59–006 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 110–314 

PATENT REFORM ACT OF 2007 

SEPTEMBER 4, 2007.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. CONYERS, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 1908] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 1908) to amend title 35, United States Code, to provide for 

patent reform, having considered the same, reports favorably thereon with an amendment and recommends that the bill as amended 

do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 1 

Purpose and Summary ............................................................................................ 20 

Background and Need for the Legislation ............................................................. 21 

Hearings ................................................................................................................... 46 

Committee Consideration ........................................................................................ 49 

Committee Votes ...................................................................................................... 50 

Committee Oversight Findings ............................................................................... 50 

New Budget Authority and Tax Expenditures ...................................................... 50 

Congressional Budget Office Cost Estimate .......................................................... 50 

Performance Goals and Objectives ......................................................................... 55 

Constitutional Authority Statement ...................................................................... 55 

Advisory on Earmarks ............................................................................................. 55 

Section-by-Section Analysis .................................................................................... 55 

Changes in Existing Law Made by the Bill, as Reported ..................................... 88 

THE AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Patent Reform Act of 2007’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act is as follows: 


hsrobinson on PROD1PC76 with HEARING
2 

Sec. 1. Short title; table of contents. 

Sec. 2. Reference to title 35, United States Code. 

Sec. 3. Right of the first inventor to file. 

Sec. 4. Inventor’s oath or declaration. 

Sec. 5. Right of the inventor to obtain damages. 

Sec. 6. Post-grant procedures and other quality enhancements. 

Sec. 7. Definitions; patent trial and appeal board. 

Sec. 8. Study and report on reexamination proceedings. 

Sec. 9. Submissions by third parties and other quality enhancements. 

Sec. 10. Tax planning methods not patentable. 

Sec. 11. Venue and jurisdiction. 

Sec. 12. Additional information; inequitable conduct as defense to infringement. 

Sec. 13. Best mode requirement. 

Sec. 14. Regulatory authority. 

Sec. 15. Technical amendments. 

Sec. 16. Study of special masters in patent cases. 

Sec. 17. Rule of construction. 

SEC. 2. REFERENCE TO TITLE 35, UNITED STATES CODE. 

Whenever in this Act a section or other provision is amended or repealed, that 

amendment or repeal shall be considered to be made to that section or other provision of title 35, United States Code. 

SEC. 3. RIGHT OF THE FIRST INVENTOR TO FILE. 

(a) DEFINITIONS.—Section 100 is amended by adding at the end the following: 

‘‘(f) The term ‘inventor’ means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of an invention. 

‘‘(g) The terms ‘joint inventor’ and ‘coinventor’ mean any one of the individuals 

who invented or discovered the subject matter of a joint invention. 

‘‘(h) The ‘effective filing date of a claimed invention’ is—

‘‘(1) the filing date of the patent or the application for patent containing the 

claim to the invention; or 

‘‘(2) if the patent or application for patent is entitled to a right of priority 

of any other application under section 119, 365(a), or 365(b) or to the benefit 

of an earlier filing date in the United States under section 120, 121, or 365(c), 

the filing date of the earliest such application in which the claimed invention 

is disclosed in the manner provided by section 112(a). 

‘‘(i) The term ‘claimed invention’ means the subject matter defined by a claim 

in a patent or an application for a patent. 

‘‘(j) The term ‘joint invention’ means an invention resulting from the collaboration of inventive endeavors of two or more persons working toward the same end 

and producing an invention by their collective efforts.’’. 

(b) CONDITIONS FOR PATENTABILITY.—

(1) IN GENERAL.—Section 102 is amended to read as follows: 

‘‘§ 102. Conditions for patentability; novelty 

‘‘(a) NOVELTY; PRIOR ART.—A patent for a claimed invention may not be obtained if—

‘‘(1) the claimed invention was patented, described in a printed publication, 

in public use, or on sale—

‘‘(A) more than one year before the effective filing date of the claimed 

invention; or 

‘‘(B) one year or less before the effective filing date of the claimed invention, other than through disclosures made by the inventor or a joint inventor or by others who obtained the subject matter disclosed directly or 

indirectly from the inventor or a joint inventor; or 

‘‘(2) the claimed invention was described in a patent issued under section 

151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the 

claimed invention. 

‘‘(b) EXCEPTIONS.—

‘‘(1) PRIOR INVENTOR DISCLOSURE EXCEPTION.—Subject matter that would 

otherwise qualify as prior art based upon a disclosure under subparagraph (B) 

of subsection (a)(1) shall not be prior art to a claimed invention under that subparagraph if the subject matter had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or others who obtained the subject 

matter disclosed directly or indirectly from the inventor or a joint inventor. 

‘‘(2) DERIVATION, PRIOR DISCLOSURE, AND COMMON ASSIGNMENT EXCEPTIONS.—Subject matter that would otherwise qualify as prior art only under 

subsection (a)(2) shall not be prior art to a claimed invention if—

‘‘(A) the subject matter was obtained directly or indirectly from the inventor or a joint inventor; 


hsrobinson on PROD1PC76 with HEARING
3 

‘‘(B) the subject matter had been publicly disclosed by the inventor or 

a joint inventor or others who obtained the subject matter disclosed directly 

or indirectly from the inventor or a joint inventor before the date on which 

the application or patent referred to in subsection (a)(2) was effectively 

filed; or 

‘‘(C) the subject matter and the claimed invention, not later than the 

effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person. 

‘‘(3) JOINT RESEARCH AGREEMENT EXCEPTION.—

‘‘(A) IN GENERAL.—Subject matter and a claimed invention shall be 

deemed to have been owned by the same person or subject to an obligation 

of assignment to the same person in applying the provisions of paragraph 

(2) if—

‘‘(i) the claimed invention was made by or on behalf of parties to 

a joint research agreement that was in effect on or before the effective 

filing date of the claimed invention; 

‘‘(ii) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and 

‘‘(iii) the application for patent for the claimed invention discloses 

or is amended to disclose the names of the parties to the joint research 

agreement. 

‘‘(B) For purposes of subparagraph (A), the term ‘joint research agreement’ means a written contract, grant, or cooperative agreement entered 

into by two or more persons or entities for the performance of experimental, 

developmental, or research work in the field of the claimed invention. 

‘‘(4) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVELY FILED.—A patent 

or application for patent is effectively filed under subsection (a)(2) with respect 

to any subject matter described in the patent or application—

‘‘(A) as of the filing date of the patent or the application for patent; or 

‘‘(B) if the patent or application for patent is entitled to claim a right 

of priority under section 119, 365(a), or 365(b) or to claim the benefit of an 

earlier filing date under section 120, 121, or 365(c), based upon one or more 

prior filed applications for patent, as of the filing date of the earliest such 

application that describes the subject matter.’’. 

(2) CONFORMING AMENDMENT.—The item relating to section 102 in the table 

of sections for chapter 10 is amended to read as follows: 

‘‘102. Conditions for patentability; novelty.’’. 

(c) CONDITIONS FOR PATENTABILITY; NON-OBVIOUS SUBJECT MATTER.—Section 

103 is amended to read as follows: 

‘‘§ 103. Conditions for patentability; nonobvious subject matter 

‘‘A patent for a claimed invention may not be obtained though the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention 

as a whole would have been obvious before the effective filing date of the claimed 

invention to a person having ordinary skill in the art to which the claimed invention 

pertains. Patentability shall not be negated by the manner in which the invention 

was made.’’. 

(d) REPEAL OF REQUIREMENTS FOR INVENTIONS MADE ABROAD.—Section 104, 

and the item relating to that section in the table of sections for chapter 10, are repealed. 

(e) REPEAL OF STATUTORY INVENTION REGISTRATION.—

(1) IN GENERAL.—Section 157, and the item relating to that section in the 

table of sections for chapter 14, are repealed. 

(2) REMOVAL OF CROSS REFERENCES.—Section 111(b)(8) is amended by striking ‘‘sections 115, 131, 135, and 157’’ and inserting ‘‘sections 131 and 135’’. 

(f) EARLIER FILING DATE FOR INVENTOR AND JOINT INVENTOR.—Section 120 is 

amended by striking ‘‘which is filed by an inventor or inventors named’’ and inserting ‘‘which names an inventor or joint inventor’’. 

(g) CONFORMING AMENDMENTS.—

(1) RIGHT OF PRIORITY.—Section 172 is amended by striking ‘‘and the time 

specified in section 102(d)’’. 

(2) LIMITATION ON REMEDIES.—Section 287(c)(4) is amended by striking ‘‘the 

earliest effective filing date of which is prior to’’ and inserting ‘‘which has an 

effective filing date before’’. 

(3) INTERNATIONAL APPLICATION DESIGNATING THE UNITED STATES: EFFECT.—Section 363 is amended by striking ‘‘except as otherwise provided in section 102(e) of this title’’. 


hsrobinson on PROD1PC76 with HEARING
4 

(4) PUBLICATION OF INTERNATIONAL APPLICATION: EFFECT.—Section 374 is 

amended by striking ‘‘sections 102(e) and 154(d)’’ and inserting ‘‘section 154(d)’’. (5) PATENT ISSUED ON INTERNATIONAL APPLICATION: EFFECT.—The second 

sentence of section 375(a) is amended by striking ‘‘Subject to section 102(e) of 

this title, such’’ and inserting ‘‘Such’’. (6) LIMIT ON RIGHT OF PRIORITY.—Section 119(a) is amended by striking ‘‘; 

but no patent shall be granted’’ and all that follows through ‘‘one year prior to 

such filing’’. (7) INVENTIONS MADE WITH FEDERAL ASSISTANCE.—Section 202(c) is amended— (A) in paragraph (2)— (i) by striking ‘‘publication, on sale, or public use,’’ and all that follows through ‘‘obtained in the United States’’ and inserting ‘‘the 1-year 

period referred to in section 102(a) would end before the end of that 

2-year period’’; and 

(ii) by striking ‘‘the statutory’’ and inserting ‘‘that 1-year’’; and 

(B) in paragraph (3), by striking ‘‘any statutory bar date that may occur 

under this title due to publication, on sale, or public use’’ and inserting ‘‘the 

expiration of the 1-year period referred to in section 102(a)’’. (h) REPEAL OF INTERFERING PATENT REMEDIES.—Section 291, and the item relating to that section in the table of sections for chapter 29, are repealed. 

(i) ACTION FOR CLAIM TO PATENT ON DERIVED INVENTION.—

(1) IN GENERAL.—Section 135(a) is amended to read as follows: 

‘‘(a) DISPUTE OVER RIGHT TO PATENT.—

‘‘(1) INSTITUTION OF DERIVATION PROCEEDING.—

‘‘(A) REQUEST FOR PROCEEDING.—An applicant may request initiation of 

a derivation proceeding to determine the right of the applicant to a patent 

by filing a request that sets forth with particularity the basis for finding 

that another applicant derived the claimed invention from the applicant requesting the proceeding and, without authorization, filed an application 

claiming such invention. Any such request—

‘‘(i) may only be made within 12 months after the earlier of—

‘‘(I) the date on which a patent is issued containing a claim 

that is the same or substantially the same as the claimed invention; or 

‘‘(II) the date of first publication of an application containing 

a claim that is the same or is substantially the same as the 

claimed invention; and 

‘‘(ii) must be made under oath, and must be supported by substantial evidence. 

‘‘(B) DETERMINATION OF DIRECTOR.— Whenever the Director determines 

that patents or applications for patent naming different individuals as the 

inventor interfere with one another because of a dispute over the right to 

patent under section 101 on the basis of a request under subparagraph (A), 

the Director shall institute a derivation proceeding for the purpose of determining which applicant is entitled to a patent. 

‘‘(2) DETERMINATION BY PATENT TRIAL AND APPEAL BOARD.—In any proceeding under this subsection, the Patent Trial and Appeal Board—

‘‘(A) shall determine the question of the right to patent; 

‘‘(B) in appropriate circumstances, may correct the naming of the inventor in any application or patent at issue; and 

‘‘(C) shall issue a final decision on the right to patent. 

‘‘(3) DERIVATION PROCEEDING.—The Patent Trial and Appeal Board may 

defer action on a request to initiate a derivation proceeding for up to three 

months after the date on which the Director issues a patent to the applicant 

that filed the earlier application. 

‘‘(4) EFFECT OF FINAL DECISION.—The final decision of the Patent Trial and 

Appeal Board in a derivation proceeding, if adverse to the claim of an applicant, 

shall constitute the final refusal by the Patent and Trademark Office on the 

claims involved. The Director may issue a patent to an applicant who is determined by the Patent Trial and Appeal Board to have the right to a patent. The 

final decision of the Board, if adverse to a patentee, shall, if no appeal or other 

review of the decision has been or can be taken or had, constitute cancellation 

of the claims involved in the patent, and notice of such cancellation shall be endorsed on copies of the patent distributed after such cancellation by the Patent 

and Trademark Office.’’. 

(2) CONFORMING AMENDMENTS.—(A) Section 135 is further amended—

(i) in subsection (b)—

(I) by striking ‘‘(b)(1) A claim’’ and inserting the following: 


hsrobinson on PROD1PC76 with HEARING
5 

‘‘(b) SAME CLAIMS.—

‘‘(1) ISSUED PATENTS.—A claim’’; and 

(II) by striking ‘‘(2) A claim’’ and inserting the following: 

‘‘(2) PUBLISHED APPLICATIONS.—A claim’’; and 

(III) moving the remaining text of paragraphs (1) and (2) 2 ems to 

the right; 

(ii) in subsection (c)—

(I) by striking ‘‘(c) Any agreement’’ and inserting the following: 

‘‘(c) AGREEMENTS TO TERMINATE PROCEEDINGS.—

‘‘(1) IN GENERAL.—Any agreement’’; 

(II) by striking ‘‘an interference’’ and inserting ‘‘a derivation proceeding’’; 

(III) by striking ‘‘the interference’’ each place it appears and inserting ‘‘the derivation proceeding’’; 

(IV) in the second paragraph, by striking ‘‘The Director’’ and inserting the following: 

‘‘(2) NOTICE.—The Director’’; 

(V) by amending the third paragraph to read as follows: 

‘‘(3) JUDICIAL REVIEW.—Any discretionary action of the Director under this 

subsection shall be reviewable under chapter 7 of title 5.’’; and 

(VI) by moving the remaining text of paragraphs (1) and (2) of subsection (c) 2 ems to the right; and 

(iii) in subsection (d)—

(I) by striking ‘‘(d) Parties’’ and inserting ‘‘(d) ARBITRATION.—Parties’’; 

(II) by striking ‘‘a patent interference’’ and inserting ‘‘a derivation 

proceeding’’; and 

(III) by striking ‘‘the interference’’ and inserting ‘‘the derivation 

proceeding’’. 

(j) ELIMINATION OF REFERENCES TO INTERFERENCES.—(1) Sections 41(a)(6), 134, 

141, 145, 146, 154, 305, and 314 are each amended by striking ‘‘Board of Patent 

Appeals and Interferences’’ each place it appears and inserting ‘‘Patent Trial and 

Appeal Board’’. 

(2) Section 141 is amended—

(A) by striking ‘‘an interference’’ and inserting ‘‘a derivation proceeding’’; 

and 

(B) by striking ‘‘interference’’ each additional place it appears and inserting 

‘‘derivation proceeding’’. 

(3) Section 146 is amended—

(A) in the first paragraph—

(i) by striking ‘‘Any party’’ and inserting ‘‘(a) IN GENERAL.—Any party’’; 

(ii) by striking ‘‘an interference’’ and inserting ‘‘a derivation proceeding’’; and 

(iii) by striking ‘‘interference’’ each additional place it appears and inserting ‘‘derivation proceeding’’; and 

(B) in the second paragraph, by striking ‘‘Such suit’’ and inserting ‘‘(b) PROCEDURE.—A suit under subsection (a)’’

(4) The section heading for section 134 is amended to read as follows: 

‘‘§ 134. Appeal to the Patent Trial and Appeal Board’’. 

(5) The section heading for section 135 is amended to read as follows: 

‘‘§ 135. Derivation proceedings’’. 

(6) The section heading for section 146 is amended to read as follows: 

‘‘§ 146. Civil action in case of derivation proceeding’’. 

(7) Section 154(b)(1)(C) is amended by striking ‘‘INTERFERENCES’’ and inserting 

‘‘DERIVATION PROCEEDINGS’’. 

(8) The item relating to section 6 in the table of sections for chapter 1 is amended to read as follows: 

‘‘6. Patent Trial and Appeal Board.’’. 

(9) The items relating to sections 134 and 135 in the table of sections for chapter 12 are amended to read as follows: 

‘‘134. Appeal to the Patent Trial and Appeal Board. 

‘‘135. Derivation proceedings.’’. 

(10) The item relating to section 146 in the table of sections for chapter 13 is 

amended to read as follows: 

‘‘146. Civil action in case of derivation proceeding.’’. 


hsrobinson on PROD1PC76 with HEARING
6 

(11) CERTAIN APPEALS.—Subsection 1295(a)(4)(A) of title 28, United States 

Code, is amended to read as follows: ‘‘(A) the Patent Trial and Appeal Board of the United States Patent and 

Trademark Office with respect to patent applications, derivation proceedings, and post-grant review proceedings, at the instance of an applicant 

for a patent or any party to a patent interference (commenced before the 

effective date provided in section 3(k) of the Patent Reform Act of 2007), 

derivation proceeding, or post-grant review proceeding, and any such appeal 

shall waive any right of such applicant or party to proceed under section 

145 or 146 of title 35;’’. (k) EFFECTIVE DATE.— (1) IN GENERAL.—The amendments made by this section— (A) shall take effect 90 days after the date on which the President 

transmits to the Congress a finding that major patenting authorities have 

adopted a grace period having substantially the same effect as that contained under the amendments made by this section; and 

(B) shall apply to all applications for patent that are filed on or after 

the effective date under subparagraph (A). 

(2) DEFINITIONS.—In this subsection: 

(A) MAJOR PATENTING AUTHORITIES.—The term ‘‘major patenting authorities’’ means at least the patenting authorities in Europe and Japan. 

(B) GRACE PERIOD.—The term ‘‘grace period’’ means the 1-year period 

ending on the effective filing date of a claimed invention, during which disclosures of the subject matter by the inventor or a joint inventor, or by others who obtained the subject matter disclosed directly or indirectly from the 

inventor or a joint inventor, do not qualify as prior art to the claimed invention. 

(C) EFFECTIVE FILING DATE.—The term ‘‘effective filing date of a 

claimed invention’’ means, with respect to a patenting authority in another 

country, a date equivalent to the effective filing date of a claimed invention 

as defined in section 100(h) of title 35, United States Code, as added by 

subsection (a) of this section. 

(l) REVIEW EVERY 7 YEARS.—Not later than the end of the 7-year period beginning on the effective date under subsection (k), and the end of every 7-year period 

thereafter, the Under Secretary of Commerce for Intellectual Property and Director 

of the United States Patent and Trademark Office (in this subsection referred to as 

the ‘‘Director’’) shall— (1) conduct a study on the effectiveness and efficiency of the amendments 

made by this section; and 

(2) submit to the Committees on the Judiciary of the House of Representatives and the Senate a report on the results of the study, including any recommendations the Director has on amendments to the law and other recommendations of the Director with respect to the first-to-file system implemented under the amendments made by this section. 

SEC. 4. INVENTOR’S OATH OR DECLARATION. 

(a) INVENTOR’S OATH OR DECLARATION.— (1) IN GENERAL.—Section 115 is amended to read as follows: 

‘‘§ 115. Inventor’s oath or declaration 

‘‘(a) NAMING THE INVENTOR; INVENTOR’S OATH OR DECLARATION.—An application for patent that is filed under section 111(a), that commences the national stage 

under section 363, or that is filed by an inventor for an invention for which an application has previously been filed under this title by that inventor shall include, or 

be amended to include, the name of the inventor of any claimed invention in the 

application. Except as otherwise provided in this section, each individual who is the 

inventor or a joint inventor of a claimed invention in an application for patent shall 

execute an oath or declaration in connection with the application. 

‘‘(b) REQUIRED STATEMENTS.—An oath or declaration by an individual under 

subsection (a) shall contain statements that—

‘‘(1) the application was made or was authorized to be made by individual; 

and 

‘‘(2) the individual believes himself or herself to be the original inventor or 

an original joint inventor of a claimed invention in the application. 

‘‘(c) ADDITIONAL REQUIREMENTS.—The Director may specify additional information relating to the inventor and the invention that is required to be included in 

an oath or declaration under subsection (a). 

‘‘(d) SUBSTITUTE STATEMENT.—

‘‘(1) IN GENERAL.—In lieu of executing an oath or declaration under subsection (a), the applicant for patent may provide a substitute statement under 


hsrobinson on PROD1PC76 with HEARING
7 

the circumstances described in paragraph (2) and such additional circumstances 

that the Director may specify by regulation. ‘‘(2) PERMITTED CIRCUMSTANCES.—A substitute statement under paragraph 

(1) is permitted with respect to any individual who— ‘‘(A) is unable to file the oath or declaration under subsection (a) because the individual— ‘‘(i) is deceased; 

‘‘(ii) is under legal incapacity; or 

‘‘(iii) cannot be found or reached after diligent effort; or ‘‘(B) is under an obligation to assign the invention and has refused to 

make the oath or declaration required under subsection (a). 

‘‘(3) CONTENTS.—A substitute statement under this subsection shall— ‘‘(A) identify the individual with respect to whom the statement applies; 

‘‘(B) set forth the circumstances representing the permitted basis for 

the filing of the substitute statement in lieu of the oath or declaration 

under subsection (a); and ‘‘(C) contain any additional information, including any showing, required by the Director. ‘‘(e) MAKING REQUIRED STATEMENTS IN ASSIGNMENT OF RECORD.—An individual 

who is under an obligation of assignment of an application for patent may include 

the required statements under subsections (b) and (c) in the assignment executed 

by the individual, in lieu of filing such statements separately. ‘‘(f) TIME FOR FILING.—A notice of allowance under section 151 may be provided 

to an applicant for patent only if the applicant for patent has filed each required 

oath or declaration under subsection (a) or has filed a substitute statement under 

subsection (d) or recorded an assignment meeting the requirements of subsection (e). ‘‘(g) EARLIER-FILED APPLICATION CONTAINING REQUIRED STATEMENTS OR SUB- STITUTE STATEMENT.—The requirements under this section shall not apply to an individual with respect to an application for patent in which the individual is named 

as the inventor or a joint inventor and that claims the benefit of an earlier filing 

date under section 120 or 365(c), if— ‘‘(1) an oath or declaration meeting the requirements of subsection (a) was 

executed by the individual and was filed in connection with the earlier-filed application; ‘‘(2) a substitute statement meeting the requirements of subsection (d) was 

filed in the earlier filed application with respect to the individual; or ‘‘(3) an assignment meeting the requirements of subsection (e) was executed 

with respect to the earlier-filed application by the individual and was recorded 

in connection with the earlier-filed application. 

‘‘(h) SUPPLEMENTAL AND CORRECTED STATEMENTS; FILING ADDITIONAL STATE- MENTS.—

‘‘(1) IN GENERAL.—Any person making a statement required under this section may withdraw, replace, or otherwise correct the statement at any time. If 

a change is made in the naming of the inventor requiring the filing of 1 or more 

additional statements under this section, such additional statements shall be 

filed in accordance with regulations established by the Director. 

‘‘(2) SUPPLEMENTAL STATEMENTS NOT REQUIRED.—If an individual has executed an oath or declaration under subsection (a) or an assignment meeting the 

requirements of subsection (e) with respect to an application for patent, the Director may not thereafter require that individual to make any additional oath, 

declaration, or other statement equivalent to those required by this section in 

connection with the application for patent or any patent issuing thereon. 

‘‘(3) SAVINGS CLAUSE.—No patent shall be invalid or unenforceable based 

upon the failure to comply with a requirement under this section if the failure 

is remedied as provided under paragraph (1). 

‘‘(i) ACKNOWLEDGMENT OF PENALTIES.—Any declaration or statement filed under 

this section must contain an acknowledgment that any willful false statement is 

punishable by fine or imprisonment, or both, under section 1001 of title 18.’’. 

(2) RELATIONSHIP TO DIVISIONAL APPLICATIONS.—Section 121 is amended by 

striking ‘‘If a divisional application’’ and all that follows through ‘‘inventor.’’. 

(3) REQUIREMENTS FOR NONPROVISIONAL APPLICATIONS.—Section 111(a) is 

amended—

(A) in paragraph (2)(C), by striking ‘‘by the applicant’’ and inserting ‘‘or 

declaration’’; 

(B) in the heading for paragraph (3), by striking ‘‘AND OATH’’; and 

(C) by striking ‘‘and oath’’ each place it appears. 

(4) CONFORMING AMENDMENT.—The item relating to section 115 in the table 

of sections for chapter 11 is amended to read as follows: 

‘‘115. Inventor’s oath or declaration.’’. 


hsrobinson on PROD1PC76 with HEARING
8 

(b) FILING BY OTHER THAN INVENTOR.—Section 118 is amended to read as follows: 

‘‘§ 118. Filing by other than inventor 

‘‘A person to whom the inventor has assigned or is under an obligation to assign 

the invention may make an application for patent. A person who otherwise shows 

sufficient proprietary interest in the matter may make an application for patent on 

behalf of and as agent for the inventor on proof of the pertinent facts and a showing 

that such action is appropriate to preserve the rights of the parties. If the Director 

grants a patent on an application filed under this section by a person other than 

the inventor, the patent shall be granted to the real party in interest and upon such 

notice to the inventor as the Director considers to be sufficient.’’. (c) SPECIFICATION.—Section 112 is amended— (1) in the first paragraph—— (A) by striking ‘‘The specification’’ and inserting ‘‘(a) IN GENERAL.—The 

specification’’; and 

(B) by striking ‘‘of carrying out his invention’’ and inserting ‘‘or joint 

inventor of carrying out the invention’’; and 

(2) in the second paragraph— (A) by striking ‘‘The specification’’ and inserting ‘‘(b) CONCLUSION.—The 

specification’’; and 

(B) by striking ‘‘applicant regards as his invention’’ and inserting ‘‘inventor or a joint inventor regards as the invention’’; 

(3) in the third paragraph, by striking ‘‘A claim’’ and inserting ‘‘(c) FORM.— A claim’’; 

(4) in the fourth paragraph, by striking ‘‘Subject to the following paragraph,’’ and inserting ‘‘(d) REFERENCE IN DEPENDENT FORMS.—Subject to subsection (e),’’; 

(5) in the fifth paragraph, by striking ‘‘A claim’’ and inserting ‘‘(e) REF- ERENCE IN MULTIPLE DEPENDENT FORM.—A claim’’; and 

(6) in the last paragraph, by striking ‘‘An element’’ and inserting ‘‘(f) ELE- MENT IN CLAIM FOR A COMBINATION.—An element’’. (d) EFFECTIVE DATE.—The amendments made by this section— (1) shall take effect at the end of the 1-year period beginning on the date 

of the enactment of this Act; and 

(2) shall apply to any application for patent, or application for reissue patent, that is filed on or after the effective date under paragraph (1). 

SEC. 5. RIGHT OF THE INVENTOR TO OBTAIN DAMAGES. 

(a) DAMAGES.—Section 284 is amended— (1) in the first paragraph, by striking ‘‘Upon’’ and inserting ‘‘(a) IN GEN- ERAL.—Upon’’; 

(2) by designating the second undesignated paragraph as subsection (c); 

(3) by inserting after subsection (a) (as designated by paragraph (1) of this 

subsection) the following: 

‘‘(b) REASONABLE ROYALTY.— ‘‘(1) IN GENERAL.— An award pursuant to subsection (a) that is based upon 

a reasonable royalty shall be determined in accordance with this subsection. 

Based on the facts of the case, the court shall determine whether paragraph (2), 

(3), or (5) will be used by the court or the jury in calculating a reasonable royalty. The court shall identify the factors that are relevant to the determination 

of a reasonable royalty under the applicable paragraph, and the court or jury, 

as the case may be, shall consider only those factors in making the determination. 

‘‘(2) RELATIONSHIP OF DAMAGES TO CONTRIBUTIONS OVER PRIOR ART.—The 

court shall conduct an analysis to ensure that a reasonable royalty under subsection (a) is applied only to that economic value properly attributable to the 

patent’s specific contribution over the prior art. The court shall exclude from the 

analysis the economic value properly attributable to the prior art, and other features or improvements, whether or not themselves patented, that contribute 

economic value to the infringing product or process. 

‘‘(3) ENTIRE MARKET VALUE.—Unless the claimant shows that the patent’s 

specific contribution over the prior art is the predominant basis for market demand for an infringing product or process, damages may not be based upon the 

entire market value of the products or processes involved that satisfy that demand. 

‘‘(4) COMBINATION INVENTIONS.—For purposes of paragraphs (2) and (3), in 

the case of a combination invention the elements of which are present individually in the prior art, the patentee may show that the contribution over the 

prior art may include the value of the additional function resulting from the 


hsrobinson on PROD1PC76 with HEARING
9 

combination, as well as the enhanced value, if any, of some or all of the prior 

art elements resulting from the combination. ‘‘(5) OTHER FACTORS.—In determining a reasonable royalty, the court may 

also consider, or direct the jury to consider, the terms of any nonexclusive marketplace licensing of the invention, where appropriate, as well as any other relevant factors under applicable law.’’; 

(4) by amending subsection (c) (as designated by paragraph (1) of this subsection) to read as follows: 

‘‘(c) WILLFUL INFRINGEMENT.— ‘‘(1) INCREASED DAMAGES.—A court that has determined that the infringer 

has willfully infringed a patent or patents may increase the damages up to 

three times the amount of damages found or assessed under subsection (a), except that increased damages under this paragraph shall not apply to provisional 

rights under section 154(d). ‘‘(2) PERMITTED GROUNDS FOR WILLFULNESS.—A court may find that an infringer has willfully infringed a patent only if the patent owner presents clear 

and convincing evidence that— ‘‘(A) after receiving written notice from the patentee— ‘‘(i) alleging acts of infringement in a manner sufficient to give the 

infringer an objectively reasonable apprehension of suit on such patent, 

and 

‘‘(ii) identifying with particularity each claim of the patent, each 

product or process that the patent owner alleges infringes the patent, 

and the relationship of such product or process to such claim, 

the infringer, after a reasonable opportunity to investigate, thereafter performed one or more of the alleged acts of infringement; 

‘‘(B) the infringer intentionally copied the patented invention with 

knowledge that it was patented; or 

‘‘(C) after having been found by a court to have infringed that patent, 

the infringer engaged in conduct that was not colorably different from the 

conduct previously found to have infringed the patent, and that resulted in 

a separate finding of infringement of the same patent. 

‘‘(3) LIMITATIONS ON WILLFULNESS.—(A) A court may not find that an infringer has willfully infringed a patent under paragraph (2) for any period of 

time during which the infringer had an informed good faith belief that the patent was invalid or unenforceable, or would not be infringed by the conduct later 

shown to constitute infringement of the patent. 

‘‘(B) An informed good faith belief within the meaning of subparagraph (A) 

may be established by—

‘‘(i) reasonable reliance on advice of counsel; 

‘‘(ii) evidence that the infringer sought to modify its conduct to avoid 

infringement once it had discovered the patent; or 

‘‘(iii) other evidence a court may find sufficient to establish such good 

faith belief. 

