PATENT AND TRADEMARK OFFICE

In Re:            
Proposed Amendments to Rules     
of Practice to Implement 20-Year 
Patent Term and Introduction     
of Provisional Applications as   
Contained in the Uruguay Round   
Agreements Act                   

               Stouffer Hotel
               2399 Jefferson Davis Highway
               Arlington, Virginia

               Thursday, February 16, 1995

               The public hearing convened, pursuant to notice, at 9:30 p.m.

     BRUCE A. LEHMAN, Chairperson,
     Assistant Secretary of Commerce and
     Commissioner of Patents and Trademarks


          Assistant Commissioner for Patents

          MICHAEL K. KIRK
          Deputy Assistant Secretary of Commerce
          Deputy Commissioner of Patents and Trademarks

          STEPHEN G. KUNIN
          Deputy Assistant Commissioner for Patent Policy         
            and Projects

          NANCY J. LINCK
          U.S. Patent and Trademark Office


          Elizabeth Dickinson
          Office of General Counsel     

          Commissioner Lehman.............................     5
                            Morning Session
          Gary Griswold..................................     10
          Richard L. Donaldson...........................     19
          Thomas I. Irving...............................     24
          Vincent A. Castiglione.........................     34
          Gary L. Newtson................................     38
          Robert A. Armitage.............................     44
          Paul Wolstenholme..............................     51
          Kate H. Murashige..............................     54
          Rene D. Tegtmeyer..............................     59
          Kenneth J. Burchfiel...........................     63
          Orville Litzsinger.............................     68
          Frampton Ellis.................................     75
          Harold C. Wegner...............................     78
          James M. Slattery..............................     88
                           Afternoon Session
          Don Stone......................................     99
          Robert S. Milanese.............................    108
          Robert Foster..................................    119
          Gerald J. Mossinghoff..........................    124
          Donald J. Barrack..............................    130
          Robert F. Green................................    138
          Lewis A. Engman and Alfred Engleberg...........    149
          Robert A. Armitage.............................    161
          Frank D. Lasaracina............................    169
          Brian Foley....................................    178
          Colin Sandercock...............................    179
          Don J. Pelto...................................    185                         


       COMMISSIONER LEHMAN:  Good morning.  My name is
       Bruce Lehman.  I am Assistant Secretary of Commerce and
       Commissioner of Patents and Trademarks.

       Joining me this morning at his hearing are Michael
       Kirk, the Deputy Assistant Secretary of Commerce and Deputy
       Commissioner of Patents and Trademarks, to my immediate

       And then, Lawrence J. Goffney, Jr., Assistant
       Commissioner for Patents; and Stephen Kunin, the Deputy
       Assistant Commissioner for Patent Policy and Projects; and
       Nancy Linck, the Solicitor of the U.S. Patent and Trademark

       This is a hearing on proposed rule changes to
       implement 20-year patent term and provisional applications
       and to modify certain procedures for filing and continuation
       of provisional applications.

       The proposed changes would amend 37 C.F.R. Parts 1
       and 3.  The proposed rules were published on December 12,
       1994, in Volume 59 of the Federal Register, at pages 63951
       through 63966, and on January 3, 1995, in Volume 1170 of the
       Official Gazette of the U.S. Patent and Trademark Office, at
       pages 377 through 390.

       The request for comments on changes to a 20-year
       patent term and its effects on patent expiration and patent
       term extension under 35 U.S.C. 156 was published on January
       17, 1995, in Volume 60 of the Federal Register, at pages
       3398 and 3399.

       Oral testimony relating to patent term extension
       under 35 U.S.C. 156 will begin this afternoon at 1:00 p.m.

       On December 8th of last year, 1994, President
       Clinton signed the Uruguay Round Agreements Act, Public Law
       103-465.  Most of the provisions of the legislation will
       take effect on January 1, 1996.  However, provisions
       relating to patent term and provisional application will
       take place sooner than that, on June 8, 1995.

       The legislation that President Clinton signed
       amended 35 U.S.C. 154 by establishing a 20-year patent term
       from the date of filing of the application.  This
       legislation provides safeguards for applicants where the
       issuance of the patent was delayed due to interferences,
       secrecy orders, and/or successful appeals to the Board of
       Patent Appeals and Interferences or to the Federal courts. 
       In these cases, applicants are entitled to patent term
       extension of up to five years.

       The legislation also includes transitional
       measures to minimize the need to file continuing
       applications after the effective date of the 20-year patent
       term provisions, that is, June 8, 1995.

       These transitional measures will change the after,
       final, and restriction practices for certain applicants. 
       The legislation also provides for the first time the filing
       of provisional applications.  The filing of the provisional
       applications will not be counted in the measurement of the
       term of a later-filed application which claims the benefit
       of the earlier-filed provisional application, in effect, a
       21-year term.

       A transcript of these hearings will be prepared
       and a copy will be made available for purchase by the public
       approximately 10 days after this hearing.  Copies of the
       transcript will also be available for purchase directly from
       the stenographer, if you so choose, and the name of the
       stenographic service today is Miller Reporting.  Their
       telephone number is (202) 546-6666. That is, (202) 546-6666.

       We received 18 written comments and 25 requests to
       appear orally at this hearing this morning.  Due to the
       number of requests to appear orally and to permit those
       persons signing up today to present testimony, we are going
       to ask each speaker to hold their comments to 10 minutes.

       Those persons who wish to provide additional
       comments may, time permitting, continue their testimony at
       the end of today's hearings or may submit their comments to
       the Patent and Trademark Office in writing.

       The speakers have been listed in the order in
       which their requests were received by the Office.  Any
       persons who wish to speak and who have not previously
       informed us of their desire to do so are requested to add
       their names to the list located at the table in the rear of
       the room.  You may also pick up at the table copies of the
       Federal Register publication of the rules change proposal. 

       When you present your comments, please give your
       name and address, and whether the comments presented are
       your own, those of your law firm or company, or whether you
       represent an organization and are presenting comments on
       their behalf.

       I would like to make an observation about this
       hearing this morning, and that is that the hearing is not
       about the wisdom of the legislation that Congress enacted
       last fall.  The hearing is about implementing that
       legislation, and so, I would hope, out of fairness to the
       people who have come to talk about the Federal Register
       notice, that witnesses would keep that in mind in presenting
       their testimony.

       I would also like to say, too, that in that
       regard, probably the most important two people who are here,
       in that regard, on the Panel this morning, are Assistant
       Commissioner for Patents Larry Goffney, and Steve Kunin, the
       Deputy Assistant Commissioner for Policy and Projects
       because they will be the ones primarily responsible for
       implementing this change, because Commissioner Goffney
       really is in charge of our patent operation.

       I also would just note that it may be, given the
       press of business in Washington and lots of other things
       that are going on, that I may have to depart and not be here
       for all of the testimony.  But rest assured that
       Commissioner Goffney and other members of the Panel will be
       here and we will have a written transcript of everyone's

       With that, I would like to ask our first witness,
       who is the first person to sign up, to come forward please,
       and that is Gary Griswold.

       MR. GRISWOLD:  Good morning.  I am Gary Griswold. 
       I am representing IPO, Intellectual Property Owners.

       Intellectual Property Owners is located at 1255
       23rd Street NW, Suite 850, Washington, D.C. 20037.  I am the
       President of IPO.

       IPO members are responsible for a substantial
       portion of the R&D that occurs in the United States.  In
       1993, members of IPO received 23 percent of all U.S. patents
       that were received by U.S. nationals.

       IPO strongly supports the 20-year patent term
       measured from application filing and provisional patent
       applications, both of which were adopted by the Uruguay
       Round Agreements Act, Public Law 103-465.

       The 20-year patent term measured from application
       filing will discourage the abuses of the system that have
       resulted in unreasonably extended patent terms in some
       cases.  The provisional application will permit applicants
       to make an initial filing quickly and at a relatively low
       cost.  It should benefit many that do not have access to the
       system today because of cost.

       It is very important that the Patent and Trademark
       Office implement the 20-patent term and provisional
       application filing procedures in a way that will best
       achieve the objectives that Congress intended.  Some people
       are concerned that with the 20-year patent term measure for
       filing patent applications will not receive as many years of
       patent life as they would with the term of 17 years from
       grant because applicants will encounter unreasonable delays
       in the Patent and Trademark Office.  There are some
       extensions that you mentioned that are provided in the

       Opinions differ on the magnitude of this problem. 
       IPO strongly opposes any legislation that would return the
       term of 17 years measured from grant and which would reopen
       the abuses that I mentioned earlier.  We do, however,
       support PTO practice changes or legislation that would
       ensure against loss of patent life as the result of PTO
       delays that are beyond the control of the applicant.

       We also support patent term restoration that will
       be a subject of the hearing this afternoon relative to
       products involved in regulatory approval and Ag Chem, for
       example, pharmaceuticals.

       I am going to specifically turn to a couple of
       areas where I think work needs to take place.  This relates
       to final rejection practice and restriction practice.

       The transitional provisions provided in Public Law
       103-465 and the rules that are the subject of this hearing
       liberalize final rejection practice and restriction practice
       on certain applications on file at the effective date of
       this legislation.  More is needed in this area.

       We propose that the PTO work with the private
       sector to develop some changes, and I am going to talk a
       little bit more about that, now.

       In order to prevent delays, we recommend permanent
       reform of the long-standing practice of almost always making
       the second rejection in a patent application the final
       action.  This needs to be relaxed.  Oftentimes, the issues
       have not been crystalized at that point and maybe further
       interviews need to take place and other activities need to
       take place, and forcing a filing of a continuation, we don't
       believe, is good practice.  With the 20-year patent term,
       the applicants will be incentivized to move forward with the

       I think if applicants are given the opportunity to
       continue prosecution efforts for final rejection they would
       avoid the delays and inefficiencies that are inherent in the
       filing of continuations, which I mentioned.  With payment of
       a reasonable cost-based fee, the PTO could permit applicants
       to submit amended claims or additional evidence or arguments
       after final rejection.  Both of these would help.   This
       would help the PTO and help the applicant reduce cycle time
       to a final conclusion relative to that technology or
       invention, so we think work needs to be done there.

       There is some language in the provision relative
       to the transition that deals with this.  There you are
       allowed two additional shots for payment of a fee.  Activity
       like that needs to take place relative and on a permanent

       Now turning to the restriction practice.  We also
       urge that permanent reform needs to take place relative to
       restriction practice in order to help avoid PTO delays
       beyond the control of the applicant.  Again, the legislation
       is not required.  PTO rules could be amended, for example,
       to permit all or at least several inventions to be examined
       in a single application upon payment of an extra fee.  

       We can calculate the fee.  The math can be done to
       figure out what the extra cost burden is.  The practice
       would be appropriate, for example, in situations where the
       claims are related, such as method and apparatus claims or
       product claims and method of making or using claims.

       Some say our classification or examination system
       won't allow us to do this.  Well, I say, re-engineering may
       provide an opportunity to do this, so let's do some
       re-engineering and get this fixed.

       COMMISSIONER LEHMAN:  That is a very important
       point that you raise, because it has been increasingly our
       observation here inside the PTO that certain of our
       practices are driven by the fee structure, and then you get
       a very artificial and in some ways inefficient processing.

       MR. GRISWOLD:  Right.

       COMMISSIONER LEHMAN:  I am wondering -- of course,
       many fees are statutory fees.

       MR. GRISWOLD:  Yes.

       COMMISSIONER LEHMAN:  Assuming that we are not
       talking about charging more than the cost of the
       application, and assuming that we would not change the small
       entity subsidy, would IPO support a little more discretion
       in the Commissioner to have more flexibility in setting fees
       after having public hearings and notice and so on and so

       MR. GRISWOLD:  Yes, I think fees should be
       cost-based.  What you need to do is to set down and process
       people, look at the best system for examining method and
       apparatus claims together, for example.  What is the best
       system?  And then, maybe the filing fee should be 1.5 times
       the normal application fee.  Maybe it is 1.3, maybe it is
       1.6, you do the math and come out with the right equation.

       We shouldn't let two things drive us.  One, cost,
       we shouldn't be wooden in our approach relative to cost; and
       two, we shouldn't be wooden relative to the fact that we
       have a classification or examination system that says "Art
       Unit X deals with it now; Art Unit Y deals with something

       Restriction practice needs a lot of work.  It is a
       serious problem and it needs to be fixed, no matter what. 
       We need to have that fixed.

       It sounds to me like -- and the nods of the heads
       of you guys -- you seem to agree, that there is some effort
       that needs to take place in this respect.  We appreciate

       Back to cost.  Obviously, we want to keep costs as
       low as possible because we want people to have access to the
       system of all types and financial ability.  The fees that
       are proposed for additional inventions requested for a
       single application under 1.129(b) and for filing addition
       arguments after final appear to be higher than the cost

       I don't know.  I haven't done the math, but it
       seems like you just picked a fee from the air rather than
       picking it as cost justified.         So, these should be
       cost-based and reasonable fees.

       Another situation is where a regular application
       is converted to a provisional application which is followed
       then by another regular application.  Once again, that
       should be a cost-based fee and I doubt that you need to
       charge the full filing fee.

       Now, those are the comments that I have relative
       to those two issues.  I am just going to hit a few of the
       details for a couple of minutes of the rules.

       The first one is, the new rules should avoid
       adding paperwork as much as possible.  The Federal Register
       proposes that file wrapper continuing procedure of Rule 1.62
       will not be used for provisional applications.  

       However, this seems to be a good situation where
       it could be used because you are going to use the same file,
       so it seems to me that that is a good opportunity to use
       1.62.  I don't know all the nuances of why you did it this
       way, but that seems like an opportunity to save paperwork.

       Another one is that the proposed rule should be
       revised to make clear that an applicant may file two or more
       provisional applications in a 12-month period before filing
       the regular application.  That is the deal, but we want to
       make sure that is clear.

       Another point is that in proposed Rule
       1.701(d)(2), we talk about due diligence and looking at due
       diligence relative to appeals, but you are looking at due
       diligence during the period of prosecution.

       It appears that the statute, if you take a look at
       the statute, the statute would indicate that it relates to
       the due diligence during appeal.  I think we need to take
       another look at that.  I am not sure that the rule tracks
       with what the statute says.

       We are going to submit some additional suggestions
       in writing relating to updating best mode, making sure that
       the inventors relate to the invention disclosed in the
       patent provisional, and allowing the filing of a regular
       application and a provisional application and another
       regular application.

       Final comment would be this.  That we need good
       forms and good information relative to how to reference
       these provisional applications.  There was some real good
       rulemaking done, I understand, and published in the Official
       Gazette on February 1, 1983.  That was a long time ago, but
       it laid out how to do it.  

       There is a lot of opportunity for mistake here
       because of the changes.  We need to have really a
       see-spot-run type set of rules and directions, so we would
       ask you to provide that and I am sure you can.

       Thank you.  Any other questions or comments?

       MR. KIRK:  Mr. Griswold, one comment, and that is
       that with respect to the conversion and using the 1.62 to
       convert the provisional to the complete.

       MR. GRISWOLD:  Yes.

       MR. KIRK:  The concern that was had about allowing
       that practice, where you would simply do the file wrapper
       conversion, had to do with the situation where you would not
       have a claim in the provisional and the conversion to the
       complete, if it were at the relevant date and claim were not
       present, you might have a problem in terms of losing the
       benefit of the provisional's filing date because you
       wouldn't have a complete application.

       Not that that can't be overcome, but in your
       additional comments, if you could address that for us, we
       would appreciate it.

       MR. GRISWOLD:  Actually, what I was referring to
       is the reverse to that.  

       MR. KIRK:  Complete to provisional, okay.

       MR. GRISWOLD:  Complete to provisional.  I
       understand the point you are making relative to the reverse.

       MR. KIRK:  Right.

       MR. GRISWOLD:  But when you go, complete to
       provisional, it is a different issue.

       MR. KIRK:  Right.

       MR. GRISWOLD:  That is my point.  Okay?

       MR. KIRK:  Thank you.

       COMMISSIONER LEHMAN:  Thank you very much.  Next,
       I would like to call on Richard Donaldson.

       MR. DONALDSON:  Good morning, Assistant Secretary
       Lehman, distinguished staff.

       My name is Richard L. Donaldson.  I am Senior Vice
       President of Texas Instruments Incorporated and General
       Patent Counsel for Texas Instruments.           We are located in
       Dallas, Texas.  I am representing Texas Instruments, today,
       in my comments.

       I would like to make the general statement that
       Texas Instruments does fully support the 20-year patent term
       and provisional applications.  We are submitting some
       written comments with respect to the proposed rules and
       those will be submitted today.

       I would like to direct my comments, and focus my
       comments today, just on two points, and I think it can be
       fairly short.  The first point has to do with Section
       129(a), dealing with transitional procedures.  And the
       second point, deals with Section 701(d)(2).

       First, with respect to transitional procedures for
       the limited examination after final, we think this is a
       great idea.  And I guess our comment would be, we would like
       to see this made permanent.  I think it would avoid
       additional papers being filed.  It would avoid prosecution
       delays, and so, we would hardily support consideration of

       The second issue, the 701(d)(2), dealing with the
       limit to an extension of the term, when you have
       successfully appealed, we believe that this conduct that you
       look at with respect to the lack of due diligence should
       only apply during the appeal process.  Or if that is not
       possible, then we would like to see a clarification of the
       term, due diligence, because we think otherwise their
       conduct during the prosecution of the patent application
       would be punished, which is really normal conduct that
       should not be punished.

       As worded, the proposed rules, I think, clearly do
       apply to conduct any time during the prosecution of the
       patent application.  And it would apply to conduct such as
       extensions of time, nonresponsiveness, and informal

       When you look at the underlying statute, 35 U.S.C.
       154, however, we think it is clear in that statute that due
       diligence refers to conduct during the appeal process and we
       believe that is the right standard to use.

       For the appeal process, if you look at the
       prosecution, this treats differently the successful
       appellant and term extensions where secrecy is involved or
       where you are involved in an interference.  We do not
       believe there is a good reason to treat what happens in
       prosecution different in those three cases.

       The statute does not address due diligence during
       prosecution and we don't believe that the rules should,
       either.  The 20-year term, we believe, already covers that
       aspect.  If you delay or are not diligent during prosecution
       of your patent, you will get a shorter effective patent
       life.  We think that is an incentive not to delay during

       As the rules are presently stated, however, the
       successful appellant could be penalized, if you want to call
       it a penalty, twice for the same conduct.  He gets a shorter
       patent life, plus he would get a shorter effective extension
       of his patent.

       I guess, in the general sense, we believe that
       abusive delay should be applied to all applicants, not just
       a successful appellant.  However, if it is necessary to
       include in the rules a provision for the appellant that it
       covers prosecution delays, we would like to see the term,
       due diligence, clarified so that normal conduct would not be
       covered.  There are good reasons for extensions of time and
       for some of the other examples that have been given, and we
       think that you should not be penalized for that.

       We think that, also, there could be an
       administrative burden on the Patent Office if the Patent
       Office is required to evaluate, for example, extensions of
       time to see if good cause is present. 

       A change had been made where you can get an
       extension of time, just by paying the fee.  Now, under these
       proposed rules, the Office may be faced with looking at the
       intent of the conduct years after the fact to determine
       whether or not to shorten the period of extension of the
       patent term.

       We would like to see an affirmative provision that
       says actions for adequate cause would be deemed due
       diligence, and we would like to see the applicant be given
       notice that the Patent Office believes that conduct will
       shorten his term so that he has an opportunity to at least
       rebut that and provide his point of view.

       That concludes my remarks.  If there are any

       COMMISSIONER LEHMAN:  Yes, Ms. Linck?

       MS. LINCK:  Mr. Donaldson, you limited your
       remarks on transition practice to 129(a) and not 129(b). 
       Was there a reason for that?

       MR. DONALDSON:  Yes, if you cover different
       inventions in the same application, I think it makes a lot
       of sense to have different patents, particularly if you are
       involved in a licensing program where you may want to
       consider one invention separately from another when you
       license it.  It just makes it a cleaner operation and we
       would support still having the separate patents.

       MS. LINCK:  Thank you.

       MR. DONALDSON:  Yes.

       COMMISSIONER LEHMAN:  Thank you very much.  Next,
       I would like to call Thomas Irving.

       MR. IRVING:  Assistant Secretary Lehman,
       distinguished staff of the United States Patent and
       Trademark Office, ladies and gentlemen.  Good morning.

       My name is Thomas Irving.  I am a partner with the
       law firm of Finnegan, Henderson, Farabow, Garrett & Dunner. 
       My address is 322 Avenue Louise, Brussels, Belgium. 

       I am here today solely on my own, to offer my own
       conclusions, after having written and lectured extensively
       about the statute and proposed rules.  I am not offering
       these comments on behalf of any client or on behalf of my
       law firm.

       The first comments I would like to address are
       with respect to provisional applications that are provided
       for in the proposed rules 1.51 and 1.53(b).  And the
       question I would like to raise is the filing date of
       provisional application and effective date under either
       Section 102(e) or Section 102(g).

       Under our current law, when an application filed
       in the United States issues as a patent it becomes prior art
       under 102(e), as of its U.S. filing date against all other
       patent applicants.  Where the patent claims benefit of a
       foreign application under 119, that patent is still prior
       art as of its U.S. filing date, but not as of the date when
       the foreign party application was filed.

       This rule, as we know, was created judicially in
       In Re Hilmer, the 1966 version of that, with respect to
       Section 102(e); the 1970 version of that, with respect to
       Section 102(g).

       Now, under the new law and under the proposed
       regulations, one can argue that a provisional application
       would be a Section 102(e) reference as of its filing date,
       assuming of course that a Section 111(a) application,
       claiming proper benefit thereof, is subsequently filed and
       issues as a U.S. patent.  Because, after all, the
       provisional application is an application filed in the
       United States.

