America Invents Act helps bridge the information gap between the patent application and existing knowledge.
The legislation also provides a modernized, streamlined mechanism for third parties that want to challenge recently issued low-quality patents that should never have been issued in the first place. Eliminating these potential trivial patents will help the entire patent system by improving certainty.
The legislation will also improve the patent system by granting the U.S. Patent and Trade Office the authority to set and adjust its own fees. Allowing the office to set their own fees will give them the resources to reduce the current backlog and devote greater resources to each patent that is reviewed to ensure higher quality.
The fee-setting authority is why IBM, one of the most innovative companies around that has facilities in Rochester, Minnesota and in the Twin Cities, that was granted a record 5,896 patents in 2010, that is why IBM supports this bill. They want to even bring more inventions and more jobs to America.
Madam President, as Chair of the Subcommittee on Competitiveness, Innovation and Export Promotion, I've been focused on ways to promote innovation and growth in the 21st century. Stakeholders from across the spectrum agree this bill is a necessary step to ensure that the United States remains the world leader in developing innovative products that bring prosperity and happiness to our citizens.
Globalization and technology changed our economy. This legislation will ensure that our patent system rewards the innovation of the 21st century.
I know this is not the exact bill that we passed in the senate earlier this year, but the major components of that earlier bill are in the one on the floor today. Those components are vital to bringing our patent system into the 21st century and unleashing American ingenuity like never before.
Sometimes it's obvious how you can get a job. Sometimes it's harder to see when you have to get an invention invented, when you have to get it approved, when you have to get that patent, when you have to market it. That's the hard work that goes on in this bill. Thank you, Madam President. I urge my colleagues to support this bill.