‘‘(C) The decision of the infringer not to present evidence of advice of counsel is not relevant to a determination of willful infringement under paragraph 

(2). 

‘‘(4) LIMITATION ON PLEADING.—Before the date on which a court determines that the patent in suit is not invalid, is enforceable, and has been infringed by the infringer, a patentee may not plead and a court may not determine that an infringer has willfully infringed a patent. The court’s determination of an infringer’s willfulness shall be made without a jury.’’; and 

(5) in the third undesignated paragraph, by striking ‘‘The court’’ and inserting ‘‘(d) EXPERT TESTIMONY.—The court’’. 

(b) DEFENSE TO INFRINGEMENT BASED ON EARLIER INVENTOR.—Section 273 is 

amended—

(1) in subsection (a)—

(A) in paragraph (1)—

(i) by striking ‘‘of a method’’; and 

(ii) by striking ‘‘review period;’’ and inserting ‘‘review period; and’’; 

(B) in paragraph (2)(B), by striking the semicolon at the end and inserting a period; and 

(C) by striking paragraphs (3) and (4); 

(2) in subsection (b)—

(A) in paragraph (1)—

(i) by striking ‘‘for a method’’; and 

(ii) by striking ‘‘at least 1 year before the effective filing date of 

such patent, and’’ and all that follows through the period and inserting 

‘‘and commercially used, or made substantial preparations for commerVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6621 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
10 

cial use of, the subject matter before the effective filing date of the 

claimed invention.’’; 

(B) in paragraph (2)—

(i) by striking ‘‘The sale or other disposition of a useful end product 

produced by a patented method’’ and inserting ‘‘The sale or other disposition of subject matter that qualifies for the defense set forth in this 

section’’; and 

(ii) by striking ‘‘a defense under this section with respect to that 

useful end result’’ and inserting ‘‘such defense’’; 

(C) in paragraph (3)—

(i) by striking subparagraph (A); and 

(ii) by redesignating subparagraphs (B) and (C) as subparagraphs 

(A) and (B), respectively; and 

(D) in paragraph (7), by striking ‘‘of the patent’’ and inserting ‘‘of the 

claimed invention’’; and 

(3) by amending the heading to read as follows: 

‘‘§ 273. Special defenses to and exemptions from infringement’’. 

(c) TABLE OF SECTIONS.—The item relating to section 273 in the table of sections for chapter 28 is amended to read as follows: 

‘‘273. Special defenses to and exemptions from infringement.’’. 

(d) EFFECTIVE DATE.—The amendments made by this section shall apply to any 

civil action commenced on or after the date of the enactment of this Act. 

(e) REVIEW EVERY 7 YEARS.—Not later than the end of the 7-year period beginning on the date of the enactment of this Act, and the end of every 7-year period 

thereafter, the Under Secretary of Commerce for Intellectual Property and Director 

of the United States Patent and Trademark Office (in this subsection referred to as 

the ‘‘Director’’) shall—

(1) conduct a study on the effectiveness and efficiency of the amendments 

made by this section; and 

(2) submit to the Committees on the Judiciary of the House of Representatives and the Senate a report on the results of the study, including any recommendations the Director has on amendments to the law and other recommendations of the Director with respect to the right of the inventor to obtain 

damages for patent infringement. 

SEC. 6. POST-GRANT PROCEDURES AND OTHER QUALITY ENHANCEMENTS. 

(a) CITATION OF PRIOR ART.—

(1) IN GENERAL.—Section 301 is amended to read as follows: 

‘‘§ 301. Citation of prior art 

‘‘(a) IN GENERAL.—Any person at any time may cite to the Office in writing—

‘‘(1) prior art consisting of patents or printed publications which that person 

believes to have a bearing on the patentability of any claim of a particular patent; or 

‘‘(2) written statements of the patent owner filed in a proceeding before a 

Federal court or the Patent and Trademark Office in which the patent owner 

takes a position on the scope of one or more patent claims. 

‘‘(b) SUBMISSIONS PART OF OFFICIAL FILE.—If the person citing prior art or written submissions under subsection (a) explains in writing the pertinence and manner 

of applying the prior art or written submissions to at least one claim of the patent, 

the citation of the prior art or written submissions (as the case may be) and the 

explanation thereof shall become a part of the official file of the patent. 

‘‘(c) PROCEDURES FOR WRITTEN STATEMENTS.—

‘‘(1) SUBMISSION OF ADDITIONAL MATERIALS.—A party that submits written 

statements under subsection (a)(2) in a proceeding shall include any other documents, pleadings, or evidence from the proceeding that address the patent owner’s statements or the claims addressed by the written statements. 

‘‘(2) LIMITATION ON USE OF STATEMENTS.—Written statements submitted 

under subsection (a)(2) shall not be considered for any purpose other than to 

determine the proper meaning of the claims that are the subject of the request 

in a proceeding ordered pursuant to section 304 or 313. Any such written statements, and any materials submitted under paragraph (1), that are subject to 

an applicable protective order shall be redacted to exclude information subject 

to the order. 

‘‘(d) IDENTITY WITHHELD.—Upon the written request of the person citing prior 

art or written statements under subsection (a), the person’s identity shall be excluded from the patent file and kept confidential.’’. 

(b) REEXAMINATION.—Section 303(a) is amended to read as follows: 


hsrobinson on PROD1PC76 with HEARING
11 

‘‘(a) Within three months after the owner of a patent files a request for reexamination under section 302, the Director shall determine whether a substantial new 

question of patentability affecting any claim of the patent concerned is raised by the 

request, with or without consideration of other patents or printed publications. On 

the Director’s own initiative, and at any time, the Director may determine whether 

a substantial new question of patentability is raised by patents and publications discovered by the Director, is cited under section 301, or is cited by any person other 

than the owner of the patent under section 302 or section 311. The existence of a 

substantial new question of patentability is not precluded by the fact that a patent 

or printed publication was previously cited by or to the Office or considered by the 

Office.’’. 

(c) CONDUCT OF INTER PARTES PROCEEDINGS.—Section 314 is amended—

(1) in the first sentence of subsection (a), by striking ‘‘conducted according 

to the procedures established for initial examination under the provisions of sections 132 and 133’’ and inserting ‘‘heard by an administrative patent judge in 

accordance with procedures which the Director shall establish’’; 

(2) in subsection (b), by striking paragraph (2) and inserting the following: 

‘‘(2) The third-party requester shall have the opportunity to file written comments on any action on the merits by the Office in the inter partes reexamination 

proceeding, and on any response that the patent owner files to such an action, if 

those written comments are received by the Office within 60 days after the date of 

service on the third-party requester of the Office action or patent owner response, 

as the case may be.’’; and 

(3) by adding at the end the following: 

‘‘(d) ORAL HEARING.—At the request of a third party requestor or the patent 

owner, the administrative patent judge shall conduct an oral hearing, unless the 

judge finds cause lacking for such hearing.’’. 

(d) ESTOPPEL.—Section 315(c) is amended by striking ‘‘or could have raised’’. 

(e) REEXAMINATION PROHIBITED AFTER DISTRICT COURT DECISION.—Section 

317(b) is amended—

(1) in the subsection heading, by striking ‘‘FINAL DECISION’’ and inserting 

‘‘DISTRICT COURT DECISION’’; and 

(2) by striking ‘‘Once a final decision has been entered’’ and inserting ‘‘Once 

the judgment of the district court has been entered’’. 

(f) POST-GRANT OPPOSITION PROCEDURES.—

(1) IN GENERAL.—Part III is amended by adding at the end the following 

new chapter: 

‘‘CHAPTER 32—POST-GRANT REVIEW PROCEDURES 

‘‘Sec. 

‘‘321. Petition for post-grant review. 

‘‘322. Timing and bases of petition. 

‘‘323. Requirements of petition. 

‘‘324. Prohibited filings. 

‘‘325. Submission of additional information; showing of sufficient grounds. 

‘‘326. Conduct of post-grant review proceedings. 

‘‘327. Patent owner response. 

‘‘328. Proof and evidentiary standards. 

‘‘329. Amendment of the patent. 

‘‘330. Decision of the Board. 

‘‘331. Effect of decision. 

‘‘332. Settlement. 

‘‘333. Relationship to other pending proceedings. 

‘‘334. Effect of decisions rendered in civil action on post-grant review proceedings. 

‘‘335. Effect of final decision on future proceedings. 

‘‘336. Appeal. 

‘‘§ 321. Petition for post-grant review 

‘‘Subject to sections 322, 324, 332, and 333, a person who is not the patent 

owner may file with the Office a petition for cancellation seeking to institute a postgrant review proceeding to cancel as unpatentable any claim of a patent on any 

ground that could be raised under paragraph (2) or (3) of section 282(b) (relating 

to invalidity of the patent or any claim). The Director shall establish, by regulation, 

fees to be paid by the person requesting the proceeding, in such amounts as the Director determines to be reasonable. 

‘‘§ 322. Timing and bases of petition 

‘‘A post-grant proceeding may be instituted under this chapter pursuant to a 

cancellation petition filed under section 321 only if—

‘‘(1) the petition is filed not later than 12 months after the grant of the patent or issuance of a reissue patent, as the case may be; or 

‘‘(2) the patent owner consents in writing to the proceeding. 


hsrobinson on PROD1PC76 with HEARING
12 

‘‘§ 323. Requirements of petition 

‘‘A cancellation petition filed under section 321 may be considered only if—

‘‘(1) the petition is accompanied by payment of the fee established by the 

Director under section 321; 

‘‘(2) the petition identifies the cancellation petitioner; and 

‘‘(3) the petition sets forth in writing the basis for the cancellation, identifying each claim challenged and providing such information as the Director may 

require by regulation, and includes copies of patents and printed publications 

that the cancellation petitioner relies upon in support of the petition; and 

‘‘(4) the petitioner provides copies of those documents to the patent owner 

or, if applicable, the designated representative of the patent owner. 

‘‘§ 324. Prohibited filings 

‘‘A post-grant review proceeding may not be instituted under section 322 if the 

petition for cancellation requesting the proceeding identifies the same cancellation 

petitioner and the same patent as a previous petition for cancellation filed under 

such section. 

‘‘§ 325. Submission of additional information; showing of sufficient grounds 

‘‘(a) IN GENERAL.—The cancellation petitioner shall file such additional information with respect to the petition as the Director may require. For each petition submitted under section 321, the Director shall determine if the written statement, and 

any evidence submitted with the request, establish that a substantial question of 

patentability exists for at least one claim in the patent. The Director may initiate 

a post-grant review proceeding if the Director determines that the information presented provides sufficient grounds to believe that there is a substantial question of 

patentability concerning one or more claims of the patent at issue. 

‘‘(b) NOTIFICATION; DETERMINATIONS NOT REVIEWABLE.—The Director shall notify the patent owner and each petitioner in writing of the Director’s determination 

under subsection (a), including a determination to deny the petition. The Director 

shall make that determination in writing not later than 60 days after receiving the 

petition. Any determination made by the Director under subsection (a), including 

whether or not to institute a post-grant review proceeding or to deny the petition, 

shall not be reviewable. 

‘‘§ 326. Conduct of post-grant review proceedings 

‘‘(a) IN GENERAL.—The Director shall prescribe regulations, in accordance with 

section 2(b)(2)—

‘‘(1) establishing and governing post-grant review proceedings under this 

chapter and their relationship to other proceedings under this title; 

‘‘(2) establishing procedures for the submission of supplemental information 

after the petition for cancellation is filed; and 

‘‘(3) setting forth procedures for discovery of relevant evidence, including 

that such discovery shall be limited to evidence directly related to factual assertions advanced by either party in the proceeding, and the procedures for obtaining such evidence shall be consistent with the purpose and nature of the proceeding. 

‘‘(b) POST-GRANT REGULATIONS.—Regulations under subsection (a)(1)—

‘‘(1) shall require that the final determination in a post-grant proceeding 

issue not later than one year after the date on which the post-grant review proceeding is instituted under this chapter, except that, for good cause shown, the 

Director may extend the 1-year period by not more than six months; 

‘‘(2) shall provide for discovery upon order of the Director; 

‘‘(3) shall provide for publication of notice in the Federal Register of the filing of a petition for post-grant review under this chapter, for publication of the 

petition, and documents, orders, and decisions relating to the petition, on the 

website of the Patent and Trademark Office, and for filings under seal exempt 

from publication requirements; 

‘‘(4) shall prescribe sanctions for abuse of discovery, abuse of process, or any 

other improper use of the proceeding, such as to harass or to cause unnecessary 

delay or unnecessary increase in the cost of the proceeding; 

‘‘(5) may provide for protective orders governing the exchange and submission of confidential information; and 

‘‘(6) shall ensure that any information submitted by the patent owner in 

support of any amendment entered under section 329 is made available to the 

public as part of the prosecution history of the patent. 

‘‘(c) CONSIDERATIONS.—In prescribing regulations under this section, the Director shall consider the effect on the economy, the integrity of the patent system, and 

the efficient administration of the Office. 


hsrobinson on PROD1PC76 with HEARING
13 

‘‘(d) CONDUCT OF PROCEEDING.—The Patent Trial and Appeal Board shall, in accordance with section 6(b), conduct each post-grant review proceeding authorized by 

the Director. 

‘‘§ 327. Patent owner response 

‘‘After a post-grant proceeding under this chapter has been instituted with respect to a patent, the patent owner shall have the right to file, within a time period 

set by the Director, a response to the cancellation petition. The patent owner shall 

file with the response, through affidavits or declarations, any additional factual evidence and expert opinions on which the patent owner relies in support of the response. 

‘‘§ 328. Proof and evidentiary standards 

‘‘(a) IN GENERAL.—The presumption of validity set forth in section 282 shall not 

apply in a challenge to any patent claim under this chapter. 

‘‘(b) BURDEN OF PROOF.—The party advancing a proposition under this chapter 

shall have the burden of proving that proposition by a preponderance of the evidence. 

‘‘§ 329. Amendment of the patent 

‘‘(a) IN GENERAL.—In response to a challenge in a petition for cancellation, the 

patent owner may file one motion to amend the patent in one or more of the following ways: 

‘‘(1) Cancel any challenged patent claim. 

‘‘(2) For each challenged claim, propose a substitute claim. 

‘‘(3) Amend the patent drawings or otherwise amend the patent other than 

the claims. 

‘‘(b) ADDITIONAL MOTIONS.—Additional motions to amend may be permitted only 

for good cause shown. 

‘‘(c) SCOPE OF CLAIMS.—An amendment under this section may not enlarge the 

scope of the claims of the patent or introduce new matter. 

‘‘§ 330. Decision of the Board 

‘‘If the post-grant review proceeding is instituted and not dismissed under this 

chapter, the Patent Trial and Appeal Board shall issue a final written decision with 

respect to the patentability of any patent claim challenged and any new claim added 

under section 329. 

‘‘§ 331. Effect of decision 

‘‘(a) IN GENERAL.—If the Patent Trial and Appeal Board issues a final decision 

under section 330 and the time for appeal has expired or any appeal proceeding has 

terminated, the Director shall issue and publish a certificate canceling any claim of 

the patent finally determined to be unpatentable and incorporating in the patent 

by operation of the certificate any new claim determined to be patentable. 

‘‘(b) NEW CLAIMS.—Any new claim held to be patentable and incorporated into 

a patent in a post-grant review proceeding shall have the same effect as that specified in section 252 for reissued patents on the right of any person who made, purchased, offered to sell, or used within the United States, or imported into the United 

States, anything patented by such new claim, or who made substantial preparations 

therefor, before a certificate under subsection (a) of this section is issued. 

‘‘§ 332. Settlement 

‘‘(a) IN GENERAL.—A post-grant review proceeding shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, 

unless the Patent Trial and Appeal Board has issued a written decision before the 

request for termination is filed. If the post-grant review proceeding is terminated 

with respect to a petitioner under this paragraph, no estoppel shall apply to that 

petitioner. If no petitioner remains in the proceeding, the panel of administrative 

patent judges assigned to the proceeding shall terminate the proceeding. 

‘‘(b) AGREEMENT IN WRITING.—Any agreement or understanding between the 

patent owner and a petitioner, including any collateral agreements referred to in the 

agreement or understanding, that is made in connection with or in contemplation 

of the termination of a post-grant review proceeding, must be in writing. A postgrant review proceeding as between the parties to the agreement or understanding 

may not be terminated until a copy of the agreement or understanding, including 

any such collateral agreements, has been filed in the Office. If any party filing such 

an agreement or understanding requests, the agreement or understanding shall be 

kept separate from the file of the post-grant review proceeding, and shall be made 

available only to Government agencies on written request, or to any person on a 

showing of good cause. 


hsrobinson on PROD1PC76 with HEARING
14 

‘‘§ 333. Relationship to other pending proceedings 

‘‘(a) IN GENERAL.—Notwithstanding subsection 135(a), sections 251 and 252, 

and chapter 30, the Director may determine the manner in which any reexamination proceeding, reissue proceeding, interference proceeding (commenced before the 

effective date provided in section 3(k) of the Patent Reform Act of 2007), derivation 

proceeding, or post-grant review proceeding, that is pending during a post-grant review proceeding, may proceed, including providing for stay, transfer, consolidation, 

or termination of any such proceeding. 

‘‘(b) STAYS.—The Director may stay a post-grant review proceeding if a pending 

civil action for infringement addresses the same or substantially the same questions 

of patentability. 

‘‘§ 334. Effect of decisions rendered in civil action on post-grant review proceedings 

‘‘If a final decision is entered against a party in a civil action arising in whole 

or in part under section 1338 of title 28 establishing that the party has not sustained its burden of proving the invalidity of any patent claim—

‘‘(1) that party to the civil action and the privies of that party may not 

thereafter request a post-grant review proceeding on that patent claim on the 

basis of any grounds, under the provisions of section 321, which that party or 

the privies of that party raised or could have raised; and 

‘‘(2) the Director may not thereafter maintain a post-grant review proceeding that was requested, before the final decision was so entered, by that 

party or the privies of that party on the basis of such grounds. 

‘‘§ 335. Effect of final decision on future proceedings 

‘‘If a final decision under section 330 is favorable to the patentability of any 

original or new claim of the patent challenged by the cancellation petitioner, the 

cancellation petitioner may not thereafter, based on any ground that the cancellation petitioner raised during the post-grant review proceeding—

‘‘(1) request or pursue a reexamination of such claim under chapter 31; 

‘‘(2) request or pursue a derivation proceeding with respect to such claim; 

‘‘(3) request or pursue a post-grant review proceeding under this chapter 

with respect to such claim; or 

‘‘(4) assert the invalidity of any such claim in any civil action arising in 

whole or in part under section 1338 of title 28. 

‘‘§ 336. Appeal 

‘‘A party dissatisfied with the final determination of the Patent Trial and Appeal Board in a post-grant proceeding under this chapter may appeal the determination under sections 141 through 144. Any party to the post-grant proceeding shall 

have the right to be a party to the appeal.’’. 

(g) CONFORMING AMENDMENT.—The table of chapters for part III is amended by 

adding at the end the following: 

‘‘32. Post-Grant Review Proceedings ............................................................................................................ 321’’. 

(h) REPEAL.—Section 4607 of the Intellectual Property and Communications 

Omnibus Reform Act of 1999, as enacted by section 1000(a)(9) of Public Law 106–

113, is repealed. 

(i) EFFECTIVE DATES.—

(1) IN GENERAL.—The amendments and repeal made by this section shall 

take effect at the end of the 1-year period beginning on the date of the enactment of this Act. 

(2) APPLICABILITY TO EX PARTE AND INTER PARTES PROCEEDINGS.—Notwithstanding any other provision of law, sections 301 and 311 through 318 of title 

35, United States Code, as amended by this section, shall apply to any patent 

that issues before, on, or after the effective date under paragraph (1) from an 

original application filed on any date. 

(3) APPLICABILITY TO POST-GRANT PROCEEDINGS.—The amendments made by 

subsection (f) shall apply to patents issued on or after the effective date under 

paragraph (1). 

(j) REGULATIONS.—

(1) REGULATIONS.—The Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (in this 

subsection referred to as the ‘‘Director’’) shall, not later than the date that is 

1 year after the date of the enactment of this Act, issue regulations to carry 

out chapter 32 of title 35, United States Code, as added by subsection (f) of this 

section. 

(2) PENDING INTERFERENCES.—The Director shall determine the procedures 

under which interferences under title 35, United States Code, that are comVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00014 Fmt 6659 Sfmt 6621 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
15 

menced before the effective date under subsection (i)(1) are to proceed, including 

whether any such interference is to be dismissed without prejudice to the filing 

of a cancellation petition for a post-grant opposition proceeding under chapter 

32 of title 35, United States Code, or is to proceed as if this Act had not been 

enacted. The Director shall include such procedures in regulations issued under 

paragraph (1). 

SEC. 7. DEFINITIONS; PATENT TRIAL AND APPEAL BOARD. 

(a) DEFINITIONS.—Section 100 (as amended by this Act) is further amended by 

adding at the end the following: 

‘‘(k) The term ‘cancellation petitioner’ means the real party in interest requesting cancellation of any claim of a patent under chapter 32 of this title and the 

privies of the real party in interest.’’. 

(a) PATENT TRIAL AND APPEAL BOARD.—Section 6 is amended to read as follows: 

‘‘§ 6. Patent Trial and Appeal Board 

‘‘(a) ESTABLISHMENT AND COMPOSITION.—There shall be in the Office a Patent 

Trial and Appeal Board. The Director, the Deputy Director, the Commissioner for 

Patents, the Commissioner for Trademarks, and the administrative patent judges 

shall constitute the Patent Trial and Appeal Board. The administrative patent 

judges shall be persons of competent legal knowledge and scientific ability who are 

appointed by the Director. Any reference in any Federal law, Executive order, rule, 

regulation, or delegation of authority, or any document of or pertaining to the Board 

of Patent Appeals and Interferences is deemed to refer to the Patent Trial and Appeal Board. 

‘‘(b) DUTIES.—The Patent Trial and Appeal Board shall—

‘‘(1) on written appeal of an applicant, review adverse decisions of examiners upon application for patents; 

‘‘(2) on written appeal of a patent owner, review adverse decisions of examiners upon patents in reexamination proceedings under chapter 30; 

‘‘(3) review appeals by patent owners and third-party requesters under section 315; 

‘‘(4) determine priority and patentability of invention in derivation proceedings under section 135(a); and 

‘‘(5) conduct post-grant opposition proceedings under chapter 32. 

Each appeal and derivation proceeding shall be heard by at least 3 members of the 

Patent Trial and Appeal Board, who shall be designated by the Director. Only the 

Patent Trial and Appeal Board may grant rehearings. The Director shall assign 

each post-grant review proceeding to a panel of 3 administrative patent judges. 

Once assigned, each such panel of administrative patent judges shall have the responsibilities under chapter 32 in connection with post-grant review proceedings.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section shall take effect 

at the end of the 1-year period beginning on the date of the enactment of this Act. 

SEC. 8. STUDY AND REPORT ON REEXAMINATION PROCEEDINGS. 

The Under Secretary of Commerce for Intellectual Property and Director of the 

Patent and Trademark Office shall, not later than 2 years after the date of the enactment of this Act—

(1) conduct a study of the effectiveness and efficiency of the different forms 

of proceedings available under title 35, United States Code, for the reexamination of patents; and 

(2) submit to the Committees on the Judiciary of the House of Representatives and the Senate a report on the results of the study, including any of the 

Director’s suggestions for amending the law, and any other recommendations 

the Director has with respect to patent reexamination proceedings. 

SEC. 9. SUBMISSIONS BY THIRD PARTIES AND OTHER QUALITY ENHANCEMENTS. 

(a) PUBLICATION.—Section 122(b)(2) is amended—

(1) by striking subparagraph (B); and 

(2) in subparagraph (A)—

(A) by striking ‘‘(A) An application’’ and inserting ‘‘An application’’; and 

(B) by redesignating clauses (i) through (iv) as subparagraphs (A) 

through (D), respectively. 

(b) PREISSUANCE SUBMISSIONS BY THIRD PARTIES.—Section 122 is amended by 

adding at the end the following: 

‘‘(e) PREISSUANCE SUBMISSIONS BY THIRD PARTIES.—

‘‘(1) IN GENERAL.—Any person may submit for consideration and inclusion 

in the record of a patent application, any patent, published patent application, 

or other publication of potential relevance to the examination of the application, 

if such submission is made in writing before the earlier of—


hsrobinson on PROD1PC76 with HEARING
16 

‘‘(A) the date a notice of allowance under section 151 is mailed in the 

application for patent; or ‘‘(B) either— ‘‘(i) 6 months after the date on which the application for patent is 

published under section 122, or ‘‘(ii) the date of the first rejection under section 132 of any claim 

by the examiner during the examination of the application for patent, 

whichever occurs later. 

‘‘(2) OTHER REQUIREMENTS.—Any submission under paragraph (1) shall— ‘‘(A) set forth a concise description of the asserted relevance of each 

submitted document; ‘‘(B) be accompanied by such fee as the Director may prescribe; and 

‘‘(C) include a statement by the submitter affirming that the submission was made in compliance with this section.’’. (c) EFFECTIVE DATE.—The amendments made by this section— (1) shall take effect at the end of the 1-year period beginning on the date 

of the enactment of this Act; and 

(2) shall apply to any application for patent filed before, on, or after the effective date under paragraph (1). 

SEC. 10. TAX PLANNING METHODS NOT PATENTABLE. 

(a) IN GENERAL.—Section 101 is amended— (1) by striking ‘‘Whoever’’ and inserting ‘‘(a) PATENTABLE INVENTIONS.— Whoever’’; and 

(2) by adding at the end the following: ‘‘(b) TAX PLANNING METHODS.— ‘‘(1) UNPATENTABLE SUBJECT MATTER.—A patent may not be obtained for a 

tax planning method. ‘‘(2) DEFINITIONS.—For purposes of paragraph (1)— ‘‘(A) the term ‘tax planning method’ means a plan, strategy, technique, 

or scheme that is designed to reduce, minimize, or defer, or has, when implemented, the effect of reducing, minimizing, or deferring, a taxpayer’s tax 

liability, but does not include the use of tax preparation software or other 

tools used solely to perform or model mathematical calculations or prepare 

tax or information returns; ‘‘(B) the term ‘taxpayer’ means an individual, entity, or other person (as 

defined in section 7701 of the Internal Revenue Code of 1986) that is subject to taxation directly, is required to prepare a tax return or information 

statement to enable one or more other persons to determine their tax liability, or is otherwise subject to a tax law; ‘‘(C) the terms ‘tax’, ‘tax laws’, ‘tax liability’, and ‘taxation’ refer to any 

Federal, State, county, city, municipality, or other governmental levy, assessment, or imposition, whether measured by income, value, or otherwise; 

and 

‘‘(D) the term ‘State’ means each of the several States, the District of 

Columbia, and any commonwealth, territory, or possession of the United 

States.’’. 

(b) APPLICABILITY.—The amendments made by this section—

(1) shall take effect on the date of the enactment of this Act; 

(2) shall apply to any application for patent or application for a reissue patent that is—

(A) filed on or after the date of the enactment of this Act; or 

(B) filed before that date if a patent or reissue patent has not been 

issued pursuant to the application as of that date; and 

(3) shall not be construed as validating any patent issued before the date 

of the enactment of this Act for an invention described in section 101(b) of title 

35, United States Code, as amended by this section. 

SEC. 11. VENUE AND JURISDICTION. 

(a) VENUE FOR PATENT CASES.—Section 1400 of title 28, United States Code, is 

amended by striking subsection (b) and inserting the following: 

‘‘(b) Notwithstanding section 1391 of this title, in any civil action arising under 

any Act of Congress relating to patents, a party shall not manufacture venue by assignment, incorporation, or otherwise to invoke the venue of a specific district court. 

‘‘(c) Notwithstanding section 1391 of this title, any civil action for patent infringement or any action for declaratory judgment may be brought only in a judicial 

district—

‘‘(1) where the defendant has its principal place of business or in the location or place in which the defendant is incorporated, or, for foreign corporations 

with a United States subsidiary, where the defendant’s primary United States 


hsrobinson on PROD1PC76 with HEARING
17 

subsidiary has its principal place of business or in the location or place in which 

the defendants primary United States subsidiary is incorporated; ‘‘(2) where the defendant has committed a substantial portion of the acts 

of infringement and has a regular and established physical facility that the defendant controls and that constitutes a substantial portion of the operations of 

the defendant; ‘‘(3) where the primary plaintiff resides, if the primary plaintiff in the action is an institution of higher education as defined under section 101(a) of the 

Higher Education Act of 1965 (20 U.S.C. 1001(a)); or ‘‘(4) where the plaintiff resides, if the plaintiff or a subsidiary of the plaintiff has an established physical facility in such district dedicated to research, 

development, or manufacturing that is operated by full-time employees of the 

plaintiff or such subsidiary, or if the sole plaintiff in the action is an individual 

inventor who is a natural person and who qualifies at the time such action is 

filed as a micro entity under section 124 of title 35. 

‘‘(d) If the plaintiff brings a civil action for patent infringement in a judicial district under subsection (c), the district court may transfer that action to any other 

district or division where— ‘‘(1) the defendant has substantial evidence or witnesses; and 

‘‘(2) venue would be appropriate under section 1391 of this title, if such 

transfer would be appropriate under section 1404 of this title.’’. 

(b) INTERLOCUTORY APPEALS.—Subsection (c) of section 1292 of title 28, United 

States Code, is amended—

(1) by striking ‘‘and’’ at the end of paragraph (1); 

(2) by striking the period at the end of paragraph (2) and inserting ‘‘; and’’; 

and 

(3) by adding at the end the following: 

‘‘(3) of an appeal from an interlocutory order or decree determining construction of claims in a civil action for patent infringement under section 271 

of title 35. 

Application for an appeal under paragraph (3) shall be made to the court within 10 

days after entry of the order or decree. The district court shall have discretion 

whether to approve the application and, if so, whether to stay proceedings in the 

district court during pendency of the appeal.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to any 

action commenced on or after the date of the enactment of this Act. 

SEC. 12. ADDITIONAL INFORMATION; INEQUITABLE CONDUCT AS DEFENSE TO INFRINGEMENT. 

(a) DISCLOSURE REQUIREMENTS FOR APPLICANTS.—

(1) IN GENERAL.—Chapter 11 is amended by adding at the end the following 

new section: 

‘‘§ 123. Additional information 

‘‘(a) IN GENERAL.—The Director shall, by regulation, require that applicants 

submit a search report and other information and analysis relevant to patentability. 

An application shall be regarded as abandoned if the applicant fails to submit the 

required search report, information, and analysis in the manner and within the time 

period prescribed by the Director. 

‘‘(b) EXCEPTION FOR MICRO ENTITIES.—Applications from micro-entities shall not 

be subject to the requirements of regulations issued under subsection (a). 

‘‘§ 124. Micro entities 

‘‘(a) DEFINITION.—For purposes of this title, the term ‘micro entity’ means an 

applicant for patent who makes a certification under either subsection (b) or (c). 

