Union Calendar No. 423

104TH CONGRESS

2D SESSION H. R. 3460

[Report No. 104–784]

A BILL

To establish the Patent and Trademark Office as

a Government corporation, and for other purposes.

SEPTEMBER 12, 1996

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union,

and ordered to be printed

IB

Union Calendar No. 423

104TH CONGRESS

2D SESSION H. R. 3460

[Report No. 104–784]

To establish the Patent and Trademark Office as a Government corporation,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 15, 1996

Mr. MOORHEAD (for himself, Mrs. SCHROEDER, Mr. CONYERS, Mr. SENSENBRENNER, Mr. COBLE, Mr. GOODLATTE, Mr. BERMAN, Mr. BOUCHER,

Mr. GALLEGLY, Mr. HOKE, Mr. NADLER, and Ms. LOFGREN) introduced

the following bill; which was referred to the Committee on the Judiciary

SEPTEMBER 12, 1996

Additional sponsors: Ms. SLAUGHTER, Mr. HEINEMAN, Mr. GEKAS, Mr.

FROST, Mr. DREIER, Mr. HYDE, Mr. JOHNSTON of Florida, Mr.

MCHALE, Mr. LAHOOD, and Mr. PICKETT

SEPTEMBER 12, 1996

Reported with an amendment, committed to the Committee of the Whole

House on the State of the Union, and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in italic]

[For text of introduced bill, see copy of bill as introduced on May 15, 1996]

A BILL

To establish the Patent and Trademark Office as a

Government corporation, and for other purposes.
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Moorhead-Schroeder

5 Patent Reform Act’’.

6 SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I—PATENT AND TRADEMARK OFFICE GOVERNMENT

CORPORATION

Sec. 101. Short title.

Subtitle A—United States Patent and Trademark Office

Sec. 111. Establishment of Patent and Trademark Office as a Government corporation.

Sec. 112. Powers and duties.

Sec. 113. Organization and management.

Sec. 114. Management Advisory Board.

Sec. 115. Conforming amendments.

Sec. 116. Trademark Trial and Appeal Board.

Sec. 117. Board of Patent Appeals and Interferences.

Sec. 118. Suits by and against the Office.

Sec. 119. Annual report of Commissioner.

Sec. 120. Suspension or exclusion from practice.

Sec. 121. Funding.

Sec. 122. Audits.

Sec. 123. Transfers.

Subtitle B—Effective Date; Technical Amendments

Sec. 131. Effective date.

Sec. 132. Technical and conforming amendments.

Subtitle C—Miscellaneous Provisions

Sec. 141. References.

Sec. 142. Exercise of authorities.

Sec. 143. Savings provisions.

Sec. 144. Transfer of assets.

Sec. 145. Delegation and assignment.

Sec. 146. Authority of Director of the Office of Management and Budget with respect to functions transferred.

Sec. 147. Certain vesting of functions considered transfers.

Sec. 148. Availability of existing funds.

Sec. 149. Definitions.
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TITLE II—EARLY PUBLICATION OF PATENT APPLICATIONS

Sec. 201. Short title.

Sec. 202. Early publication.

Sec. 203. Time for claiming benefit of earlier filing date.

Sec. 204. Provisional rights.

Sec. 205. Prior art effect of published applications.

Sec. 206. Cost recovery for publication.

Sec. 207. Conforming changes.

Sec. 208. Patent term extension authority.

Sec. 209. Examining procedure improvements; further limited reexamination of

patent applications.

Sec. 210. Last day of pendency of provisional application.

Sec. 211. Reporting requirement.

Sec. 212. Effective date.

TITLE III—PRIOR DOMESTIC COMMERCIAL USE

Sec. 301. Short title.

Sec. 302. Defense to patent infringement based on prior domestic commercial use.

Sec. 303. Effective date and applicability.

TITLE IV—INVENTOR PROTECTION

Sec. 401. Short title.

Sec. 402. Invention development services.

Sec. 403. Technical and conforming amendment.

Sec. 404. Effective date.

TITLE V—PATENT REEXAMINATION REFORM

Sec. 501. Short title.

Sec. 502. Definitions.

Sec. 503. Reexamination procedures.

Sec. 504. Conforming amendments.

Sec. 505. Effective date.

TITLE VI—MISCELLANEOUS PATENT PROVISIONS

Sec. 601. Provisional applications.

Sec. 602. International applications.

Sec. 603. Plant patents.

Sec. 604. Just compensation for United States Government use of patents.

Sec. 605. Electronic filing.

1 TITLE I—PATENT AND TRADE2 MARK OFFICE GOVERNMENT

3 CORPORATION

4 SEC. 101. SHORT TITLE.

5 This title may be cited as the ‘‘Patent and Trademark

6 Office Government Corporation Act of 1996’’.
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1 Subtitle A—United States Patent

2 and Trademark Office

3 SEC. 111. ESTABLISHMENT OF PATENT AND TRADEMARK

4 OFFICE AS A GOVERNMENT CORPORATION.

5 Section 1 of title 35, United States Code, is amended

6 to read as follows:

7 ‘‘§ 1. Establishment

8 ‘‘(a) ESTABLISHMENT.—The United States Patent and

9 Trademark Office is established as a wholly owned Govern10 ment corporation subject to chapter 91 of title 31, and shall

11 be an agency of the United States under the policy direction

12 of the Secretary of Commerce, except as otherwise provided

13 in this title. For purposes of internal management, the

14 United States Patent and Trademark Office shall be a cor15 porate body not subject to supervision by any department,

16 except as otherwise provided in this title.

17 ‘‘(b) OFFICES.—The United States Patent and Trade18 mark Office shall maintain an office in the District of Co19 lumbia, or the metropolitan area thereof, for the service of

20 process and papers and shall be deemed, for purposes of

21 venue in civil actions, to be a resident of the district in

22 which its principal office is located. The United States Pat23 ent and Trademark Office may establish offices in such

24 other places as it considers necessary or appropriate in the

25 conduct of its business.
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1 ‘‘(c) REFERENCE.—For purposes of this title, the

2 United States Patent and Trademark Office shall also be

3 referred to as the ‘Office’ and the ‘Patent and Trademark

4 Office’.’’.

5 SEC. 112. POWERS AND DUTIES.

6 Section 2 of title 35, United States Code, is amended

7 to read as follows:

8 ‘‘§ 2. Powers and Duties

9 ‘‘(a) IN GENERAL.—The United States Patent and

10 Trademark Office shall be responsible for—

11 ‘‘(1) the granting and issuing of patents and the

12 registration of trademarks;

13 ‘‘(2) conducting studies, programs, or exchanges

14 of items or services regarding domestic and inter15 national patent and trademark law, the administra16 tion of the Office, or any other function vested in the

17 Office by law, including programs to recognize, iden18 tify, assess, and forecast the technology of patented in19 ventions and their utility to industry;

20 ‘‘(3)(A) authorizing or conducting studies and

21 programs cooperatively with foreign patent and

22 trademark offices and international organizations, in

23 connection with the granting and issuing of patents

24 and the registration of trademarks; and
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1 ‘‘(B) with the concurrence of the Secretary of

2 State, authorizing the transfer of not to exceed

3 $100,000 in any year to the Department of State for

4 the purpose of making special payments to inter5 national intergovernmental organizations for studies

6 and programs for advancing international coopera7 tion concerning patents, trademarks, and related mat8 ters; and

9 ‘‘(4) disseminating to the public information

10 with respect to patents and trademarks.

11 The special payments under paragraph (3)(B) shall be in

12 addition to any other payments or contributions to inter13 national organizations described in paragraph (3)(B) and

14 shall not be subject to any limitations imposed by law on

15 the amounts of such other payments or contributions by the

16 United States Government.

17 ‘‘(b) SPECIFIC POWERS.—The Office—

18 ‘‘(1) shall have perpetual succession;

19 ‘‘(2) shall adopt and use a corporate seal, which

20 shall be judicially noticed and with which letters pat21 ent, certificates of trademark registrations, and pa22 pers issued by the Office shall be authenticated;

23 ‘‘(3) may sue and be sued in its corporate name

24 and be represented by its own attorneys in all judi-
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1 cial and administrative proceedings, subject to the

2 provisions of section 7;

3 ‘‘(4) may indemnify the Commissioner of Pat4 ents and Trademarks, and other officers, attorneys,

5 agents, and employees (including members of the

6 Management Advisory Board established in section 5)

7 of the Office for liabilities and expenses incurred

8 within the scope of their employment;

9 ‘‘(5) may adopt, amend, and repeal bylaws,

10 rules, regulations, and determinations, which—

11 ‘‘(A) shall govern the manner in which its

12 business will be conducted and the powers grant13 ed to it by law will be exercised;

14 ‘‘(B) shall be made after notice and oppor15 tunity for full participation by interested public

16 and private parties;

17 ‘‘(C) shall facilitate and expedite the proc18 essing of patent applications, particularly those

19 which can be filed, stored, processed, searched,

20 and retrieved electronically, subject to the provi21 sions of section 122 relating to the confidential

22 status of applications; and

23 ‘‘(D) may govern the recognition and con24 duct of agents, attorneys, or other persons rep25 resenting applicants or other parties before the
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1 Office, and may require them, before being recog2 nized as representatives of applicants or other

3 persons, to show that they are of good moral

4 character and reputation and are possessed of

5 the necessary qualifications to render to appli6 cants or other persons valuable service, advice,

7 and assistance in the presentation or prosecution

8 of their applications or other business before the

9 Office;

10 ‘‘(6) may acquire, construct, purchase, lease,

11 hold, manage, operate, improve, alter, and renovate

12 any real, personal, or mixed property, or any interest

13 therein, as it considers necessary to carry out its

14 functions;

15 ‘‘(7)(A) may make such purchases, contracts for

16 the construction, maintenance, or management and

17 operation of facilities, and contracts for supplies or

18 services, without regard to the provisions of the Fed19 eral Property and Administrative Services Act of

20 1949 (40 U.S.C. 471 and following), the Public

21 Buildings Act (40 U.S.C. 601 and following), and the

22 Stewart B. McKinney Homeless Assistance Act (42

23 U.S.C. 11301 and following); and

24 ‘‘(B) may enter into and perform such purchases

25 and contracts for printing services, including the
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1 process of composition, platemaking, presswork, silk

2 screen processes, binding, microform, and the products

3 of such processes, as it considers necessary to carry

4 out the functions of the Office, without regard to sec5 tions 501 through 517 and 1101 through 1123 of title

6 44;

7 ‘‘(8) may use, with their consent, services, equip8 ment, personnel, and facilities of other departments,

9 agencies, and instrumentalities of the Federal Govern10 ment, on a reimbursable basis, and cooperate with

11 such other departments, agencies, and instrumental12 ities in the establishment and use of services, equip13 ment, and facilities of the Office;

14 ‘‘(9) may obtain from the Administrator of Gen15 eral Services such services as the Administrator is au16 thorized to provide to other agencies of the United

17 States, on the same basis as those services are pro18 vided to other agencies of the United States;

19 ‘‘(10) may use, with the consent of the United

20 States and the agency, government, or international

21 organization concerned, the services, records, facilities,

22 or personnel of any State or local government agency

23 or instrumentality or foreign government or inter24 national organization to perform functions on its be25 half;
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1 ‘‘(11) may determine the character of and the ne2 cessity for its obligations and expenditures and the

3 manner in which they shall be incurred, allowed, and

4 paid, subject to the provisions of this title and the Act

5 of July 5, 1946 (commonly referred to as the ‘Trade6 mark Act of 1946’);

7 ‘‘(12) may retain and use all of its revenues and

8 receipts, including revenues from the sale, lease, or

9 disposal of any real, personal, or mixed property, or

10 any interest therein, of the Office, including for re11 search and development and capital investment, sub12 ject to the provisions of section 10101 of the Omnibus

13 Budget Reconciliation Act of 1990 (35 U.S.C. 41

14 note);

15 ‘‘(13) shall have the priority of the United States

16 with respect to the payment of debts from bankrupt,

17 insolvent, and decedents’ estates;

18 ‘‘(14) may accept monetary gifts or donations of

19 services, or of real, personal, or mixed property, in

20 order to carry out the functions of the Office;

21 ‘‘(15) may execute, in accordance with its by22 laws, rules, and regulations, all instruments necessary

23 and appropriate in the exercise of any of its powers;

24 ‘‘(16) may provide for liability insurance and

25 insurance against any loss in connection with its
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1 property, other assets, or operations either by contract

2 or by self-insurance; and

3 ‘‘(17) shall pay any settlement or judgment en4 tered against it from the funds of the Office and not

5 from amounts available under section 1304 of title

6 31.’’.

7 SEC. 113. ORGANIZATION AND MANAGEMENT.

8 Section 3 of title 35, United States Code, is amended

9 to read as follows:

10 ‘‘§ 3. Officers and employees

11 ‘‘(a) COMMISSIONER.—

12 ‘‘(1) IN GENERAL.—The management of the

13 United States Patent and Trademark Office shall be

14 vested in a Commissioner of Patents and Trademarks

15 (hereafter in this title referred to as the ‘Commis16 sioner’), who shall be a citizen of the United States

17 and who shall be appointed by the President, by and

18 with the advice and consent of the Senate. The Com19 missioner shall be a person who, by reason of profes20 sional background and experience in patent or trade21 mark law, is especially qualified to manage the Of22 fice.

23 ‘‘(2) DUTIES.—

24 ‘‘(A) IN GENERAL.—The Commissioner shall

25 be responsible for the management and direction
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1 of the Office, including the issuance of patents

2 and the registration of trademarks, and shall

3 perform these duties in a fair, impartial, and

4 equitable manner.

5 ‘‘(B) ADVISING THE PRESIDENT.—The

6 Commissioner shall advise the President, through

7 the Secretary of Commerce, of all activities of the

8 Office undertaken in response to obligations of

9 the United States under treaties and executive

10 agreements, or which relate to cooperative pro11 grams with those authorities of foreign govern12 ments that are responsible for granting patents

13 or registering trademarks. The Commissioner

14 shall also recommend to the President, through

15 the Secretary of Commerce, changes in law or

16 policy which may improve the ability of United

17 States citizens to secure and enforce patent

18 rights or trademark rights in the United States

19 or in foreign countries.

20 ‘‘(C) CONSULTING WITH THE MANAGEMENT

21 ADVISORY BOARD.—The Commissioner shall con22 sult with the Management Advisory Board estab23 lished in section 5 on a regular basis on matters

24 relating to the operation of the Office, and shall

25 consult with the Board before submitting budg-
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1 etary proposals to the Office of Management and

2 Budget or changing or proposing to change pat3 ent or trademark user fees or patent or trade4 mark regulations.

5 ‘‘(D) SECURITY CLEARANCES.—The Com6 missioner, in consultation with the Director of

7 the Office of Personnel Management, shall main8 tain a program for identifying national security

9 positions and providing for appropriate security

10 clearances.

