Congressman Lamar Smith 21st district of Texas

Contact: Blair Jones 202 225 4236

Washington, Apr 20, 2005 - This hearing is the first of two that we will conduct this month on patent reform. More specifically, today the Subcommittee will explore the merits of a Committee Print that incorporates a number of changes to improve the quality of patents issued by the U.S. Patent and Trademark Office.

The Print also speaks to certain patent practices that disrupt the operations of manufacturers and other businesses.

The Subcommittee will hold its second hearing on the Print next week and a third hearing on a bill that I will introduce shortly after that.

While the Subcommittee has documented a steady increase in application pendency and backlogs at the PTO in recent years, the consensus view among agency officials and the inventor community is that efforts to address these problems should not take precedent over improving patent quality.

Patents of questionable scope or validity waste valuable resources by inviting third-party challenges and ultimately discourage private-sector investment.

Accordingly, our Subcommittee has pursued a number of initiatives over the past decade to improve the operations of the PTO and the patent system.

But concern over patent quality and its effect on the economy at large has not been confined to Congress and the PTO.

Comprehensive studies recently issued by the Federal Trade Commission and the National Academies generated much discussion within inventor, industry, and government circles about the present patent system and how it could be improved.

Two leading economists, Adam Jaffe and Josh Lerner, published a book in 2004, entitled Innovation and Its Discontents, that also stimulated further debate on the subject.

Critics of the U.S. patent system became more vocal as their ranks swelled.

They maintained that the gains of the previous decade were too incremental or otherwise insufficient.

The Subcommittee responded in the last Congress by conducting two oversight hearings on seven reform proposals.

While we did not move an omnibus reform bill in 2004, the hearings contributed to the growing sentiment that favors enactment of such legislation in this Congress.

The Committee Print is a first step in this process.

It contains most of the leading recommendations developed by the PTO and a broad cross-section of industry and trade associations that are involved in the formulation of patent policy.

It is expected that small businesses, independent inventors, and other interested parties will also participate in this dialogue and the eventual drafting of a bill, based on the Print, that I expect to move this spring.

The Print addresses a number of topics, some of which will inspire controversy.

This is not surprising since so many competing interests are affected by our work on this broad topic.

With so much on our plate, ours is an ambitious undertaking, to say the least.

I now recognize the Ranking Member for his opening statement.