‘‘(b) UNASSIGNED APPLICATION.—A certification under this subsection is a certification by each inventor named in the application that the inventor—

‘‘(1) qualifies as a small entity as defined in regulations issued by the Director; 

‘‘(2) has not been named on five or more previously filed patent applications; 

‘‘(3) has not assigned, granted, or conveyed, and is not under an obligation 

by contract or law to assign, grant, or convey, a license or any other ownership 

interest in the application; and 

‘‘(4) does not have a gross income, as defined in section 61(a) of the Internal 

Revenue Code of 1986, exceeding 2.5 times the median household income, as reported by the Bureau of the Census, for the most recent calendar year preceding 

the calendar year in which the examination fee is being paid. 

‘‘(c) ASSIGNED APPLICATION.—A certification under this subsection is a certification by each inventor named in the application that the inventor—


hsrobinson on PROD1PC76 with HEARING
18 

‘‘(1) qualifies as a small entity as defined in regulations issued by the Director and meets the requirements of subsection (b)(4); ‘‘(2) has not been named on five or more previously filed patent applications; and ‘‘(3) has assigned, granted, conveyed, or is under an obligation by contract 

or law to assign, grant, or convey, a license or other ownership interest in the 

application to an entity that has five or fewer employees and has a gross taxable income, as defined in section 61(a) of the Internal Revenue Code of 1986, 

that does not exceed 2.5 times the median household income, as reported by the 

Bureau of the Census, for the most recent calendar year preceding the calendar 

year in which the examination fee is being paid.’’. (2) CONFORMING AMENDMENT.—The table of sections for chapter 11 is 

amended by adding at the end the following new items: 

‘‘123. Additional information. 

‘‘124. Micro entities.’’. 

(b) INEQUITABLE CONDUCT AS DEFENSE TO INFRINGEMENT.—Section 282 is 

amended—

(1) in the first undesignated paragraph, by striking ‘‘A patent’’ and inserting ‘‘(a) IN GENERAL.—A patent’’; 

(2) in the second undesignated paragraph— (A) by striking ‘‘The following’’ and inserting ‘‘(b) DEFENSES.—The following’’; and 

(B) by striking the comma at the end of each of paragraphs (1), (2), and 

(3) and inserting a period; 

(3) in the third undesignated paragraph—

(A) by striking ‘‘In actions’’ and inserting ‘‘(d) NOTICE OF ACTIONS; 

PLEADING.—In actions’’; 

(B) by inserting after the second sentence the following: ‘‘In an action 

involving any allegation of inequitable conduct under subsection (c), the 

party asserting this defense or claim shall comply with the pleading requirements set forth in Rule 9(b) of the Federal Rules of Civil Procedure.’’; 

and 

(C) by striking ‘‘Invalidity’’ and inserting ‘‘(e) EXTENSION OF PATENT

TERM.—Invalidity’’; and 

(4) by inserting after subsection (b), as designated by paragraph (2) of this 

subsection, the following: 

‘‘(c) INEQUITABLE CONDUCT.—

‘‘(1) DEFENSE.—A patent may be held to be unenforceable, or other remedy 

imposed under paragraph (3), for inequitable conduct only if it is established, 

by clear and convincing evidence, that—

‘‘(A) the patentee, its agents, or another person with a duty of disclosure to the Office, with the intent to mislead or deceive the patent examiner, misrepresented or failed to disclose material information concerning a 

matter or proceeding before the Office; and 

‘‘(B) in the absence of such deception, the Office, acting reasonably, 

would, on the record before it, have made a prima facie finding of 

unpatentability. 

‘‘(2) INTENT.—In order to prove intent to mislead or deceive under paragraph (1), specific facts beyond materiality of the information submitted or not 

disclosed must be proven that support an inference of intent to mislead or deceive the Patent and Trademark Office. Facts support an inference of intent if 

they show circumstances that indicate conscious or deliberate behavior on the 

part of the patentee, its agents, or another person with a duty of disclosure to 

the Office, to not disclose material information or to submit materially false information. 

‘‘(3) REMEDY.—Upon a finding of inequitable conduct, the court shall balance the equities to determine which of the following remedies to impose: 

‘‘(A) Denying equitable relief to the patent holder and limiting the remedy for infringement to damages. 

‘‘(B) Holding the claims-in-suit, or the claims in which inequitable conduct occurred, unenforceable. 

‘‘(C) Holding the patent unenforceable. 

‘‘(D) Holding the claims of a related patent unenforceable. 

‘‘(4) ATTORNEY MISCONDUCT.—Upon a finding of inequitable conduct, if 

there is evidence that the conduct can be attributable to a person or persons 

authorized to practice before the Office, the court shall refer the matter to the 

Office for appropriate disciplinary action under section 32, and shall order the 

parties to preserve and make available to the Office any materials that may be 

relevant to the determination under section 32.’’. 


hsrobinson on PROD1PC76 with HEARING
19 

(c) EFFECTIVE DATE.—

(1) SUBSECTION (a).—The amendments made by subsection (a)—

(A) shall take effect at the end of the 1-year period beginning on the 

date of the enactment of this Act; and 

(B) shall apply to any application for patent filed on or after the effective date under subparagraph (A). 

(2) SUBSECTION (b).—The amendments made by subsection (b) shall apply 

to any civil action commenced on or after the date of the enactment of this Act. 

SEC. 13. BEST MODE REQUIREMENT. 

Section 282(b) (as designated by section 12(b) of this Act) is amended by striking paragraph (3) and inserting the following: 

‘‘(3) Invalidity of the patent or any claim in suit for failure to comply with—

‘‘(A) any requirement of section 112 of this title, other than the requirement that the specification shall set forth the best mode contemplated by 

the inventor of carrying out his invention; or 

‘‘(B) any requirement of section 251 of this title.’’. 

SEC. 14. REGULATORY AUTHORITY. 

(a) REGULATORY AUTHORITY.—Section 2(c) is amended by adding at the end the 

following: 

‘‘(6) The powers granted under paragraph (2) of subsection (b) include the authority to promulgate regulations to ensure the quality and timeliness of applications and their examination, including specifying circumstances under which an application for patent may claim the benefit under sections 120, 121 and 365(c) of the 

filing date of a prior filed application for patent.’’. 

(b) CLARIFICATION.—The amendment made by subsection (a) clarifies the scope 

of power granted to the United States Patent and Trademark Office by paragraph 

(2) of section 2(b) of title 35, United States Code, as in effect since the enactment 

of Public Law 106–113. 

SEC. 15. TECHNICAL AMENDMENTS. 

(a) JOINT INVENTIONS.—Section 116 is amended—

(1) in the first paragraph, by striking ‘‘When’’ and inserting ‘‘(a) JOINT

INVENTIONS.—When’’; 

(2) in the second paragraph, by striking ‘‘If a joint inventor’’ and inserting ‘‘(b) OMITTED INVENTOR.—If a joint inventor’’; and 

(3) in the third paragraph, by striking ‘‘Whenever’’ and inserting ‘‘(c) 

CORRECTION OF ERRORS IN APPLICATION.—Whenever’’. 

(b) FILING OF APPLICATION IN FOREIGN COUNTRY.—Section 184 is amended—

(1) in the first paragraph, by striking ‘‘Except when’’ and inserting ‘‘(a) FILING IN FOREIGN COUNTRY.—Except when’’; 

(2) in the second paragraph, by striking ‘‘The term’’ and inserting ‘‘(b) APPLICATION.—The term’’; and 

(3) in the third paragraph, by striking ‘‘The scope’’ and inserting ‘‘(c) SUBSEQUENT MODIFICATIONS, AMENDMENTS, AND SUPPLEMENTS.—The scope’’. 

(c) REISSUE OF DEFECTIVE PATENTS.—Section 251 is amended—

(1) in the first paragraph, by striking ‘‘Whenever’’ and inserting ‘‘(a) IN

GENERAL.—Whenever’’; 

(2) in the second paragraph, by striking ‘‘The Director’’ and inserting ‘‘(b) 

MULTIPLE REISSUED PATENTS.—The Director’’; 

(3) in the third paragraph, by striking ‘‘The provisions’’ and inserting ‘‘(c) 

APPLICABILITY OF THIS TITLE.—The provisions’’; and 

(4) in the last paragraph, by striking ‘‘No reissued patent’’ and inserting 

‘‘(d) REISSUE PATENT ENLARGING SCOPE OF CLAIMS.—No reissued patent’’. 

(d) EFFECT OF REISSUE.—Section 253 is amended—

(1) in the first paragraph, by striking ‘‘Whenever’’ and inserting ‘‘(a) IN

GENERAL.—Whenever’’; and 

(2) in the second paragraph, by striking ‘‘In like manner’’ and inserting ‘‘(b) 

ADDITIONAL DISCLAIMER OR DEDICATION.—In the manner set forth in subsection 

(a),’’. 

(e) CORRECTION OF NAMED INVENTOR.—Section 256 is amended—

(1) in the first paragraph, by striking ‘‘Whenever’’ and inserting ‘‘(a) CORRECTION.—Whenever’’; and 

(2) in the second paragraph, by striking ‘‘The error’’ and inserting ‘‘(b) PATENT VALID IF ERROR CORRECTED.—The error’’. 

(f) EFFECTIVE DATE.—The amendments made by this section shall take effect 

on the date of the enactment of this Act. 


hsrobinson on PROD1PC76 with HEARING
20 

SEC. 16. STUDY OF SPECIAL MASTERS IN PATENT CASES. 

(a) IN GENERAL.—Not later than 180 days after the date of the enactment of 

this Act, the Director of the Administrative Office of the United States Courts shall 

conduct a study of, and submit to the Committee on the Judiciary of the House of 

Representatives and the Committee on the Judiciary of the Senate a report on, the 

use of special masters in patent litigation who are appointed in accordance with 

Rule 53 of the Federal Rules of Civil Procedure. 

(b) OBJECTIVE.—In conducting the study under subsection (a), the Director shall 

consider whether the use of special masters has been beneficial in patent litigation 

and what, if any, program should be undertaken to facilitate the use by the judiciary of special masters in patent litigation. 

(c) FACTORS TO CONSIDER.—In conducting the study under subsection (a), the 

Director, in consultation with the Federal Judicial Center, shall consider—

(1) the basis upon which courts appoint special masters under Rule 53(b) 

of the Federal Rules of Civil Procedure; 

(2) the frequency with which special masters have been used by the courts; 

(3) the role and powers special masters are given by the courts; 

(4) the subject matter at issue in cases that use special masters; 

(5) the impact on court time and costs in cases where a special master is 

used as compared to cases where no special master is used; 

(6) the legal and technical training and experience of special masters; 

(7) whether the use of special masters has an impact on the reversal rate 

of district court decisions at the Court of Appeals for the Federal Circuit; and 

(8) any other factors that the Director believes would assist in gauging the 

effectiveness of special masters in patent litigation. 

SEC. 17. RULE OF CONSTRUCTION. 

The enactment of section 102(b)(3) of title 35, United States Code, under section 

(3)(b) of this Act is done with the same intent to promote joint research activities 

that was expressed, including in the legislative history, through the enactment of 

the Cooperative Research and Technology Enhancement Act of 2004 (Public Law 

108–453; the ‘‘CREATE Act’’), the amendments of which are stricken by section 3(c) 

of this Act. The United States Patent and Trademark Office shall administer section 

102(b)(3) of title 35, United States Code, in a manner consistent with the legislative 

history of the CREATE Act that was relevant to its administration by the Patent 

and Trademark Office. 

PURPOSE AND SUMMARY

The purpose H.R. 1908, the ‘‘Patent Reform Act of 2007,’’ is to 

address several problems in the patent system that hinder the ability of patents to promote future innovation. These problems deal 

primarily with the rampant issuance of poor-quality patents, abusive practices particular to patent litigation, and inefficiencies that 

are a result of the lack of harmonization between patent law in the 

United States and the rest of the world. Among the many agencies 

and groups calling for some form of patent reform include the 

United States Patent and Trademark Office (USPTO), the Federal 

Trade Commission (FTC), the National Academy of Science, the Intellectual Property Owners Association, the American Bar Association Intellectual Property Division, the American Intellectual Property Law Association, and businesses representing every sector of 

industry. 

The reforms included in H.R. 1908, are the creation of a postgrant review procedure as a check on poor-quality patents, defining 

how courts are to apportion damages in patent infringement cases 

so that awards reflect patent value, clarification of when treble 

damages may be awarded in order to prevent patent hold-ups, updating inter partes reexamination to promote greater use of the 

procedure, eliminating so-called ‘‘submarine patents’’ by requiring 

18-month publication for all patent applications, allowing third 

parties to submit prior art during patent prosecution as a further 

check against poor-quality patents, codifying the doctrine of inequiVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00020 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
21 

1 U.S. Const., Art. 1, § 8, Cl. 8. 

table conduct in order to stem its overuse, clarifying the extent the 

USPTO’s regulatory authority, switching the United States patent 

system to a first-inventor-to-file system in order to promote harmonization, and creating prior user rights as a means to mitigate the 

change in the scope of prior art required by a first-inventor-to-file 

system. 

BACKGROUND AND NEED FOR THE LEGISLATION

Patents are provided to inventors as an incentive to advance the 

state of knowledge and to develop innovative products and services. 

They do this by granting inventors exclusive rights to their inventions for a limited period. In exchange for the temporary monopoly 

right, inventors are required to disclose to society the knowledge 

behind their inventions. This social bargain is enshrined in the 

Constitution, which empowers Congress to ‘‘promote the progress of 

. . . science and the useful arts . . . by securing for limited times 

to . . . inventors the exclusive right to their . . . discoveries.’’ 1

Over the last several years, agencies like the USPTO and FTC, 

the National Academy of Science, professional organizations, industry coalitions, economists, academics and others have identified significant problems in the patent system. These problems boil down 

to two main areas—the issuance of poor-quality patents and abusive practices particular to patent litigation. These problems have 

hindered the ability of patents to spur innovation today and have 

put at risk future innovation. H.R. 1908, the Patent Reform Act of 

2007, is designed to address several of the problems identified in 

the United States patent system and modernize it for the 21st Century. 

The Patent Reform Act of 2007 affects several parts of our patent 

law. The most significant changes pertain to the first-inventor-tofile system, the inventor’s oath requirement, apportionment of 

damages, willful infringement, prior user rights, reexamination 

generally, ex parte reexamination, inter partes reexamination, postgrant review, 18 month publication of patent applications, prior art 

submissions by third parties, tax patents, venue, interlocutory appeals, applicant disclosure requirements, inequitable conduct, best 

mode and USPTO regulatory authority. Background for each of 

these topics is provided below. 

FIRST-INVENTOR-TO-FILE SYSTEM

The United States is the only major industrialized country to 

maintain a first-to-invent patent system. In such a system, priority 

to a patent for an invention is awarded to the first inventor. However, often times, especially in cases of dispute over the invention 

date or who invented first, two complex issues can arise that leave 

in doubt whether the applicant has the right to the patent. The 

first relates to ‘‘prior art’’—information already available to the 

public at the time a patent is sought. If the invention already appears in the prior art, or is made obvious by it, then the patentee 

cannot receive a patent. But if prior art that defeats the patent application is found by the United States Patent and Trademark Office (USPTO) during examination, an applicant may prove that the 

invention was conceived and reduced to practice at a date earlier 


hsrobinson on PROD1PC76 with HEARING
22 

2This report uses the term ‘‘first-inventor-to-file,’’ rather than ‘‘first-to-file,’’ because a patent 

applicant who files later than another can be awarded a patent if he demonstrates that the earlier filer was not a true inventor. 3 National Research Council of the National Academies (hereinafter ‘‘NRC’’), A Patent System 

for the 21st Century (2004) at 124. 4Perspectives on Patents: Harmonization and Other Matters, Hearings Before the Subcommittee on Intellectual Property, Senate Judiciary Committee, 109th Cong. (2005) (statement 

of Hon. Gerald Mossinghoff, Former Assistant Secretary of Commerce and Commissioner of Patents and Trademarks and Senior Counsel, Oblon, Spivak, McClelland, Maier & Neustadt). 

than the prior art date, unless the prior art was available more 

than 1 year before the application filing date. This process is called 

‘‘swearing back’’ and is intended to allow an inventor to prove he 

was the first to come up with the invention. Maintaining sufficient 

proof to swear back requires the inventor to keep detailed records 

of all activities leading up to the invention and can be quite a burden to demonstrate when required. Second, where there are two or 

more applications that claim the same invention, priority to the 

patent is awarded to the inventor who can demonstrate the earliest 

conception of the invention in an administrative proceeding called 

an interference. Again, this process permits the first inventor to 

show that he was indeed the first to come up with the invention. 

Here again, inventors need to keep detailed records of all activities 

leading up to invention in order to furnish proof of invention date. 

These characteristics of a first-to-invent patent system leave in 

doubt whether an applicant will actually have the right to patent 

his invention. 

In all other countries in the world, priority to a patent for an invention is awarded to the first person to file a patent application 

for the invention. These systems are aptly referred to as first-tofile systems. In such systems, one need not prove the date of invention. A second or subsequent inventor may secure the patent right 

in an invention if this person was the first to submit a patent application on the invention. Also, any prior art references adequately 

discloses the invention and predates that invention’s application 

date will invalidate the patent for the invention. A first-to-file system is not only more streamlined but also gives inventors and the 

public a clearer idea of whether they have the right to patent their 

inventions. 

There are compelling reasons for the United States to switch to 

a first-inventor-to-file system.2 As discussed above, maintaining a 

first-to-invent system requires interference proceedings to determine who among two or more inventors to the same invention is 

entitled to the patent right. According to a recent study by National Research Council (NRC),3 these interference proceedings are ‘‘costly and very protracted,’’ and in general are not worth maintaining. The NRC estimates that on average it costs between 

$750,000 and $1,000,000 to participate in an interference proceeding. Costs such as these disadvantage small inventors who 

may not have the resources to initiate an interference proceeding, 

and thus undermines any argument that a first-to-invent patent 

system is fairer than a first-inventor-to file patent system. Furthermore, a detailed review of patents issued from 1983 through 2004 

showed that greater than 50% of interference decisions disadvantaged small entities.4

The NRC Report also points out that as a practical matter, most 

applicants simply use their date of application as their date of invention, and therefore most applicants already operate as if the 


hsrobinson on PROD1PC76 with HEARING
23 

United States has a first-inventor-to-file patent system, so there 

would be little disruption to formally change to such a system. 

Likewise, statistics show that less than 1 in 1000 patent applications are ever subject to an interference proceeding. Since the firstto-invent aspects of our patent system are rarely used, serious 

doubt is cast on the need of having a first-to-invent system. 

Many businesses have urged that the United States move to a 

first-inventor-to-file system. Businesses of every size seek to protect 

their inventions throughout the world and thus they apply for and 

maintain patents for the same invention in several countries. Because the basic rules relating to priority to invention are different 

between the United States and the rest of the world, businesses are 

forced to dedicate more resources to maintaining their patent portfolios than they would otherwise have to if the United States 

adopted a first-inventor-to-file system. 

Lastly, patent harmonization is in the long-run interests of 

United States inventors. Greater harmonization will make it easier 

for United States inventors to secure patent rights in other countries. Given the increasing globalization of commerce, international 

patent protection will be increasingly important to the ability of 

United States companies to compete. Unfortunately, recent attempts to harmonize patent laws, such as through the Substantive 

Patent Law Treaty, have stalled, to a large extent, because of the 

fundamental difference between how the United States and the 

rest of the world award priority of invention. 

The Committee has found persuasive the above reasons to move 

the United States patent system to a first-inventor-to-file system. 

As such, the legislation gives priority, in most cases, to the first inventor to file an application for patent on an invention, thus bringing United States patent system into conformity with the practices 

of the rest of the world. In order to fully implement this new system, changes are made to the definition and scope of prior art. Additionally, to facilitate an easy transition to a first-inventor-to-file 

system, the 1-year inventor’s grace period is maintained and important exceptions to prior art are established, such as a first-to-publish rule that preserves an inventor’s priority of application in limited circumstances where he publicly discloses his invention. The 

grace period and exceptions to prior art will effectively address any 

lingering concerns that a first-inventor-to-file system will force inventors to patent their inventions before they are ready for patenting, or disadvantage inventors whose first regular means of disclosure is through publication. 

Additionally, a derivation proceeding is created to determine the 

right to patent in cases where an invention may have been misappropriated. There has been some concern that a first-inventor-tofile system will encourage theft of inventions by unscrupulous parties who may be able to file a patent application on the invention 

before the real inventor has an opportunity to do so. An inventor 

suffering from misappropriation can make use of the derivation 

proceeding even if he does not immediately know that his invention 

has been misappropriated. This derivation proceeding will ensure 

that only a true inventor, and not someone who misappropriates an 

invention, will be awarded the patent. 

Finally, so that American inventors are not disadvantaged by the 

lack of an inventor’s grace period in other important countries, the 


hsrobinson on PROD1PC76 with HEARING
24 

implementation of these changes are conditioned on the major patent authorities in Japan and Europe adopting a similar kind of 

grace period. 

INVENTOR’S OATH

Existing 35 U.S.C. § 115 requires an inventor (or if relevant, joint 

inventors) to execute an oath stating that he believes himself to be 

an original inventor of the claimed invention and the country of 

which he is a citizen. This requirement, however, does not reflect 

the realities of modern research. The globalization of science and 

technology has led to an environment of international collaborations and migrating scientists and engineers, in which it is increasingly difficult to obtain the signatures of all the inventors when filing a patent application. Often, it is at the time when the research 

is developed to the point at which a patent application can be prepared that one or more inventors may no longer reside in the 

United States. 

The legislation amends § 115 to allow a substitute statement to 

be submitted in lieu of an inventor’s oath or declaration. The statement will be required to state why an oath could not be obtained 

and to have a warning that any false statement would be subject 

to perjury charges. The amendments will provide more flexibility in 

completing the oath requirements, particularly in cases where it is 

difficult to reach an inventor who has already assigned his rights. 

Existing § 118 provides that when an inventor refuses to execute 

an application for a patent, or cannot be found or reached after diligent effort, a person to whom the inventor has assigned or agreed 

in writing to assign the invention, or a person who otherwise shows 

sufficient proprietary interest in the matter to justify the action, 

may apply for a patent on behalf of and as agent for the inventor. 

As amended, § 118 will allow a person who has an assignment from 

an inventor to submit a patent application for an invention made 

by the inventor. If the Director permits such a filing, the patent 

will issue in the name of the real party in interest. 

APPORTIONMENT OF DAMAGES

The right conferred by a patent on its owner is the right to exclude others from making, using, offering to sell, selling and importing a patented invention, as set forth in § 271. Whoever engages in any of those activities, or induces others to do so, without 

permission of the patent owner infringes the patent. The remedies 

for patent infringement include injunction and damages. 

The basic goal of damages for infringement is to put the plaintiff 

patent holder in the same position (economically) as it would have 

been had the defendant not infringed. In other words, damages are 

intended to compensate plaintiff for the loss resulting from invasion of his rights; they are not intended to provide windfalls or to 

punish the infringer. In only limited circumstances (e.g., treble 

damages for willful infringement) should damages exceed the 

amount necessary to provide full compensation. Thus, the patent 

damages statute, § 284, currently provides, in pertinent part: 

Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement but 


hsrobinson on PROD1PC76 with HEARING
25 

5 318 F.Supp. 1116, 1120 (S.D.N.Y. 1970), modified 446 F.2d 295 (2d Cir. 1971). 

6See, for example, the American of Intellectual Property Law Association’s Model Patent Jury 

Instructions 12.15 (‘‘In determining the value of a reasonable royalty, you may consider evidence 

on any of the following factors:’’ [listing the 15 Georgia-Pacific factors], plus ‘‘16. Any other economic factor that a normally prudent business person would, under similar circumstances, take 

into consideration in negotiating the hypothetical license ’’). Similar jury instructions are urged 

by the Federal Circuit Bar Association. and the American Bar Association’s Model Jury Instructions for Patent Litigation. 7Monsanto Co. v. Ralph, 382 F.3d 1374, 1383 (Fed. Cir. 2004). 

in no event less than a reasonable royalty for the use made of 

the invention by the infringer . . . 

Unfortunately, as the Committee has found, courts often have 

difficulty in assuring that damages are: 1) ‘‘to compensate for the 

infringement’’ (i.e., compensatory, not punitive); 2) ‘‘reasonable;’’ and 3) related to ‘‘the use made of the invention by the infringer.’’ ‘‘Damages adequate to compensate for the infringement’’ are 

plaintiff’s loss due to infringement. In some cases, this can be 

ascertained by applying a lost profits analysis (such as where an 

infringing competitor diverts sales from plaintiff). However, circumstances often do not allow for a lost profit analysis. For instance, a lost profit analysis cannot be used where a plaintiff is not 

(yet) engaged in selling its patented product or process, nor has a 

track record of licensing the patent to others. In these situations, 

under § 284, the plaintiff is entitled to a ‘‘reasonable royalty’’ in lieu 

of lost profits. A ‘‘reasonableness’’ standard allows a fair degree of 

flexibility, hence uncertainty, in calculating damages. 

Courts have endeavored to provide certainty and predictability to 

the ‘‘reasonable royalty’’ analysis by crafting guidelines to be used 

in calculating awards. In Georgia-Pacific Corp. v. United States 

Plywood Corp., 5 the court compiled a list of 15 factors to be used 

as the starting point (and, often, the end point) for most reasonable 

royalty damage calculations. The 15 factors are complex and are 

designed to cover a wide range of situations among diverse technologies and market practices. Courts often simply provide juries 

all of Georgia-Pacific’s 15 possible factors for assessing a reasonable 

royalty and then direct the juries to determine a reasonable royalty 

without much other guidance.6 This often results in the 

misapplication of these factors and damage awards that are neither 

just nor related to the statutory standard—compensation for ‘‘the 

use made of the invention by the infringer.’’ Moreover, damage 

awards are seldom overturned on appeal. Because the record often 

fails to reveal which factors the jury used in calculating the award, 

it is usually hard to identify errors of law. As a result, the Federal 

Circuit uses a highly deferential standard: 

‘‘The jury’s award of damages is entitled to deference. Specifically, the jury’s damages award must be upheld unless the 

amount is grossly excessive or monstrous, clearly not supported by the evidence, or based only on speculation or guesswork.’’ 7

Fundamentally, the economic value of a patent is determined by 

the marketplace. Licensing deals are heavily influenced by the consequences of infringement. Damage awards that greatly exceed 

plaintiff’s loss have a recursive effect on license negotiations, and 

vice versa. A patent holder’s fee demand for a license increases as 

damage awards escalate. Awards, in turn, reflect inflation in license fees. This results in an upward cycle of ever increasing royalVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00025 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
26 

8The Patent Reform Act of 2007, Hearings Before the Subcommittee on Courts, the Internet 

and Intellectual Property, House Judiciary Committee, 110th Cong. (2007) (statement of John 

R. Thomas, Professor of Law Georgetown University Law Center Washington, D.C.). 9Mark A. Lemley and Carl Shapiro, Patent Holdup and Royalty Stacking, 85 Texas L. Rev. 

1991, 1992 (2007). 10The FTC describes this as a ‘‘complements problem,’’ where multiple patent holders each 

seek monopoly rents in exchange for their exclusive rights. Federal Trade Commission, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy (FTC, Oct. 

2003). 11See State Indus. Inc. v. Mor-Flo Indus. Inc., 883 F.2d 1573, 1580 (Fed. Cir. 1989) (‘‘there 

is no rule that a royalty be no higher than the infringer’s net profit’’). 

ties, both those negotiated in the market and those awarded by juries. Indeed, the Committee was presented with numerous studies 

showing that current litigation practices often produce a royalty 

award substantially in excess of a reasonable royalty. This cycle is 

harmful to our overall economy and especially damaging to technology innovation. 

Professor John Thomas of Georgetown University Law Center 

has pointed to three adverse practical consequences resulting from 

this trend: 

• ‘‘excessive awards may promote patent litigation. A rational 

patent proprietor may be unwilling to make fair royalty demands in the boardroom when they are able to obtain significantly higher damages awards in the courtroom;’’

• ‘‘the gap between the damages awarded for patent infringement and the marketplace value of a patented invention may 

also encourage speculation in patents;’’

• ‘‘high damages awards ‘‘may cause the scope of patent protection routinely to extend beyond the scope of its claims.’’

And he noted, the threat of these adverse consequences is much 

greater in today’s ‘‘environment where high technology products increasingly embody not merely a single or handful of patented inventions, but hundreds or even thousands of them.’’ 8 As an example, ‘‘literally thousands of patents have been identified as essential 

to the proposed new standards for 3G cellular telephone systems.’’ 9

Infringement suits typically focus on one or a few patents in isolation, rather than their relative contribution to an overall product. 

In economic theory, each patentee seeks to capture a share of the 

licensee (or infringer’s) surplus.10 When the user has to pay monopoly rents for each of many patents (called ‘‘royalty stacking ’’), the 

sum of the parts can become greater than the whole. In other 

words, the net total damage award can be disproportionate to the 

patent’s market utility. In some cases, it can exceed the infringer’s 

total profit.11

Reasonable royalty analysis typically focuses on: 1) what the patentee could obtain in the market as a license fee for the invention, 

or 2) the amount of defendant’s profits from sale of an infringing 

product. Both mechanisms have their limitations. The first is based 

either on an ‘‘established royalty rate’’ if the patent-in-suit has 

been licensed by the patentee or, where licensing history is lacking, 

on a constructed ‘‘hypothetical negotiation’’ between plaintiff and 

defendant. This can result in excessive royalties where the patent 

is used to block development or marketing of defendant’s products. 

Thus, in the 3G example, a holdout patentee can extract abovemarket fees from potential licensees (hence, from defendant as a 

‘‘hypothetical’’ licensee). The second approach, using the defendVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00026 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
27 

12The case of Fonar Corp. v. General Electric, 107 F.3d 1543 (Fed. Cir. 1997) illustrates the 

problem courts have had in calculating damages when ‘‘reasonable royalty’’ is premised on defendant’s profits. Fonar’s patent was for a method of using a Magnetic Resonance Imaging (MRI) 

machine that reduced the number of scans required to obtain multiple images (called ‘‘MAO’’ imaging). GE’s MRI machines were held to infringe the patent. In upholding a reasonable roy- alty award ($34 million) based on the entire sales price of GE’s machines, the Court of Appeals 

ruled there was no need to apportion GE’s profits between the patented invention and other 

components and features of the machines. Instead, the court applied the ‘‘Entire Market Value’’ rule to award damages based on total sales, rather than the separate value of the MAO feature. 

A similar result occurred in Lucent-Alcatel v. Microsoft, 02CV2060 (SD Cal. 2007), where the jury awarded the patentee of a component piece of MP3 audio compression technology $1.52 billion in damages, based on world-wide sales of computers running Windows XP, which contained 

the Windows Media Player, which in turn contained an MP3 codec, which ultimately contained 

the patented component. 