       Further support for this conclusion can be found
       in the express wording of new Section 119(e)(1), that talks
       about an application for patent filed under Section 111(a),
       for an invention disclosed in a provisional application
       filed under 111(b), shall have the same effect as the such

       Now I realize that very similar language to this
       is found in 119(a), which is old 119 that was already
       construed in the Hilmer cases.  It will be noted, however,
       that unlike 119(a), 119(e)(1) does not contain language that
       relates to the statutory bar that is determined by your
       actual U.S. filing date.

       Thus, unlike a conventional non-U.S. priority
       application, a provisional application provides protection
       against a statutory bar to a later-filed application under

       I have heard some argue that this is yet another
       reason why the Hilmer doctrine does not apply to provisional
       applications and why those applications should be accorded a
       102(e) date, subject to the assumptions we discussed above.

       On the other hand, one can argue, looking back at
       the Alexander Milburn Supreme Court case, that the policy
       considerations that led to the statutory enactment of 102(e)
       simply do not apply.  Since the provisional application is
       not examined, it is not possible that that could have issued
       as a patent on the same day it was filed, even if the PTO
       were a 100 sufficient.

       One could also argue that since priority to the
       provisional applications claimed under 119, the rationale of
       the Hilmer cases that Section 119 and Section 102(e) and (g)
       have nothing to do with each other may still apply.

       Now in the second Hilmer case, the Court
       reiterated that 119 and 102(g) are entirely different, but
       there again, a distinction is, those were foreign
       applications where here we are talking about applications
       filed in the United States.

       Since the provisional application is provided for
       in the applications section of the statute and since the
       statute requires that inventors be designated, one can argue
       that the filing of the provisional application constitutes a
       constructed reduction to practice of those inventions
       described therein, satisfying Section 112, first paragraph,
       and thus does create a 102(g) date that can be offensively
       against other applicants.

       Counter argument would still be to go back to
       Hilmer and point out the differences between Sections 119
       and 102.

       The U.S. PTO, in administering the Act, will have
       the opportunity to decide whether the filing of provisional
       application creates a prior art date against other patent
       applicants under either or both of 102(e) and 102(g). 
       Therefore, I urge the PTO in the forthcoming Notice of Final
       Rulemaking that will be published in the Federal Register,
       to indeed express its position with respect to whether the
       filing of provisional application under circumstances where
       a 111(a) application is timely filed and issues as a patent
       creates either or both a 102(e) or 102(g) date that can be
       applied against other patent applicants.   By doing so, the
       public will be aware of the PTO's position in what I think
       is a highly significant matter.

       Let me tough also on Rule 701(d)(2), due
       diligence, as it has been expressed by previous offerors of
       testimony.  Only with respect to extensions of patent term
       accorded a patent resulting from a successful appeal, as set
       forth in Section 154(b)(1), is the Commissioner charged
       under 154(b)(3)(C), to reduce the extension by the period of
       time during which the applicant for patent did not act with
       due diligence.

       Now in the discussion of specific rules set forth
       in the December 12, 1984, Federal Register, examples are
       given of what may -- and I emphasize may -- constitute lack
       of due diligence, including requests for extension of time
       to respond to Office communications, submission of response
       which is not fully responsive to an Office communication,
       and filing of informal applications.

       It is believed by many, in my travels and
       lectures, that these examples are overly broad and they
       should be modified in the discussion that will accompany the
       forthcoming final rules.

       For example, with respect to extensions of time,
       the examples are not limited to those related to a filing of
       the appeal brief that can be read to cover any extension of
       time, taken at any time during prosecution.  Similarly,
       filing of informal applications includes filing an
       application without an oath or without a fee which results
       in the issuance by the PTO of a Notice to File Missing
       Parts.  Thus, it seems to be contemplated in the discussion
       of the Federal Register that acts during the entire course
       of prosecution will be considered and not just those arising
       on or after the filing of a notice of appeal.

       There seems to be at least two problems with this
       possibly overly broad approach.  First, Rule 136 expressly
       provides for extensions of time and, second, the statute,
       Section 111(a)(3) allows for the fee and oath to be
       submitted after the 111(a) application has been filed
       without losing the filing date.

       How can it be lack of due diligence if a patent
       applicant takes actions expressly authorized by the statute
       and rules of practice?

       Second, in a 20-year-term world, that will exist
       under the Act, any extension of time, any informal
       application that is filed, is filed at its peril because it
       inevitably results in loss of effective patent term.

       So why, since this is already the case, should
       that same period of time be again subtracted from the
       possible extension under 154(b)(2)?

       I would urge the PTO to reconsider and withdraw
       these comments in the final version.  Perhaps an appropriate
       example of lack of due diligence would be actions taken by
       the applicant to postpone the date of an oral hearing,
       either before the Board of Patent Appeals or the Court of
       Appeals for the Federal Circuit.

       The last point I would like to touch on is the
       effective date of international applications filed under the
       PTC designated in the U.S.  I have heard questions raised
       repeatedly whether the proper filing before June 8, 1995, of
       an international application, designating the U.S. under the
       PCT, whether or not that filing is effected in receiving
       office other than the PTO will preserve the possibility that
       any patent resulting from entry of the United States
       national stage will have a 17-year term, even if entry of
       that national stage occurs after June 7, 1995.

       The question, of course, assumes that no
       continuation application is later filed in the U.S.  That
       is, that the patent issues directly from the application by
       which entry into the U.S. national stage was effected.

       Now according to Section 154(c)(1), the term of a
       patent that is enforced on June 8, 1995, or the results from
       an application filed before June 8, 1995, is the greater of
       17 years from issue or 20 years from filing.

       The issues are whether in the circumstance
       described the international application qualifies as, under
       154(c)(1), an application filed before June 8, 1995, for
       purposes of Section 154(c)(1) and whether the subsequent
       post-June 7, 1995, filing of the application by which entry
       into the U.S. national stage is effected somehow eliminates
       the possibility of a 17-year patent term.

       I would direct your attention to Section 363 of
       the Act, which states:

       "[a]n international application designating the

              United States shall have the effect, from its

              international filing date under article 11 of the

              treaty, of a national application for patent

              regularly filed in the Patent and Trademark Office

              except as otherwise provided in Section 102(e) of

              this title."

       This suggests that a PTC application filed before
       June 8, 1995, an international application designating the
       U.S., should be subject to 154(c)(1), even if it
       subsequently enters the U.S. national stage after June 7,

       This would retain, of course, the possibility of a
       17-year term from issue.

       It is important to the public to know whether the
       PTO interprets the Act to mean that entry into the national
       stage in the U.S. must occur before June 8, 1995, in order
       to preserve the 17/20 possibility of patent term

       Specifically, patent applicants must know and want
       to know whether their pre-June 8, 1995, PTC international
       filing date will preserve the possibility of a 17-year term
       from issue for a patent obtained by entry into the U.S.
       national stage after June 7, 1995.

       I would respectfully urge the PTO to make clear in
       the commentary associated with the final rules what
       interpretation it is going to follow and to answer the
       question:  Does the international filing date or the date of
       entry into the U.S. national stage control for purposes of
       Section 154(c)(1).

       COMMISSIONER LEHMAN:  I think your time has

       MR. IRVING:  And so have my comments.  Thank you.


       COMMISSIONER LEHMAN:          You came all the way from
       Belgium.  To give you an extra 30 seconds seemed reasonable.


       COMMISSIONER LEHMAN:  Next, I would like to call
       Vincent Castiglione.

       MR. CASTIGLIONE:  Assistant Commissioner,
       distinguished staff, good morning.

       My name is Vinc Castiglione.  I am a patent
       attorney with Becton Dickinson and Company, 1 Becton Drive,
       Franklin Lakes, New Jersey.

       These comments are being presented on my own
       behalf and the behalf of a colleague, who spoke yesterday. 
       They are not necessarily the views of our employer.

       We are very encouraged as to the changes that have
       been made to harmonize the laws, the U.S. patent laws, in
       line with those in the world environment and to conform to
       the GATT and NAFTA obligations.  However, we are somewhat
       concerned and some of the changes that were made are
       somewhat piecemeal and they, in fact, delay harmonization
       efforts.  The biggest concern we have is the period of
       effective term, the enforceability.  

       As the changes have been currently promulgated,
       the effective term of a patent will be measured from the
       date of issue, although the overall term of a patent will be
       measured from the date of filing.

       We do believe that this may result in some
       discrimination to patentees in that they will not be able to
       recoup the amount of money they have put in.  Unequal
       enforceability, they will not be able to recoup funds
       because the terms of effective enforceability will vary.

       We were informed yesterday that there is a current
       Senate bill that does have some type of provision of
       enforceability so that you will be able to get some type of
       royalty measured from the date of publication if, in fact,
       publication is implemented.

       However, to our knowledge, this has not been
       passed by the Senate.  The current House version does not
       this royalty provision, and in fact, there is no type of
       provisional remedy at this time.

       There may be some constitutional arguments to the
       lack of equal terms because the Constitution in Article I,
       Section 8, Clause 8, does provide that patentees will be
       guaranteed for limited times the exclusive right to their
       respective writings and discoveries.

       We feel that the patent terms, the so-called
       limited times, cannot be measured with some degree of
       specificity and consistency for the entire public at large. 
       It is likely that the law in its current form may face
       credible constitutional challenges under due process grounds
       or equal protection grounds.

       We feel that it is not equitable to measure one
       patentee's contractual disclosure to the public vis-a-vis
       another's in a way that would account for inevitable
       discrepancies in their abilities to reap awards for
       respective discoveries, particularly whereas substantially
       summit technology or developments are at issue.

       Interim protection would go to great lengths to
       even out the playing field, so to speak, and we are very
       much in favor of providing some type of interim protection
       so that at least we could be able to value the assets in a
       fixed manner, in an equitable manner, so to speak, and
       inventors in this country would be able to reap a similar
       reward.  At least, as to term.

       The terms of effective enforceability of patents
       may vary due to things that are not in the patentee's
       control at this time.  

       Factors.  The length of patent prosecution will
       vary according to the work load of certain groups, skill
       levels of certain individual examiners.  But really, most
       importantly, the work loads and talents of the attorneys and
       agents.  And as part of the patent community, we are very
       well aware that those vary tremendously and do contribute to
       discrepancies in issue dates, now, which will directly
       translate to effective terms enforceability when the new law
       goes into effect.  And we don't feel that the patentee
       should have to suffer for that.

       We do recognize that the PTO has recognized that
       there will be problems caused by delays, and in fact have
       provided provisions for extensions for interferences,
       secrecy orders, and Federal court and Board of Patent
       Appeals action.

       However, instead of trying to identify situations,
       it would be advisable to have extensions in all areas. 
       This, coupled with the publication of applications of
       provisional remedies, would go to a great length to rectify
       the problem of enforceability.

       I believe that is really the text of the comments. 
       A lot of these were presented yesterday by my colleague in
       terms of 18-month publication.  We just wanted to reinforce
       the notion that we do feel that provisional remedies should
       be provided for in the laws, when they are passed.

       COMMISSIONER LEHMAN:  Thank you very much.  

       MR. CASTIGLIONE:  Thank you.

       COMMISSIONER LEHMAN:  Next, I would like to call
       on James Slattery.

       [No response.]

       COMMISSIONER LEHMAN:  Is Mr. Slattery here?

       [No response.]

       COMMISSIONER LEHMAN:  If not, the next person on
       our list is Gary L. Newtson.

       MR. NEWTSON:  My name is Gary L. Newtson.  I am a
       partner with Harness, Dickey & Pierce.  My office is located
       at 888 16th Street N.W., Washington, D.C. 20006.

       My comments are my own and not made on behalf of a
       client or my law firm.

       Mr. Assistant Secretary, distinguished staff of
       the Patent Office, my comments are directed to the rules
       relating to the disclosure which will be necessary to comply
       with the requirements of the Uruguay Round Agreements Act.

       In many, if not most, technical areas in the
       mechanical and electrical arts, only one embodiment of the
       invention is disclosed in a conventional application. 
       Generally, a sketch or a drawing alone with a few additional
       comments or notes would enable one skilled in the art to
       make and use that device.

       Although the fee for filing a provisional
       application is small, I am concerned about the overall cost
       of the application to the owner, whether it is an individual
       or a small or a large entity.  In particular, I am concerned
       that the inventor small entity groups be either required on
       their own or feel obligated to hire, or intimated into
       hiring, an attorney to prepare a specification that would
       disclose more than is absolutely necessary under the first
       paragraph of 35 U.S.C. 112, to teach one skilled in the art
       how to make the invented product, device, or machine.

       In a similar manner, large corporations should not
       have to bear the expense of preparing a "more than
       necessary" specification to take advantages of the
       provisional application.

       I believe that almost all specifications and
       drawings of mechanical and electrical invention applications
       describe more than is absolutely necessary, and I emphasize
       absolutely, to enable one skilled in the art to make the
       product disclosed.

       The rules on which we are commenting today do not
       detail the substantive material which is needed to comply
       with the first paragraph of 35 U.S.C. 112.  The commentary
       does state that the disclosure may comprise "nothing more
       than a written description of the invention and drawings." 
       However, further in the notice, it states that presumably
       most provisional applications will be filed by a registered

       This will entail costs as the attorney drafts a
       specification which, in my opinion, would be considerably
       more detailed than the basic information necessary to enable
       one skilled in the art to make the device.

       The cost to the client, whether it is an
       individual inventor, or small or a large entity, is going to
       climb to the point where a provisional application costs
       nearly as much in legal fees and takes as much time in
       preparing as a conventional patent application.

       I do not believe that that was the intent of the
       Act, nor should the Act be interpreted to require such
       expense.  It is my contention that the Act amendments do not
       require a detailed specification, as set forth above.

       Section 111(b) states that the application include
       a specification as described in the first paragraph of
       Section 112 and a drawing as prescribed by Section 113.  The
       first paragraph of 112 states that the specification -- and
       these are my words -- need only contain a written
       description of the invention and the manner and process of
       making and using it, in terms to enable any person skilled
       in the art to which it pertains to make and use the same,
       and shall set forth the best mode contemplated by the
       inventor of carrying out the invention.

       Nowhere in the referred language does one find a
       requirement that the object of the invention be set forth,
       nor that it is necessary to provide any description in
       excess of what is sufficient to enable any person skilled in
       the art to make and use the invention.

       As I said, in many, if not  most, mechanical and
       electrical product industries, sketches of new products are
       often prepared as the first step in recording a new
       invention.  Sometimes, blueprints are made, or sketches or
       drawings are made, or other reproductions created, either
       manually or with computer technology.

       These sketches or blueprints often disclose all it
       is necessary for one skilled in the art to know how to make
       the sketched or drawn product.  Some of the sketches or
       prints have notes or a few comments or sentences to clarify
       the drawings, but often such notes or sentences are
       unnecessary to make the construction readily apparent to one
       skilled in the art.

       I submit that most inventors, engineers,
       scientists, businessmen, or anyone making such drawings,
       know that such drawings, if disclosed to a competitor, that
       is, one skilled in the art, that it would enable that
       competitor to easily recognize how to make and use the
       product or device.

       I can think of no situation where any prudent
       inventor or entity would be willing to show such sketches,
       drawings, or blueprints to a competitor, that is, one
       skilled in the art, without expecting or worrying that such
       a skilled person would be enabled to make and use the

       Many invention disclosure forms even include the
       witness notation, "read and understood by the witness." 
       Such a witness is enabled by the disclosure to make and use
       it, if necessary.

       I believe that such disclosures which, although
       not including a long, written description, but enough
       information in the form of notes, legends, can enable one
       skilled in the art to make the device, and sufficient to
       support claims in a later-filed formal application,
       disclosing the best mode known to the inventor at the time,
       would fully comply with the first paragraph of Section 112
       and the drawings specified under 113.

       To paraphrase Section 112, perhaps the Office
       might consider issuing a written specification format or
       guideline to enable any inventor or small or large entity to
       prepare a specification sufficient to comply with the first
       paragraph of Section 112, and be acceptable to an examiner
       as sufficient support in a later-filed formal application
       without spending several thousand dollars.

       It seems to me that the bottom line of the
       sufficiency of disclosure in a provisional application is
       simply that, one, regardless of its written length or
       drawing content, the disclosure is "sufficient" and not
       "more than necessary" to enable one skilled in the art to
       make and use the invention.

       Two, the best mode known to the inventor at the
       time of filing the provisional application is disclosed; and
       three, the disclosed embodiment provides support for any
       claims in the formal application which rely on the
       provisional disclosure for priority.

       Now is the time for the U.S. Patent and Trademark
       Office to be innovative, creative, set a reasonable standard
       for the world, and make a real effort in simplicity and
       reinvent government with the user-customer and his ability,
       time, and pocketbook being kept, along with Section 112,
       foremost in your mind.

       COMMISSIONER LEHMAN:  Any questions?

       [No response.]

       COMMISSIONER LEHMAN:  Thank you very much, Mr.
       Newtson.  We appreciate your help, in helping us reinvent
       the Patent Office.

       Next, Robert Armitage.

       MR. ARMITAGE:  My name is Robert A. Armitage.  I
       am appearing here on behalf of the American Intellectual
       Property Law Association.  I am currently the President of
       that Association.  Our address is 2001 Jefferson Davis
       Highway, in Arlington, Virginia.

       Assistant Secretary Lehman and distinguished
       officials of the Patent and Trademark Office:  You have
       heard from several speakers this morning, and I would like
       you to think back to the very first speaker, Gary Griswold. 
       I am going to be able to shorten my comments mightily, by
       saying ditto.


       Let me begin by congratulating the administration
       on the enactment of the Uruguay Round Agreements Act.  We
       are, at AIPLA, very pleased that one component of this was
       the inclusion of a comprehensive system for provisional
       filing of patent applications.

       We have long argued that a simplified system of
       gaining access to the Patent Office at low cost and with few
       complexities would be in the best interest of U.S.

       We have a few comments on the provisional filing
       scheme, and I think I would like to begin by a comment on
       fees.  We believe that after the Patent Office gains some
       experience with using the system for provisional filing,
       that it ought to reassess whether or not the fees charged
       cover the incremental costs for providing these services.

       Obviously, when you are in an area such as fees,
       not every Patent Office service can be provided to the
       public at an incremental cost or there would not be enough
       revenue generated in the Office to cover all of the Office's

       However, we believe that there is a strong enough
       public policy interest in encouraging provisional filing
       that this is perhaps a unique area where the Office should
       consider the lowest possible fee.  Particularly independent
       inventors and small entities, for them this needs to be as
       optimal a procedure as it can be.

       Second, we fully endorse the IPO suggestion that
       some means exist for an applicant not filing a provisional
       application have a simplified way of disgorging from the
       patent term calculation that first year.  Whether it is a
       Rule 62 mechanism or a new Rule 62.5 mechanism, we would
       encourage that the filing of a single paper in the Office
       with the payment of an appropriate fee be a mechanism
       whereby prosecution could be continued, with prior to that
       filing of the paper prosecution being regarded as

       We also note that many applicants will enter the
       U.S. patent system and file continuing applications or
       perhaps continuation-in-part applications during the first
       year with the result that their initial priority filing, or
       initial U.S. filing, will go abandoned within the first 12
       months.  We would hope that the Patent Office might find a
       creative way through rulemaking to deem all such
       applications that go abandoned within one year of the
       earliest priority date be provisional applications.

       What this would do by operation of Patent Office
       rule is exempt these applications from the first year of
       patent term and, in effect, put U.S. inventors on the same
       plane as foreign inventors.  And obviously, it is provision
       that in almost every conceivable circumstance would only
       benefit a U.S. inventor.

       We believe that there are some problems and
       complexities associated with inventorship determinations in
       provisional applications.  There is no, to us, clear-cut way
       in which one can ever really define what it means to be an
       inventor of an application where there are never claims and
       there never is intended to be any examination.

       The bottom line is, we believe that the ultimate
       solution for the problem of naming inventorship in
       provisional applications is a system of assignee filing. 
       Indeed, a system of assignee filing would do no more than
       put U.S. provisional filers on the same plane as foreign
       filers, both of whom take the benefit of their early filing
       dates under Section 119, rather than under Section 120.

       If, indeed, for an interim period of time, it is
       necessary to designate inventorship in provisional
       applications, then we would suggest that the Patent and
       Trademark Office by rule allow both, what I will call the
       over-naming of inventors and the under-naming of inventors,
       with some express notion in the rule that it is a proper
       designation of inventorship for the purpose of provisional
       applications, if either too few or too many inventors are
       named.  And in particular, one would not be able to
       challenge an application if there were, for example, eight
       inventors named, but in no subsequent application was ever
       an invention claimed that named more than one or two of
       those inventors.  You will recall in the rules, there are
       provisions for adding, but not removing, inventors. 
       Implying, of course, that this practice is possible.

       We also think that it is equally desirable for the
       Office to expressly allow the underdesignating of inventors. 
       Obviously, without a common inventorship, with a later
       application there can be no benefit of the provisional
       application, but nonetheless if one or two joint inventors
       is not named, it ought nonetheless to be possible to claim
       the benefit of that application in a subsequent application
       with at least one common inventor.

       There are, of course, some other, more technical
       aspects to provisional filing that rulemaking or commentary
       associated with rulemaking might clarify.  You have heard
       some of these before.  One of them is some expressed
       provision for allowing multiple provisionals to be claimed. 
       Perhaps some commentary in the rules that a provisional
       application not need to have a one-to-one correspondence in
       terms of inventions or claims, subject matter with a
       later-filed application.  And perhaps, some clarification as
       to what the best mode updating obligations are for an
       applicant using the provisional application.

