Abusive Patent Litigation: the Impact on American Innovation and Jobs, and Po- Tential Solutions
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ABUSIVE PATENT LITIGATION: THE IMPACT ON AMERICAN INNOVATION AND JOBS, AND PO- TENTIAL SOLUTIONS HEARING BEFORE THE SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND THE INTERNET OF THE COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES ONE HUNDRED THIRTEENTH CONGRESS FIRST SESSION MARCH 14, 2013 Serial No. 113–13 Printed for the use of the Committee on the Judiciary ( Available via the World Wide Web: http://judiciary.house.gov U.S. GOVERNMENT PRINTING OFFICE 79–880 PDF WASHINGTON : 2013 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON THE JUDICIARY BOB GOODLATTE, Virginia, Chairman F. JAMES SENSENBRENNER, JR., JOHN CONYERS, JR., Michigan Wisconsin JERROLD NADLER, New York HOWARD COBLE, North Carolina ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia LAMAR SMITH, Texas MELVIN L. WATT, North Carolina STEVE CHABOT, Ohio ZOE LOFGREN, California SPENCER BACHUS, Alabama SHEILA JACKSON LEE, Texas DARRELL E. ISSA, California STEVE COHEN, Tennessee J. RANDY FORBES, Virginia HENRY C. ‘‘HANK’’ JOHNSON, JR., STEVE KING, Iowa Georgia TRENT FRANKS, Arizona PEDRO R. PIERLUISI, Puerto Rico LOUIE GOHMERT, Texas JUDY CHU, California JIM JORDAN, Ohio TED DEUTCH, Florida TED POE, Texas LUIS V. GUTIERREZ, Illinois JASON CHAFFETZ, Utah KAREN BASS, California TOM MARINO, Pennsylvania CEDRIC RICHMOND, Louisiana TREY GOWDY, South Carolina SUZAN DelBENE, Washington MARK AMODEI, Nevada JOE GARCIA, Florida RAU´ L LABRADOR, Idaho HAKEEM JEFFRIES, New York BLAKE FARENTHOLD, Texas GEORGE HOLDING, North Carolina DOUG COLLINS, Georgia RON DeSANTIS, Florida KEITH ROTHFUS, Pennsylvania SHELLEY HUSBAND, Chief of Staff & General Counsel PERRY APELBAUM, Minority Staff Director & Chief Counsel SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND THE INTERNET HOWARD COBLE, North Carolina, Chairman TOM MARINO, Pennsylvania, Vice-Chairman F. JAMES SENSENBRENNER, JR., MELVIN L. WATT, North Carolina Wisconsin JOHN CONYERS, JR., Michigan LAMAR SMITH, Texas HENRY C. ‘‘HANK’’ JOHNSON, JR., STEVE CHABOT, Ohio Georgia DARRELL E. ISSA, California JUDY CHU, California TED POE, Texas TED DEUTCH, Florida JASON CHAFFETZ, Utah KAREN BASS, California MARK AMODEI, Nevada CEDRIC RICHMOND, Louisiana BLAKE FARENTHOLD, Texas SUZAN DelBENE, Washington GEORGE HOLDING, North Carolina HAKEEM JEFFRIES, New York DOUG COLLINS, Georgia JERROLD NADLER, New York RON DeSANTIS, Florida ZOE LOFGREN, California KEITH ROTHFUS, Pennsylvania SHEILA JACKSON LEE, Texas JOE KEELEY, Chief Counsel STEPHANIE MOORE, Minority Counsel (II) C O N T E N T S MARCH 14, 2013 Page OPENING STATEMENTS The Honorable Howard Coble, a Representative in Congress from the State of North Carolina, and Chairman, Subcommittee on Courts, Intellectual Property, and the Internet .................................................................................. 1 The Honorable Melvin L. Watt, a Representative in Congress from the State of North Carolina, and Ranking Member, Subcommittee on Courts, Intellec- tual Property, and the Internet .......................................................................... 3 The Honorable John Conyers, Jr., a Representative in Congress from the State of Michigan, Ranking Member, Committee on the Judiciary, and Member, Subcommittee on Courts, Intellectual Property, and the Internet .. 5 The Honorable Bob Goodlatte, a Representative in Congress from the State of Virginia, and Chairman, Committee on the Judiciary ................................. 6 WITNESSES Mark Chandler, Senior Vice President and General Counsel, Cisco Systems, Inc. Oral Testimony ..................................................................................................... 9 Prepared Statement ............................................................................................. 12 Janet L. Dhillon, Executive Vice President, General Counsel and Corporate Secretary, JCPenney Company, Inc. Oral Testimony ..................................................................................................... 35 Prepared Statement ............................................................................................. 37 John Boswell, Senior Vice President and General Counsel, SAS Institute, Inc. Oral Testimony ..................................................................................................... 42 Prepared Statement ............................................................................................. 44 C. Graham Gerst, Partner, Global IP Law Group, LLC Oral Testimony ..................................................................................................... 