I

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104TH CONGRESS

2D SESSION H. R. 3460

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

A BILL

To establish the Patent and Trademark Office as a

Government corporation, and for other purposes.

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 ‘‘Inventor Rights Pro5 tection and Patent Reform Act of 1996’’.

6 SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I—PATENT AND TRADEMARK OFFICE GOVERNMENT

CORPORATION
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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.

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.
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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.

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 Trade6 mark Office Government Corporation Act of 1996’’.

7 Subtitle A—United States Patent

8 and Trademark Office

9 SEC. 111. ESTABLISHMENT OF PATENT AND TRADEMARK

10 OFFICE AS A GOVERNMENT CORPORATION.

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

12 to read as follows:

13 ‘‘§ 1. Establishment

14 ‘‘(a) ESTABLISHMENT.—The United States Patent

15 and Trademark Office is established as a wholly owned
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1 Government corporation subject to chapter 91 of title 31,

2 and shall be an agency of the United States under the

3 policy guidance of the Secretary of Commerce, except as

4 otherwise provided in this title. For purposes of internal

5 management, the United States Patent and Trademark

6 Office shall be a corporate body not subject to supervision

7 by any department, except as otherwise provided in this

8 title.

9 ‘‘(b) OFFICES.—The United States Patent and

10 Trademark Office shall maintain an office in the District

11 of Columbia, or the metropolitan area thereof, for the

12 service of process and papers and shall be deemed, for pur13 poses of venue in civil actions, to be a resident of the dis14 trict in which its principal office is located. The United

15 States Patent and Trademark Office may establish offices

16 in such other places as it considers necessary or appro17 priate in the conduct of its business.

18 ‘‘(c) REFERENCE.—For purposes of this title, the

19 United States Patent and Trademark Office shall also be

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

21 Office’.’’.

22 SEC. 112. POWERS AND DUTIES.

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

24 to read as follows:
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1 ‘‘§ 2. Powers and Duties

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

3 Trademark Office shall be responsible for—

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

5 the registration of trademarks;

6 ‘‘(2) conducting studies, programs, or ex7 changes of items or services regarding domestic and

8 international patent and trademark law, the admin9 istration of the Office, or any other function vested

10 in the Office by law, including programs to recog11 nize, identify, assess, and forecast the technology of

12 patented inventions and their utility to industry;

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

14 programs cooperatively with foreign patent and

15 trademark offices and international organizations, in

16 connection with the granting and issuing of patents

17 and the registration of trademarks; and

18 ‘‘(B) with the concurrence of the Secretary of

19 State, authorizing the transfer of not to exceed

20 $100,000 in any year to the Department of State

21 for the purpose of making special payments to inter22 national intergovernmental organizations for studies

23 and programs for advancing international coopera24 tion concerning patents, trademarks, and related

25 matters; and
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1 ‘‘(4) disseminating to the public information

2 with respect to patents and trademarks.

3 The special payments under paragraph (3)(B) may be in

4 addition to any other payments or contributions to inter5 national organizations described in paragraph (3)(B) and

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

7 the amounts of such other payments or contributions by

8 the United States Government.

9 ‘‘(b) SPECIFIC POWERS.—The Office—

10 ‘‘(1) shall have perpetual succession;

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

12 shall be judicially noticed and with which letters pat13 ent, certificates of trademark registrations, and pa14 pers issued by the Office shall be authenticated;

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

16 and be represented by its own attorneys in all judi17 cial and administrative proceedings, subject to the

18 provisions of section 8;

19 ‘‘(4) may indemnify the Commissioner of Pat20 ents and Trademarks, and other officers, attorneys,

21 agents, and employees (including members of the

22 Management Advisory Board established in section

23 5) of the Office for liabilities and expenses incurred

24 within the scope of their employment;
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1 ‘‘(5) may adopt, amend, and repeal bylaws,

2 rules, regulations, and determinations, which—

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

4 business will be conducted and the powers

5 granted to it by law will be exercised;

6 ‘‘(B) shall be made after notice and oppor7 tunity for full participation by interested public

8 and private parties;

9 ‘‘(C) shall facilitate and expedite the proc10 essing of patent applications, particularly those

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

12 and retrieved electronically, subject to the provi13 sions of section 122 relating to the confidential

14 status of applications; and

15 ‘‘(D) may govern the recognition and con16 duct of agents, attorneys, or other persons rep17 resenting applicants or other parties before the

18 Office, and may require them, before being rec19 ognized as representatives of applicants or

20 other persons, to show that they are of good

21 moral character and reputation and are pos22 sessed of the necessary qualifications to render

23 to applicants or other persons valuable service,

24 advice, and assistance in the presentation or
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1 prosecution of their applications or other busi2 ness before the Office;

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

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

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

6 therein, as it considers necessary to carry out its

7 functions;

8 ‘‘(7)(A) may make such purchases, contracts

9 for the construction, maintenance, or management

10 and operation of facilities, and contracts for supplies

11 or services, without regard to the provisions of the

12 Federal Property and Administrative Services Act of

13 1949 (40 U.S.C. 471 and following), the Public

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

15 the Stewart B. McKinney Homeless Assistance Act

16 (42 U.S.C. 11301 and following); and

17 ‘‘(B) may enter into and perform such pur18 chases and contracts for printing services, including

19 the process of composition, platemaking, presswork,

20 silk screen processes, binding, microform, and the

21 products of such processes, as it considers necessary

22 to carry out the functions of the Office, without re23 gard to sections 501 through 517 and 1101 through

24 1123 of title 44;
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1 ‘‘(8) may use, with their consent, services,

2 equipment, personnel, and facilities of other depart3 ments, agencies, and instrumentalities of the Fed4 eral Government, on a reimbursable basis, and co5 operate with such other departments, agencies, and

6 instrumentalities in the establishment and use of

7 services, equipment, and facilities of the Office;

8 ‘‘(9) may obtain from the Administrator of

9 General Services such services as the Administrator

10 is authorized to provide to other agencies of the

11 United States, on the same basis as those services

12 are provided to other agencies of the United States;

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

14 States and the agency, government, or international

15 organization concerned, the services, records, facili16 ties, or personnel of any State or local government

17 agency or instrumentality or foreign government or

18 international organization to perform functions on

19 its behalf;

20 ‘‘(11) may determine the character of and the

21 necessity for its obligations and expenditures and

22 the manner in which they shall be incurred, allowed,

23 and paid, subject to the provisions of this title and

24 the Act of July 5, 1946 (commonly referred to as

25 the ‘Trademark Act of 1946’);
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1 ‘‘(12) may retain and use all of its revenues

2 and receipts, including revenues from the sale, lease,

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

4 or any interest therein, of the Office, including for

5 research and development and capital investment,

6 subject to the provisions of section 10101 of the

7 Omnibus Budget Reconciliation Act of 1980 (35

8 U.S.C. 41 note);

9 ‘‘(13) shall have the priority of the United

10 States with respect to the payment of debts from

11 bankrupt, insolvent, and decedents’ estates;

12 ‘‘(14) may accept monetary gifts or donations

13 of services, or of real, personal, or mixed property,

14 in order to carry out the functions of the Office;

15 ‘‘(15) may execute, in accordance with its by16 laws, rules, and regulations, all instruments nec17 essary and appropriate in the exercise of any of its

18 powers;

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

20 insurance against any loss in connection with its

21 property, other assets, or operations either by con22 tract or by self-insurance; and

23 ‘‘(17) shall pay any settlement or judgment en24 tered against it from the funds of the Office and not
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1 from amounts available under section 1304 of title

2 31.’’.

3 SEC. 113. ORGANIZATION AND MANAGEMENT.

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

5 to read as follows:

6 ‘‘§ 3. Officers and employees

7 ‘‘(a) COMMISSIONER.—

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

9 United States Patent and Trademark Office shall be

10 vested in a Commissioner of Patents and Trade11 marks (hereafter in this title referred to as the

12 ‘Commissioner’), who shall be a citizen of the United

13 States and who shall be appointed by the President,

14 by and with the advice and consent of the Senate.

15 The Commissioner shall be a person who, by reason

16 of professional background and experience in patent

17 or trademark law, is especially qualified to manage

18 the Office.

19 ‘‘(2) DUTIES.—

20 ‘‘(A) IN GENERAL.—The Commissioner

21 shall be responsible for the management and di22 rection of the Office, including the issuance of

23 patents and the registration of trademarks, and

24 shall perform these duties in a fair, impartial,

25 and equitable manner.
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1 ‘‘(B) ADVISING THE PRESIDENT.—The

2 Commissioner shall advise the President,

3 through the Secretary of Commerce, of all ac4 tivities of the Office undertaken in response to

5 obligations of the United States under treaties

6 and executive agreements, or which relate to co7 operative programs with those authorities of

8 foreign governments that are responsible for

9 granting patents, registering trademarks, or

10 other intellectual property rights. The Commis11 sioner shall also recommend to the President,

12 through the Secretary of Commerce, changes in

13 law or policy which may improve the ability of

14 United States citizens to secure and enforce

15 patent rights, trademark rights, or other intel16 lectual property rights in the United States or

17 in foreign countries.

18 ‘‘(C) CONSULTING WITH THE MANAGE19 MENT ADVISORY BOARD.—The Commissioner

20 shall consult with the Management Advisory

21 Board established in section 5 on a regular

22 basis on matters relating to the operation of the

23 Office, and shall consult with the Board before

24 submitting budgetary proposals to the Office of

25 Management and Budget or changing or pro-
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1 posing to change patent or trademark user fees

2 or patent or trademark regulations.

3 ‘‘(D) SECURITY CLEARANCES.—The Com4 missioner, in consultation with the Director of

5 the Office of Personnel Management, shall

6 maintain a program for identifying national se7 curity positions and providing for appropriate

8 security clearances.

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

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

11 expiration of the Commissioner’s term until a suc12 cessor is appointed and assumes office. The Com13 missioner may be reappointed to subsequent terms.

14 ‘‘(4) OATH.—The Commissioner shall, before

15 taking office, take an oath to discharge faithfully the

16 duties of the Office.

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

18 receive compensation at the rate of pay in effect for

19 level II of the Executive Schedule under section

20 5313 of title 5.

21 ‘‘(6) REMOVAL.—The Commissioner may be re22 moved from office by the President only for cause.

23 ‘‘(7) DESIGNEE OF COMMISSIONER.—The Com24 missioner shall designate an officer of the Office who

25 shall be vested with the authority to act in the ca-
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1 pacity of the Commissioner in the event of the ab2 sence or incapacity of the Commissioner.

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

4 ‘‘(1) DEPUTY COMMISSIONERS.—The Commis5 sioner shall appoint a Deputy Commissioner for Pat6 ents and a Deputy Commissioner for Trademarks

7 for terms that shall expire on the date on which the

8 Commissioner’s term expires. The Deputy Commis9 sioner for Patents shall be a person with dem10 onstrated experience in patent law and the Deputy

11 Commissioner for Trademarks shall be a person with

12 demonstrated experience in trademark law. The

13 Deputy Commissioner for Patents and the Deputy

14 Commissioner for Trademarks shall be the principal

15 policy and management advisors to the Commis16 sioner on all aspects of the activities of the Office

17 that affect the administration of patent and trade18 mark operations, respectively.

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

20 Commissioner shall—

21 ‘‘(A) appoint an Inspector General and

22 such other officers, employees (including attor23 neys), and agents of the Office as the Commis24 sioner considers necessary to carry out its func25 tions;
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1 ‘‘(B) fix the compensation of such officers

2 and employees, except as provided in subsection

3 (e); and

4 ‘‘(C) define the authority and duties of

5 such officers and employees and delegate to

6 them such of the powers vested in the Office as

7 the Commissioner may determine.

8 The Office shall not be subject to any administra9 tively or statutorily imposed limitation on positions

10 or personnel, and no positions or personnel of the

11 Office shall be taken into account for purposes of

12 applying any such limitation.

13 ‘‘(c) LIMITS ON COMPENSATION.—Except as other14 wise provided by law, the annual rate of basic pay of an

15 officer or employee of the Office may not be fixed at a

16 rate that exceeds, and total compensation payable to any

17 such officer or employee for any year may not exceed, the

18 annual rate of basic pay in effect for the Commissioner

19 for the year involved. The Commissioner shall prescribe

20 such regulations as may be necessary to carry out this

21 subsection.

22 ‘‘(d) INAPPLICABILITY OF TITLE 5 GENERALLY.—

23 Except as otherwise provided in this section, officers and

24 employees of the Office shall not be subject to the provi25 sions of title 5 relating to Federal employees.
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1 ‘‘(e) CONTINUED APPLICABILITY OF CERTAIN PRO2 VISION OF TITLE 5.—

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

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

5 employees:

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

7 of relatives; restrictions).