       In our view, perhaps the simplest standard would
       simply be for all Section 119 priority applications to be
       stated by the Office to be subject to the same requirements
       in terms of updating best mode.

       Several of our committees also pointed out that
       the provisions on identifying provisional applications by
       virtue of a cross reference contained in a later application
       might be clarified, particularly so that it would be clear
       to the Office and clear to someone reading a published
       application or otherwise, as to what was provisional and
       what was not.

       I will move on to just a couple of comments on the
       20-year patent term implementing legislation.  Yesterday, of
       course, during testimony on behalf of AIPLA, we indicated
       that we supported the 20-year patent term.  We also
       supported 18-month publication with the ability to have
       expansive incorporation by references of technical
       disclosures, in part to prevent in the Patent Office files
       the generation of a multiplicity of identical technical

       I continue those comments today by seconding the
       observations of prior speakers that we need as much as
       possible to compact prosecution in the Office, not only for
       the sake of multiplying technical disclosures, but also
       because of some of the restrictions applicants will be under
       in enjoying a 20-year patent term.

       Certainly, the after-final reconsideration
       practice on the payment of a fee would seem to be something
       that could be incorporated into 20-year patent term
       applications generally, not just those in the transition
       area, and also to provide applicants the option, not the
       mandate, of continuing prosecution of independent and
       distinct inventions in a parent application rather than
       requiring that divisional applications be filed.

       We have in our written comments a number of other
       observations, and I would end my oral comments at this time.

       COMMISSIONER LEHMAN:  Thank you very much, Mr.
       Armitage.  If there are no questions, then I would like to
       call Paul Wolstenholme.

       MR. WOLSTENHOLME:  Thank you.  My name is Paul
       Wolstenholme.  I live at 630 Dushane Drive in Bellefontaine,

       I am here on my own behalf, and I am an
       independent inventor.  My day job is as an insurance agent,
       and my advocation is invention and innovation.

       The purpose of my testimony is to ask that, when
       you implement the new 20-year term, that you keep in mind
       and in the rules the needs of the independent inventors,
       such as myself.  Of limited means and oftentimes, we file
       patent applications pro se.

       We are a disorganized group.  I think, by
       definition, the independent inventor is disorganized.  I
       belong to the Central Ohio Inventors' Network, and we are so
       disorganized I can't even organize a card game among that


       So that is why there is not many of us here, and
       that is why we are not organized to have a spokesman, so I
       have more or less taken it upon myself, for my group, the
       Central Ohio Inventors' Network.

       I know what individuals think about the issues of
       harmonization.  They think it is a phony issue and one that
       is being used by large corporations in other nations to get
       rule changes that will eliminate the small inventor from
       getting a piece of the pie.

       Large corporations hate being told that they
       cannot use advancements until they get permission from
       somebody like me.  I hold two U.S. patents and one Canadian
       patent on a highly successful, low-cost grain storage

       I agree that if you stand back and take a broader
       view of the patent system, you can see that there may be an
       isolated cancer in the system.  Namely, the submarine patent
       and the road block patent.

       I had the opportunity yesterday to briefly talk
       with a senior examiner who had handled several of the
       limousine patents, which many say fall into this category. 
       In his view, we don't need to change our laws, but we need
       smarter and better examiners.

       I think that the PTO should focus like a laser
       beam on the problem and perform laser micro-surgery so that
       the rest of the system remains untouched.  It seems that the
       device being used today in a sawed-off shotgun.  Bam! 
       Seventeen-year term.  Bam! Confidential applications.  Bam!
       First to invent.

       I fear that before long the PTO building will look
       like the government buildings in Bosnia and Chechnya.

       As we speak, the individual American inventor is
       going over your heads to their members of Congress. 
       Generally, they find their congressmen to be both
       sympathetic and responsive.

       I wrote to my representative, David Hobson and
       asked him to vote for Congressman Rohrabacher's House bill,
       359.  Last week, I received his response.  He said he will
       not only vote for it, but he will also cosponsor it.      At
       last count, there were over 124 cosponsors in the House of
       Representatives for the bill.

       I don't think the Congress wants to micro manage
       the PTO, but I also don't think that they want to see the
       individual inventor disappear.  Thank you.

       COMMISSIONER LEHMAN:  Thank you very much, Mr.

       Next, I would like to ask Kate Murashige to come
       forward, please.

       MS. MURASHIGE:  Thank you, Assistant Secretary
       Lehman, distinguished panel.  Good morning.

       My name is Kate Murashige.  I am a partner at
       Morrison & Foerster, at 2000 Pennsylvania Avenue N.W., here
       in Washington.  I am speaking for myself and on behalf of
       other members of the Patent Practicing Group.

       I appreciate the opportunity to comment on these
       rules.  In particular, I wanted to comment on the proposed
       transitional provisions, and what I am really going to
       suggest is that they both be simplified and be made
       permanent, as others have suggested, too.

       I have often wondered why file wrapper
       continuations are used to prolong prosecution when really
       all we are doing is continuing prosecution and paying the
       additional fees necessary to reimburse the Office for the
       additional examination.

       That has been used where a final rejection needs
       to be responded to and also after a Notice of Allowance
       where additional art has come to the attention of the
       applicant and needs to be cited.

       What I have in mind is that after the applicant
       has received either a Notice of Allowance or a final
       rejection, that he could open prosecution simply by filing a
       form and an additional filing fee, really equivalent to the
       filing fee that is charged now for a file wrapper
       continuation.  This would permit additional art to be
       submitted and additional arguments, additional evidence, and
       so forth.

       It also has the added benefit, I think, of taking
       a lot of the pressure off of the objections to the 20-year
       term because I think the fear of many people, who are in the
       kind of practice that I am in, are concerned that
       applications that are already on file won't be able to be
       finished up with the two bites of the apple that are
       provided.  If we had this mechanism, essentially the
       retroactive effect of the 20-year term from filing would be
       mitigated.  And I think that would take a lot of the
       pressure away from going back to a 17-year term from issue,
       which, I will have to say, would be a great disappointment
       to me and some of my fellow practitioners who are interested
       in seeing harmonization take place, because it would be a
       backward step.  If we could remove that sense of pressure,
       perhaps that would be a good way to mitigate some of it.

       It seems to me that in addition, the restriction
       practice transitional provision could also be revised in a
       similar manner.  I understand the convenience of having
       separate patents for separate inventions, having separate
       maintenance fees on separate patents for separate
       inventions, but I don't think that that is inconsistent with
       having a practice where multiple inventions could be
       examined for multiple fees in a single application and then
       issued, not necessarily all at the same time, as separate

       In most cases where I have run into restriction
       requirements, at least, it doesn't appear beyond the ability
       of the examiner to examine all the inventions.  I think
       someone earlier mentioned it is sort of a function of the
       classification system.  In those odd instances where perhaps
       there really was such a different invention that the same
       examiner wouldn't be able to examine it, I am sure some
       provision could be made whereby that could happen, as well.

       So what I would have in mind there, I think, is
       just a situation where a restriction requirement could be
       issued.  Either the applicant could pay an additional fee
       without quarreling, or if he or she objected to the
       restriction requirement, could petition.  If lost the
       petition, could then pay the additional fee, and there could
       still be the option for divisional application later.

       Similarly again, I think this simplifies things. 
       There is no reason really to make the transitional
       provisions transitional.  It seems to me that they could be
       applicable to all applications, including those filed after
       the effective date of the GATT Treaty implementing

       I understand the concerns that other people have
       about costs of filing fees and so forth.  I agree with the
       idea that they should be proportional to the burden on the
       Office, but I think the main focus that I want to emphasize
       is just simplifying this, making it fair to people who have
       to continue to prosecute applications that were filed before
       the Act is effective and essentially streamlining procedure.

       I have one further comment that is unrelated to
       the previous ones.  It is a straightforward, simple comment. 
       I notice that in the provisional applications, that there
       still will be a requirement for filing a paper copy of
       sequences, although not a machine readable copy.

       I just have to say that it is just as much trouble
       to make the paper copy as the machine readable copy and it
       is a fairly expensive procedure for the applicant.  Since
       those applications aren't going to be examined and since it
       really isn't the purpose of the provisional application to
       provide a data base, but rather to provide a means for an
       applicant to get his foot in the door, I think that should
       be changed so that no formal requirements for sequences
       should be included.

       I think that is all my remarks.  Thank you.

       COMMISSIONER LEHMAN:  Thank you very much.  Next,
       I would like to ask Rene Tegtmeyer, please, to come forward.

       MR. TEGTMEYER:  My name is Rene Tegtmeyer.  I am a
       partner in the firm of Fish and Richardson.  The address is
       601 13th Street N.W., Washington, D.C. 20005.

       My comments today are on behalf of the American
       Bar Association's Section on Intellectual Property Law.  The
       comments that I am presenting have not been approved by the
       Board of Governors or the House of Delegates of the American
       Bar Association, and therefore, do not represent comments of
       the American Bar Association, but the comments only of the
       Section on Intellectual Property Law.

       My comments are going to sound a little like a
       broken record because I think most of the points I am going
       to make have been made, although a few of them I have a
       little additional information on, and I will try and be
       brief on the ones where I don't.

       I should compliment the Office on an excellent job
       of drafting the rules.  I think they amazingly cover a lot
       of the different points that needed to be covered for
       consistency throughout the whole rules package.

       One of the points that was raised by a couple of
       the speakers is the costs and the fact that the fees should
       be limited to recoup only the average additional costs of
       the extra work involved in connection with, for instance,
       the filing of a provisional application or the consideration
       of additional actions after a final rejection or multiple
       inventions in a single case.

       I will note in that respect that the Office, about
       10 or 12 years ago, made a proposal to enable applicants to
       substitute for continuation applications the payment of a
       fee in order to get an additional action after a final
       rejection.  There wasn't a lot of interest at the time, but
       there wasn't a 20-year term running against them, either,
       and there wasn't the prospect or possibility of 18 months
       publication facing them.

       So at that point in time, the fee that was
       proposed was a lower fee than it would have cost to file an
       additional continuation application to take into account
       some of the savings in processing by the Office.

       A second point which, I guess, has not been made
       by a number of the speakers relates to the requirement in
       Rule 45(c) where it refers to joint inventors and indicates
       that joint inventors must have made a contribution to the
       subject matter disclosed.

       That seems inconsistent with the statute and
       probably should be reworded, to be clear that it refers to
       the invention disclosed.  The present rule refers to the
       subject matter claimed and that does focus in on the
       invention, so the recommendation is that Rule 45(c) be
       amended in that manner.

       Another comment is on what appears to be a
       relatively minor point, but that is whether or not the
       provisional application file is maintained with the complete
       application file subsequently or sent to the Files
       Repository.  And for several reasons, we believe that it
       should be maintained with the complete application.  An
       examiner may need to refer to it in determining whether the
       complete application is entitled to the benefit of the
       provisional application or applications.  And also, an
       18-month publication, if it comes along subsequently, there
       will be a demand for accessibility by the public to that at
       the time of publication, and if it has to be ordered up from
       the Files Repository, that will cause problems.

       Another comment relates to the transitional
       provision in regard to restriction requirements, where the
       statute when it was amended mandates that the Commissioner
       shall institute regulations providing for the consideration
       of multiple inventions in a single application, where the
       application has been pending for three years or longer.  And
       the Statement of Administrative Action accompanying the
       legislation referred to an additional condition, which is,
       that the restriction requirement have been made within two
       months of the effective date of the legislation or June 8,
       and that does not appear in the statute and seems consistent
       with the statutory language.  A more logical date would be
       one of the other alternatives set forth in the rule, and
       that is, the time at which the examiner has acted on the
       elected invention after the restriction requirement in a
       case more than three years old.

       A number of people have made comments in regard to
       due diligence, and I will just reiterate their comments. 
       The Section is opposed to consideration of questions of due
       diligence outside the appeal period or process in a
       successful appeal situation.  That that is not what was
       intended by the statute.

       And in addition, also feels that while the rule,
       itself, has good language to characterize what constitutes a
       lack of due diligence for the purposes of reducing an
       extension for a successful appeal, the examples again that
       are given to explain that language in the rule go far too
       far in specifying that a request for extension of time or
       the like would constitute a lack of due diligence, and that
       would be a severe penalty for something that is not only
       permitted by statute, but also by existing rules.

       That concludes my comments.  I will be happy to
       answer any questions.

       COMMISSIONER LEHMAN:  Thank you very much, Mr.
       Tegtmeyer.  Are there any questions?

       [No response.]

       COMMISSIONER LEHMAN:  If not, I would like to call
       Kenneth Burchfiel.

       MR. BURCHFIEL:  Good morning.  My name is Kenneth
       Burchfiel.  I am a partner at Sughrue, Mion, Zinn, Macpeak &
       Seas, 2100 Pennsylvania Avenue, in the District.

       Mr. Commissioner, Madam Solicitor, distinguished
       staff, I appreciate the chance to come and talk briefly on
       two or three points that have been raised by the
       participants in the lectures that I have conducted.  I am
       not speaking on behalf of the firm or my clients, but as a
       person who has been doing lectures and who has coauthored a
       book on this topic.

       The first question that I would like to address is
       the transitional provision for examination of independent
       and distinct inventions in applications pending for three
       years or longer.  In response to the statutory requirement,
       the PTO has proposed 37 C.F.R. 1.129(b), that expressly
       permits the Office to maintain any restriction requirement
       made before April 8, 1995, and to require the applicant to
       file divisional applications after the effective date in
       such cases.

       This proposed regulation provides far too little
       help to industry and the bar, who are forced to adapt to the
       requirements of this new law very suddenly.  A devastating
       loss of term is going to occur in older cases where
       divisionals are filed after the effective date or are
       entitled only to the 20-year term.

       In order to retain the benefit of a 17-year term,
       all divisionals from all prior restriction requirements in
       all applications pending for whatever length of time must be
       filed before June 8, 1995, or loss of term will be
       automatic.  This is a very heavy penalty on the chemical and
       pharmaceutical industries who have less than four months to
       search through all the ancestors of all pending applications
       and identify all restriction requirements, however phrased,
       in whatever application they occurred.

       In areas such as pharmaceuticals where restriction
       requirements are frequent, a heavy financial burden is also
       imposed to file all of these applications immediately and to
       pay a separate fee.  This could easily double or quadruple
       the filing budget that was made by corporations in complete
       ignorance of the provisions that have now been enacted.

       It would be better for the rule to state that
       restriction requirements will not be made or maintained in
       any application pending for three years on the effective
       date, without reference to the April 8th cutoff.  Also,
       after the effective date, it will be mandatory for
       applicants to file simultaneous divisional applications
       immediately in response to any restriction requirement that
       is imposed in an application filed after the effective date.

       Examining groups are going to be flooded with new
       divisional applications, as applicants seek to preserve as
       much of the 20-year term as is possible.

       The PTO should at least consider fundamental
       change of its customary restriction practice and examination
       of more than one separately classified invention in a single
       application to avoid both the administrative burden and the
       cost to the industry.

       The second question that I will address is the
       proposed reduction of appellate extension for lack of due
       diligence provisions.  The PTO has proposed that examples of
       what may constitute lack of due diligence include requests
       for extension of time to respond to Office actions and other
       actions that are expressly permitted by the rules.  This is
       a punitive and harsh standard that erases the minimal
       protection against PTO delay that is mandated by the

       How can the due diligence requirement require more
       than the patent statute and the rules of practice?  I can
       only emphasize, and second, the remarks of the earlier
       commentators.  I want to point out that this rule
       discriminates particularly harshly against chemical and
       pharmaceutical industries where we have to synthesize and
       test new compounds that we don't have on our shelves in
       order to provide comparative evidence with respect to prior
       art compounds identified during prosecution.

       Such testing may require months and at the current
       practice has required filing not only routine petitions for
       extension of time, but also continuation applications simply
       to gain the time necessary to synthesize compounds and test
       them to provide meaningful comparative evidence.

       The proposed interpretation further discriminates
       against foreign applicants who are required to wait for
       translations, both of the Office action and references going
       out, and of their foreign language responses in evidence
       necessary to respond.

       If this provision stands, it will be necessary to
       paper applications with lengthy explanations of any period
       of time required to respond in order to provide the basis
       for the inevitable petitions to your Office contesting
       inconsistent, adverse determinations by various examining
       groups who will be forced to contest adverse or incorrect
       determinations of extension term in District Court actions
       in important cases.

       It will lead to a huge amount of work that is
       entirely unnecessary, if the provision could be modified to
       make it more reasonable.

       I would suggest that in order to reduce the
       administrative burden and to provide more guidance to the
       industry with respect to the expiration term of a patent,
       which is important in other context in infringement, the
       Office should consider adopting a gross negligence standard
       that would apply only to delay occurring after the filing of
       a Notice of Appeal.

       Those are my remarks.  I thank you very much for
       your attention and consideration.

       COMMISSIONER LEHMAN:  Thank you very much, Mr.
       Burchfiel.  Any questions?

       [No response.]

       COMMISSIONER LEHMAN:  If not, next I would like to
       call Orville Litzsinger, please.

       MR. LITZSINGER:  Good morning, and thank you, Mr.
       Commissioner, for the opportunity to speak.  We, too,
       appreciate this opportunity, which hasn't always been
       available to us.

       I represent The Alliance for American Innovation,
       which is located at 1100 Connecticut Avenue, here in
       Washington, in Suite 1200.

       In Washington, The Alliance for American
       Innovation represents over 3,000 members of the innovative
       community, focusing primarily on the independent and small
       business inventors, but we also work in the interests of a
       number of small businesses, including the biotech people and
       people in the venture capital area, as well.

       While Paul Wolstenholme indicated that his group
       was disorganized, we do represent an organization here
       locally, and we are a fast-growing organization, and I would
       like to certify at this time, we are not funded by -- and I
       am not personally funded by -- anyone that has been accused
       of being a submarine inventor.  Okay?


       I would appreciate the same certifications by
       people speaking in your behalf that speak for associations
       and other groups, that they certify that in their private
       business they do not have clients that are of a conflict of
       interest to what is happening to the United States patent

       After reviewing the documentation supporting this
       idea, I have some specific points that I will make relative
       to that.  And if I vary, it will be only in response to
       previous comments made and allowed, and anything superfluous
       to that will be held to a strict minimum.

       When we reviewed the rules, of course, one of our
       main concerns is the fee area.  And so what is new, right,
       with the independent inventors?  We have had a problem with
       the fees for a long time.

       But specifically, one of the questions that we
       have is maintenance fees.  I fail, and our people fail, to
       find a specific place where the clock starts ticking on
       maintenance fees.  Are people going to have to pay
       maintenance fees before their patent is issued in some
       cases?  Or are they going to pay them in six months after
       issuance?  Or when are they going to pay that
       three-and-a-half-year maintenance fee?

       We need to know that.  Mr. Kirk?

       MR. KIRK:  The maintenance fees would be due
       exactly as they are, from point of issuance.

       MR. LITZSINGER:  From point of issuance?

       MR. KIRK:  From point of issuance.

       MR. LITZSINGER:  Thank you.  That was a question
       that we had.

       A question that we had, also, reflects to the
       package being circulated in support of the effort, which
       lists about 20 companies or organizations that are on-line. 
       We question the degree of completeness of that, relative to
       people that are on there, as to whether they still are.  I
       know the Biotech Industries Association was listed as a
       supporter, and we know that within the past few weeks they
       had a vote here of the Patent Subcommittee, and the biotech
       firms voted two to one to support the Rohrabacher-Dole
       effort that gives the option of 20 years or 17.

       If we are talking to the list of supporters
       relative to 20-year term, you could add our name to that
       list because we do support a 20-year term from date of
       filing, or 17 years from date of issue.  We believe that our
       proposal has been less severe than the one adopted in
       response to the GATT enabling legislation.

       We would like the IPO for their recent alert on
       submarine patents because they use an example of a 40-year
       patent and we saw the response prepared by the inventors'
       people that indicated that that patent had been in the
       Patent Office for 29 years and ball was only in the court of
       the inventor for less than 30 months.  So if that is the
       best example that we can get for submarine patents, we are

       Additionally, I sat in on a meeting last week with
       people from Phillips Petroleum, with Congressman
       Rohrabacher's staff, and they brought in two patents.  They
       said, "These are submarine patents.  Look, here."

       By the time they left, they realized, after we
       examined them closer, that the delays were not caused by the
       inventor, the delays were caused by divisional actions and

       They also left knowing that, under the new system,
       that their company would have lost $300 million because
       their patent would have expired before they had a chance to
       exercise it.

       I have that in a letter going back to the CEO of
       Phillips Petroleum that Congressman Rohrabacher sent, and if
       you desire it, I am sure he would respond with a copy for

       One of the factors on fees that we discussed is
       the requirements that we have, not only to pay the fees, but
       to get venture capital.  There was a report that was just
       put out by Oak Ridge National Laboratory on an inventions
       program that the Department of Energy has for independent
       inventors.  That report says that for every dollar spent by
       the independent inventor to get to the point where he has a
       patent or almost to that point, he needs $37.00 after that,
       to commercialize his product.

       This is why the National Venture Capital
       Association is in support of our preference for the optional
       term, because the venture capitalists across this country
       will no longer invest in a system where the inventor is not
       guaranteed a fixed time of return on that money.

       I note your reference to the Constitution earlier. 
       I note the reference to the Constitution earlier and your
       reference in a response to an inventor just three days ago,
       where you brought the subject of the Constitution up.