On August 6, 2007, the jury award in Lucent-Alcatel was set aside by the trial court on a motion 

for new trial, ruling that the Entire Market Value rule was inapplicable to the facts of the case. 13See Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1550 (Fed. Cir. 1995). 

ant’s profits as a base for reasonable royalty, can also lead to excessive damages due to the difficulty in calculating what portion of defendant’s profits resulted from ‘‘the use made of the invention by 

the infringer.’’ 12

Because of the difficulty in evaluating the specific contribution a 

patented invention makes to defendant’s profits on an infringing 

product, courts often use a rule known as the ‘‘Entire Market 

Value’’ to award the entirety of such profits to the plaintiff. The 

Entire Market Value rule was judicially created for situations 

where patented and unpatented components are sold and operate 

together as a functional unit, or where the infringed patent is the 

basis for customer demand’’ for the entire unit.13 Unless that precondition applies, the Entire Market Value rule is inapplicable, and 

a court should ‘‘apportion’’ the infringer’s profits to determine the 

unique contribution of the infringed patent. Like other economic 

calculations, apportionment is not an easy task. Despite the fact 

that apportionment appears as one of the Georgia-Pacific factors 

(number 13), it appears to be under-utilized. This can lead to excessive damage awards. The Committee believes this growing problem 

can be attributed to the lack of guidance provided to and by the 

courts in calculating reasonable royalty damages. 

In order to ensure that damages awards are just and fairly compensate inventors, § 284 is significantly amended by providing important additional guidance for both courts and juries. First, courts 

will have the responsibility to determine what factors are most appropriate to use in determining a reasonable royalty in each case. 

The factors that courts may choose from are defined in further 

amendments of § 284, and include apportionment of damages, the 

entire market value rule, and other factors recognized as appropriate. 

Apportionment of damages, as specified in the bill, should allow 

for reasonable royalty calculations that truly reflect the value of 

the invention being infringed. Apportionment is also particularly 

appropriate to use to confront ‘‘stacking royalties;’’ that is, where 

a product embodies numerous patented components, each requiring 

a license and associated royalty payments. 

WILLFUL INFRINGEMENT

Under current 35 U.S.C. § 284 a ‘‘court may increase the damages up to three times the amount found or assessed.’’ Nothing in 

the existing statute explicitly states on what grounds a court may 

increase damages in an infringement action. But courts have found 


hsrobinson on PROD1PC76 with HEARING
28 

14 Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 508 (1964). 15 Christopher A. Harkins, Choosing Between the Advice of Counsel Defense to Willful Patent 

Infringment or the Effective Assistance of Trial Counsel: A Bridge or the Troubled Waters?, 5 

Nw. J. of Tech and Intell. Prop. 209, 219 (2007). 16 Knorr-Bremse Systeme Fuer Nutzfahrzeuge Gmbh v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 

2004) (en banc)(providing that an adverse inference cannot be imputed if a company seeks a 

patent liability opinion). 17 NRC, supra note 3, at 119. 18 Harkins, supra note 6, at 225. 19 Id. 20 Just before this Committee Report went to print, the Court of Appeals for the Federal Circuit amended its rule for finding willful patent infringement. See In re Seagate Technology, 2007 

U.S. App. LEXIS 19768 (Fed. Cir. 2007) (‘‘proof of willful infringement permitting enhanced 

damages requires at least a showing of objective recklessness’’ together with actual or constructive knowledge of infringement). 

that this provision allows for ‘‘punitive’’ or exemplary damages in 

appropriate cases, as in where infringement is found to be willful 

or in bad faith.14

There is currently no threshold requirement for having a charge 

of willfulness considered by the court. Thus, given the potential 

benefits of proving willfulness, it is asserted in most infringement 

suits. However, there is substantial question as to whether the current standards used by the court to determine willfulness are appropriate. For instance, courts have found that knowledge of a patent can be used as evidence to prove willful infringement of the 

patent. Further, this knowledge can be established by vague assertions in notice of infringement and ‘‘invitation to license’’ letters.15

Businesses have employed various strategies to protect themselves from willful infringement charges. For instance, a company 

may obtain patent liability opinions from outside counsel when 

they learn of a patent that may relate to its products or activities.16 This, however, is a very expense means to protect against 

willful infringement claims. The NRC estimated that an infringement opinion usually costs between $10,000 and $100,000.17 Additionally, patent liability opinion letters are not always sufficient to 

establish there was no willful infringement.18

Another strategy businesses use to protect themselves from a 

willful infringement charge is to deliberately avoid searching for 

patents altogether, on the theory that if they are not aware they 

are infringing a patent, their activity cannot be willful.19 This result, however, is the exact opposite of the intention of the patent 

system. As part of the social contract underlying the patent system, 

each patent is made publicly available in order to disseminate the 

knowledge contained therein. However, because courts have found 

that where previous knowledge of a patent is evidence of willful infringement, some businesses actively avoid consulting patent 

records. 

This bill addresses these problems concerning willfulness by 

amending § 284 to codify that treble damages may be awarded 

when the court has determined that the infringer engaged in willful infringement. This bill also limits the permitted grounds for a 

finding of willfulness, by enhancing standards for notice of infringement, establishing limitations on the time during which an infringer may be held to have willfully infringed, and establishing 

limitations on when a pleading of willfulness may be made by the 

patentee or determined by the courts.20


hsrobinson on PROD1PC76 with HEARING
29 

21State Street Bank & Trust Co. v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998). 

PRIOR USER RIGHTS

Generally, prior user rights allow someone who had been making 

or using an invention to continue to do so after the invention has 

been patented by another. Prior user rights are found under current law in § 273. This was added by the American Inventor’s Protection Act of 1999 (AIPA), responding in part to the Federal Circuit’s decision to allow ‘‘business methods patents.’’ 21 In particular, 

prior to the State Street decision, most patent practitioners believed 

that business methods were unpatentable subject matter, and they 

did not file for patents in this subject area. After State Street, the 

USPTO experienced a flood of business method patent applications. 

As with other expansions of patentable subject matter, the USPTO 

initially had few prior art references to use to judge the novelty 

and obviousness of business method patent applications. This led 

to the issuance of a large number of business method patents that 

were not properly vetted against existing prior art. Lawsuits and 

threats of lawsuits began to surface where poor-quality business 

method patents were being enforced against companies who had 

been practicing the claimed invention for years under the assumption such inventions could not be patented. While in many of these 

cases there was ample room for defendants to argue that the patents being enforced were invalid, the costs of litigating the matter 

were thought to be an unproductive drain on the resources of defendants. The defense of prior user rights, which had been considered in amendments to the patent statute since the 1980’s, was established only for business method patents. However, the defense 

as created by the AIPA, may be too narrow, since very few prior 

users have to date invoked it. 

The defense is limited not only in scope—namely, business method patents—but also to a person’s prior use of an invention at a 

particular location at the time of the filing of a patent that may 

cover some or all of that same use. These limitations were imputed 

to ensure that incentive to use the patent system (vs. trade secret 

law) were not diminished while allowing use of something that was 

used previous to the filing of a patent. 

This legislation widens the scope of prior user rights to all patented inventions. Thus, users of all types of inventions, products or 

processes, will now be able to make use of the defense if the invention is later patented by another. The changes to prior user rights 

made by this bill do not change the original goal of § 273, but enhance the original purpose for the provision. This goal, however, is 

secondary to two other goals achieved by the expansion of prior 

user rights. These goals are to 1) give early users limited protection 

from patent infringement and 2) reduce the burden on the applicant to file applications on every technology they use (versus choosing to use trade secret law) and as a result reduce the number of 

patent applications filed at the USPTO on less critical inventions. 

Given the definition and scope of prior art under both current 

law and the modifications of 35 USC § 102 discussed above, an inventor must decide whether or not to seek patent protection for his 

invention. If an inventor chooses patent protection, the patent system provides the inventor legal recourse to prevent others from 

making or using his invention for a period of 20 years in exchange 


hsrobinson on PROD1PC76 with HEARING
30 

22 NRC, supra note 3, at 66. 

for public disclosure of how the invention works. If an inventor 

chooses not to seek patent protection, he does not have to disclose 

the invention to the public and may make exclusive use of the invention indefinitely under trade secret law. However, the inventor 

who seeks trade secret protection also runs the risk of another inventor independently coming up with and patenting the invention. 

If this were to happen, the first inventor would not only lose his 

monopoly over the invention, but would be subject to an infringement suit by the later inventor who chose to patent the invention. 

A limited prior user rights defense, however, ensures that an inventor who chooses to protect his invention through trade secrets 

will not be barred from using the invention. In this case, a prior 

user will continue making use of the invention, and the subsequent 

patent holder is foreclosed from enforcing his patent right against 

the prior user but may enforce the patent against others. 

The other goal of providing prior user rights is to reduce the 

number of applications filed overall, by removing the burden on applicants to file an application on every invention. Many companies 

today file patent applications on every aspect of their business, including incremental inventions, in order to shield themselves from 

potential liability for infringement if someone were to later patent 

the invention. This practice of defensive patenting has contributed 

to the increase of patent applications in recent years and the resultant backlog in examinations. Inventions that are patented for 

defensive reasons are generally not enforced against others and are 

simply used as a safeguard. 

REEXAMINATION

After a patent issues, a party seeking to challenge the validity 

and enforceability of the patent has two avenues under current 

law: a reexamination proceeding at the USPTO or litigation in district court. The former is used sparingly and is considered not very 

effective; the latter is unwieldy and expensive. The average time 

between patent application and final outcome in patent litigation 

is a staggering 12 years, or 60% of a patent’s life.22 The legislation 

reforms the reexamination procedure to make it more effective and 

encourage its wider use. It also creates a new post-grant review 

proceeding that will allow for limited USPTO review of a patent on 

the basis of patentability. 

The Committee believes that the ability to have a quality check 

on issued patents is important to the integrity of the patent system. Patents of questionable validity may stifle innovation, especially in fast-moving technology industries. Some patent holders 

have developed strategic methods to game the system based on 

poor-quality patents, building business plans around leveraging 

monetary value from patent portfolios. 

Reexamination of an issued patent is currently governed by 

Chapters 30 and 31 Title 35. Reexamination serves as an expedited, low-cost alternative to patent litigation for reviewing limited 

aspects of patent validity, specifically whether an invention was 

anticipated or made obvious by documentary prior art. 


hsrobinson on PROD1PC76 with HEARING
31 

23Pub. L. 96–517, 94 Stat. 3016, § 1. The rules governing reexamination are found at 37 

C.F.R. 1.501–1.570. 24 In re Portola Packaging Inc., 110 F.3d 786 (Fed. Cir. 1997). This was reversed in the 2002 

amendments of the Patent Act. 

Chapter 30 was added in 1980 23 and is codified in 35 U.S.C. 

§§ 301–307. Under this mechanism, an ex parte reexamination can 

be initiated. Patentees may request ex parte reexamination of their 

own patents. Approximately half of all ex parte proceedings have 

been requested by the patentee, often as a strategy to insulate the 

patent from late-surfacing prior art by cutting back the claims. 

Potential challengers have regarded ex parte reexamination as 

insufficient because: 

(1) after a reexamination is ordered, the third party’s participation is limited to one statutory reply prior to the examination process, and only if the patent owner files an optional pre-examination statement; 

(2) reexamination does not permit challenges to enablement, 

written description, best mode, or utility; and 

(3) there is no opportunity for the challenger to appeal the examiner’s decision on reexamination. 

Subsequent congressional review indicated infrequent use of ex 

parte reexamination. Interested parties suggested that the volume 

of lawsuits in the district courts would be reduced if third parties 

had the opportunity to present their case for patent invalidity at 

the USPTO during reexamination. To address those concerns and 

provide such an opportunity, Congress enacted the ‘‘Optional Inter 

Partes Reexamination Procedure Act of 1999’’ as Subtitle F of the 

AIPA. The AIPA retained the existing ex parte reexamination procedure intact and separate from the newly enacted inter partes reexamination procedure. 

Chapter 31 (35 U.S.C. § 311, et seq.) governs the inter partes reexamination procedure, where third parties can more fully participate than under the ex parte procedure. They can: 

(1) submit a written comment each time the patent owner files 

a response to an ‘‘Office action’’ on the merits issued by the 

USPTO; 

(2) appeal an adverse decision of the patent examiner to the 

Board of Patent Appeals and Interferences (BPAI); and 

(3) have full participation rights in a patent owner’s appeal to 

the BPAI. 

Several infirmities in the reexamination process remained following enactment of the AIPA. Of greatest import were that: 

(1) it did not provide third-party requesters the ability to appeal to the Federal Circuit, nor to participate in the patent 

owner’s appeal to the Court; 

(2) any prior art considered during the initial examination of 

an application could not serve as the basis for reexamination, since it did not raise ‘‘a substantially new question of 

patentability.’’ 24

(3) there was no opportunity for discovery; 

(4) the requester was ‘‘estopped’’ from asserting in subsequent 

litigation (including as defendant in an infringement case) 


hsrobinson on PROD1PC76 with HEARING
32 

25Optional Inter Partes Reexamination Procedure Act of 1999, § 4607, uncodified 26Merges & Duffy, Patent Law And Policy: Cases And Materials (2002) at 1210–11. 27Pub. L. 107–273, § 5–6, amending 35 U.S.C. § 303(a), 312 (a) 134, and 141–44. 

patent invalidity based on any ground the requester raised 

or could have raised in the inter partes reexamination; and 

(5) the new procedure was available only regarding patents 

issued on applications filed on or after November 29, 1999, 

the date of enactment of the statute. All previously issued 

patents, and all patents based on applications pending on 

the effective date, were excluded from inter partes reexamination. 

Whether a ground for invalidity ‘‘could have been raised’’ turned 

on a fact-intensive analysis of the availability of prior art at the 

time the reexamination proceeding was conducted. Also, the requester would be estopped from later challenging in a civil action 

any ‘‘fact’’ determined in the inter partes reexamination.25 (). At the 

same time, ‘‘the confirmation of a patent in reexamination is accorded a great deal of respect by courts, and hence a reexamination 

could bolster the ’strength’ of a patent.’’ 26

As a result of the limitations in the inter partes reexamination 

procedure, it was rarely used. Although the USPTO had estimated 

it would receive approximately 400 inter partes reexamination requests in the first year alone, not a single request was filed. In the 

first 3 years, only five inter partes requests were filed, out of approximately 160,000 patents issued. 

In 2002, in order to make the optional inter partes reexamination 

procedures a more attractive alternative to litigation, the AIPA’s 

inter partes reexamination practice was amended by the Patent 

and Trademark Office Authorization Act of 2002.27 This act: 

(1) provide third party inter partes reexamination requesters 

with the right to appeal to the Court of Appeals for the 

Federal Circuit and to participate in the patent owner’s appeal to the Court; and 

(2) clarify that reexamination (both ex parte and inter partes) 

may be based on a patent or printed publication previously 

cited by or to the USPTO, or considered by the USPTO, as 

long as a substantial new question of patentability is 

raised. 

The estoppel provisions were not, however, changed by the 2002 

amendments. Another unaddressed limitation was the effective 

date of the inter partes reexamination statute. A large number of 

patents issued before 2002 remained exempt from the inter partes 

reexamination procedures. 

The AIPA included the requirement that USPTO assist Congress 

in its continuing oversight of patent operations. The agency was required to submit to Congress, within 5 years of enactment, a report 

evaluating whether the inter partes reexamination proceedings established by the Act were ‘‘inequitable to any of the parties in interest.’’ If the agency were to find inequity to exist, the USPTO’s 

report must then contain ‘‘recommendations for changes . . . to remove such inequity.’’ In fulfilling this duty, the Director reported 

to Congress in 2004 that changes needed to be made to reexaminaVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00032 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
33 

28The Advisory Commission On Patent Law Reform, A Report To The Secretary Of Commerce 

(1992). 29 As the Federal Trade Commission noted in its report on the patent system, ‘‘procedures that 

third parties can use to challenge questionable patents may be insufficient.’’ Federal Trade Commission (‘‘FTC’’), To Promote Innovation: The Proper Balance of Competition and Patent Law 

and Policy, Ch. 1, 33 (Oct. 2003). 30 35 U.S.C. § 301. 

tion. The Director provided the following recommendations for postissuance review of patents: 

(1) reducing the estoppel effects on challengers; 

(2) broadening challenger participation (currently limited to 

replying to patentee reexamination filings), such as independent submissions; 

(3) enlarging the time for challenger responses (current 30 day 

time frame may affect thoroughness of response); 

(4) enlarging the scope of reexamination (currently limited to 

novelty and obviousness disclosed by documentary prior 

art) to include non-documentary prior art or other validityrelated questions (e.g., statutory bars, enablement, utility); 

(5) scaled filing fees for small entity challengers; 

(6) availability of discovery and cross-examination; and 

(7) creation of a special review panel. 

The Committee is also mindful of recommendations made 15 

years ago by the Advisory Commission on Patent Law Reform: 

‘‘An essential relationship [exists] between the value of patent 

rights . . . and the cost of patent litigation. [Reform should] 

ensure that transactional costs do not prejudice the rights of 

patentees or the rights of the public through the process of patent enforcement.’’ Increased quality of examination will 

strengthen the presumption of validity, which in turn will decrease the number of unwarranted challenges to patent validity. This will also increase the confidence of the courts in applying the statutory presumption of validity.’’ 28

The amendments to the reexamination procedure address most of 

the concerns raised by the FTC, the USPTO and the Advisory Committee. They are the result of thorough consideration given to those 

views as well as other scholarly commentary.29

CITABLE PRIOR ART

Prior art that may be cited to establish either an ex parte and 

inter partes reexamination includes ‘‘. . . patents or printed publications which that person believes to have a bearing on the patentability of any claim of a particular patent.’’ 30 The Committee heard 

comments that patent owners would, occasionally, offer differing 

interpretations of cited prior art. They might take one position during litigation or initial examination, and a different one during reexamination. To counteract this practice, the legislation amends 35 

U.S.C. § 301 to allow the submission of documents, pleadings, or 

evidence from another proceeding that addresses the patent owner’s statements or the claims addressed by the written statements. 

Consideration of such statements is limited to determining the 

proper meaning of any claims that are the subject of the reexamVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00033 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
34 

31President’s Commission on the Patent System, To Promote the Progress of . . . Useful Arts 

in an Age of Exploding Technology 7 (1966). 32Gulliksen v. Halberg, 75 USPQ 252 (Pat. Off. Bd. Int’f. 1937). 33See, e.g., In re Wyer, 655 F.2d 221, 226–27 (CCPA 1981) (‘‘traditional dichotomy between ’printing’ and ’publication’ is no longer valid. Given the state of technology in document duplication, data storage, and data-retrieval systems, the ’probability of dissemination’ of an item very 

often has little to do with whether or not it is ’printed’ in the sense of that word when it was 

introduced into the patent statutes in 1836 ’’). 34MIT v. AB Fortia, 774 F.2d 1104 (Fed. Cir. 1985) (oral presentation to technical audience 

accompanied by distribution of some copies satisfied ‘‘publication’’ requirement). 35 In re Klopfenstein, 380 F.3d 1345 (Fed. Cir. 2004). 36 E. I. du Pont de Nemours & Co. v. Cetus Corp., 19 USPQ2d 1174 (N.D. Calif. 1990). 

ination proceeding. Otherwise the operative language of § 301 is retained. 

The legislation retains the types of prior art that can be cited 

under 35 U.S.C. § 301, namely patents and printed publications. 

While the term ‘‘patents’’ is self-evident, the term ‘‘printed publications’’ has become a term of art in case law. This applies not just 

to § 301, but also to § 102, which also includes printed publications 

as prior art. As it turns out, a reference does not need literally be 

‘‘printed’’ or a ‘‘publication.’’ Rather, these terms have evolved, commensurate with advances in technology and public accessibility of 

information. 

In 1966, the President’s Commission on the Patent System proposed that § 102 be amended to reflect changes in technology in the 

intervening 130 years since ‘‘printed’’ first appeared in the patent 

code.31 The report recommended eliminating the technical requirement of printing, as to include other media of wide distribution, 

such as microfilm and computer storage. 

At the time, the patent office had already begun construing 

‘‘printed’’ as including any reproduction ‘‘impressed or fixed upon a 

sheet of paper or other material.’’ 32 This included microfilm and 

other fixed media. Courts accepted the expanded definition.33

Under current law, if a reference may be obtained through reasonable diligence by a person of ordinary skill in the art, the reference will qualify as a ‘‘printed publication.’’ 34 This includes modern forms of communication such as presentation slide shows.35

Even a single copy of a document, such as a doctoral thesis, indexed and catalogued in a library, qualifies as a ‘‘printed publication’’ if it is ‘‘sufficiently accessible to a researcher who exercised 

reasonable diligence.’’ 36

The Committee intends that case law will continue to inform the 

definition of ‘‘printed publication’’ for purposes of prior art citation 

under § 301, as amended by the legislation. 

EX PARTE REEXAMINATION

The legislation amends § 303(a) relating to ex parte reexaminations. It allows the Director to institute an ex parte reexamination 

at any time based on certain prior art discovered by the Director, 

cited under § 301, or cited by any person other than the owner of 

the patent under § 302 or § 311. It permits the Director to order an 

ex parte reexamination based on art submitted in a request by a 

third party for an inter partes reexamination. This change clarifies 

the existing authority of the Director, since prior art that accompanies a request under § 311 must be submitted under the provisions of § 301, and is therefore available to the Director to use in 


hsrobinson on PROD1PC76 with HEARING
35 

determining whether a substantial new question of patentability 

exists. 

The prior art upon which a substantial new question of patentability is raised is the same as that specified in § 301, even though 

that section uses the term ‘‘printed publication’’ rather than simply 

‘‘publication’’ as here. As noted above, given the evolving meaning 

of the term ‘‘publication,’’ no operative difference arises between 

the two terms. 

Inter Partes Reexamination 

The legislation also amends §§ 314, 315 and 317 relating to the 

conduct of inter partes reexamination proceedings. The changes are 

aimed at increasing the effectiveness of inter partes reexamination 

and making it a more attractive way to challenge patents without 

having to resort to litigation. The amendments to §§ 314, 315 and 

317 accomplish the following: 

1. Reexamination will no longer be conducted by a patent examiner. Rather, an administrative patent judge (APJ) will 

conduct and decide the reexamination. 

2. The petitoner (or ‘‘requestor ’’) may file replies to any office 

action on the merits or on any submission by the patent 

owner. 

3. The APJ may hold an oral hearing upon request ‘‘unless the 

judge finds cause lacking for such hearing.’’

4. The scope of estoppel is narrowed. A challenger is still estopped, after decision, from reasserting patent invalidity 

based on any ground actually raised in an inter partes reexamination, but estoppel no longer extends to any ground 

that ‘‘could have [been] raised’’ during the proceeding. 

5. The heading and text of § 317(b), relating to preclusion of 

inter partes reexamination following civil action, is changed 

from ‘‘Final Decision’’ to ‘‘District Court Decision’’ (heading) 

and ‘‘judgment of the district court’’ (body). By this change, 

an inter partes reexamination may not be instituted after a 

district court decision. 

6. Inter partes reexamination will be available for all patents, 

not just those issued after November 29, 1999. 

POST-GRANT REVIEW

The legislation also adds a new post-grant review procedure that 

can be utilized during the first 12 months after a patent issues, or 

thereafter with consent of the patent owner. The ex parte or inter 

partes reexamination is extremely limited. The post-grant review 

would allow a time constrained challenge to an issued patent on 

any ground going to patentability, not just those based on certain 

prior art (i.e., patents and printed publications under § 301). More 

specifically, the reexamination process does not allow a patent to 

be challenged on the basis that the claims were anticipated or 

made obvious by prior non-documentary knowledge, public uses, 

sale, or that the disclosure was inadequate to enable others to practice the invention. The new post-grant review procedure is intended 

to fill this gap in patent review. 

Post-grant review offers meaningful opportunities to improve 

patent quality by drawing upon the information and expertise of 


hsrobinson on PROD1PC76 with HEARING
36 

those skilled in the art. Under an ex parte examination system, access to competitors’ knowledge is limited. In contrast, a person 

skilled in the art engaged in an administrative challenge to a patent will be well-positioned to supply the best prior art, as well as 

the expertise necessary to probe beneath the surface of an applicant’s affidavits and declarations. A post-grant review system channels administrative and public resources in a cost-effective and expeditious way to assure patent quality and validity. 

As part of its 21st Century Strategic Plan, the USPTO proposed 

a new Post-Grant Review system to address patent quality, as well 

as provide an expeditious alternative to litigation. Post-Grant Review received great support among all major patent interest 

groups, including the bar, technology companies, academicians, and 

others seeking patent reform. 

18-MONTH PUBLICATION OF ALL PATENT APPLICATIONS

United States patent law was fundamentally changed in 1999 

with the introduction of pre-grant publication. Prior to this change, 

all applications filed with the USPTO were maintained in secrecy 

until a patent issued from the application. The secrecy of a pending 

application, combined with the ability of applicants to file unlimited numbers of continuing applications, and a patent term that 

ran for 17 years from the date a patent issued, led to abuse of the 

system with so-called ‘‘submarine’’ patents. These were patents 

that were deliberately kept under examination for long periods of 

time while a technology was developed in the market-place, and 

then allowed to issue and asserted against businesses that had 

taken the risks and expense of commercializing the technology 

without knowing that applications to patent that technology had 

been filed. 

The 1999 changes required that certain applications be published 

18-months after they were submitted to the USPTO. This requirement eliminated a portion of the submarine patent problem. Pregrant publication also increased the quality of issued patents by 

making applications available as prior art in a manner that was 

more effective than procedures then previously available at the 

USPTO. However, the amended statute gave applicants the opportunity to opt out of pre-grant publication if they agreed not to file 

an application on the same invention with another national or 

international patent office or agency, thus leaving open the possibility of submarine patents. 

The legislation eliminate that opt-out provision, preventing an 

application from remaining a secret after 18 months. It is the opinion of the Committee that this will provide better notice to potential users of inventions that have not yet been patented, but may 

be in the near future, and that the availability of all applications 

as potential prior art will reduce the number of patents that issue 

on closely related inventions that may be obvious variants of the 

same invention. 

THIRD PARTY SUBMISSION OF PRIOR ART

The quality of issued patents has received a great deal of attention in recent years. There has been a growing concern that, regardless of the efforts of competent examiners, patents have issued 

on inventions that were publicly known and in use prior to the filVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00036 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
37 

ing of the applications. Much of the reason for the issuance of patents on already known inventions is that evidence of the knowledge 

or use is not readily available to the patent examiners. This has 

proven to be especially true in newer areas of technology that previously did not exist, or were considered not to be eligible for patent protection. Examples of such areas of technology include computer software and systems, processes implemented by or involving 

computers, and processes that do not necessarily involve what is 

commonly thought of as technology, such as methods of doing business. Unlike the academic-based areas of chemistry and biotechnology, the computer and business method areas do not have 

a well-developed tradition of, or system for, publication in readily 

searchable printed journals. The result has been that examiners in 

the computer and business method fields, and to a lesser extent in 

some other fields, have not been able to find all of the prior art 

that exists in these fields. 

The bill amends 35 U.S.C. § 122(e) to allow third parties to submit prior art that may be known to the public, but not readily 

available to the examiner, before the determination of patentability 

is made. Under existing law, third parties are allowed to submit information related to a published application within 2 months of 

publication of the application or prior to the mailing of a notice of 

allowance, whichever is earlier, but the submission cannot include 

any explanation of the references submitted or any other explanation. These and other limiting conditions are set in 37 CFR 

§ 1.99, and are designed to comply with § 122(c) by ensuring that 

the submissions not amount to a protest or pre-issuance opposition 

by a third party. By leaving § 122(c) intact, but amending § 122(e) 

to include broader circumstances under which third parties may 

submit prior art in a published application, the Committee intends 

to increase the opportunities for the examiner to have the best 

prior art available during examination of an application. The submission must, however, include an explanation of the relevance of 

the prior art to the application being examined. Nor does the Committee intend this change to allow for additional third party input 

that would amount to a protest or pre-issuance opposition. To meet 

these ends, and to limit the possibility that the process be used to 

interfere with the progress of examination, the time period for submissions by third parties is extended to either 6 months after the 

date of publication, or the date of the first rejection of one or more 

claims in the published application, whichever occurs later, unless 

a notice of allowance is mailed earlier than either of those times. 

Once 6 months have elapsed from time of publication, or the examiner has made a substantive determination related to the patentability of the claims, additional third party submissions will not be 

accepted for consideration. In order to assist the examiner in focusing on the relevant information in any submitted patent or publication, the submitter must explain how the reference pertains to the 

invention claimed in the published application. Besides focusing 

the examiner, the requirement for an explanation of each reference 

will reduce the likelihood that a third party will submit large numbers of irrelevant or cumulative references. Through these provisions, examiners should obtain the benefit of patents and publications they may not otherwise see, without significant additional 

burden. 


hsrobinson on PROD1PC76 with HEARING
38 

TAX PATENTS

Under current law, patents on tax strategies may be granted provided they meet the general requirements of patentability. Tax 

strategy patents negatively impact a broad range of issues, and the 

legislation would accordingly deem them unpatentable subject matter. 

Tax strategy patents are considered a subclass of business method patents. The USPTO website shows that 60 patents had been 

issued in that subclass as of July 31, 2007, along with at least 89 

more applications pending. These patents have involved many aspects of the tax law, including financial products, charitable giving, 

estate planning, and tax-deferred exchanges. Patenting tax strategies also raises the question of patent quality, insofar as the relevant prior art may be difficult to find. 

The Committee has a number of concerns regarding tax strategy 

patents. As an initial matter, they conflict with the primary purpose of our tax laws, to raise money for government programs and 

responsibilities and protect the public fisc. Many, perhaps most, tax 

strategy patents have as their fundamental objective the reduction 

of Federal tax liabilities. If the use of tax strategy patents proliferates, encouraged by the marketing advantages conferred by a 

patent’s government-granted monopoly and presumption of validity, many tax lawyers anticipate that there will be a corresponding 

reduction in Federal tax revenues. Granting a government monopoly in the form of a patent that undermines another key Federal 

function—the collection of revenue—seems peculiar, if not contradictory, and raises fundamental questions about the appropriateness of such patents. 

Moreover, tax strategy patents remove from the public domain 

particular ways to satisfy a taxpayer’s legal obligations. Those 

methods cannot be practiced by the taxpayer without permission of 

the patent holder. This will have adverse consequences for both the 

tax payers and tax advisers who may face patent infringement 

suits for using patented tax strategies. This undermines public confidence in law and uniformity in tax policies. It is also likely to increase public dissatisfaction with tax laws if compliance must be 

accompanied by patent searches and licensing. 

Finally, if patents become an important part of the tax landscape, the atmosphere could become more secretive and less cooperative. The tax system as a whole will suffer if, in order to protect 

their patentable intellectual property, tax professionals are no 

longer willing to discuss, evaluate, and criticize each other’s insights regarding how to comply with the tax system. 

The Committee has considered whether removing tax strategies 

as patentable subject matter would violate the United States’ obligations as a member of the World Trade Organization (WTO), specifically whether the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) allowed such exclusion. 

