2001CRS11363 STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS, Part 1/4
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[Congressional Record: November 1, 2001 (Senate)]
[Page S11363-S11389]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr01no01-92]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. KERRY (for himself and Mr. Kennedy):
S. 1609. A bill to amend the National Trails System Act to direct the
Secretary of the Interior to conduct a study on the feasibility of
desig-
nating the Metacomet-Monadnock-Mattabesett Trail extending through
western Massachusetts and central Connecticut as a national historic
trail; to the Committee on Energy and Natural Resources.
Mr. KERRY. Mr. President, I rise today to introduce a bill along with
my senior Senator, Senator Kennedy of Massachusetts, to amend the
National Trails System Act to conduct a study on the feasibility of
designating the Metacomet-Monadnock-Mattabesett Trail extending through
western Massachusetts and central Connecticut as a national historic
trail.
The National Trails System was created in 1968 to provide outdoor
recreation and to conserve the scenic, historic, natural, and cultural
qualities of the areas through which trails more than 100 miles long
pass. Trails provide opportunities for outdoor recreation to citizens
in Massachusetts and around the country. People enjoy bicycling, cross-
country skiing, day hiking, jogging, camping, and long-distance
backpacking. In addition, National Scenic Trails promote tourism and
foster economic development. National trails
[[Page S11364]]
can only be authorized and designated by Acts of Congress.
The Metacomet-Monadnock-Matta-
besett Trail plays an important role in land protection and wildlife
habitat preservation. It is a system of trails and potential trails
extending southward approximately 180 miles from the Metacomet-
Monadnock Trail in western Massachusetts, across central Connecticut on
the Metacomet Trail and the Mattabesett Trail, and ending at Long
Island Sound. Dozens of waterfalls, natural areas, and wildlife viewing
spots can be found along the route. There are dramatic traprock ledges
and summits that provide tremendous views of the Connecticut River
Valley. At a time when the Northeast corridor is faced with
overdevelopment, designating the Metacomet-Monadnock-Mattabesett as a
national trail would help protect it, facilitate better planning for
power lines, pipelines, and roads, and help maintain natural habitats
through the financial and technological assistance of the National Park
Service, nonprofit organizations, and local volunteers.
I would like to share a few of the comments from organizations in
Massachusetts and Connecticut that support this legislation. Peter
Westover, the conservation director for the town of Amherst, wrote to
express strong support for the trail. He is confident that there will
be widespread support among trail managers and trail users throughout
the region. Both Durand, the Massachusetts Secretary of Environmental
Affairs, wrote that the Metacomet-Monadnock portion of the trail is an
important recreational, scenic, and historic resource that could be
significantly enhanced by this project. The Massachusetts director of
the Nature Conservancy, Wayne Klockner, expressed his strong support
for the trail, writing that he supports the benefits that designation
can bring to a fragile area and that he looks forward to increased land
protection, funding and technical expertise. From Connecticut, Leslie
Kane, chairman of the Guilford Land Acquisition Committee, supports the
trail because it will preserve Connecticut's natural heritage for all
people to enjoy. These comments represent only a handful of the letters
of support that my colleagues and I have received.
Establishing a new national scenic trail is typically a four-step
process, which, on average, can take 10 years to complete. In 10 years,
given the rapid development in the Northeast, entire landscapes and
habitats can change and become endangered. The first step in the
process to establish a new national trail is amending the National
Trails System Act to allow for a feasibility study. Senator Kennedy and
I are asking today that we take that first step and get started
protecting the natural heritage of this small part of New England.
______
By Mr. LEAHY:
S. 1611. A bill to restore Federal remedies for infringements of
intellectual property by States, and for other purposes; to the
Committee on the Judiciary.
Mr. LEAHY. Mr. President, in June 1999, the U.S. Supreme Court issued
a pair of decisions that altered the legal landscape with respect to
intellectual property. I am referring to the Florida Prepaid and
College Savings Bank cases. The Court ruled in these cases that States
and their institutions cannot be held liable for patent infringement
and other violations of the Federal intellectual property laws, even
though they can and do enjoy the full protection of those laws for
themselves.
About 4 months after the Court ruled in these cases, I introduced a
bill that responded to the Court's decisions. The Intellectual Property
Restoration Act of 1999 was designed to restore Federal remedies for
violations of intellectual property rights by States.
I regret that the Senate Judiciary Committee did not consider my
legislation during the last Congress, and that the Senate has yet to
give any attention to the nearly 2-year-old Supreme Court decisions
that opened such a troubling loophole in our Federal intellectual
property laws. We should delay no further.
Today, I am introducing the Intellectual Property Protection
Restoration Act of 2001, IPPRA. This legislation builds on my earlier
proposal and on the helpful comments I received on that proposal from
legal experts across the country. In particular, I would like to thank
Justin Hughes, David Carson, Steve Tepp, Michael Kirk, Michael Klipper,
and John Kent for their assistance in improving and refining this
legislation. I also want to thank the House sponsors of the counterpart
bill, Howard Coble and Howard Berman, who are the chairman and ranking
member of the Subcommittee on Courts, the Internet, and Intellectual
Property.
The IPPRA has two essential components. First, it places States on an
equal footing with private parties by eliminating any damages remedy
for infringement of State-owned intellectual property unless the State
has waived its immunity in Federal suits for infringement of privately
owned intellectual property. Second, it improves the limited remedies
that are available to enforce a nonwaiving State's obligations under
Federal law and the United States Constitution. I will discuss both
provisions in more detail later in these remarks.