11 ‘‘(3) TERM.—The Commissioner shall serve a

12 term of 5 years, and may continue to serve after the

13 expiration of the Commissioner’s term until a suc14 cessor is appointed and assumes office. The Commis15 sioner may be reappointed to subsequent terms.

16 ‘‘(4) OATH.—The Commissioner shall, before tak17 ing office, take an oath to discharge faithfully the du18 ties of the Office.

19 ‘‘(5) COMPENSATION.—The Commissioner shall

20 receive compensation at the rate of pay in effect for

21 level II of the Executive Schedule under section 5313

22 of title 5.

23 ‘‘(6) REMOVAL.—The Commissioner may be re24 moved from office by the President only for cause.
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1 ‘‘(7) DESIGNEE OF COMMISSIONER.—The Com2 missioner shall designate an officer of the Office who

3 shall be vested with the authority to act in the capac4 ity of the Commissioner in the event of the absence or

5 incapacity of the Commissioner.

6 ‘‘(b) OFFICERS AND EMPLOYEES OF THE OFFICE.—

7 ‘‘(1) DEPUTY COMMISSIONERS.—The Commis8 sioner shall appoint a Deputy Commissioner for Pat9 ents and a Deputy Commissioner for Trademarks for

10 terms that shall expire on the date on which the Com11 missioner’s term expires. The Deputy Commissioner

12 for Patents shall be a person with demonstrated expe13 rience in patent law and the Deputy Commissioner

14 for Trademarks shall be a person with demonstrated

15 experience in trademark law. The Deputy Commis16 sioner for Patents and the Deputy Commissioner for

17 Trademarks shall be the principal policy and man18 agement advisors to the Commissioner on all aspects

19 of the activities of the Office that affect the adminis20 tration of patent and trademark operations, respec21 tively.

22 ‘‘(2) OTHER OFFICERS AND EMPLOYEES.—The

23 Commissioner shall—

24 ‘‘(A) appoint an Inspector General and

25 such other officers, employees (including attor-
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1 neys), and agents of the Office as the Commis2 sioner considers necessary to carry out its func3 tions;

4 ‘‘(B) fix the compensation of such officers

5 and employees, except as otherwise provided in

6 this section; and

7 ‘‘(C) define the authority and duties of such

8 officers and employees and delegate to them such

9 of the powers vested in the Office as the Commis10 sioner may determine.

11 The Office shall not be subject to any administra12 tively or statutorily imposed limitation on positions

13 or personnel, and no positions or personnel of the Of14 fice shall be taken into account for purposes of apply15 ing any such limitation.

16 ‘‘(c) LIMITS ON COMPENSATION.—Except as otherwise

17 provided by law, the annual rate of basic pay of an officer

18 or employee of the Office may not be fixed at a rate that

19 exceeds, and total compensation payable to any such officer

20 or employee for any year may not exceed, the annual rate

21 of basic pay in effect for the Commissioner for the year in22 volved. The Commissioner shall prescribe such regulations

23 as may be necessary to carry out this subsection.

24 ‘‘(d) INAPPLICABILITY OF TITLE 5 GENERALLY.—Ex25 cept as otherwise provided in this section, officers and em-
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1 ployees of the Office shall not be subject to the provisions

2 of title 5 relating to Federal employees.

3 ‘‘(e) CONTINUED APPLICABILITY OF CERTAIN PROVI4 SION OF TITLE 5.—

5 ‘‘(1) IN GENERAL.—The following provisions of

6 title 5 shall apply to the Office and its officers and

7 employees:

8 ‘‘(A) Section 3110 (relating to employment

9 of relatives; restrictions).

10 ‘‘(B) Subchapter II of chapter 55 (relating

11 to withholding pay).

12 ‘‘(C) Subchapters II and III of chapter 73

13 (relating to employment limitations and polit14 ical activities, respectively).

15 ‘‘(D) Chapter 71 (relating to labor-manage16 ment relations), subject to paragraph (2) and

17 subsection (g).

18 ‘‘(E) Section 3303 (relating to political rec19 ommendations).

20 ‘‘(F) Subchapter II of chapter 61 (relating

21 to flexible and compressed work schedules).

22 ‘‘(2) COMPENSATION SUBJECT TO COLLECTIVE

23 BARGAINING.—

24 ‘‘(A) IN GENERAL.—Notwithstanding any

25 other provision of law, for purposes of applying
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1 chapter 71 of title 5 pursuant to paragraph

2 (1)(D), basic pay and other forms of compensa3 tion shall be considered to be among the matters

4 as to which the duty to bargain in good faith

5 extends under such chapter.

6 ‘‘(B) EXCEPTIONS.—The duty to bargain in

7 good faith shall not, by reason of subparagraph

8 (A), be considered to extend to any benefit under

9 title 5 which is afforded by paragraph (1), (2),

10 (3), or (4) of subsection (f).

11 ‘‘(C) LIMITATIONS APPLY.—Nothing in this

12 subsection shall be considered to allow any limi13 tation under subsection (c) to be exceeded.

14 ‘‘(f) PROVISIONS OF TITLE 5 THAT CONTINUE TO

15 APPLY, SUBJECT TO CERTAIN REQUIREMENTS.—

16 ‘‘(1) RETIREMENT.—(A) The provisions of sub17 chapter III of chapter 83 and chapter 84 of title 5

18 shall apply to the Office and its officers and employ19 ees, subject to subparagraph (B).

20 ‘‘(B)(i) The amount required of the Office under

21 the second sentence of section 8334(a)(1) of title 5

22 with respect to any particular individual shall, in23 stead of the amount which would otherwise apply, be

24 equal to the normal-cost percentage (determined with

25 respect to officers and employees of the Office using
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1 dynamic assumptions, as defined by section 8401(9)

2 of such title) of the individual’s basic pay, minus the

3 amount required to be withheld from such pay under

4 such section 8334(a)(1).

5 ‘‘(ii) The amount required of the Office under

6 section 8334(k)(1)(B) of title 5 with respect to any

7 particular individual shall be equal to an amount

8 computed in a manner similar to that specified in

9 clause (i), as determined in accordance with clause

10 (iii).

11 ‘‘(iii) Any regulations necessary to carry out this

12 subparagraph shall be prescribed by the Office of Per13 sonnel Management.

14 ‘‘(C) The United States Patent and Trademark

15 Office may supplement the benefits provided under

16 the preceding provisions of this paragraph.

17 ‘‘(2) HEALTH BENEFITS.—(A) The provisions of

18 chapter 89 of title 5 shall apply to the Office and its

19 officers and employees, subject to subparagraph (B).

20 ‘‘(B)(i) With respect to any individual who be21 comes an officer or employee of the Office pursuant to

22 subsection (h), the eligibility of such individual to

23 participate in such program as an annuitant (or of

24 any other person to participate in such program as

25 an annuitant based on the death of such individual)
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1 shall be determined by disregarding the requirements

2 of section 8905(b) of title 5. The preceding sentence

3 shall not apply if the individual ceases to be an offi4 cer or employee of the Office for any period of time

5 after becoming an officer or employee of the Office

6 pursuant to subsection (h) and before separation.

7 ‘‘(ii) The Government contributions authorized

8 by section 8906 for health benefits for anyone partici9 pating in the health benefits program pursuant to

10 this subparagraph shall be made by the Office in the

11 same manner as provided under section 8906(g)(2) of

12 title 5 with respect to the United States Postal Serv13 ice for individuals associated therewith.

14 ‘‘(iii) For purposes of this subparagraph, the

15 term ‘annuitant’ has the meaning given such term by

16 section 8901(3) of title 5.

17 ‘‘(C) The Office may supplement the benefits pro18 vided under the preceding provisions of this para19 graph.

20 ‘‘(3) LIFE INSURANCE.—(A) The provisions of

21 chapter 87 of title 5 shall apply to the Office and its

22 officers and employees, subject to subparagraph (B).

23 ‘‘(B)(i) Eligibility for life insurance coverage

24 after retirement or while in receipt of compensation

25 under subchapter I of chapter 81 of title 5 shall be
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1 determined, in the case of any individual who be2 comes an officer or employee of the Office pursuant to

3 subsection (h), without regard to the requirements of

4 section 8706(b) (1) or (2), but subject to the condition

5 specified in the last sentence of paragraph (2)(B)(i)

6 of this subsection.

7 ‘‘(ii) Government contributions under section

8 8708(d) on behalf of any such individual shall be

9 made by the Office in the same manner as provided

10 under paragraph (3) thereof with respect to the

11 United States Postal Service for individuals associ12 ated therewith.

13 ‘‘(C) The Office may supplement the benefits pro14 vided under the preceding provisions of this para15 graph.

16 ‘‘(4) EMPLOYEES’ COMPENSATION FUND.—(A)

17 Officers and employees of the Office shall not become

18 ineligible to participate in the program under chapter

19 81 of title 5, relating to compensation for work inju20 ries, by reason of subsection (d).

21 ‘‘(B) The Office shall remain responsible for re22 imbursing the Employees’ Compensation Fund, pur23 suant to section 8147 of title 5, for compensation paid

24 or payable after the effective date of the Patent and

25 Trademark Office Government Corporation Act of
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1 1996 in accordance with chapter 81 of title 5 with re2 gard to any injury, disability, or death due to events

3 arising before such date, whether or not a claim has

4 been filed or is final on such date.

5 ‘‘(g) LABOR-MANAGEMENT RELATIONS.—

6 ‘‘(1) LABOR RELATIONS AND EMPLOYEE RELA7 TIONS PROGRAMS.—The Office shall develop labor re8 lations and employee relations programs with the ob9 jective of improving productivity and efficiency, in10 corporating the following principles:

11 ‘‘(A) Such programs shall be consistent with

12 the merit principles in section 2301(b) of title 5.

13 ‘‘(B) Such programs shall provide veterans

14 preference protections equivalent to those estab15 lished by sections 2108, 3308–3318, and 3320 of

16 title 5.

17 ‘‘(C)(i) The right to work shall not be sub18 ject to undue restraint or coercion. The right to

19 work shall not be infringed or restricted in any

20 way based on membership in, affiliation with, or

21 financial support of a labor organization.

22 ‘‘(ii) No person shall be required, as a con23 dition of employment or continuation of

24 employment—
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1 ‘‘(I) to resign or refrain from

2 voluntary membership in, voluntary affili3 ation with, or voluntary financial support

4 of a labor organization;

5 ‘‘(II) to become or remain a member of

6 a labor organization;

7 ‘‘(III) to pay any dues, fees, assess8 ments, or other charges of any kind or

9 amount to a labor organization;

10 ‘‘(IV) to pay to any charity or other

11 third party, in lieu of such payments, any

12 amount equivalent to or a pro-rata portion

13 of dues, fees, assessments, or other charges

14 regularly required of members of a labor or15 ganization; or

16 ‘‘(V) to be recommended, approved, re17 ferred, or cleared by or through a labor or18 ganization.

19 ‘‘(iii) This subparagraph shall not apply to

20 a person described in section 7103(a)(2)(v) of

21 title 5 or a ‘supervisor’, ‘management official’, or

22 ‘confidential employee’ as those terms are defined

23 in 7103(a) (10), (11), and (13) of such title.

24 ‘‘(iv) Any labor organization recognized by

25 the Office as the exclusive representative of a
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1 unit of employees of the Office shall represent the

2 interests of all employees in that unit without

3 discrimination and without regard to labor orga4 nization membership.

5 ‘‘(2) ADOPTION OF EXISTING LABOR AGREE6 MENTS.—The Office shall adopt all labor agreements

7 which are in effect, as of the day before the effective

8 date of the Patent and Trademark Office Government

9 Corporation Act of 1996, with respect to such Office

10 (as then in effect).

11 ‘‘(h) CARRYOVER OF PERSONNEL.—

12 ‘‘(1) FROM PTO.—Effective as of the effective

13 date of the Patent and Trademark Office Government

14 Corporation Act of 1996, all officers and employees of

15 the Patent and Trademark Office on the day before

16 such effective date shall become officers and employees

17 of the Office, without a break in service.

18 ‘‘(2) OTHER PERSONNEL.—Any individual who,

19 on the day before the effective date of the Patent and

20 Trademark Office Government Corporation Act of

21 1996, is an officer or employee of the Department of

22 Commerce (other than an officer or employee under

23 paragraph (1)) shall be transferred to the Office if—

24 ‘‘(A) such individual serves in a position

25 for which a major function is the performance of
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1 work reimbursed by the Patent and Trademark

2 Office, as determined by the Secretary of Com3 merce;

4 ‘‘(B) such individual serves in a position

5 that performed work in support of the Patent

6 and Trademark Office during at least half of the

7 incumbent’s work time, as determined by the

8 Secretary of Commerce; or

9 ‘‘(C) such transfer would be in the interest

10 of the Office, as determined by the Secretary of

11 Commerce in consultation with the Commis12 sioner of Patents and Trademarks.

13 Any transfer under this paragraph shall be effective

14 as of the same effective date as referred to in para15 graph (1), and shall be made without a break in serv16 ice.

17 ‘‘(3) ACCUMULATED LEAVE.—The amount of sick

18 and annual leave and compensatory time accumu19 lated under title 5 before the effective date described

20 in paragraph (1), by those becoming officers or em21 ployees of the Office pursuant to this subsection, are

22 obligations of the Office.

23 ‘‘(4) TERMINATION RIGHTS.—Any employee re24 ferred to in paragraph (1) or (2) of this subsection

25 whose employment with the Office is terminated dur-
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1 ing the 2-year period beginning on the effective date

2 of the Patent and Trademark Office Government Cor3 poration Act of 1996 shall be entitled to rights and

4 benefits, to be afforded by the Office, similar to those

5 such employee would have had under Federal law if

6 termination had occurred immediately before such

7 date. An employee who would have been entitled to

8 appeal any such termination to the Merit Systems

9 Protection Board, if such termination had occurred

10 immediately before such effective date, may appeal

11 any such termination occurring within this 2-year

12 period to the Board under such procedures as it may

13 prescribe.

14 ‘‘(5) CONTINUATION IN OFFICE OF CERTAIN OFFI15 CERS.—(A) The individual serving as the Commis16 sioner of Patents and Trademarks on the day before

17 the effective date of the Patent and Trademark Office

18 Government Corporation Act of 1996 may serve as

19 the Commissioner until the date on which a Commis20 sioner is appointed under subsection (a).

21 ‘‘(B) The individual serving as the Assistant

22 Commissioner for Patents on the day before the effec23 tive date of the Patent and Trademark Office Govern24 ment Corporation Act of 1996 may serve as the Dep25 uty Commissioner for Patents until the date on which
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1 a Deputy Commissioner for Patents is appointed

2 under subsection (b).