Article 27.1 of TRIPs requires that ‘‘patents shall be available 

and patent rights enjoyable without discrimination as to the place 

of invention, the field of technology and whether products are imported or locally produced.’’ This anti-discrimination provision 

raises the question of whether tax strategies are a protected ‘‘field 

of technology.’’ Analysis of the patent laws of signatories to WTO 


hsrobinson on PROD1PC76 with HEARING
39 

37 ‘‘Examples of items which do not meet [TRIPs patent] criteria are . . . methods of doing 

business, and algorithms and mathematical formulas per se, including those incorporated in 

computer programs.’’ Suggestion by the United States for Achieving the Negotiating Objective, 

Oct. 17, 1988, at 4. 38Synoptic Tables Setting Out Existing International Standards And Proposed Standards And 

Principles, Revision, Sept. 29, 1989. 39 ‘‘Surely, TRIPs does not prescribe patentability of business methods. The generally perceived need for world wide patent law harmonisation should not lead to the conclusion that the 

European patent system must follow U.S. developments automatically.’’ Directorate-General for 

Research of the European Parliament, The Patentability of Computer Programmes (2002) at 14. 40For instance, under the European Patent Convention, business methods ‘‘as such’’ are unpatentable because they make no contribution to the technical arts. 41 28 U.S.C. § 1338(a). 42 Bradford Novelty Co. v Manheim, 156 F Supp 489 (SD NY 1957). 43Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957). 44Schnell v Peter Eckrich & Sons, Inc., 365 U.S. 260 (1961); United States Aluminum Corp. 

v. Kawneer Co., 694 F.2d 193, 195 (9th Cir. 1982). 

at the time of ratification (1994), and the members’ negotiating positions, confirms that business methods were not included as a 

‘‘field of technology,’’ either in 1994 or subsequently.37

The table of existing international standards prepared by the 

Secretariat for Uruguay Round negotiators does not show that any 

country had, prior to that time, provided patent protection for software or business methods.38 Other documents prepared for TRIPs 

negotiators showed that business method patents were often excluded, but never included.39 Indeed, many countries today still do 

not recognize business methods as patentable subject matter.40

Further, TRIPs allows countries to make exceptions to patentable subject matter under certain circumstances. Specifically, article 27.3 allows members to exclude from patentability inventions 

that are necessary to protect ordre public or morality. As noted 

above, tax patents may be contrary to tax policy, and therefore offend public order. They also frustrate regulatory action aimed at diminishing economic incentives to exploit tax loopholes. Tax strategy patents can change and burden the practice of tax law. It will 

make compliance with U.S. law (the ability to engage in tax planning) subject to private regulation and licensing. In short, it would 

privatize public policy and law compliance. For these reasons, even 

if tax strategy patents were otherwise covered by TRIPs, they may 

be excluded under the ordre public exception. 

VENUE

Since 1800, the United States district courts have had original 

and exclusive jurisdiction ‘‘of any civil action arising under any Act 

of Congress relating to patents...’’ 41 A special venue statute for 

patent infringement cases. 28 U.S.C. § 1400(b), was enacted as part 

of the 1948 revision to the Judicial Code. It was designed to limit 

the available forums ‘‘to those reasonably convenient to the defendant.’’ 42 As such, venue is proper in the judicial district where the 

defendant resides, or where the defendant has committed acts of 

infringement and has a regular and established place of business. 

The Supreme Court held that § 1400(b) was the exclusive provision for venue in patent infringement cases.43 The general and 

more expansive venue statute for Federal question cases, 28 U.S.C. 

§ 1391(b), could not be used in infringement cases, although it was 

still applicable to other cases involving patents; e.g., declaratory relief cases.44 However, § 1391(c) was amended in 1988 to provide enlarged venue for corporate defendants. This change was the basis 

of the Federal Circuit’s decision to holding that the amendments to 


hsrobinson on PROD1PC76 with HEARING
40 

45 VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1575 (Fed. Cir. 1990). 46 28 U.S.C. § 1292(b). 47 Id.; Fed. R. App. Pro. 5. 48See 28 U.S.C. § 1292(c). 49See Voda v. Cordis Corp., 476 F.3d 887 (Fed. Cir. 2007). 50 Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978). 51 Intel Corp. v. Commonwealth Sci. & Indus. Research Org., 455 F.3d 1364 (Fed. Cir. 2006). 52Fed. R. Civ. Pro. 54(b) (‘‘the court may direct the entry of a final judgment as to one or 

more but fewer than all of the claims or parties ’’). 

§ 1391(c) also apply to venue under § 1400(b).45 Accordingly, corporate defendants in infringement cases can be sued wherever personal jurisdiction attaches. That is determined by state long-arm 

statutes. Since these, typically, are broad, and include any place 

the defendant does business, § 1391(c) invites plaintiffs to forum 

shop. 

The amendments made by the Act to § 1400 are designed to discourage the widespread use of forum shopping and to provide 

greater certainty in venue selection. The Committee believes that 

simply returning to the 1948 venue framework would be too strict 

for modern patterns of technology development and global commerce. Accordingly, venue requirements are relaxed by providing 

venue based on plaintiff’s residence in many cases. In this way 

venue in patent cases should optimize convenience to all parties. 

INTERLOCUTORY APPEALS

Currently, interlocutory appeals are permitted in limited circumstances, which are specifically described in 28 U.S.C. § 1292(a). 

The most common of these is the grant or refusal of a preliminary 

injunction. In addition to the specified interlocutory orders which 

are appealable as of right, a district court may certify other nonfinal orders for immediate appeal if the court is ‘‘of the opinion that 

such order involves a controlling question of law as to which there 

is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate 

termination of the litigation.’’ 46 In addition to the discretionary 

certification by the district court, the circuit court must also agree 

to hear the interlocutory appeal.47

The Federal Circuit’s jurisdiction in infringement cases extends 

to the same type of interlocutory rulings as permitted by § 1292(a) 

and (b).48 Respecting discretionary appeals, the Federal Circuit 

must also agree that interlocutory appeal is proper under § 1292 

(b).49

There is a small class of interlocutory orders that do not fit within either § 1292(a) or (b), and yet are permitted. The so-called ‘‘collateral order’’ doctrine permits appeal of district court orders that 

(1) ‘‘conclusively determine the disputed question,’’ (2) ‘‘resolve an 

important issue completely separate from the merits of the action,’’

and (3) are ‘‘effectively unreviewable on appeal from a final judgment.’’ 50 This doctrine also applies to appeals in patent cases.51

Finally, a district court can accelerate appeal by issuing a ‘‘partial judgment.’’ 52 Thus, if the causes of action in an infringement 

case are severable, the court can (and often does) issue partial 

summary judgment. The partial judgment is final and appealable 

under § 1291. 


hsrobinson on PROD1PC76 with HEARING
41 

53 Coopers & Lybrand, supra note 40. 54 Cybor Corp. v. Fas Techs., 138 F.3d 1448, 1479 (Fed. Cir. 1998). See also Lava Trading, 

Inc. v. Sonic Trading Mgmt., LLC, 445 F.3d 1348, 1350 (Fed. Cir. 2006) (‘‘[w]ithout the vital 

contextual knowledge of the accused products or processes, [an interlocutory] appeal takes on 

the attributes of something akin to an advisory opinion on the scope of the . . . patent ’’). 55Paul M. Schoenhard, Reversing the Reversal Rate: Using Real Property Principles to Guide 

Federal Circuit Patent Jurisprudence, 17 Fordham Intell. Prop. Media & Ent. L.J. 299, 302–303 

(2007) 

To review, the Court of Appeals for the Federal Circuit has jurisdiction over patent appeals from the district courts in five classes 

of cases: 

(1) Final decisions. 

(2) Interlocutory appeals as of right. 

(3) Discretionary interlocutory appeals of controlling questions 

of law. 

(4) Collateral orders.53

(5) Partial final judgment. 

Another type of interlocutory order, Markman hearings, is essentially claim construction rulings that do not neatly fit into the narrow categories of immediately appealable interlocutory orders. Although often they are dispositive on the meaning or validity of a 

patent, they cannot ordinarily be appealed until after trial and 

judgment. They are not a final judgment, nor a ‘‘collateral order,’’ nor an interlocutory order appealable as of right. The only route for 

immediate appeal is by district court certification under § 1292(b). 

Yet, even where that has occurred, the Federal Circuit has declined 

all such certified questions. Their reason is because of ‘‘the difficulties that could flow from premature claim interpretation.’’ 54

While the Federal Circuit refuses to hear appeals of just 

Markman rulings, statistics show that they reverse around 50% of 

all Markman rulings do eventually hear when the district court 

ruling is appealed.55 The large number of appeals—and reversals— significantly increases the time and money it takes to resolve infringement suits. As such, the administration of justice could be 

promoted and final resolution of many patent disputes could be accelerated if appeals to Markman rulings were held prior to the district courts decision on the merits of the infringement action. Accordingly, 28 U.S.C. § 1292(c) is amended to permit such appeals, 

at the discretion of the district court, since they are in the best position to determine whether the scope of patent claims is integral 

or dispositive to the ultimate decision in each case. While such interlocutory appeals can occur under the existing statute, it is vehicle that will never be used if left up to the Federal Circuit. By inserting a special provision in the jurisdictional statutes relating to 

interlocutory patent appeals, it is the Committee’s intent that this 

mechanism be more widely considered by district courts. 

APPLICANT DISCLOSURES

The determination to grant or not grant a patent is an ex parte, non-adversarial procedure where the person who wishes to obtain 

a patent provides information in support of patentability and a patent examiner evaluates that information in the context of what is 

known in the relevant art. The examiner is expected to be knowledgeable in the technology and proficient at searching and evaluating the prior art, and is to use his knowledge and resources to 


hsrobinson on PROD1PC76 with HEARING
42 

56 United States v. American Bell Tel. Co., 128 U.S. 315 (1888). 57Digital Control v. Merlin Technology, 437 F.3d 1309, 1314–1315 (Fed. Cir. 2006). 58 Id. at 1313; Union Pac. Res. Co. v. Chesapeake Energy Corp., 236 F.3d 684, 693 (Fed. Cir. 

2001); FMC Corp. v. Manitowoc Co. Inc., 835 F.2d 1411, 1413 (Fed. Cir. 1987). 

determine whether a patent should be granted for each application 

he reviews. However, an examiner does not know everything about 

a particular field, nor could he have access to or know where to 

find all information about a particular field. 

On the other hand, patent applicants have a better perspective 

and often the best perspective on what prior art is relevant to their 

invention and more importantly, why it is relevant. However, 

under current law, applicants are only required to disclose prior art 

relevant to their invention of which they are aware. This has had 

two affects, both of which have impacted the ability of examiners 

to thoroughly examine applications. 

First, since the current disclosure requirement only requires disclosure of prior art that the applicant is aware of, many applicants 

choose not to perform prior art searches. This increases the burden 

upon examiners because they have very little information in an application, besides the patent, to use in their review. This means examiners must take more time than they would have otherwise to 

search and review the relevant prior art. Second, for applicants 

that do review the prior art, in order to fulfill their disclosure requirement and avoid a later charge of inequitable conduct, they 

send the office all the prior art references they know of, including 

those that are only vaguely relevant. This creates another substantial burden on examiners, as they have to sift through voluminous 

application files. 

To address these two problems with the current system, the legislation grants the Director authority to require by rule that applicants perform prior art searches and submit to the USPTO search 

reports with their applications. Additionally, the Director may also 

promulgate rules requiring applicants to analyze the prior art provided in the search report. 

INEQUITABLE CONDUCT

Inequitable conduct has been established by the courts as a defense to patent infringement. The primary purpose of this defense 

is to foreclose enforcement of a patent that was secured through 

acts of fraud or other dishonest practice. A fraudulently procured 

patent has long been treated as invalid.56

Generally, to prove inequitable conduct, it must be shown that 

the patent holder withheld or misstated material information with 

the intent to deceive the USPTO. But because this remedy was established by the courts, a number of interpretations of the requisite 

level of materiality and intent have been generated, leading to uncertainty in how the defense will be applied. For instance, in a recently decided Federal Circuit opinion on inequitable conduct, it 

was found that no less than four separate standards for materiality 

may be used in deciding inequitable conduct.57 Furthermore, courts 

have bound materiality and intent together, holding that a strong 

showing of one element will be sufficient to overcome a weak showing of the other.58 This has given courts the opportunity to infer 


hsrobinson on PROD1PC76 with HEARING
43 

59 John F. Lynch, An Argument for Eliminating the Defense of Patent Unenforceability Based 

on Inequitable Conduct, 16 Am. Intell. Prop. Law Asso. Q. J. (1988); Burlington Indus., Inc. v. 

Dayco Corp., 849 F.2d 1418 (Fed. Cir. 1988) (‘‘the habit of charging inequitable conduct in almost every major patent case has become an absolute plague.’’). 

intent solely from the materiality of information misstated or withheld. 

As applied by the courts, the penalty for engaging in inequitable 

conduct is to render the patent unenforceable, and sometimes related patents as well, even if all of the patent’s claims are otherwise valid. The severity of the penalty provides strong motivation 

for the accused infringer to plead inequitable conduct as a defense. 

However, it has also led to over use of the defense, prompting 

many users of the patent system to argue that it is often pled but 

rarely found.59 Once plead, it adds significantly to the complexity 

and expense of the trial because it opens avenues to extensive discovery. Because it depends on a subjective finding of intent on the 

part of the applicant, it injects a great deal of uncertainty into the 

trial. The possibility of the patent being held unenforceable also 

impacts potential settlement discussions. The mere pleading of inequitable conduct places a significant burden on the patent owner 

and has little or no adverse impact on the accused infringer. However, it is extremely important to maintain an adequate deterrence 

to applicant lying to the USPTO. 

In order to provide an increased level of certainty to the defense, 

inequitable conduct is codified. This codification includes procedural requirements, substantive standards and remedies for inequitable conduct. 

BEST MODE

Under current law, the first paragraph of 35 U.S.C. § 112 requires applicants for a patent to disclose three things: (1) a written 

description of the invention, (2) a written description of the manner 

of making and using the invention, sufficient to enable one skilled 

in the art to make and use it, and (3) the best mode contemplated 

by the inventor of carrying out his invention. 

The best mode requirement is unique to American patent law. 

While other patent laws and international agreements (i.e., TRIPs) 

typically impose an enablement requirement, the additional requirement of best mode is not required. The public policy behind 

§ 112 goes to the heart of the reason that patents exist in the 

United States to advance technology (the useful arts) by rewarding 

inventors for teaching the public how to make and use their inventions in the best, most effective way of which they are aware. Its 

inclusion in American law is intended to preclude a patentee from 

maintaining a competitive advantage after patent expiration. While 

the patent must teach others how to practice the invention, if the 

patentee can withhold superior modes of practice, he effectively retains a trade secret at the same time as receiving patent protection. This breaks faith with the fundamental bargain of patent law. 

Determining whether an application complies with the best mode 

requirement involves two factual inquiries. First, it must be determined whether or not the inventor knew of or had in mind a best 

mode of practicing the invention. This determination is subjective 

and temporal, in that it requires assessing what was in the mind 

of the inventor at the time the application was filed. Second, if it 


hsrobinson on PROD1PC76 with HEARING
44 

60Manual of Patent Examining Procedure, Chapter 2100, §§ 2161.01 and 2162. 61See Amgen, Inc. v. Chugai Pharmaceutical Co., Ltd., 927 F.2d 1200, 1205 n.5 (Fed. Cir. 

1991). 62 NRC, supra note 3, at 54. 

can be determined that the inventor did contemplate a best mode 

for the invention, the application disclosure must be analyzed to 

determine whether that best mode was disclosed in sufficient detail 

to enable one skilled in the art to practice the best mode. Failure 

to disclose a known best mode of carrying out the invention, whether intentional or accidental, could result in denial of a patent on 

the claimed invention or a holding of invalidity of an issued 

claim.60

In recent years, the wisdom of requiring disclosure of best mode 

has been questioned on three grounds. The first is that the subjective nature of whether the inventor contemplated a best mode, and 

what that was, requires what may be extensive pre-trial discovery 

to obtain the evidence necessary for a clear and convincing showing, if such evidence exists. As with other defenses based on subjective findings (e.g., inequitable conduct), the defense based on best 

mode significantly increases the expense and complexity of litigation. Moreover, since the defense applies only to particular claims 

in which the best mode was known at the time but was not disclosed, it must be litigated on a claim-by-claim basis.61

The second ground is that best mode applies only to what the inventor knew at the time of filing, not modes of practice that may 

be created or refined thereafter. Accordingly, by the time of patent 

litigation, the best mode may already be obsolete. 

The third objection to best mode is the expense it adds to international filings. Foreign patent applicants wishing to protect their 

inventions in the United States must amend or prepare their applications to meet a requirement that is unnecessary anywhere else. 

The Committee has acknowledged the desire to address the difficulty of litigating extremely subjective elements such as best 

mode.62 Therefore, the Committee opted to make failure to meet 

the best mode requirement unavailable as a defense to infringement by amending 35 U.S.C. § 282. Failure to include best mode in 

the written description is still grounds for rejecting an application, 

or for opposition under any of the post-grant procedures specified 

in the Act (particularly inter partes reexamination or post-grant review). However, the requirement to disclose the best mode is retained. By retaining the requirement so that applicants provide a 

full disclosure of the invention, which can later be used by the public. By removing best mode as a defense to infringement, the bill 

eliminates the incentive to engage in speculative analysis. 

REGULATORY AUTHORITY

The primary grant of USPTO rulemaking authority is found in 

35 U.S.C. 2(b)(2)(A), which gives the USPTO authority to ‘‘establish 

regulations, not inconsistent with law, which shall govern the conduct of proceedings in the Office.’’ Under this authority, the 

USPTO has promulgated numerous regulations related to the processing and granting of patents. A recent example of this rulemaking authority are the rules on continuation applications reVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00044 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
45 

63The USPTO’s new rules related to continuations allows patent applicants to file two continuation applications and one Request for Continued Examination (RCE) without restriction, 

but any further continuations or RCEs would be allowed only if they are filed to obtain consideration of an amendment, argument or evidence that could not have been submitted during the 

prosecution of the prior-filed application. Changes to Practice for Continuing Applications, Patent 

Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications; Final Rule, 72 Fed. Reg. 46716 (Aug. 21, 2007). 64 Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications Containing Patentability Indistinct Claims, 71 Fed. Reg. 48, 49–50 (Jan. 

3, 2006). 65 In re Henriksen, 399 F.2d 253 (CCPA, 1968). 66 In re Bogese II, 303 F.3d 1362 (Fed. Cir., 2002). 

cently promulgated.63 The reason behind this change, as cited by 

the USPTO, is that continuation applications make up a large portion of total applications and as such which contributes partially to 

the USPTO’s application backlog.64 The extent of this authority, 

however, has been questioned, bringing into doubt whether the 

USPTO may place limitations on continuations or require applicants to provide documentation to support their applications. 

Typically, courts will give deference to the rules promulgated by 

an agency if an Act which charges the agency with responsibility 

doesn’t speak to the issue that the rule pertains to. However, if direction on the issue can be found in the statute, any agency rules 

that conflict with the statute must be struck down. This is what 

was done in 1968 to rules established by the USPTO’s Board of 

Patent Appeals and Interferences (BPAI) that limited continuations. 

The BPAI had construed a limit on the number of continuations 

an applicant can file based on a literal reading of 35 USC § 120 

that would suggest only one or two continuations could ever be 

filed. However, in In re Hernicksen the Court of Claims and Patent 

Appeals (CCPA) held that the BPAI’s decision was flawed.65 The 

CCPA found that the statute placed no restrictions on the number 

of continuations an applicant may obtain, and that the BPAI’s interpretation of the continuations provisions was inconsistent with 

§ 120. Many have since suggested that In re Herniksen established 

that any ‘‘mechanical rules’’ that limit the number of continuations, 

even if passed through normal rulemaking procedures, would be in 

violation of § 120 of the patent statute, despite later precedent in 

In re Bogese II suggesting that the USPTO may limit continuations 

when ‘‘dilatory tactics’’ are used in the prosecution of applications.66

To resolve the ambiguity in the USPTO’s rulemaking authority, 

the Committee does not intend to alter it, but only clarify and reiterate that the USPTO has always had authority to promulgate 

rules that place limitations or conditions on patent applications, including continuation applications, that do not directly contradict 

any such limitations or conditions expressly stated in statute. 

Where Congress has seen fit to provide specific limitations or conditions in statute, the USPTO may not surpass or take away these 

limitations or conditions by promulgated rule. But where Congress 

has remained silent and no express limitations or conditions are 

stated in statute, the USPTO may make rules that promote the 

quality and timeliness of patent applications which impose limitations or conditions, provided such rules are reasonable and do not 

eviscerate the rights and privileges that Congress intended to give 

patent applicants. 


hsrobinson on PROD1PC76 with HEARING
46 

HEARINGS

The Judiciary Committee’s Subcommittee on Courts, the Internet 

and Intellectual Property held a day of hearings on H.R. 1908 on 

Thursday, April 26, 2007. Testimony was received from Gary L. 

Griswold, President and Chief Counsel of Intellectual Property, 3M 

Innovative Properties, St. Paul, Minnesota; Anthony Peterman, Director, Patent Counsel, Dell Incorporated, Round Rock, Texas; 

Kevin Sharer, Chairman of the Board and Chief Executive Officer, 

Amgen Incorporated, Thousand Oaks, California; John R. Thomas, 

Professor of Law, Georgetown University Law Center, Washington, 

D.C.; William T. Tucker, Executive Director, Research and Administration and Technology Transfer, University of California, Oakland, California. 

In addition to this hearing, the testimony collected at numerous 

hearings over the past several years has also greatly informed the 

reforms to the patent system called for in H.R. 1908. These hearings include: 

• Closed door meeting for Member and staff of the Subcommittee briefing on ‘‘Patent Reform,’’ held on May 9, 2007. 

Participants included Pat Choate, Political Economist and 

Author of Hot Property: The Stealing of Ideas in an Age of 

Globalization; Gary L. Griswold, President and Chief Counsel of Intellectual Property, 3M Innovative Properties, St. 

Paul, Minnesota; Bryan Lord, CEO, Amber Waves; Moshe 

Malina, Director, Associate General Counsel and Chief Patent Counsel for Citigroup, representing the Financial Services Roundtable; Emery Simon, Counsel, The Business Software Alliance (BSA); John R. Thomas, Professor of Law, 

Georgetown University Law Center, Washington, D.C. 

• Oversight Hearing by the Subcommittee on ‘‘American Innovation at Risk: The Case for Patent Reform,’’ held on Thursday, February 15, 2007. Testimony was received from Adam 

B. Jaffe, Professor of Economics and Dean of Arts and 

Sciences, Brandeis University Whaltham, Massachusetts; 

Suzanne Michel, Chief Intellectual Property Counsel and the 

Deputy Assistant Director for Policy Coordination, Federal 

Trade Commission, Washington, D.C.; Mark Myers, Co-Chair 

of the National Academy of Sciences Report Patent System 

for 21st Century, Unionville, Pennsylvania; Daniel B. 

Ravicher, Executive Director, Public Patent Foundation, New 

York, New York. 

• Oversight Hearing by the Subcommittee on ‘‘Patent Trolls: 

Fact or Fiction?’’ held on Thurday, June 15, 2006. Testimony 

was received from Ed Reines Esq., Weil, Gotshal & Manges, 

LLP; Dean Kamen President, DEKA Research & Development Corporation, Paul Misener, Vice President for Global 

Policy, Amazon.com; Chuck Fish, Vice President & Chief 

Patent Counsel, Time Warner, Inc. 

• Oversight Hearing by the Subcommittee on ‘‘Patent Harmonization,’’ held on Thursday, April 27, 2006. Testimony was 

received from Q. Todd Dickinson, Vice President and Chief 

Intellectual Property Counsel, General Electric Company; 

Robert A. Armitage, Senior Vice President and General 

Counsel, Eli Lilly and Company; Gary Mueller, President 


hsrobinson on PROD1PC76 with HEARING
47 

and Chief Executive Officer, Digital Now, Inc.; Pat Choate, 

Political Economist and Author of Hot Property: The Stealing of Ideas in an Age of Globalization. 

• Oversight Hearing by the Subcommittee on ‘‘Patent Quality 

Enhancement in the Information-Based Economy,’’ held on 

Wednesday, April 5, 2006. Testimony was received from the 

Honorable Jon W. Dudas, Under Secretary of Commerce for 

Intellectual Property & Director of the U.S. Patent and 

Trademark Office; James Balsillie, Chairman and Co-Chief 

Executive Officer, Research in Motion; Robert A. Stewart, 

Director and Chief Patent Counsel of Americas, UBS AG; 

Mark A. Lemley, William H. Neukom Professor of Law, 

Stanford Law School. 

• Oversight Hearing by the Subcommittee on ‘‘Improving Federal Court Adjudication of Patent Cases,’’ held on October 6, 

2005. Testimony was received from Kimberly A. Moore, Professor of Law, George Mason University School of Law; John 

B. Pegram, Senior Counsel, New York Office of Fish & Richardson, P.C.; Chris J. Katopis, Counsel, Drinker Biddle & 

Reath, LLP; the Honorable T. S. Ellis, III, United States District Judge, Eastern District of Virginia. 

• Legislative Hearing by the Subcommittee on ‘‘The Amendment in the Nature of a Substitute to H.R. 2795, the Patent 

Act of 2005,’’ held on Thursday, September 15, 2005. Testimony was received from Emery Simon, Counsel, The Business Software Alliance (BSA); Philip S. Johnson Chief Patent 

Counsel, Johnson & Johnson on behalf of the Pharmaceutical 

Research and Manufacturers of America (PhRMA); Robert B. 

Chess, Chairman, Nektar Therapeutics on behalf of the Biotechnology Industry Organization (BIO); John R. Thomas, 

Professor, Georgetown University Law Center. 

• Oversight Hearing by the Subcommittee on ‘‘Review of U.S. 

Patent and Trademark Office Operations, Including Analysis 

of General Accounting Office, Inspector General, and National Academy of Public Administration Reports,’’ held on 

September 8, 2005. Testimony was received from the Honorable Jon W. Dudas, Under Secretary of Commerce for Intellectual Property & Director of the U.S. Patent and Trademark Office (USPTO); Anu K. Mittal, Director, Science and 

Technology Issues, U.S. General Accounting Office (GAO); 

Ronald J. Stern President, Patent Office Professional Association (POPA); Charles Van Horn, Finnegan, Henderson, 

Farabow, Garrett, and Dunner, LLP. 

• Legislative Hearing by the Subcommittee on H.R. 2795, the 

‘‘Patent Act of 2005,’’ held on Thursday, June 9, 2005. Testimony was received from Gary L. Griswold, President and 

Chief Intellectual Property Counsel, 3M Innovative Properties Company on behalf of the American Intellectual Property Law Association (AIPLA); Carl Gulbrandsen, Managing 

Director, Wisconsin Alumni Research Foundation (WARF); 

Josh Lerner, Professor, Harvard Business School; Daniel B. 

Ravicher, Executive Director, Public Patent Foundation 

(PUBPAT). 


hsrobinson on PROD1PC76 with HEARING
48 

• Oversight Hearing by the Subcommittee on the ‘‘Committee 

Print Regarding Patent Quality Improvement—Part II,’’ held 

on Thursday, April 28, 2005. Testimony was received from 

the Honorable Jon W. Dudas, Under Secretary of Commerce 

for Intellectual Property & Director of the USPTO; Richard 

Levin, President, Yale University; Dr. Nathan P. Myhrvold, 

Chief Executive Officer, Intellectual Ventures; Darin E. Bartholomew, Senior Attorney, Patent Department, John Deere 

and Company on behalf of the Financial Services Roundtable. 

• Oversight Hearing by the Subcommittee on the ‘‘Committee 

Print Regarding Patent Quality Improvement—Part I,’’

Wednesday, April 20, 2005. Testimony was received from J. 

Jeffrey Hawley, Legal Division Vice President and Director, 

Patent Legal Staff, Eastman Kodak Company on behalf of 

Intellectual Property Owners Association (IPO); Richard J. 

Lutton Jr., Chief Patent Counsel, Apple on behalf of the 

Business Software Alliance; Jeffrey P. Kusham Esq.; Sidley 

Austin Brown and Wood, LLP, on behalf of Genetech; William L. LaFuze, Chair, Section of Intellectual Property Law, 

American Bar Association on behalf of the American Bar Association and the ABA Section of Intellectual Property Law. 

• Oversight Hearing by the Subcommittee on ‘‘Patent Quality 

Improvement: Post-Grant Opposition,’’ held on Thursday, 

June 24, 2004. Testimony was received from Michael K. 

Kirk, Executive Director, American Intellectual Property 

Law Association (AIPLA); Jeffrey P. Kushan Esq., Sidley 

Austin Brown & Wood on behalf of Genentech; Karl Sun, 

Senior Patent Counsel, Google Inc.; James A. Toupin, General Counsel, USPTO. 

• Oversight Hearing by the Subcommittee on ‘‘Patent Quality 

Improvement,’’ held on Thursday, July 24, 2003. Testimony 

was received from, Mark Kesslen, Managing Director and 

Associate General Counsel, J.P. Morgan Chase & Company 

on behalf of the Financial Services Roundtable and BITS; 

David M. Simon, Chief Patent Counsel, Intel Corporation; 

John R. Thomas, Professor of Law, Georgetown University; 

Mr. Charles E. Van Horn, Partner, Finnegan, Henderson, 

Farabow, Garrett & Dunner, on behalf of the American Intellectual Property Law Association (AIPLA). 

• Oversight Hearing by the Subcommittee on ‘‘The U.S. Patent 

and Trademark Office: Fee Schedule Adjustment and Agency 

Reform,’’ held on July 18, 2002. Testimony was received from 

Charles P. Baker, Chair, Intellectual Property Law Section, 

American Bar Association; Michael K. Kirk, Executive Director, American Intellectual Property Law Association 

(AIPLA), Kathryn Barrett Park, Executive Vice President, 

International Trademark Association (INTA); the Honorable 

James Rogan, Undersecretary of Commerce for Intellectual 

Property and Director of the U.S. Patent and Trademark Office. 

• Oversight Hearing by the Subcommittee on ‘‘Patent Reexamination and Small Business Innovations,’’ held on Thursday, 

June 20, 2002. Testimony was received by Paul Heckel, IndeVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00048 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
49 

pendent Inventor; Dr. Nancy Linck, Senior Vice President, 

General Counsel & Secretary, Guilford Pharmaceuticals, 

Inc.; Peter Theis, President, Theis Research, Inc.; Mr. Mark 

H. Webbink, Senior Vice President & General Counsel, Red 

Hat, Inc. 

• Oversight Hearing by the Subcommittee on ‘‘The U.S. Patent 

and Trademark Office: Operations and Fiscal Year 2003 

Budget,’’ held on April 11, 2002. Testimony was received by 

the Honorable James Rogan, Undersecretary of Commerce 

for Intellectual Property and Director of the U.S. Patent and 

Trademark Office, Michael K. Kirk, Executive Director, 

American Intellectual Property Law Association; John K. 

Williamson, President, Intellectual Property Owners; Colleen 

Kelley, National President, National Treasury Employees 

Union. 

• Oversight Hearing by the Subcommittee on ‘‘Patents Improving Quality and Curing Defect,’’ held on Thursday, May 10, 

2001. Testimony was received by James F. Cottone, President, National Intellectual Property Researchers Association; 

Michael K. Kirk, Executive Director, American Intellectual 

Property Law Association (AIPLA); Jeffrey P. Kushan, Esq., 

Powell, Goldstein, Frazer and Murphy, LLP; David E. Martin, Chief Executive Officer, M.CAM. 