Innovation and creativity have been the fuel of our national economic
boom over the past decade. The United States now leads the world in
computing, communications and biotechnologies, and American authors and
brand names are recognized across the globe.
Our national prosperity is, first and foremost, a tribute to American
ingenuity. But it is also a tribute to the wisdom of our Founding
Fathers, who made the promotion of what they called ``Science and the
Useful Arts'' a national project, which they constitutionally assigned
to Congress. And it is no less of a tribute to the successive
Congresses and administrations of both parties who have striven to
provide real incentives and rewards for innovation and creativity by
providing strong and even-handed protection to intellectual property
rights. Congress passed the first Federal patent law in 1790, and the
U.S. Government issued its first patent the same year, to Samuel
Hopkins of my home State of Vermont. The first Federal copyright law
was also enacted in 1790, and the first Federal trademark laws date
back to the 1870s.
The Supreme Court has long recognized that intellectual property
rights bear the hallmark of true constitutional property rights, the
right of exclusion against the world, and are therefore protection
against appropriation both by individuals and by government. Consistent
with this understanding of intellectual property, Congress has long
ensured that the rights secured by the Federal intellectual property
laws were enforceable against the Federal Government by waiving the
government's immunity in suits alleging infringements of those rights.
No doubt Congress would have legislated similarly with respect to
infringements by State entities and bureaucrats had there been any
doubt that they were already fully subject to Federal intellectual
property laws. But there was no doubt. States had long enjoyed the
benefits of the intellectual property laws on an equal footing with
private parties.
By the same token, and in accordance with the fundamental principles
of equity on which our intellectual property laws are founded, the
States bore the burdens of the intellectual property laws, being liable
for infringements just like private parties. States were free to join
intellectual property markets as participants, or to hold back from
commerce and limit themselves to a narrower governmental role. The
intellectual property right of exclusion meant what it said and was
enforced even-handedly for public and private entities alike.
This harmonious state of affairs ended in 1985, with the Supreme
Court's announcement of the so-called ``clear statement'' rule in
Atascadero State Hospital versus Scanlon. The Court in Atascadero held
that Congress must express its intention to abrogate the States' 11th
Amendment immunity ``in unmistakable language in the statute itself.''
A few years later in Pennsylvania versus Union Gas Co., the Supreme
Court assured us that if the intent to abrogate were expressed clearly
enough, it would be honored.
Following Atascadero, some courts held that States and State entities
and
[[Page S11365]]
officials could escape liability for patent, copyright and trademark
infringement because the patent, copyright and trademark laws lacked
the clear statement of congressional intent that was now necessary to
abrogate State sovereign immunity.
To close this new loophole in the law, Congress promptly did
precisely what the Supreme Court had told us was necessary. In 1990 and
1992, Congress passed three laws--the Patent and Plant Variety
Protection Remedy Clarification Act, the Copyright Remedy Clarification
Act, and the Trademark Remedy Clarification Acts. The sole purpose of
the Clarification Acts was to make it absolutely, unambiguously, 100
percent clear that Congress intended the patent, copyright and
trademark laws to apply to everyone, including the States, and that
Congress did not intend the States to be immune from liability for
money damages. Each of the three Clarification Acts passed unanimously.
In 1996, however, by a five-to-four-vote, the Supreme Court in
Seminole Tribe of Florida versus Florida reversed its earlier decision
in Union Gas and held that Congress lacked authority under article I of
the Constitution to abrogate the States' 11th amendment immunity from
suit in Federal court.
Then, on June 23, 1999, by the same bare majority, the Supreme Court
in Florida Prepaid Postsecondary Education Expense Board versus College
Savings Bank told us that it did not really mean what it said in
Atascadero and invalidated the Patent and Plant Variety Protection
Remedy Clarification Act. In the companion case decided on the same
day, College Savings Bank versus Florida Prepaid Postsecondary
Education Expense Board, the same five Justices held that the Trademark
Remedy Clarification Act also failed to abrogate State sovereign
immunity.
The Florida Prepaid decisions have been the subject of bipartisan
criticism. In a floor statement on July 1, 1999, I highlighted the
anti-democratic implications of the approach of the activist majority
of the Supreme Court, who have left constitutional text behind, ripped
up precedent, and treated Congress with less respect than that due to
an administrative agency in their haste to impose their natural law
notions of sovereignty as a barrier to democratic regulation. I also
noted that ``the Court's decisions will have far-reaching consequences
about how * * * intellectual property rights may be protected against
even egregious infringements and violations by the states.''
One of my Republican colleagues on the Judiciary Committee, Senator
Specter, expressed similar concerns in a floor statement on August 5,
1999. He noted that the Court decisions ``leave us with an absurd and
untenable state of affairs,'' where ``states will enjoy an enormous
advantage over their private sector competitors.''
Charles Fried, a professor at Harvard Law School and former Solicitor
General during the Reagan administration, has called the Florida
Prepaid decisions ``truly bizarre.'' He observed in an op-ed piece in
the New York Times:
[The Court's decisions] did not question that states are
subject to the patent and trademark laws of the United
States. It's just that when a state violates those laws--as
when it uses a patented invention without permission and
without paying for it--the patent holder cannot sue the state
for infringement. So a state hospital can manufacture
medicines patented by others and sell or use them, and state
schools and universities can pirate textbooks and software,
and the victims cannot sue for infringement.
It is hard to see what sense this makes, and the claim that
``the Constitution made me do it'' is particularly
unconvincing. The 11th Amendment does protect states from
suits in Federal courts by residents of other states--a
provision almost certainly not intended to protect states
from suits based on Federal law.