       Section 8 of the Constitution has 18 things listed
       in it that give the Congress powers to do certain actions. 
       Clause No. 8 -- there are 18 clauses -- clause No. 8 says
       that the Congress shall have the power to promote the
       progress of science and useful arts by securing for a
       limited times to authors and inventors the exclusive right
       to the respective writings and discoveries.

       The GATT enabling legislation took this right
       away.  It is the only right, out of those 18 clauses, that
       is no longer in effect in this country. 

       That right has been in existence for 200 years,
       plus, and it includes other rights, such as forming and
       maintaining a militia, an army and navy, and making loans,
       and the things that we say.

       In a discussion that I had at the White House
       yesterday, they indicated that the administration position
       on that was issued as a result of a recommendation from the
       PTO.  Now, we have a situation for the first time in 200
       years, the Congress has been influenced to remove a right of
       the independent inventors in this country.

       Also, speaking of other difficulties associated
       with this, beyond that, the insurance underwriters are
       saying that because of the due diligence effort discussed
       earlier, that malpractice insurance for patent attorneys
       will grow tremendously before it will cease to exist because
       of the liability and the problems associated with the
       process of the patent for the inventor.

       The provisional application and the 18-month
       clock, or 6-month clock as we discussed yesterday.  When
       does the clock start on publication, if, in fact, that bill
       is passed?  Does it mean that an invention is published at
       six months instead of 18?  There are a lot of folks that
       have some serious problems with that.

       I want to say, again, thank you for the
       opportunity to speak.  I would be happy to answer any
       questions that you might have and, of course, I have a
       written correspondence that I will submit formally.

       COMMISSIONER LEHMAN:  Thank you very much, Mr.

       Next, I would like to call Frampton Ellis.

       MR. ELLIS:  I am Frampton Ellis.  I am an
       independent inventor, based here in Arlington, Virginia.  My
       address is 2895 South Abingdon Street, Suite B2.  The zip is

       I am here on my own, and these are my own
       comments.  I am limiting my comments to the enacted law, as
       it now exists, but in no way endorse it, and I would like to
       focus on the transitional provisions proposed by the Patent

       The PTO states in the Federal Register that it is
       now proposing to amend the rules of patent practice to
       implement the Uruguay Round Agreements Act, and "to simplify
       the rules."

       I referred to the Federal Register many times
       before and therefore was very surprised to discover that
       bureaucrats are now allowed to indulge their taste for
       humorous remarks in this official publication.  Maybe this
       resulted from some misunderstanding in the administration's
       effort to reinvent government.

       In this particular context, however, I have
       trouble appreciating the humor since the proposed transition
       provisions have ignored the simplest and fairest approach in
       order to devise a hugely complicated Rube Goldberg approach
       that would be arbitrarily unfair.

       In the short term, meaning the several year
       transition period, especially between now and June 8th, it
       seems like we will also generate truly spectacular earnings
       for patent attorneys.  Innovation will take a backseat for
       at least the next year, while thousands and thousands of
       clients everywhere work out complex and expense strategies
       for prosecution and filing, to salvage what they can from
       their potential patent term for pending applications.

       Any inventors who have been forced to spend
       several years or many years unsuccessfully attempting to get
       reasonable claims allowed by the PTO will suddenly be under
       enormous time pressure to accept any possible allowable
       claims or potentially lose years, possibly many years, from
       their patent term.

       Bad rules yield arbitrary and senseless results. 
       For example, important inventions will likely be protected
       by several continuing applications and will end up being
       protected by several different sets of claims with different

       I think we should be true to the oft-stated goals
       of reinventing government to keep things simple.  If we must
       have a new patent term, the only fair transition is the
       simplest.  Patents with a priority date before June 8, 1995,
       should have a 17-year term after grant.  And patents with a
       priority date of June 8th or after, should have a 20-year
       term from their priority date.

       It is a simple rule.  End of story.  No endless
       complications.  No huge windfall of fees, either.

       But at least, the rules are not changed unfairly
       in the middle of the prosecution game.

       In closing, I guess I have to admit I am a little
       too unsophisticated to understand why we are really now
       posed here, to stand on its head, an existing set of patent
       rules with a proven innovation effectiveness in an attempt
       to stop the supposedly egregious effect of a tiny number of
       submarine patents.

       Ignoring for a moment that no one has demonstrated
       in any rigorous fashion the existence of these egregious
       effects, what are the tradeoffs?  Is there any possibility
       that by sinking submarine patents, we also seek innovation,
       far more generally?  Has anyone thought seriously about

       Just in final closing, the one other comment I
       would like to make is, this seems to be a typical government
       approach for which it receives the heaviest criticism. 
       Which is, to focus a set of rules that apply to everyone, to
       go after the 1 percent problem area that is alleged.

       That's it.  Do you have any questions?

       [No response.]

       COMMISSIONER LEHMAN:  Next, I would like to call
       Mr. Harold C. Wegner.

       MR. WEGNER:  Thank you, Mr. Assistant Secretary,
       Deputy Commissioner, Deputy Assistant, and Madam Solicitor. 
       Thank you for this opportunity to appear.

       My name is Harold Wegner.  I am Professor of Law
       and Director of the Intellectual Property Law Program at the
       George Washington University National Law Center; Director
       of the Dean Dinwoodey Center for Intellectual Property
       Studies; and of counsel to the law firm of Foley & Lardner. 
       My address for this hearing is Foley & Lardner, Suite 500,
       3000 K Street N.W., Washington, D.C. 20007.

       All of the comments I make today are on my own
       personal behalf and do not necessarily reflect the views of
       any organization with which I may be associated.

       First, if these proposed rules were final rules,
       they would be the best example of positive rulemaking that
       the Office has had in many, many years, reflective of both
       the talent and attitude of a superb staff that you put
       together in just the last couple years.  So if these were
       final rules, they would be excellent.

       They are only provisional rules, and you have
       given us the opportunity of looking at options and
       variations.  I think most of the possible weak spots that
       could exist have been explained in your proposed rulemaking
       and have been adequately addressed by the several
       commentators who have taken time to diligently make

       With our permission, in these remarks I would like
       to discuss some of the points that strike out, which strike
       me, which have struck many of the people here today.  Kate
       Murashige maybe said it best:  Why is it that we have had
       Rule 62 practice in so many continuing cases?  And, why
       couldn't we simplify this earlier?

       The reason we couldn't encourage voluntary
       refiling of cases earlier was, the public has a right to
       have a time to practice an invention.  Now, we have a cap at
       20 years.  Now, we can liberalize.

       What we are talking about, basically today, is
       fees and beans.  Fees for the office and bean counting.  Why
       did the strict, hard-ball approach evolve in the late 1970s
       to force refilings of cases?

       This goes back to the late era of Edward Brenner,
       when he went to Congress and said, we are cutting the back
       log, we are cutting the pendency.  And pendency was counted,
       bean counting was counted from the actual time of pendency
       of an application.

       So if you had a first application pending for 10
       years and then had a continuation that was pending only six
       months, the pendency was six months for the bean counting.  

       Now is the time to make a sea change and get away
       from the bean counting.  To start fresh, to start counting
       how we are doing, measuring from the first filing date. 
       Let's replay the down, let's start the game over, and let's
       look at accounting procedures that measure the term of the
       patent from the first filing date.

       Let's also get rid of the bean counting in terms
       of promoting examiners by how many refilings they can force,
       and let's see their actual production.  How many cases can
       be allowed?

       These reforms are essential.  Otherwise, it will
       never work, to say let's have a more liberalized practice to
       permit continued prosecution because examiners, the bread on
       their home table, their promotions, are based upon how many
       disposals, how many cases they have.  So every time a
       continuation is filed, they get another disposal widget,
       another credit.

       We have to replay the down, start all over again,
       and have a new system.

       Having said that -- and let's do that -- then,
       let's abolish Rule 62 altogether, and replace it by a simple
       form.  Just like you pay a certain fee for a Notice of
       Appeal, you would pay a certain fee to erase finality and
       maybe set a three-month period, to make a voluntary
       amendment, to start procedures all over again.

       We can do that, now, because we have the 20-year
       cap, so let's take advantage of that and move forward.

       Also, the constructive suggestions of several of
       the speakers on restriction practice should be noted and
       taken into account.

       I very much value the opinions of Richard
       Donaldson and what he said about measuring the diligence
       during the appeal period.  He is on all-fours.  He is
       exactly right, and that was very constructive.

       Mr. Irving talked about the Patent Office giving
       guidance on Hilmer.  With due respect, you don't have the
       authority to do that.  That is up to the courts to decide. 
       The best you can do is to give a warning, to say there is an
       uncertainty, here.

       And with due respect to this noted speaker, there
       are other arguments that can be made the other say, and
       whether he or I favor a particular solution, we are limited
       in what we can do in the rulemaking, in the comments, by
       what the statute permits.

       I would only say, the Hilmer problem with respect
       to provisionals, is a serious remaining problem and should
       be dealt with by legislation.  I am not proposing what that
       legislation should be.

       I do agree with Mr. Irving that, if it is his
       suggestion, that a PTC application filed anywhere in the
       world, but actually filed before June 8th, this is under the
       old law and 35 U.S.C. 363 makes this absolutely clear, and
       there is no dispute on this issue so I would think one
       sentence to this effect is very good, because this is fine.

       Some people are talking about how we are losing
       rights under the Constitution.  The Constitution is best
       served by a strong system.  Investments are best served by
       having certainty.  That includes certainty as the third
       party rights.  That includes having everyone get their
       patents granted as soon as possible.

       What we have in this legislation is really a net
       21-year term, when we count the provisional filing year. 
       And the net pendency today is much less than 21 years, so
       what we are doing is giving a bonus to the diligent who push
       their applications through.

       There are some who suggest that it is not bad if
       we have patents expiring 30 or 40 years after the filing
       date.  Let's look at the cost.

       In addition to the problems that are raised for
       industry, the uncertainties.  Maybe a Phillips made $300
       million in the bonus round by having this extension.  What
       happened to American industry during that period?

       Where did competitors go?  Did they go to Holland? 
       Did they go to Japan, to Taiwan, to compete for the world
       market because patents were expired in those countries?

       Why should we punish American industry?  If we
       want to encourage American jobs, we should encourage jobs at
       home.  So when patents expire abroad, how dare we let these
       patents linger on for 30 or 40 year?

       But let's look at administrative costs.  If we are
       going to stretch a patent out an extra 20 years through this
       gamesmanship, this means that the prosecution is churning
       for 20 years.  We, the taxpayers, are paying for that.  We,
       who have our applications held up because of a backlog, can
       thank the people who are letting their cases linger in the
       Patent Office for 20 or 30 years for this benefit.

       Mr. Newtson made a very important comment.  We
       must simply.  I think the problem is more macroscopic.  It
       is not limited to provisionals.

       The first thing we should do is find a big trash
       barrel and take this big volume known as the Manual of
       Patent Examining Procedure, or Nightmare from Hell:  How to
       Reject the Case, and throw it away.

       Throw it away, and let's reinvent the manual, and
       let's teach examiners and attorneys, alike, how to allow
       cases.  How they should construct their cases.  We refer to
       objects of the invention.  Those aren't statutory
       requirements for anything.

       Let's just take the manual and get a trash barrel
       and throw it away.

       Mr. Armitage was the first speaker to touch on
       inventorship.  That is a very important point and I am
       supplying my comments separately on this.  

       Germany doesn't require inventorship nomination
       for 16 months.  There is no reason we should punish
       applicants by requiring an accurate inventorship nomination
       any earlier than the Germans do.

       Submarine patents, Mr. Wolstenholme mentioned an
       isolated cancer.  It is a cancer, I think it probably is a
       minority of the cases, but it is growing.  It must be cut
       out.  This is a cancer on the Constitution.          It is a cancer
       on our patent system.

       Finally, Mr. Litzsinger raised some very
       interesting points.  We must protect the rights of the
       individual inventors.  We do that best by following the
       suggestion of Mr. Newtson and simplifying applications.

       We do that best by having an open prosecution with
       sunshine.  There are abuses by applicants, some attorneys,
       and examiners, alike.  Let's have sunshine prosecution. 
       Let's have the 18-month bill put into law.  Let's have open
       prosecution.  Let's expose the frauds where they exist.  Let
       the chips where they may.

       Let's get patents in the hands of the inventors
       cheaply, efficiently, without forcing them to go through the
       harassment and problems of patent persecution.

       Let's get the cases allowed quickly.  But we must
       have a fixed term that expires at a certain date.  The U.S.
       Congress itself, in a predecessor to 35 U.S.C. 102(d),
       enacted a law that capped U.S. patent terms under certain
       circumstances to expire as of the earliest counterpart
       foreign patent expiration date.

       The idea is, at some point in time, there will be
       a generic industry.  If there is a generic industry, there
       will be a generic industry, let that be in the United States
       and not abroad.

       There is a case called Ex Parte Mushettes
       application, where one of your predecessors, about 124 years
       ago, 125 years ago, denied a patent extension in one case
       because he said that if he granted an extension of steel
       making process patent in the United States, the patent had
       already expired in the United Kingdom, and then all generic
       competition would go abroad.  Steel would be made abroad,
       instead of here at home.

       Isn't that crazy?  Isn't that anti-American?

       So let's honor the Constitution, let's strengthen
       the patent system, and let's proceed with the simplification
       of the system.  And I applaud your legislative and
       rulemaking initiatives. 

       Thank you very much for your time.  Do you have
       any questions, sir?

       [No response.]

       COMMISSIONER LEHMAN:  Thank you very much, Mr.

       MR. WEGNER:  Thank you.

       COMMISSIONER LEHMAN:  We had one witness who was
       not here when he was called.  That was Mr. Slattery, I
       believe.  If he is here, now, he can come forward.

       MR. SLATTERY:  Good morning.  My name is James
       Slattery.  I am a partner with the firm of Birch, Stewart,
       Kolasch & Birch.  Our address is at 8110 Gatehouse Road, in
       Falls Church, Virginia.

       Thank you, Commissioner, Assistant Commissioner,
       Deputy Commissioner, Deputy Assistant Commissioner, and
       Madam Solicitor.

       I have, basically, four issues to discuss.  These
       issues are really my own opinion.  Our firm has not fully
       reviewed all of them because the GATT legislation was on the
       fast track and, similarly, the rulemaking is somewhat of a
       fast track.  But I think it is good for all of us to review
       these changes that are being proposed, and I have four
       things that I want to address.

       One relates to the patent term.  Presently, all of
       us can calculate the patent term.  It is 17 years.  And any
       of the patents that are issued prior to June 8, 1995, we can
       all calculate the patent term.  It will be 20 years from the
       date of filing or 17 years from the date of grant.

       But my request is to, for all patents issued after
       June 8, 1995, to print the patent term on the front of the
       patent.  Some patents will have an extension of the patent
       term, based on either appeal process or interference, and it
       will be impossible to know the patent term unless you order
       up the file history and check to see if any extension has
       been granted.

       Now, in the most recent of the AIPLA Bulletin,
       under the section on relations with PTO affairs, it did
       indicate, of course, you are going to print on the Notice of
       Allowance, what you think the patent term extension might
       be.  And of course, the applicant will have the Notice of

       And the applicant will have the right to appeal or
       somehow try to extend that period, if she or he thinks it is

       But according to the publication by the AIPLA, the
       PTO will be printing the term of the patent on the front of
       the patents?

       Because it states here, the PTO will determine the
       appropriate length of the patent term extension before issue

       MR. GOFFNEY:  We will print the extensions on the

       MR. SLATTERY:  The extensions.

       MR. GOFFNEY:  Yes, that is the number of days.

       MR. SLATTERY:  Number days.  So then, we will be
       able to calculate from the front of the patent.

       MR. GOFFNEY:  That's right.

       MR. SLATTERY:  Okay.  The second point relates to
       provisional applications.

       The U.S. Patent Office has made a determination
       that provisional applications provide an applicant with a
       102(e) date; 102(e), I think, is very clear.  Section 102(e)
       says that it has to be an application for a patent.

       The invention was described in a patent granted on
       an application for patent filed by another in the United
       States.  Well, by definition, a provisional application
       cannot be an application for patent.  Provisional
       application will be abandoned at the end of a one-year
       period, automatically, so therefore, cannot possibly be a
       102(e) date.  That is, based on my review.

       Now, what I would suggest is that you amend 102(e)
       to clearly state that it applies not only to an application
       for patent, but also applies to a provisional application. 
       Because I think the statute is not going to permit you to
       have a 102(e) date for a provisional application, and
       eventually that is going to be litigated, and I think the
       person that does not want that to be a 102(e) date will

       My third point relates to PTC filing dates. 
       Section 102(e) makes it clear that PTC application filed
       under 35 U.S.C. 371(c) is permitted to have a 102(e) date,
       as to the date that they comply with the provisions of

       Well, the Patent Cooperation Treaty section of the
       PTO is extremely strict with regard to what they require on
       a declaration.  We had one recently where the residency of
       the applicant was not listed and, therefore, we were not
       given a 102(e) date.

       We have had other applications that have been
       pending at the PTC section for eight or nine months and
       then, finally, they issue a communication to us with a
       30-day time period to respond, saying, the declaration is
       not acceptable because it doesn't identify the foreign
       priority date or doesn't identify the PTC filing date.  Even
       though, there was a declaration attached to the application.

       The problem is that 35 U.S.C. 371(c) requires by
       statute that you have the declaration, and it also requires
       that the declaration comply with the rules.  

       Well, the rules are even more onerous than the
       statute.  So, nationally filed applications in the Patent
       Office do not require a declaration to obtain a filing date
       and to obtain a 102(e) date.

       So my recommendation would be, that if you are
       going to be reviewing these statutes and making some
       changes, that you make sure you review 371(c) and delete it,
       because I don't think the provisions for the declaration
       should be requirement for obtaining the filing date.  The
       declaration could always be filed at a later date.

       And if you want any further information about how
       onerous this problem is and how much problems we have, I
       would suggest you talk to Richard Lazarus, who is in charge
       of the PTC section.  I think it is something that he has
       wanted to change for a number of years.

       The fourth thing I want to address is the PTC
       filing date.  The Patent Office has made a ruling that if
       you file a PTC application before June 8, 1995, that that
       will not qualify for the greater of 20 years from date of
       filing or 17 years from date of grant.

       I think it is clear in 35 U.S.C. 363, that the PTC
       filing date should be the date of filing throughout the
       world.  This problem also occurred a number of years ago,
       when maintenance fees were enacted in the U.S. Patent
       Office.  All applications filed before December 12, 1980, do
       not require maintenance fees.

       At that point in time, the Patent Office made a
       determination that PTC applications filed before December
       12, 1980, do not require the payment of a maintenance fee. 
       So similarly, I think that it would be consistent with not
       only the statute, but your prior rulings, that any PTC
       application filed before June 8, 1995, any place in the
       world, should be accorded the filing date of that date of
       filing and thus be permitted to have a patent term of either
       20 years from the date of filing or 17 years from date of

       This hearing is not to address the issue of

       COMMISSIONER LEHMAN:  That's right.

       MR. SLATTERY:  Okay.  Thank you very much for your
       time and for permitting me to address the group.

       COMMISSIONER LEHMAN:  Thank you very much, Mr.

       Are there any other witnesses, who signed up, that
       we didn't have?

       [No response.]

       COMMISSIONER LEHMAN:  If not, I would just like to
       make one comment before concluding our hearings this

       For the benefit of the people who are here and who
       stayed this whole time, we have obviously a lot of people
       who are very interested in the well-being of our
       intellectual property system.

       I would just like to say that, since I have had
       the benefit of being at the Patent and Trademark Office for
       nearly two years, now, it is my observation that the quality
       of the people who work there, the quality of people who it
       has produced over the years who have gone on to the private
       bar, who served the intellectual property system of the
       United States and the world, has been extremely high.  

       In fact, I would venture to say that it is the
       highest in the entire world and does great honor to our
       country.  I have had the occasion, in these last two years,
       which is a very rare one, that very few people have the
       opportunity to do and that is, to travel around the world
       and have to deal with foreign governments and foreign

       One can talk about bureaucrats in the United
       States and tear down our country, but there is none other
       better in the world.  There is no society that has ever
       existed in the history of the human race with 250 million
       people and all of the diverse interests that we have, that
       works as well as ours does.

       This hearing, this process that brought us here
       today, is an example of this.  This doesn't take place any
       place else in this planet.

       If you want to know what a bureaucrat is like,
       then I invite you to go deal with some of our foreign


       I know some comments were made, and part of the
       bureaucrat's responsibility, the civil servant's
       responsibility, is to toil tirelessly in our Office and take
       it when it is dished out to them.

       But as an appointee of the United States, I don't
       have to take that, and I want to stand up for those people
       and I want to tell people here that I don't appreciate it
       when the motivations and honesty and integrity of our
       employees at the Patent and Trademark Office are impugned.

       We will reconvene this afternoon at 1:00 p.m., for
       a hearing on the restoration issues.

       [At 11:29 a.m., the public hearing was recessed,
              to reconvene at 1:00 p.m., on the same day.]                   

       [1:06 p.m.]

       COMMISSIONER LEHMAN:  I would like to welcome
       everybody to our afternoon session.  For those of you who
       were not here this morning, let me again introduce myself.

       I am Bruce Lehman, and I am the Assistant
       Secretary of Commerce and Commissioner of Patents and
       Trademarks.  To my immediate left is Michael K. Kirk, the
       Deputy Assistant Secretary and Deputy Commissioner of
       Patents and Trademarks.  To his left is Lawrence J. Goffney,
       the Assistant Commissioner for Patents, and then, Stephen
       Kunin, the Deputy Assistant Commissioner for Patent Policy
       and Projects, and Nancy Linck, the Patent and Trademark
       Office Solicitor.