3 ‘‘(C) The individual serving as the Assistant

4 Commissioner for Trademarks on the day before the

5 effective date of the Patent and Trademark Office

6 Government Corporation Act of 1996 may serve as

7 the Deputy Commissioner for Trademarks until the

8 date on which a Deputy Commissioner for Trade9 marks is appointed under subsection (b).

10 ‘‘(i) COMPETITIVE STATUS.—For purposes of appoint11 ment to a position in the competitive service for which an

12 officer or employee of the Office is qualified, such officer

13 or employee shall not forfeit any competitive status, ac14 quired by such officer or employee before the effective date

15 of the Patent and Trademark Office Government Corpora16 tion Act of 1996, by reason of becoming an officer or em17 ployee of the Office pursuant to subsection (h).

18 ‘‘(j) SAVINGS PROVISIONS.—

19 ‘‘(1) IN GENERAL.—Compensation, benefits, and

20 other terms and conditions of employment in effect

21 immediately before the effective date of the Patent and

22 Trademark Office Government Corporation Act of

23 1996, whether provided by statute or by rules and

24 regulations of the former Patent and Trademark Of25 fice or the executive branch of the Government of the
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1 United States, shall continue to apply to officers and

2 employees of the Office, until changed in accordance

3 with this section (whether by action of the Commis4 sioner or otherwise).

5 ‘‘(2) PROVISIONS SPECIFIC TO BASIC PAY.—With

6 respect to any individual who becomes an officer or

7 employee of the Office pursuant to subsection (h), the

8 rate of basic pay for such officer or employee may

9 not, on or after the effective date of the Patent and

10 Trademark Office Government Corporation Act of

11 1996, be less than the rate in effect immediately before

12 such effective date, except—

13 ‘‘(A) pursuant to a collective-bargaining

14 agreement entered into under this section; or

15 ‘‘(B) for inefficiency, neglect of duty, or

16 misconduct, on the part of such individual.

17 For purposes of this subparagraph, the term ‘basic

18 pay’ includes any amount considered to be part of

19 basic pay for purposes of subchapter III of chapter 83

20 or chapter 84 of title 5.

21 ‘‘(k) REMOVAL OF QUASI-JUDICIAL EXAMINERS.—The

22 Office may remove a patent examiner or examiner-in-chief,

23 or a trademark examiner or member of a Trademark Trial

24 and Appeal Board, only for such cause as will promote the

25 efficiency of the Office.’’.
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1 SEC. 114. MANAGEMENT ADVISORY BOARD.

2 Chapter 1 of part I of title 35, United States Code,

3 is amended by inserting after section 4 the following:

4 ‘‘§ 5. Patent and Trademark Office Management Advi5 sory Board

6 ‘‘(a) ESTABLISHMENT OF MANAGEMENT ADVISORY

7 BOARD.—

8 ‘‘(1) APPOINTMENT.—The United States Patent

9 and Trademark Office shall have a Management Ad10 visory Board (hereafter in this title referred to as the

11 ‘Board’) of 12 members, 4 of whom shall be appointed

12 by the President, 4 of whom shall be appointed by the

13 Speaker of the House of Representatives, and 4 of

14 whom shall be appointed by the President pro tem15 pore of the Senate. Not more than 3 of the 4 members

16 appointed by each appointing authority shall be

17 members of the same political party.

18 ‘‘(2) TERMS.—Members of the Board shall be ap19 pointed for a term of 4 years each, except that of the

20 members first appointed by each appointing author21 ity, 1 shall be for a term of 1 year, 1 shall be for a

22 term of 2 years, and 1 shall be for a term of 3 years.

23 No member may serve more than 1 term.

24 ‘‘(3) CHAIR.—The President shall designate the

25 chair of the Board, whose term as chair shall be for

26 3 years.
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1 ‘‘(4) TIMING OF APPOINTMENTS.—Initial ap2 pointments to the Board shall be made within 3

3 months after the effective date of the Patent and

4 Trademark Office Government Corporation Act of

5 1996, and vacancies shall be filled within 3 months

6 after they occur.

7 ‘‘(5) VACANCIES.—Vacancies shall be filled in the

8 manner in which the original appointment was made

9 under this subsection. Members appointed to fill a va10 cancy occurring before the expiration of the term for

11 which the member’s predecessor was appointed shall

12 be appointed only for the remainder of that term. A

13 member may serve after the expiration of that mem14 ber’s term until a successor is appointed.

15 ‘‘(6) COMMITTEES.—The Chair shall designate

16 members of the Board to serve on a committee on pat17 ent operations and on a committee on trademark op18 erations to perform the duties set forth in subsection

19 (e) as they relate specifically to the Office’s patent op20 erations, and the Office’s trademark operations, re21 spectively.

22 ‘‘(b) BASIS FOR APPOINTMENTS.—Members of the

23 Board shall be citizens of the United States who shall be

24 chosen so as to represent the interests of diverse users of

25 the United States Patent and Trademark Office, and shall
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1 include individuals with substantial background and

2 achievement in corporate finance and management.

3 ‘‘(c) APPLICABILITY OF CERTAIN ETHICS LAWS.—

4 Members of the Board shall be special Government employ5 ees within the meaning of section 202 of title 18.

6 ‘‘(d) MEETINGS.—The Board shall meet at the call of

7 the chair to consider an agenda set by the chair.

8 ‘‘(e) DUTIES.—The Board shall—

9 ‘‘(1) review the policies, goals, performance,

10 budget, and user fees of the United States Patent and

11 Trademark Office, and advise the Commissioner on

12 these matters; and

13 ‘‘(2) within 60 days after the end of each fiscal

14 year, prepare an annual report on the matters re15 ferred to in paragraph (1), transmit the report to the

16 President and the Committees on the Judiciary of the

17 Senate and the House of Representatives, and publish

18 the report in the Patent and Trademark Office Offi19 cial Gazette.

20 ‘‘(f) COMPENSATION.—Members of the Board shall be

21 compensated for each day (including travel time) during

22 which they are attending meetings or conferences of the

23 Board or otherwise engaged in the business of the Board,

24 at the rate which is the daily equivalent of the annual rate

25 of basic pay in effect for level III of the Executive Schedule
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1 under section 5314 of title 5, and while away from their

2 homes or regular places of business they may be allowed

3 travel expenses, including per diem in lieu of subsistence,

4 as authorized by section 5703 of title 5.

5 ‘‘(g) ACCESS TO INFORMATION.—Members of the Board

6 shall be provided access to records and information in the

7 United States Patent and Trademark Office, except for per8 sonnel or other privileged information and information con9 cerning patent applications required to be kept in con10 fidence by section 122.’’.

11 SEC. 115. CONFORMING AMENDMENTS.

12 (a) DUTIES OF COMMISSIONER.—Chapter 1 of title 35,

13 United States Code, is amended by striking section 6.

14 (b) REGULATIONS FOR AGENTS AND ATTORNEYS.—

15 Section 31 of title 35, United States Code, and the item

16 relating to such section in the table of sections for chapter

17 3 of title 35, United States Code, are repealed.

18 SEC. 116. TRADEMARK TRIAL AND APPEAL BOARD.

19 Section 17 of the Act of July 5, 1946 (commonly re20 ferred to as the ‘‘Trademark Act of 1946’’) (15 U.S.C. 1067)

21 is amended to read as follows:

22 ‘‘SEC. 17. (a) In every case of interference, opposition

23 to registration, application to register as a lawful concur24 rent user, or application to cancel the registration of a

25 mark, the Commissioner shall give notice to all parties and
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1 shall direct a Trademark Trial and Appeal Board to deter2 mine and decide the respective rights of registration.

3 ‘‘(b) The Trademark Trial and Appeal Board shall in4 clude the Commissioner, the Deputy Commissioner for Pat5 ents, the Deputy Commissioner for Trademarks, and mem6 bers competent in trademark law who are appointed by the

7 Commissioner.’’.

8 SEC. 117. BOARD OF PATENT APPEALS AND INTER9 FERENCES.

10 Chapter 1 of title 35, United States Code, is amended

11 by striking section 7 and inserting after section 5 the fol12 lowing:

13 ‘‘§ 6. Board of Patent Appeals and Interferences

14 ‘‘(a) ESTABLISHMENT AND COMPOSITION.—There shall

15 be in the United States Patent and Trademark Office a

16 Board of Patent Appeals and Interferences. The Commis17 sioner, the Deputy Commissioner for Patents, the Deputy

18 Commissioner for Trademarks, and the examiners-in-chief

19 shall constitute the Board. The examiners-in-chief shall be

20 persons of competent legal knowledge and scientific ability.

21 ‘‘(b) DUTIES.—The Board of Patent Appeals and

22 Interferences shall, on written appeal of an applicant, re23 view adverse decisions of examiners upon applications for

24 patents and shall determine priority and patentability of

25 invention in interferences declared under section 135(a).
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1 Each appeal and interference shall be heard by at least 3

2 members of the Board, who shall be designated by the Com3 missioner. Only the Board of Patent Appeals and Inter4 ferences may grant rehearings.’’.

5 SEC. 118. SUITS BY AND AGAINST THE OFFICE.

6 Chapter 1 of part I of title 35, United States Code,

7 is amended by inserting after section 6 the following new

8 section:

9 ‘‘§ 7. Suits by and against the Office

10 ‘‘(a) IN GENERAL.—

11 ‘‘(1) ACTIONS UNDER UNITED STATES LAW.—

12 Any civil action or proceeding to which the United

13 States Patent and Trademark Office is a party is

14 deemed to arise under the laws of the United States.

15 The Federal courts shall have exclusive jurisdiction

16 over all civil actions by or against the Office.

17 ‘‘(2) CONTRACT CLAIMS.—Any action or pro18 ceeding against the Office in which any claim is cog19 nizable under the Contract Disputes Act of 1978 (41

20 U.S.C. 601 and following) shall be subject to that Act.

21 For purposes of that Act, the Commissioner shall be

22 deemed to be the agency head with respect to contract

23 claims arising with respect to the Office. Any other

24 action or proceeding against the Office founded upon
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1 contract may be brought in an appropriate district

2 court, notwithstanding any provision of title 28.

3 ‘‘(3) TORT CLAIMS.—(A) Any action or pro4 ceeding against the Office in which any claim is cog5 nizable under the provisions of section 1346(b) and

6 chapter 171 of title 28, shall be governed by those pro7 visions.

8 ‘‘(B) Any other action or proceeding against the

9 Office founded upon tort may be brought in an ap10 propriate district court without regard to the provi11 sions of section 1346(b) and chapter 171 of title 28.

12 ‘‘(4) PROHIBITION ON ATTACHMENT, LIENS,

13 ETC.—No attachment, garnishment, lien, or similar

14 process, intermediate or final, in law or equity, may

15 be issued against property of the Office.

16 ‘‘(5) SUBSTITUTION OF OFFICE AS PARTY.—The

17 Office shall be substituted as defendant in any civil

18 action or proceeding against an officer or employee of

19 the Office, if the Office determines that the officer or

20 employee was acting within the scope of his or her

21 employment with the Office. If the Office refuses to

22 certify scope of employment, the officer or employee

23 may at any time before trial petition the court to find

24 and certify that the officer or employee was acting

25 within the scope of his or her employment. Upon cer-
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1 tification by the court, the Office shall be substituted

2 as the party defendant. A copy of the petition shall

3 be served upon the Office. In any such civil action or

4 proceeding to which paragraph (3)(A) applies, the

5 provisions of section 1346(b) and chapter 171 of title

6 28 shall apply in lieu of this paragraph.

7 ‘‘(b) RELATIONSHIP WITH JUSTICE DEPARTMENT.—

8 ‘‘(1) EXERCISE BY OFFICE OF ATTORNEY GEN9 ERAL’S AUTHORITIES.—Except as provided in this

10 section, with respect to any action or proceeding in

11 which the Office is a party or an officer or employee

12 thereof is a party in his or her official capacity, the

13 Office, officer, or employee may exercise, without

14 prior authorization from the Attorney General, the

15 authorities and duties that otherwise would be exer16 cised by the Attorney General on behalf of the Office,

17 officer, or employee under title 28 or other laws.

18 ‘‘(2) APPEARANCES BY ATTORNEY GENERAL.—

19 Notwithstanding paragraph (1), at any time the At20 torney General may, in any action or proceeding de21 scribed in paragraph (1), file an appearance on be22 half of the Office or the officer or employee involved,

23 without the consent of the Office or the officer or em24 ployee. Upon such filing, the Attorney General shall

25 represent the Office or such officer or employee with
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1 exclusive authority in the conduct, settlement, or com2 promise of that action or proceeding.

3 ‘‘(3) CONSULTATIONS WITH AND ASSISTANCE BY

4 ATTORNEY GENERAL.—The Office may consult with

5 the Attorney General concerning any legal matter,

6 and the Attorney General shall provide advice and as7 sistance to the Office, including representing the Of8 fice in litigation, if requested by the Office.

9 ‘‘(4) REPRESENTATION BEFORE SUPREME

10 COURT.—The Attorney General shall represent the Of11 fice in all cases before the United States Supreme

12 Court.

13 ‘‘(5) QUALIFICATIONS OF ATTORNEYS.—An attor14 ney admitted to practice to the bar of the highest

15 court of at least one State in the United States or the

16 District of Columbia and employed by the Office may

17 represent the Office in any legal proceeding in which

18 the Office or an officer or employee of the Office is a

19 party or interested, regardless of whether the attorney

20 is a resident of the jurisdiction in which the pro21 ceeding is held and notwithstanding any other pre22 requisites of qualification or appearance required by

23 the court or administrative body before which the pro24 ceeding is conducted.’’.
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1 SEC. 119. ANNUAL REPORT OF COMMISSIONER.

2 Section 14 of title 35, United States Code, is amended

3 to read as follows:

4 ‘‘§ 14. Annual report to Congress

5 ‘‘The Commissioner shall report to the Congress, not

6 later than 180 days after the end of each fiscal year, the

7 moneys received and expended by the Office, the purposes

8 for which the moneys were spent, the quality and quantity

9 of the work of the Office, and other information relating

10 to the Office. The report under this section shall also meet

11 the requirements of section 9106 of title 31, to the extent

12 that such requirements are not inconsistent with the pre13 ceding sentence. The report required under this section shall

14 be deemed to be the report of the United States Patent and

15 Trademark Office under section 9106 of title 31, and the

16 Commissioner shall not file a separate report under such

17 section.’’.

18 SEC. 120. SUSPENSION OR EXCLUSION FROM PRACTICE.

19 Section 32 of title 35, United States Code, is amended

20 by inserting before the last sentence the following: ‘‘The

21 Commissioner shall have the discretion to designate any at22 torney who is an officer or employee of the United States

23 Patent and Trademark Office to conduct the hearing re24 quired by this section.’’.
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1 SEC. 121. FUNDING.