Not surprisingly, alarm has also been expressed in the business
community about the potential of the Court's recent decisions to harm
intellectual property owners in a wide variety of ways. A commentary in
Business Week offered these cautions:
Watch out if you publish software that someone at a state
university wants to copy for free . . . Watch out if you own
a patent on a medical procedure that some doctor in a state
medical school wants to use. Watch out if you've invested
heavily in a great trademark, like Nike's Swoosh, and a
bureaucrat decides his state program would be wildly promoted
if it used the same mark.
I believe that these concerns are real. As Congress acknowledged when
it waived Federal sovereign immunity in this area, it would be naive to
imagine that reliance on the commercial decency of the government and
its myriad agencies and officials would provide the security needed to
promote investment in research and development and to facilitate
negotiation in the exclusive licensing arrangements that are often
necessary to bring valuable products and creations to market. Indeed,
the good intentions of government may be beside the point, if
businesses are unwilling to enter into agreements because one side
cannot be bound by the law.
Since the Court issued its decisions in June 1999, intellectual
property scholars and practitioners across the country have come
together to explore ways for Congress to restore protection for federal
intellectual property rights as against the States. The Patent and
Trademark Office hosted a particularly enlightening conference in March
2000, in cooperation with the American Intellectual Property Law
Association and the Intellectual Property Section of the American Bar
Association. I commend the PTO for taking the initiative on this
important issue.
More recently, in September 2001, the General Accounting Office
released a report requested by Senator Orrin Hatch on State Immunity in
Infringement Actions. The GAO's research confirmed that, after Florida
Prepaid, owners of intellectual property have few alternatives or
remedies available against State infringements. A State cannot be sued
in Federal court for damages except in the unlikely event that it
waives its sovereign immunity. As for the State courts, there is little
chance of success with infringement-type a actions for patents and
copyrights because of Federal judicial preemption and an absence of
State-recognized causes of action. Furthermore, even if infringement
suits can be brought in State court, it may not be possible to bring
them against States that have governmental immunity shielding them from
suit in their own courts.
What I have just described is a series of dead ends for intellectual
property owners. That is why the two Federal agencies with expertise in
intellectual property matters, the U.S. Copyright Office and the U.S.
Patent and Trademark Office, have expressed their support for
corrective legislation by Congress. As the Copyrights Office told the
GAO, ``Only in this way can the proper balance, and basic fairness, be
restored.''
I hope we can all agree on the need for congressional action on this
issue. We need to assure American inventors and investors, and our
foreign trading partners, that as State involvement in intellectual
property becomes ever greater in the new information economy, U.S.
intellectual property rights are backed by legal remedies.
This is important as a matter of economics: Our national economy
depends on real and effective intellectual property rights. It is also
important as a matter of justice: In conceding that the States are
constitutionally bound to respect Federal intellectual property rights
but invalidating the remedies Congress has created to enforce those
rights, the Court has jeopardized one of the basic principles that
distinguishes our Constitution from the constitution of the old Soviet
Union, the principle that where there is a right, there must also be a
remedy.
It is also important as a matter of foreign relations: American
trading interests have been well served by our strong and consistent
advocacy of effective intellectual property protections in treaty
negotiations and other international fora, and those efforts could be
jeopardized by the loophole in U.S. intellectual property enforcement
that the Supreme Court has created.
Like most of the constitutional experts who have examined the issue,
I have no doubt that several constitutional mechanisms remain open to
Congress to restore substantial protection for patents, copyrights and
trademarks. The Supreme Court's hypertechnical constitutional
interpretations require us to jump through some technical hoops of our
own, but that the exercise is now not merely worthwhile, but essential
to safeguard both U.S. prosperity and the continued authority of
Congress.
[[Page S11366]]
My bill is based on a simple premise: That there is no inherent,
``natural law'' entitlement to Federal intellectual property rights and
remedies. In discussing the policies underlying the intellectual
property laws, the Supreme Court has emphasized that intellectual
property is not a right but a privilege, and that it is conditioned by
a public purpose. For example, the Court wrote in Mercoid Corp. versus
Mid-Continent Invest Co., a 1944 case, that ``The grant of a patent is
the grant of a special privilege `to promote the Progress of Science
and useful Arts,' '' and that ``It is the public interest which is
dominant in the patent system.'' Similarly, in discussing the copyright
laws in Fogerty versus Fantasy, Inc, the Court underscored that ``the
monopoly privileges that Congress has authorized, while intended to
motivate the creative activity of authors and inventors by the
provision of a special reward, are limited in nature and must
ultimately serve the public good.''
The Constitution empowers but does not require Congress to make
intellectual property rights and remedies available, and Congress
should do so in a manner that encourages and protects innovation in the
public and private sector alike.
States and their institutions, especially State Universities, benefit
hugely from the Federal intellectual property laws. All 50 States own
or have obtained patents, some hold many hundreds of patents. States
also hold other intellectual property rights secured by Federal law,
and the trend is toward increased participation by the States in
commerce involving intellectual property.
Principles of State sovereignty tell us that States and their
instrumentalities are entitled to a free and informed choice of whether
or not to participate in the Federal intellectual property system,
subject only to their constitutional obligations.
Equity and common sense tell us that one who chooses to enjoy the
benefits of a law, whether it be a Federal research grant or the
multimillion-dollar benefits of Federal intellectual property
protections, should also bear its burdens.
Sound economics and traditional notions of federalism tell us that it
is appropriate for the Federal Government to assist and encourage the
sovereign States in their sponsorship of whatever innovation and
creation they freely choose to sponsor by giving them intellectual
property protection and, on occasion, funding, so long as the States
hold up their end of the bargain by honoring the exclusive rights of
other intellectual property owners.
