American Invents Act

Floor Speech

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Mr. POLIS. Madam Chair, H.R. 1249 correctly changes the policy involving tax strategy patents. Under current law, although it was current law that was never specifically contemplated by lawmakers, tax strategy methods are
patentable. Now these tax strategy patents have complicated the tax filing process and have allowed commonsense filing techniques to be patentable, so H.R. 1249 removes this complication by mandating that tax strategies are deemed insufficient to differentiate a claimed invention from the prior art.

I strongly support this provision. However, there are a number of folks who are currently involved with the process of applying for tax strategy patents, and in effect, we risk changing the rules of the game retroactively for them, a form of takings. There are currently 160 tax strategy patent applications in the process. Many of the inventors have decided to devote thousands of hours of time to disclose their innovations. Again, had this window of patentability never been opened--and it never should have been--this would not have been an issue because these inventors would have retained their innovations as trade secrets.

However, you can't blame them for saying, okay, there's a window on patentability; I will disclose so that I can have the 17-year exclusive. And now the risk is that that calculation that they made to disclose is being changed retroactively insofar as they will no longer have the ability to protect their innovation as a trade secret.

In their patent applications, these applicants have described how to make and use their invention. Many have even provided computer programs, including code, to carry them out. The patent applications have been published, and some of them are pending for many years. Changing the law midstream fundamentally hurts these applicants who did all that was proper under the law at the time they filed their patent application.

The underlying bill as drafted would make those patent applications useless; and because the patent applications have been published, the patent applicant will get nothing for disclosing their secrets, except the expense of pursuing a patent and of course the ability of others to replicate their innovation. Competitors will be free to use their disclosures in the published patent application process.

Changing the law midstream simply sends the wrong message to inventors that one cannot trust the law that is in place when they file a patent. Congress would be sending a message, unless my amendment is incorporated into the underlying bill, that all inventors on any subject matter may have their disclosures taken away from them after they have made the decision to apply for a patent by retroactively negating the possibility of them receiving a patent.

Tax strategy patents should never have been allowed under the law. I think there's broad agreement among all of us in this Chamber on that topic. It's unfortunate that there was a window. However, rational inventors, making a conscious choice, said, hey, in favor of disclosing, I will then accept a 17-year monopoly, and are now being penalized for making what was a very reasonable decision.

Restore equity to the America Invents Act by supporting my amendment. I hope Members on both sides of the aisle will support this, which effectively addresses only those 160 applications that are in effect now. It certainly continues and am in support of the ban on future patents for tax strategies, but there seem to be very few alternatives or remedies to the takings that would otherwise occur under this bill unless my amendment is incorporated.

I strongly urge a ``yes'' vote on the amendment.

I yield back the balance of my time.

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