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

9 to withholding pay).

10 ‘‘(C) Subchapter II of chapter 73 (relating

11 to employment limitations).

12 ‘‘(D) Chapter 71 (relating to labor-man13 agement relations), subject to paragraph (2)

14 and subsection (g).

15 ‘‘(2) COMPENSATION SUBJECT TO COLLECTIVE

16 BARGAINING.—

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

18 other provision of law, for purposes of applying

19 chapter 71 of title 5 pursuant to paragraph

20 (1)(D), basic pay and other forms of compensa21 tion shall be considered to be among the mat22 ters as to which the duty to bargain in good

23 faith extends under such chapter.

24 ‘‘(B) EXCEPTIONS.—The duty to bargain

25 in good faith shall not, by reason of subpara-
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1 graph (A), be considered to extend to any bene2 fit under title 5 which is afforded by paragraph

3 (1), (2), (3), or (4) of subsection (f).

4 ‘‘(C) LIMITATIONS APPLY.—Nothing in

5 this subsection shall be considered to allow any

6 limitation under subsection (c) to be exceeded.

7 ‘‘(f) PROVISIONS OF TITLE 5 RELATING TO CERTAIN

8 BENEFITS.—

9 ‘‘(1) RETIREMENT.—(A) Officers and employ10 ees of the Office shall not become ineligible to par11 ticipate in the retirement program under subchapter

12 III of chapter 83 or under chapter 84 of title 5 by

13 reason of subsection (d).

14 ‘‘(B)(i) The amount required of the Office

15 under the second sentence of section 8334(a)(1) of

16 title 5 with respect to any particular individual shall,

17 instead of the amount which would otherwise apply,

18 be equal to the normal-cost percentage (determined

19 with respect to officers and employees of the Office

20 using dynamic assumptions, as defined by section

21 8401(9) of such title) of the individual’s basic pay,

22 minus the amount required to be withheld from such

23 pay under such section 8334(a)(1).

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

25 section 8334(k)(1)(B) of title 5 with respect to any
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1 particular individual shall be equal to an amount

2 computed in a manner similar to that specified in

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

4 (iii).

5 ‘‘(iii) Any regulations necessary to carry out

6 this subparagraph shall be prescribed by the Office

7 of Personnel Management.

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

9 Office may supplement the benefits provided under

10 the preceding provisions of this paragraph.

11 ‘‘(2) HEALTH BENEFITS.—(A) Officers and em12 ployees of the Office shall not become ineligible to

13 participate in the health benefits program under

14 chapter 89 of title 5 by reason of subsection (d).

15 ‘‘(B)(i) With respect to any individual who be16 comes an officer or employee of the Office pursuant

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

18 participate in such program as an annuitant (or of

19 any other person to participate in such program as

20 an annuitant based on the death of such individual)

21 shall be determined disregarding the requirements of

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

23 shall not apply if the individual ceases to be an offi24 cer or employee of the Office for any period of time
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1 after becoming an officer or employee of the Office

2 pursuant to subsection (h) and before separation.

3 ‘‘(ii) The Government contributions authorized

4 by section 8906 for health benefits for anyone par5 ticipating in the health benefits program pursuant to

6 this subparagraph shall be made by the Office in the

7 same manner as provided under section 8906(g)(2)

8 of title 5 with respect to the United States Postal

9 Service for individuals associated therewith.

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

11 term ‘annuitant’ has the meaning given such term

12 by section 8901(3) of title 5.

13 ‘‘(C) The Office may supplement the benefits

14 provided under the preceding provisions of this para15 graph.

16 ‘‘(3) LIFE INSURANCE.—(A) Officers and em17 ployees of the Office shall not become ineligible to

18 participate in the life insurance program under

19 chapter 87 of title 5 by reason of subsection (d).

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

21 after retirement or while in receipt of compensation

22 under subchapter I of chapter 81 of title 5 shall be

23 determined, in the case of any individual who be24 comes an officer or employee of the Office pursuant

25 to subsection (h), without regard to the require-
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1 ments of section 8706(b) (1) or (2), but subject to

2 the condition specified in the last sentence of para3 graph (2)(B)(i) of this subsection.

4 ‘‘(ii) Government contributions under section

5 8708(d) on behalf of any such individual shall be

6 made by the Office in the same manner as provided

7 under paragraph (3) thereof with respect to the

8 United States Postal Service for individuals associ9 ated therewith.

10 ‘‘(C) The Office may supplement the benefits

11 provided under the preceding provisions of this para12 graph.

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

14 Officers and employees of the Office shall not be15 come ineligible to participate in the program under

16 chapter 89 of title 5, relating to compensation for

17 work injuries, by reason of subsection (d).

18 ‘‘(B) The Office shall remain responsible for re19 imbursing the Employees’ Compensation Fund, pur20 suant to section 8147 of title 5, for compensation

21 paid or payable after the effective date of the Patent

22 and Trademark Office Government Corporation Act

23 of 1996 in accordance with chapter 81 of title 5 with

24 regard to any injury, disability, or death due to
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1 events arising before such date, whether or not a

2 claim has been filed or is final on such date.

3 ‘‘(g) LABOR-MANAGEMENT RELATIONS.—

4 ‘‘(1) LABOR RELATIONS AND EMPLOYEE RELA5 TIONS PROGRAMS.—The Office shall develop labor

6 relations and employee relations programs with the

7 objective of improving productivity and efficiency, in8 corporating the following principles:

9 ‘‘(A) Such programs shall be consistent

10 with the merit principles in section 2301(b) of

11 title 5.

12 ‘‘(B) Such programs shall provide veterans

13 preference protections equivalent to those estab14 lished by sections 2108, 3308–3318, and 3320

15 of title 5.

16 ‘‘(C)(i) The right to work shall not be sub17 ject to undue restraint or coercion. The right to

18 work shall not be infringed or restricted in any

19 way based on membership in, affiliation with, or

20 financial support of a labor organization.

21 ‘‘(ii) No person shall be required, as a con22 dition of employment or continuation of employ23 ment—

24 ‘‘(I) to resign or refrain from vol25 untary membership in, voluntary affiliation
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1 with, or voluntary financial support of a

2 labor organization;

3 ‘‘(II) to become or remain a member

4 of a labor organization;

5 ‘‘(III) to pay any dues, fees, assess6 ments, or other charges of any kind or

7 amount to a labor organization;

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

9 third party, in lieu of such payments, any

10 amount equivalent to or a pro-rata portion

11 of dues, fees, assessments, or other charges

12 regularly required of members of a labor

13 organization; or

14 ‘‘(V) to be recommended, approved,

15 referred, or cleared by or through a labor

16 organization.

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

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

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

20 or ‘confidential employee’ as those terms are

21 defined in 7103(a)(10), (11), and (13) of such

22 title.

23 ‘‘(iv) Any labor organization recognized by

24 the Office as the exclusive representative of a

25 unit of employees of the Office shall represent
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1 the interests of all employees in that unit with2 out discrimination and without regard to labor

3 organization membership.

4 ‘‘(2) ADOPTION OF EXISTING LABOR AGREE5 MENTS.—The Office shall adopt all labor agreements

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

7 date of the Patent and Trademark Office Govern8 ment Corporation Act of 1996, with respect to such

9 Office (as then in effect).

10 ‘‘(h) CARRYOVER OF PERSONNEL.—

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

12 date of the Patent and Trademark Office Govern13 ment Corporation Act of 1996, all officers and em14 ployees of the Patent and Trademark Office on the

15 day before such effective date shall become officers

16 and employees of the Office, without a break in serv17 ice.

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

19 on the day before the effective date of the Patent

20 and Trademark Office Government Corporation Act

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

22 of Commerce (other than an officer or employee

23 under paragraph (1)) shall be transferred to the Of24 fice if—
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1 ‘‘(A) such individual serves in a position

2 for which a major function is the performance

3 of work reimbursed by the Patent and Trade4 mark Office, as determined by the Secretary of

5 Commerce;

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

7 that performed work in support of the Patent

8 and Trademark Office during at least half of

9 the incumbent’s work time, as determined by

10 the Secretary of Commerce; or

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

12 of the Office, as determined by the Secretary of

13 Commerce in consultation with the Commis14 sioner of Patents and Trademarks.

15 Any transfer under this paragraph shall be effective

16 as of the same effective date as referred to in para17 graph (1), and shall be made without a break in

18 service.

19 ‘‘(3) ACCUMULATED LEAVE.—The amount of

20 sick and annual leave and compensatory time accu21 mulated under title 5 before the effective date de22 scribed in paragraph (1), by those becoming officers

23 or employees of the Office pursuant to this sub24 section, are obligations of the Office.
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1 ‘‘(4) TERMINATION RIGHTS.—Any employee re2 ferred to in paragraph (1) or (2) of this subsection

3 whose employment with the Office is terminated

4 during the 2-year period beginning on the effective

5 date of the Patent and Trademark Office Govern6 ment Corporation Act of 1996 shall be entitled to

7 rights and benefits, to be afforded by the Office,

8 similar to those such employee would have had

9 under Federal law if termination had occurred im10 mediately before such date. An employee who would

11 have been entitled to appeal any such termination to

12 the Merit Systems Protection Board, if such termi13 nation had occurred immediately before such effec14 tive date, may appeal any such termination occur15 ring within this 2-year period to the Board under

16 such procedures as it may prescribe.

17 ‘‘(5) CONTINUATION IN OFFICE OF CERTAIN

18 OFFICERS.—(A) The individual serving as the Com19 missioner of Patents and Trademarks on the day be20 fore the effective date of the Patent and Trademark

21 Office Government Corporation Act of 1996 may

22 serve as the Commissioner until the date on which

23 a Commissioner is appointed under subsection (a).

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

25 Commissioner for Patents on the day before the ef-
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1 fective date of the Patent and Trademark Office

2 Government Corporation Act of 1996 may serve as

3 the Deputy Commissioner for Patents until the date

4 on which a Deputy Commissioner for Patents is ap5 pointed under subsection (b).

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

7 Commissioner for Trademarks on the day before the

8 effective date of the Patent and Trademark Office

9 Government Corporation Act of 1996 may serve as

10 the Deputy Commissioner for Trademarks until the

11 date on which a Deputy Commissioner for Trade12 marks is appointed under subsection (b).

13 ‘‘(i) COMPETITIVE STATUS.—For purposes of ap14 pointment to a position in the competitive service for

15 which an officer or employee of the Office is qualified,

16 such officer or employee shall not forfeit any competitive

17 status, acquired by such officer or employee before the ef18 fective date of the Patent and Trademark Office Govern19 ment Corporation Act of 1996, by reason of becoming an

20 officer or employee of the Office pursuant to subsection

21 (h).

22 ‘‘(j) SAVINGS PROVISIONS.—

23 ‘‘(1) IN GENERAL.—Compensation, benefits,

24 and other terms and conditions of employment in ef25 fect immediately before the effective date of the Pat-
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1 ent and Trademark Office Government Corporation

2 Act of 1996, whether provided by statute or by rules

3 and regulations of the former Patent and Trade4 mark Office or the executive branch of the Govern5 ment of the United States, shall continue to apply

6 to officers and employees of the Office, until

7 changed in accordance with this section (whether by

8 action of the Commissioner or otherwise).

9 ‘‘(2) PROVISIONS SPECIFIC TO BASIC PAY.—

10 With respect to any individual who becomes an offi11 cer or employee of the Office pursuant to subsection

12 (h), the rate of basic pay for such officer or em13 ployee may not, on or after the effective date of the

14 Patent and Trademark Office Government Corpora15 tion Act of 1996, be less than the rate in effect im16 mediately before such effective date, except—

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

18 agreement entered into under this section; or

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

20 misconduct, on the part of such individual.

21 For purposes of this subparagraph, the term ‘basic

22 pay’ includes any amount considered to be part of

23 basic pay for purposes of subchapter III of chapter

24 83 or chapter 84 of title 5.
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1 ‘‘(k) REMOVAL OF QUASI-JUDICIAL EXAMINERS.—

2 The Office may remove a patent examiner or examiner3 in-chief, or a trademark examiner or member of a Trade4 mark Trial and Appeal Board, only for such cause as will

5 promote the efficiency of the Office.’’.