The IPPRA builds on these principles. In order to promote cooperative
federalism in the intellectual property arena, it provides reasonable
incentives for states to waive their immunity in intellectual property
cases and participate in our national intellectual property project on
equal terms with private parties. States that choose not to waive their
immunity within 2 years after enactment of the IPPRA would continue to
enjoy many of the benefits of the Federal intellectual property system;
however, like private parties that sue non-waiving states for
infringement, nonwaiving States that sue private parties for
infringement could not recover any money damages that would otherwise
be available under Federal law. That is because Federal intellectual
property that has been owned by a nonwaiving State would be short one
``stick'' from the usual bundle of rights accorded by Federal law: The
ability to sue for damages under Federal law when the intellectual
property has been infringed.
This scheme is plainly authorized by the letter of the Constitution.
Article I empowers Congress to ``promote the Progress of Science and
useful Arts, by securing for limited Times to Authors and Inventors the
exclusive right to their respective Writings and Discoveries.''
Incident to this power, Congress may attach conditions on the receipt
of exclusive intellectual property rights. Indeed, we have always
attached certain conditions, such as the requirement of public
disclosure of an invention at the Patent and Trademark Office in order
to obtain a patent.
My proposal is also consistent with the spirit of federalism, as
interpreted by the Supreme Court, because it gives State entities a
free, informed and meaningful choice to waive or not to waive immunity
at any time. The condition imposed on receipt of federal benefits by
the IPPRA, submitting to suit under laws that are already binding on
the States, is not onerous, nor does it co-opt any state resources to
the service of Federal policy. It simply levels the intellectual
property playing field.
Congress may attach conditions on a State's receipt of Federal
intellectual property protection under its Article I intellectual
property power just as Congress may attach conditions on a State's
receipt of Federal funds under its Article I spending power. Either
way, the power to attach conditions to the Federal benefit is an
integral part of the greater power to deny the benefit altogether.
Either way, the State has a choice, to forgo the Federal benefit and
exercise its sovereign power however it wishes subject to the
Constitution, or to take the benefit and exercise its sovereign power
in the manner requested by Congress.
Three Federal appeals courts have applied similar reasoning in
connection with the 1996 Telecommunications Act. The Courts of Appeals
for the Fifth, Seventh, Tenth Circuits have reasoned that, because
Congress was under no obligation to allow States to participate in the
regulatory scheme established by the 1996 Act, Congress could validly
condition a state commission's decision to exercise regulatory
authority under the Act on its waiving sovereign immunity.
This seems like plain common sense to me. It would be a truly bizarre
reading of the Constitution to say that it is up to Congress whether or
not to let States participate in telecom regulation or in the
intellectual property regime, but that if we choose to let them
participate, we cannot hold them accountable for their actions.
Given the choice between opting in to the intellectual property laws
and forging some intellectual property protection under the Federal
laws, States and their institutions will, I hope, choose to opt in. The
benefit--being able to recover damages for an infringement--is
significant, while the burden--consenting to be sued for future State
infringements--is slight. Most States already respect intellectual
property rights and will seldom find themselves in infringement suits.
However, some State entities and officials have violated intellectual
property rights in the past, and the massive growth of both
intellectual property and state participation in the
intellectual property marketplace that we are seeing in the new economy
give ample cause for concern that such violations will continue. Now
that the Supreme Court has seemingly given the States carte blanche to
violate intellectual property rights free from any adverse financial
consequences so long as they stand on their newly augmented sovereign
immunity, the prospect of States violating Federal law and then
asserting immunity is too serious to ignore.
The IPPRA therefore also provides for the limited set of remedies
that the Supreme Court's new jurisprudence leaves available to Congress
to enforce a nonwaiving State's obligations under Federal law and the
United States Constitution. The key point here is that, while the Court
struck down our prior effort to enforce the intellectual property laws
themselves by authorizing actions for damages against the states, it
nonetheless acknowledged Congress' power to authorize actions for
injunctions and actions to enforce constitutional rights related to
intellectual property.
First, for the avoidance of doubt, the IPPRA ensures the full
availability of prospective equitable relief to prevent States from
violating or exceeding their rights under Federal intellectual property
laws. As the Supreme Court expressly acknowledged in its Seminole Tribe
decision in 1996, such relief is available, notwithstanding any
assertion of State sovereign immunity, under what is generally known as
the doctrine of Ex parte Young.
Second, to address the harm done to the rights of intellectual
property owners before they can secure an injunction, the IPPRA also
provides a damages remedy to the full extent of Congress' power to
enforce the constitutional rights of intellectual property owners.
Under the Supreme Court's recent decisions, this remedy is necessarily
limited to the redress of constitutional violations, not violations of
[[Page S11367]]
the Federal intellectual property laws themselves. However, the Supreme
Court has reaffirmed on may occasions that the intellectual property
owner's right of exclusion is a property right fully protected from
governmental violation under the Fifth amendment's takings clause and
under the 14th amendment's due process clause.
The constitutional remedy provided by the IPPRA closely resembles the
remedy that Congress provided decades ago for deprivations of Federal
rights by persons acting under color of State law. The bill does not
expand the property rights secured by the Federal intellectual property
laws--these laws are already binding on the States' nor does the bill
interfere with any governmental authority to regulate businesses that
own such rights. It simply restores the ability of private persons to
enforce such rights against the States.