2 Section 42 of title 35, United States Code, is amended

3 to read as follows:

4 ‘‘§ 42. Patent and Trademark Office funding

5 ‘‘(a) FEES PAYABLE TO THE OFFICE.—All fees for

6 services performed by or materials furnished by the United

7 States Patent and Trademark Office shall be payable to the

8 Office.

9 ‘‘(b) USE OF MONEYS.—Moneys from fees shall be

10 available to the United States Patent and Trademark Office

11 to carry out, to the extent provided in appropriations Acts,

12 the functions of the Office. Moneys of the Office not other13 wise used to carry out the functions of the Office shall be

14 kept in cash on hand or on deposit, or invested in obliga15 tions of the United States or guaranteed by the United

16 States, or in obligations or other instruments which are

17 lawful investments for fiduciary, trust, or public funds. Fees

18 available to the Office under this title shall be used for the

19 processing of patent applications and for other services and

20 materials relating to patents. Fees available to the Office

21 under section 31 of the Act of July 5, 1946 (commonly re22 ferred to as the ‘Trademark Act of 1946’; 15 U.S.C. 1113),

23 shall be used for the processing of trademark registrations

24 and for other services and materials relating to trademarks.

25 ‘‘(c) BORROWING AUTHORITY.—The United States

26 Patent and Trademark Office is authorized to issue from
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1 time to time for purchase by the Secretary of the Treasury

2 its debentures, bonds, notes, and other evidences of indebted3 ness (hereafter in this subsection referred to as ‘obligations’)

4 to assist in financing its activities. Borrowing under this

5 subsection shall be subject to prior approval in appropria6 tions Acts. Such borrowing shall not exceed amounts ap7 proved in appropriations Acts. Any borrowing under this

8 subsection shall be repaid only from fees paid to the Office

9 and surcharges appropriated by the Congress. Such obliga10 tions shall be redeemable at the option of the Office before

11 maturity in the manner stipulated in such obligations and

12 shall have such maturity as is determined by the Office with

13 the approval of the Secretary of the Treasury. Each such

14 obligation issued to the Treasury shall bear interest at a

15 rate not less than the current yield on outstanding market16 able obligations of the United States of comparable matu17 rity during the month preceding the issuance of the obliga18 tion as determined by the Secretary of the Treasury. The

19 Secretary of the Treasury shall purchase any obligations

20 of the Office issued under this subsection and for such pur21 pose the Secretary of the Treasury is authorized to use as

22 a public-debt transaction the proceeds of any securities

23 issued under chapter 31 of title 31, and the purposes for

24 which securities may be issued under that chapter are ex25 tended to include such purpose. Payment under this sub-
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1 section of the purchase price of such obligations of the

2 United States Patent and Trademark Office shall be treated

3 as public debt transactions of the United States.’’.

4 SEC. 122. AUDITS.

5 Chapter 4 of part I of title 35, United States Code,

6 is amended by adding at the end the following new section:

7 ‘‘§ 43. Audits

8 ‘‘(a) IN GENERAL.—Financial statements of the

9 United States Patent and Trademark Office shall be pre10 pared on an annual basis in accordance with generally ac11 cepted accounting principles. Such statements shall be au12 dited by an independent certified public accountant chosen

13 by the Commissioner. The audit shall be conducted in ac14 cordance with standards that are consistent with generally

15 accepted Government auditing standards and other stand16 ards established by the Comptroller General, and with the

17 generally accepted auditing standards of the private sector,

18 to the extent feasible. The Commissioner shall transmit to

19 the Committees on the Judiciary of the House of Represent20 atives and the Senate the results of each audit under this

21 subsection.

22 ‘‘(b) REVIEW BY COMPTROLLER GENERAL.—The

23 Comptroller General may review any audit of the financial

24 statement of the Patent and Trademark Office that is con25 ducted under subsection (a). The Comptroller General shall
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1 report to the Congress and the Office the results of any such

2 review and shall include in such report appropriate rec3 ommendations.

4 ‘‘(c) AUDIT BY COMPTROLLER GENERAL.—The Comp5 troller General may audit the financial statements of the

6 Office and such audit shall be in lieu of the audit required

7 by subsection (a). The Office shall reimburse the Comp8 troller General for the cost of any audit conducted under

9 this subsection.

10 ‘‘(d) ACCESS TO OFFICE RECORDS.—All books, finan11 cial records, report files, memoranda, and other property

12 that the Comptroller General deems necessary for the per13 formance of any audit shall be made available to the Comp14 troller General.

15 ‘‘(e) APPLICABILITY IN LIEU OF TITLE 31 PROVI16 SIONS.—This section applies to the Office in lieu of the pro17 visions of section 9105 of title 31.’’.

18 SEC. 123. TRANSFERS.

19 (a) TRANSFER OF FUNCTIONS.—Except as otherwise

20 provided in this title, there are transferred to, and vested

21 in, the United States Patent and Trademark Office all func22 tions, powers, and duties vested by law in the Secretary

23 of Commerce or the Department of Commerce or in the offi24 cers or components in the Department of Commerce with

25 respect to the authority to grant patents and register trade-
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1 marks, and in the Patent and Trademark Office, as in effect

2 on the day before the effective date of this title, and in the

3 officers and components of such Office.

4 (b) TRANSFER OF FUNDS AND PROPERTY.—The Sec5 retary of Commerce shall transfer to the United States Pat6 ent and Trademark Office, on the effective date of this title,

7 so much of the assets, liabilities, contracts, property,

8 records, and unexpended and unobligated balances of ap9 propriations, authorizations, allocations, and other funds

10 employed, held, used, arising from, available to, or to be

11 made available to the Department of Commerce, including

12 funds set aside for accounts receivable which are related to

13 functions, powers, and duties which are vested in the Patent

14 and Trademark Office by this title.

15 Subtitle B—Effective Date;

16 Technical Amendments

17 SEC. 131. EFFECTIVE DATE.

18 This title and the amendments made by this title shall

19 take effect 4 months after the date of the enactment of this

20 Act.

21 SEC. 132. TECHNICAL AND CONFORMING AMENDMENTS.

22 (a) AMENDMENTS TO TITLE 35.—

23 (1) The item relating to part I in the table of

24 parts for chapter 35, United States Code, is amended

25 to read as follows:

‘‘I. United States Patent and Trademark Office .............. 1’’.
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1 (2) The heading for part I of title 35, United

2 States Code, is amended to read as follows:

3 ‘‘PART I—UNITED STATES PATENT AND

4 TRADEMARK OFFICE’’.

5 (3) The table of chapters for part I of title 35,

6 United States Code, is amended by amending the

7 item relating to chapter 1 to read as follows:

‘‘1. Establishment, Officers and Employees, Functions ........ 1’’.

8 (4) The table of sections for chapter 1 of title 35,

9 United States Code, is amended to read as follows:

10 ‘‘CHAPTER 1—ESTABLISHMENT, OFFICERS

11 AND EMPLOYEES, FUNCTIONS

‘‘Sec.

‘‘1. Establishment.

‘‘2. Powers and duties.

‘‘3. Officers and employees.

‘‘4. Restrictions on officers and employees as to interest in patents.

‘‘5. Patent and Trademark Office Management Advisory Board.

‘‘6. Board of Patent Appeals and Interferences.

‘‘7. Suits by and against the Office.

‘‘8. Library.

‘‘9. Classification of patents.

‘‘10. Certified copies of records.

‘‘11. Publications.

‘‘12. Exchange of copies of patents with foreign countries.

‘‘13. Copies of patents for public libraries.

‘‘14. Annual report to Congress.’’.

12 (5) The table of sections for chapter 4 of part I

13 of title 35, United States Code, is amended by adding

14 at the end the following new item:

‘‘43. Audits.’’.

15 (b) OTHER PROVISIONS OF LAW.—
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1 (1) Section 9101(3) of title 31, United States

2 Code, is amended by adding at the end the following:

3 ‘‘(R) the United States Patent and Trade4 mark Office.’’.

5 (2) Section 500(e) of title 5, United States Code,

6 is amended by striking ‘‘Patent Office’’ and inserting

7 ‘‘United States Patent and Trademark Office’’.

8 (3) Section 5102(c)(23) of title 5, United States

9 Code, is amended by striking ‘‘Patent and Trademark

10 Office, Department of Commerce’’ and inserting

11 ‘‘United States Patent and Trademark Office’’.

12 (4) Section 5316 of title 5, United States Code

13 (5 U.S.C. 5316) is amended by striking ‘‘Commis14 sioner of Patents, Department of Commerce.’’, ‘‘Dep15 uty Commissioner of Patents and Trademarks.’’, ‘‘As16 sistant Commissioner for Patents.’’, and ‘‘Assistant

17 Commissioner for Trademarks.’’.

18 (5) Section 12 of the Act of February 14, 1903

19 (15 U.S.C. 1511) is amended by striking ‘‘(d) Patent

20 and Trademark Office;’’ and redesignating subsections

21 (a) through (g) as paragraphs (1) through (6), respec22 tively.

23 (6) The Act of April 12, 1892 (27 Stat. 395; 20

24 U.S.C. 91) is amended by striking ‘‘Patent Office’’
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1 and inserting ‘‘United States Patent and Trademark

2 Office’’.

3 (7) Sections 505(m) and 512(o) of the Federal

4 Food, Drug, and Cosmetic Act (21 U.S.C. 355(m) and

5 360b(o)) are each amended by striking ‘‘Patent and

6 Trademark Office of the Department of Commerce’’

7 and inserting ‘‘United States Patent and Trademark

8 Office’’.

9 (8) Section 105(e) of the Federal Alcohol Admin10 istration Act (27 U.S.C. 205(e)) is amended by strik11 ing ‘‘United States Patent Office’’ and inserting

12 ‘‘United States Patent and Trademark Office’’.

13 (9) Section 1744 of title 28, United States Code

14 is amended—

15 (A) by striking ‘‘Patent Office’’ each place

16 it appears in the text and section heading and

17 inserting ‘‘United States Patent and Trademark

18 Office’’; and

19 (B) by striking ‘‘Commissioner of Patents’’

20 and inserting ‘‘Commissioner of Patents and

21 Trademarks’’.

22 (10) Section 1745 of title 28, United States

23 Code, is amended by striking ‘‘United States Patent

24 Office’’ and inserting ‘‘United States Patent and

25 Trademark Office’’.
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1 (11) Section 1928 of title 28, United States

2 Code, is amended by striking ‘‘Patent Office’’ and in3 serting ‘‘United States Patent and Trademark Of4 fice’’.

5 (12) Section 160 of the Atomic Energy Act of

6 1954 (42 U.S.C. 2190) is amended—

7 (A) by striking ‘‘United States Patent Of8 fice’’ and inserting ‘‘United States Patent and

9 Trademark Office’’; and

10 (B) by striking ‘‘Commissioner of Patents’’

11 and inserting ‘‘Commissioner of Patents and

12 Trademarks’’.

13 (13) Section 305(c) of the National Aeronautics

14 and Space Act of 1958 (42 U.S.C. 2457(c)) is amend15 ed by striking ‘‘Commissioner of Patents’’ and insert16 ing ‘‘Commissioner of Patents and Trademarks’’.

17 (14) Section 12(a) of the Solar Heating and

18 Cooling Demonstration Act of 1974 (42 U.S.C.

19 5510(a)) is amended by striking ‘‘Commissioner of

20 the Patent Office’’ and inserting ‘‘Commissioner of

21 Patents and Trademarks’’.

22 (15) Section 1111 of title 44, United States

23 Code, is amended by striking ‘‘the Commissioner of

24 Patents,’’.
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1 (16) Section 1114 of title 44, United States

2 Code, is amended by striking ‘‘the Commissioner of

3 Patents,’’.

4 (17) Section 1123 of title 44, United States

5 Code, is amended by striking ‘‘the Patent Office,’’.

6 (18) Sections 1337 and 1338 of title 44, United

7 States Code, and the items relating to those sections

8 in the table of contents for chapter 13 of such title,

9 are repealed.

10 (19) Section 10(i) of the Trading With the

11 Enemy Act (50 U.S.C. App. 10(i)) is amended by

12 striking ‘‘Commissioner of Patents’’ and inserting

13 ‘‘Commissioner of Patents and Trademarks’’.

14 (20) Section 8G(a)(2) of the Inspector General

15 Act of 1978 (5 U.S.C. App.) is amended by inserting

16 ‘‘the United States Patent and Trademark Office,’’

17 after ‘‘the United States International Trade Com18 mission,’’.

19 Subtitle C—Miscellaneous

20 Provisions

21 SEC. 141. REFERENCES.

22 Any reference in any other Federal law, Executive

23 order, rule, regulation, or delegation of authority, or any

24 document of or pertaining to a department or office from

25 which a function is transferred by this title—
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1 (1) to the head of such department or office is

2 deemed to refer to the head of the department or office

3 to which such function is transferred; or

4 (2) to such department or office is deemed to

5 refer to the department or office to which such func6 tion is transferred.

7 SEC. 142. EXERCISE OF AUTHORITIES.

8 Except as otherwise provided by law, a Federal official

9 to whom a function is transferred by this title may, for

10 purposes of performing the function, exercise all authorities

11 under any other provision of law that were available with

12 respect to the performance of that function to the official

13 responsible for the performance of the function immediately

14 before the effective date of the transfer of the function under

15 this title.

16 SEC. 143. SAVINGS PROVISIONS.

17 (a) LEGAL DOCUMENTS.—All orders, determinations,

18 rules, regulations, permits, grants, loans, contracts, agree19 ments, certificates, licenses, and privileges—

20 (1) that have been issued, made, granted, or al21 lowed to become effective by the President, the Sec22 retary of Commerce, any officer or employee of any

23 office transferred by this title, or any other Govern24 ment official, or by a court of competent jurisdiction,
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1 in the performance of any function that is transferred

2 by this title, and

3 (2) that are in effect on the effective date of such

4 transfer (or become effective after such date pursuant

5 to their terms as in effect on such effective date),

6 shall continue in effect according to their terms until modi7 fied, terminated, superseded, set aside, or revoked in accord8 ance with law by the President, any other authorized offi9 cial, a court of competent jurisdiction, or operation of law.

10 (b) PROCEEDINGS.—This title shall not affect any pro11 ceedings or any application for any benefits, service, license,

12 permit, certificate, or financial assistance pending on the

13 effective date of this title before an office transferred by this

14 title, but such proceedings and applications shall be contin15 ued. Orders shall be issued in such proceedings, appeals

16 shall be taken therefrom, and payments shall be made pur17 suant to such orders, as if this title had not been enacted,

18 and orders issued in any such proceeding shall continue in

19 effect until modified, terminated, superseded, or revoked by

20 a duly authorized official, by a court of competent jurisdic21 tion, or by operation of law. Nothing in this subsection shall

22 be considered to prohibit the discontinuance or modification

23 of any such proceeding under the same terms and condi24 tions and to the same extent that such proceeding could have
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1 been discontinued or modified if this title had not been en2 acted.