6 SEC. 114. MANAGEMENT ADVISORY BOARD.

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

8 is amended by inserting after section 4 the following:

9 ‘‘§ 5. Patent and Trademark Office Management Advi10 sory Board

11 ‘‘(a) ESTABLISHMENT OF MANAGEMENT ADVISORY

12 BOARD.—

13 ‘‘(1) APPOINTMENT.—The United States Pat14 ent and Trademark Office shall have a Management

15 Advisory Board (hereafter in this title referred to as

16 the ‘Board’) of 12 members, 4 of whom shall be ap17 pointed by the President, 4 of whom shall be ap18 pointed by the Speaker of the House of Representa19 tives, and 4 of whom shall be appointed by the

20 President pro tempore of the Senate. Not more than

21 3 of the 4 members appointed by each appointing

22 authority shall be members of the same political

23 party.

24 ‘‘(2) TERMS.—Members of the Board shall be

25 appointed for a term of 4 years each, except that of
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1 the members first appointed by each appointing au2 thority, 1 shall be for a term of 1 year, 1 shall be

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

4 3 years. No member may serve more than 1 term.

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

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

7 3 years.

8 ‘‘(4) TIMING OF APPOINTMENTS.—Initial ap9 pointments to the Board shall be made within 3

10 months after the effective date of the Patent and

11 Trademark Office Government Corporation Act of

12 1996, and vacancies shall be filled within 3 months

13 after they occur.

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

15 the manner in which the original appointment was

16 made under this subsection. Members appointed to

17 fill a vacancy occurring before the expiration of the

18 term for which the member’s predecessor was ap19 pointed shall be appointed only for the remainder of

20 that term. A member may serve after the expiration

21 of that member’s term until a successor is ap22 pointed.

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

24 members of the Board to serve on a committee on

25 patent operations and on a committee on trademark
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1 operations to perform the duties set forth in sub2 section (e) as they relate specifically to the Office’s

3 patent operations, and the Office’s trademark oper4 ations, respectively.

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

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

7 chosen so as to represent the interests of diverse users

8 of the United States Patent and Trademark Office, and

9 shall include individuals with substantial background and

10 achievement in corporate finance and management.

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

12 Members of the Board shall be special Government em13 ployees within the meaning of section 202 of title 18.

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

15 of the chair to consider an agenda set by the chair.

16 ‘‘(e) DUTIES.—The Board shall—

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

18 budget, and user fees of the United States Patent

19 and Trademark Office, and advise the Commissioner

20 on these matters; and

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

22 year, prepare an annual report on the matters re23 ferred to in paragraph (1), transmit the report to

24 the President and the Committees on the Judiciary

25 of the Senate and the House of Representatives, and
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1 publish the report in the Patent and Trademark Of2 fice Official Gazette.

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

4 be compensated for each day (including travel time) dur5 ing which they are attending meetings or conferences of

6 the Board or otherwise engaged in the business of the

7 Board, at the rate which is the daily equivalent of the an8 nual rate of basic pay in effect for level III of the Execu9 tive Schedule under section 5314 of title 5, and while away

10 from their homes or regular places of business they may

11 be allowed travel expenses, including per diem in lieu of

12 subsistence, as authorized by section 5703 of title 5.

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

14 Board shall be provided access to records and information

15 in the United States Patent and Trademark Office, except

16 for personnel or other privileged information and informa17 tion concerning patent applications required to be kept in

18 confidence by section 122.’’.

19 SEC. 115. CONFORMING AMENDMENTS.

20 (a) DUTIES OF COMMISSIONER.—Section 6 of title

21 35, United States Code, and the item relating to such sec22 tion in the table of contents for chapter 1 of title 35, Unit23 ed States Code, are repealed.

24 (b) REGULATIONS FOR AGENTS AND ATTORNEYS.—

25 Section 31 of title 35, United States Code, and the item
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1 relating to such section in the table of contents for chapter

2 3 of title 35, United States Code, are repealed.

3 SEC. 116. TRADEMARK TRIAL AND APPEAL BOARD.

4 Section 17 of the Act of July 5, 1946 (commonly re5 ferred to as the ‘‘Trademark Act of 1946’’) (15 U.S.C.

6 1067) is amended to read as follows:

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

8 to registration, application to register as a lawful concur9 rent user, or application to cancel the registration of a

10 mark, the Commissioner shall give notice to all parties and

11 shall direct a Trademark Trial and Appeal Board to deter12 mine and decide the respective rights of registration.

13 ‘‘(b) The Trademark Trial and Appeal Board shall

14 include the Commissioner, the Deputy Commissioner for

15 Patents, the Deputy Commissioner for Trademarks, and

16 members competent in trademark law who are appointed

17 by the Commissioner.’’.

18 SEC. 117. BOARD OF PATENT APPEALS AND INTER19 FERENCES.

20 Section 7 of title 35, United States Code, is amended

21 to read as follows:

22 ‘‘§ 7. Board of Patent Appeals and Interferences

23 ‘‘(a) ESTABLISHMENT AND COMPOSITION.—There

24 shall be in the United States Patent and Trademark Of25 fice a Board of Patent Appeals and Interferences. The
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1 Commissioner, the Deputy Commissioner for Patents, the

2 Deputy Commissioner for Trademarks, and the examin3 ers-in-chief shall constitute the Board. The examiners-in4 chief shall be persons of competent legal knowledge and

5 scientific ability.

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

7 Interferences shall, on written appeal of an applicant, re8 view adverse decisions of examiners upon applications for

9 patents and shall determine priority and patentability of

10 invention in interferences declared under section 135(a).

11 Each appeal and interference shall be heard by at least

12 3 members of the Board, who shall be designated by the

13 Commissioner. Only the Board of Patent Appeals and

14 Interferences may grant rehearings.’’.

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

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

17 is amended—

18 (1) by redesignating sections 8 through 14 as

19 sections 9 through 15; and

20 (2) by inserting after section 7 the following

21 new section:

22 ‘‘§ 8. Suits by and against the Office

23 ‘‘(a) IN GENERAL.—

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

25 Any civil action or proceeding to which the United
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1 States Patent and Trademark Office is a party is

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

3 The Federal courts shall have exclusive jurisdiction

4 over all civil actions by or against the Office.

5 ‘‘(2) CONTRACT CLAIMS.—Any action or pro6 ceeding against the Office in which any claim is cog7 nizable under the Contract Disputes Act of 1978 (41

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

9 Act. For purposes of that Act, the Commissioner

10 shall be deemed to be the agency head with respect

11 to contract claims arising with respect to the Office.

12 Any other action or proceeding against the Office

13 founded upon contract may be brought in an appro14 priate district court, notwithstanding any provision

15 of title 28.

16 ‘‘(3) TORT CLAIMS.—(A) Any action or pro17 ceeding against the Office in which any claim is cog18 nizable under the provisions of section 1346(b) and

19 chapter 171 of title 28, shall be governed by those

20 provisions.

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

22 Office founded upon tort may be brought in an ap23 propriate district court without regard to the provi24 sions of section 1346(b) and chapter 171 of title 28.
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1 ‘‘(4) PROHIBITION ON ATTACHMENT, LIENS,

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

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

4 be issued against property of the Office.

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

6 The Office shall be substituted as defendant in any

7 civil action or proceeding against an officer or em8 ployee of the Office, if the Office determines that the

9 officer or employee was acting within the scope of

10 his or her employment with the Office. If the Office

11 refuses to certify scope of employment, the officer or

12 employee may at any time before trial petition the

13 court to find and certify that the officer or employee

14 was acting within the scope of his or her employ15 ment. Upon certification by the court, the Office

16 shall be substituted as the party defendant. A copy

17 of the petition shall be served upon the Office. In

18 any such civil action or proceeding to which para19 graph (3)(A) applies, the provisions of section

20 1346(b) and chapter 171 of title 28 shall apply in

21 lieu of this paragraph.

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

23 ‘‘(1) EXERCISE BY OFFICE OF ATTORNEY GEN24 ERAL’S AUTHORITIES.—Except as provided in this

25 section, with respect to any action or proceeding in
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1 which the Office is a party or an officer or employee

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

3 Office, officer, or employee may exercise, without

4 prior authorization from the Attorney General, the

5 authorities and duties that otherwise would be exer6 cised by the Attorney General on behalf of the Of7 fice, officer, or employee under title 28 or other

8 laws.

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

10 Notwithstanding paragraph (1), at any time the At11 torney General may, in any action or proceeding de12 scribed in paragraph (1), file an appearance on be13 half of the Office or the officer or employee involved,

14 without the consent of the Office or the officer or

15 employee. Upon such filing, the Attorney General

16 shall represent the Office or such officer or employee

17 with exclusive authority in the conduct, settlement,

18 or compromise of that action or proceeding.

19 ‘‘(3) CONSULTATIONS WITH AND ASSISTANCE

20 BY ATTORNEY GENERAL.—The Office may consult

21 with the Attorney General concerning any legal mat22 ter, and the Attorney General shall provide advice

23 and assistance to the Office, including representing

24 the Office in litigation, if requested by the Office.
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1 ‘‘(4) REPRESENTATION BEFORE SUPREME

2 COURT.—The Attorney General shall represent the

3 Office in all cases before the United States Supreme

4 Court.

5 ‘‘(5) QUALIFICATIONS OF ATTORNEYS.—An at6 torney admitted to practice to the bar of the highest

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

8 the District of Columbia and employed by the Office

9 may represent the Office in any legal proceeding in

10 which the Office or an officer or employee of the Of11 fice is a party or interested, regardless of whether

12 the attorney is a resident of the jurisdiction in which

13 the proceeding is held and notwithstanding any

14 other prerequisites of qualification or appearance re15 quired by the court or administrative body before

16 which the proceeding is conducted.’’.

17 SEC. 119. ANNUAL REPORT OF COMMISSIONER.

18 Section 15 of title 35, United States Code, as redesig19 nated by section 118 of this Act, is amended to read as

20 follows:

21 ‘‘§ 15. Annual report to Congress

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

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

24 moneys received and expended by the Office, the purposes

25 for which the moneys were spent, the quality and quantity
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1 of the work of the Office, and other information relating

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

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

4 that such requirements are not inconsistent with the pre5 ceding sentence. The report required under this section

6 shall be deemed to be the report of the United States Pat7 ent and Trademark Office under section 9106 of title 31,

8 and the Commissioner shall not file a separate report

9 under such section.’’.

10 SEC. 120. SUSPENSION OR EXCLUSION FROM PRACTICE.

11 Section 32 of title 35, United States Code, is amend12 ed by inserting before the last sentence the following: ‘‘The

13 Commissioner shall have the discretion to designate any

14 attorney who is an officer or employee of the United

15 States Patent and Trademark Office to conduct the hear16 ing required by this section.’’.

17 SEC. 121. FUNDING.

18 Section 42 of title 35, United States Code, is amend19 ed to read as follows:

20 ‘‘§ 42. Patent and Trademark Office funding

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

22 services performed by or materials furnished by the Unit23 ed States Patent and Trademark Office shall be payable

24 to the Office.
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1 ‘‘(b) USE OF MONEYS.—Moneys of the United States

2 Patent and Trademark Office not otherwise used to carry

3 out the functions of the Office shall be kept in cash on

4 hand or on deposit, or invested in obligations of the United

5 States or guaranteed by the United States, or in obliga6 tions or other instruments which are lawful investments

7 for fiduciary, trust, or public funds. Fees available to the

8 Commissioner under this title shall be used for the proc9 essing of patent applications and for other services and

10 materials relating to patents. Fees available to the Com11 missioner under section 31 of the Act of July 5, 1946

12 (commonly referred to as the ‘Trademark Act of 1946’;

13 15 U.S.C. 1113), shall be used for the processing of trade14 mark registrations and for other services and materials

15 relating to trademarks.

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

17 Patent and Trademark Office is authorized to issue from

18 time to time for purchase by the Secretary of the Treasury

19 its debentures, bonds, notes, and other evidences of in20 debtedness (hereafter in this subsection referred to as ‘ob21 ligations’) to assist in financing its activities. Any borrow22 ing under this subsection shall be repaid only from fees

23 paid to the Office and surcharges appropriated by the

24 Congress. Such obligations shall be redeemable at the op25 tion of the Office before maturity in the manner stipulated
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1 in such obligations and shall have such maturity as is de2 termined by the Office with the approval of the Secretary

3 of the Treasury. Each such obligation issued to the Treas4 ury shall bear interest at a rate not less than the current

5 yield on outstanding marketable obligations of the United

6 States of comparable maturity during the month preced7 ing the issuance of the obligation as determined by the

8 Secretary of the Treasury. The Secretary of the Treasury

9 shall purchase any obligations of the Office issued under

10 this subsection and for such purpose the Secretary of the

11 Treasury is authorized to use as a public-debt transaction

12 the proceeds of any securities issued under chapter 31 of

13 title 31, and the purposes for which securities may be is14 sued under that chapter are extended to include such pur15 pose. Payment under this subsection of the purchase price

16 of such obligations of the United States Patent and Trade17 mark Office shall be treated as public debt transactions

18 of the United States.’’.