I view this bill as an exercise in cooperative federalism. Clear,
certain, and uniform national rules protecting Federal intellectual
property rights benefit everyone: Consumers, businesses, the Federal
Government and the States. The IPPRA preserves States' rights, and
gives States a free choice. At the same time, it ensures effective
protection for individual constitutional rights closing the loophole
created by the Supreme Court of Federal rights unsupported by effective
remedies. We unanimously passed more sweeping legislation in the early
1990s, but were thwarted by Supreme Court's shifting jurisprudence. The
IPPRA is designed to restore the benefits we sought to provide
intellectual property owners while meeting the Court's new
jurisprudential requirements.
There are to be sure, other approaches that Congress could take to
address the problems created by the Court's decisions. In consultation
with experts in intellectual property law and constitutional law, I
reviewed several alternatives before settling on the IPPRA's approach.
In the end, I concluded that the approach I have outlined is the best
way to achieve a solution that meets any constitutional concerns,
fosters State-Federal cooperation, and encourages American innovation
and creativity to providing certain and effective intellectual property
protection.
when I first introduced the IPPRA in 1999, it prompted a flurry of
constructive comments and suggestions on how the legislation could be
improved. I look forward to considering further refinements to the bill
as the legislative process moves forward.
I ask unanimous consent that the text of the bill and a section-by-
section summary of the bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1611
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES.
(a) Short Title.--This Act may be cited as the
``Intellectual Property Protection Restoration Act of 2001''.
(b) References.--Any reference in this Act to the Trademark
Act of 1946 shall be a reference to the Act entitled ``An Act
to provide for the registration and protection of trade-marks
used in commerce, to carry out the provisions of certain
international conventions, and for other purposes'', approved
July 5, 1946 (15 U.S.C. 1051 et seq.).
SEC. 2. PURPOSES.
The purposes of this Act are to--
(1) help eliminate the unfair commercial advantage that
States and their instrumentalities now hold in the Federal
intellectual property system because of their ability to
obtain protection under the United States patent, copyright,
and trademark laws while remaining exempt from liability for
infringing the rights of others;
(2) promote technological innovation and artistic creation
in furtherance of the policies underlying Federal laws and
international treaties relating to intellectual property;
(3) reaffirm the availability of prospective relief against
State officials who are violating or who threaten to violate
Federal intellectual property laws; and
(4) abrogate State sovereign immunity in cases where States
or their instrumentalities, officers, or employees violate
the United States Constitution by infringing Federal
intellectual property.
SEC. 3. INTELLECTUAL PROPERTY REMEDIES EQUALIZATION.
(a) Amendment to Patent Law.--Section 287 of title 35,
United States Code, is amended by adding at the end the
following:
``(d)(1) No remedies under section 284 or 289 shall be
awarded in any civil action brought under this title for
infringement of a patent issued on or after January 1, 2002,
if a State or State instrumentality is or was at any time the
legal or beneficial owner of such patent, except upon proof
that--
``(A) on or before the date the infringement commenced or
January 1, 2004, whichever is later, the State has waived its
immunity, under the eleventh amendment of the United States
Constitution and under any other doctrine of sovereign
immunity, from suit in Federal court brought against the
State or any of its instrumentalities, for any infringement
of intellectual property protected under Federal law; and
``(B) such waiver was made in accordance with the
constitution and laws of the State, and remains effective.
``(2) The limitation on remedies under paragraph (1) shall
not apply with respect to a patent if--
``(A) the limitation would materially and adversely affect
a legitimate contract-based expectation in existence before
January 1, 2002; or
``(B) the party seeking remedies was a bona fide purchaser
for value of the patent, and, at the time of the purchase,
did not know and was reasonably without cause to believe that
a State or State instrumentality was once the legal or
beneficial owner of the patent.
``(3) The limitation on remedies under paragraph (1) may be
raised at any point in a proceeding, through the conclusion
of the action. If raised before January 1, 2004, the court
may stay the proceeding for a reasonable time, but not later
than January 1, 2004, to afford the State an opportunity to
waive its immunity as provided in paragraph (1).''.
(b) Amendment to Copyright Law.--Section 504 of title 17,
United States Code, is amended by adding at the end the
following:
``(e) Limitation on Remedies in Certain Cases.--
``(1) No remedies under this section shall be awarded in
any civil action brought under this title for infringement of
an exclusive right in a work created on or after January 1,
2002, if a State or State instrumentality is or was at any
time the legal or beneficial owner of such right, except upon
proof that--
``(A) on or before the date the infringement commenced or
January 1, 2004, whichever is later, the State has waived its
immunity, under the eleventh amendment of the United States
Constitution and under any other doctrine of sovereign
immunity, from suit in Federal court brought against the
State or any of its instrumentalities, for any infringement
of intellectual property protected under Federal law; and
``(B) such waiver was made in accordance with the
constitution and laws of the State, and remains effective.
``(2) The limitation on remedies under paragraph (1) shall
not apply with respect to an exclusive right if--
``(A) the limitation would materially and adversely affect
a legitimate contract-based expectation in existence before
January 1, 2002; or
``(B) the party seeking remedies was a bona fide purchaser
for value of the exclusive right, and, at the time of the
purchase, did not know and was reasonably without cause to
believe that a State or State instrumentality was once the
legal or beneficial owner of the right.
``(3) The limitation on remedies under paragraph (1) may be
raised at any point in a proceeding, through the conclusion
of the action. If raised before January 1, 2004, the court
may stay the proceeding for a reasonable time, but not later
than January 1, 2004, to afford the State an opportunity to
waive its immunity as provided in paragraph (1).''.