       And finally, Elizabeth Dickinson, Office of
       General Counsel, of the Food and Drug Administration.  We
       welcome you to the PTO, Ms. Dickinson.

       This afternoon, we are going to hear from
       witnesses regarding the effects of the 20-year patent term
       on patent expiration dates and patent term extension under
       35 U.S.C. 156.

       A request for comments relating to this issue was
       published on January 17, 1995, in Volume 60 of the Federal
       Register at pages 3398 and 3399. 

       Let me state, as I did this morning, that a
       transcript of this hearing also will be prepared and a copy
       will be made available for purchase by the public
       approximately 10 days after the hearing.  Copies will also
       be available directly for purchase from the stenographer and
       the name of the stenographic service is Miller Reporting,
       and if you want to call them directly, their number is

       Of course, copies are available for examination by
       the public for absolutely no charge, here in the Patent and
       Trademark Office, as well.

       I would like to reiterate that, due to the number
       of requests to appear orally, we have asked each speaker to
       try to limit their comments to 10 minutes.  Any people who
       wish to speak and haven't previously told us about their
       desire, I requested to add their names to the list that is,
       I think, located on one of the back tables in the rear of
       the room.

       You may also pick up at that table, copies of the
       Federal Register publication noticing the hearing.

       When you present your comments, I would appreciate
       it if you would give your name and address and whether the
       comments presented are your own or whether you have been
       authorized to present them on behalf of a law firm or a
       company or an organization, that you might represent.

       With that, I would like to call forward our first
       witness this afternoon, who is Don Stone, if he is here.

       MR. STONE:  Thank you.  I am Don Stone, with the
       law firm of McKenna and Cunio, at 1575 I Street N.W., in
       Washington, D.C.

       I speak to you this afternoon as counsel for the
       National Pharmaceutical Alliance and am presenting their
       position to you.

       The NPA is an association of more than 155 firms
       involved in the manufacture and nationwide distribution of
       pharmaceuticals, including proprietary and generic
       prescription drugs, over-the-counter medications, and
       branded proprietary medications.

       NPA has members in 28 states, Puerto Rico, and
       Canada.  The primary purpose of NPA is to promote the
       general welfare of the pharmaceutical industry.  The
       Association has a mission of disseminating information
       concerning the pharmaceutical industry to assure the
       availability of pharmaceuticals at efficient prices.

       Your agencies are considering actions they should
       take to implement the Uruguay Round Agreements Act, or URAA,
       which made changes to the patent laws that affect brand name
       and generic drugs.

       The PTO, in its announcement, has posed seven
       specific issues for comment.  The NPA is pleased to present
       its views on how the PTO and FDA should respond to those
       issues.  The Association recommendations discuss both the
       general philosophy embodied in pertinent legislation and the
       specific statutory language involved.

       To begin with, a little bit of background in our
       more general philosophical approach.  As we are all aware,
       numerous nations recently concluded the Uruguay Round of the
       General Agreement on Tariffs and Trade.  Then in December of
       1994, Congress passed and the President signed, the URAA
       legislation implementing those changes.

       The purposes of both GATT and URAA are to promote
       competition in international trade and to harmonize relevant
       legal requirements world wide to carry out that promotional

       GATT and URAA made several changes to the U.S.
       patent law.  One of those changes effects the terms of some
       existing and pending U.S. applications.  Those terms will,
       in some cases, be extended.  Both GATT and URAA recognized
       that the term extensions could adversely affect the rights
       of persons who had begun preparations to compete with
       products that are currently protected by patents nearing

       The legislation struck a critical balance between
       the rights of the patent owners and the rights of those who
       had made substantial investment in preparing to compete with
       those patent owners.  That balance granted an extension of
       the term to some issued patents through the transitional
       provisions.  However, it also limited the rights of those
       patent owners against person who have made substantial
       investment by the end of the transitional period, as they
       prepare to compete with the patented technology.

       The balance struck allows those persons, which we
       will call, in our remarks, protected infringers, to market
       their products during the patent term extension caused by
       URAA changes.  The patent owners' remedies for infringement
       which occurs, then, are limited to equitable remuneration. 
       Injunctions, damages, and attorneys' fees are not permitted
       against protected infringers.

       This balance between patent owners' rights and the
       rights of competitors who have made a substantial investment
       must be maintained in all actions taken by the PTO and the
       FDA, in matters concerning patented brand name and competing
       generic pharmaceutical products.

       In 1984, Congress had passed the Drug Price
       Competition and Patent Restoration Act, which is commonly
       known as the Waxman-Hatch Act.  Waxman-Hatch also struck a
       careful balance between the rights of owners of patented
       drug technology and those of competitors producing generic

       The Waxman-Hatch Act provides strong protection
       against competition during the original or the Waxman-Hatch
       extended term of a patent on a drug product.  However, the
       Waxman-Hatch Act promotes immediate competition upon
       expiration of that term. 

       The Waxman-Hatch Act permits potential generic
       competitors to begin preparations for competition with the
       patented drugs by conducting bioavailability and
       bioequivalent studies and by filing abbreviated new drug
       applications, or ANDAs, prior to the expiration of the
       patent term.

       Those actions are defined as non-infringing.  By
       taking those permitted actions, the generic drug
       manufacturers necessarily make a substantial investment in
       preparing to compete with the patented drug.

       A similar philosophy and objectives underlay the
       passage of the Generic Animal Drug and Patent Term
       Restoration Act in 1988.  Actions similar to those for
       generic human drugs were established as non-infringing, even
       when they are conducted prior to expiration of the patents.

       Again, the intention was to promote competition
       immediately upon expiration of the original or generic
       animal drug extended patent term.

       The transitional provisions of both GATT and URAA
       clearly contemplate that competition should and will exist
       during any patent term extended by URAA, if the competitor
       has made a timely substantial investment, which would
       otherwise be detrimentally affected.

       Generic drug applicants who have either commenced
       bioequivalents or bioavailability studies, or who have filed
       an ANDA or abbreviated new animal drug application, ANADA,
       by June 8, 1995, should be treated as having made the
       necessary substantial investment.

       Their applications, if otherwise satisfactory,
       should be approved to permit them to compete as protected
       infringers during the URAA extended patent term.

       The patent owner is not left helpless.  The owner
       is entitled to equitable remuneration for the resulting

       We strongly urge that all actions, by both the PTO
       and the FDA, concerning the issues raised for public
       comment, should be consistent with the achievement of GATT
       and URAA objectives.  In particular, PTO and FDA should not
       take any action which would frustrate legitimate competition
       between patent owners and protected infringers during URAA
       extended patent terms.

       Let me now move to respond to your specific
       issues.  Issue No. 1, what should be done in the orange and
       Green Books?

       NPA believes that FDA should revise the Orange
       Book and the Green Book to provide two critical patent dates
       for each effected, listed patent, granted before December 8,
       1994.  The first date should be the patent expiration date
       under the law prior to URAA.  The second date should be the
       pertinent patent expiration date, taking into account any
       URAA extension.

       Both are dates which have been valid, correct
       expiration dates under the patent law.  NPA believes that
       both meet the requirements for publication by FDA,
       established in Sections 505(b)(1) and (c)(2), and 512(b)(1)
       and (c)(3), of the Food, Drug and Cosmetic Act.

       Publication of both dates will define clearly that
       portion of the patent term during which competition would be
       allowed under the URAA transitional provisions.  Publication
       of both dates serves the interests of all parties.

       Publication of only a single date would be
       misleading to the public, in our opinion.  Permanent
       retention of the original expiration date would not inform
       potential generic drug applicants and others that equitable
       remuneration might be due to a patent owner, if they had
       sales before the extended expiration date.

       Revision of the information to provide only the
       extended date would misinform the public and applicants
       about when generic equivalent products might be available or

       On your second issue, should the PTO certify, NPA
       believes that the PTO should certify new patent expiration
       dates to NDA and NADA holders.  NPA does not believe that
       the certification should be limited to those patents
       currently listed.

       Similar certification should be provided to patent
       owners who wish to list additional patents with FDA in the

       The reason that we believe that certification is
       important is that the determination of patent expiration
       dates under URAA changes will be more complicated than under
       prior law.  Determination of the patent term will require
       references to previously filed applications.

       Patents issued on applications filed after June 8,
       1995, of course, will also require reference to term
       extensions caused by interferences, secrecy orders, or
       appellate review.

       NPA encourages the Patent Office to develop a
       system for printing the expiration date, assuming of course
       that all applicable fees are paid, on the first page of
       patent copies.

       NPA believes that the PTO should certify that date
       for any patent which does not, on its face, already show
       that date.

       On your third issue, NPA believes that NDA holders
       and NADA holders should submit revised patent expiration
       dates to FDA for those patents already listed.  Future
       listing information should be required to contain two dates,
       those two dates I spoke of earlier.

       We believe that the listing should only be after
       the PTO has certified the dates.  

       I will indicate very briefly that the remainder of
       my remarks are in written form before all of you.  I
       apologize that the time has run so fast.  We have also
       submitted written copies to both the PTO and FDA of all of
       these dates, and copies will be available for anyone who
       would like them after the meeting.  Thank you.

       COMMISSIONER LEHMAN:  Thank you very much, Mr.
       Stone, for accommodating our time restrictions.

       Are there any questions of Mr. Stone?

       [No response.]

       COMMISSIONER LEHMAN:  If not, I would like to ask
       Robert Milanese, President of the National Association of
       Pharmaceutical Manufacturers, to come forward, please.

       MR. MILANESE:  Thank you.  My name is Robert
       Milanese.  I am President of the National Association of
       Pharmaceutical Manufacturers, located at 320 Old Country
       Road, in Garden City, New York.

       NAPM is pleased to present its views concerning
       the potential adverse impact on U.S. generic pharmaceutical
       industry, U.S. consumers, and Federal and State
       pharmaceutical reimbursement agencies, caused by URAA.  

       NAPM is the national trade association
       representing independent generic pharmaceutical
       manufacturers and supplies of bulk drug chemicals to the
       U.S. generic drug manufacturing industry.

       PTO has requested comments regarding the possible
       changes to the U.S. drug approval system related to the
       20-year patent term contained in URAA.  URAA extends the
       patent term for all patents filed with the PTO on or after
       June 8, 1995, to 20 years from the date of application,
       rather than the current patent term of 17 years from date of

       In addition, under a transitional provision, all
       unexpired patents as of June 8, 1995, may be extended to 20
       years from the earliest application filing date, if that
       term is longer than 17 years from the patent issue date. 
       The difference in term between the 17-year term, from the
       date of grant, and the 20-year term, from the date of
       application, is referred to by the PTO as the delta period.

       If the provisions of GATT, as well as PTO and FDA
       operative statutes, are not read in proper context and
       correctly applied by PTO and FDA, the results could very
       well be a de facto injunction against the approval of
       generic drug applications during the qualified patent term
       extensions, i.e., the delta period, which could be granted
       to over 100 brand name pharmaceutical products.

       In essence, brand name pharmaceutical patents
       extended on June 8, 1995, which were issued within the three
       years of filing, will receive certain additional qualified
       protection for the difference between the 20-year measuring
       scheme and the original 17-year measuring scheme.  Under
       URAA transitional provision, however, a company which has
       made substantial investment in developing a competitive
       product prior to June 8, 1995, may market the product
       notwithstanding any additional qualified protection by GATT,
       with payment to the patent holder of equitable remuneration
       for such marketing.

       Under the FD&C Act, the approval of an ANDA or an
       ANADA for a generic equivalent drug product, except when the
       validity of the patent is questioned, will not granted until
       the patent expires on the brand name product.  FDA is
       required to publish patent expiration dates in an official
       publication known as the Orange Book for human
       pharmaceuticals and the Green Book for animal drugs.  One
       possible, but impermissible, interpretation of the law could
       be listing the GATT-extended patents in the Orange Book and
       Green Book which could act as a complete bar to the approval
       of the generic product until the GATT-extended patent date

       This result would be totally inconsistent with the
       qualified patent protection granted under URAA.  

       Under the enabling legislation, a company which
       has made substantial investment in developing the
       competitive product prior to June 8, 1995, is permitted to
       market the product on the date of the original patent

       The patent holder is not allowed to obtain an
       injunction, nor is it allowed actual damages or attorneys'
       fees, as is currently provided for by law for patent
       infringement.  Rather, the patent holders' exclusive remedy
       is equitable remuneration for the marketing of a competitive
       generic product during the delta period.  Nothing more,
       nothing less.

       Thus, it is clear that GATT has created a new
       class of proprietary right in the patent holder which does
       not fall literally within the language of either FDA's or
       PTO's operative statutes.  Notwithstanding this fact, it is
       clear that applying the statutes as written and the
       agencies' implementing regulations would only permit one
       result.  That for patents in effect on June 8, 1995, GATT
       extensions do not and were not intended to operate as a bar
       to the marketing of a generic drug once the original
       pre-GATT period of patent protection had run.

       In this respect, GATT has mandated no change in
       the status of the patented drug product.  Once the original
       patent protection has expired, a generic drug may be
       marketed.  There should be no dispute on this point.

       It is also clear that the exclusive marketing
       granted by the law -- full, unqualified patent protection --
       ends on the date contained in the Orange Book for ANDAs and
       the Green Book for ANADAs, as they exist today.  This was
       true prior to GATT and it remains true under the
       renegotiated treaty.

       It is these dates which determine when a generic
       drug may come on the market.  There should be no dispute on
       this point, either.

       URAA was never intended to be an absolute
       prohibition of the marketing of competitive products during
       the delta period, and does not, in fact, bar such marketing. 
       NPA strongly urges PTO to work with FDA to establish
       policies which will continue the approval of ANDAs and
       ADADAs on the original patent expiration dates as currently
       reflected in the Orange and Green Books.  

       A contrary result would cost the American
       consumer, the Federal and State reimbursement agencies,
       billions of dollars due to the needless delay in the
       introduction of safe and effective, lower-cost equivalent
       generic drug products.

       This result would also provide a substantial
       windfall to the U.S. holders of pharmaceutical patents that
       have structured their pricing over the years to recoup all
       the research and development and other costs by the patent
       term applicable at the time that the patent for the brand
       name product was filed.

       The generic drug industry, through a combination
       of NAPM and NPA has commissioned a study on the economic
       impact of this scenario and will supplement the record of
       this hearing in the very near future, once it is completed.

       We have a preliminary example of just one drug,
       Zantac, ranitidine, which will be extended by over 19
       months, from December of 1995 to July of 1997.  That is
       going to result in a cost to the American consumer of over
       $1 billion.  That is one drug we have identified, over 100.

       Let's address some of the questions.  Should FDA
       revise the patent term expiration dates currently listed in
       the Orange Book and the Green Book?  NAPM submits that no
       dates may be changed from those currently in the Orange Book
       and the Green Book.  We feel that FDA is required to utilize
       the current patent term dates in the Orange Book and Green
       Book as effective dates of approval for ANDA and ANADA
       applicants prior to which the product may not be marketed.

       The primary difficulty with using GATT-extended
       patent termination dates for the list of patents in the
       Orange Book and the Green Book is that, in contravention to
       the terms of GATT, these GATT-extended dates would become
       the effective dates of generic drug approvals and thereby
       operate as an absolute bar to marketing.

       GATT, however, clearly indicates that the patent
       extensions granted to it do not operate as a bar to
       marketing, but rather to the contrary, permit the marketing
       of generic drug products in which the applicant has made a
       substantial investment.

       The only condition established by GATT for such
       marketing during the GATT extension period is the payment of
       equitable remuneration to the patent holder.  In our view,
       it would substantially exceed the mandate of GATT to change
       the current Orange Book and Green Book dates to
       GATT-extended dates, which would, under FDA's drug approval
       scheme, operate as a full bar to marketing.

       NAPM submits that if companies submit such
       GATT-extended dates to FDA as dates of patent expiration,
       that such dates, if placed into the Orange Book or Green
       Book, be clearly marked with a notation that they represent
       GATT extensions which do not operate as a bar to marketing
       and that such dates representing only a qualified patent
       extension do not constitute the type of full patent
       protection which the statute requires FDA to utilize in
       setting approval-effective dates.

       Second question.  Should PTO, at the request of
       NDA or NADA holders, certify?  As previously stated, there
       is only one type of patent certification which is operative
       for FDA in setting the approval-effective date, and that is
       the date of expiration of the full, unqualified patent

       GATT extensions do not constitute such unqualified
       patent protection and therefore cannot be certified through
       FDA as dates of patent expiration for purposes of setting a
       drug approval date.

       Question three.  Should NDA and NADA holders be
       required to submit to FDA revised patent expiration dates
       for those patents currently listed in the Orange Book and
       Green Book that will have a longer term under URAA?

       GATT-extended patent term expiration dates are not
       relevant to the drug approval process and therefore have no
       place in FDA's regulatory scheme.  FDA is charged by law to
       render ANDA and ANADA approvals effective on the date first
       allowed by law for marketing.  These dates were not changed
       by GATT.

       GATT merely provided for certain potential
       periods.  The ANDA applicant who has made a substantial
       investment would be required to provide equitable
       remuneration to the patent holder.

       The issue of such equitable remuneration and the
       conditions and amount of its payment are not issue subject
       to FDA's determination or jurisdiction.  Accordingly, such
       extension dates should not be a required part of the FDA

       I am just going to jump to question number six,
       because my time is up.

       I think we wanted to get in the concept of what we
       would consider substantial investment.  We submit that, at a
       minimum, any substantially complete application filed before
       June 8, 1995, would automatically qualify as a substantial
       investment.  Moreover, if a firm has manufactured pilot
       batches or has commenced a bioequivalency study prior to
       June 8, 1995, and subsequently files a substantially
       complete ANDA, after June 8, 1995, that expenditure of
       resources should qualify as substantial investment.

       In conclusion, NAPM respectfully submits that GATT
       extensions for patents in effect on June 8, 1995, confer not
       a true, unqualified patent right, but a commercial royalty
       right which is not subject to FDA's jurisdiction, nor should
       it properly determine FDA's approval dates, which have been
       and which continue to be determined by statute, unaffected
       by GATT.  Thank you.

       COMMISSIONER LEHMAN:  I want to ask a question
       because I am a little confused about the position of the

       We have heard some discussion here in the last two
       days about a bill, H.R. 359, in the House of
       Representatives, which actually would modify the URAA by
       actually extending indefinitely a provision which would
       require that a patentee would receive a 17- or 20-year term,
       whichever is longer.

       You seem to be concerned about the impact of the
       transitional provisions here, and yet I am surprised that we
       haven't heard anything from you about H.R. 359.

       MR. MILANESE:  Well, we were concerned primarily
       about FDA's quandary about what to do with approvals, and we
       thought that the focus of this hearing --

       COMMISSIONER LEHMAN:  So you don't have any
       problem with the pharmaceutical companies then having under
       the new system, the benefit of H.R. 359, which is 17 years
       or 20 years, whichever is longer?

       MR. MILANESE:  We think that a lot of products are
       going to be impacted by this extension.  We are very
       concerned about it.

       COMMISSIONER LEHMAN:  I am not aware that anybody
       has heard about that.  You know, there are 120 sponsors of
       that bill in the House of Representatives.  I would suggest,
       if you are concerned about this, you might want to let them
       know about it because, I think, that is probably
       considerably more long-term interest to you than these
       transitional provisions are.

       MR. MILANESE:  They be hearing about it.  Yes,
       thank you.

       COMMISSIONER LEHMAN:  Thank you.  By the way, you
       know, for some strange reason, I think the Pharmaceutical
       Research and Manufacturing Association actually is opposed
       to the Rohrabacher bill, so it is sort of surprising that
       they are in favor of restricting their term and the generic
       industry isn't.

       But, there are stranger things that happen.


       COMMISSIONER LEHMAN:  Next, I would like to ask
       Roger Foster to come forward, please.

       MR. FOSTER:  Thank you, Commissioner Lehman.  My
       name is Roger Foster.  I am Corporate Counsel for Mylan
       Laboratories, Morgantown, West Virginia, and the testimony I
       am giving here today is in behalf of Mylan.

       Mylan develops, manufactures, and markets generic
       pharmaceutical products and a number of other pharmaceutical
       products in which we have a proprietary interest.  We employ
       more than 1,200 people in four manufacturing facilities, two
       distribution centers, and numerous offices.

       We sell more than five billion dosage units each
       year and one in every six prescriptions filled in the United
       States annually is filled with a Mylan-manufactured product.

       Commissioner Lehman, much of my testimony, or my
       prepared testimony, has already been given by Bob and Don,
       and I don't want to bore you with a repetition.  I would
       like to say that we support much, if not all, of what has
       been said.

       I would like to amplify one point, and that is, in
       my reading of URAA and, in particular, the Waxman-Hatch
       amendments, it is apparent that the intention here is for
       competitors to have some protected status with respect to
       practicing the patented invention during the term as
       extended by URAA.

       I would point out to you that because of the
       statutes, 355(j)(4)(A), I believe, in the Federal Food, Drug
       and Cosmetic Act, there is only one industry, to my
       knowledge, and one industry alone that is denied that
       protection, and that is the generic drug industry.  And that
       is because the Food and Drug Administration is prohibited
       from approving an ANDA during the term of a patent.

       If an ANDA applicant certifies in the application
       that it will not sell the product prior to the expiration
       date of the patent, which is a paragraph 3 certification,
       FDA will not approve the application until after that date
       has come and gone.  So unless we can get, what I believe to
       be a very technical and narrow legislative remedy, this
       problem is going to persist.

       We think that there is much that the FDA and the
       PTO can do with respect to this issue, but we also believe
       that a legislative remedy is called for.  And we would ask
       that the PTO and the FDA lend their support to such a

       What we believe to be the ultimate remedy would be
       a reconciliation of the language of URAA with that of the
       Federal Food, Drug and Cosmetic Act.