19 SEC. 122. AUDITS.

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

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

22 ‘‘§ 43. Audits

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

24 United States Patent and Trademark Office shall be pre25 pared on an annual basis in accordance with generally ac-
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1 cepted accounting principles. Such statements shall be au2 dited by an independent certified public accountant chosen

3 by the Commissioner. The audit shall be conducted in ac4 cordance with standards that are consistent with generally

5 accepted Government auditing standards and other stand6 ards established by the Comptroller General, and with the

7 generally accepted auditing standards of the private sec8 tor, to the extent feasible. The Commissioner shall trans9 mit to the Committees on the Judiciary of the House of

10 Representatives and the Senate the results of each audit

11 under this subsection.

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

13 Comptroller General may review any audit of the financial

14 statement of the Patent and Trademark Office that is con15 ducted under subsection (a). The Comptroller General

16 shall report to the Congress and the Office the results of

17 any such review and shall include in such report appro18 priate recommendations.

19 ‘‘(c) AUDIT BY COMPTROLLER GENERAL.—The

20 Comptroller General may audit the financial statements

21 of the Office and such audit shall be in lieu of the audit

22 required by subsection (a). The Office shall reimburse the

23 Comptroller General for the cost of any audit conducted

24 under this subsection.
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1 ‘‘(d) ACCESS TO OFFICE RECORDS.—All books, fi2 nancial records, report files, memoranda, and other prop3 erty that the Comptroller General deems necessary for the

4 performance of any audit shall be made available to the

5 Comptroller General.

6 ‘‘(e) APPLICABILITY IN LIEU OF TITLE 31 PROVI7 SIONS.—This section applies to the Office in lieu of the

8 provisions of section 9105 of title 31.’’.

9 SEC. 123. TRANSFERS.

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

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

12 in, the United States Patent and Trademark Office all

13 functions, powers, and duties vested by law in the Sec14 retary of Commerce or the Department of Commerce or

15 in the officers or components in the Department of Com16 merce with respect to the authority to grant patents and

17 register trademarks, and in the Patent and Trademark

18 Office, as in effect on the day before the effective date

19 of this title, and in the officers and components of such

20 Office.

21 (b) TRANSFER OF FUNDS AND PROPERTY.—The

22 Secretary of Commerce shall transfer to the United States

23 Patent and Trademark Office, on the effective date of this

24 title, so much of the assets, liabilities, contracts, property,

25 records, and unexpended and unobligated balances of ap-
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1 propriations, authorizations, allocations, and other funds

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

3 made available to the Department of Commerce, including

4 funds set aside for accounts receivable which are related

5 to functions, powers, and duties which are vested in the

6 Patent and Trademark Office by this title.

7 Subtitle B—Effective Date;

8 Technical Amendments

9 SEC. 131. EFFECTIVE DATE.

10 This title and the amendments made by this title

11 shall take effect 4 months after the date of the enactment

12 of this Act.

13 SEC. 132. TECHNICAL AND CONFORMING AMENDMENTS.

14 (a) AMENDMENTS TO TITLE 35.—

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

16 parts for chapter 35, United States Code, is amend17 ed to read as follows:

‘‘I. United States Patent and Trademark Office ............. 1.’’.

18 (2) The heading for part I of title 35, United

19 States Code, is amended to read as follows:

20 ‘‘PART I—UNITED STATES PATENT AND

21 TRADEMARK OFFICE’’.

22 (3) The table of contents for part I of title 35,

23 United States Code, is amended by amending the

24 item relating to chapter 1 to read as follows:

‘‘1. Establishment, Officers and Employees, Functions ........................... 1.’’
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1 (4) The table of sections for chapter 1 of title

2 35, United States Code, is amended to read as fol3 lows:

4 ‘‘CHAPTER 1—ESTABLISHMENT, OFFICERS

5 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. Duties of Commissioner.

‘‘7. Board of Patent Appeals and Interferences.

‘‘8. Suits by and against the Office.

‘‘9. Library.

‘‘10. Classification of patents.

‘‘11. Certified copies of records.

‘‘12. Publications.

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

‘‘14. Copies of patents for public libraries.

‘‘15. Annual report to Congress.’’.

6 (5) The table of contents for chapter 4 of part

7 I of title 35, United States Code, is amended by

8 adding at the end the following new item:

‘‘43. Audits.’’.

9 (b) OTHER PROVISIONS OF LAW.—

10 (1) Section 9101(3) of title 31, United States

11 Code, is amended by adding at the end the follow12 ing:

13 ‘‘(O) the United States Patent and Trade14 mark Office.’’.

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

16 Code, is amended by striking ‘‘Patent Office’’ and
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1 inserting ‘‘United States Patent and Trademark Of2 fice’’.

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

4 States Code, is amended by striking ‘‘Patent and

5 Trademark Office, Department of Commerce’’ and

6 inserting ‘‘United States Patent and Trademark Of7 fice’’.

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

9 (5 U.S.C. 5316) is amended by striking ‘‘Commis10 sioner of Patents, Department of Commerce.’’,

11 ‘‘Deputy Commissioner of Patents and Trade12 marks.’’, ‘‘Assistant Commissioner for Patents.’’,

13 and ‘‘Assistant Commissioner for Trademarks.’’.

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

15 (15 U.S.C. 1511) is amended by striking ‘‘(d) Pat16 ent and Trademark Office;’’ and redesignating sub17 sections (a) through (g) as paragraphs (1) through

18 (6), respectively.

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

20 20 U.S.C. 91) is amended by striking ‘‘Patent Of21 fice’’ and inserting ‘‘United States Patent and

22 Trademark Office’’.

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

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

25 and 360b(o)) are each amended by striking ‘‘Patent
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1 and Trademark Office of the Department of Com2 merce’’ and inserting ‘‘United States Patent and

3 Trademark Office’’.

4 (8) Section 105(e) of the Federal Alcohol Ad5 ministration Act (27 U.S.C. 205(e)) is amended by

6 striking ‘‘United States Patent Office’’ and inserting

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

8 (9) Section 1744 of title 28, United States

9 Code is amended—

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

11 it appears and inserting ‘‘United States Patent

12 and Trademark Office’’; and

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

14 and inserting ‘‘Commissioner of Patents and

15 Trademarks’’.

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

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

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

19 Trademark Office’’.

20 (11) Section 1928 of title 28, United States

21 Code, is amended by striking ‘‘Patent Office’’ and

22 inserting ‘‘United States Patent and Trademark Of23 fice’’.

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

25 1954 (42 U.S.C. 2190) is amended—
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1 (A) by striking ‘‘United States Patent Of2 fice’’ and inserting ‘‘United States Patent and

3 Trademark Office’’; and

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

5 and inserting ‘‘Commissioner of Patents and

6 Trademarks’’.

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

8 and Space Act of 1958 (42 U.S.C. 2457(c)) is

9 amended by striking ‘‘Commissioner of Patents’’ and

10 inserting ‘‘Commissioner of Patents and Trade11 marks’’.

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

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

14 5510(a)) is amended by striking ‘‘Commissioner of

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

16 Patents and Trademarks’’.

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

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

19 Patents,’’.

20 (16) Section 1114 of title 44, United States

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

22 Patents,’’.

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

24 Code, is amended by striking ‘‘the Patent Office,’’.
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1 (18) Sections 1337 and 1338 of title 44, United

2 States Code, and the items relating to those sections

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

4 are repealed.

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

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

7 striking ‘‘Commissioner of Patents’’ and inserting

8 ‘‘Commissioner of Patents and Trademarks’’.

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

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

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

12 after ‘‘the United States International Trade Com13 mission,’’.

14 Subtitle C—Miscellaneous

15 Provisions

16 SEC. 141. REFERENCES.

17 Any reference in any other Federal law, Executive

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

19 document of or pertaining to a department or office from

20 which a function is transferred by this title—

21 (1) to the head of such department or office is

22 deemed to refer to the head of the department or of23 fice to which such function is transferred; or
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1 (2) to such department or office is deemed to

2 refer to the department or office to which such func3 tion is transferred.

4 SEC. 142. EXERCISE OF AUTHORITIES.

5 Except as otherwise provided by law, a Federal offi6 cial to whom a function is transferred by this title may,

7 for purposes of performing the function, exercise all au8 thorities under any other provision of law that were avail9 able with respect to the performance of that function to

10 the official responsible for the performance of the function

11 immediately before the effective date of the transfer of the

12 function under this title.

13 SEC. 143. SAVINGS PROVISIONS.

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

15 rules, regulations, permits, grants, loans, contracts, agree16 ments, certificates, licenses, and privileges—

17 (1) that have been issued, made, granted, or al18 lowed to become effective by the President, the Sec19 retary of Commerce, any officer or employee of any

20 office transferred by this title, or any other Govern21 ment official, or by a court of competent jurisdic22 tion, in the performance of any function that is

23 transferred by this title, and

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

25 such transfer (or become effective after such date
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1 pursuant to their terms as in effect on such effective

2 date),

3 shall continue in effect according to their terms until

4 modified, terminated, superseded, set aside, or revoked in

5 accordance with law by the President, any other author6 ized official, a court of competent jurisdiction, or operation

7 of law.

8 (b) PROCEEDINGS.—This title shall not affect any

9 proceedings or any application for any benefits, service,

10 license, permit, certificate, or financial assistance pending

11 on the effective date of this title before an office trans12 ferred by this title, but such proceedings and applications

13 shall be continued. Orders shall be issued in such proceed14 ings, appeals shall be taken therefrom, and payments shall

15 be made pursuant to such orders, as if this title had not

16 been enacted, and orders issued in any such proceeding

17 shall continue in effect until modified, terminated, super18 seded, or revoked by a duly authorized official, by a court

19 of competent jurisdiction, or by operation of law. Nothing

20 in this subsection shall be considered to prohibit the dis21 continuance or modification of any such proceeding under

22 the same terms and conditions and to the same extent that

23 such proceeding could have been discontinued or modified

24 if this title had not been enacted.
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1 (c) SUITS.—This title shall not affect suits com2 menced before the effective date of this title, and in all

3 such suits, proceedings shall be had, appeals taken, and

4 judgments rendered in the same manner and with the

5 same effect as if this title had not been enacted.

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

7 or other proceeding commenced by or against the Depart8 ment of Commerce or the Secretary of Commerce, or by

9 or against any individual in the official capacity of such

10 individual as an officer or employee of an office trans11 ferred by this title, shall abate by reason of the enactment

12 of this title.

13 (e) CONTINUANCE OF SUITS.—If any Government of14 ficer in the official capacity of such officer is party to a

15 suit with respect to a function of the officer, and under

16 this title such function is transferred to any other officer

17 or office, then such suit shall be continued with the other

18 officer or the head of such other office, as applicable, sub19 stituted or added as a party.

20 (f) ADMINISTRATIVE PROCEDURE AND JUDICIAL RE21 VIEW.—Except as otherwise provided by this title, any

22 statutory requirements relating to notice, hearings, action

23 upon the record, or administrative or judicial review that

24 apply to any function transferred by this title shall apply

25 to the exercise of such function by the head of the Federal
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1 agency, and other officers of the agency, to which such

2 function is transferred by this title.

3 SEC. 144. TRANSFER OF ASSETS.

4 Except as otherwise provided in this title, so much

5 of the personnel, property, records, and unexpended bal6 ances of appropriations, allocations, and other funds em7 ployed, used, held, available, or to be made available in

8 connection with a function transferred to an official or

9 agency by this title shall be available to the official or the

10 head of that agency, respectively, at such time or times

11 as the Director of the Office of Management and Budget

12 directs for use in connection with the functions trans13 ferred.

14 SEC. 145. DELEGATION AND ASSIGNMENT.

15 Except as otherwise expressly prohibited by law or

16 otherwise provided in this title, an official to whom func17 tions are transferred under this title (including the head

18 of any office to which functions are transferred under this

19 title) may delegate any of the functions so transferred to

20 such officers and employees of the office of the official as

21 the official may designate, and may authorize successive

22 redelegations of such functions as may be necessary or ap23 propriate. No delegation of functions under this section

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

2 of responsibility 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 de8 termination of the functions that are transferred under

9 this title.