(c) Amendment to Trademark Law.--Section 35 of the
Trademark Act of 1946 (15 U.S.C. 1117) is amended by adding
at the end the following:
``(e) Limitation on Remedies in Certain Cases.--
``(1) No remedies under this section shall be awarded in
any civil action arising under this Act for a violation of
any right of the registrant of a mark registered in the
Patent and Trademark Office on or after January 1, 2002, or
any right of the owner of a mark first used in commerce on or
after January 1, 2002, if a State or State instrumentality is
or was at any time the legal or beneficial owner of such
right, except upon proof that--
``(A) on or before the date the violation commenced or
January 1, 2004, whichever is later, the State has waived its
immunity, under the eleventh amendment of the United States
Constitution and under any other doctrine of sovereign
immunity, from suit in Federal court brought against the
State or any of its instrumentalities, for any infringement
of intellectual property protected under Federal law; and
``(B) such waiver was made in accordance with the
constitution and laws of the State, and remains effective.
``(2) The limitation on remedies under paragraph (1) shall
not apply with respect to a right of the registrant or owner
of a mark if--
``(A) the limitation would materially and adversely affect
a legitimate contract-based expectation in existence before
January 1, 2002; or
``(B) the party seeking remedies was a bona fide purchaser
for value of the right, and, at the time of the purchase, did
not know and was reasonably without cause to believe that a
State or State instrumentality was once the legal or
beneficial owner of the right.
``(3) The limitation on remedies under paragraph (1) may be
raised at any point in a proceeding, through the conclusion
of the
[[Page S11368]]
action. If raised before January 1, 2004, the court may stay
the proceeding for a reasonable time, but not later than
January 1, 2004, to afford the State an opportunity to waive
its immunity as provided in paragraph (1).''.
(d) Technical and Conforming Amendments.--
(1) Amendments to patent law.--
(A) In general.--Section 296 of title 35, United States
Code, is repealed.
(B) Table of sections.--The table of sections for chapter
29 of title 35, United States Code, is amended by striking
the item relating to section 296.
(2) Amendments to copyright law.--
(A) In general.--Section 511 of title 17, United States
Code, is repealed.
(B) Table of sections.--The table of sections for chapter 5
of title 17, United States Code, is amended by striking the
item relating to section 511.
(3) Amendments to trademark law.--Section 40 of the
Trademark Act of 1946 (15 U.S.C. 1122) is amended--
(A) by striking subsection (b);
(B) in subsection (c), by striking ``or (b)'' after
``subsection (a)''; and
(C) by redesignating subsection (c) as subsection (b).
SEC. 4. CLARIFICATION OF REMEDIES AVAILABLE FOR STATUTORY
VIOLATIONS BY STATE OFFICERS AND EMPLOYEES.
In any action against an officer or employee of a State or
State instrumentality for any violation of any of the
provisions of title 17 or 35, United States Code, the
Trademark Act of 1946, or the Plant Variety Protection Act (7
U.S.C. 2321 et seq.), remedies shall be available against the
officer or employee in the same manner and to the same extent
as such remedies are available in an action against a private
individual under like circumstances. Such remedies may
include monetary damages assessed against the officer or
employee, declaratory and injunctive relief, costs, attorney
fees, and destruction of infringing articles, as provided
under the applicable Federal statute.
SEC. 5. LIABILITY OF STATES FOR CONSTITUTIONAL VIOLATIONS
INVOLVING INTELLECTUAL PROPERTY.
(a) Due Process Violations.--Any State or State
instrumentality that violates any of the exclusive rights of
a patent owner under title 35, United States Code, of a
copyright owner, author, or owner of a mask work or original
design under title 17, United States Code, of an owner or
registrant of a mark used in commerce or registered in the
Patent and Trademark Office under the Trademark Act of 1946,
or of an owner of a protected plant variety under the Plant
Variety Protection Act (7 U.S.C. 2321 et seq.), in a manner
that deprives any person of property in violation of the
fourteenth amendment of the United States Constitution, shall
be liable to the party injured in a civil action in Federal
court for compensation for the harm caused by such violation.
(b) Takings Violations.--
(1) In general.--Any State or State instrumentality that
violates any of the exclusive rights of a patent owner under
title 35, United States Code, of a copyright owner, author,
or owner of a mask work or original design under title 17,
United States Code, of an owner or registrant of a mark used
in commerce or registered in the Patent and Trademark Office
under the Trademark Act of 1946, or of an owner of a
protected plant variety under the Plant Variety Protection
Act (7 U.S.C. 2321 et seq.), in a manner that takes property
in violation of the fifth and fourteenth amendments of the
United States Constitution, shall be liable to the party
injured in a civil action in Federal court for compensation
for the harm caused by such violation.
(2) Effect on other relief.--Nothing in this subsection
shall prevent or affect the ability of a party to obtain
declaratory or injunctive relief under section 4 of this Act
or otherwise.
(c) Compensation.--Compensation under subsection (a) or
(b)--
(1) may include actual damages, profits, statutory damages,
interest, costs, expert witness fees, and attorney fees, as
set forth in the appropriate provisions of title 17 or 35,
United States Code, the Trademark Act of 1946, and the Plant
Variety Protection Act; and
(2) may not include an award of treble or enhanced damages
under section 284 of title 35, United States Code, section
504(d) of title 17, United States Code, section 35(b) of the
Trademark Act of 1946 (15 U.S.C. 1117 (b)), and section
124(b) of the Plant Variety Protection Act (7 U.S.C.
2564(b)).
(d) Burden of Proof.--In any action under subsection (a) or
(b)--
(1) with respect to any matter that would have to be proved
if the action were an action for infringement brought under
the applicable Federal statute, the burden of proof shall be
the same as if the action were brought under such statute;
and
(2) with respect to all other matters, including whether
the State provides an adequate remedy for any deprivation of
property proved by the injured party under subsection (a),
the burden of proof shall be upon the State or State
instrumentality.