3 (c) SUITS.—This title shall not affect suits commenced

4 before the effective date of this title, and in all such suits,

5 proceedings shall be had, appeals taken, and judgments ren6 dered in the same manner and with the same effect as if

7 this title had not been enacted.

8 (d) NONABATEMENT OF ACTIONS.—No suit, action, or

9 other proceeding commenced by or against the Department

10 of Commerce or the Secretary of Commerce, or by or against

11 any individual in the official capacity of such individual

12 as an officer or employee of an office transferred by this

13 title, shall abate by reason of the enactment of this title.

14 (e) CONTINUANCE OF SUITS.—If any Government offi15 cer in the official capacity of such officer is party to a suit

16 with respect to a function of the officer, and under this title

17 such function is transferred to any other officer or office,

18 then such suit shall be continued with the other officer or

19 the head of such other office, as applicable, substituted or

20 added as a party.

21 (f) ADMINISTRATIVE PROCEDURE AND JUDICIAL RE22 VIEW.—Except as otherwise provided by this title, any stat23 utory requirements relating to notice, hearings, action upon

24 the record, or administrative or judicial review that apply

25 to any function transferred by this title shall apply to the
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1 exercise of such function by the head of the Federal agency,

2 and other officers of the agency, to which such function is

3 transferred by this title.

4 SEC. 144. TRANSFER OF ASSETS.

5 Except as otherwise provided in this title, so much of

6 the personnel, property, records, and unexpended balances

7 of appropriations, allocations, and other funds employed,

8 used, held, available, or to be made available in connection

9 with a function transferred to an official or agency by this

10 title shall be available to the official or the head of that

11 agency, respectively, at such time or times as the Director

12 of the Office of Management and Budget directs for use in

13 connection with the functions transferred.

14 SEC. 145. DELEGATION AND ASSIGNMENT.

15 Except as otherwise expressly prohibited by law or oth16 erwise provided in this title, an official to whom functions

17 are transferred under this title (including the head of any

18 office to which functions are transferred under this title)

19 may delegate any of the functions so transferred to such

20 officers and employees of the office of the official as the offi21 cial may designate, and may authorize successive redelega22 tions of such functions as may be necessary or appropriate.

23 No delegation of functions under this section or under any

24 other provision of this title shall relieve the official to whom
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1 a function is transferred under this title of responsibility

2 for the administration of the function.

3 SEC. 146. AUTHORITY OF DIRECTOR OF THE OFFICE OF

4 MANAGEMENT AND BUDGET WITH RESPECT

5 TO FUNCTIONS TRANSFERRED.

6 (a) DETERMINATIONS.—If necessary, the Director of

7 the Office of Management and Budget shall make any deter8 mination of the functions that are transferred under this

9 title.

10 (b) INCIDENTAL TRANSFERS.—The Director of the Of11 fice of Management and Budget, at such time or times as

12 the Director shall provide, may make such determinations

13 as may be necessary with regard to the functions transferred

14 by this title, and to make such additional incidental dis15 positions of personnel, assets, liabilities, grants, contracts,

16 property, records, and unexpended balances of appropria17 tions, authorizations, allocations, and other funds held,

18 used, arising from, available to, or to be made available

19 in connection with such functions, as may be necessary to

20 carry out the provisions of this title. The Director shall pro21 vide for the termination of the affairs of all entities termi22 nated by this title and for such further measures and dis23 positions as may be necessary to effectuate the purposes of

24 this title.
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1 SEC. 147. CERTAIN VESTING OF FUNCTIONS CONSIDERED

2 TRANSFERS.

3 For purposes of this title, the vesting of a function in

4 a department or office pursuant to reestablishment of an

5 office shall be considered to be the transfer of the function.

6 SEC. 148. AVAILABILITY OF EXISTING FUNDS.

7 Existing appropriations and funds available for the

8 performance of functions, programs, and activities termi9 nated pursuant to this title shall remain available, for the

10 duration of their period of availability, for necessary ex11 penses in connection with the termination and resolution

12 of such functions, programs, and activities.

13 SEC. 149. DEFINITIONS.

14 For purposes of this title—

15 (1) the term ‘‘function’’ includes any duty, obli16 gation, power, authority, responsibility, right, privi17 lege, activity, or program; and

18 (2) the term ‘‘office’’ includes any office, admin19 istration, agency, bureau, institute, council, unit, or20 ganizational entity, or component thereof.

21 TITLE II—EARLY PUBLICATION

22 OF PATENT APPLICATIONS

23 SEC. 201. SHORT TITLE.

24 This title may be cited as the ‘‘Patent Application

25 Publication Act of 1996’’.
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1 SEC. 202. EARLY PUBLICATION.

2 Section 122 of title 35, United States Code, is amended

3 to read as follows:

4 ‘‘§ 122. Confidential status of applications; publica5 tion of patent applications

6 ‘‘(a) CONFIDENTIALITY.—Except as provided in sub7 section (b), applications for patents shall be kept in con8 fidence by the Patent and Trademark Office and no infor9 mation concerning the same given without authority of the

10 applicant or owner unless necessary to carry out the provi11 sions of an Act of Congress or in such special circumstances

12 as may be determined by the Commissioner.

13 ‘‘(b) PUBLICATION.—

14 ‘‘(1) IN GENERAL.—(A) Subject to paragraph

15 (2), each application for patent, except applications

16 for design patents filed under chapter 16 of this title

17 and provisional applications filed under section

18 111(b) of this title, shall be published, in accordance

19 with procedures determined by the Commissioner, as

20 soon as possible after the expiration of a period of 18

21 months from the earliest filing date for which a ben22 efit is sought under this title. At the request of the ap23 plicant, an application may be published earlier than

24 the end of such 18-month period.
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1 ‘‘(B) No information concerning published pat2 ent applications shall be made available to the public

3 except as the Commissioner determines.

4 ‘‘(C) Notwithstanding any other provision of

5 law, a determination by the Commissioner to release

6 or not to release information concerning a published

7 patent application shall be final and nonreviewable.

8 ‘‘(2) EXCEPTIONS.—(A) An application that is

9 no longer pending shall not be published.

10 ‘‘(B) An application that is subject to a secrecy

11 order pursuant to section 181 of this title shall not

12 be published.

13 ‘‘(C)(i) Upon the request of the applicant at the

14 time of filing, the application shall not be published

15 in accordance with paragraph (1) until 3 months

16 after the Commissioner makes a notification to the

17 applicant under section 132 of this title.

18 ‘‘(ii) Applications filed pursuant to section 363

19 of this title, applications asserting priority under sec20 tion 119 or 365(a) of this title, and applications as21 serting the benefit of an earlier application under sec22 tion 120, 121, or 365(c) of this title shall not be eligi23 ble for a request pursuant to this subparagraph.

24 ‘‘(iii) In a request under this subparagraph, the

25 applicant shall certify that the invention disclosed in
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1 the application was not and will not be the subject of

2 an application filed in a foreign country.

3 ‘‘(iv) A request under this subparagraph shall

4 only be available to an applicant who has been ac5 corded the status of independent inventor under sec6 tion 41(h) of this title.

7 ‘‘(v) The Commissioner may establish appro8 priate procedures and fees for making a request under

9 this subparagraph.

10 ‘‘(c) PRE-ISSUANCE OPPOSITION.—The provisions of

11 this section shall not operate to create any new opportunity

12 for pre-issuance opposition. The Commissioner may estab13 lish appropriate procedures to ensure that this section does

14 not create any new opportunity for pre-issuance opposi15 tion.’’.

16 SEC. 203. TIME FOR CLAIMING BENEFIT OF EARLIER FILING

17 DATE.

18 (a) IN A FOREIGN COUNTRY.—Section 119(b) of title

19 35, United States Code, is amended to read as follows:

20 ‘‘(b)(1) No application for patent shall be entitled to

21 this right of priority unless a claim, identifying the foreign

22 application by specifying its application number, country,

23 and the day, month, and year of its filing, is filed in the

24 Patent and Trademark Office at such time during the pend25 ency of the application as required by the Commissioner.
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1 ‘‘(2) The Commissioner may consider the failure of the

2 applicant to file a timely claim for priority as a waiver

3 of any such claim, and may require the payment of a sur4 charge as a condition of accepting an untimely claim dur5 ing the pendency of the application.

6 ‘‘(3) The Commissioner may require a certified copy

7 of the original foreign application, specification, and draw8 ings upon which it is based, a translation if not in the

9 English language, and such other information as the Com10 missioner considers necessary. Any such certification shall

11 be made by the patent office of the foreign country in which

12 the foreign application was filed and show the date of the

13 application and of the filing of the specification and other

14 papers.’’.

15 (b) IN THE UNITED STATES.—Section 120 of title 35,

16 United States Code, is amended by adding at the end the

17 following: ‘‘The Commissioner may determine the time pe18 riod during the pendency of the application within which

19 an amendment containing the specific reference to the ear20 lier filed application is submitted. The Commissioner may

21 consider the failure to submit such an amendment within

22 that time period as a waiver of any benefit under this sec23 tion. The Commissioner may establish procedures, includ24 ing the payment of a surcharge, to accept unavoidably late

25 submissions of amendments under this section.’’.
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1 SEC. 204. PROVISIONAL RIGHTS.

2 Section 154 of title 35, United States Code, is

3 amended—

4 (1) in the section caption by inserting ‘‘; provi5 sional rights’’ after ‘‘patent’’; and

6 (2) by adding at the end the following new sub7 section:

8 ‘‘(d) PROVISIONAL RIGHTS.—

9 ‘‘(1) IN GENERAL.—In addition to other rights

10 provided by this section, a patent shall include the

11 right to obtain a reasonable royalty from any person

12 who, during the period beginning on the date of pub13 lication of the application for such patent pursuant

14 to section 122(b) of this title, or in the case of an

15 international application designating the United

16 States, the date of international publication of the ap17 plication, and ending on the date the patent is

18 issued—

19 ‘‘(A)(i) makes, uses, offers for sale, or sells

20 in the United States the invention as claimed in

21 the published patent application or imports such

22 an invention into the United States; or

23 ‘‘(ii) if the invention as claimed in the pub24 lished patent application is a process, uses, offers

25 for sale, or sells in the United States or imports

26 into the United States products made by that
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1 process as claimed in the published patent appli2 cation; and

3 ‘‘(B) had actual notice of the published pat4 ent application and where the right arising

5 under this paragraph is based upon an inter6 national application designating the United

7 States that is published in a language other than

8 English, a translation of the international appli9 cation into the English language.

10 ‘‘(2) RIGHT BASED ON SUBSTANTIALLY IDEN11 TICAL INVENTIONS.—The right under paragraph (1)

12 to obtain a reasonable royalty shall not be available

13 under this subsection unless the invention as claimed

14 in the patent is substantially identical to the inven15 tion as claimed in the published patent application.

16 ‘‘(3) TIME LIMITATION ON OBTAINING A REASON17 ABLE ROYALTY.—The right under paragraph (1) to

18 obtain a reasonable royalty shall be available only in

19 an action brought not later than 6 years after the

20 patent is issued. The right under paragraph (1) to ob21 tain a reasonable royalty shall not be affected by the

22 duration of the period described in paragraph (1).

23 ‘‘(4) REQUIREMENTS FOR INTERNATIONAL APPLI24 CATIONS.—The right under paragraph (1) to obtain

25 a reasonable royalty based upon the publication
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1 under the treaty of an international application des2 ignating the United States shall commence from the

3 date that the Patent and Trademark Office receives a

4 copy of the publication under the treaty of the inter5 national application, or, if the publication under the

6 treaty of the international application is in a lan7 guage other than English, from the date that the Pat8 ent and Trademark Office receives a translation of the

9 international application in the English language.

10 The Commissioner may require the applicant to pro11 vide a copy of the international publication of the

12 international application and a translation thereof.’’.

13 SEC. 205. PRIOR ART EFFECT OF PUBLISHED APPLICA14 TIONS.

15 Section 102(e) of title 35, United States Code, is

16 amended to read as follows:

17 ‘‘(e) the invention was described in—

18 ‘‘(1) an application for patent, published pursu19 ant to section 122(b) of this title, by another filed in

20 the United States before the invention by the appli21 cant for patent, except that an international applica22 tion filed under the treaty defined in section 351(a)

23 of this title shall have the effect under this subsection

24 of a national application published under section

25 122(b) of this title only if the international applica-
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1 tion designating the United States was published

2 under Article 21(2)(a) of such treaty in the English

3 language, or

4 ‘‘(2) a patent granted on an application for pat5 ent by another filed in the United States before the

6 invention by the applicant for patent, except that a

7 patent granted on an international application filed

8 under the treaty defined in section 351(a) of this title

9 shall have the effect under this subsection of a patent

10 granted on a national application only if the inter11 national application was published under Article

12 21(2)(a) of such treaty in the English language, or’’.

13 SEC. 206. COST RECOVERY FOR PUBLICATION.

14 The Commissioner shall recover the cost of early publi15 cation required by the amendment made by section 202 by

16 adjusting the filing, issue, and maintenance fees under title

17 35, United States Code, by charging a separate publication

18 fee, or by any combination of these methods.

19 SEC. 207. CONFORMING CHANGES.

20 The following provisions of title 35, United States

21 Code, are amended:

22 (1) Section 11 is amended in paragraph 1 of

23 subsection (a) by inserting ‘‘and published applica24 tions for patents’’ after ‘‘Patents’’.

25 (2) Section 12 is amended—
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1 (A) in the section caption by inserting

2 ‘‘and applications’’ after ‘‘patents’’; and

3 (B) by inserting ‘‘and published applica4 tions for patents’’ after ‘‘patents’’.

5 (3) Section 13 is amended—

6 (A) in the section caption by inserting

7 ‘‘and applications’’ after ‘‘patents’’; and

8 (B) by inserting ‘‘and published applica9 tions for patents’’ after ‘‘patents’’.

10 (4) The items relating to sections 12 and 13 in

11 the table of sections for chapter 1 are each amended

12 by inserting ‘‘and applications’’ after ‘‘patents’’.

13 (5) The item relating to section 122 in the table

14 of sections for chapter 11 is amended by inserting ‘‘;

15 publication of patent applications’’ after ‘‘applica16 tions’’.

17 (6) The item relating to section 154 in the table

18 of sections for chapter 14 is amended by inserting ‘‘;

19 provisional rights’’ after ‘‘patent’’.

20 (7) Section 181 is amended—

21 (A) in the first paragraph—

22 (i) by inserting ‘‘by the publication of

23 an application or’’ after ‘‘disclosure’’; and

24 (ii) by inserting ‘‘the publication of the

25 application or’’ after ‘‘withhold’’;
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1 (B) in the second paragraph by inserting

2 ‘‘by the publication of an application or’’ after

3 ‘‘disclosure of an invention’’;

4 (C) in the third paragraph—

5 (i) by inserting ‘‘by the publication of

6 the application or’’ after ‘‘disclosure of the

7 invention’’; and

8 (ii) by inserting ‘‘the publication of the

9 application or’’ after ‘‘withhold’’; and

10 (D) in the fourth paragraph by inserting

11 ‘‘the publication of an application or’’ after

12 ‘‘and’’ in the first sentence.