10 (b) INCIDENTAL TRANSFERS.—The Director of the

11 Office of Management and Budget, at such time or times

12 as the Director shall provide, may make such determina13 tions as may be necessary with regard to the functions

14 transferred by this title, and to make such additional inci15 dental dispositions of personnel, assets, liabilities, grants,

16 contracts, property, records, and unexpended balances of

17 appropriations, authorizations, allocations, and other

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

19 available in connection with such functions, as may be nec20 essary to carry out the provisions of this title. The Direc21 tor shall provide for the termination of the affairs of all

22 entities terminated by this title and for such further meas23 ures and dispositions as may be necessary to effectuate

24 the purposes of 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

4 in a department or office pursuant to reestablishment of

5 an office shall be considered to be the transfer of the func6 tion.

7 SEC. 148. AVAILABILITY OF EXISTING FUNDS.

8 Existing appropriations and funds available for the

9 performance of functions, programs, and activities termi10 nated pursuant to this title shall remain available, for the

11 duration of their period of availability, for necessary ex12 penses in connection with the termination and resolution

13 of such functions, programs, and activities.

14 SEC. 149. DEFINITIONS.

15 For purposes of this title—

16 (1) the term ‘‘function’’ includes any duty, obli17 gation, power, authority, responsibility, right, privi18 lege, activity, or program; and

19 (2) the term ‘office’ includes any office, admin20 istration, agency, bureau, institute, council, unit, or21 ganizational entity, or component thereof.

22 TITLE II—EARLY PUBLICATION

23 OF PATENT APPLICATIONS

24 SEC. 201. SHORT TITLE.

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

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

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

3 amended 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 cir12 cumstances 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

21 18 months from the earliest filing date for which a

22 benefit is sought under this title. At the request of

23 the applicant, an application may be published ear24 lier than 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

20 section 119 or 365(a) of this title, and applications

21 asserting the benefit of an earlier application under

22 section 120, 121, or 365(c) of this title shall not be

23 eligible 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

2 of 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

9 under this subparagraph.

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

11 this section shall not operate to create any new oppor12 tunity for pre-issuance or pre-grant opposition. The Com13 missioner may establish appropriate procedures to ensure

14 that this section does not create any new opportunity for

15 pre-issuance or pre-grant opposition that did not exist

16 prior to the adoption of this section.’’.

17 SEC. 203. TIME FOR CLAIMING BENEFIT OF EARLIER FIL18 ING DATE.

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

20 35, United States Code, is amended to read as follows:

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

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

23 application by specifying its application number, country,

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

25 Patent and Trademark Office at such time during the
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1 pendency of the application as required by the Commis2 sioner.

3 ‘‘(2) The Commissioner may consider the failure of

4 the applicant to file a timely claim for priority as a waiver

5 of any such claim, and may require the payment of a sur6 charge as a condition of accepting an untimely claim dur7 ing the pendency of the application.

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

9 of the original foreign application, specification, and draw10 ings upon which it is based, a translation if not in the

11 English language, and such other information as the Com12 missioner considers necessary. Any such certification shall

13 be made by the patent office of the foreign country in

14 which the foreign application was filed and show the date

15 of the application and of the filing of the specification and

16 other papers.’’.

17 (b) IN THE UNITED STATES.—Section 120 of title

18 35, United States Code, is amended by adding at the end

19 the following: ‘‘The Commissioner may determine the time

20 period during the pendency of the application within which

21 an amendment containing the specific reference to the ear22 lier filed application is submitted. The Commissioner may

23 consider the failure to submit such an amendment within

24 that time period as a waiver of any benefit under this sec25 tion. The Commissioner may establish procedures, includ-
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1 ing the payment of a surcharge, to accept unavoidably late

2 submissions of amendments under this section.’’.

3 SEC. 204. PROVISIONAL RIGHTS.

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

5 amended—

6 (1) in the section caption by inserting ‘‘; pro7 visional rights’’ after ‘‘patent’’; and

8 (2) by adding at the end the following new sub9 section:

10 ‘‘(d) PROVISIONAL RIGHTS.—

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

12 provided by this section, a patent shall include the

13 right to obtain a reasonable royalty from any person

14 who, during the period beginning on the date of pub15 lication of the application for such patent pursuant

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

17 international application designating the United

18 States, the date of international publication of the

19 application, and ending on the date the patent is is20 sued—

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

22 in the United States the invention as claimed in

23 the published patent application or imports

24 such an invention into the United States; or
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1 ‘‘(ii) if the invention as claimed in the pub2 lished patent application is a process, uses, of3 fers for sale, or sells in the United States or

4 imports into the United States products made

5 by that process as claimed in the published pat6 ent application; and

7 ‘‘(B) had actual notice of the published

8 patent application and where the right arising

9 under this paragraph is based upon an inter10 national application designating the United

11 States that is published in a language other

12 than English, a translation of the international

13 application into the English language.

14 ‘‘(2) RIGHT BASED ON SUBSTANTIALLY IDEN15 TICAL INVENTIONS.—The right under paragraph (1)

16 to obtain a reasonable royalty shall not be available

17 under this subsection unless the invention as claimed

18 in the patent is substantially identical to the inven19 tion as claimed in the published patent application.

20 ‘‘(3) TIME LIMITATION ON OBTAINING A REA21 SONABLE ROYALTY.—The right under paragraph (1)

22 to obtain a reasonable royalty shall be available only

23 in an action brought not later than 6 years after the

24 patent is issued. The right under paragraph (1) to

25 obtain a reasonable royalty shall not be affected by
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1 the duration of the period described in paragraph

2 (1).

3 ‘‘(4) REQUIREMENTS FOR INTERNATIONAL AP4 PLICATIONS.—The right under paragraph (1) to ob5 tain a reasonable royalty based upon the publication

6 under the treaty of an international application des7 ignating the United States shall commence from the

8 date that the Patent and Trademark Office receives

9 a copy of the publication under the treaty of the

10 international application, or, if the publication under

11 the treaty of the international application is in a lan12 guage other than English, from the date that the

13 Patent and Trademark Office receives a translation

14 of the international application in the English lan15 guage.’’.

16 SEC. 205. PRIOR ART EFFECT OF PUBLISHED APPLICA17 TIONS.

18 (a) DESCRIPTION.—Section 102(e) of title 35, United

19 States Code, is amended to read as follows:

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

21 ‘‘(1)(A) an application for patent, published

22 pursuant to section 122(b) of this title, by another

23 filed in the United States before the invention by the

24 applicant for patent, or
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1 ‘‘(B) an international application designating

2 the United States, published under the treaty, de3 fined in section 351(a) of this title, by another who

4 has fulfilled the requirements of paragraphs (1), (2),

5 and (4) of section 371(c) of this title before the in6 vention by applicant for patent, or

7 ‘‘(2) a patent granted on an application for pat8 ent by another filed in the United States before the

9 invention by the applicant for patent, or on an inter10 national application by another who has fulfilled the

11 requirements of paragraphs (1), (2), and (4) of sec12 tion 371(c) of this title before the invention by the

13 applicant for patent, or’’.

14 (b) TREATY.—Section 102 of title 35, United States

15 Code, is amended—

16 (1) by redesignating subsections (c) through (g)

17 as (d) through (h), respectively; and

18 (2) by inserting after subsection (b) the follow19 ing:

20 ‘‘(c) an international application designating

21 the United States was published under the treaty,

22 defined in section 351(a) of this title, in the English

23 language by another before the invention by the ap24 plicant for patent, or’’.
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1 SEC. 206. COST RECOVERY FOR PUBLICATION.

2 The Commissioner shall recover the cost of early pub3 lication required by the amendment made by section 202

4 by adjusting the filing, issue, and maintenance fees under

5 title 35, United States Code, by charging a separate publi6 cation fee, or by any combination of these methods.

7 SEC. 207. CONFORMING CHANGES.

8 The following provisions of title 35, United States

9 Code, are amended:

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

11 subsection (a) by inserting ‘‘and published applica12 tions for patents’’ after ‘‘Patents’’.

13 (2) Section 12 is amended—

14 (A) in the section caption by inserting

15 ‘‘and applications’’ after ‘‘patents’’; and

16 (B) by inserting ‘‘and published applica17 tions for patents’’ after ‘‘patents’’.

18 (3) Section 13 is amended—

19 (A) in the section caption by inserting

20 ‘‘and applications’’ after ‘‘patents’’; and

21 (B) by inserting ‘‘and published applica22 tions for patents’’ after ‘‘patents’’.

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

24 the table of sections for chapter 1 are each amended

25 by inserting ‘‘and applications’’ after ‘‘patents’’.
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1 (5) The item relating to section 122 in the table

2 of sections for chapter 11 is amended by inserting

3 ‘‘; publication of patent applications’’ after ‘‘applica4 tions’’.

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

6 of sections for chapter 14 is amended by inserting

7 ‘‘; provisional rights’’ after ‘‘patent’’.

8 (7) Section 181 is amended—

9 (A) in the first paragraph—

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

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

12 (ii) ‘‘the publication of the application

13 or’’ after ‘‘withhold’’;

14 (B) in the second paragraph by inserting

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

16 ‘‘disclosure of an invention’’;

17 (C) in the third paragraph—

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

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

20 invention’’; and

21 (ii) ‘‘the publication of the application

22 or’’ after ‘‘withhold’’; and

23 (D) in the fourth paragraph by inserting

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

25 ‘‘and’’ in the first sentence.
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1 (8) Section 252 is amended in the first undesig2 nated paragraph by inserting ‘‘substantially’’ before

3 ‘‘identical’’ each place it appears.

4 (9) Section 284 is amended by adding at the

5 end of the second paragraph the following: ‘‘In6 creased damages under this paragraph shall not

7 apply to provisional rights under section 154(d) of

8 this title.’’.

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

10 ‘‘§ 374. Publication of international application: Ef11 fect

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

13 351(a) of this title, of an international application des14 ignating the United States shall confer the same rights

15 and shall have the same effect under this title as an appli16 cation for patent published under section 122(b), except

17 as provided in section 102(e) of this title.’’.

18 SEC. 208. PATENT TERM EXTENSION AUTHORITY.

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

20 amended to read as follows:

21 ‘‘(b) TERM EXTENSION.—

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

23 ‘‘(A) DELAY.— Subject to the limitations

24 set forth in paragraph (2), if the issue of an

25 original patent is delayed due to—
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1 ‘‘(i) a proceeding under section 135(a)

2 of this title,

3 ‘‘(ii) the imposition of an order pursu4 ant to section 181 of this title,

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

6 Patent Appeals and Interferences or by a

7 Federal court where the patent was issued

8 pursuant to a decision in the review revers9 ing an adverse determination of patentabil10 ity, or

11 ‘‘(iv) an unusual administrative delay

12 by the Patent and Trademark Office in is13 suing the patent,

14 the term of the patent shall be extended

15 for the period of delay.

16 ‘‘(B) ADMINISTRATIVE DELAY.—For pur17 poses of subparagraph (A)(iv), an unusual ad18 ministrative delay by the Patent and Trade19 mark office is the failure to—

20 ‘‘(i) make a notification of the rejec21 tion of any claim for a patent or any objec22 tion or argument under section 132 of this

23 title or give or mail a written notice of al24 lowance under section 151 of this title not
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1 later than 14 months after the date on

2 which the application was filed;

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

4 132 of this title or to an appeal taken

5 under section 134 of this title not later

6 than 4 months after the date on which the

7 reply was filed or the appeal was taken;

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

9 than 4 months after the date of a decision

10 by the Board of Patent Appeals and Inter11 ferences under section 134 or 135 of this

12 title or a decision by a Federal court under

13 section 141, 145, or 146 of this title where

14 allowable claims remain in an application;

15 or

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

17 months after the date on which the issue

18 fee was paid under section 151 of this title

19 and all outstanding requirements were sat20 isfied.

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

22 any extensions granted pursuant to either subclause

23 (iii) or (iv) of paragraph (1)(A) or both such sub24 clauses shall not exceed 10 years. To the extent that

25 periods of delay attributable to grounds specified in
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1 paragraph (1) overlap, the period of any extension

2 granted under this subsection shall not exceed the

3 actual number of days the issuance of the patent

4 was delayed.

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

6 patent under this subsection shall be reduced by a

7 period equal to the time in which the applicant failed

8 to engage in reasonable efforts to conclude prosecu9 tion of the application. The Commissioner shall pre10 scribe regulations establishing the circumstances

11 that constitute a failure of an applicant to engage in

12 reasonable efforts to conclude processing or exam13 ination of an application.