(e) Effective Date.--This section shall apply to violations
that occur on or after the date of enactment of this Act.
SEC. 6. RULES OF CONSTRUCTION.
(a) Jurisdiction.--The district courts shall have original
jurisdiction of any action arising under this Act under
section 1338 of title 28, United States Code.
(b) Broad Construction.--This Act shall be construed in
favor of a broad protection of intellectual property, to the
maximum extent permitted by the United States Constitution.
(c) Severability.--If any provision of this Act or any
application of such provision to any person or circumstance
is held to be unconstitutional, the remainder of this Act and
the application of the provision to any other person or
circumstance shall not be affected.
____
Intellectual Property Protection Restoration Act of 2001--Section-by-
Section Summary
Recent Supreme Court decisions invalidated prior efforts by
Congress to abrogate state sovereign immunity in actions
arising under the federal intellectual property laws. The
Court's decisions give states an unfair advantage in the
intellectual property marketplace by shielding them from
money damages when they infringe the rights of private
parties, while leaving them free to obtain money damages when
their own rights are infringed. These decisions also have the
potential to impair the rights of private intellectual
property owners, discourage technological innovation and
artistic creation, and compromise the ability of the United
States to fulfill its obligations under a variety of
international treaties. The Intellectual Property Protection
Restoration Act of 2001 creates reasonable incentives for
states to waive their immunity in intellectual property cases
and participate in the intellectual property marketplace on
equal terms with private parties. The bill also provides new
remedies for state infringements that rise to the level of
constitutional violations.
Sec. 1. Short title; references.--This Act may be cited as
the ``Intellectual Property Protection Restoration Act of
2001.
Sec. 2. Purposes.--Legislative purposes in support of this
Act.
Sec. 3. Intellectual property remedies equalization.--
Places states on an equal footing with private parties by
eliminating any damages remedy for infringement of state-
owned intellectual property unless the state has waived its
immunity from any damages remedy for infringement of
privately-owned intellectual property. Intellectual property
that the state owned before the enactment of this Act is not
affected.
Sec. 4. Clarification of remedies available for statutory
violations by state officers and employees.--Affirms the
availability of injunctive relief against state officials who
violate the federal intellectual property laws. Such relief
is authorized under the doctrine of Ex parte Young, 209 U.S.
123 (1908), which held that an individual may sue a state
official for prospective relief requiring the state official
to cease violating federal law, even if the state itself is
immune from suit under the eleventh amendment. This section
also affirms that state officials may be personally liable
for violations of the intellectual property laws.
Sec. 5. Liability of states for constitutional violations
involving intellectual property.--Establishes a right to
compensation for state infringements of intellectual property
that rise to the level of constitutional violations.
Compensation shall be measured by the statutory remedies
available under the federal intellectual property laws, but
may not include treble damages.
Sec. 6. Rules of construction.--Establishes rules for
interpreting this Act.
______
By Mr. THOMPSON:
S. 1612. A bill to provide Federal managers with tools and
flexibility in areas such as personnel, budgeting, property management
and disposal, and for other purposes; to the Committee on Governmental
Affairs.
______
By Mr. THOMPSON:
S. 1613. A bill to provide for expedited congressional consideration
of ``Freedom to Manage'' legislative proposals transmitted by the
President to Congress to eliminate or reduce barriers to efficient
government operations that are posed by laws that apply to one or more
agencies, including government-wide laws; to the Committee on
Governmental Affairs.
Mr. THOMPSON. Mr. President, I am introducing legislation today that
was referred to Congress by President Bush. The legislation seeks to
extensively reform management of the Federal Government. I applaud the
Administration's attention to the issue of government reform, and I
will work with my colleagues on the Governmental Affairs Committee and
in Congress to enact this important package, because it includes
comprehensive reforms that will make government work better.
The Governmental Affairs Committee has documented the problems
affecting Executive Branch operations for some time, and I am impressed
with the President's attention to these issues at this critical time in
our Nation's history. The President's package of management reform
proposals will allow government managers to carry out their critical
responsibilities for the American public more effectively. It's obvious
the Administration understands how very important government
[[Page S11369]]
reform is to ensuring that the government can accomplish its varied
missions.
The legislation, which includes the Freedom to Manage Act and the
Managerial Flexibility Act, makes it easier for Executive Branch
management to increase accountability, reduce unnecessary costs, and
manage for results. The Managerial Flexibility Act will help the
government recruit and retain people with needed skills, increase the
flexibility of federal property management, and allow agencies to
budget for results. The Freedom to Manage Act would allow other reform
proposals, submitted to the Congress by the Administration, to be
considered expeditiously by the Congress.
I ask unanimous consent that a summary of this important legislation
be printed in the Record.
There being no objection, the summary was ordered to be printed in
the Record, as follows:
Freedom to Manage Reform Package--A Summary
Freedom to Manage Act of 2001
This legislation establishes a procedure under which heads
of departments and agencies can identify statutory barriers
to good management. Congress, in turn, would quickly consider
those obstacles and act to remove them.
Managerial Flexibility Act of 2001
This legislation provides federal managers with increased
flexibility in managing personnel; assigns agencies the
responsibility for funding the full government share of the
accruing cost of all retirement and retiree health care
benefits for Federal employees; and gives agencies greater
flexibility in managing property.
Reform Personnel Management. This proposal gives Federal
agencies and managers increased discretion and flexibility in
attracting, managing, and retaining a high quality workforce.