13 (8) Section 252 is amended in the first para14 graph by inserting ‘‘substantially’’ before ‘‘identical’’

15 each place it appears.

16 (9) Section 284 is amended by adding at the end

17 of the second paragraph the following: ‘‘Increased

18 damages under this paragraph shall not apply to pro19 visional rights under section 154(d) of this title.’’.

20 (10) Section 374 is amended to read as follows:

21 ‘‘§ 374. Publication of international application: Ef22 fect

23 ‘‘The publication under the treaty, defined in section

24 351(a) of this title, of an international application desig25 nating the United States shall confer the same rights and
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1 shall have the same effect under this title as an application

2 for patent published under section 122(b), except as pro3 vided in sections 102(e) and 154(d) of this title.’’.

4 SEC. 208. PATENT TERM EXTENSION AUTHORITY.

5 Section 154(b) of title 35, United States Code, is

6 amended to read as follows:

7 ‘‘(b) TERM EXTENSION.—

8 ‘‘(1) BASIS FOR PATENT TERM EXTENSION.—

9 ‘‘(A) DELAY.—Subject to the limitations set

10 forth in paragraph (2), if the issue of an origi11 nal patent is delayed due to—

12 ‘‘(i) a proceeding under section 135(a)

13 of this title,

14 ‘‘(ii) the imposition of an order pursu15 ant to section 181 of this title,

16 ‘‘(iii) appellate review by the Board of

17 Patent Appeals and Interferences or by a

18 Federal court where the patent was issued

19 pursuant to a decision in the review revers20 ing an adverse determination of patent21 ability, or

22 ‘‘(iv) an unusual administrative delay

23 by the Patent and Trademark Office in is24 suing the patent,
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1 the term of the patent shall be extended for the

2 period of delay.

3 ‘‘(B) ADMINISTRATIVE DELAY.—For pur4 poses of subparagraph (A)(iv), an unusual ad5 ministrative delay by the Patent and Trademark

6 office is the failure to—

7 ‘‘(i) make a notification of the rejection

8 of any claim for a patent or any objection

9 or argument under section 132 of this title

10 or give or mail a written notice of allow11 ance under section 151 of this title not later

12 than 14 months after the date on which the

13 application was filed;

14 ‘‘(ii) respond to a reply under section

15 132 of this title or to an appeal taken under

16 section 134 of this title not later than 4

17 months after the date on which the reply

18 was filed or the appeal was taken;

19 ‘‘(iii) act on an application not later

20 than 4 months after the date of a decision

21 by the Board of Patent Appeals and Inter22 ferences under section 134 or 135 of this

23 title or a decision by a Federal court under

24 section 141, 145, or 146 of this title where
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1 allowable claims remain in an application;

2 or

3 ‘‘(iv) issue a patent not later than 4

4 months after the date on which the issue fee

5 was paid under section 151 of this title and

6 all outstanding requirements were satisfied.

7 ‘‘(2) LIMITATIONS.—(A) The total duration of

8 any extensions granted pursuant to either clause (iii)

9 or (iv) of paragraph (1)(A) or both such clauses shall

10 not exceed 10 years. To the extent that periods of

11 delay attributable to grounds specified in paragraph

12 (1) overlap, the period of any extension granted under

13 this subsection shall not exceed the actual number of

14 days the issuance of the patent was delayed.

15 ‘‘(B) The period of extension of the term of a

16 patent under this subsection shall be reduced by a pe17 riod equal to the time in which the applicant failed

18 to engage in reasonable efforts to conclude prosecution

19 of the application. The Commissioner shall prescribe

20 regulations establishing the circumstances that con21 stitute a failure of an applicant to engage in reason22 able efforts to conclude processing or examination of

23 an application.

24 ‘‘(C) No patent the term of which has been dis25 claimed beyond a specified date may be extended
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1 under this section beyond the expiration date specified

2 in the disclaimer.

3 ‘‘(3) PROCEDURES.—The Commissioner shall

4 prescribe regulations establishing procedures for the

5 notification of patent term extensions under this sub6 section and procedures for contesting patent term ex7 tensions under this subsection.’’.

8 SEC. 209. EXAMINING PROCEDURE IMPROVEMENTS; FUR9 THER LIMITED REEXAMINATION OF PATENT

10 APPLICATIONS.

11 The Commissioner of Patents and Trademarks shall

12 prescribe regulations to provide for the further limited reex13 amination of applications for patent. The Commissioner

14 may establish appropriate fees for such further limited reex15 amination and shall be authorized to provide a 50 percent

16 reduction on such fees for small entities that qualify for re17 duced fees under section 41(h)(1) of title 35, United States

18 Code.

19 SEC. 210. LAST DAY OF PENDENCY OF PROVISIONAL APPLI20 CATION.

21 Section 119(e) of title 35, United States Code, is

22 amended by adding at the end the following:

23 ‘‘(3) If the day that is 12 months after the filing date

24 of a provisional application falls on a Saturday, Sunday,

25 or legal holiday as defined in rule 6(a) of the Federal Rules
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1 of Civil Procedure, the period of pendency of the provisional

2 application shall be extended to the next succeeding business

3 day.’’.

4 SEC. 211. REPORTING REQUIREMENT.

5 The Commissioner of Patents and Trademarks shall

6 report to the Congress not later than April 1, 2000, and

7 not later than April 1 of each year thereafter, regarding

8 the impact of publication on the patent applications filed

9 by an applicant who has been accorded the status of inde10 pendent inventor under section 41(h) of title 35, United

11 States Code. The report shall include information con12 cerning the frequency and number of initial and continuing

13 patent applications, pendency, interferences, reexamina14 tions, rejection, abandonment rates, fees, other expenses, and

15 other relevant information related to the prosecution of pat16 ent applications.

17 SEC. 212. EFFECTIVE DATE.

18 (a) SECTIONS 202 THROUGH 207.—Sections 202

19 through 207, and the amendments made by such sections,

20 shall take effect on April 1, 1997, and shall apply to all

21 applications filed under section 111 of title 35, United

22 States Code, on or after that date, and all international

23 applications designating the United States that are filed

24 on or after that date.
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1 (b) SECTIONS 208 THROUGH 210.—The amendments

2 made by sections 208 through 210 shall take effect on the

3 date of the enactment of this Act and, except for a design

4 patent application filed under chapter 16 of title 35, United

5 States Code, shall apply to any application filed on or after

6 June 8, 1995.

7 TITLE III—PRIOR DOMESTIC

8 COMMERCIAL USE

9 SEC. 301. SHORT TITLE.

10 This title may be cited as the ‘‘Prior Domestic Com11 mercial Use Act of 1996’’.

12 SEC. 302. DEFENSE TO PATENT INFRINGEMENT BASED ON

13 PRIOR DOMESTIC COMMERCIAL USE.

14 (a) DEFENSE.—Chapter 28 of title 35, United States

15 Code, is amended by adding at the end the following new

16 section:

17 ‘‘§ 273. Prior domestic commercial use; defense to in18 fringement

19 ‘‘(a) DEFINITIONS.—For purposes of this section—

20 ‘‘(1) the terms ‘commercially used’, ‘commer21 cially use’, and ‘commercial use’ mean the use in the

22 United States in commerce or the use in the design,

23 testing, or production in the United States of a prod24 uct or service which is used in commerce, whether or
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1 not the subject matter at issue is accessible to or oth2 erwise known to the public;

3 ‘‘(2) the terms ‘used in commerce’, and ‘use in

4 commerce’ mean that there has been an actual sale or

5 other commercial transfer of the subject matter at

6 issue or that there has been an actual sale or other

7 commercial transfer of a product or service resulting

8 from the use of the subject matter at issue; and

9 ‘‘(3) the ‘effective filing date’ of a patent is the

10 earlier of the actual filing date of the application for

11 the patent or the filing date of any earlier United

12 States, foreign, or international application to which

13 the subject matter at issue is entitled under section

14 119, 120, or 365 of this title.

15 ‘‘(b) DEFENSE TO INFRINGEMENT.—(1) A person shall

16 not be liable as an infringer under section 271 of this title

17 with respect to any subject matter that would otherwise in18 fringe one or more claims in the patent being asserted

19 against such person, if such person had, acting in good

20 faith, commercially used the subject matter before the effec21 tive filing date of such patent.

22 ‘‘(2) The sale or other disposition of the subject matter

23 of a patent by a person entitled to assert a defense under

24 this section with respect to that subject matter shall exhaust

25 the patent owner’s rights under the patent to the extent such
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1 rights would have been exhausted had such sale or other dis2 position been made by the patent owner.

3 ‘‘(c) LIMITATIONS AND QUALIFICATIONS OF DE4 FENSE.—The defense to infringement under this section is

5 subject to the following:

6 ‘‘(1) DERIVATION.—A person may not assert the

7 defense under this section if the subject matter on

8 which the defense is based was derived from the pat9 entee or persons in privity with the patentee.

10 ‘‘(2) NOT A GENERAL LICENSE.—The defense as11 serted by a person under this section is not a general

12 license under all claims of the patent at issue, but ex13 tends only to the subject matter claimed in the patent

14 with respect to which the person can assert a defense

15 under this chapter, except that the defense shall also

16 extend to variations in the quantity or volume of use

17 of the claimed subject matter, and to improvements in

18 the claimed subject matter that do not infringe addi19 tional specifically claimed subject matter of the pat20 ent.

21 ‘‘(3) EFFECTIVE AND SERIOUS PREPARATION.—

22 With respect to subject matter that cannot be commer23 cialized without a significant investment of time,

24 money, and effort, a person shall be deemed to have

25 commercially used the subject matter if—
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1 ‘‘(A) before the effective filing date of the

2 patent, the person reduced the subject matter to

3 practice in the United States, completed a sig4 nificant portion of the total investment necessary

5 to commercially use the subject matter, and

6 made a commercial transaction in the United

7 States in connection with the preparation to use

8 the subject matter; and

9 ‘‘(B) thereafter the person diligently com10 pleted the remainder of the activities and invest11 ments necessary to commercially use the subject

12 matter, and promptly began commercial use of

13 the subject matter, even if such activities were

14 conducted after the effective filing date of the

15 patent.

16 ‘‘(4) BURDEN OF PROOF.—A person asserting the

17 defense under this section shall have the burden of es18 tablishing the defense.

19 ‘‘(5) ABANDONMENT OF USE.—A person who has

20 abandoned commercial use of subject matter may not

21 rely on activities performed before the date of such

22 abandonment in establishing a defense under sub23 section (b) with respect to actions taken after the date

24 of such abandonment.
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1 ‘‘(6) PERSONAL DEFENSE.—The defense under

2 this section may only be asserted by the person who

3 performed the acts necessary to establish the defense

4 and, except for any transfer to the patent owner, the

5 right to assert the defense shall not be licensed or as6 signed or transferred to another person except in con7 nection with the good faith assignment or transfer of

8 the entire enterprise or line of business to which the

9 defense relates.

10 ‘‘(7) ONE-YEAR LIMITATION.—A person may not

11 assert a defense under this section unless the subject

12 matter on which the defense is based had been com13 mercially used or reduced to practice more than one

14 year prior to the effective filing date of the patent by

15 the person asserting the defense or someone in privity

16 with that person.

17 ‘‘(d) UNSUCCESSFUL ASSERTION OF DEFENSE.—If the

18 defense under this section is pleaded by a person who is

19 found to infringe the patent and who subsequently fails to

20 demonstrate a reasonable basis for asserting the defense, the

21 court shall find the case exceptional for the purpose of

22 awarding attorney’s fees under section 285 of this title.

23 ‘‘(e) INVALIDITY.—A patent shall not be deemed to be

24 invalid under section 102 or 103 of this title solely because

25 a defense is established under this section.’’.
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1 (b) CONFORMING AMENDMENT.—The table of sections

2 at the beginning of chapter 28 of title 35, United States

3 Code, is amended by adding at the end the following new

4 item:

‘‘273. Prior domestic commercial use; defense to infringement.’’.

5 SEC. 303. EFFECTIVE DATE AND APPLICABILITY.

6 This title and the amendments made by this title shall

7 take effect on the date of the enactment of this Act, but shall

8 not apply to any action for infringement that is pending

9 on such date of enactment or with respect to any subject

10 matter for which an adjudication of infringement, includ11 ing a consent judgment, has been made before such date of

12 enactment.

13 TITLE IV—INVENTOR

14 PROTECTION

15 SEC. 401. SHORT TITLE.

16 This title may be cited as the ‘‘Inventor Protection Act

17 of 1996’’.

18 SEC. 402. INVENTION DEVELOPMENT SERVICES.

19 Part I of title 35, United States Code, is amended by

20 adding after chapter 4 the following new chapter:

21 ‘‘CHAPTER 5—INVENTION DEVELOPMENT

22 SERVICES

‘‘Sec.

‘‘51. Definitions.

‘‘52. Contracting requirements.

‘‘53. Standard provisions for cover notice.

‘‘54. Reports to customer required.
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‘‘55. Mandatory contract terms.

‘‘56. Remedies.

‘‘57. Records of complaints.

‘‘58. Fraudulent representation by an invention developer.

‘‘59. Rule of construction.

1 ‘‘§ 51. Definitions

2 ‘‘For purposes of this chapter—

3 ‘‘(1) the term ‘contract for invention development

4 services’ means a contract by which an invention de5 veloper undertakes invention development services for

6 a customer;

7 ‘‘(2) the term ‘customer’ means any person, firm,

8 partnership, corporation, or other entity who is solic9 ited by, seeks the services of, or enters into a contract

10 with an invention promoter for invention promotion

11 services;

12 ‘‘(3) the term ‘invention promoter’ means any

13 person, firm, partnership, corporation, or other entity

14 who offers to perform or performs for, or on behalf of,

15 a customer any act described under paragraph (4),

16 but does not include—

17 ‘‘(A) any department or agency of the Fed18 eral Government or of a State or local govern19 ment;

20 ‘‘(B) any nonprofit, charitable, scientific, or

21 educational organization, qualified under appli22 cable State law or described under section
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1 170(b)(1)(A) of the Internal Revenue Code of

2 1986; or

3 ‘‘(C) any person duly registered and in

4 good standing before the Patent and Trademark

5 Office acting within the scope of that person’s

6 registration to practice before the Patent and

7 Trademark Office; and

8 ‘‘(4) the term ‘invention development services’

9 means, with respect to an invention by a customer,

10 any act involved in—

11 ‘‘(A) evaluating the invention to determine

12 its protectability as some form of intellectual

13 property, other than evaluation by a person li14 censed by a State to practice law who is acting

15 solely within the scope of that person’s profes16 sional license;

17 ‘‘(B) evaluating the invention to determine

18 its commercial potential by any person for pur19 poses other than providing venture capital; or

20 ‘‘(C) marketing, brokering, licensing, sell21 ing, or promoting the invention or a product or

22 service in which the invention is incorporated or

23 used, except that the display only of an inven24 tion at a trade show or exhibit shall not be con25 sidered to be invention development services.
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1 ‘‘§ 52. Contracting requirements

2 ‘‘(a) IN GENERAL.—(1) Every contract for invention

3 development services shall be in writing and shall be subject

4 to the provisions of this chapter. A copy of the signed writ5 ten contract shall be given to the customer at the time the

6 customer enters into the contract.