• Oversight Hearing by the Subcommittee on ‘‘Business Method Patents,’’ held on April 4, 2001. Testimony was received 

by the Honorable Nicholas Godici; Acting Undersecretary of 

Commerce for Intellectual Property and Acting Director of 

the U.S. Patent and Trademark Office; Michael K. Kirk, Executive Director, American Intellectual Property Law Association (AIPLA); Ronald E. Myrick, Chief Intellectual Property Counsel, General Electric on behalf of Intellectual Property Owners Association; Andrew B. Steinberg, Executive 

Vice President, Administration General Counsel and Corporate Secretary, Travelocity. 

As evidenced by the number of hearings, the Committee has been 

mindful that patent reform is a complex and very important policy 

objective, and has proceeded in a deliberative fashion, soliciting at 

every stage the input and advice of all users of the patent system. 

As the legislation proceeds through the legislative process the Committee intends to remain receptive to input from all concerned, so 

as to arrive at a balanced final bill that benefits from the fullest 

consideration of all points of view.. 

COMMITTEE CONSIDERATION

On May 16, 2007, the Subcommittee on Courts, the Internet and 

Intellectual Property met in open session and ordered the bill H.R. 

1908 favorably reported, by voice vote, a quorum being present. On 

July 18, 2007, the Committee met in open session and ordered the 

bill H.R. 1908 favorably reported, as amended, by voice vote, a 

quorum being present. 


hsrobinson on PROD1PC76 with HEARING
50 

COMMITTEE VOTES

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that there were 

no recorded votes during the Committee’s consideration of H.R. 

1908. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. xxxx, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, September 4, 2007. 

Hon. JOHN CONYERS, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1908, the Patent Reform 

Act of 2007. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact for health-related questions 

is Julia Christensen, who can be reached at 226–9010. For other 

questions, the staff contact is Susan Willie, who can be reached at 

226–2860. 

Sincerely, 

PETER R. ORSZAG, 

DIRECTOR. 

Enclosure 

cc: Honorable Lamar S. Smith. 

Ranking Member 

H.R. 1908—Patent Reform Act of 2007. 

SUMMARY

H.R. 1908 would amend various provisions of current law that 

regulate how the Patent and Trademark Office (PTO) awards patents. The bill would alter the rule that prioritizes the award of a 


hsrobinson on PROD1PC76 with HEARING
51 

patent from the ‘‘first to invent’’ to the ‘‘first inventor to file.’’ As 

a result, PTO would change certain procedures followed in awarding patents and procedures that allow individuals to challenge the 

validity of patents that have been awarded. The bill would authorize PTO to collect certain fees to offset most of the costs associated 

with these new procedures. Several provisions of H.R. 1908 would 

alter intellectual property protections associated with brand name 

drugs and could affect when competing versions of generic drugs 

ultimately enter the market. Other provisions would require PTO 

to prepare several reports for the Congress on the effectiveness of 

the changes to the patent process that would be made by H.R. 

1908. 

Subject to appropriation of the necessary amounts, CBO estimates that implementing the bill would have a net discretionary 

cost of $3 million in 2008 and $11 million over the 2008–2012 period. Enacting H.R. 1908 could affect direct spending and revenues, 

but CBO estimates that any such changes would be negligible over 

the 2008–2017 period. 

H.R. 1908 would impose intergovernmental and private-sector 

mandates, as defined in the Unfunded Mandates Reform Act 

(UMRA), on certain patent applicants. Based on information from 

PTO, CBO estimates that the cost of complying with the mandates 

would exceed the annual threshold for private-sector mandates established in UMRA ($131 million in 2007, adjusted annually for inflation) in each of the first 5 years the mandate is in effect. CBO 

estimates that the costs to state and local governments of complying with the mandates would not exceed the annual threshold 

for intergovernmental mandates established in UMRA ($66 million 

in 2007, adjusted annually for inflation). 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 1908 is shown in the following table. The costs of this legislation fall within budget function 370 (commerce and housing credit). 

By Fiscal Year, in Millions of Dollars 

2008 2009 2010 2011 2012 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Inter Partes Reexaminations 

Estimated Authorization Level 4 17 28 44 57 

Estimated Outlays 4 15 26 41 54 

Post-grant Reviews 

Estimated Authorization Level 1 4 10 5 2 

Estimated Outlays 1 4 9 5 2 

Offsetting Collections 

Estimated Authorization Level –2 –29 –35 –40 –44 

Estimated Outlays –2 –29 –35 –40 –44 

Net Changes 

Estimated Authorization Level 3 –8 3 9 15 

Estimated Outlays 3 –10 0 6 12 

BASIS OF ESTIMATE

For this estimate, CBO assumes the bill will be enacted near the 

start of fiscal year 2008. 


hsrobinson on PROD1PC76 with HEARING
52 

Spending Subject to Appropriation 

H.R. 1908 would create a new procedure to challenge the validity 

of a patent and would authorize PTO to collect fees to offset its 

costs for this activity. Further, PTO expects that the volume of requests for certain other patent review processes would increase as 

a result of implementing the bill. Under current law, PTO is authorized to collect fees for these activities. The collection and 

spending of those fees are subject to provisions in annual appropriations acts, and the fees are recorded in the budget as offsets 

to the discretionary spending of PTO. For 2007, the PTO received 

a gross appropriation of $1,771 million, and CBO estimates that 

amount will be offset by $1,799 million in fee collections. Assuming 

appropriation of the necessary amounts, CBO estimates that implementing H.R. 1908 would increase the PTO’s net outlays by $3 mil- lion in 2008 and $11 million over the 2008–2012 period. 

Inter Partes Reexaminations. Under current law, an individual may question the validity of an awarded patent through an 

inter partes reexamination, which allows both the challenger and 

the patent-holder to participate in the proceedings by submitting 

arguments and filing appeals. 

Inter partes challenges may be raised at any time after a patent 

has been awarded. Because of certain limitations in the process, 

however, very few challenges have been raised. The bill would 

relax these limitations and increase the number of patents that 

could be challenged. Further, the bill would require the inter 

partes proceedings to be conducted by an administrative patent 

judge; under current law, these proceedings are conducted by a patent examiner. 

With fewer limitations on future challenges and a larger universe 

of patents open to challenge, CBO expects that the number of inter 

partes proceedings would increase under the bill. Based on information from PTO, CBO expects at least 100 additional employees 

would be necessary to handle that increase in patent challenges. 

We estimate that implementing the changes to the inter partes reexamination procedures would cost about $4 million in 2008 to 

begin hiring and training additional staff, and $140 million over 

the 2008–2012 period. PTO is authorized to collect fees that would 

offset most of the costs of conducting those examinations. 

Post-grant Opposition Procedures. H.R. 1908 would authorize PTO to initiate a new procedure, at the request of third parties, 

to review the validity of patents already awarded. This opportunity 

for a post-grant review generally would be available within 12 

months of the date the patent was issued, and would take place in 

a court-like proceeding where both parties would be involved in developing and presenting information regarding the validity of an 

awarded patent. The bill also would authorize PTO to collect a fee 

to offset the cost of this new process. 

Based on information from PTO, CBO expects that around 300 

requests for post-grant reviews would be made each year once regulations defining the process are complete. CBO estimates that implementing this new process would cost $1 million in 2008 and $21 

million over the 2008–2012 period, which would be offset by fee collections starting in 2009. The cost would be higher in the early 

years because we expect that the agency would incur expenses to 

set up the system before cases would be presented for review. 


hsrobinson on PROD1PC76 with HEARING
53 

Offsetting Collections. H.R. 1908 would authorize PTO to collect fees to offset the cost of post-grant reviews. In addition, PTO 

is authorized to collect fees under current law for inter partes reexaminations. Fees for inter partes reviews are set in current law, 

and PTO cannot increase the fees beyond an annual adjustment for 

inflation. CBO expects that fees for inter partes reexaminations 

would largely but not completely offset the cost of those reviews. 

Based on information from PTO, CBO expects that most fee collections would begin in 2009 after regulations to implement the legislation are completed. CBO estimates that fee collections would 

total $2 million in 2008 and $150 million over the 2008–2012 period. 

Direct Spending 

Several provisions of H.R. 1908 would alter intellectual property 

protections associated with brand name drugs and could affect 

when competing versions of generic drugs ultimately enter the 

market. Changing when lower-priced generic drugs would be available to purchasers would affect spending by Federal health programs that purchase drugs or provide health insurance that covers 

drugs. Consequently, CBO expects that direct spending for Medicare, Medicaid, the Federal Employees Health Benefits program, 

and the Defense Department’s TRICARE for Life program could be 

affected under the bill. However, based on information provided by 

experts in patent law and the brand and generic drug industry, 

CBO estimates that net changes in direct spending for those programs would be negligible over the 2008–2017 period. 

The potential effects of the bill on the pharmaceutical industry 

are highly uncertain. Some provisions of the bill could affect patent 

protections for pharmaceuticals (and the timing of generic entry) in 

countervailing ways. For example, allowing a party to administratively challenge the validity of a patent through the new post-grant 

review proceedings at PTO, under certain circumstances, would 

provide generic firms and other interested parties with a new tool 

to eliminate patents that block entry of lower priced generic drugs. 

However, other provisions in the bill, such as one that would modify standards for proving inequitable conduct by patent holders, 

could make overturning certain patents or the timely launch of 

their products more uncertain for generic firms in some cases. 

CBO anticipates that provisions of the Federal Food, Drug, and 

Cosmetic Act governing marketing of brand and generic drugs 

would significantly limit how H.R. 1908 might affect the timing of 

generic entry over the 2008–2017 period. H.R. 1908 also would 

make certain new requirements prospective in nature and thereby 

limit the effect of such changes on the market entry of generic 

drugs over that period. Because numerous provisions would apply 

to patent cases initiated and new patents issued after enactment, 

we expect that the effect of the bill on average drug prices could 

be significant beyond 2017. The nature and extent of any such 

long-term effects are unclear, however. 

The Chief Judge of the U.S. Court of Appeals for the Federal Circuit has expressed concerns that section 5 of H.R. 1908 could sigVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00053 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
54 

1Letter from the Honorable Paul R. Michel, U.S. Court of Appeals for the Federal Circuit, 

to the Honorable John Conyers Jr. and the Honorable Lamar S. Smith, Chairman and Ranking 

Member, respectively, of the House Committee on the Judiciary, May 21, 2007. 

nificantly lengthen patent trials and delay their final resolution.1

CBO expects that the provision relating to damages would infrequently apply to drug cases involving generic competitors and 

would apply only to cases initiated after enactment. Consequently, 

any potential budgetary effect from delaying resolution of pharmaceutical patents probably would not be significant over the next 10 

years. 

Revenues 

Enacting H.R. 1908 also could affect Federal revenues. Any 

change to the average cost for prescription drugs available on the 

market would affect the cost of premiums for private health insurance. CBO anticipates that changes in spending by private health 

insurance plans would cause a shift in compensation between taxable wages and tax-favored benefits, thereby affecting Federal revenue from income taxes and payroll taxes. However, because CBO 

estimates that enacting the bill would have a negligible net effect 

on the average price of drugs over the next 10 years, the net effect 

on Federal revenues would also be negligible over that period. 

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

H.R. 1908 would impose intergovernmental and private-sector 

mandates, as defined in UMRA, on certain patent applicants. The 

mandates include following new application requirements and prohibiting tax planning methods from being patentable. 

Required Search Reports 

The bill would direct the Patent and Trademark Office to establish regulations that would require certain patent applicants to 

submit a search report, analysis, and other information relevant to 

receiving a patent. Most patent applicants, including public universities, would be required to follow the new application process. The 

bill would exempt applications from micro-entities, as defined in 

the bill, from providing such reports and information. According to 

PTO, the cost for applicants to research and provide such information would be about $5,000 to $10,000 per search report; however, 

some applicants already provide similar information in their applications. Based on the number of patent applications per year, CBO 

expects that the direct cost to comply with the mandate would exceed the annual threshold for private-sector mandates established 

in UMRA ($131 million in 2007, adjusted annually for inflation) in 

each of the first 5 years the mandate is in effect. CBO estimates 

that the costs to public universities of complying with the mandates would not exceed the annual threshold for intergovernmental 

mandates established in UMRA ($66 million in 2007, adjusted annually for inflation). 

Prohibiting Tax Planning Methods 

The bill also would prohibit tax planning methods from being 

patentable. The prohibition would apply to any application for a 

new or reissued patent that is filed on or after the date of enactment. While the number of such applicants would likely be small, 


hsrobinson on PROD1PC76 with HEARING
55 

CBO has no basis for estimating the net income that would be forgone by a patent applicant for not receiving a patent. Therefore, 

CBO cannot estimate the cost to private entities of complying with 

this mandate. CBO estimates that the costs of complying with this 

mandate for state, local, and tribal entities would be small. 

ESTIMATE PREPARED BY: 

Federal Costs: Susan Willie (226–2860) and Julia Christensen 

(226–9010) 

Impact on State, Local, and Tribal Governments: Elizabeth Cove 

(225–3220) 

Impact on the Private Sector: Paige Piper/Bach (226–2960) 

ESTIMATE APPROVED BY: 

Peter H. Fontaine 

Assistant Director for Budget Analysis 

PERFORMANCE GOALS AND OBJECTIVES

The Committee states, pursuant to clause 3(c)(4) of rule XIII of 

the Rules of the House of Representatives, H.R. 1908 will improve 

the quality of patents being issued by the USPTO, greatly reduce 

the abusive practices particular to patent litigation, and harmonize 

the United States patent system with the rest of the world. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8, clause 8 of the Constitution. 

ADVISORY ON EARMARKS

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 1908 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(d), 9(e), or 9(f) of Rule XXI. 

SECTION-BY-SECTION ANALYSIS

SEC. 1. SHORT TITLE; TABLE OF CONTENTS

This section sets forth the short title of the bill as the ‘‘Patent 

Reform Act of 2007’’ and sets forth a table of contents. 

SEC. 2. REFERENCE TO TITLE 35, UNITED STATES CODE

This section makes clear that amendments made by this Act are 

to made to title 35 of the United States Code, unless otherwise 

stated. 

SEC. 3. RIGHT OF THE FIRST INVENTOR TO FILE

Definitions 

In order to accommodate the change to a first-to-file patent system, Section 3(a) amends 35 U.S.C. § 100 to include definitions for 

terms that are used in the context of a first-to-file system. These 

definitions bring added clarity to the meaning and application of 

the terms. Terms added and defined include § 100(f) ‘‘inventor’’, 


hsrobinson on PROD1PC76 with HEARING
56 

§ 100(g) ‘‘joint inventor’’, § 100(h) ‘‘effective filing date of a claim invention’’, § 100(i) ‘‘claimed invention’’, and § 100(j) ‘‘joint invention.’’ The term ‘‘inventor’’ refers to a single individual who has, working alone, invented or discovered an invention. In cases where two 

or more individuals are responsible for inventing or discovering an 

invention, the term inventor applies to all the individuals collectively. 

The term ‘‘joint inventor’’ is applied to any one of the individuals 

who have invented or discovered an invention together. Such a 

term is necessary since the term inventor is used to refer to either 

a single inventor or, collectively, to all the joint inventors of an invention made or discovered by more than one person. 

The ‘‘effective filing date of a claimed invention’’ as applied in 

§ 100(h)(1) is the date a patent application containing a disclosure 

of the invention is filed. The ‘‘effective filing date for the claimed 

invention’’ may also be the filing date of a previously filed application if the current application is entitled to a right of priority to 

an earlier provisional or foreign application under 35 U.S.C. §§ 119, 

365(a) or 365(b), or is entitled to the benefit of an earlier filing date 

of a United States application under 35 U.S.C. §§ 120, 121 or 365(c) 

as provided by § 100(h)(2), so long as the application that is the 

basis of priority fully describes and enables the claimed invention. 

The term ‘‘claimed invention’’ is any invention defined by a claim 

in a particular patent or patent application, as required by § 112(b) 

as amended by this Act. 

The term ‘‘joint invention’’ is an invention that is made from the 

collaboration of inventive endeavors of two or more persons working toward the same end and producing an invention by their collective efforts. 

Prior Art 

Section 3(b) substantially amends § 102, the definition of prior 

art and conditions for patentability. Broadly, the new § 102(a) defines prior art while the new § 102(b) establishes exceptions to 

§ 102(a). 

Under the new § 102(a)(1), the issuance of a patent is prohibited 

if the claimed invention was patented, described in a publication, 

in public use, or on sale before the effective filing date of an application claiming the invention. Pursuant to subparagraph (A), any 

of these acts operates as an absolute bar if done more than a year 

prior to filing. Such acts also operate as a bar under subparagraph 

(B) if done a year or less prior to filing, except for an inventor’s 

own disclosure. Working together and as required in a first-to-file 

patent system, these two provisions establish that any prior art reference or disclosure (e.g., patent, publication, public use or sale) 

available before the effective filing date of an application that 

teaches or describes the invention may be used to defeat the patentability of the invention. 

Under the new § 102(a)(1)(B) the grace period that has traditionally been available in the Untied States is maintained. This inventor’s grace period allows an inventor to make his invention publicly 

available, whether by publication, public use, or sale, up to 1 year 

prior to filing a patent application for the invention, without such 

activity being used as prior art against him. This grace period allows an inventor to assess the usefulness, marketability and practiVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00056 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
57 

cality of the invention for a limited period of time before undertaking the expense of obtaining a patent on the invention. The 

grace period is also very important for universities and nonprofit 

research organizations and will allow academic inventors to discuss 

or publish information concerning their invention without fear that 

such a disclosure would be used against their applications. 

The Committee uses the current § 102(b) as the template from 

which to define the scope of prior art in the Act, primarily because 

of how the terms ‘‘in public use’’ and ‘‘on sale’’ have been interpreted by the courts. The provisions of § 102(b) are meant to serve 

a set of very specific policy goals which include 1) encouraging inventors to file early for patent protection, 2) preventing inventors 

from extending their monopoly in the invention and 3) not taking 

away from the public what it justifiably believes is in the public domain. Additionally, there is nothing inherent in a first-to-file system that will deter inventors from making use of their inventions 

as trade secrets and then some time later filing a patent application for the invention. Thus, the maintenance of the ‘‘public use’’ and ‘‘on sale’’ definitions of prior art are needed to prevent such activity. 

The Committee also chose to eliminate any geographical limitations placed on the ‘‘in public use’’ and ‘‘on sale’’ prior art found in 

the current § 102(b). These limitations were first created in an era 

where it took weeks to travel to other countries and information 

concerning inventions in other countries, was limited at best. Given 

advances in communications technology and transportation, the average person can learn as much about activities in a foreign land 

as he can learn about what is happening in his own neighborhood. 

As such, there is no longer a need to distinguish, for prior art purposes, between a public use or sale in this country versus one in 

another. Furthermore, most other countries do not limit prior art 

to domestic knowledge. 

The new § 102(a)(2) carries over the current § 102(e) class of prior 

art, namely patents and patent applications not yet published. 

Exceptions to Prior Art 

While the Committee finds that the United States should make 

the switch to a first-inventor-to-file system, the Committee also recognizes that the limitations inherent in a strict first-to-file system 

may be too restrictive given the nature of invention discovery and 

development, even with the inventor’s grace period provided in 

§ 102(a)(1)(B). With this in mind, this Act incorporates a number of 

exceptions to prior art. 

The first exception to prior art is provided by § 102(b)(1). This 

provision disqualifies any prior art under § 102(a)(1)(B) if the same 

subject matter had already been publicly disclosed by the inventor 

(hereinafter ‘‘first-to-disclose exception’’). This exception effectively 

creates a first-to-disclose rule. If an inventor publicly discloses his 

invention, he preserves his priority to the invention even if there 

is intervening prior art between the inventor’s public disclosure 

and the inventor’s application for patent, provided that the application is made 1 year or less after the initial disclosure. 

As a general rule in a first-to-file system, where two independent 

inventors come up with the same invention, priority will go to the 

first inventor to submit an application (new § 102(a)(2)). The earVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00057 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
58 

lier, or ‘‘senior,’’ application will operate as prior art against the 

later, or ‘‘junior,’’ application and bar the second patent. However, 

new § 102(b)(2) establishes several exceptions to § 102(a)(2). 

First, if a senior application claims subject matter that was obtained directly or indirectly from a junior applicant who was the 

true inventor, the senior application will not qualify as § 102(a)(2) 

prior art against the junior application. This is why the new ‘‘firstto-file’’ system is more properly characterized as a ‘‘first-inventorto-file’’ system. Second, if the subject matter of the senior application was publicly disclosed by the junior applicant before the senior 

application was filed, the senior application does not qualify as 

prior art against the junior one under § 102(b)(2). In this sense, the 

new ‘‘first-inventor-to-file’’ system is also a ‘‘first-to-disclose’’ system. Finally, under the new § 102(b)(2), a published patent or application under § 102(a)(2) that normally would constitute prior art 

against a subsequently filed patent application, does not qualify as 

prior art against the subsequent invention if the published patent 

or application and the subsequent invention were owned by or subject to an obligation of assignment to the same entity as of the effective filing date of the subsequent patent application. 

The new § 102(b)(3) carries over the Cooperative Research and 

Technology Enhancement (CREATE) Act of 2004 (108 P.L. 453; 118 

Stat. 3596), originally codified in § 103(c). This re-codification establishes an exception to § 102(a)(2) prior art in the possession of parties to a joint research agreement. Such prior art will not be counted against a subsequently filed application by the parties if the 

claimed invention was developed under a joint research agreement 

and has an effective filing date on or after the date of the joint research agreement. 

The above provisions are illustrated by the following example. Inventor (I) delivers a paper at an academic conference on January 

1, disclosing the subject matter of her invention. Colleague (C) 

learns the invention at the conference and publishes a paper on the 

same subject matter on August 1. Thereafter, C files a patent application on October 1. I files her own application on December 1. 

Is either I or C entitled to a patent? 

I’s disclosure at the conference would ordinarily constitute prior 

art under § 102(a)(1). Because it was disclosed less than 1 year 

prior to filing (by both I and C), it is covered by § 102(a)(1)(B), 

which exempts it as prior art for I (‘‘disclosures made by the inventor ’’) but not for C. It will defeat C’s patent application, but not 

I’s. 

C’s publication on August 1 would also ordinarily constitute prior 

art for both I and C. Yet, it is excluded for C by § 102(a)(1)(B) and 

for I by the same paragraph (disclosure ‘‘by others who obtained 

the subject matter disclosed directly or indirectly from the inventor 

’’). If C were an independent inventor and did not obtain the subject matter from I, C’s disclosure by publication on August 1 would 

still not operate as prior art against I because of the exception in 

§ 102(b)(1) (earlier disclosure by inventor). An independent disclosure will not operate as prior art if the applicant had disclosed first 

(within 1 year of her filing). 

C’s patent application on October 1 will also operate as prior art 

against I pursuant to § 102(a)(2) because it was effectively filed before the filing date of I’s application. However, since the subject 


hsrobinson on PROD1PC76 with HEARING
59 

matter in C’s application was obtained from I, § 102(b)(2)(A) prevents it from operating as prior art. Even if C obtained the subject 

matter independently, and not from I, C’s application will not serve 

as prior art because of the exception in § 102(b)(2)(B). That is because I publicly disclosed her invention before C filed. 

In summary, because of the ‘‘grace period’’ in § 102, none of the 

events prior to I’s filing on December 1 will operate as prior art as 

to I. C’s application, however, is barred. He may have a grace period for his own disclosures, but not for earlier disclosures by another inventor. Even if C were not barred, I could initiate a derivation proceeding against him under § 135(a). Upon proof that C derived his invention from I, I would be awarded the patent. 

It’s right to a patent over C is illustrative of the difference of a 

pure ‘‘first-to-file’’ as opposed to ‘‘first-inventor-to file’’ system. 

Changes to Obviousness 

Section 3(c) repeals §§ 103(b) & (c) and amends the definition of 

obviousness so that obviousness is measured as of the date of application for the claimed invention instead of the date of invention. 

Derivation Proceeding 

In order to address concerns that a first-inventor-to-file system 

may make it easier for an invention to be misappropriated from the 

true inventor, section 3(i) replaces the current interference proceeding in § 135(a) with a new derivation proceeding that will allow 

a true inventor to challenge an earlier applicant’s right to patent. 

This is a formal administrative proceeding that provides an applicant the opportunity to show that another, earlier applicant claiming essentially the same invention, actually derived the invention 

from the requester, thus removing the earlier application or patent 

as prior art under the exception set forth in § 102(b)(2)(A). 

Under the amended § 135(a)(1)(A), an applicant requesting a derivation proceeding must set forth the basis for finding that an earlier applicant misappropriated the claimed invention and without 

authorization filed an application claiming such invention. Also the 

request must be filed within 12 months of the date of first publication of an earlier application or issuance of a patent on that application, whichever is first, covering a claim that is the same or substantially the same as the claimed invention. 

Under § 135(a)(1)(B), the Director is to determine whether the 

basis set forth under § 135(a)(1)(A) has been met. Under § 135(a)(2), 

the Patent Trial and Appeal Board (PTAB) shall determine the 

right to the patent and issue a final decision thereon. Under 

§ 135(a)(3), the Board may defer action on a request for a derivation proceeding until 3 months after a patent is issued on the earlier-filed application. As per § 135(a)(3), the Board’s decision concerning the merits of the positions advanced during the derivation 

proceeding will serve as the final decision by the USPTO as to who 

has the right to patent. The losing party may appeal to the Federal 

Circuit. 

While a derivation proceeding may appear to have some similarity to an interference proceeding, its purpose is not to determine 

who invented first. The only concern of a derivation proceeding is 

whether one applicant obtained the subject matter from the other, 

and is therefore not a true inventor of that subject matter. 


hsrobinson on PROD1PC76 with HEARING
60 

Condition on Implementation of Section 3 

Section 3(k) contains the effective date for this section. The adoption of the ‘‘first-inventor-to-file’’ system is delayed until 90 days 

after the President certifies to Congress that other ‘‘major patenting authorities’’ have adopted a grace period substantially similar to the one contained in this section. As of time of adoption of 

this report, neither the European Patent Convention nor Japanese 

patent law provide a grace period. The beneficial effect of the grace 

period provided to United States filers by this section could be lost 

should they also seek patent protection in Europe or Japan, which 

are the most frequent destinations for international filings by 

United States nationals. The Committee believes that in this limited instance and with Congressional oversight, the Executive is 

the appropriate body to determine whether other countries have 

sufficiently conformed their patent laws to the grace period under 

this section. The Committee is providing section 3(k) as guidance 

to the President, by defining ‘‘major patenting authorities’’ to mean 

the patenting authorities in Europe and Japan. This is not meant 

to require that every European country adopt a grace period. Rather, it is sufficient if the European Patent Office and the patent offices of Germany and the United Kingdom do so. Nor must their 

grace periods operate exactly as in this section, or define exempt 

prior art in precisely the same way. 

Review of Effects of Section 3 Amendments 

Section 3(l) mandates that the Undersecretary of Commerce for 

Intellectual Property and Director (hereinafter ‘‘the Director’’ of the 

Unites States Patent and Trademark Office (USPTO) conduct a 

study on the effectiveness and efficiency of the amendments made 

by this section, and submit to the Committees on the Judiciary of 

the House of Representatives and the Senate a report on the results of the study. The report must include any recommendations 

the Director may have on amendments to the law and any other 

recommendations the Director may have with respect to the firstinventor-to-file system as put into effect by the amendments in this 

section. The first such study must be done not later than the end 

of the 7-year period beginning on the effective date of this section 

as set forth in subsection (k). The study must be repeated at the 

end of every 7-year period after the date of the first study. It is the 

opinion of the Committee that the amendments in section 3 of the 

bill serve to implement a fundamental change in the operation of 

the United States patent system. Such change, while well-reasoned, requires a mechanism for monitoring its long-term effects. 

SEC. 4. INVENTOR’S OATH OR DECLARATION

Section 4 amends §§ 115 and 118. As amended, § 115(a) requires 

that z patent application include the names of the inventors of any 

invention claimed in the application, and that inventors sign an 

oath or a declaration in lieu of oath. Section 115(a) also requires 

that the inventor of each claim in the patent application execute 

an oath or declaration for the application. An oath or declaration 

must be executed by every inventor in the case where an invention 

has more than one inventor. 


hsrobinson on PROD1PC76 with HEARING
61 

Under § 115(b) the oath or declaration required under § 115(a) 

must state that the application was made or authorized to be made 

by the affiant or declarant, and that such individual believes himself to be the ‘‘original’’ inventor of the claimed invention. This 

change partly reflects a change to a first-inventor-to-file system, because the affiant or declarant no longer has to state that he believes himself to be the ‘‘first’’ inventor of the claimed invention. 

Under § 115(c), the Director of the USPTO is allowed to require additional information related to the inventor or invention to be included in the oath or declaration. 

Under § 115(d)(1), the requirements of § 115 (b) and (c) may be 

met through a substitute statement in lieu of an oath or declaration under certain circumstances. These circumstances are listed in 

§ 115(d)(2), and include times where the inventor is dead, is legally 

incapacitated, or cannot be found or reached after a diligent effort. 

Section 115(d)(2) also allows a substitute statement to be submitted in lieu of an oath or declaration when an inventor has an 

obligation to assign his rights to the invention but refuses to make 

the oath or declaration required by § 115(a). Today, many inventions are made by employee-inventors who have assigned to their 

employers, in contract or other terms of employment, the rights to 

any inventions they make in connection with their employment. Or 

an employer may claim rights to an invention by implication. 

Where such a relationship exists, this change will prevent an employee-inventor from withholding his oath or declaration as a 

means to delay or prevent an employer from seeking patent protection of an invention created by the employee-inventor, or as a 

means to negotiate remuneration from the employer. Under 

§ 115(d)(3) the substitute statement must identify the individual 

with respect to whom the statement is made (i.e., the inventor or 

joint inventor) and set forth the permitted circumstances that are 

the basis for filing the statement (e.g., the inventor has an obligation to assign his invention but refuses to sign the oath or declaration). The Director of the USPTO is authorized to require additional information to be included in the substitute statement. In 

cases where assignment is alleged, the Committee expects the Director to require evidence showing the assignment. 

To provide further flexibility, § 115(e) allows an individual who 

is under an obligation to assign the invention to make the statements required under § 115 (b) and (c) in the assignment document, 

rather than making the statements in a separate filing. Amended 

§ 115(e) exempts individuals from the requirements of the section 

when they file an application that claims priority under § 120 or 

§ 365(c) if the requirements of this section were met in the earlier 

application. Finally, amended § 115 prohibits the USPTO from 

issuing a notice of allowance under § 151 until the conditions of 

this section are met, thus defining the time at which the conditions 

must be met by the applicant(s) as anytime prior to the issuance 

of a notice of allowance. 

