America Invents Act

Floor Speech

BREAK IN TRANSCRIPT
Madam Chair, I rise to urge adoption of the Baldwin-Sensenbrenner amendment that strikes section 5 in the America Invents Act. Section 5 expands the prior-user rights defense from its present narrow scope to broadly apply to all patents with minimal exceptions.

As we work to rebuild our economy, Congress should be doing all that it can
to foster small business innovation and investment. I believe that section 5 will do just the opposite. Expanding prior-user rights will be disastrous for small American innovators, as well as university researchers, and ultimately slow job creation.

Despite current challenges, the U.S. patent system remains the envy of the world. Since the founding of our Nation, inventions have been awarded exclusive rights in exchange for public disclosure. This system also creates incentives for investing in new ideas, fostering new ways of thinking, and encouraging further advancement and disclosures. It promotes progress.

If proponents of expanding prior-user rights have their way with this legislation, they will give new rights to those who have previously developed and used the same process or product even if they never publicly divulged their innovation and never even applied for a patent. It will transform our patent system from one that values transparency to one that rewards secrecy.

To understand why expanding prior-user rights runs counter to the public interest, it is important to reiterate how critical exclusive rights are for inventions to gain marketplace value and acquire capital. For start-ups and small businesses, raising necessary capital is vital and challenging. The expansion of prior-user rights would only make that task all the more difficult.

Under the system proposed in the American Invents Act, investors would have no way of determining whether anyone had previously developed and used the process or product that they were seeking to patent. In such a scenario, a patent might be valuable or relatively worthless; and the inventor and potential investors would have no means of determining which was true.

Madam Chairwoman, I would like to boast for a moment if I could about Stratatech, a fiercely innovative small business in Madison run by a top researcher at the University of Wisconsin who, through her research there, developed a human living skin substitute. This living skin is a groundbreaking treatment method that we hope will ultimately save the lives of American troops who have suffered burns while serving in Iraq and Afghanistan.

The company was recently awarded nearly $4 million to continue clinical trials for their tissue product. And what can save lives in a desert combat setting abroad will assuredly transform the way doctors save lives of burn victims in hospitals around our country and around the world.

Now, I wonder if Stratatech would have been able to drive this phenomenal innovation and life-saving technology as far as they have with a patent that provides only conditional exclusivity. Would investors have felt as secure advancing this technology in a system shrouded in secrecy? What if Stratatech's patent was subject to the claims of an unlimited number of people or companies who could later claim ``prior use''?

The Acting CHAIR. The time of the gentlewoman has expired.

Ms. BALDWIN. I yield myself 15 additional seconds.

If we let section 5 stand, it is unclear to me whether a similar company would ever secure the funding that they need to grow.

I urge my colleagues to adopt the Baldwin-Sensenbrenner amendment.

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