7 ‘‘(2) If a contract is entered into for the benefit of a

8 third party, such party shall be considered a customer for

9 purposes of this chapter.

10 ‘‘(b) REQUIREMENTS OF INVENTION DEVELOPER.—

11 The invention developer shall—

12 ‘‘(1) state in a written document, at the time a

13 customer enters into a contract for invention develop14 ment services, whether the usual business practice of

15 the invention developer is to—

16 ‘‘(A) seek more than 1 contract in connec17 tion with an invention; or

18 ‘‘(B) seek to perform services in connection

19 with an invention in 1 or more phases, with the

20 performance of each phase covered in 1 or more

21 subsequent contracts; and

22 ‘‘(2) supply to the customer a copy of the written

23 document together with a written summary of the

24 usual business practices of the invention developer,

25 including—
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1 ‘‘(A) the usual business terms of contracts;

2 and

3 ‘‘(B) the approximate amount of the usual

4 fees or other consideration that may be required

5 from the customer for each of the services pro6 vided by the developer.

7 ‘‘(c) RIGHT OF CUSTOMER TO CANCEL CONTRACT.—

8 (1) Notwithstanding any contractual provision to the con9 trary, a customer shall have the right to terminate a con10 tract for invention development services by sending a writ11 ten letter to the invention developer stating the customer’s

12 intent to cancel the contract. The letter of termination must

13 be deposited with the United States Postal Service on or

14 before 5 business days after the date upon which the cus15 tomer or the invention developer executes the contract,

16 whichever is later.

17 ‘‘(2) Delivery of a promissory note, check, bill of ex18 change, or negotiable instrument of any kind to the inven19 tion developer or to a third party for the benefit of the in20 vention developer, without regard to the date or dates ap21 pearing in such instrument, shall be deemed payment re22 ceived by the invention developer on the date received for

23 purposes of this section.
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1 ‘‘§ 53. Standard provisions for cover notice

2 ‘‘(a) CONTENTS.—Every contract for invention devel3 opment services shall have a conspicuous and legible cover

4 sheet attached with the following notice imprinted in bold5 face type of not less than 12-point size:

6 ‘‘ ‘YOU HAVE THE RIGHT TO TERMINATE

7 THIS CONTRACT. TO TERMINATE THIS CON8 TRACT, YOU MUST SEND A WRITTEN LETTER

9 TO THE COMPANY STATING YOUR INTENT TO

10 CANCEL THIS CONTRACT. THE LETTER OF

11 TERMINATION MUST BE DEPOSITED WITH

12 THE UNITED STATES POSTAL SERVICE ON

13 OR BEFORE FIVE (5) BUSINESS DAYS AFTER

14 THE DATE ON WHICH YOU OR THE COMPANY

15 EXECUTE THE CONTRACT, WHICHEVER IS

16 LATER.

17 ‘‘ ‘THE TOTAL NUMBER OF INVENTIONS

18 EVALUATED BY THE INVENTION DEVELOPER

19 FOR COMMERCIAL POTENTIAL IN THE PAST

20 FIVE (5) YEARS IS lllll. OF THAT NUM21 BER, lllll RECEIVED POSITIVE EVAL22 UATIONS AND lllll RECEIVED NEGA23 TIVE EVALUATIONS.

24 ‘‘ ‘IF YOU ASSIGN EVEN A PARTIAL IN25 TEREST IN THE INVENTION TO THE INVEN26 TION DEVELOPER, THE INVENTION DEVEL-
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1 OPER MAY HAVE THE RIGHT TO SELL OR

2 DISPOSE OF THE INVENTION WITHOUT YOUR

3 CONSENT AND MAY NOT HAVE TO SHARE

4 THE PROFITS WITH YOU.

5 ‘‘ ‘THE TOTAL NUMBER OF CUSTOMERS

6 WHO HAVE CONTRACTED WITH THE INVEN7 TION DEVELOPER IN THE PAST FIVE (5)

8 YEARS IS lllll. THE TOTAL NUMBER

9 OF CUSTOMERS KNOWN BY THIS INVENTION

10 DEVELOPER TO HAVE RECEIVED, BY VIRTUE

11 OF THIS INVENTION DEVELOPER’S PER12 FORMANCE, AN AMOUNT OF MONEY IN EX13 CESS OF THE AMOUNT PAID BY THE CUS14 TOMER TO THIS INVENTION DEVELOPER IS

15 lllllll.

16 ‘‘ ‘THE OFFICERS OF THIS INVENTION

17 DEVELOPER HAVE COLLECTIVELY OR INDI18 VIDUALLY BEEN AFFILIATED IN THE LAST

19 TEN (10) YEARS WITH THE FOLLOWING IN20 VENTION DEVELOPMENT COMPANIES: (LIST

21 THE NAMES AND ADDRESSES OF ALL PRE22 VIOUS INVENTION DEVELOPMENT COMPA23 NIES WITH WHICH THE PRINCIPAL OFFI24 CERS HAVE BEEN AFFILIATED AS OWNERS,

25 AGENTS, OR EMPLOYEES). YOU ARE ENCOUR-
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1 AGED TO CHECK WITH THE UNITED STATES

2 PATENT AND TRADEMARK OFFICE, THE FED3 ERAL TRADE COMMISSION, YOUR STATE AT4 TORNEY GENERAL’S OFFICE, AND THE BET5 TER BUSINESS BUREAU FOR ANY COM6 PLAINTS FILED AGAINST ANY OF THESE

7 COMPANIES.

8 ‘‘ ‘YOU ARE ENCOURAGED TO CONSULT

9 WITH AN ATTORNEY OF YOUR OWN CHOOS10 ING BEFORE SIGNING THIS CONTRACT. BY

11 PROCEEDING WITHOUT THE ADVICE OF AN

12 ATTORNEY REGISTERED TO PRACTICE BE13 FORE THE PATENT AND TRADEMARK OF14 FICE, YOU COULD LOSE ANY RIGHTS YOU

15 MIGHT HAVE IN YOUR IDEA OR INVENTION.’.

16 ‘‘(b) OTHER REQUIREMENTS FOR COVER NOTICE.—

17 The cover notice shall contain the items required under sub18 section (a) and the name, primary office address, and local

19 office address of the invention developer, and may contain

20 no other matter.

21 ‘‘(c) DISCLOSURE OF CERTAIN CUSTOMERS NOT RE22 QUIRED.—The requirement in the notice set forth in sub23 section (a) to include the ‘TOTAL NUMBER OF CUS24 TOMERS WHO HAVE CONTRACTED WITH THE IN25 VENTION DEVELOPER IN THE PAST FIVE (5)
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1 YEARS’ need not include information with respect to cus2 tomers who have purchased trade show services, research,

3 advertising, or other nonmarketing services from the inven4 tion developer, nor with respect to customers who have de5 faulted in their payments to the invention developer.

6 ‘‘§ 54. Reports to customer required

7 ‘‘With respect to every contract for invention develop8 ment services, the invention developer shall deliver to the

9 customer at the address specified in the contract, at least

10 once every 3 months throughout the term of the contract,

11 a written report that identifies the contract and includes—

12 ‘‘(1) a full, clear, and concise description of the

13 services performed to the date of the report and of the

14 services yet to be performed and names of all persons

15 who it is known will perform the services; and

16 ‘‘(2) the name and address of each person, firm,

17 corporation, or other entity to whom the subject mat18 ter of the contract has been disclosed, the reason for

19 each such disclosure, the nature of the disclosure, and

20 complete and accurate summaries of all responses re21 ceived as a result of those disclosures.

22 ‘‘§ 55. Mandatory contract terms

23 ‘‘(a) MANDATORY TERMS.—Each contract for inven24 tion development services shall include in boldface type of

25 not less than 12-point size—
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1 ‘‘(1) the terms and conditions of payment and

2 contract termination rights required under section 52;

3 ‘‘(2) a statement that the customer may avoid

4 entering into the contract by not making a payment

5 to the invention developer;

6 ‘‘(3) a full, clear, and concise description of the

7 specific acts or services that the invention developer

8 undertakes to perform for the customer;

9 ‘‘(4) a statement as to whether the invention de10 veloper undertakes to construct, sell, or distribute one

11 or more prototypes, models, or devices embodying the

12 invention of the customer;

13 ‘‘(5) the full name and principal place of busi14 ness of the invention developer and the name and

15 principal place of business of any parent, subsidiary,

16 agent, independent contractor, and any affiliated

17 company or person who it is known will perform any

18 of the services or acts that the invention developer un19 dertakes to perform for the customer;

20 ‘‘(6) if any oral or written representation of esti21 mated or projected customer earnings is given by the

22 invention developer (or any agent, employee, officer,

23 director, partner, or independent contractor of such

24 invention developer), a statement of that estimation
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1 or projection and a description of the data upon

2 which such representation is based;

3 ‘‘(7) the name and address of the custodian of all

4 records and correspondence relating to the contracted

5 for invention development services, and a statement

6 that the invention developer is required to maintain

7 all records and correspondence relating to perform8 ance of the invention development services for such

9 customer for a period of not less than 2 years after

10 expiration of the term of such contract; and

11 ‘‘(8) a statement setting forth a time schedule for

12 performance of the invention development services, in13 cluding an estimated date in which such performance

14 is expected to be completed.

15 ‘‘(b) INVENTION DEVELOPER AS FIDUCIARY.—To the

16 extent that the description of the specific acts or services

17 affords discretion to the invention developer with respect to

18 what specific acts or services shall be performed, the inven19 tion developer shall be deemed a fiduciary.

20 ‘‘(c) AVAILABILITY OF INFORMATION.—Records and

21 correspondence described under subsection (a)(7) shall be

22 made available after 7 days written notice to the customer

23 or the representative of the customer to review and copy

24 at a reasonable cost on the invention developer’s premises

25 during normal business hours.
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1 ‘‘§ 56. Remedies

2 ‘‘(a) IN GENERAL.—(1) Any contract for invention de3 velopment services that does not comply with the applicable

4 provisions of this chapter shall be voidable at the option

5 of the customer.

6 ‘‘(2) Any contract for invention development services

7 entered into in reliance upon any material false, fraudu8 lent, or misleading information, representation, notice, or

9 advertisement of the invention developer (or any agent, em10 ployee, officer, director, partner, or independent contractor

11 of such invention developer) shall be voidable at the option

12 of the customer.

13 ‘‘(3) Any waiver by the customer of any provision of

14 this chapter shall be deemed contrary to public policy and

15 shall be void and unenforceable.

16 ‘‘(4) Any contract for invention development services

17 which provides for filing for and obtaining utility, design,

18 or plant patent protection shall be voidable at the option

19 of the customer unless the invention developer offers to per20 form or performs such act through a registered patent attor21 ney or agent.

22 ‘‘(b) CIVIL ACTION.—(1) Any customer who is injured

23 by a violation of this chapter by an invention developer

24 or by any material false or fraudulent statement or rep25 resentation, or any omission of material fact, by an inven26 tion developer (or any agent, employee, director, officer,
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1 partner, or independent contractor of such invention devel2 oper) or by failure of an invention developer to make all

3 the disclosures required under this chapter, may recover in

4 a civil action against the invention developer (or the offi5 cers, directors, or partners of such invention developer) in

6 addition to reasonable costs and attorneys’ fees, the greater

7 of—

8 ‘‘(A) $5,000; or

9 ‘‘(B) the amount of actual damages sustained by

10 the customer.

11 ‘‘(2) Notwithstanding paragraph (1), the court may

12 increase damages to not more than 3 times the amount

13 awarded.

14 ‘‘(c) REBUTTABLE PRESUMPTION OF INJURY.—For

15 purposes of this section, substantial violation of any provi16 sion of this chapter by an invention developer or execution

17 by the customer of a contract for invention development

18 services in reliance on any material false or fraudulent

19 statements or representations or omissions of material fact

20 shall establish a rebuttable presumption of injury.

21 ‘‘§ 57. Records of complaints

22 ‘‘(a) RELEASE OF COMPLAINTS.—The Commissioner

23 shall make all complaints received by the Patent and Trade24 mark Office involving invention developers publicly avail25 able, together with any response of the invention developers.
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1 ‘‘(b) REQUEST FOR COMPLAINTS.—The Commissioner

2 may request complaints relating to invention development

3 services from any Federal or State agency and include such

4 complaints in the records maintained under subsection (a),

5 together with any response of the invention developers.

6 ‘‘§ 58. Fraudulent representation by an invention de7 veloper

8 ‘‘Whoever, in providing invention development serv9 ices, knowingly provides any false or misleading statement,

10 representation, or omission of material fact to a customer

11 or fails to make all the disclosures required under this chap12 ter, shall be guilty of a misdemeanor and fined not more

13 than $10,000 for each offense.

14 ‘‘§ 59. Rule of construction

15 ‘‘Except as expressly provided in this chapter, no pro16 vision of this chapter shall be construed to affect any obliga17 tion, right, or remedy provided under any other Federal

18 or State law.’’.

19 SEC. 403. TECHNICAL AND CONFORMING AMENDMENT.

20 The table of chapters for part I of title 35, United

21 States Code, is amended by adding after the item relating

22 to chapter 4 the following:

‘‘5. Invention Development Services ............................................... 51’’.
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1 SEC. 404. EFFECTIVE DATE.

2 This title and the amendments made by this title shall

3 take effect 60 days after the date of the enactment of this

4 Act.

5 TITLE V—PATENT

6 REEXAMINATION REFORM

7 SEC. 501. SHORT TITLE.

8 This title may be cited as the ‘‘Patent Reexamination

9 Reform Act of 1996’’.

10 SEC. 502. DEFINITIONS.

11 Section 100 of title 35, United States Code, is amended

12 by adding at the end the following new subsection:

13 ‘‘(e) The term ‘third-party requester’ means a person

14 requesting reexamination under section 302 of this title who

15 is not the patent owner.’’.