Section 115(f) requires, as a condition before a notice of allowance is provided, that the applicant has filed each required oath or 

declaration under § 115(a), or substitute statement under § 115(d), 

or has recorded an assignment meeting the requirements of 

§ 115(e). 


hsrobinson on PROD1PC76 with HEARING
62 

Section 115(g) allows an applicant to forgo the requirements of 

§ 115 if the application is claiming priority based on a continuation 

application under § 120 or a foreign filed application under § 365 

and the earlier application meets the requirements set out in § 115 

(a), (d) or (e). 

Section 115(h)(1) allows changes to be made to any statements 

filed under § 115. If the change includes naming one or more additional inventors, the Director will establish regulations that guide 

how such a change is to be made. However, under § 115(h)(2), no 

supplemental statement shall be required if an oath or declaration 

under § 115(a) or an assignment under § 115(e) is already executed. 

Section 115(h)(3) provides that no patent shall be invalid or enforceable if the requirements of § 115 are not met. However, willful 

false statements may still serve as a basis for making unenforceable patents that are acquired by means of inequitable conduct as 

defined in § 282. 

Section 115(i) requires that any declaration or statement, including oaths, include an acknowledgment that any willful false statement is punishable by fine or imprisonment, or both, under 18 

U.S.C. § 1001. This is to ensure that all inventors and/or applicants 

are held accountable for making any statements they know are 

false in an oath or declaration, or a substitute statement or assignment that is intended to be in lieu of an oath or declaration as permitted under § 115. 

As amended, § 118 will permit a person to whom the invention 

is assigned, or to whom the inventor is under an obligation to assign the invention, to apply for a patent on the invention without 

having to show that the inventor cannot be found or reached, or 

has refused to execute the application. Also, under the amended 

§ 118, a patent issuing from an application filed by anyone other 

than the inventor will be issued to the real party in interest, with 

notice to the inventor. In most cases, the real party in interest will 

be the person to whom the patent is assigned. This change will 

have little impact on the rights of the inventor who has already 

given up his rights to the invention by having assigned his rights 

to the applicant, and should increase the flexibility and efficiency 

with which an assignee may file a patent application on inventions 

made under the assignee’s auspices. As amended, § 118 will harmonize U.S. patent law relating to who can file a patent application with the laws of most if not all foreign patent agencies. 

SEC. 5. RIGHT OF THE INVENTOR TO OBTAIN DAMAGES

Apportionment of Damages 

Section 5(a) amends 35 U.S.C. § 284. As amended, § 284(a) maintains the current option between lost profits and other measures, 

not less than a reasonable royalty, as the basis for damages. The 

Committee does not intend to change or affect the ways courts and 

juries award damages for lost profits. The changes in the bill are 

addressed to awards of damages based on a reasonably royalty theory. Further, the plaintiff is still entitled to compensatory damages 

‘‘together with interest and costs as fixed by the court.’’ Generally, newly added § 284(b) is applicable whenever ‘‘reasonable royalty’’ is used to determine damages. Paragraph (1) governs 

how a reasonable royalty is to be calculated. It prescribes three esVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00062 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
63 

sential steps. First, the court must affirmatively determine which 

of the specified alternative methods of calculating a reasonable royalty will be used. Next, the court must identify which factors (e.g., 

from among the 15 Georgia-Pacific factors or any others) are relevant to the selected calculation method. In these first two steps, 

the court acts as gatekeeper, identifying for the jury (or for the 

court’s own consideration) the applicable methodology and the factors that are both relevant under that methodology and supported 

by the evidence in the case. Finally, the court or jury may rely only 

on the selected method (or methods) and only those factors specifically identified as relevant and supported by the evidence presented in calculating the amount of reasonable royalty. Merely providing a list of the Georgia-Pacific factors to the jury, as often occurs now, would be insufficient and impermissible under the revised § 287(b) unless the court explains on the record why only that 

approach can produce a just damages award and is necessary in 

the interest of justice. 

Paragraphs (2), (3) and (5) of § 284(b) provide different approaches to the determination of a reasonable royalty. The court 

will select the methodology that best suits the facts of the case and 

the patent-in-suit. The Committee expects that paragraphs (2) or 

(3) will apply in many of cases. However, where neither of those 

methods is capable of achieving the standard set out in subsection 

(a) (‘‘a reasonable royalty for the use made of the invention by the 

infringer ’’), then the court may use the alternative provided by 

paragraph (5). 

The Committee anticipates that courts will perform their gatekeeping function by conducting a hearing outside the presence of 

a jury in cases tried to a jury for the purpose of reviewing the evidence that the parties plan to introduce relating to calculation of 

damages. After assessing the admissible evidence relating to reasonable royalty, the court will (1) determine the applicable methodology and factors relevant under that methodology and explain on 

the record the reasons for its determination; and (2) permit the 

parties to put before the jury only the evidence relevant to the 

methodology and factors determined to be applicable by the court. 

This will prevent confusion of the jury that likely would result from 

the introduction of misleading or irrelevant evidence. Making these 

determinations part of the record will facilitate review, both by the 

court on a post-trial motion and on appeal. 

Although individual judges should determine what is appropriate 

based on the facts of the case before them, it would be preferable 

for the analysis to occur earlier in the process rather than later. 

Evidence presented in support of a reasonable royalty award often 

will include experts’ economic analysis of three relevant sets of 

commercial considerations aimed toward establishing ‘‘a reasonable 

royalty for the use made of the invention by the infringer’’—

• the value of the actual invention (its ‘‘specific contribution 

over the prior art’’); 

• the impact of the actual invention, if any, on supply of and 

demand for a product or process incorporating the invention; 

and 

• any collateral effects, such as cost savings, increased efficiency in production, lower distribution cost, etc. 


hsrobinson on PROD1PC76 with HEARING
64 

Expert testimony may include opinion testimony on development 

costs, production costs, cost associated with re-engineering, the 

market size, changes in both supply and demand directly attributable to the invention, evidence of specific consumer reliance on 

the invention and other microeconomic analyses. This evidence, 

when appropriate, may include previous licensing of the actual or 

related inventions, accounting for variations in the terms and conditions of such licenses. Finally, if available, evidence may be taken 

on the economic value of non-infringing alternatives to the actual 

invention. 

As amended, § 284(b)(2) provides for apportionment of damages 

as the first of three alternative mechanisms for calculating reasonable royalty. This paragraph requires the court to conduct an economic analysis of the infringing product or process and determine 

what portion of its value is properly attributable to the invention. 

Expert testimony typically would focus on the value of the invention as such, separate and apart from the economic value of the 

product or process that may incorporate the invention. It would do 

so by a process of identifying the elements of the invention that 

render it patentable and the economic value properly attributable 

to those elements. The economic valuation should identify the specific value of the invention’s inventive steps as such, separate and 

apart from other technologies and elements (the ‘‘prior art ’’) with 

which it may be associated. Finally, from the infringing product or 

process’s overall value, the court must exclude ‘‘the economic value 

properly attributable to the prior art’’ and the ‘‘other features or 

improvements, whether or not themselves patented, that contribute 

economic value to the infringing product or process.’’ For example, in a case alleging that the patent-in-suit was infringed by a particular aspect of a GPS navigation system incorporated in an automobile, the economic analysis would focus on determining the incremental value contributed by the particular aspect of the GPS system attributable to infringement of the actual 

invention embodied in that patent; it should exclude the value contributed by the other GPS technology, as well as the value of the 

car as a whole, its engines, body, steering system, seats, drive 

train, windows, etc. Similarly, an invention permitting a bank’s 

customers to round up their debit card or credit card charges to 

even dollars and automatically transfer those cents into a savings 

account, should not be valued on the basis of banking services generally such as savings, debit card use or brokerage but rather on 

the incremental value attributable to the rounding up/transfer 

process itself. 

Accordingly, paragraph (2) directs the use of an objective method 

to measure a patent’s value for damages purposes. Inventors 

should be rewarded for their ‘‘inventive contributions;’’ they should 

not be rewarded for others’ innovations (even where incorporated 

into the patent) or for market success properly attributable to the 

overall commercial context in which the invention is used, except 

as provided under paragraph (3). 

As amended, § 284(b)(3) permits courts to use the ‘‘entire market 

value’’ rule in calculating damages when the prerequisites for use 

of that standard are met. 

The ‘‘entire market value’’ rule is the corollary of apportionment. 

Where separate unpatented products operate as a functional unit 


hsrobinson on PROD1PC76 with HEARING
65 

with the infringing product, or the infringed component serves as 

the basis for customer demand of the functional unit, damages may 

be based on the ‘‘entire market value’’ of the combination. See RiteHite Corp. v. Kelley Co., Inc., 56 F.3d 1538 (Fed. Cir. 1995) (in 

banc). The rule applies most often in the case of accessory items 

which form a single functional and marketable unit with the infringing product. After-market ‘‘convoyed’’ sales can also be included. See Juicy Whip, Inc. v. Orange Bang, Inc., 382 F.3d 1367 

(Fed. Cir. 2004). In both cases, defendant’s profits on separate, noninfringing, products may be included in the damages base if the 

market demand for them is determined by the infringed invention. 

The test for determining whether the infringed component drives 

the market demand for the overall product or combination is refined by § 284(b)(3). ‘‘[T]he patent’s specific contribution over the 

prior art [must be] the predominant basis for market demand for 

an infringing product or process.’’ The ‘‘specific contribution’’ requirement focuses the inquiry on whether the innovative element 

of the patented product is the basis for customer demand, rather 

than non-innovative (prior art) features that just happen to be 

claimed in the patent. This complements the purpose of paragraph 

(2) to award a patent holder for his true contributions, rather than 

for technologies defendant could have incorporated without infringing. 

In using the term ‘‘predominant basis,’’ the Committee did not intend to imply that the invention should be the one and only factor 

that leads all consumers to make their purchase decisions. Rather 

the intent of the Committee is to ensure that this test is met only 

when the invention is the factor determining marketplace acceptance, not in the sense that it is the only relevant factor but in the 

sense that, based on the facts presented, the invention’s specific 

contribution over the prior art (and not other factors) drives marketplace demand for the product or process which incorporates it. 

Typical examples of situations where the patented contribution 

may distinguish over the prior art include pharmaceuticals. Often 

the only reason to purchase a drug is the patented active chemical 

agent for a drug or a treatment. In such cases, the invention is the 

very reason why customers purchase the product. In the case of a 

patented cholesterol-reducing chemical dispensed in the form of a 

pill, the customer has little interest in the binders, buffers, starches or coloring associated with the pill. The sole reason for the demand is the therapeutic effect. Similarly, when the invention is a 

new methodology for dispensing medication, such as insulin, the 

dispenser itself, for example an inhaler, may be the sole reason for 

customers to demand the medication in that form.. As a general 

rule, for products with one or two key distinct features which are 

the actual invention, it should be relatively easy to establish that 

the entire market value rule applies. However, with respect to 

products that have many constituent components, such as software 

and integrated circuits, it should rarely apply. 

The codification of the ‘‘entire market value rule’’ at § 284(b)(3) 

does not otherwise change the operation of the rule as it pertains 

to convoyed sales (‘‘the products or processes involved ’’) so long as 

they satisfy the customer demand created by infringing use of the 

patent-in-suit. 


hsrobinson on PROD1PC76 with HEARING
66 

The amended § 284(b)(4) applies to damages measures under 

§ 284(b)(2) and (3); it is not an independent method that can be 

used as an alternative to them. It reflects the reality of modern 

technology, that innovation may lie simply in combining prior art 

in novel, non-obvious and useful ways. In such cases, the value of 

the invention may lie in increased functionality or enhancement of 

the prior art due to the inventive combination. 

Thus, in determining an invention’s ‘‘specific contribution over 

the prior art’’ (i.e., the value of the patented innovation), in the 

case of a combination, a court should not simply exclude the values 

of previously known elements. Some of that value may be attributable to the invention and is properly part of plaintiff’s damages 

base. One example provided to the Committee was that of a telephone. Its inventor (Alexander Graham Bell) mostly combined preexisting products in a novel way. If the separate value of each component preexisting in the prior art was simply subtracted from the 

overall value of the telephone, there would be nothing left that 

could be attributed to the novel combination (the patented invention). Clearly, the combination increased the value of the coils, 

wires, amplifiers, and so on, that previously existed; § 284(b)(4) permits plaintiff to include these ‘‘additions to value’’ under § 284(b)(2) 

or (3) by showing the enhanced value of the combination due to the 

patented invention. 

Amended § 284(b)(5) provides alternate mechanisms for determining a reasonable royalty when the two principal methods 

(§ 284(b)(2) and (3)) have been found by the court to be ill-suited 

to the facts of the case, and the court explains the reasons for that 

determination on the record. Paragraph (5) contains two approaches, which may be used singly or in combination. 

The first looks to ‘‘any nonexclusive marketplace licensing of the 

invention.’’ Where there is an established marketplace standard for 

licensing of the invention for the particular use made by the defendant, the royalties obtained under those licenses provide an established measurement of ‘‘reasonable royalty’’ for § 284 purposes. 

Courts often prefer to use this measurement, where available, rather than to estimate a royalty by constructing a hypothetical negotiation between the parties. This approach derives from the first of 

15 factors identified by the court in Georgia-Pacific v. United States 

Plywood Corp., 318 F.Supp. 1116, 1120 (S.D.N.Y. 1970), modified 

446 F.2d 295 (2d Cir. 1971). 

The second approach allows the court to select any other relevant 

factors under applicable law. This is designed to permit courts to 

address the situations in which the methods set forth in the other 

paragraphs of § 284(b) will not produce a just result. This includes 

factors courts have used in applying § 284 since 1952 or other factors the court determines to be necessary to achieve a just result. 

Since the amendments to that section do not change the basic 

framework (‘‘damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use 

made of the invention by the infringer ’’), judicial approaches under 

existing law are relevant to the section as amended. This includes 

the 15 Georgia-Pacific factors. They appear in three groupings: 

1. Rates and terms of marketplace licenses (factors 1–4, 7); 

2. Nature of the invention, and its economic value to infringer 

(factors 6, 8–13); 


hsrobinson on PROD1PC76 with HEARING
67 

3. Relationship and bargaining positions of the parties (factors 

5, 15). 

A court may use such factors individually or in combination as it 

finds appropriate, provided that it states its reasons on the record 

(including its reason for resorting to paragraph (5) in the first 

place). 

The Georgia-Pacific factors were never intended as an exclusive 

list. As new forms of technology become patented, new forms of 

business relationships appear in the market, and new indications 

of infringement emerge, a court can craft additional factors to respond to the specifics of the case at hand. In addition, a court may 

take the opinion testimony of experts (factor 14). As noted above, 

such testimony should focus on the microeconomic variables that 

set the value of the actual invention, and should be stated with 

precision and specificity. The value of the invention is a function 

of many variables that affect supply and demand both for the invention itself and for products or processes that incorporate or rely 

on the invention. In making these determinations experts should 

focus on both the factors of production that affect the supply of the 

invention—the development, production, distribution, etc.—as well 

as the factors that determine demand, the value customers associate with the inclusion of the invention in a product or process as 

compared to products or processes that do not include the invention. 

An explanation of how paragraph (5) would apply is provided by 

the example of insulin inhalers, which has been cited to the Committee a number of times, and was raised specifically by Kathryn 

L. Biberstein, Senior Vice President of Alkermes, Inc., in her testimony to the Senate on the topic of patent reform. Ms. Biberstein 

argued that the language of the bill requiring the assessment of 

damages based on the invention’s specific contribution over prior 

art would exclude from damages analysis previously known technologies, potentially leaving without remedies inventors of devices 

such as insulin inhalers, where both its principal components—insulin and pump inhalers—are previously known technologies. Mr. 

Gary Griswold, of the 3M Corporation, made substantially the 

same arguments in his testimony to the House, using the example 

of Post-It notes. 

Both instances present examples where combinations of existing 

technologies produce a valuable new invention. Of course, this is 

very much the norm. Few inventions are dramatic departures. In 

virtually all cases, inventions are the product of incremental 

change and cumulative growth in knowledge. 

Although the Committee believes that both the insulin pump and 

the Post-It note are very much susceptible to a just damages analysis and compensation under paragraph (2) or (3), the specific purpose of including paragraph (5) is to ensure courts and juries have 

the latitude to rely on case law and common law when it determines just results cannot be achieved otherwise. 

Under paragraph (5), licensing by Alkermes or 3M of its inventions, the terms and conditions of those licenses, would be fully 

available to the judge or jury as they calculated a reasonable royalty and could be considered if the standards discussed above are 

satisfied. If the patent owner has not licensed the invention, the 

court may find applicable the other Georgia-Pacific factors. In fact 


hsrobinson on PROD1PC76 with HEARING
68 

the court under subparagraph (5) can rely on any of these factors 

provided their application is not inconsistent with the balance of 

this section, and the court determines that the methods specified 

in the statute are not capable of producing a just result. Still, it 

is the Committee’s intention that courts should not continue the 

practice of instructing juries on all 15 Georgia-Pacific factors and 

leaving the jury to determine which factors are relevant. As required in § 284(b)(1), if the court determines that other factors are 

to be used to determine a reasonable royalty, then the court must 

also identify which of these factors are to be used and why. 

Willful Infringement 

Section 5(a) also amends 35 U.S.C. § 284(c), relating to willful infringement. As amended, § 284(c)(1) codifies the judicial doctrine 

that treble damages may be awarded when the court has determined that the infringer engaged in willful infringement. 

Under the amended § 284(c)(2), willful infringement cannot be 

found unless there is clear and convincing evidence of one of the 

following: 

(1) that an infringer continued to infringe after receiving written notice alleging acts of infringement in a manner that 

gives the alleged infringer reasonable apprehension of suit 

on those grounds, and identifies with particularity each 

claim that is infringed, each activity or product that infringes, and the relationship between the claim and the infringing product or activity; or 

(2) the infringer intentionally copied the patented invention 

with knowledge that it was patented, or 

(3) the infringer continued to infringe after having been found 

by a court to have infringed the same patent. In this case, 

the infringer must have been found to infringe a patent by 

engaging in acts not colorably different from activities that 

were found in the previous infringement action to have infringed the same patent. 

Amended § 284(c)(3) places limitations on when infringing activities may be considered to have been willful. First, any act of infringement may not be deemed to be willful for any period during 

which the infringer had an informed good faith belief that activities 

later found to be infringing would not infringe the patent, or that 

the claims were invalid or unenforceable. The informed good faith 

belief may be based on reasonable reliance on advice of counsel, 

evidence that the infringer took significant steps to modify its conduct to avoid infringement once it became aware of the patent, or 

other evidence that the court may find sufficient to establish good 

faith belief. Under amended § 284(c)(3)(C), an infringer’s failure to 

seek or present advice of counsel shall have no evidentiary implications regarding willfulness. It is the Committee’s opinion that a 

documented search effort aimed at establishing freedom to operate, 

conducted prior to engaging in activities that were later found to 

infringe, may constitute evidence against willful infringement provided the search and resulting efforts to avoid infringing prior art 

patents are sufficiently extensive. 

Amended § 284 (c)(4) bars the patentee from pleading willfulness 

and the courts from finding willfulness until the court first finds 


hsrobinson on PROD1PC76 with HEARING
69 

that the patent in suit is valid and enforceable, and has been infringed by the infringer. The determination of willfulness shall be 

made by the court even when the rest of the case is tried to a jury. 

These provisions will reduce significantly the added expense and 

complications attributable to the process of determining willfulness 

during litigation by eliminating any consideration of willfulness in 

cases where the patent in suit is judged to be invalid, unenforceable or not infringed. In such cases there can be no damages payable to the patentee, and thus no consideration of treble damages. 

Prior User Rights 

Section 5(b) amends § 273, the defense to infringement based on 

an earlier invention (i.e., ‘‘prior user rights ’’). Under current law, 

prior user rights are available only for the prior use of business 

method patents. However, as amended, § 273(a) widens the scope 

of prior user rights to all patented inventions. Thus, users of all 

types of inventions, products or processes, will now be able to make 

use of the defense if the invention is later patented by another. 

Another significant change will be the relaxing of conditions to 

make use of the defense. Under current law, in order to use the defense, a prior user must have made commercial use of the invention more than 1 year prior to another’s filing of a patent application on the invention. However, the amended § 284(b)(1) will allow 

the prior user defense to be applied to a qualifying use prior to the 

filing date of a claimed invention. Furthermore, a qualifying use 

may be either a commercial use or substantial preparation for commercial use. 

Review of Effects of Section 5 Amendments 

Section 5(e) mandates that the Director conduct a study on the 

effectiveness and efficiency of the amendments made by this section, and submit to the Committees on the Judiciary of the House 

of Representatives and the Senate a report on the results of the 

study. The report must include any recommendations the Director 

may have on amendments to the law and any other recommendations the Director may have with respect to the right of the inventor to obtain damages for patent infringement. The study must be 

done not later than the end of the 7-year period beginning on the 

date of enactment of this Act and at the end of every 7-year period 

after the date of the first study. It is the opinion of the Committee 

that the amendments in section 5 of the bill will have many positive effects on the patent system, but that the changes are sufficiently significant to require periodic monitoring. By examining the 

effects of these changes on a regular basis, and by paying attention 

to such feedback as may be obtained through these studies, Congress can ensure that any unforeseen negative consequences that 

may arise can be dealt with through future legislation or other 

mechanisms. 

SEC. 6. POST-GRANT PROCEDURES AND OTHER QUALITY

ENHANCEMENTS

Reexamination 

Section 6(a) amends ex parte and inter partes reexamination and 

establishes a new post-grant review procedure. 


hsrobinson on PROD1PC76 with HEARING
70 

Under the amended § 301(a)(2), a person requesting reexamination may cite to written statements of the patent owner made before a Federal court or the USPTO in which the patent owner takes 

a position on the scope of one or more patent claims. The Committee heard comments that patent owners would, occasionally, 

offer differing interpretations of cited prior art. They might take 

one position during litigation or initial examination, and a different 

one during reexamination. This amendment is meant to allow such 

earlier statements to form part of the reexamination record. These 

written statements, which include, documents, pleadings, or evidence from the aforementioned proceedings that address the patent 

owner’s statements, shall not be considered for any purpose other 

than to determine the proper meaning of the claims that are the 

subject of the request in a proceeding. 

Under current law, if a reference is ‘‘disseminated or otherwise 

made available to the extent that persons interested and of ordinary skill in the subject matter or art, exercising reasonable diligence can locate it,’’ it will qualify as a ‘‘printed publication.’’ MIT 

v. AB Fortia, 774 F.2d 1104 (Fed. Cir. 1985) (oral presentation to 

technical audience accompanied by distribution of some copies satisfied ‘‘publication’’ requirement). This includes modern forms of 

communication such as presentation slide shows. In re 

Klopfenstein, 380 F.3d 1345 (Fed. Cir. 2004). Even a single copy of 

a document, such as a doctoral thesis, indexed and catalogued in 

a library, qualifies as a ‘‘printed publication’’ if it is ‘‘sufficiently accessible to a researcher who exercised reasonable diligence.’’ E. I. 

du Pont de Nemours & Co. v. Cetus Corp., 19 USPQ2d 1174 (N.D. 

Calif. 1990). 

The Committee endorses the current case law and definition of 

print publication for purposes of prior art citation under § 301 and 

recognizes that the definition will evolve commensurate with advances in technology and public accessibility of information. 

Section 6(b) amends § 303(a) relating to ex parte reexaminations 

by allowing the Director to determine whether a substantial new 

question of patentability exists based on patents or publications 

discovered by the Director, cited under § 301, or cited by any person 

other than the owner of the patent under § 302 or § 311. The term 

‘‘publication’’ as used here is meant to have no operative difference 

with the term ‘‘printed publication’’ as used in § 301. 

Section 6(c) amends § 314 relating to the conduct of inter partes 

reexamination proceedings. Amended § 314(a) deletes the procedure 

for reexamination under §§ 132 and 133, and replaces it with a new 

procedure using Administrative Patent Judges (APJs). Under current law, reexaminations are conducted by patent examiners in the 

same manner as initial examinations. However, reliance on the 

same corps of examiners to uncover and correct errors in their colleague’s initial decisions may result in institutional bias. The 

amendment replaces reexamination by patent examiners with reexamination by APJs. APJs are defined by 35 U.S.C. § 6 as ‘‘persons 

of competent legal knowledge and scientific ability who are appointed by the Director.’’

Amended § 314(b) enlarges the opportunity that a third-party requester has to participate in an inter partes reexamination. Under 

current § 314(b)(2), the third-party requester can reply only to patent owner responses to office actions. The amendment allows the 


hsrobinson on PROD1PC76 with HEARING
71 

requester to also file written comments in response to the office action itself. In both cases (response to the office action, reply to patent owner’s response), the requestor’s filing must be received within 60 days of the precipitating event. 

Amended § 314(d) allows either party to an inter partes reexamination to request an oral hearing before the APJ. Here, an ‘‘oral 

hearing’’ is equivalent to an oral argument, as at a motion hearing 

or appeal in civil litigation. It is not an opportunity to present evidence or witnesses. Since the grounds for inter partes reexamination are limited by § 301 to documentary prior art, all supporting 

materials introduced by a party should be part of their written submissions. The APJ may dispense with an oral hearing if he feels 

it would not aid disposition of contested matters. 

Section 6(d) amends § 315(c), the estoppel provision in inter 

partes reexamination. Under current law, § 315(c) estops a thirdparty requestor from reasserting in civil litigation the invalidity of 

a patent claim ‘‘finally determined to be valid and patentable on 

any ground which the third-party requester raised or could have 

raised during the inter partes reexamination proceedings.’’ The 

highlighted language creates a form of res judicata, or ‘‘claim preclusion’’ in civil procedure, by prohibiting renewed challenges to 

patent claims even where a precise ground for invalidity was not 

asserted in the prior action. This has discouraged many challengers 

from utilizing the inter partes reexamination procedure. Accordingly, § 315(c) is amended by removing the phrase ‘‘or could have 

been raised.’’

Section 6(e) amends § 317(b), which precludes inter partes reexamination of a claim following civil action upholding its validity. 

The heading of § 317(b) is amended from ‘‘Final Decision’’ to ‘‘District Court Decision’’ and its text is amended to read ‘‘Once the 

judgment of the district court has been entered.’’ By this change, 

an inter partes reexamination may not be instituted after a district 

court decision. 

Post-Grant Review 

Section 6(f) adds Chapter 32, commencing with § 321 which describes a petition for post-grant review as a petition by a thirdparty (‘‘a person who is not the patent owner ’’) seeking ‘‘to cancel 

as unpatentable any claim of a patent on any ground’’ going to patentability under Chapter II (35 U.S.C. § 100, et seq). A reissue patent under § 251 may be challenged on the same grounds. The Director will prescribe the filing fee to be paid by the cancellation petitioner. 

Conditions for filing a cancellation petition are defined in § 322. 

The opportunity to challenge is limited to 12 months after a patent 

issues or reissues. However, a patent owner may consent in writing 

to a post-grant review proceeding at any time. Where a challenger 

is outside the § 322 window, his only means to challenge the validity of a patent is to file a request for reexamination or challenge 

the patent’s validity in a judicial proceeding. 

Requirements of the petition for cancellation are set forth in 

§ 323. A petition must: 

(1) be accompanied by the filing fee; 

(2) identify the cancellation petitioner; 


hsrobinson on PROD1PC76 with HEARING
72 

(3) set forth in writing the basis for the cancellation and each 

claim challenged, including other information as required 

by the Director; and 

(4) provide copies of patents and printed publications relied 

upon, both to the office and to the patent owner (or representative). 

The purpose for requiring a petitioner to identify and provide 

copies of his evidence is both to provide full notice to the patent 

holder and to streamline the process. It is expected that the Director will promulgate regulations under this section to require petitioner to include all information he has, relating to the patent (e.g., 

other documentary evidence, affidavits), at the time of filing. Further information beyond the initial filing may be submitted only 

pursuant to § 325. A petition that fails to comply with the filing requirements, or alleges insufficient grounds for post-grant review, 

will be dismissed pursuant to § 325. 

Multiple challenges are prohibited under § 324. A cancellation petitioner may not file a second post-grant opposition proceeding 

against the same patent, including other claims of the patent, irrespective of its disposition. To avoid collusive filings, the ‘‘same cancellation petitioner’’ includes other parties, although not named in 

the earlier petition, if they were in privy with the petitioner. 

‘‘Privy’’ describes a person or entity that was ‘‘in privity’’ with the 

named parties of record. This includes non-parties to the first action whose interests are so closely aligned with a named party, 

that a judgment against the latter should be preclusive as to all. 

See generally 18–131 Moore’s Federal Practice—Civil § 131.40. 

Under § 325(a), the Director may require a cancellation petitioner 

to provide additional information, either before initiating the proceeding or after. The Director must determine whether the original 

petition, together with additional information supplied, establish a 

substantial question of patentability for at least one claim in the 

patent. If he determines that it does not, the petition must be dismissed. 

A substantial question of patentability exists where there is a 

substantial likelihood that a reasonable examiner would consider 

the prior art reference or other information supplied by the petitioner important in deciding whether or not the claim is patentable. It is not necessary that a prima facie case of unpatentability 

exist based on the reference or information. In re Etter, 756 F.2d 

852, 857 n.5 (Fed. Cir. 1985). Furthermore, questions of patentability reviewed by an examiner during prosecution may serve as 

the basis for post-grant review. 

Under § 325(b), the Director is required to send notice to the patent owner and each petitioner, within 60 days of the filing of the 

petition, of the determination made under § 325(a). The Director’s 

determination is not reviewable by appeal or otherwise (e.g., by 

writ of mandamus). Dilatory petitions can obstruct successful exploitation of a patent by using the post-grant review process as a 

delaying tactic. Foreclosing review is thought necessary to avoid 

this problem 

Under § 326 the Director is required to promulgate regulations 

governing the conduct of post-grant review proceedings. It also 

specifies that the proceeding will be conducted before the PTAB. 


hsrobinson on PROD1PC76 with HEARING
73 

Under § 326(a) the Director is required to promulgate regulations 

in three areas. Paragraph (1) provides specific authority, consistent 

with the USPTO’s general regulatory authority in 35 U.S.C. § 2(b), 

to issue regulations ‘‘establishing and governing post-grant review 

proceedings . . . and their relationship to other proceedings under 

this title.’’ The first of these authorizations is modified by the requirements set forth in subsection 9(b). The latter authorization is 

read in conjunction with new § 333 (Relationship to other pending 

proceedings). Together, they allow the Director to coordinate or terminate co-pending proceedings related to the same patent. 

Paragraph (2) authorizes regulations regarding submission of information by the parties as provided in § 325. Although § 323(3) requires a cancellation petitioner to include [with the petition] copies 

of patents and printed publications upon which it relies, the form 

of other permitted or required evidence is not specified. This paragraph allows the Director to specify what types of submissions (e.g., 

declarations, affidavits) may be made, and when they can be filed. 

Paragraph (3) authorizes regulations regarding discovery. Such 

discovery must be related to factual assertions advanced by either 

party. It is expected that the Director will promulgate regulations 

concerning the availability, scope and timing of discovery, limiting 

it to relevant evidence or information likely to lead to relevant evidence. The Director can also specify the conditions for protective orders and submission of evidence under seal (e.g., confidential matters). Discovery may occur only upon order of the Director, as per 

§ 326(b)(2) and should reflective of the fact that this is an administrative proceeding and not a court proceeding. 