       With respect to your specific questions, your
       first question having to do with revising the patent term
       expiration dates currently listed in the Orange Book and
       Green Book.  We believe that you should continue to list the
       pre-URAA expiration dates, as well as those dates that are
       currently listed in the Orange Book.

       We believe that if you fail to include the
       original expiration date and only use the URAA date, the
       extended URAA date, there may be ANDA applicants out there
       who might not realize that they could benefit from the URAA
       transition language.

       With respect to your second question, we believe
       that the PTO must certify the extended expiration date. 
       URAA makes references to documents which are antecedents to
       the actual patent issuance and the PTO is far better suited
       to make a determination with respect to the extended date,
       due to the frequency and complexity of the prosecution
       histories of many of these patents.

       Your third issue is related in some respects to
       the second one.  With respect to the third issue, we simply
       believe that the revised date should be published upon
       certification by the PTO of the extended patent expiration

       Question four, we believe that the PTO must
       certify as to these extended dates to minimize any disputes
       with respect to the date of expiration.  Should FDA fail to
       require such a certification, it should at a minimum require
       a sworn statement from the applicant stating the extended
       expiration date and describing in detail the analysis
       utilized in documents relied upon to arrive at the date.

       The applicant should also be required to certify
       the FDA that no other relevant documents exist with respect
       to that determination.

       With respect to question five, we believe that
       ANDA applicants who have applications on file as of June 8,
       should not be required to amend the certification set forth
       in the application.  Likewise, no information regarding
       substantial investment should be required.

       FDA should regard the commencement of a biostudy,
       or in the case of those products which don't require a
       biostudy, the pivotal study with respect to those products
       as prima facie evidence of a substantial investment.

       With respect to your sixth question, we don't
       believe that there is any evidence to support any contention
       that Congress intended 35 U.S.C. 156 extensions to be
       treated as anything other than a patent term.  Once
       extended, the term of the patent is just that.  It is the

       The term should be treated the same for any and
       all purposes.  Therefore, no distinction should be given or
       made with respect to a patent term extended under 156, as
       opposed to an original term.

       With regard to your last question, the statute
       with regard to 156 extensions is abundantly clear.  No
       patent term, once extended, can then be extended again. 
       That is under 35 U.S.C. 156(a)(2).  The statute makes no
       distinction as to the source of the first extension. 
       Therefore, one must consider a second extension to be per se

       Thank you very much.

       COMMISSIONER LEHMAN:  Thank you.  Are there any

       [No response.]

       COMMISSIONER LEHMAN:  If not, the next witness, I
       believe, is Gerald J. Mossinghoff, former Commissioner of
       Patents and Trademarks.  

       Welcome, Mr. Mossinghoff.

       MR. MOSSINGHOFF:  Thank you, Mr. Secretary.  

       I represent the Pharmaceutical Research and
       Manufacturers of America, PRMA, as we call it.  We are at
       15th and L, in downtown Washington.  I am very pleased to
       participate in this very important hearing.

       In my prepared statement, which I think you have
       and I hope can be made a part of the record, in the first
       six pages, I discuss generally how the law should operate.

       I would say, if I understand the previous
       testimony given, I tend to agree with it.  I think to carry
       out the desires of the first three spokesmen would require a
       change in the law, require a legislative change.  We thought
       the focus here was principally on what the law is and how it
       can be implemented.  We think it gives very little room for
       policy or discretion.  It really is a self-executing law
       that did extent the term of patents.

       So with that as background, let me go to the
       questions you specifically asked.  Question No. 1, should
       the FDA revise the patent term expiration dates currently
       listed in the Orange Book for those patent entitled to a
       longer term?

       Our answer is that they must do that.  There is no
       discretion.  And indeed, I think the authority of the
       Secretary to grant a NDA approval is limited by the fact
       that if it contains an error, significant error of material
       fact, that that is one of the reasons why the Secretary
       lacks the power, Secretary of HHS lacks the power.

       Second answer, should the PTO at the request of an
       NDA or ANDA holder, certify or verify the expiration dates? 
       The 1984 Hatch-Waxman amendments and the FDA implementing
       regulations specify that the new drug application or
       application holders submit patent information to FDA.  There
       is no legal requirement for the Patent and Trademark Office
       for certification or verification.

       On the other hand, in the case of disputes about
       the proper revised patent expiration date -- and it could
       get complicated, I believe, in some cases -- a verification
       procedure, we think, by the Patent and Trademark Office
       would be very helpful and we would even be willing to pay a
       reasonable fee to have that done, if the Office were willing
       to do that.

       Third, should NDA and ANDA holders be required
       holders be required to submit to FDA revised patent
       expiration dates for those patents currently listed.  By law
       and regulation, NDA holders must be given an opportunity to
       submit to FDA revised patent expiration dates for patents
       currently listed in the Orange Book.  While Section 314.53
       does not specify a time period for submission of changes,
       the submission in our view would clearly be considered if it
       were made any time prior to 30 days after the June 8 cutoff

       Four, if the revised patent term dates are
       published in the Orange Book and the Green Book, and if PTO
       does not certify or verify, what if any submission should
       FDA require to verify the dates?

       FDA should continue to accept patent information,
       in our view, directly from the NDA applicants and applicants
       holders, in accordance with the 1984 law, the Agency's 1994
       regulations, and its procedures in place prior to that.

       The criminal sanctions in Federal law for
       intentionally filing false information, obviously, would
       cover this situation. 

       In addition, there is a Patent Information Dispute
       Resolution Procedure outlined in FDA regulations which we
       think could come into play in this case.

       Five, if the revised patent term expiration dates
       are published, this question addresses what information
       related to substantial investment be required by FDA?  

       We believe that the decision on whether there has
       been substantial investment and a decision on whether or not
       we are in this delta period, is obviously one for the
       Federal courts to make and not for FDA to make and not for
       the Patent and Trademark Office to make.

       The last two questions, should the Patent Office
       take any action with respect to existing patent term
       extensions under Section 156?

       There, we say the patent has received a new
       expiration date as a result of enactment of the Uruguay
       Round Amendments.  The number of days of the patent term
       previously granted under the Hatch-Waxman amendments, by
       law, must be added to the new expiration date.

       Finally, what approach should the Patent Office
       take with respect to calculation of new patent term
       extensions under 156?

       There, the longer of the 17- or 20-year patent
       term, under the URAA, must be used in determining patent
       term extensions under Section 156.  We believe that,
       although there are arguments that can be made to the
       contrary, we believe that the courts will ultimately hold
       that the 14-year overall limitation on extensions will
       continue to apply.

       Mr. Commissioner, that completes the summary of my

       COMMISSIONER LEHMAN:  Thank you very much.  I
       assume you wouldn't oppose legislation changing that 14-year

       MR. MOSSINGHOFF:  That 14-year limitation is an
       important block, I think, and we think that --

       COMMISSIONER LEHMAN:  It is not an extension to a
       longer period of time.

       MR. MOSSINGHOFF:  As I say, it is not consistent
       with extensions done internally.  I think we could make a
       good policy case for legislation which would do that, but it
       again would require a change in the law.

       We think, under existing law -- and again, I think
       an argument can be made to the contrary -- but we think,
       ultimately, the courts will hold that the 14-year current
       law limitation would override these others.

       COMMISSIONER LEHMAN:  We have heard a lot of
       discussion here in the last two days that -- in fact, we
       have heard it even raised to the level of a constitutional
       principle -- that all patent applicants should be entitled,
       basically, to at least a 17-year term.  That is, at least,
       an equal term.

       In fact, the Patent Office is really committed to
       doing that.  Moving to a 20-year term from filing doesn't in
       any way suggest that people should get less than 17 years of
       effective patent protection because, certainly, we ought to
       be able to process those patents within three years.

       MR. MOSSINGHOFF:  Absolutely.

       COMMISSIONER LEHMAN:  But you are the one
       industry, it seems to me, where the critics have a point to
       make and it is not a result of the Uruguay Round
       implementing legislation.  You have been laboring under this
       for a long time, because as a practical matter, you don't
       have oftentimes 17 years of patent protection.

       Now, the Hatch-Waxman legislation attempts to
       address that, in part, but clearly it doesn't make you
       completely whole with regard to these, if your measurement
       of success is that you absolutely, totally, are guaranteed
       17 years of protection.

       So I am just suggesting if we want to respond to
       these people who, I think, have made some fairly persuasive
       arguments that we should get full 17 years of protection,
       perhaps we ought to revisit Hatch-Waxman.

       MR. MOSSINGHOFF:  We would welcome that.  At the
       time, it was an arbitrary limitation of what all other
       patent holders get, all other inventors get, and we would
       certainly welcome the idea of making the case to your
       administration and to the Congress that perhaps it is time
       to remove that arbitrary limitation in America's most
       successful high technology industry.

       COMMISSIONER LEHMAN:  Thank you very much.  Are
       there any other questions?

       [No response.]

       MR. MOSSINGHOFF:  Thank you.

       COMMISSIONER LEHMAN:  Okay, thank you.  Next, I
       would like to ask Donald Barrack to come forward, please.

       MR. BARRACK:  Mr. Secretary and other
       distinguished members of the panel, my name is Donald
       Barrack, and I am pleased to present these views on behalf
       of Bristol-Myers Squibb Company.  A health-care and consumer
       products company, employing approximately 20,000 people in
       the United States.

       The headquarters of Bristol-Myers Squibb is
       located at 345 Park Avenue in Manhattan, New York City. 
       Bristol-Myers Squibb Company is a research-based company, as
       evidenced by the more than $1 billion it spends each year on
       research and development.

       These hearings have been called to receive
       comments on issues arising from the Uruguay Round Agreements
       Act.  The questions presented in the PTO's notice addressed
       the interrelationships between the Uruguay Round Agreements
       Act and the 1984 Hatch-Waxman amendments to the Food, Drug
       and Cosmetic Act and to the Patent Code.

       In exploring these interrelationships, it must be
       appreciated that the Uruguay Round Agreements Act explicitly
       accords precedence to existing Federal legislation unless it
       is specifically provided otherwise.

       The principal focus of my comments today will be
       the effect of the Uruguay Round Agreements Act on the Food
       and Drug Administration approval process for abbreviated new
       drug applications.

       My premise is a simple one.  The Uruguay Round
       Agreements Act replaces 35 U.S.C. 154 with a new section
       154.  No other statutory provisions related to the ANDA
       approval process were amended in a manner that impacted that

       The Hatch-Waxman amendments to the Food, Drug and
       Cosmetic Act made it possible for ANDA applicants to gain
       regulatory approval for their products based largely on the
       safety and efficacy data generated by pioneer NDA filers.

       At the same time, the FDA was required, for the
       first time, to acknowledge the existence of patents.  If an
       ANDA applicant seeks approval to market a product while
       relevant patents are enforced, it must notify the patentee
       and recognize the possibility of an infringement suit.

       The ANDA approval process described in the
       Hatch-Waxman amendments is certainly not, by any stretch of
       the imagination, a windfall for pharmaceutical patentees. 
       Rather, it is a recognition by Congress that it took
       valuable rights from NDA holders and from patentees,
       pharmaceutical patentees, when it allowed ANDA applicants to
       piggyback the NDA filing, and at the same time, reverse the
       Federal Circuit's 1984 Roche v. Bolar decision.

       As we know, that decision was reversed with
       Section 271(e)(1), which permits ANDA applicants to file and
       pursue their applications for regulatory approval while the
       relevant patents remain in force.

       The language of the Uruguay Round Agreements Act,
       the Food, Drug and Cosmetic Act, the Patent Code, and the
       October 1994 FDA rules implementing the Hatch-Waxman
       amendments leaves no room for doubt that ANDA applicants
       must submit patent certifications or recertifications with
       respect to timely filed patent information including revised
       patent expiration dates.

       An example of updated patent information used in
       the preamble to the FDA's October 1994 rules is a patent
       expiration date that has been extended under 35 U.S.C. 156. 
       The analogy to the redefined expiration dates of the Uruguay
       Round Agreements Act, Section 154(c) of the Patent Code,
       could not be clearer.

       Bristol-Myers Squibb, of course, recognizes that
       new Section 154(c) contains a provision limiting remedies. 
       In some circumstances, the remedies of 35 U.S.C. 283, 284,
       and 285 will not be available to a patentee who has
       benefitted from the redefinition of patent term.

       The statutory language is specific to these
       sections of the Patent Code.  Nothing in the language limits
       a patentee's remedies and rights under Section 271(e) and
       under the Food, Drug and Cosmetic Act.

       As noted previously, this is entirely reasonable,
       in view of the benefits derived by ANDA applicants from the
       1984 Hatch-Waxman amendments.

       It cannot reasonably be argued that Congress
       overlooked the ANDA approval process when it enacted the
       limitation of remedy section of the Uruguay Round Agreements
       Act, Section 154(c).  To the contrary, Section 271(e) was
       examined, it seemed, by the conforming amendments and its
       fundamental provisions remain unchanged.

       In filing ANDAs and seeking tentative ANDA
       approvals before patent expiration date, ANDA applicants are
       availing themselves of the benefits of 35 U.S.C. 271(e).  It
       is unreasonable to argue that ANDA applicants should be
       afforded the benefits of 271(e)(1), while at the same time
       denying pharmaceutical patentees the rights afforded by
       271(e)(4) and by the patent certification provision of the
       Food, Drug and Cosmetic Act.

       All of these provisions were enacted as part of
       the 1984 Hatch-Waxman amendments and must be given their
       plain meaning.

       The PTO raises the issue of what information
       related to substantial investment should be included in the
       patent certification by an ANDA applicant.  Each ANDA
       applicant will determine for itself the appropriate
       certification to make and the appropriate information to
       include in its notice to the patent and NDA holders.

       Sufficient information must be included in the
       notice to allow the patentee to determine whether an
       infringement action is appropriate.  It should be emphasized
       with respect that it is for the courts, not for the FDA, to
       interpret the relevance and meaning of substantial

       Submissions by ANDA applicants to FDA that do
       address substantial investment are not relevant to any issue
       that the FDA should be considering.

       Procedural issues relating to the PTO
       certification or verification of redefined patent expiration
       dates for inclusion in the Orange Book are also raised by
       the PTO notice.  Bristol-Myers Squibb appreciates the
       willing of the PTO to participate in this process and
       suggests that two avenues be available to NDA and patent
       holders for having their redefined expiration dates listed
       in the Orange Book.

       Either the NDA holder can bring the information to
       the attention of the FDA in accordance with existing FDA
       rules or the NDA holder can request the Patent Office to
       certify or verify the redefined date to the FDA.

       PTO certification or verification should not,
       however, be a prerequisite to inclusion of the patent date
       in the Orange Book.

       The two avenues suggested are those currently
       available to NDA and patent holders with respect to 156
       extensions.  Current practice is for the Patent Office to
       copy FDA on notices of grant of Section 156 extensions and
       the FDA revises the Orange Book accordingly.

       Procedure here is not believed to be the central
       issue, however.  From the perspective of NDA and patent
       holders, the availability of some procedure that ensures a
       prompt updating of the Orange Book to reflect patent
       expiration dates, redefined by the Uruguay Round Agreements
       Act, is what is needed, followed by implementation of the
       patent certification and recertification requirements of the
       Food, Drug and Cosmetic Act and the FDA rules.

       I was pleased to hear the acknowledgement, what I
       consider to be an acknowledgement, by the gentleman from
       Mylan, that the law as it now stands dictates these results. 
       I have no comments on a legislative change, but I
       respectfully suggest that the law as it now stands is as I
       have laid it out.

       If I have some time left, I would also like to
       address some brief comments to the relationship of patent
       term extensions under 156 and the redefinition of patent
       terms under new Section 154.

       When Congress enacted the Uruguay Round Agreements
       Act, it substituted a new Section 154 for the present
       section of the Patent Code.  Both the newly enacted and old
       sections 154 defined the term of a utility patent.  New
       Section 154, now defines a patent's original expiration
       date.  The language of Section 154(c) is all-inclusive and
       it should not be read as though it excluded one group of
       patents, i.e, patents that have been previously extended
       under Section 156, due to regulatory review.

       There is no statutory justification for such an
       exclusionary interpretation and no logically consistent
       position that would support it.

       Section 156 of the Patent Code, which was not
       substantively amended by the Uruguay Round Agreements Act
       provides patent term extensions to a small group of patents. 
       Its purpose was to remedy an inequity in useful patent term
       between regulated products and unregulated products.

       The Uruguay Round Agreements Act, Section 154(c),
       the new Section 154(c), has an entirely different purpose. 
       The purpose is to provide a minimum -- I emphasize the word,
       minimum -- patent term of 20 years.  There is nothing in the
       Uruguay Round Agreements Act that indicates that the
       Congress intended to recreate a disparity by defining a new
       potentially larger term for patents generally, but excluding
       patents that have been extended under 156.

       Thank you very much.

       COMMISSIONER LEHMAN:  Thank you very much.  If
       anything, we have been hearing that some people don't think
       that the 20 years from filing is enough.

       I am agreeing with your last comment.

       Next, Robert F. Green.

       MR. GREEN:  Mr. Secretary, distinguished panel. 
       My name is Robert F. Green.  I am a partner with the law
       firm of Lodi, Point & Mer [phonetic], Chicago, Illinois.  I
       am here today on behalf of Novopharm Limited, Canada's
       largest generic pharmaceutical manufacturer, as well as its
       U.S. subsidiary, Novopharm, Inc.

       I wish to address really only two points today. 
       ANDAs filed prior to June 8, 1995, and the question of
       tacking of a 156 extension onto a GATT term.  

       To put this into context, I have personally looked
       at the Orange Book, as to all listed patents, and have
       determined that over 200 listed patents fall into the
       category of having an extended term as a result of the GATT
       provisions.  This is obviously a significant concern to the
       generic pharmaceutical industry.

       There has been a lot of talk here as to what law
       has changed and what law has not changed, as a result of
       GATT.  I say that to understand answer to that, we have to
       first understand what the law, in fact, is.

       How does a patent become an obstacle to approval
       of an ANDA?  I think we all know that there is registration
       procedure by which an NDA holder registers with the FDA a
       given patent.  Then, when an ANDA applicant comes along,
       there is a certification requirement under 21 U.S.C.
       355(j)(2)(A)(7), and it says that "that ANDA applicant must
       certify with respect to any patent that is then in
       existence, the date upon which such patent will expire." 
       That is a quote.

       The FDA, then, proceeds to examine the ANDA,
       ultimately determines whether it is approvable or not and
       then must face the question of what is the effective date of
       that approval if there is a patent certification under
       paragraph 3.

       When an ANDA applicant under paragraph 3 makes a
       certification, the FDA is then mandated to make an
       approvable ANDA effective in accordance with the provisions
       of 21 U.S.C. 355(j)(4)(B)(2), which requires that the
       approval be made, "effective on the date certified under
       subclause (3)."

       Thus, for any ANDA filed prior to June 8, 1995,
       containing a paragraph 3 certification of expiry based upon
       that original 17-year patent term, the statute permits the
       FDA to delay approval only until the passage of that expiry

       This must be taken, I think, also in concert with
       the provisions of 35 U.S.C. 271(e)(2), the patent
       infringement provision which states that it is an act of
       infringement to submit an ANDA, "if the purpose of such
       submission is to obtain approval to engage in the commercial
       manufacture, use, or sale of the drug claimed in a patent or
       the use of which is claimed in a patent before the
       expiration of such patent."

       The sole potential act of infringement, then, is
       the submission of the ANDA.  Without a doubt, the submission
       of an ANDA prior to June 8, 1995, seeking approval to market
       upon the expiration of that original 17-year patent term is
       not then an act of infringement.

       We submit that there is no statutory authority by
       which the FDA can seek, request, or demand an amended patent
       certification because the term of a certified patent has
       been changed through the implementation of subsequent
       legislation, including the URAA.  

       Congress was conspicuously quiet on this point
       when it did enact URAA.  Accordingly, it is our position
       that with respect to any ANDA submitted prior to June 8,
       1995, seeking approval to market a product, upon expiration
       of the original 17-year date expiry date of a patent, it is
       only that expiry date that can govern with respect to that
       complete ANDA.

       FDA has no statutory basis upon which to require
       recertification, as suggested by the gentleman from
       Bristol-Myers Squibb.  New expiration dates would be
       modified under URAA.  The FDA is authorized by statute to
       delay the effective date of approval for any such ANDA only
       until the "date certified," by the ANDA applicant, which
       would the original 17-year expiry date.

       To take a position otherwise would be to interpret
       the URAA as requiring a retroactive application which
       specifically was not authorized by Congress.  I would like
       to quote from a 1994 U.S. Supreme Court decision, Landgraf
       v. USI Film Products.  In this decision, the Court was
       addressing whether a statute in part should be applied

       From the Court itself:  "The presumption against
       retroactive legislation is deeply routed in our
       jurisprudence.  It embodies legal doctrine centuries older
       than our Republic.  Elementary considerations of fairness
       dictate that individuals should have an opportunity to know
       what the law is and to conform their conduct accordingly. 
       Subtle expectations," such as that of an ANDA applicant
       filed before June 8, 1995, "should not be lightly disrupted. 
       Retroactive legislation presents problems of unfairness that
       are more serious than those posed by prospective legislation
       because it can deprive citizens of legitimate expectations
       and upset subtle transactions."