14 ‘‘(C) No patent whose term has been disclaimed

15 beyond a specified date may be extended under this

16 section beyond the expiration date specified in the

17 disclaimer.

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

19 prescribe regulations establishing procedures for the

20 notification of patent term extensions under this

21 subsection and procedures for contesting patent

22 term extensions under this subsection.’’.
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1 SEC. 209. EXAMINING PROCEDURE IMPROVEMENTS; FUR2 THER LIMITED REEXAMINATION OF PATENT

3 APPLICATIONS.

4 The Commissioner shall prescribe regulations to pro5 vide for the further limited reexamination of an applica6 tion for patent. The Commissioner may establish appro7 priate fees for such further limited reexamination and

8 shall be authorized to provide a 50 percent reduction on

9 such fees for small entities that qualify for reduced fees

10 under section 41(h)(1).

11 SEC. 210. LAST DAY OF PENDENCY OF PROVISIONAL APPLI12 CATION.

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

14 amended by adding at the end the following:

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

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

17 or legal holiday as defined in rule 6(a) of the Federal

18 Rules of Civil Procedure, the period of pendency of the

19 provisional application shall be extended to the next suc20 ceeding business day.’’.

21 SEC. 211. REPORTING REQUIREMENT.

22 The Commissioner shall report to Congress not later

23 than April 1, 2000, and each subsequent April 1 there24 after regarding the impact of publication on the applica25 tions filed by an applicant who has been accorded the sta26 tus of independent inventor under section 41(h) of this
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1 title. The report shall include information concerning the

2 frequency and number of initial and continuing patent ap3 plications, pendency, interferences, reexaminations, rejec4 tion, abandonment rates, fees, other expenses, and such

5 other relevant information related to the prosecution of

6 patent applications.

7 SEC. 212. EFFECTIVE DATE.

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

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

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

11 applications filed under section 111 of title 35, United

12 States Code, on or after that date, and all applications

13 complying with section 371 of title 35, United States

14 Code, that resulted from international applications filed

15 on or after that date. The amendment made by section

16 204 shall also apply to international applications designat17 ing the United States that are filed on or after April 1,

18 1997.

19 (b) SECTIONS 208 THROUGH 210.—The amend20 ments made by sections 208 through 210 shall take effect

21 on the date of the enactment of this Act and, except for

22 a design patent application filed under chapter 16 of title

23 35, United States Code, shall apply to any application

24 filed on or after June 8, 1995, .
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1 TITLE III—PRIOR DOMESTIC

2 COMMERCIAL USE

3 SEC. 301. SHORT TITLE.

4 This title may be cited as the ‘‘Prior Domestic Com5 mercial Use Act of 1996’’.

6 SEC. 302. DEFENSE TO PATENT INFRINGEMENT BASED ON

7 PRIOR DOMESTIC COMMERCIAL USE.

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

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

10 section:

11 ‘‘§ 273. Prior domestic commercial use; defense to in12 fringement

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

14 ‘‘(1) the terms ‘commercially used’, ‘commer15 cially use’, and ‘commercial use’ mean the use in the

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

17 testing, or production in the United States of a

18 product or service which is used in commerce,

19 whether or not the subject matter at issue is acces20 sible to or otherwise known to the public;

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

22 commerce’ mean that there has been an actual sale

23 or other commercial transfer of the subject matter

24 at issue or that there has been an actual sale or

25 other commercial transfer of a product or service re-
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1 sulting from the use of the subject matter at issue;

2 and

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

4 earlier of the actual filing date of the application for

5 the patent or the filing date of any earlier United

6 States, foreign, or international application to which

7 the subject matter at issue is entitled under section

8 119, 120, or 365 of this title.

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

10 shall not be liable as an infringer under section 271 of

11 this title with respect to any subject matter that would

12 otherwise infringe one or more claims in the patent being

13 asserted against such person, if such person had, acting

14 in good faith, commercially used the subject matter before

15 the effective filing date of such patent.

16 ‘‘(2) The sale or other disposition of the subject mat17 ter of a patent by a person entitled to assert a defense

18 under this section with respect to that subject matter shall

19 exhaust the patent owner’s rights under the patent to the

20 extent such rights would have been exhausted had such

21 sale or other disposition been made by the patent owner.

22 ‘‘(c) LIMITATIONS AND QUALIFICATIONS OF DE23 FENSE.—The defense to infringement under this section

24 is subject to the following:
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1 ‘‘(1) DERIVATION.—A person may not assert

2 the defense under this section if the subject matter

3 on which the defense is based was derived from the

4 patentee or persons in privity with the patentee.

5 ‘‘(2) NOT A GENERAL LICENSE.—The defense

6 asserted by a person under this section is not a gen7 eral license under all claims of the patent at issue,

8 but extends only to the subject matter claimed in the

9 patent with respect to which the person can assert

10 a defense under this chapter, except that the defense

11 shall also extend to variations in the quantity or vol12 ume of use of the claimed subject matter, and to im13 provements in the claimed subject matter that do

14 not infringe additional specifically claimed subject

15 matter of the patent.

16 ‘‘(3) EFFECTIVE AND SERIOUS PREPARA17 TION.—With respect to subject matter that cannot

18 be commercialized without a significant investment

19 of time, money, and effort, a person shall be deemed

20 to have commercially used the subject matter if—

21 ‘‘(A) before the effective filing date of the

22 patent, the person reduced the subject matter

23 to practice in the United States, completed a

24 significant portion of the total investment nec25 essary to commercially use the subject matter,
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1 and made a commercial transaction in the Unit2 ed States in connection with the preparation to

3 use the subject matter, and

4 ‘‘(B) thereafter the person diligently com5 pleted the remainder of the activities and in6 vestments necessary to commercially use the

7 subject matter, and promptly began commercial

8 use of the subject matter, even if such activities

9 were conducted after the effective filing date of

10 the patent.

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

12 the defense under this section shall have the burden

13 of establishing the defense.

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

15 has abandoned commercial use of subject matter

16 may not rely on activities performed before the date

17 of such abandonment in establishing a defense under

18 subsection (b) with respect to actions taken after the

19 date of such abandonment.

20 ‘‘(6) PERSONAL DEFENSE.—The defense under

21 this section may only be asserted by the person who

22 performed the acts necessary to establish the defense

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

24 right to assert the defense shall not be licensed or

25 assigned or transferred to another person except in
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1 connection with the good faith assignment or trans2 fer of the entire enterprise or line of business to

3 which the defense relates.

4 ‘‘(7) ONE-YEAR LIMITATION.—A person may

5 not assert a defense under this section unless the

6 subject matter on which the defense is based had

7 been commercially used or reduced to practice more

8 than one year prior to the effective filing date of the

9 patent by the person asserting the defense or some10 one in privity with that person.

11 ‘‘(d) UNSUCCESSFUL ASSERTION OF DEFENSE.—If

12 the defense under this section is pleaded by a person who

13 is found to infringe the patent and who subsequently fails

14 to demonstrate a reasonable basis for asserting the de15 fense, the court shall find the case exceptional for the pur16 pose of awarding attorney’s fees under section 285 of this

17 title.

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

19 be invalid under section 102 or 103 of this title solely be20 cause a defense is established under this section.’’.

21 (b) CONFORMING AMENDMENT.—The table of sec22 tions at the beginning of chapter 28 of title 35, United

23 States Code, is amended by adding at the end the follow24 ing new item:

‘‘Sec. 273. Prior domestic commercial use; defense to infringement.’’.
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1 SEC. 303. EFFECTIVE DATE AND APPLICABILITY.

2 This title and the amendments made by this title

3 shall take effect on the date of the enactment of this Act,

4 but shall not apply to any action for infringement that

5 is pending on such date of enactment or with respect to

6 any subject matter for which an adjudication of infringe7 ment, including a consent judgment, has been made before

8 such date of enactment.

9 TITLE IV—INVENTOR

10 PROTECTION

11 SEC. 401. SHORT TITLE.

12 This title may be cited as the ‘‘Inventor Protection

13 Act of 1996’’.

14 SEC. 402. INVENTION DEVELOPMENT SERVICES.

15 Part I of title 35, United States Code, is amended

16 by adding after chapter 4 the following new chapter:

17 ‘‘CHAPTER 5—INVENTION DEVELOPMENT

18 SERVICES

‘‘Sec.

‘‘51. Definitions.

‘‘52. Contracting requirements.

‘‘53. Standard provisions for cover notice.

‘‘54. Reports to customer required.

‘‘55. Mandatory contract terms.

‘‘56. Remedies.

‘‘57. Records of complaints.

‘‘58. Fraudulent representation by an invention developer.

‘‘59. Rule of construction.

19 ‘‘§ 51. Definitions

20 ‘‘For purposes of this chapter—
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1 ‘‘(1) the term ‘contract for invention develop2 ment services’ means a contract by which an inven3 tion developer undertakes invention development

4 services for a customer;

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

6 firm, partnership, corporation, or other entity who is

7 solicited by, seeks the services of, or enters into a

8 contract with an invention promoter for invention

9 promotion services;

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

11 person, firm, partnership, corporation, or other en12 tity who offers to perform or performs for, or on be13 half of, a customer any act described under para14 graph (4), but does not include—

15 ‘‘(A) any department or agency of the Fed16 eral, State, or local government;

17 ‘‘(B) any nonprofit, charitable, scientific,

18 or educational organization, qualified under ap19 plicable State law or described under section

20 170(b)(1)(A) of the Internal Revenue Code of

21 1986; or

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

23 good standing before the Patent and Trade24 mark Office acting within the scope of that per-
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1 son’s registration to practice before the Patent

2 and Trademark Office; and

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

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

5 any act involved in—

6 ‘‘(A) evaluating the invention to determine

7 its protectability as some form of intellectual

8 property, other than evaluation by a person li9 censed by a State to practice law who is acting

10 solely within the scope of that person’s profes11 sional license;

12 ‘‘(B) evaluating the invention to determine

13 its commercial potential by any person for pur14 poses other than providing venture capital; or

15 ‘‘(C) marketing, brokering, licensing, sell16 ing, or promoting the invention or a product or

17 service in which the invention is incorporated or

18 used. The mere display of an invention at a

19 trade show or exhibit is not considered an in20 vention promotion service.

21 ‘‘§ 52. Contracting requirements

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

23 development services shall be in writing and shall be sub24 ject to the provisions of this chapter. A copy of the signed
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1 written contract shall be given to the customer at the time

2 the customer enters into the contract.

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

4 a third party, such party shall be considered a customer

5 for the purposes of this chapter.

6 ‘‘(b) REQUIREMENTS OF INVENTION DEVELOPER.—

7 The invention developer shall—

8 ‘‘(1) state in a written document, at the time

9 a customer enters into a contract for invention de10 velopment services, whether the usual business prac11 tice of the invention developer is to—

12 ‘‘(A) seek more than 1 contract in connec13 tion with an invention; or

14 ‘‘(B) seek to perform services in connection

15 with an invention in 1 or more phases, with the

16 performance of each phase covered in 1 or more

17 subsequent contracts; and

18 ‘‘(2) supply to the customer a copy of the writ19 ten document together with a written summary of

20 the usual business practices of the invention devel21 oper, including—

22 ‘‘(A) the usual business terms of contracts;

23 and

24 ‘‘(B) the approximate amount of the usual

25 fees or other consideration that may be required
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1 from the customer for each of the services pro2 vided by the developer.

3 ‘‘(c) RIGHT OF CUSTOMER TO CANCEL CONTRACT.—

4 (1) Notwithstanding any contractual provision to the con5 trary, a customer shall have the right to terminate a con6 tract for invention development services by sending a writ7 ten letter to the invention developer stating the customer’s

8 intent to cancel the contract. The letter of termination

9 must be deposited with the United States Postal Service

10 on or before 5 business days after the date upon which

11 the customer or the invention developer executes the con12 tract, whichever is later.

13 ‘‘(2) Delivery of a promissory note, check, bill of ex14 change, or negotiable instrument of any kind to the inven15 tion developer or to a third party for the benefit of the

16 invention developer, without regard to the date or dates

17 appearing in such instrument, shall be deemed payment

18 received by the invention developer on the date received

19 for the purpose of this section.