It empowers Federal agencies to determine when, if, and how
they might offer new employee incentives, and it enhances the
agencies' authority to use recruitment, retention, and
relocation bonuses to compete better with the private sector.
The bill permits agencies to develop alternative personnel
systems to attract and hire employees that best fit the
position, and it will enable managers to offer early
retirement packages. By enacting important changes to the
Senior Executive Service, this proposal also permits high-
level Federal managers to be treated more like their private
sector counterparts, by results-based performance standards
that hold them accountable.
Budgeting and Managing for Results.--Full Funding for
Federal Retiree Costs: This proposal charges Federal agencies
the full accruing cost of all retirement and retiree health
care benefits for Federal employees. This proposal is the
first government-wide step in linking the full cost of
resources used with the results achieved, which will make
management in the Executive Branch more performance-oriented.
This proposal will not change any of the benefits provided by
these programs, and will not change the level of employee
contributions.
Reform Federal Property Management.--The Federal Government
owns or controls more than 24 million acres of land and
facilities, but existing rules restrict the government's
ability to consolidate or release underperforming property.
In many instances, Federal agencies lack the incentives and
authority to renovate the property or tap its equity. This
proposal facilitates a total asset management approach to
Federal property issues by: improving life cycle planning and
management; allowing greater flexibility to optimize asset
performance; and providing incentives for better property
management. Modernizing these processes enhances government-
wide property management, bringing the practices federal
agencies use to manage their assets into the 21st century.
______
By Mr. SESSIONS (for himself, Mrs. Hutchison, Mr. Edwards, Mr.
Shelby, Mr. Hollings, Mr. Lott, Mr. Cleland, Mr. Cochran, Mr.
Helms, and Mr. Inhofe):
S. 1614. A bill to provide for the preservation and restoration of
historic buildings at historically women's public colleges or
universities; to the Committee on Energy and Natural Resources.
Mr. SESSIONS. Mr. President, today I rise to re-introduce legislation
to help preserve the heritage of eight historic women's colleges and
universities. The legislation would authorize the Secretary of the
Interior to provide restoration and preservation grants for historic
buildings and structures at eight historically women's colleges or
universities. The bill directs the Secretary to award $16 million
annually from fiscal years 2002 through 2006 to the eight institutions.
Funds would be awarded from the National Historic Preservation Fund and
are subject to a 50 percent matching requirement from non-federal
sources.
The sweeping changes of the industrial revolution prompted Congress
in 1862, with further action in 1887 and 1890, to provide Federal
support for the establishment of agricultural and mechanical colleges
with growing emphasis on industrial and technical education.
Unfortunately, these ``land-grant'' schools were only for men, leaving
women untrained as they entered the expanded work force. Women's
advocates, such as Miss Julia Tutwiler in Alabama, immediately
recognized the need for institutions where women could receive an equal
education. Beginning in 1836, eight institutions in seven separate
States were established as industrial schools for women. These
institutions include the Mississippi University for Women, in Alabama
the University of Montevallo, Georgia College and State University,
Wesleyan College also in Georgia, Winthrop University in South
Carolina, University of North Carolina at Greensboro, Texas Women's
University, and the University of Science and Arts of Oklahoma. These
eight institutions remain open, providing a liberal arts education for
both men and women, but retain significant historical and academic
features of those pioneering efforts to educate women. Despite their
continued use, many of the structures located on these campuses are
facing destruction or closure because preservation funds are not
available. My legislation would enable these buildings to be preserved
and maintained by providing funding for the historic buildings located
at the colleges and universities that I have identified. Funding would
originate from the National Historic Preservation Fund. No more than
$16 million would be available and would be distributed in equal
amounts to the eight institutions. My bill also provides that a 50
percent matching contribution from non-federal sources and assures that
alterations in properties using the funds are subject to approval from
the Secretary of the Interior and reasonable public access for
interpretive and educational purposes.
These historically women's colleges and universities have contributed
significantly to the effort to attain equal opportunity through
postsecondary education for women, low income individuals, and
educationally disadvantaged Americans. I believe it is our duty to do
all we can to preserve these historic institutions and I ask my
colleagues for their support.
______
By Mr. TORRICELLI (for himself and Mr. Corzine):
S. 1616. A bill to provide for interest on late payments of health
care claims; to the Committee on Finance.
Mr. TORRICELLI. Mr. President, I rise today to introduce the ``Prompt
Payment Bill''. This legislation addresses the need for the managed
care industry to not only take responsibility for their payments on
time, but to face specific penalties if they do not do so.
HMOs are one of the few entities that continue to be shielded from
lawsuits. It is shocking that under current federal and most state
laws, there are no consequences when HMOs fail to pay their bills in a
timely manner. HMOs even have the right to drop out of Medicare simply
because they are unsatisfied with the rate, let alone the timeliness,
of what the government is paying them. It is time that this lack of
accountability is addressed and significantly increased.
In my State of New Jersey, there is in fact a ``prompt pay'' law that
requires HMOs to pay their bills in thirty days from receiving a claim
from a beneficiary, hospital or health care provider. However, a 1998
survey of twenty-four New Jersey hospitals found that more than $150
million in HMO payments were held up for sixty days or longer. That
same year, sixty percent of New Jersey hospitals lost money, over $172
million in statewide losses. HMOs simply face no consequences from
state regulatory agencies and the enforcement mechanisms currently in
place are too weak. If we let this continue, we will jeopardize the
care that people receive from their health care providers.
For these reasons, I am introducing the ``Prompt Payment Bill''. This
amendment will move HMOs considerably closer to assuming the financial
responsibilities for the health care coverage they are being paid to
provide.