       James Madison argued that retroactive legislation
       also offered a special opportunity for the powerful to
       obtain special and improper legislative benefits.  According
       to Madison, bills of attainder, ex post facto laws, and laws
       impairing the obligations of contracts were contrary to the
       first principles of social compact and to every principle of
       sound legislation, in part because such measures invited the
       influential to speculate on public measures to the detriment
       to the more industrious and less informed part of the

       Continuing, the Court said:  "A requirement that
       Congress first make its intention clear help ensure that
       Congress itself has determined that the benefits of
       retroactivity outweigh the potential for disruption or
       unfairness.  Since the early days of this Court, we have
       declined to give retroactive effect to statutes burdening
       private rights unless Congress had made clear its intent. 
       If the statute would operate retroactively, our traditional
       presumption teaches that it does not govern absent clear
       congressional intent favoring such a result."

       Our position on that is, it does not exist in this

       If I could have 30 seconds to address the question
       of the 156 extension?

       Apples and oranges.  I harken back to the days, I
       can still remember, in high school algebra where, to make
       the point that you can't add X and Y, the instructor said,
       "Apples and oranges can't be added together."

       A Section 156 extension is an extension that is
       "specific to an approved product."  The extended term under
       GATT is with respect to all claims of a patent but subject
       to the substantial investment inroad, if you will, that can
       be made by one who has undertaken a substantial investment
       prior to June 8, 1995.

       The rights derived by each are different and can't
       be added together.  I would say, as one point in fact, if
       you look at the Orange Book for the product, Misoprostol,
       this patent contains claims that cover the product per se as
       approved, as well as other claims.  It currently is in
       existence only because of the Section 156 extension.  

       What is the outcome if we add a GATT extension to
       that?  Do the claims in the application that are not
       directed to the approved product then become reincarnated,

       I think this amply indicates that these are apples
       and oranges and cannot be added back to back.  

       I would entertain any questions.

       COMMISSIONER LEHMAN:  Could you tell me a little
       bit about Novopharm?  What is the size of the company?

       MR. GREEN:  It is the largest pharmaceutical
       company, generic pharmaceutical company, in Canada.  I think
       in terms of both dollars, sales, as well as in terms of
       prescriptions filled.  

       It has a substantial presence here in the United

       COMMISSIONER LEHMAN:  What is the annual revenue?

       MR. GREEN:  The President of Novopharm, Inc., is
       actually in the audience.  I would have to defer to him.

       Bob, if you have an answer?

       THE PRESIDENT OF NOVOPHARM:  The annual sales on a
       global basis is in excess of $500 million.

       COMMISSIONER LEHMAN:  Does Novopharm have a
       substantial share of the Canadian market?

       MR. GREEN:  Yes.  It is the largest generic
       pharmaceutical manufacturer.

       COMMISSIONER LEHMAN:  Would you say that more
       generic pharmaceuticals are sold in Canada than in the
       United States?

       MR. GREEN:  At this time, I would say that is
       certainly true because of the compulsory licensing situation
       that was in Canada prior to --

       COMMISSIONER LEHMAN:  I would like to leave you
       with a thought, and that is that at the present time -- we
       are dealing with intellectual property, here.

       MR. GREEN:  Yes.

       COMMISSIONER LEHMAN:  At the present time, the
       Government of Canada is applying exemption to the NAFTA
       Agreement, so-called cultural exemption, to basically
       discriminate against U.S. program suppliers who are trying
       to exercise their intellectual property rights there.

       They have just recently taken the country music
       channel off Canadian cable.  I think they put restrictions
       on CNN.  

       I would have to say that the United States has an
       obligation to protect our intellectual property-based
       industries.  Quite clearly, we have had great difficulty
       with Canada in the past.  You referred to the compulsory
       license that we had.  Fortunately, we have gotten rid of
       that, but obviously there are residual effects.

       The $500 million in sales that Novopharm is
       experiencing in Canada are no doubt a result of their
       ability to seize control through a compulsory license of
       U.S. patents.

       And I would say that, under the NAFTA agreement,
       we are not limited in our ability as we are under GATT, to
       retaliate against Canada for so-called cultural restrictions
       that they place on us.

       So, we will take a very close look at this, but I
       am glad that you have brought to our attention the existence
       of Novopharm.  I have to say that I am completely
       unsympathetic --


       COMMISSIONER LEHMAN:  -- to a Canadian company who
       wants to come to the United States when they are trying, and
       have a history, of trying to keep United States exports out
       of Canada, and then ask for us to give them favorable
       regulatory treatment here.

       I think that, since your CEO is here, he might
       want to make the Canadian parliament and government aware of
       that, because I can assure you the United States is not
       going to look favorably upon Canadian products entering into
       the United States in any area, particularly that involving
       intellectual property, when we are receiving this kind of
       treatment in Canada.  Thank you.

       MR. GREEN:  I appreciate that, Mr. Secretary, and
       simply say that as far as my presentation here is concerned,
       it certainly is not limited to the fact that Novopharm is a
       Canadian company.  I think the concerns expressed here, as
       well as the legal analysis applied to any U.S. generic
       pharmaceutical manufacturer equally.

       COMMISSIONER LEHMAN:  Yes, we might want to take a
       look at the difference between the two companies.  Canada
       has decided to distinguish between its intellectual property
       rights holders and others.  We can do the same.  Okay?

       MR. GREEN:  Again, I would say, don't hold
       Novopharm to the intent of the Canadian government --

       COMMISSIONER LEHMAN:  Well, it is not me who is
       doing it.  I am sorry, it is the Canadian government.

       MR. GREEN:  Yes.  Thank you.

       COMMISSIONER LEHMAN:  Okay.  Next, I would like to
       call on Lew Engman, please.

       MR. ENGMAN:  Mr. Secretary, members of the panel,
       my name is Lew Engman.  I am the President of the Generic
       Pharmaceutical  Industry Association, which is based in

       Our members probably have the most at stake in the
       outcome of these hearings.  They have a very significant
       number of ANDAs, which are pending and have been filed with
       the FDA.

       Al Engleberg, who worked with you and others in
       helping to fashion the 1984 Act, will make our oral

       MR. ENGLEBERG:  My name is Alfred Engleberg, and I
       am an attorney in private practice in Greenwich,

       I would like to address what I believe are four
       key issues that arise out of the URAA, in relationship to
       the 1984 Waxman-Hatch legislation.  That are, in order, the
       status of patent term extensions granted prior to June 8,
       1995; the status of pending ANDAs, which are pending before
       June 8, 1985; what happens to ANDAs which are filed after
       June 8, 1995; and lastly, the status of the Orange Book.

       First, with respect to patent term extensions,
       which apparently have been at the back of everybody else's
       agenda, and so I moved them up on mine so that we can talk
       about them.

       There is no question whatsoever that all of the
       patent term extensions granted by the Patent Office up to
       now have been based on the 17-year patent term and based on
       specific limitations that were calculated based on an
       expiration date after 17 years.

       I note specifically that the Patent Office, in its
       current procedure, issues something called the Notice of
       Final Determination and a Certificate of Extension, in
       connection with each application.  If you look at those, you
       will find that in each case, consideration is given to
       Section 156(c)(3) of the extension provisions which is the
       so-called 14-year cap, and the number of days which is
       listed in the Certificate reflects the cap.

       The important point with respect to that is, that
       you cannot after June 8th simply take a Certificate of
       Extension or the days in the Certificate of Extension and
       tack it onto a 20-year term.  

       It does not work.  It would be improper.  It would
       come up with the wrong answer in every many situations.

       That leads to the question, what is the status of
       these prior extended patents?  Are they entitled to any

       I think the answer is that when Section 156 was
       amended in the URAA, no amendment was made to change the
       limitation that says that a patent can only be extended
       once.  Nor was any amendment made with respect to the
       question of whether or not an application could be filed
       after 60 days from the time of an NDA approval.

       So what we have is a situation where those
       amendments which were required for retroactivity were simply
       not made.  Now, let me state clearly, because I think it is
       the fact, that no one who has gotten a patent term extension
       up to June 8, 1995, is going to be deprived of anything. 
       They got exactly what they were entitled to under
       Waxman-Hatch and they are going to get exactly what they are
       entitled to under the URAA.

       Their patents are going to last for at least 20
       years, or 17 years, whichever is longer, and they may indeed
       last longer than that if the extension lasts longer than

       But if you go back and recalculate and reissue
       Certificate of Extensions, which is what you would have to
       do, you will be violating the statute.  You will be issuing
       a second extension.  You will be accepting an application
       after the 60 days from the approval and you will be
       upsetting the entire scheme that was created.

       After June 8, 1995, which is often the case when
       new legislation comes along, people's rights will be
       different and it will be determined at the time the
       application is made.  But I think you are powerless to do
       anything, based on the statute.

       Turning now to pending ANDAs --

       COMMISSIONER LEHMAN:  Would you expect that there
       would be litigation?  I mean, I assume they could always be
       litigated.  You say we are powerless, I mean --

       MR. ENGLEBERG:  I think as long as there is a
       dissatisfied party and enough money at stake, there will be
       litigation on every issue we are discussing here today.

       The question is, what should the regulators do in
       the first instance, giving maximum respect to the language
       and intent of the two statutes involved?   And I think that
       is all we are discussing.

       I believe the question can arise when someone
       tries to lift a date in the Orange Book in some way that the
       FDA disagrees with.  It could arise if the Patent Office
       ends up certifying the dates, there.  There are any number
       of ways it can arise.  But it will arise, we can be sure of

       Now, let me just say, we disagree entirely with
       those who have said that we need a legislative fix, here. 
       No two statutes ever exquisitely blend together.

       But if you look at the purpose and you look at the
       language and you look at what is actually demanded by
       statute and what has been done by regulation and what can be
       fixed by regulation, you can come to some very logical

       As to the pending ANDAs, we can all agree that
       every pending ANDA, that is, every ANDA filed before June
       8th, had a correct certification.  It was correctly
       certified under a paragraph 3 certification that a patent
       would expire as of a certain date.

       There is absolutely nothing in the Waxman-Hatch
       legislation, the statute as passed, that requires an
       amendment to a certification.  The rules with regard to an
       amendment are just that.  They are rules and regulations
       enacted by the FDA, based on their interpretation of what
       would be consistent and proper in carrying out the conceived
       purposes of Waxman-Hatch.

       They now have to look to see if the URAA requires
       them to make an amendment to their regulations in that area
       in order to make these two statutes consistent.

       We get, then, to the question of what date is this
       pending ANDA entitled to and what date is it entitled to as
       an effective date for a market date?

       The answer, I believe, which is somewhat different
       than what you have today, is that the provisions of Section
       532 URAA, which grandfather in the parties who made acts or
       substantial investment is, in fact, a self-executing statute
       with respect to pending ANDAs.  That there is no discretion. 
       That they are entitled to that statutory license, as a
       matter of law.

       Let me tell you why.  The Section 154(c)(2) and
       (3) of URAA really only has two requirements.  It says that
       if you were engaged in acts or you made a substantial
       investment prior to June 8th, which became infringing by
       virtue of the law coming into effect on June 8th, you get
       the relief.

       Let's look at an ANDA.  An ANDA was filed.  It was
       based on certain acts.  Let's forget about investment.  It
       was based on certain acts by the applicant, conducted before
       June 8, 19885.  Those acts were not infringing by virtue of
       271(e)(1).  They were exempted under the so-called Roche v.
       Bolar exemption.

       Why?  Because the applicants sought approval as of
       the expiration date of the patent.

       On June 8th, those acts will become infringing. 
       Why?  Because the certification in the ANDA says, "I want
       approval as of the date I previously certified."  That date
       is no longer the expiration date of the patent and Roche v.
       Bolar no longer protects them.

       But, 532 of URAA does, and says, "You are entitled
       to go on the market."  That is the statutory scheme.

       What does the FDA do about it?

       The FDA requirements, as they now stand say that a
       party has to amend a certification if he believes or if his
       original certification becomes incorrect, or if he believes
       it is incorrect.

       Well, it is not incorrect.  It correctly certifies
       that that party wants to go on the market as of the original
       expiration date because that is precisely what the URAA says
       he is entitled to.

       So, I would submit to you that, in fact, the 
       FDA does not even have to amend its regulations.  It can
       interpret the existing regulations to say that no mistake
       had been made and no correction is required.

       I would suggest, however, and we think it makes a
       little more sense, to put it in writing, and for purposes of
       clarity, to say that those who had pending ANDAs are
       entitled to the relief of URAA and, therefore, need not

       Now, what does this do to the patent owners?  Is
       this unfair?  

       No, it is not unfair because there is nothing in
       Waxman-Hatch that takes a single Title 35 remedy away from
       patent owners.  If the FDA says that a pending ANDA can go
       on the market, as of the original patent approval date, the
       patent owner can sue for patent infringement.

       He can get a preliminary injunction.  He can test
       the water on whether or not these acts or investments
       qualify for the statutory relief under URAA, and in fact,
       this is the only we are going to get this issue to court in
       a timely fashion.

       What Pharma and Bristol and others are trying to
       accomplish here is to create an administrative maze, throw
       up their hands, say "we got a technical problem; you need a
       legislative fix," but what they are really trying to do is
       to moot out the issue by time and to prevent the Geneva
       generics of the world, who have an approval in-hand today,
       to go on the market on August 8th.  To block that approval,
       to tie it up in an administrative boggle, so that they get
       an extra six months, even though the URAA says you are not
       entitled to that six months.

       You can't let that happen, if you follow the
       mandate of the Administrative Procedure Act, and enact
       regulations that are consistent and harmonize these two

       What about ANDAs after June 8th?  From June 8th
       on, every patent has a new expiration date.  It is
       undeniable.  That is what the URAA does.  It creates a new
       patent expiration date.

       And for an ANDA filed after June 8th, it is
       unclear whether that applicant will be entitled to the
       benefit of URAA 532, the statutory license, or not.  Once
       before, the FDA was faced with a situation of how to
       interpret a paragraph 4 certifications and concluded in the
       instance of inequitable conduct that the statutory scheme of
       Waxman-Hatch didn't make any sense unless you permitted
       paragraph 4 certifications for inequitable conduct.

       I would suggest to you that it wouldn't make any
       sense in this instance other than to make it a paragraph 4
       certification for those who think they made a substantial
       investment or engaged in acts before June 8th, and it would
       work very well.

       Very simply, people would file an application,
       just as they would certify non-infringement or
       unenforceability.  They could certify non-enforceability by
       virtue of statutory license.  They would put the patent
       owner on notice at the beginning of the ANDA process, and
       you would let the courts litigate the issue of substantial
       investment while the ANDA is pending.

       It is fair to the patent owners.  It is fair to
       the ANDA holder.  It is fair to the public.  It resolves the
       issue at the earliest possible moment.

       I see my time is up.  I have not had time to
       address the Orange Book issue.  I will be happy to answer
       any questions.

       COMMISSIONER LEHMAN:  You can certainly supply any
       further information in writing.

       I would like to ask you a question.  That is, Mr.
       Barrack indicated that, in his view, because Congress chose
       to attack this problem by restricting the remedies available
       to the patent holder and leaving them only with certain
       remedies, mainly the right to equitable remuneration, that
       therefore clearly every other right that attaches to the
       extended patent would apply.

       How do you respond to that?  I mean, that would
       indicate that if you have a 20-year term, you have a 20-year

       MR. ENGLEBERG:  What Congress did was say:  You
       have a 20-year term, but you also have a compulsory license
       for those people who acted in reliance on current law.  That
       is what the statute says.

       For the interim period, we are going to grant the
       compulsory license to those people caught in the middle.  We
       are going to grandfather them, and those people are only
       going to pay equitable remuneration.

       So the scheme set up by Congress to protect
       against the retroactive damage that the change in patent law
       could cause to occur contemplates that there will be
       competition, contemplates that there will be no exclusivity. 
       And what Mr. Barrack is proposing is that the generic never
       get up to bat on that issue because the ANDA process and the
       FDA will bar the door.

       COMMISSIONER LEHMAN:  Yes, that is precisely the
       point, though.  That since they took a very selective --
       they used a very surgical drafting technique, I think his
       point is -- and they did not modify the FDA's powers in this

       MR. ENGLEBERG:  The answer is, they didn't have to
       modify the FDA's powers as to pending ANDAs because pending
       ANDA's, as I just said in my remarks, already had correct
       certifications in them.  There is no statutory requirement
       for amendment.  It is a matter of regulation.

       COMMISSIONER LEHMAN:  I understand what your point

       MR. ENGLEBERG:  If you want to carry out -- let me
       just say one thing.

       There is no statutory history, as we all well
       know.  There was no discussion of drugs.  There was no
       discussion of a carve-out or giving the drug companies back
       anything that they may or may have lost in 1984.

       This poor, plain, and simple was a statute enacted
       due to the requirements of the TRIPS text and the GATT
       treaty, and to argue that anyone intended any kind of
       particular benefit for the drug companies, or for anyone
       else for that matter, is just not the case.

       I mean, this can and should be harmonized, and it
       should not be used to create an administrative net for
       people to hide behind so that these issues cannot be
       litigated in a prompt fashion and in the public interest.

       COMMISSIONER LEHMAN:  Thank you very much.

       Next, I would like to ask Robert Armitage to come
       forward, please.

       MR. ARMITAGE:  Good afternoon.  My name is Robert
       Armitage.  I am here on behalf of the American Intellectual
       Property Law Association.  Our address is 2001 Jefferson
       Davis Highway, in Arlington, Virginia.

       We are an organization of largely patent lawyers,
       and we are not in the pharmaceutical business in any
       significant way.  Nonetheless, we are here today because we
       believe that there are important issues of patent policy.

       I might begin by making a slight digression to
       state that the AIPLA strongly opposes H.R. 359.  We believe
       that pharmaceutical companies and others using the patent
       system should not be given the option of either a 20-year or
       17-year patent term, whichever is longer.

       Having said this, we also have come to realize
       that in the making of the Uruguay Round Agreements Act,
       there were certain provisions in Section 156 in the way of
       technical amendments that were not addressed and should have
       been addressed and our Association has now come to the
       conclusion that it is time for the administration to take a
       close look at the structure of Section 156 beyond the fact
       that there are technical deficiencies as a result of the
       Uruguay Round Agreements Act.

       It is quite clear to us that with the more
       liberal, in certain respects, extension provisions available
       in Europe and Japan, and the seeming endless series of
       special bills in Congress seeking extensions in individual
       cases that we have in the way of the original 1984
       compromise, it is perhaps not now adequate in light of
       experience in developments over the past decade.

       Let me say that we come to this, trying to get our
       compass to point to the north.  Having listened now to seven
       or eight speakers, I find that if you follow all the
       arguments, you can spin round and round and round.  We
       clearly believe in just a few, simple, basic principles. 
       Namely, that drugs under the Uruguay Round Agreements Act,
       more or less, should be treated like any other form of
       patented technology.

       In the 1984 Waxman-Hatch Act, we believe there was
       a fairly simple role for the patent information being
       inserted into NDAs.  Namely, under that Act, one was not
       entitled to get on the market until patents had expired. 
       Therefore, in the NDA application itself, the NDA applicant
       was required to list those patents whose expiration date was
       to be relevant.

       The other seemingly obvious principle, to us, is
       that the patent certification provisions in the ANDA were
       simply designed to establish whether the ANDA applicant
       would be challenging those patents certified or would be
       content to wait until the patents expired to go on the

       Now, if these are the basic principles that the
       ANDA Act itself was designed to hold up generic competition
       under the ANDA law, until patents had expired, then it seems
       to us that the FDA simply must accept new patent information
       under the Uruguay Round Agreements Act.  

       This would be the same if a 156 extension were
       granted.  The FDA would need to accept that information.  It
       would be the same if the patentee were forced to file a
       terminal disclaimer.  Certainly, no one would argue that a
       generic applicant ought to be held up under an outdated
       certification for a patent that had been terminally

       Next, we believe that it is obvious, therefore,
       that the FDA needs to require in order for the public notice
       provision to be satisfied that there be a prompt submission
       of new patent information under the URAA.  

       Also, quite clearly, if there is submission of new
       patent information, it seems to us equally obvious that the
       FDA should provide notice to ANDA applicants of the need to
       provide a recertification based on a new patent information
       in the NDA being referenced.

       We then come to the suggestion that has been made
       earlier that there ought to be a double listing of patent
       expiration dates.  We do not believe that this is an ANDA
       issue, at all.  It seems to us that if one wishes to file a
       complete new drug application, one is entitled to get on the
       market at any time during the patent term.  It is a matter
       of patent infringement, not a matter of FDA law.

       However, in a situation where someone seeks the
       privilege of marketing under the ANDA, the statutory
       principle again seems to us to be quite clear and that is
       one must wait until the expiration date of the patent and,
       therefore, regardless of the level of investment that has
       been made, substantial or otherwise, it is simply not

       Now, one of the main reasons that we decided as a
       group of patent and other intellectual property lawyers, to
       testify today, was to make some comments on what the role of
       the Patent and Trademark Office ought to be in these

       I can summarize that role in a single word, or
       perhaps two words.  None, or almost none.

       Basically, the Patent and Trademark Office does
       not have statutory authority over issued patents.  There are
       certainly special situations, such as interferences and
       reissues and patent extension provisions, but basically the
       role of the PTO in these matters, we believe, is a passive
       rather than an active one.

       We do believe that the FDA should have the benefit
       of the expertise of the PTO, if the FDA reaches a point
       where receiving new patent certifications or receiving new
       patent information causes ambiguities or uncertainties in
       terms of how the FDA ought to act, but certainly, in our
       view, the PTO should not involve itself in a proceeding
       involving issued patents in which it has no statutory

       One final comment, I will make, is in terms of the
       patent expiration date that we believe should be calculated
       based on the Uruguay Round Agreements Act.