20 ‘‘§ 53. Standard provisions for cover notice

21 ‘‘(a) CONTENTS.—Every contract for invention devel22 opment services shall have a conspicuous and legible cover

23 sheet attached with the following notice imprinted in bold24 face type of not less than 12-point size:
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1 ‘‘ ‘YOU HAVE THE RIGHT TO TERMI2 NATE THIS CONTRACT. TO TERMINATE

3 THIS CONTRACT, YOU MUST SEND A WRIT4 TEN LETTER TO THE COMPANY STATING

5 YOUR INTENT TO CANCEL THIS CONTRACT.

6 THE LETTER OF TERMINATION MUST BE

7 DEPOSITED WITH THE UNITED STATES

8 POSTAL SERVICE ON OR BEFORE FIVE (5)

9 BUSINESS DAYS AFTER THE DATE ON

10 WHICH YOU OR THE COMPANY EXECUTE

11 THE CONTRACT, WHICHEVER IS LATER.

12 ‘‘ ‘THE TOTAL NUMBER OF INVENTIONS

13 EVALUATED BY THE INVENTION DEVEL14 OPER FOR COMMERCIAL POTENTIAL IN

15 THE PAST FIVE (5) YEARS IS . OF

16 THAT NUMBER, RECEIVED POSI17 TIVE EVALUATIONS AND RE18 CEIVED NEGATIVE EVALUATIONS.

19 ‘‘ ‘IF YOU ASSIGN EVEN A PARTIAL IN20 TEREST IN THE INVENTION TO THE IN21 VENTION DEVELOPER, THE INVENTION DE22 VELOPER MAY HAVE THE RIGHT TO SELL

23 OR DISPOSE OF THE INVENTION WITHOUT

24 YOUR CONSENT AND MAY NOT HAVE TO

25 SHARE THE PROFITS WITH YOU.
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1 ‘‘ ‘THE TOTAL NUMBER OF CUSTOMERS

2 WHO HAVE CONTRACTED WITH THE IN3 VENTION DEVELOPER IN THE PAST FIVE

4 (5) YEARS IS . THE TOTAL NUM5 BER OF CUSTOMERS KNOWN BY THIS IN6 VENTION DEVELOPER TO HAVE RECEIVED,

7 BY VIRTUE OF THIS INVENTION DEVEL8 OPER’S PERFORMANCE, AN AMOUNT OF

9 MONEY IN EXCESS OF THE AMOUNT PAID

10 BY THE CUSTOMER TO THIS INVENTION

11 DEVELOPER IS .

12 ‘‘ ‘THE OFFICERS OF THIS INVENTION

13 DEVELOPER HAVE COLLECTIVELY OR INDI14 VIDUALLY BEEN AFFILIATED IN THE LAST

15 TEN (10) YEARS WITH THE FOLLOWING IN16 VENTION DEVELOPMENT COMPANIES:

17 (LIST THE NAMES AND ADDRESSES OF ALL

18 PREVIOUS INVENTION DEVELOPMENT COM19 PANIES WITH WHICH THE PRINCIPAL OFFI20 CERS HAVE BEEN AFFILIATED AS OWNERS,

21 AGENTS, OR EMPLOYEES). YOU ARE EN22 COURAGED TO CHECK WITH THE UNITED

23 STATES PATENT AND TRADEMARK OFFICE,

24 THE FEDERAL TRADE COMMISSION, YOUR

25 STATE ATTORNEY GENERAL’S OFFICE, AND
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1 THE BETTER BUSINESS BUREAU FOR ANY

2 COMPLAINTS FILED AGAINST ANY OF

3 THESE COMPANIES.

4 ‘‘ ‘YOU ARE ENCOURAGED TO CONSULT

5 WITH AN ATTORNEY OF YOUR OWN CHOOS6 ING BEFORE SIGNING THIS CONTRACT. BY

7 PROCEEDING WITHOUT THE ADVICE OF AN

8 ATTORNEY REGISTERED TO PRACTICE BE9 FORE THE PATENT AND TRADEMARK OF10 FICE, YOU COULD LOSE ANY RIGHTS YOU

11 MIGHT HAVE IN YOUR IDEA OR INVEN12 TION.’.

13 ‘‘(b) OTHER REQUIREMENTS FOR COVER NOTICE.—

14 The cover notice shall contain the items required under

15 subsection (a) and the name, primary office address, and

16 local office address of the invention developer, and may

17 contain no other matter.

18 ‘‘(c) DISCLOSURE OF CERTAIN CUSTOMERS NOT RE19 QUIRED.—The requirement in the notice set forth in sub20 section (a) to include the ‘TOTAL NUMBER OF CUS21 TOMERS WHO HAVE CONTRACTED WITH THE

22 INVENTION DEVELOPER IN THE PAST FIVE (5)

23 YEARS’ need not include information with respect to cus24 tomers who have purchased trade show services, research,

25 advertising, or other nonmarketing services from the in-
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1 vention developer, nor with respect to customers who have

2 defaulted in their payments to the invention developer.

3 ‘‘§ 54. Reports to customer required

4 ‘‘With respect to every contract for invention develop5 ment services, the invention developer shall deliver to the

6 customer at the address specified in the contract, at least

7 once every 3 months throughout the term of the contract,

8 a written report that identifies the contract and includes—

9 ‘‘(1) a full, clear, and concise description of the

10 services performed to the date of the report and of

11 the services yet to be performed and names of all

12 persons who it is known will perform the services;

13 and

14 ‘‘(2) the name and address of each person,

15 firm, or corporation, or other entity to whom the

16 subject matter of the contract has been disclosed,

17 the reason for each such disclosure, the nature of

18 the disclosure, and copies of all responses received as

19 a result of those disclosures.

20 ‘‘§ 55. Mandatory contract terms

21 ‘‘(a) Each contract for invention development services

22 shall include in boldface type of not less than 12-point

23 size—
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1 ‘‘(1) the terms and conditions of payment and

2 contract termination rights required under section

3 52;

4 ‘‘(2) a statement that the customer may avoid

5 entering into the contract by not making a payment

6 to the invention developer;

7 ‘‘(3) a full, clear, and concise description of the

8 specific acts or services that the invention developer

9 undertakes to perform for the customer;

10 ‘‘(4) a statement as to whether the invention

11 developer undertakes to construct, sell, or distribute

12 one or more prototypes, models, or devices embody13 ing the invention of the customer;

14 ‘‘(5) the full name and principal place of busi15 ness of the invention developer and the name and

16 principal place of business of any parent, subsidiary,

17 agent, independent contractor, and any affiliated

18 company or person who it is known will perform any

19 of the services or acts that the invention developer

20 undertakes to perform for the customer;

21 ‘‘(6) if any oral or written representation of es22 timated or projected customer earnings is given by

23 the invention developer (or any agent, employee, offi24 cer, director, partner, or independent contractor of

25 such invention developer) a statement of that esti-
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1 mation or projection and a description of the data

2 upon which such representation is based;

3 ‘‘(7) the name and address of the custodian of

4 all records and correspondence relating to the con5 tracted for invention development services, and a

6 statement that the invention developer is required to

7 maintain all records and correspondence relating to

8 performance of the invention development services

9 for such customer for a period of not less than 2

10 years after expiration of the term of such contract;

11 and

12 ‘‘(8) a statement setting forth a time schedule

13 for performance of the invention development serv14 ices, including an estimated date in which such per15 formance is expected to be completed.

16 ‘‘(b) INVENTION DEVELOPER AS FIDUCIARY.—To

17 the extent that the description of the specific acts or serv18 ices affords discretion to the invention developer with re19 spect to what specific acts or services shall be performed,

20 the invention developer shall be deemed a fiduciary.

21 ‘‘(c) AVAILABILITY OF INFORMATION.—Records and

22 correspondence described under subsection (a)(7) shall be

23 made available after 7 days written notice to the customer

24 or the representative of the customer to review and copy
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1 at a reasonable cost on the invention developer’s premises

2 during normal business hours.

3 ‘‘§ 56. Remedies

4 ‘‘(a) IN GENERAL.—(1) Any contract for invention

5 development services that does not comply with the appli6 cable provisions of this chapter shall be voidable at the

7 option of the customer.

8 ‘‘(2) Any contract for invention development services

9 entered into in reliance upon any material false, fraudu10 lent, or misleading information, representation, notice, or

11 advertisement of the invention developer (or any agent,

12 employee, officer, director, partner, or independent con13 tractor of such invention developer) shall be voidable at

14 the option of the customer.

15 ‘‘(3) Any waiver by the customer of any provision of

16 this chapter shall be deemed contrary to public policy and

17 shall be void and unenforceable.

18 ‘‘(4) Any contract for invention development services

19 which provides for any act involved in filing for and ob20 taining utility, design, or plant patent protection shall be

21 voidable at the option of the customer unless the invention

22 developer offers to perform or performs such act through

23 a registered patent attorney or agent.

24 ‘‘(b) CIVIL ACTION.—(1) Any customer who is in25 jured by a violation of this chapter by an invention devel-
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1 oper or by any false or fraudulent statement, representa2 tion, or omission of material fact by an invention developer

3 (or any agent, employee, director, officer, partner, or inde4 pendent contractor of such invention developer) or by fail5 ure of an invention developer to make all the disclosures

6 required under this chapter, may recover in a civil action

7 against the invention developer (or the officers, directors,

8 or partners of such invention developer) in addition to rea9 sonable costs and attorneys’ fees, the greater of—

10 ‘‘(A) $5,000; or

11 ‘‘(B) the amount of actual damages sustained

12 by the customer.

13 ‘‘(2) Notwithstanding paragraph (1), the court may

14 increase damages not to exceed 3 times the amount award15 ed.

16 ‘‘(c) REBUTTABLE PRESUMPTION OF INJURY.—For

17 the purpose of this section, substantial violation of any

18 provision of this chapter by an invention developer or exe19 cution by the customer of a contract for invention develop20 ment services in reliance on any false or fraudulent state21 ments, representations, or material omissions shall estab22 lish a rebuttable presumption of injury.

23 ‘‘§ 57. Records of complaints

24 ‘‘(a) RELEASE OF COMPLAINTS.—The Commissioner

25 shall make all complaints received by the Patent and
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1 Trademark Office involving invention developers publicly

2 available, together with any response of the invention de3 velopers.

4 ‘‘(b) REQUEST FOR COMPLAINTS.—The Commis5 sioner may request complaints relating to invention devel6 opment services from any Federal or State agency and in7 clude such complaints in the records maintained under

8 subsection (a) together with any response of the invention

9 developers.

10 ‘‘§ 58. Fraudulent representation by an invention de11 veloper

12 ‘‘Whoever, in providing invention development serv13 ices, knowingly provides any false or misleading state14 ment, representation, or omission of material fact to a cus15 tomer or fails to make all the disclosures required under

16 this chapter, shall be guilty of a misdemeanor and fined

17 not more than $10,000 for each offense.

18 ‘‘§ 59. Rule of construction

19 ‘‘Except as expressly provided in this chapter, no pro20 vision of this chapter shall be construed to affect any obli21 gation, right, or remedy provided under any other Federal

22 or State law.’’.
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1 SEC. 403. TECHNICAL AND CONFORMING AMENDMENT.

2 The table of chapters for part I of title 35, United

3 States Code, is amended by adding after the item relating

4 to chapter 4 the following:

‘‘5. Invention development services ........................................... 51’’.

5 SEC. 404. EFFECTIVE DATE.

6 This title and the amendments made by this title

7 shall take effect 60 days after the date of the enactment

8 of this Act.

9 TITLE V—PATENT

10 REEXAMINATION REFORM

11 SEC. 501. SHORT TITLE.

12 This title may be cited as the ‘‘Patent Reexamination

13 Reform Act of 1996’’.

14 SEC. 502. DEFINITIONS.

15 Section 100 of title 35, United States Code, is

16 amended by adding at the end the following new sub17 section:

18 ‘‘(e) The term ‘third-party requester’ means a person

19 requesting reexamination under section 302 of this title

20 who is not the patent owner.’’.

21 SEC. 503. REEXAMINATION PROCEDURES.

22 (a) REQUEST FOR REEXAMINATION.—Section 302 of

23 title 35, United States Code, is amended to read as fol24 lows:
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1 ‘‘§ 302. Request for reexamination

2 ‘‘Any person at any time may file a request for reex3 amination by the Office of a patent on the basis of any

4 prior art cited under the provisions of section 301 of this

5 title or on the basis of the requirements of section 112

6 of this title except for the requirement to set forth the

7 best mode of carrying out the invention. The request must

8 be in writing, must include the identity of the real party

9 in interest, and must be accompanied by payment of a re10 examination fee established by the Commissioner of Pat11 ents and Trademarks pursuant to the provisions of section

12 41 of this title. The request must set forth the pertinency

13 and manner of applying cited prior art to every claim for

14 which reexamination is requested or the manner in which

15 the patent specification or claims fail to comply with the

16 requirements of section 112 of this title. Unless the re17 questing person is the owner of the patent, the Commis18 sioner promptly shall send a copy of the request to the

19 owner of record of the patent.’’.