49 Prepared Statement ............................................................................................. 51 Philip S. Johnson, Chief Intellectual Property Counsel, Johnson & Johnson Oral Testimony ..................................................................................................... 55 Prepared Statement ............................................................................................. 57 Dana Rao, Vice President of Intellectual Property and Litigation, Adobe Sys- tems Oral Testimony ..................................................................................................... 78 Prepared Statement ............................................................................................. 80 LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING Material submitted by the Honorable Melvin L. Watt, a Representative in Congress from the State of North Carolina, and Ranking Member, Sub- committee on Courts, Intellectual Property, and the Internet ......................... 113 APPENDIX MATERIAL SUBMITTED FOR THE HEARING RECORD Prepared Statement of the Honorable Melvin L. Watt, a Representative in Congress from the State of North Carolina, and Ranking Member, Sub- committee on Courts, Intellectual Property, and the Internet ......................... 147 (III) IV Page Prepared Statement of the Honorable George Holding, a Representative in Congress from the State of North Carolina, and Member, Subcommittee on Courts, Intellectual Property, and the Internet ........................................... 158 Material submitted by the Honorable Jason Chaffetz, a Representative in Congress from the State of Utah, and Member, Subcommittee on Courts, Intellectual Property, and the Internet .............................................................. 160 Letter from C. Graham Gerst, Partner, Global IP Law Group, LLC .................. 167 Letter from Bill Hughes, Senior Vice President, Government Affairs, Retail Industry Leaders Association (RILA) ................................................................. 169 Submission entitled ‘‘The Costs and Benefits of United States Patents’’ ........... 171 Letter from the Coalition of Patent Fairness ........................................................ 217 Prepared Statement of the American Bankers Association ................................. 220 Letters from John Lindgren, President and Chief Executive Officer, MOSAID Technologies Incorporated ................................................................................... 222 Prepared Statement of Bruce Lehman, on behalf of TeleCommunications Sys- tems, Inc. .............................................................................................................. 229 Response to Questions for the Record from Mark Chandler, Senior Vice Presi- dent and General Counsel, Cisco Systems, Inc. ................................................ 234 Response to Questions for the Record from Janet L. Dhillon, Executive Vice President, General Counsel and Corporate Secretary, JCPenney Company, Inc. ......................................................................................................................... 236 Response to Questions for the Record from John Boswell, Senior Vice Presi- dent and General Counsel, SAS Institute, Inc. ................................................. 239 Response to Questions for the Record from C. Graham Gerst, Partner, Global IP Law Group, LLC ............................................................................................. 243 Response to Questions for the Record from Philip S. Johnson, Chief Intellec- tual Property Counsel, Johnson & Johnson ....................................................... 249 Response to Questions for the Record from Dana Rao, Vice President of Intellectual Property and Litigation, Adobe Systems ....................................... 258 ABUSIVE PATENT LITIGATION: THE IMPACT ON AMERICAN INNOVATION AND JOBS, AND POTENTIAL SOLUTIONS THURSDAY, MARCH 14, 2013 HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND THE INTERNET COMMITTEE ON THE JUDICIARY Washington, DC. The Subcommittee met, pursuant to call, at 11:36 a.m., in room 2141, Rayburn Office Building, the Honorable Howard Coble (Chairman of the Subcommittee) presiding. Present: Representatives Coble, Marino, Goodlatte, Chabot, Issa, Poe, Chaffetz, Amodei, Farenthold, Collins, DeSantis, Rothfus, Watt, Conyers, Johnson, Chu, Deutch, Bass, Richmond, DelBene, Jeffries, Nadler, Lofgren, and Jackson Lee. Staff Present: (Majority) Vishal Amin, Counsel; Olivia Lee, Clerk; and (Minority) Stephanie Moore, Minority Counsel. Mr. COBLE. The Subcommittee will come to order. Without objec- tion, the Chair is authorized to declare recesses of the Sub- committee at any time. We welcome