In what old Hill hands are calling a legislative switcheroo beyond anything they’ve seen before, the House of Representatives on Wednesday passed the most significant intellectual property bill in years.
HR 1907, the complex American Inventors Protection Act of 1999, was voted in by an overwhelming majority, 376-43. What is most remarkable is the sea change the legislation underwent from its original form, which was presented late Friday.
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The bill was watched closely by those in the biogenetics, chemical, and microchip industries, as well as by a broad range of independent inventors.
In its first iteration, HR 1907 included measures that would favor large corporations at the expense of small entities, including independent inventors, small businesses, start-up entrepreneurs, and university inventors. Those features were greatly altered, stunning large-company lobbyists who were pushing the original bill.
Representative Don Manzullo (R-Illinois), a strong opponent of prior patent bills, initially tried to derail the HR 1907. Then, as the bill thundered down the tracks, his strategy shifted to making repairs. Part of that effort involved getting patent expert Dr. Robert H. Rines of MIT to speak with and persuade, among others, House Judiciary Chairman Henry Hyde (R-Illinois) on the real-world impact and nuances of the proposed bill.
Hyde and Howard Coble (R-North Carolina) concluded that the bill warranted a major overhaul.
Manzullo said among the most significant of the changes he and his colleagues made was the virtual elimination of any "first inventor defense or prior user rights for any other process, method, or product, or other statutorily recognized class of patentable rights."
A prior user right would allow a company that kept an invention secret to continue to use that invention without limitation if another party independently invented and patented it. Rines argued that would decimate the value -- and economic incentive -- of a patent, which depends on exclusivity in order to be licensed or to attract venture capital. Rines argued that this unduly rewards those who elect to keep discoveries from the public.
"Processes as components of invention are rapidly increasing in importance," Rines said. "They include processes for new genetic modification and micro-biological manufacture, and for the rapidly expanding miniaturization techniques in electronic chips and integrated circuits, as well as techniques for plastic and chemical product manufacture."
But an extremely narrow exemption was cut into the law, in response to recent court law that held that some methods of doing business could be patentable, something no one had previously assumed to be the case.
"In recognition of this pioneer clarification in the law," said Manzullo, "we felt that those who kept their business practices secret had an equitable cause not to be stopped by someone who subsequently reinvented the method of doing or conducting business and obtained a patent."
As to criticism from some inventors that this threatens an expansion of rights for those keeping trade secrets, Manzullo says the legislative history is clear as to the strict limitation to methods of doing or conducting business.
Critics like Representative Marcy Kaptur (D-Ohio) objected to the speed with which the changes came about and the lack of opportunity to carefully consider them. Manzullo agreed.
"We determined that our approach of trying to make better the legislation was the only option available," he said. "I am happy to say that it worked.... I admit that the process was not the best, but it was the only way it was going to go forward ... and the many interests involved did roll up their sleeves to work with us and work out a compromise."
House backers of the revised bill expect the Senate to return with an identical bill. If the bill comes back altered, those on the Hill anticipate a major backlash in the House. And then the patent wars will begin anew.