20 (b) DETERMINATION OF ISSUE BY COMMISSIONER.—

21 Section 303 of title 35, United States Code, is amended

22 to read as follows:

23 ‘‘§ 303. Determination of issue by Commissioner

24 ‘‘(a) REEXAMINATION.—Not later than 3 months

25 after the filing of a request for reexamination under the

26 provisions of section 302 of this title, the Commissioner
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1 shall determine whether a substantial new question of pat2 entability affecting any claim of the patent concerned is

3 raised by the request, with or without consideration of

4 other patents or printed publications. On the Commis5 sioner’s initiative, and any time, the Commissioner may

6 determine whether a substantial new question of patent7 ability is raised by patents and publications or by the fail8 ure of the patent specification or claims to comply with

9 the requirements of section 112 of this title except for the

10 best mode requirement described in section 302.

11 ‘‘(b) RECORD.—A record of the Commissioner’s de12 termination under subsection (a) shall be placed in the of13 ficial file of the patent, and a copy shall be promptly given

14 or mailed to the owner of record of the patent and to the

15 third-party requester, if any.

16 ‘‘(c) FINAL DECISION.—A determination by the

17 Commissioner pursuant to subsection (a) shall be final

18 and nonappealable. Upon a determination that no sub19 stantial new question of patentability has been raised, the

20 Commissioner may refund a portion of the reexamination

21 fee required under section 302 of this title.’’.

22 (c) REEXAMINATION ORDER BY COMMISSIONER.—

23 Section 304 of title 35, United States Code, is amended

24 to read as follows:
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1 ‘‘§ 304. Reexamination order by Commissioner

2 ‘‘If, in a determination made under the provisions of

3 section 303(a) of this title, the Commissioner finds that

4 a substantial new question of patentability affecting a

5 claim of a patent is raised, the determination shall include

6 an order for reexamination of the patent for resolution of

7 the question. The order may be accompanied by the initial

8 action of the Patent and Trademark Office on the merits

9 of the reexamination conducted in accordance with section

10 305 of this title.’’.

11 (d) CONDUCT OF REEXAMINATION PROCEEDINGS.—

12 Section 305 of title 35, United States Code, is amended

13 to read as follows:

14 ‘‘§ 305. Conduct of reexamination proceedings

15 ‘‘(a) IN GENERAL.—Subject to subsection (b), reex16 amination shall be conducted according to the procedures

17 established for initial examination under the provisions of

18 sections 132 and 133 of this title. In any reexamination

19 proceeding under this chapter, the patent owner shall be

20 permitted to propose any amendment to the patent and

21 a new claim or claims, except that no proposed amended

22 or new claim enlarging the scope of the claims of the pat23 ent shall be permitted.

24 ‘‘(b) RESPONSE.—(1) This subsection shall apply to

25 any reexamination proceeding in which the order for reex-
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1 amination is based upon a request by a third-party re2 quester.

3 ‘‘(2) With the exception of the reexamination request,

4 any document filed by either the patent owner or the

5 third-party requester shall be served on the other party.

6 ‘‘(3) If the patent owner files a response to any Pat7 ent and Trademark Office action on the merits, the third8 party requester shall have 1 opportunity to file written

9 comments within a reasonable period not less than 1

10 month after the date of service of the patent owner’s re11 sponse. Written comments provided under this paragraph

12 shall be limited to issues covered by the Patent and Trade13 mark Office action or the patent owner’s response.

14 ‘‘(c) SPECIAL DISPATCH.—Unless otherwise provided

15 by the Commissioner for good cause, all reexamination

16 proceedings under this section, including any appeal to the

17 Board of Patent Appeals and Interferences, shall be con18 ducted with special dispatch within the Office.’’.

19 (e) APPEAL.—Section 306 of title 35, United States

20 Code, is amended to read as follows:

21 ‘‘§ 306. Appeal

22 ‘‘(a) PATENT OWNER.—The patent owner involved in

23 a reexamination proceeding under this chapter—

24 ‘‘(1) may appeal under the provisions of section

25 134 of this title, and may appeal under the provi-
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1 sions of sections 141 through 144 of this title, with

2 respect to any decision adverse to the patentability

3 of any original or proposed amended or new claim

4 of the patent, and

5 ‘‘(2) may be a party to any appeal taken by a

6 third-party requester pursuant to subsection (b) of

7 this section.

8 ‘‘(b) THIRD-PARTY REQUESTER.—A third-party re9 quester may—

10 ‘‘(1) appeal under the provisions of section 134

11 of this title, and may appeal under the provisions of

12 sections 141 through 144 of this title, with respect

13 to any final decision favorable to the patentability of

14 any original or proposed amended or new claim of

15 the patent, or

16 ‘‘(2) be a party to any appeal taken by the pat17 ent owner, subject to subsection (c) of this section.

18 ‘‘(c) PARTICIPATION AS PARTY.—(1) A third-party

19 requester who, under the provisions of sections 141

20 through 144 of this title, files a notice of appeal or who

21 participates as a party to an appeal by the patent owner

22 is estopped from asserting at a later time, in any forum,

23 the invalidity of any claim determined to be patentable on

24 appeal on any ground which the third-party requester
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1 raised or could have raised during the reexamination pro2 ceedings.

3 ‘‘(2) A third-party requester is deemed not to have

4 participated as a party to an appeal by the patent owner

5 unless, not later than 20 days after the patent owner has

6 filed notice of appeal, the third-party requester files notice

7 with the Commissioner electing to participate.’’.

8 (f) REEXAMINATION PROHIBITED.—(1) Chapter 30

9 of title 35, United States Code, is amended by adding at

10 the end the following new section:

11 ‘‘§ 308. Reexamination prohibited

12 ‘‘(a) ORDER FOR REEXAMINATION.—Notwithstand13 ing any provision of this chapter, once an order for reex14 amination of a patent has been issued under section 304

15 of this title, neither the patent owner nor the third-party

16 requester, if any, nor privies of either, may file a subse17 quent request for reexamination of the patent until a reex18 amination certificate is issued and published under section

19 307 of this title, unless authorized by the Commissioner.

20 ‘‘(b) FINAL DECISION.—Once a final decision has

21 been entered against a party in a civil action arising in

22 whole or in part under section 1338 of title 28 that the

23 party has not sustained its burden of proving the invalidity

24 of any patent claim in suit, then neither that party nor

25 its privies may thereafter request reexamination of any
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1 such patent claim on the basis of issues which that party

2 or its privies raised or could have raised in such civil ac3 tion, and a reexamination requested by that party or its

4 privies on the basis of such issues may not thereafter be

5 maintained by the Office, notwithstanding any other provi6 sion of this chapter.’’.

7 (2) The table of sections for chapter 30 of title 35,

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

9 following:

‘‘308. Reexamination prohibited.’’.

10 SEC. 504. CONFORMING AMENDMENTS.

11 (a) BOARD OF PATENT APPEALS AND INTER12 FERENCES.—The first sentence of section 7(b) of title 35,

13 United States Code, is amended to read as follows: ‘‘The

14 Board of Patent Appeals and Interferences shall, on writ15 ten appeal of an applicant, or a patent owner or a third16 party requester in a reexamination proceeding, review ad17 verse decisions of examiners upon applications for patents

18 and decisions of examiners in reexamination proceedings,

19 and shall determine priority and patentability of invention

20 in interferences declared under section 135(a) of this

21 title.’’.

22 (b) PATENT FEES; PATENT AND TRADEMARK

23 SEARCH SYSTEMS.—Section 41(a)(7) of title 35, United

24 States Code, is amended to read as follows:
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1 ‘‘(7) On filing each petition for the revival of an

2 unintentionally abandoned application for a patent,

3 for the unintentionally delayed payment of the fee

4 for issuing each patent, or for an unintentionally de5 layed response by the patent owner in a reexamina6 tion proceeding, $1,250, unless the petition is filed

7 under sections 133 or 151 of this title, in which case

8 the fee shall be $110.’’.

9 (c) APPEAL TO THE BOARD OF PATENT APPEALS

10 AND INTERFERENCES.—Section 134 of title 35, United

11 States Code, is amended to read as follows:

12 ‘‘§ 134. Appeal to the Board of Patent Appeals and

13 Interferences

14 ‘‘(a) PATENT APPLICANT.—An applicant for a pat15 ent, any of whose claims has been twice rejected, may ap16 peal from the decision of the primary examiner to the

17 Board of Patent Appeals and Interferences, having once

18 paid the fee for such appeal.

19 ‘‘(b) PATENT OWNER.—A patent owner in a reexam20 ination proceeding may appeal from the final rejection of

21 any claim by the primary examiner to the Board of Patent

22 Appeals and Interferences, having once paid the fee for

23 such appeal.

24 ‘‘(c) THIRD-PARTY.—A third-party requester may

25 appeal to the Board of Patent Appeals and Interferences
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1 from the final decision of the primary examiner favorable

2 to the patentability of any original or proposed amended

3 or new claim of a patent, having once paid the fee for

4 such appeal.’’.

5 (d) APPEAL TO COURT OF APPEALS FOR THE FED6 ERAL CIRCUIT.—Section 141 of title 35, United States

7 Code, is amended by amending the first sentence to read

8 as follows: ‘‘An applicant, a patent owner, or a third-party

9 requester, dissatisfied with the final decision in an appeal

10 to the Board of Patent Appeals and Interferences under

11 section 134 of this title, may appeal the decision to the

12 United States Court of Appeals for the Federal Circuit.’’.

13 (e) PROCEEDINGS ON APPEAL.—Section 143 of title

14 35, United States Code, is amended by amending the third

15 sentence to read as follows: ‘‘In ex parte and reexamina16 tion cases, the Commissioner shall submit to the court in

17 writing the grounds for the decision of the Patent and

18 Trademark Office, addressing all the issues involved in the

19 appeal.’’.

20 (f) CIVIL ACTION TO OBTAIN PATENT.—Section 145

21 of title 35, United States Code, is amended in the first

22 sentence by inserting ‘‘(a)’’ after ‘‘section 134’’.

23 SEC. 505. EFFECTIVE DATE.

24 This title and the amendments made by this title

25 shall take effect on the date that is 6 months after the
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1 date of the enactment of this Act and shall apply to all

2 reexamination requests filed on or after such date.

3 TITLE VI—MISCELLANEOUS

4 PATENT PROVISIONS

5 SEC. 601. PROVISIONAL APPLICATIONS.

6 (a) ABANDONMENT.—Section 111(b)(5) of title 35,

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

8 ‘‘(5) ABANDONMENT.—Notwithstanding the ab9 sence of a claim, upon timely request and as pre10 scribed by the Commissioner, a provisional applica11 tion may be treated as an application filed under

12 subsection (a). If no such request is made, the provi13 sional application shall be regarded as abandoned 12

14 months after the filing date of such application and

15 shall not be subject to revival thereafter.’’.

16 (b) EFFECTIVE DATE.—The amendments made by

17 subsection (a) apply to a provisional application filed on

18 or after June 8, 1995.

19 SEC. 602. INTERNATIONAL APPLICATIONS.

20 Section 119 of title 35, United States Code, is

21 amended as follows:

22 (1) In subsection (a), insert ‘‘or in a foreign

23 WTO member country’’ after ‘‘or to citizens of the

24 United States,’’.
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1 (2) In subsection (b), delete ‘‘patent office of

2 the foreign country’’ and insert ‘‘foreign intellectual

3 property authority.’’.

4 (3) At the end of section 119 add the following

5 subsection:

6 ‘‘(f) Applications for plant breeder’s rights filed in

7 a foreign WTO member country (or in a foreign UPOV

8 Contracting Party) shall have the same effect for the pur9 pose of the right of priority under this section as applica10 tions for patents, subject to the same conditions and re11 quirements of this section as apply to applications for pat12 ents.’’

13 SEC. 603. PLANT PATENTS.

14 (a) TUBER PROPAGATED PLANTS.—Section 161 of

15 title 35, United States Code, is amended by striking ‘‘a

16 tuber propagated plant or’’.

17 (b) RIGHTS IN PLANT PATENTS.—The text of section

18 163 of title 35, United States Code, is amended to read

19 as follows: ‘‘In the case of a plant patent, the grant to

20 the patentee, such patentee’s heirs or assigns, shall have

21 the right to exclude others from asexually reproducing the

22 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 amendments by sub2 section (a) shall apply on the date of enactment of this

3 Act. The amendments made by subsection (b) shall apply

4 to any plant patent issued on or after the date of enact5 ment of this Act.

Æ