       Certainly, anyone who has heard the testimony
       heretofore today, will realize that this is a legal issue
       that ultimately will be determined by the courts.  We
       believe, however, that the best posture for this, to be
       determined by the courts, is for the FDA and the Patent
       Office to recognize that certain statutory principles,
       namely the following, are involved.

       One is that under Section 156, patent extensions
       have been granted for a period of time certain.  They are
       not extensions granted to a date certain.

       Second, under the Uruguay Round Agreements Act,
       patents in force on June 8, 1995, were not extended.  The
       statutory terms for those patents were simply reset under
       the Act.  It was not a matter of granting an already
       extended patent, a second patent extension.

       Third, we can see no other logical outcome of
       these two facts, than for the Section 156 extension to apply
       as it always has applied to the original expiration date,
       which now would become the expiration date as reset under
       the URAA.

       Notwithstanding the comments of Pharma, we further
       see no basis for the Patent Office, the FDA, or anyone else
       in a regulatory setting, to arbitrarily chop these
       pharmaceutical patent terms to 14 years from the date of the
       regulatory approval.

       We come to this conclusion because it is clear to
       us that Congress decided, in its wisdom, that patents across
       the board would be extended for the greater of 17- to
       20-years, affording a number of patentees additional periods
       of protection of, in some cases, one to two years.

       And we see nothing in the legislative history and
       nothing in the statute to suggest that pharmaceutical
       patents are somehow different and those one- to two-year
       extensions that applied in the case of other patents, as a
       result of the resetting of patent terms under the GATT,
       would not also apply in the pharmaceutical industry.

       We have, on a question-by-question basis, in our
       written comments provided answers and, at this point, I
       would end my oral comments, in the absence of questions.

       COMMISSIONER LEHMAN:  Thank you very much.  I
       apologize.  I am trying to consult with Mr. Kirk.

       Your comments have been really helpful.  If I have
       been talking to him, it is because your comments are so
       helpful, I am trying to use them to sort through all of

       Are there any other questions?

       [No response.]

       MR. ARMITAGE:  Thank you.

       COMMISSIONER LEHMAN:  Thank you very much.

       Next, Mr. Frank Lasaracina.

       MR. LASARACINA:  Thank you, and good afternoon. 
       My name is Frank Lasaracina.  I am Vice President of
       Business Development for Ciba Pharmaceuticals.  We are based
       in Summit, New Jersey.

       Ciba is a research-based company with interests in
       agricultural chemicals, pharmaceuticals, as well as
       industrial chemicals.  I would add that on the
       pharmaceutical side, Ciba has interests in patent protected
       products, as well as in generics.

       As a matter of fact, Geneva Pharmaceuticals, which
       was mentioned a moment ago, is a Ciba company.

       We certainly appreciate the opportunity to be able
       to present oral testimony to you this afternoon to talk
       about the issues surrounding the GATT transition provisions. 
       As we see it, these transitional provisions were designed in
       such a way so as to permit extension of certain patent
       rights to patent holders, while at the same time permitting
       generic products to enter the marketplace.

       Should the transitional provisions not be able to
       function, we would be of the opinion that that would not be
       in agreement with the intent of Congress.  And this is what
       I would like to address in my brief comments.

       Let me begin by affirming my company's strong
       reliance on intellectual property rights.  These strong
       intellectual property rights give us the opportunity to grow
       and sustain our business.  Without those rights, we would
       not be able to.

       We believe that a strong global system is
       essential for our company, for our industry, and we believe
       it is good for the United States economy, in general.          For
       these reasons, we continue to support the provisions
       embodied in the GATT treaty.

       The problem we see is where the transitional
       provisions intersect with Waxman-Hatch.  As you know, the
       ANDA process is governed by Waxman-Hatch and it is where
       that intersection occurs.  The possibility exists that a
       company which has made a substantial investment prior to
       June 8th might, because of a certain interpretation, be
       prohibited from entering the market during this transitional

       It seems to me that if a generic product company
       is prohibited from entering the market during the
       transitional phase, then by definition, for a generic
       industry, there is no transitional phase.  Lacking language
       to the contrary, we think that all industries were intended
       to be included.

       COMMISSIONER LEHMAN:  Can I ask you a question to
       try to clarify how this is going to work?  Mr. Armitage said
       there really isn't a role for the Patent and Trademark
       Office here, at all.  The regulatory role is really at the

       MR. LASARACINA:  Yes.

       COMMISSIONER LEHMAN:  Because the FDA is the
       entity which gives marketing approval for the generic
       product when the patent expires.

       MR. LASARACINA:  Yes.

       COMMISSIONER LEHMAN:  So what is going to happen
       here is that the FDA, in effect, is going to have to
       interpret this statute and is going to have to decide what
       requirements the statute places on it in a situation in
       which the patentee would arguably be able to say that their
       patent had been extended and is now a 20-year patent, which
       is longer than the term that they would have had, under

       I always want to say, Wax-Hatchman.  I'll bet I
       have even said that to Senator Hatch, which doesn't go over
       too well, sometimes.


       COMMISSIONER LEHMAN:  So the way this is likely to
       be played out, tell me if I am wrong -- what is going to
       happen is that at some point --

       The FDA has a lot of control here, but let's
       assume that the FDA takes the position articulated by the
       generic pharmaceutical association.  They will then issue at
       the time the drug would have become available for marketing
       under Hatch-Waxman, under the old law, they will say:  Okay,
       you have the right to go on the market.

       Now, I guess we all agree, that there would be a
       royalty that would be paid.  But the question is, whether
       they can go on the market at all.

       At that point, if the patentee doesn't like that
       result, then he would sue for infringement and say:  No, the
       new law gives me exclusive rights, here, and so you can't go
       onto the market.

       Am I interpreting the way this is likely to play
       out, factually, correctly?

       MR. LASARACINA:  Well, let me clarify, and I
       apologize.  I didn't mention earlier, I am here only
       representing Ciba.

       COMMISSIONER LEHMAN:  I maybe should have asked
       Mr. Armitage this.

       MR. LASARACINA:  Our concern, and several of the
       questions you asked, which I will not address here orally
       but will be addressed in written testimony and delivered
       tomorrow, it is possible that one of the ways this may
       function would be to require recertification of the
       paragraph 3 in the ANDAs.

       It is possible that we would be required to take
       pending ANDAs and recertify as to the later, only, the later
       date, ignoring the pre-GATT date.

       Under those circumstances, it seems to me, it
       might occur that we would be prevented from entering the
       marketplace in this so-called transitional period, and that
       is our great concern.

       COMMISSIONER LEHMAN:  You are speaking with your
       generic hat on, now.

       MR. LASARACINA:  Yes, I am, yes.

       COMMISSIONER LEHMAN:  And if that happens, then I
       assume that what you will do, or if you decide not to do it
       because you don't want to litigate it, other companies will
       do -- well, you wouldn't be the one who would do it.  The
       suit would come from the patentee.  They would sue for

       And at that point, the courts would resolve this

       MR. LASARACINA:  What we see is, if we were, for
       example, to recertify, and if we were to recertify only at
       the extended date, we would not be able to come to the
       marketplace.  Or, I should say, we wouldn't come to the
       market place prior to expiration of the extended date.

       COMMISSIONER LEHMAN:  But assuming the FDA takes
       your view, so the way this will be tested is that then there
       will be an infringement lawsuit and the court -- well, that
       is my point.

       MR. LASARACINA:  We have got a recommendation.

       COMMISSIONER LEHMAN:  Which is great, but I am
       just trying to envisualize, you know, what the various --
       how this will play out and who has responsibility for what. 
       And it sounds to me like we don't very much responsibility
       in the Patent Office itself, other than possibly to make
       some recommendation that might forestall litigation or make
       perhaps some recommendation to the FDA. 

       Of course, we have the FDA representative, here.

       MR. LASARACINA:  Yes, and we would tend to agree.

       We would recommend a minor modification to FDA
       procedure, which if implemented, we believe, would put the
       pharmaceutical industry, or specifically the generic portion
       of the pharmaceutical industry, on footing which is
       equivalent to what we think is the same as every other
       industry in the United States being effected here.

       So what we propose is a change to the paragraph 3
       certification, under Waxman-Hatch.  The ANDA applicant would
       certify to FDA that a substantial investment had been made
       prior to the June 8th cutoff date, and would certify further
       that the applicant had contacted the innovator company to
       inform them of such investment and such application being

       What this would do is, it would put the onus of
       clarifying the issue of substantial investment, what is it,
       has it been made, has it been made in the right time frame,
       as well as the issue of equitable remuneration, back out
       into the marketplace where the two parties should work
       together to amicably, hopefully, resolve those issues.  They
       may end up in litigation, as well, but we don't see that as
       a PTO issue and we see FDA's involvement being minor, only
       to the extent that regulation would be altered to allow this
       changed wording of the paragraph 3 certification, only.

       And then, we feel that the other forces in the
       marketplace would prevail.

       Now, in our written testimony, we are providing
       illustration of wording which we feel could implement this. 
       This is an option.  It is a proposal being made.  Certainly,
       there will be other.

       What we think is essential, though, is that
       generic pharmaceuticals be permitted the opportunity to
       commercialize the investments which have been made pre-June
       8, 1995.  

       The  mechanics of how we get there, there are
       people a lot more knowledgeable about that than I am.  I may
       be the only one presenting today who is not a lawyer.

       The mechanics are important, but I think what is
       essential is the outcome, as well.

       So in summary, we believe that the GATT
       transitional provisions were intended to extend certain
       patent rights to patent holders, but at the same time,
       permit generic marketing, if the requirements had been met. 
       I provided you with one option, which we think would
       function in such a way as to allow the generic industry to
       enjoy the rights and privileges and obligations that seem to
       us to have been bestowed on all other industries in the
       United States, as a result of the GATT implementing

       We believe that Congress really didn't intend to
       treat any one particular industry or industry segment any
       differently from all the rest.  We believe FDA has the
       authority to make this modification in its procedure.  We
       believe if such modification was to occur, that it would
       resolve the issue that we think, from Ciba's point of view,
       is important at this moment in time.

       As I said earlier, we will be submitting written
       testimony.  It will be coming in tomorrow.  It will address
       the questions which have been posed and more fully describe
       what I have spoken about, here.  Thank you very much.

       COMMISSIONER LEHMAN:  Anybody else have any

       [No response.]

       COMMISSIONER LEHMAN:  Thank you very much.

       MR. LASARACINA:  Thank you.

       COMMISSIONER LEHMAN:  Brian Foley, please.

       MR. FOLEY:  Good afternoon.  Brian Foley, and on
       behalf of McGovern & Associates, Greenwich, Connecticut.  My
       comments today will be limited to the effect of the patent
       term extension as a result of Section 156, on the question
       of whether a patent in force on June 8, 1995, as a result of
       such extension should have the extension added onto the
       longer of the 17- or 20-year patent term.

       In light of some earlier comments, I think I can
       be relatively brief.

       First, PTO's assumption is correct that the
       patents in force on June 8, 1995, are entitled to the longer
       of the 17 years from the issue date or 20 years from the
       date of the filing of the application.

       Second, the URAA uses the language, "patents in
       force," and does not distinguish the rights of the patent
       holder whose patent is in force on June 8, 1995, due to an
       extension under Section 156, in any way.

       Thus, it is clear that the intent is to treat
       patents in force as of June 8, 1995, due to a Section 156
       extension no differently than any other patents.  Thus,
       patents in force due to extension should be treated no
       differently and the first approach mentioned in the
       Commission's notice of this meeting is the correct one, to
       add the extension issued already by the PTO to the longer of
       the 17- or 20-year period.  Thank you.

       COMMISSIONER LEHMAN:  Thank you.  Next, Mr.
       Sandercock, please.

       MR. SANDERCOCK:  Good afternoon.  My name is Colin
       Sandercock.  I am with the law firm of Foley and Lardner in
       Washington, D.C.  We are at 3000 K Street N.W., Washington.

       I am testifying today on behalf of two of my
       clients, who are American inventors, American producers, and
       who have benefitted from the American patent system.

       I would like to begin by thanking the Commissioner
       and the distinguished panel and the PTO for this opportunity
       to comment on the effect of URAA on patents in force on June
       8, 1995, which are in force solely by virtue of an existing
       patent term extension under 35 U.S.C. 156.

       The Uruguay Round Agreements Act simply implements
       a new patent term calculation for patents in force on June
       8, 1995.  That is certainly something that has been echoed
       by several speakers.  Contrary to the suggestions of some,
       it does not constitute an extension.

       It should not be characterized as an extension for
       patents in force.

       At issue, then, are the terms of several patents
       that are in force solely because of the 156 extension.  The
       PTO --

       COMMISSIONER LEHMAN:  Is that the situation of
       your clients?

       MR. SANDERCOCK:  Yes, sir.

       COMMISSIONER LEHMAN:  You have clients in that

       MR. SANDERCOCK:  That is correct.

       The PTO proposes how to address the question of
       whether these patents should be treated differently than
       other patents in force on June 8.  Should they essentially
       receive discriminatory treatment by the PTO simply because
       they are in force by virtue of their extension?

       I respectfully submit that there should be no
       discrimination and that they should be treated no

       I think the first question is whether they are
       patents in force, and Section 156 governs the term of a
       patent.  It provides a patent with a new expiration date. 
       During the extension, the patentee can avail himself or
       herself of the rights of a patentee, including enforcement
       of the patent.

       I think, therefore, the patent is clearly in

       COMMISSIONER LEHMAN:  Mr. Sandercock, I think I
       have got this pretty much straight, but I just want to get
       it completely tied down, now.

       Because you really have a client who is likely to
       actually be in this situation.

       MR. SANDERCOCK:  Who is in this situation, sir.

       COMMISSIONER LEHMAN:  Who is in this situation.

       The only way that a generic company is going to
       get into the market in this questionable period, between
       when your patent would have expired under your Hatch-Waxman
       extension and its new rights, is when the FDA gives approval
       for it to go on the market.

       MR. SANDERCOCK:  Correct.

       COMMISSIONER LEHMAN:  So to some degree, the FDA
       -- if the FDA wanted to support your position, they would
       simply say:  Okay, we are going to delay the marketing
       approval until the longer period of time.

       MR. SANDERCOCK:  I would agree with that, on this
       point, yes.

       COMMISSIONER LEHMAN:  I mean, then they can't get
       on the market without FDA approval.

       So then, you are home free.  I suppose there is
       some -- you know, there is litigation against the FDA that
       the generic company could bring.

       Let's assume that the FDA decides to take the
       other reading that we have heard, though, and it concludes
       that, it makes its determination to permit the marketing of
       the generic version of your client's drug at the end of the
       expiration period under the old system.

       MR. SANDERCOCK:  Correct.

       COMMISSIONER LEHMAN:  Then, I assume what you are
       going to do is that you are going to probably sue for
       infringement and you are going to say:  No, under the new
       law, I have a longer term.

       I mean, maybe that is unfair to ask you a business
       question like that right now, but you would have that

       Of course, the Patent Office doesn't have any
       direct control over that.

       MR. SANDERCOCK:  I would agree.  The question, as
       raised by Mr. Armitage is, really, how much authority should
       the Patent Office exercise.  And I believe that -- and I
       certainly would like to address your question in the written
       comments -- so I would like to have a little time to think
       about it and not say something improper or incorrect, here.

       But I think the question that I came to address
       today is the question that was set forth in the notice, and
       that is, what the Patent Office plans to do as far as its
       interpretation.  And so, really, the question you asked is a
       little bit beyond that scope and I would like to address
       that in my written comments.

       COMMISSIONER LEHMAN:  On that point, I suppose we
       could have an interpretation which might carry some weight,
       or we could say nothing.

       MR. SANDERCOCK:  I would agree 100 percent.  And
       that is where -- you know, you are sitting here with a lot
       of people who are very concerned on this issue.  You will
       receive a lot of testimony.  You have spent a long time
       considering this issue.

       And I would urge you to do just that, and that is,
       take a position, something that could be used in subsequent

       COMMISSIONER LEHMAN:  Well, thank you for helping
       me out.  I think I am finally getting through to what the
       essential issue here is.

       MR. SANDERCOCK:  I think what the Patent Office
       will have to say on it is very important, and so I would
       urge not a role that is simply passive, but a role that does
       take an action.

       COMMISSIONER LEHMAN:  Well, I suppose to the
       extent that the FDA agreed with our position, it might
       affect their regulatory process, or it might obviously give
       you a leg up in court, too, if you went to court.

       MR. SANDERCOCK:  I won't deny that.

       But I think the only remaining question, then, is
       whether the patents should be treated differently under the
       URAA.  And as some other speakers have mentioned, I think it
       would require reading a limitation into the legislation
       which was not there.  I don't think there is any
       demonstrated congressional intent to treat these patents
       differently, and granted they are in a special area, but
       there is no congressional intent.  There is no language, to
       which one could point that would justify or suggest a
       disparate treatment, and I see no reason under the rules of
       interpretation and construction why the provisions of the
       URAA would suggest a discrimination of this small group of

       And so, in concluding, I would urge the PTO to
       maintain the interpretation that it initially has taken in
       identifying these patents and that is to consider them as
       patents in force and to which the 17/20-term will apply, and
       that the Section 156 extension should be added to the longer
       of that term.  Thank you.

       COMMISSIONER LEHMAN:  Thank you.  Are there any
       other questions?

       [No response.]

       COMMISSIONER LEHMAN:  Next, Mr. Pelto.

       MR. PELTO:  Thank you and good afternoon.  My name
       is Don Pelto, and I am a patent attorney at the firm of
       Foley and Lardner, in Washington, D.C.  Our address is 3000
       K Street N.W.

       My testimony reflects my personal views, and
       should not be considered as reflective of those of Foley &
       Lardner or any of our clients or our colleagues.

       The impending changes to Title 35 of United States
       Code relating to patent terms, specifically the provisions
       of the URAA patent amendments, that recalculate the term of
       existing patents necessitates an exact and consistent
       interpretation by the PTO of those amendments to Title 35
       for all patents considered to be in force on June 8, 1995,
       the effective date of the URAA.

       Turning to the specific issues raised in the OG
       notice regarding the effect of the URAA on existing patent
       term extensions, under Section 156, the PTO states that it
       has assumed for purposes of evaluating the number of
       extended patents that may be affected by the recalculated
       term, the patent which expired under its original 17-year
       term before June 8, 1995, but received a patent term
       extension under Section 156 for a period beyond June 8th,
       should be considered a patent in force on the effective date
       of the URAA.

       I am here to say that I believe that that
       assumption is proper and correct.

       The patent term extension provided in Section 156
       extends the patentee's right to exclude others from making,
       using, or selling the subject invention.  Those rights are
       no different than those of a patentee under the usual
       17-year term.

       Moreover, patents to pharmaceuticals should not be
       treated any differently than patents to other inventions
       that are in force on June 8, 1995.

       Consistency in the protection of those patent
       rights requires that patents in force beyond June 8, 1995,
       due to patent term extensions, be treated the same way under
       the URAA as any other patent in force at that time.

       The PTO's assumption that such patents are in
       force for purposes of the URAA is correct, and I urge the
       PTO to adopt this definition.

       Referring to the questions raised by the PTO on
       the effect of the URAA on patent term extensions under 156,
       I urge that the first interpretation provided by the PTO on
       the provision of the URAA, which grants the longer of the
       17- or 20-year patent term to patents in force on June 8,
       1995, be adopted.

       Specifically, that first interpretation states
       that the extension already issued by the PTO under Section
       156 should simply be added to the longer of the 17- or
       20-year patent firm, to patents in force on June 8, 1995,
       thus requiring no action by the PTO.

       Again, consistency in protecting the rights of
       patent holders requires the even-handed application of all
       provisions of the URAA that recalculate the term of each and
       every patent that is in force on June 8, 1995.

       Finally, and although not explicitly mentioned in
       the OG notice, I want to make it clear that extension of the
       remedies available to a patent holder as provided in Section
       532 of the URAA should also apply to existing patent term
       extensions under the provisions of the URAA.

       Specifically, Section 532(c)(2) of URAA sets forth
       the remedies available to a patent holder for patent
       infringement under certain circumstances.  Under that
       section, a patent holder may not obtain an injunction or
       monetary damages for acts which became infringing by reason
       of the new 20-year provision, which were commenced or for
       which substantial investment was made, before June 8, 1995.

       Again, Section 532 provides that the patent holder
       may only collect an equitable remuneration under any such

       Again, even-handed application of the 20-year
       patent term under the URAA to all patents in force on June
       8, 1995, requires an even-handed application of the
       provisions of Section 532, also.

       In summary, the proposed regulations reflect a
       positive attitude by the PTO and thereby consistency and
       even-handedness in the application of the URAA.  I thank you
       very much for inviting me to testify on these important

       COMMISSIONER LEHMAN:  Thank you very much.  Are
       there any questions?

       [No response.]

       COMMISSIONER LEHMAN:          This completes the list of
       persons who asked in advance to testify.  Are there any
       other people that have signed up?

       [No response.]

       COMMISSIONER LEHMAN:          If there is no one else who
       would like to testify, let me mention that written comments
       can be received until February 17, 1995, and a transcript of
       the hearing, as I mentioned in the opening statement, will
       be available, as well as all the written comments received. 

       They can be reviewed probably about March 3, 1995,
       in Room 520 of Crystal Park 1, which is 2011 Crystal Drive.

       They will also be available on the Internet
       through FTP, and the address is FTP.USPTO.GOV.

       All written comments and the oral comments made
       here today will be taken into consideration before any final
       rules are published.

       Since we are under time limitation, any comments
       received after February 17, 1995, cannot be assured of

       This concludes today's hearing.  I want to thank
       everybody who participated for helping us work through these

       [Whereupon, at 3:09 p.m., the public hearing was

Last Modified: March 1995