16 SEC. 503. REEXAMINATION PROCEDURES.

17 (a) REQUEST FOR REEXAMINATION.—Section 302 of

18 title 35, United States Code, is amended to read as follows:

19 ‘‘§ 302. Request for reexamination

20 ‘‘Any person at any time may file a request for reex21 amination by the Office of a patent on the basis of any

22 prior art cited under the provisions of section 301 of this

23 title or on the basis of the requirements of section 112 of

24 this title except for the requirement to set forth the best mode

25 of carrying out the invention. The request must be in writ26 ing, must include the identity of the real party in interest,
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1 and must be accompanied by payment of a reexamination

2 fee established by the Commissioner pursuant to the provi3 sions of section 41 of this title. The request must set forth

4 the pertinency and manner of applying cited prior art to

5 every claim for which reexamination is requested or the

6 manner in which the patent specification or claims fail to

7 comply with the requirements of section 112 of this title.

8 Unless the requesting person is the owner of the patent, the

9 Commissioner promptly shall send a copy of the request to

10 the owner of record of the patent.’’.

11 (b) DETERMINATION OF ISSUE BY COMMISSIONER.—

12 Section 303 of title 35, United States Code, is amended to

13 read as follows:

14 ‘‘§ 303. Determination of issue by Commissioner

15 ‘‘(a) REEXAMINATION.—Not later than 3 months after

16 the filing of a request for reexamination under the provi17 sions of section 302 of this title, the Commissioner shall de18 termine whether a substantial new question of patentability

19 affecting any claim of the patent concerned is raised by the

20 request, with or without consideration of other patents or

21 printed publications. On the Commissioner’s initiative, at

22 any time, the Commissioner may determine whether a sub23 stantial new question of patentability is raised by patents

24 and publications or by the failure of the patent specification

25 or claims to comply with the requirements of section 112
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1 of this title except for the best mode requirement described

2 in section 302.

3 ‘‘(b) RECORD.—A record of the Commissioner’s deter4 mination under subsection (a) shall be placed in the official

5 file of the patent, and a copy shall be promptly given or

6 mailed to the owner of record of the patent and to the third7 party requester, if any.

8 ‘‘(c) FINAL DECISION.—A determination by the Com9 missioner pursuant to subsection (a) shall be final and non10 appealable. Upon a determination that no substantial new

11 question of patentability has been raised, the Commissioner

12 may refund a portion of the reexamination fee required

13 under section 302 of this title.’’.

14 (c) REEXAMINATION ORDER BY COMMISSIONER.—Sec15 tion 304 of title 35, United States Code, is amended to read

16 as follows:

17 ‘‘§ 304. Reexamination order by Commissioner

18 ‘‘If, in a determination made under the provisions of

19 section 303(a) of this title, the Commissioner finds that a

20 substantial new question of patentability affecting a claim

21 of a patent is raised, the determination shall include an

22 order for reexamination of the patent for resolution of the

23 question. The order may be accompanied by the initial ac24 tion of the Patent and Trademark Office on the merits of
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1 the reexamination conducted in accordance with section 305

2 of this title.’’.

3 (d) CONDUCT OF REEXAMINATION PROCEEDINGS.—

4 Section 305 of title 35, United States Code, is amended to

5 read as follows:

6 ‘‘§ 305. Conduct of reexamination proceedings

7 ‘‘(a) IN GENERAL.—Subject to subsection (b), reexam8 ination shall be conducted according to the procedures es9 tablished for initial examination under the provisions of

10 sections 132 and 133 of this title. In any reexamination

11 proceeding under this chapter, the patent owner shall be

12 permitted to propose any amendment to the patent and a

13 new claim or claims, except that no proposed amended or

14 new claim enlarging the scope of the claims of the patent

15 shall be permitted.

16 ‘‘(b) RESPONSE.—(1) This subsection shall apply to

17 any reexamination proceeding in which the order for reex18 amination is based upon a request by a third-party re19 quester.

20 ‘‘(2) With the exception of the reexamination request,

21 any document filed by either the patent owner or the third22 party requester shall be served on the other party.

23 ‘‘(3) If the patent owner files a response to any Patent

24 and Trademark Office action on the merits, the third-party

25 requester shall have 1 opportunity to file written comments
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1 within a reasonable period not less than 1 month after the

2 date of service of the patent owner’s response. Written com3 ments provided under this paragraph shall be limited to

4 issues covered by the Patent and Trademark Office action

5 or the patent owner’s response.

6 ‘‘(c) SPECIAL DISPATCH.—Unless otherwise provided

7 by the Commissioner for good cause, all reexamination pro8 ceedings under this section, including any appeal to the

9 Board of Patent Appeals and Interferences, shall be con10 ducted with special dispatch within the Office.’’.

11 (e) APPEAL.—Section 306 of title 35, United States

12 Code, is amended to read as follows:

13 ‘‘§ 306. Appeal

14 ‘‘(a) PATENT OWNER.—The patent owner involved in

15 a reexamination proceeding under this chapter—

16 ‘‘(1) may appeal under the provisions of section

17 134 of this title, and may appeal under the provisions

18 of sections 141 through 144 of this title, with respect

19 to any decision adverse to the patentability of any

20 original or proposed amended or new claim of the

21 patent; and

22 ‘‘(2) may be a party to any appeal taken by a

23 third-party requester pursuant to subsection (b) of

24 this section.
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1 ‘‘(b) THIRD-PARTY REQUESTER.—A third-party

2 requester—

3 ‘‘(1) may appeal under the provisions of section

4 134 of this title, and may appeal under the provisions

5 of sections 141 through 144 of this title, with respect

6 to any final decision favorable to the patentability of

7 any original or proposed amended or new claim of

8 the patent; and

9 ‘‘(2) may be a party to any appeal taken by the

10 patent owner, subject to subsection (c) of this section.

11 ‘‘(c) PARTICIPATION AS PARTY.—(1) A third-party re12 quester who, under the provisions of sections 141 through

13 144 of this title, files a notice of appeal or who participates

14 as a party to an appeal by the patent owner is estopped

15 from asserting at a later time, in any forum, the invalidity

16 of any claim determined to be patentable on appeal on any

17 ground which the third-party requester raised or could have

18 raised during the reexamination proceedings.

19 ‘‘(2) A third-party requester is deemed not to have par20 ticipated as a party to an appeal by the patent owner un21 less, not later than 20 days after the patent owner has filed

22 notice of appeal, the third-party requester files notice with

23 the Commissioner electing to participate.’’.
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1 (f) REEXAMINATION PROHIBITED.—(1) Chapter 30 of

2 title 35, United States Code, is amended by adding at the

3 end the following new section:

4 ‘‘§ 308. Reexamination prohibited

5 ‘‘(a) ORDER FOR REEXAMINATION.—Notwithstanding

6 any provision of this chapter, once an order for reexamina7 tion of a patent has been issued under section 304 of this

8 title, neither the patent owner nor the third-party requester,

9 if any, nor privies of either, may file a subsequent request

10 for reexamination of the patent until a reexamination cer11 tificate is issued and published under section 307 of this

12 title, unless authorized by the Commissioner.

13 ‘‘(b) FINAL DECISION.—Once a final decision has been

14 entered against a party in a civil action arising in whole

15 or in part under section 1338 of title 28 that the party

16 has not sustained its burden of proving the invalidity of

17 any patent claim in suit, then neither that party nor its

18 privies may thereafter request reexamination of any such

19 patent claim on the basis of issues which that party or its

20 privies raised or could have raised in such civil action, and

21 a reexamination requested by that party or its privies on

22 the basis of such issues may not thereafter be maintained

23 by the Office, notwithstanding any other provision of this

24 chapter.’’.
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1 (2) The table of sections for chapter 30 of title 35,

2 United States Code, is amended by adding at the end the

3 following:

‘‘308. Reexamination prohibited.’’.

4 SEC. 504. CONFORMING AMENDMENTS.

5 (a) BOARD OF PATENT APPEALS AND INTER6 FERENCES.—The first sentence of section 6(b) of title 35,

7 United States Code, as amended by section 117 of this Act,

8 is amended to read as follows: ‘‘The Board of Patent Ap9 peals and Interferences shall, on written appeal of an appli10 cant, or a patent owner or a third-party requester in a reex11 amination proceeding, review adverse decisions of exam12 iners upon applications for patents and decisions of exam13 iners in reexamination proceedings, and shall determine

14 priority and patentability of invention in interferences de15 clared under section 135(a) of this title.’’.

16 (b) PATENT FEES; PATENT AND TRADEMARK SEARCH

17 SYSTEMS.—Section 41(a)(7) of title 35, United States Code,

18 is amended to read as follows:

19 ‘‘(7) On filing each petition for the revival of an

20 unintentionally abandoned application for a patent,

21 for the unintentionally delayed payment of the fee for

22 issuing each patent, or for an unintentionally delayed

23 response by the patent owner in a reexamination pro24 ceeding, $1,250, unless the petition is filed under sec-
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1 tions 133 or 151 of this title, in which case the fee

2 shall be $110.’’.

3 (c) APPEAL TO THE BOARD OF PATENT APPEALS AND

4 INTERFERENCES.—Section 134 of title 35, United States

5 Code, is amended to read as follows:

6 ‘‘§ 134. Appeal to the Board of Patent Appeals and

7 Interferences

8 ‘‘(a) PATENT APPLICANT.—An applicant for a patent,

9 any of whose claims has been twice rejected, may appeal

10 from the decision of the primary examiner to the Board

11 of Patent Appeals and Interferences, having once paid the

12 fee for such appeal.

13 ‘‘(b) PATENT OWNER.—A patent owner in a reexam14 ination proceeding may appeal from the final rejection of

15 any claim by the primary examiner to the Board of Patent

16 Appeals and Interferences, having once paid the fee for such

17 appeal.

18 ‘‘(c) THIRD-PARTY.—A third-party requester may ap19 peal to the Board of Patent Appeals and Interferences from

20 the final decision of the primary examiner favorable to the

21 patentability of any original or proposed amended or new

22 claim of a patent, having once paid the fee for such ap23 peal.’’.

24 (d) APPEAL TO COURT OF APPEALS FOR THE FED25 ERAL CIRCUIT.—Section 141 of title 35, United States
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1 Code, is amended by amending the first sentence to read

2 as follows: ‘‘An applicant, a patent owner, or a third-party

3 requester, dissatisfied with the final decision in an appeal

4 to the Board of Patent Appeals and Interferences under sec5 tion 134 of this title, may appeal the decision to the United

6 States Court of Appeals for the Federal Circuit.’’.

7 (e) PROCEEDINGS ON APPEAL.—Section 143 of title

8 35, United States Code, is amended by amending the third

9 sentence to read as follows: ‘‘In ex parte and reexamination

10 cases, the Commissioner shall submit to the court in writing

11 the grounds for the decision of the Patent and Trademark

12 Office, addressing all the issues involved in the appeal.’’.

13 (f) CIVIL ACTION TO OBTAIN PATENT.—Section 145

14 of title 35, United States Code, is amended in the first sen15 tence by inserting ‘‘(a)’’ after ‘‘section 134’’.

16 SEC. 505. EFFECTIVE DATE.

17 This title and the amendments made by this title shall

18 take effect on the date that is 6 months after the date of

19 the enactment of this Act and shall apply to all reexamina20 tion requests filed on or after such date.

21 TITLE VI—MISCELLANEOUS

22 PATENT PROVISIONS

23 SEC. 601. PROVISIONAL APPLICATIONS.

24 (a) ABANDONMENT.—Section 111(b)(5) of title 35,

25 United States Code, is amended to read as follows:
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1 ‘‘(5) ABANDONMENT.—Notwithstanding the ab2 sence of a claim, upon timely request and as pre3 scribed by the Commissioner, a provisional applica4 tion may be treated as an application filed under

5 subsection (a). If no such request is made, the provi6 sional application shall be regarded as abandoned 12

7 months after the filing date of such application and

8 shall not be subject to revival thereafter.’’.

9 (b) EFFECTIVE DATE.—The amendment made by sub10 section (a) applies to any provisional application filed on

11 or after June 8, 1995.

12 SEC. 602. INTERNATIONAL APPLICATIONS.

13 Section 119 of title 35, United States Code, is

14 amended—

15 (1) in subsection (a), by inserting ‘‘or in a WTO

16 member country’’ after ‘‘or to citizens of the United

17 States,’’;

18 (2) in subsection (b), as amended by section 203

19 of this Act, by striking ‘‘patent office of the foreign

20 country’’ and inserting ‘‘foreign intellectual property

21 authority’’; and

22 (3) by adding at the end the following new sub23 sections:

24 ‘‘(f) APPLICATIONS FOR PLANT BREEDER’S

25 RIGHTS.—Applications for plant breeder’s rights filed in
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1 a WTO member country (or in a UPOV Contracting Party)

2 shall have the same effect for the purpose of the right of

3 priority under subsections (a) through (c) of this section

4 as applications for patents, subject to the same conditions

5 and requirements of this section as apply to applications

6 for patents.

7 ‘‘(g) DEFINITIONS.—As used in this section—

8 ‘‘(1) the term ‘WTO member country’ has the

9 same meaning as the term is defined in section

10 104(b)(2) of this title; and

11 ‘‘(2) the term ‘UPOV Contracting Party’ means

12 a member of the International Convention for the

13 Protection of New Varieties of Plants.’’.

14 SEC. 603. PLANT PATENTS.

15 (a) TUBER PROPAGATED PLANTS.—Section 161 of

16 title 35, United States Code, is amended by striking ‘‘a

17 tuber propagated plant or’’.

18 (b) RIGHTS IN PLANT PATENTS.—The text of section

19 163 of title 35, United States Code, is amended to read as

20 follows: ‘‘In the case of a plant patent, the grant shall in21 clude the right to exclude others from asexually reproducing

22 the plant, and from using, offering for sale, or selling the

23 plant so reproduced, or any of its parts, throughout the

24 United States, or from importing the plant so reproduced,

25 or any parts thereof, into the United States.’’.
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1 (c) EFFECTIVE DATE.—The amendment made by sub2 section (a) shall apply on the date of the enactment of this

3 Act. The amendment made by subsection (b) shall apply

4 to any plant patent issued on or after the date of the enact5 ment of this Act.

6 SEC. 604. JUST COMPENSATION FOR U.S. GOVERNMENT USE

7 OF PATENTS.

8 (a) COMPENSATION.—Section 1498(a) of title 28,

9 United States Code, is amended by adding at the end of

10 the first paragraph the following: ‘‘Reasonable and entire

11 compensation shall include the owner’s reasonable costs, in12 cluding reasonable fees for expert witnesses and attorneys,

13 in pursuing the action if the owner is an independent in14 ventor, a nonprofit organization, or an entity that had no

15 more than 500 employees at any time during the 5-year

16 period preceding the use or manufacture of the patented in17 vention by or for the United States.’’.

18 (b) EFFECTIVE DATE.—The amendment made by sub19 section (a) shall apply to actions under section 1498(a) of

20 title 28, United States Code, that are pending on, or

21 brought on or after, the date of the enactment of this Act.

22 SEC. 605. ELECTRONIC FILING.

23 Section 22 of title 35, United States Code, is amended

24 by striking ‘‘printed or typewritten’’ and inserting ‘‘print25 ed, typwritten, or on an electronic medium’’.