Specific limitations on the regulations promulgated by the Director pursuant to § 326(a)(1) are imposed by § 326(b). 

Paragraph (1) requires that a post-grant review proceeding conclude no later than 1 year after it is initiated. For good cause 

shown, the Director may extend this period up to 6 months. 

Paragraph (2) precludes discovery except upon order of the Director. Thus, despite a possible broad reading of § 326(a)(3) to permit 

automatic or as-of-right discovery, this paragraph requires the Director to order any discovery request, which should generally be 

contingent upon approval by the APJs hearing the post-grant review proceeding. 

Paragraph (3) governs publication of petitions for post-grant review and related documents. Notice of the petition must be published in the Federal Register. This will identify the petitioner, the 

patentee or patent holder, and the patent claims in dispute. The 

full petition, together with supporting and opposing documents and 

other pleadings, and orders and decisions, will be published to the 

USPTO website, except for those filings made under seal. 

Paragraph (4) authorizes the Director to discourage harassment 

through abuse of the post-grant review process, by specifying the 

actions that constitute abuse and by prescribing appropriate sanctions. The Director is given wide discretion to protect the integrity 

of the process, and may impose sanctions in the form of monetary 

fines (or payments to other parties) or restrictive orders relating to 

the proceedings, including dismissal of petitions or cancellation of 

claims. 

Paragraph (5) authorizes regulations to protect confidential matters, such as trade secrets. 


hsrobinson on PROD1PC76 with HEARING
74 

Paragraph (6) requires that any submissions by the patent owner 

become part of the patent file, and be made publicly available to 

the same extent as other matter in the file, except where subject 

to protective orders. 

The considerations the Director must take into account in promulgating regulations under § 326(a) and (b) are set forth in 

§ 326(c). These are: ‘‘the effect on the economy, the integrity of the 

patent system, and the efficient administration of the Office.’’ As 

used here, ‘‘effect on the economy,’’ means simply the cost to the 

parties of conducting the post-grant review process, including complying with the regulations issued under this section. 

All post-grant review proceedings under this chapter are required to be conducted by the PTAB by § 326(d). 

The patent owner is given the right to respond to the cancellation petition by § 327. However, this right is available only after a 

post-grant review proceeding has been initiated by the Director 

pursuant to § 325. Accordingly, the determination made by the Director merely tests the sufficiency of the allegations and supporting 

documents in the petition; it is not an opportunity to resolve conflicting positions. In his response after the Director has initiated 

the proceeding, the patent owner has the right to submit affidavits, 

declarations, expert opinions and other evidence bearing on patentability. The time period for the patent owner’s response shall be set 

by the Director by regulation. 

Under § 328(a), the presumption of validity set forth in § 282 

shall not apply in a challenge to any patent claim under this chapter. Given that post-grant review is not ‘‘judicial review,’’ with its 

attendant deference to agency determinations, the presumption of 

validity found in § 282 is not required, either by the Administrative 

Procedure Act or general separation of powers principles. Indeed, 

the whole purpose of post-grant review is to test the validity of the 

patent vel non; to catch patents that never should have issued in 

the first place. 

The burden of proving a proposition is allocated to the party advancing that proposition by § 328(b). The term ‘‘burden of proof’’ is 

used here in its common sense as including both the ‘‘burden of 

production’’ and the ‘‘burden of persuasion.’’ Both are imposed, with 

respect to a particular proposition, on the party putting forward 

that proposition. For example, a challenger claiming that prior art 

makes obvious the patented invention would have to both (1) 

produce and authenticate the prior art, and (2) persuade the APJ 

that a person of ordinary skill in the relevant art would find the 

invention obvious in light of that prior art. 

Also, § 328(b) defines the standard of persuasion as preponderance of the evidence. In the example, the APJ would have to find 

it more likely than not that a person of ordinary skill in the art 

would find the invention obvious in light of the reference. This is 

the same standard used in reexamination proceedings. See Patent 

Office Rule 1.555 (b)(2)(ii). 

Under § 329, in response to a cancellation petition, the patent 

owner may file a motion to amend the patent by canceling or substituting any challenged claim or by amending the specification or 

drawings. One such motion may be filed as of right under § 329(a); 

subsequent motions will be granted only for good cause shown as 


hsrobinson on PROD1PC76 with HEARING
75 

per § 329(b). A substitute claim cannot enlarge the scope of the 

original claim nor introduce new matter. 

Under § 330, once the Director has initiated a post-grant review 

proceeding, the PTAB must render a written decision respecting 

the patentability of any challenged or new claim (as permitted by 

§ 329), unless the matter is first settled pursuant to § 332. 

Under § 331(a) and following a decision of the PTAB, the Director 

shall issue and publish a certificate canceling any claim found by 

the PTAB to be unpatentable, or incorporating into the patent any 

new claim determined to be patentable. 

Pursuant § 331(b), any new claim incorporated into the patent 

shall have the same effect as that of a reissue patent under § 252. 

A pending case or cause of action for acts that infringed a valid 

claim replaced pursuant to § 329 is not abated by that claim’s replacement if the new claim is substantially similar to the one it replaces. However, acts that infringe only newly added claims, but 

not claims in the original patent, that were commenced (or substantial preparations were made for such acts) prior to the date of 

the Director’s certificate under § 331, may continue under such conditions as a court specifies in an infringement action. This provision conforms acts commenced prior to a recertified patent to the 

policy of ‘‘prior user rights’’ in § 273. 

Under § 332(a), the patent holder and cancellation petitioner may 

agree to settle and terminate the post-grant review proceeding at 

any time before the Board issues its written decision. The provisions of § 335, relating to estoppel, do not apply to any petitioner 

who settles under this section. Where there are multiple petitioners, the proceeding may be settled for fewer than all of them. 

If the sole petitioner settles, or all petitioners settle, the Board 

shall terminate the proceeding. 

Pursuant to § 332(b), all settlement agreements must be in writing with a copy filed in the Patent Office. Any collateral agreements (such as license or covenant not to sue) must accompany the 

filing. At the request of any party, the settlement agreement shall 

be sealed and made available only to government agencies on written request, or other person for good cause shown. 

The Director is authorized by § 333(a) to resolve any conflicts or 

inconsistencies arising from the co-pendency of post-grant review 

under this chapter with another post-issue review proceeding. Several changes made by this statute can affect pending USPTO proceedings. Not only does the newly added chapter 32 create a postgrant review process, but adoption of the first-inventor-to-file system (section 3 of the statute), expanded reexamination procedures 

(sections 6(a)—(e)), and the new derivation proceeding (section 3(i)), 

among others, can affect pending reexamination, reissue and interference proceedings. While some sections have a delayed effective 

date, conflicts still could arise among co-pending proceedings. Also, 

because of multiple routes to post-issue review of patents, or separate proceedings brought by multiple parties, some overlap can be 

expected even after the statute becomes fully operative. Pursuant 

to § 333(a), the Director may stay, transfer, consolidate or terminate such other proceedings. This provision is designed to promote 

judicial economy by having fewer proceedings on the same issue. 

Another set of potential conflicts, arising from the co-pendency of 

post-grant review proceedings and infringement actions in district 


hsrobinson on PROD1PC76 with HEARING
76 

court, are addressed by § 333(b). Under this provision, the Director 

may stay the post-grant proceeding if a pending infringement action addresses the same or substantially the same questions of patentability. That would presumably occur wherever the claims-insuit are the same as those challenged by the cancellation petitioner. The stay authority is discretionary with the Director. 

A final decision in a civil case has a preclusive effect on the parties in a later civil action. Section 317(b) in current law extends 

preclusion to later filed or pending inter partes examinations. New 

§ 334 does the same for post-grant review proceedings. It applies to 

all patent litigation cases where jurisdiction is, or could be, based 

on 28 U.S.C. § 1338 (jurisdiction in intellectual property cases). ‘‘Final decision’’ means a final judgment. Thus, a decision of the 

district court has no preclusive effect until it has been upheld on 

appeal or the time for appeal has lapsed. Preclusion extends to any 

cancellation petitioner who was a party, or a ‘‘privy’’ to a party, in 

an earlier civil action. 

Preclusion under § 334 operates in two situations. Under paragraph (1) a precluded party may not request a post-grant review 

proceeding on any patent claim previously adjudicated against it on 

the basis of any ground that the party raised or could have raised. 

The ‘‘could have raised’’ language makes this a broad form of preclusion, similar to claim preclusion or res judicata in civil litigation. 

It is not limited to facts or legal issues actually decided. Thus, a 

new ground for unpatentability (e.g., newly discovered prior art) ordinarily could not serve as a basis for a later-instituted post-grant 

review proceeding. Nominally, preclusion applies only to grounds 

raised under the provisions of § 311, i.e. anticipation or obviousness 

resulting from prior art consisting of patents and printed publications. However, the reference to § 311 is illustrative, not limiting. 

Thus, a patent claim may not be made the subject of a post-grant 

review proceeding, irrespective of the reason alleged for 

unpatentability, if it had previously been adjudicated in district 

court. 

Preclusion under paragraph (2) operates in much the same way 

as under paragraph (1), except that it applies to pending post-grant 

review proceedings. Once a final decision adverse to the cancellation petitioner has been entered in Federal court, any precluded 

claims must be severed from the pending post-grant review proceeding. If no claims remain in the proceeding, it must be dismissed. 

Preclusion under § 334 operates only if validity of the claim is 

called into question, and upheld, in the prior civil action. If the 

claim is not challenged as unpatentable, then the judgment does 

not preclude a pending or later-filed post-grant review proceeding. 

Similar to § 334, § 335 provides preclusion where the first decision is in a post-grant review proceeding under this chapter. However, it differs in an important respect. Preclusion applies only to 

a ground which the cancellation petitioner raised, not to grounds 

that could have been raised. Thus, it operates similar to issue preclusion or collateral estoppel in civil litigation. Only grounds actually asserted (whether or not decided) in the prior proceeding serve 

as the basis for preclusion. This difference is partly based on the 

Committee’s intent that some form of post-issue review remain 

available throughout the life of a patent, so as to accommodate 


hsrobinson on PROD1PC76 with HEARING
77 

newly discovered prior art or application of patent claims to new 

circumstances. 

Preclusion under § 335 applies only to final decisions of the 

PTAB issued under § 330. Preclusion is effective as soon as the decision issues, even if it is subsequently appealed to the Federal Circuit. Of course, if the court reverses or remands, the decision may 

no longer be favorable to patentability, thus undoing the basis for 

asserting preclusion. 

Under § 335, preclusion will apply to all of the following, (1) new 

or ongoing inter partes reexaminations, (2) new or ongoing derivation proceedings under § 135(a), (3) new or other ongoing post-grant 

review proceedings under chapter 32, and (4) new or ongoing patent litigation cases, including declaratory judgment cases. 

Judicial review of a final decision of the PTAB is given exclusively to the Federal Circuit by § 336. It references, and is therefore 

identical to, appeal provisions in the patent code (specifically 35 

U.S.C. §§ 141–145) applicable to other decisions of the PTAB. Any 

party to the post-grant review proceeding has standing on appeal. 

Conforming Amendment 

The table for part III (‘‘Patents and Protection of Patent Rights’’) 

is amended to conform to the new chapter added by section 6(f). 

Repeal of Former Estoppel Provision in Inter Partes Reexamination 

Section 6(h) repeals § 4607 of the Optional Inter Partes Reexamination Procedure Act of 1999, which describes the estoppel 

grounds in inter partes reexamination. Estoppel resulting from 

inter partes reexamination decisions is now governed by § 315(c), as 

amendment by this Act. 

Effective Dates 

Under section 6(i), the amendments made by section 6 become effective 1 year after the date of enactment of this statute. Once effective, the amendments made to § 301 (citation of prior art) and 

to chapter 31 (ex parte reexamination) will apply to all patents, irrespective of when issued. This supercedes any previously stated 

effective date for inter partes reexamination. See Optional Inter 

Partes Reexamination Procedure Act of 1999, § 4608 (applicable 

only to patents issued after Nov. 20, 1999). 

But, chapter 32 (post-grant review procedure) will apply only to 

patents issued on or after the section’s effective date. Accordingly, 

patents issued at any time before the effective date are subject to 

the amended reexamination provisions, but not subject to postgrant review proceedings. 

Regulatory Authority 

Section 6(j), requires the Director to promulgate regulations governing chapter 32 post-grant review proceedings as described in 

§ 326, not later than 1 year after enactment of this Act. This is 

time frame is made with the effective date of chapter 32 in mind. 

Because the regulations must be in place when the post-grant review procedures become operative, the Director will need to promulgate and publish the regulations, for notice and comment, in 

advance of the date set by this section. 


hsrobinson on PROD1PC76 with HEARING
78 

SEC. 7. DEFINITIONS: PATENT AND TRIAL APPEAL BOARD

Section 7 amends 35 U.S.C. § 6(a) to define the composition of the 

PTAB to include the Director, Deputy Director, Commissioner for 

Patents, the Commissioner for Trademarks, and administrative 

patent judges. This corrects the current language of § 6(a) which 

names the Deputy Commissioner instead of the Deputy Director to 

the Board. 

As amended, § 6(b) defines the duties of the Board. These duties 

include hearing appeals from adverse decisions by examiners, hearing adverse decisions by examiners on ex parte reexaminations, 

hearing appeals from inter partes reexamination, determining the 

right to patent in derivation proceedings, and conducting postgrant review proceedings. 

Also under amended § 6(b), the Director is to assign each postgrant review proceeding to a panel of three administrative patent 

judges. It is the Committee’s intention that only administrative 

patent judges may adjudicate post-grant review proceedings and 

that the Director, Deputy Director, the Commissioner for Patents, 

and the Commissioner for Trademarks may not participate in the 

adjudication of post-grant review proceedings. The purpose of this 

provision is to prevent political considerations from influencing 

post-grant opposition decisions. 

Section 7 also defines an additional term, ‘‘cancellation petitioner’’ as the real party in interest who requests a post-grant review proceeding as provided in Chapter 32, and its privies. 

SEC. 8. STUDY AND REPORT ON REEXAMINATION PROCEEDINGS

Section 8 directs the Director to conduct a study of the effectiveness and efficiency of reexamination proceedings available under 

Title 35 of the U.S. Code, and to submit a report on the results of 

the study to the Judiciary Committees of the House of Representatives and Senate, along with any suggestions or recommendations 

the Director may have to amend the law with respect to patent reexamination proceedings or otherwise change the way reexamination proceedings operate. The study is to be initiated not later than 

2 years after the date of enactment of this Act. The Director should 

focus the study on whether ex parte reexamination, inter partes reexamination, or both, should be phased out or merged, particularly 

in light of the newly created post-grant opposition proceeding. 

SEC. 9. SUBMISSIONS BY THIRD PARTIES AND OTHER QUALITY

ENHANCEMENTS

Section 9 amends § 122 which provides guidelines to the publication of pending patent applications. Under current § 122(b)(2)(B), 

an applicant is allowed to request that an application not be published if the applicant certifies that the invention disclosed in the 

application will not be the subject of an application filed in another 

country or under a multilateral international agreement that requires publication of applications 18 months after filing. Section 

122(b)(2)(B) is struck, thus all non-provisional utility patent applications will be published 18 months after application, unless they 

are abandoned prior to the 18 month publication date, or are subject to a secrecy order. 


hsrobinson on PROD1PC76 with HEARING
79 

Section 9 also adds § 122(e) which allows third parties to submit 

patents, printed patent applications and other publications of potential relevance for consideration by an examiner and inclusion in 

the record of a published application. Third party submitted references must be made in writing before the earlier of either the 

mailing of a notice of allowance in the application for patent, or the 

later of 6 months after the date of publication or the date of the 

first rejection under § 132 of any claim in the application for patent. To be considered and placed in the record of a published application, a submitted reference must be accompanied by a concise description of its asserted relevance, any fee that may be prescribed 

by the Director, and a statement that the submission was made in 

compliance with § 122. 

SEC. 10. TAX PLANNING METHODS NOT PATENTABLE. 

Section 10 amends § 101, which defines patentable subject matter, by adding paragraph (b)(1) which states that a patent may not 

be obtained for a tax planning method. Paragraph (2) defines the 

operative terms. Here, a tax planning method is any plan, strategy, 

technique, or scheme that is designed to reduce, minimize, or defer 

a taxpayer’s tax liability, or has such effect. Excluded from the definition (and hence not unpatentable) are tax preparation software 

or other tools used solely to perform or model mathematical calculations or prepare tax or information returns. The intention is to 

prohibit the following tax planning methods: 

(1) Patents claiming strategies for reducing tax liability; 

(2) Patents claiming investment strategies, to the extent the 

patent claims the sheltering of income from tax liability; 

and 

(3) Patents claiming strategies designed to maximize investment return, to the extent the patent claims the minimization of taxes on those returns. 

Excluded from the definition of ‘‘tax planning method’’ are, inter 

alia: 

(1) Patents claiming software to assist in determining tax liability; and 

(2) Business method patents, including investment strategies, 

to the extent tax planning methods are not claimed 

If a patent or application claims both excluded and not-excluded 

subject matter, the latter claims are unaffected by this amendment. 

The exceptions to non-patentability, found in § 101(b)(2), covering 

tax preparation software and the like, does not necessarily mean 

that such items are patentable. Rather, any patent or application 

falling within the exception, whenever issued or filed, will be subject to generally applicable patent standards and procedures. The 

Committee does not intend by this exclusion to express any view 

on the patentability of such inventions. 

Pursuant to § 101(b)(2)(B), ‘‘taxpayer,’’ for purposes of § 101(b), is 

any individual, entity or other person (as defined by 26 U.S.C. 

§ 7701) subject to taxation or a tax law, or is required to prepare 

a tax return or other information for someone who is. 

‘‘Tax’’ and related terms are defined by § 101(b)(2)(C) and include 

any form of state, local or Federal tax, whether income, gift and esVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00079 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
80 

tate, consumption and sales, property, ad valorem or any other 

similar government levy. It does not include foreign taxes. 

Section 10 becomes effective on the date of enactment of the Act. 

It applies to all applications filed on or after the effective date, and 

to all pending applications that have not resulted in an issued patent as of the effective date. Patents issued before the effective date 

are unaffected by this section. However, pursuant to § 101(b)(3), 

this grandfather provision shall not be construed as validating any 

patent issued before the date of enactment of this Act for an invention described in 35 U.S.C. § 101(b), as amended by this section. 

This provision expresses the Committee’s intent that previously 

issued tax strategy patents should be evaluated, if subject to review in litigation or USPTO post-issuance review, based on standards existing at the time of issue. The prospective exclusion of such 

patents under § 101(b) shall not be construed as expressing the 

Committee’s view that, prior to that time, such patents were valid. 

SEC. 11. VENUE AND JURISDICTION

Venue 

Section 11(a) amends 28 U.S.C. § 1400(b) relating to venue in 

patent cases by completely replacing the current language with a 

detailed means for establishing venue. Section 11 also amends 

§ 1292 of the same title pertaining to interlocutory appeals. 

The new § 1400(b) prohibits manufactured venue by virtue of assignment, incorporation, or otherwise. As used in the case law, 

‘‘manufactured venue’’ usually refers to a plaintiff taking advantage of the liberal venue rules in § 1391, but still in literal compliance with the statute. See, e.g., Sidney Coal Co. v. SSA, 427 F.3d 

336 (6th Cir. 2005). In this sense, manufactured venue is entirely 

permissible since venue cannot be defeated based on plaintiff’s motives. Martin v. United States, 323 F. Supp. 1131 (D. Pa. 1970). 

Manufactured venue for patent venue purposes is redefined by 

§ 1400(b). It precludes venue otherwise permitted by § 1400(c) and 

(d), if the circumstance on which venue is based has no independent purpose. It is similar to (but broader than) the collusive 

venue doctrine and similar in function to § 1359 of the Judicial 

Code: 

‘‘A district court shall not have jurisdiction of a civil action in 

which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of 

such court.’’

Examples of manufactured venue under amended § 1400(b) include: 

(1) A patent holder who assigns or licenses his patent rights 

to a person or entity residing elsewhere, for no apparent 

reason other than to obtain a preferred venue; 

(2) Collusive or fraudulent joinder of a plaintiff or defendant 

to secure venue based on that party’s location; 

(3) A party incorporating or reincorporating, or creating or 

merging with a subsidiary, in a district primarily for venue 

purposes; 


hsrobinson on PROD1PC76 with HEARING
81 

(4) A defendant who seeks a change of venue (see § 1400(d)) 

based on the situs of relevant evidence or witnesses recently relocated or procured in the transferee district. 

The sole authority for venue on the basis of defendant’s residence 

is established under § 1400(c). The expanded venue provisions of 

§ 1391(c) are no longer applicable to patent infringement cases, although they still are in other cases involving patents (e.g., declaratory judgment). 

Under paragraph § 1400(c)(1), venue is proper at the following locations: 

(1) Where defendant has its principal place of business; or 

(2) Where the defendant is incorporated, if a domestic corporation; or 

(3) Where the defendant’s primary United States subsidiary, if 

any, has its principal place of business or is incorporated, 

if the defendant is a foreign corporation; 

The term ‘‘where the defendant resides’’ in existing § 1400(b) was 

limited, in the case of a corporate defendant, to the state of its incorporation. Fourco Glass Co. v. Transmirra Products Corp., 353 

U.S. 222 (1957). Within that state, its residency is where it has its 

principle place of business. Zin-Plas Corp. v Plumbing Quality 

AGF. Co., 622 F Supp 415 (WD Mich, 1985). The amendment to 

§ 1400(b) expands venue based on defendant’s residency to include 

states other than the state of incorporation if their principal place 

of business is there, and in the case of foreign corporations. The 

term ‘‘principal place of business’’ has a long and well established 

meaning in case law, and its is the Committee’s intention that the 

term be so defined. See, e.g., Panhandle Eastern Pipe Line Co. v. 

Federal Power Com’n., 324 U.S. 635 (1945); United Nuclear Corp. 

v Moki Oil & Rare Metals Co., 364 F2d 568 (10th Cir. 1966). 

A foreign defendant without a United States subsidiary could not 

be sued on the basis of § 1400(c)(1). Where § 1400 provides no 

forum for an infringement suit against a foreign defendant, a court 

should look to § 1391(d) (‘‘an alien may be sued in any district ’’). 

Brunette Machine Works, Ltd. v. Kockum Industries, Inc., 406 U.S. 

706, 714 (1972); Zin-Plas Corp (infringement suit against U.S. citizen with no domestic residence governed by § 1391(d)). The amendment to § 1400 does not change this rule. 

The amendment to § 1400(b)(1) also does not affect the rule that, 

in case of multiple defendants, venue must be proper for all of 

them. Thus, unless the principal place of business or state of incorporation are common, paragraph (1) may not be used as a basis for 

venue. 

Venue under § 1400(c)(2) is more restrictive. Under current law, 

venue is where the defendant has committed acts of infringement 

and has a regular and established place of business. Section 

1400(c)(2) adds two requirements: 

(1) a substantial portion of the acts of infringement must occur 

in the district; and 

(2) the defendant must have a regular and established physical facility that the defendant controls and that constitutes 

a substantial portion of the operations of the defendant. 


hsrobinson on PROD1PC76 with HEARING
82 

It is also important to note that both tests under subsection (c)(2) 

must be met. If not, plaintiffs must establish venue under the other 

subsections of this section. 

The requirement of substantial acts of infringement is intended 

to reduce plaintiff forum shopping, especially in cases of nationwide 

sales and uses. The other requirement, operations at defendantcontrolled physical facility, may also reduce the available fora. Regular and established place of business, under the existing patent 

venue statute, is often interpreted to require a significant on-going 

corporate presence in the district, but a fixed physical presence has 

not been required. See, e.g., In re Cordis Corp., 769 F2d 733 (Fed. 

Cir. 1985). The amendment to § 1400(c)(2) adds a fixed physical 

presence as a requirement. 

As per 35 U.S.C. § 271(a), acts of infringement can occur where 

the defendant makes, uses, offers to sell, or sells any patented invention, or imports an infringing product into the United States. 

Venue based on § 1400(c)(2) would exist only where a substantial 

portion of the infringing acts occurs. In the case of infringement by 

manufacture, that will likely be the defendant’s principal manufacturing facility, at least for the infringing product, which may or 

may not also constitute a substantial portion of the operations of 

the defendant. If these conditions describe separate facilities in different districts, then venue cannot be based on § 1400(c)(2). The 

same analysis would apply to infringement by use. 

In the case of infringement by sale or an offer to sell, a substantial portion of infringing acts describes where a substantial number 

of sales or offers occur. If defendant does not have a qualifying facility in that forum, then § 1400(c)(2) is not available. 

Finally, the place of importation, if that is the infringing act, 

must also be where defendant has a qualifying physical facility. 

As with § 1400(c)(1), venue based on § 1400(c)(2) must be proper 

as to all defendants. A forum where a substantial portion of the 

acts of infringement occurs with respect to one defendant may not 

be the with respect to another defendant. Or, more likely, the multiple defendants will not all have qualifying physical facilities in 

the same forum. 

‘‘Congress does not in general intend to create venue gaps,’’ Brunette, 406 at 710. The Committee recognizes, however, that the ‘‘all 

defendants’’ rules of § 1400(c)(1) and (2) could, in isolated cases, 

leave a case without a suitable forum. It is not the Committee’s intent that infringement plaintiffs not be able to sue at all. Therefore, where no district would have venue under § 1400(c), the regular venue statute, 28 U.S.C. § 1391, should apply. 

Under § 1400(c)(3), venue is proper at the primary plaintiff’s residence if it is an institution of higher education as defined by 20 

U.S.C. § 1010(a); e.g., accredited post-secondary 4-year degreegranting institutions and 2-year credit-granting institutions. Most 

plaintiffs taking advantage of this venue provision will be universities with research programs. In some cases, however, the university is not the patentee or the holder of patent rights, or not the 

‘‘primary plaintiff.’’

Under § 1400(c)(4), venue is proper where the plaintiff or subsidiary has an established physical facility dedicated to research, 

development, or manufacturing that is operated by full-time employees, or where the sole plaintiff is an individual inventor who 


hsrobinson on PROD1PC76 with HEARING
83 

is a natural person and who qualifies at the time such action is 

filed as a micro entity. 

The plaintiff’s physical facility need not be the counterpart of a 

defendant’s physical facility for venue under § 1400(c)(2). It does 

not have to be regular and it does not have to constitute a substantial portion of the party’s operations. But it does have to be operated by full-time employees, which, may approximate the ‘‘regular’’

requirement of § 1400(c)(2). Moreover, the facility must be one for 

research, development, or manufacturing. This requirement will exclude many ‘‘non-practicing entities;’’ i.e., plaintiffs for whom the 

patent-in-suit is more of a financial or investment instrument than 

a means for manufacturing, using or marketing a product or process. It is the Committee’s intention that university licensing entities, whether acting as a unit of a university or as a related third 

party, be considered a facility dedicated to research and development. 

As in the case of defendants, venue under § 1400(c)(4) must be 

proper as to all plaintiffs in the case of multiple plaintiffs. 

The combined effect of § 1400(c)(3) and (4) is to allow many plaintiffs to sue in the forum of their residence. However, excluded are 

patent holding companies and owners of ‘‘liquid patents.’’ See, Amy 

Landers, Liquid Patents, 84 Denv. U.L. Rev. 199, 233 (2006). 

Venue in cases filed by such entities must be based on paragraphs 

§ 1400(c)(1) or (2). 

The exclusive method for change of venue in patent infringement 

cases is provided by § 1400(d), supplanting the general change of 

venue statute, 28 U.S.C. § 1404. In patent infringement cases, 

where venue is governed by § 1400, a change of venue is permissible only to another district where the defendant has substantial 

evidence or witnesses, and change of venue is proper under § 1404. 

Where it applies, a defendant can choose any forum that would 

have been proper under the old venue statute, as modified by 28 

U.S.C. § 1391(c) in the case of corporate defendants. 

It is expected that most motions for change of venue under 

§ 1400(d) will be filed by defendants. Egregious forms of defendant 

forum shopping are avoided by the rule against manufactured 

venue in § 1400(a). Furthermore, a change of venue is discretionary 

with the district court. 

While § 1400(d) supersedes 28 U.S.C. § 1404, it does not supersede 28 U.S.C. § 1406. This latter provision allows a court to cure 

a defect in venue by transferring the case to any district or division 

in which it could have been brought. It also allows the parties to 

waive venue defects, such as by failure to timely interpose an objection. 

The Committee understands that certain jurisdictions have seen 

a rapid rise in patent infringement filings in the first half of 2007, 

perhaps due to Congressional efforts to reform and bring balance 

to the patent laws. The Committee urges the courts to provide appropriate scrutiny to any recent case filings to ensure that they are 

being pursued in a proper venue, and where there is some nexus 

to the issues of the case. If cases have been inappropriately filed, 

the Committee urges the courts to consider transferring them to 

more appropriate forums, according to the procedures permitted 

under 28 U.S.C. § 1404. 


hsrobinson on PROD1PC76 with HEARING
84 

Interlocutory Appeals 

Section 11(b) amends 28 U.S.C. § 1292(c) by allowing appeals 

from interlocutory orders that determine construction of claims in 

patent infringement suits. The district court will have discretion as 

to whether to approve the appeal and whether to stay the proceedings. 

In most patent infringement cases, a question is raised about the 

scope of the invention as defined by the claims and limitations in 

the patent. Because construing patent claims is usually complicated and is a matter of law, Markman v. Westview Instruments, 

Inc., 517 U.S. 370 (1996), courts often conduct pre-trial hearings to 

determine the scope of claims, without regard to the question of infringement. These so-called ‘‘Markman hearings’’ do not neatly fit 

into the narrow categories of immediately appealable interlocutory 

orders and cannot ordinarily be appealed until after trial and judgment. Furthermore, the Committee has heard testimony that the 

Federal Circuit’s reversal rate of claim construction is unusually 

high. For these reasons, the District Courts will now have to certify 

the interlocutory appeal for it to go forward. 

SEC. 12. ADDITIONAL INFORMATION; INEQUITABLE CONDUCT AS A

DEFENSE TO INFRINGEMENT

Disclosure Requirements 

Section 12(a) amends Chapter 11 of Title 35 of the United States 

Code by adding §§ 123 and 124. 

The newly created § 123 gives the Director of the USPTO authority to require applicants to submit a search report with an analysis 

relevant to the patentability of the invention claimed in the application. Noncompliance with the requirements within the time periods prescribed by the Director as abandonment of the application 

are also addressed by § 123. 

The proposed statutory language of § 123 does not define in any 

detail what is necessary or sufficient to meet these requirements 

as the Committee believes that is best left to the Director. The 

USPTO has discussed the need for some sort of examination support document or applicant quality submission to improve the examination process. It may include a thorough search of the art in 

the field of the invention and in related fields in which one skilled 

in the art pertaining to the invention would expect to find information applicable to the invention. It is also expected that the information discovered by the search that is material to the patentability of the claimed invention be disclosed to the USPTO along 

with an analysis of how the information relates to the claimed invention and how the claimed invention us distinguished over the 

prior art information. 

Micro Entities 

The newly created § 124 defines a new category of applicant, 

known as a ‘‘micro entity.’’ Under § 124(b), a micro entity is defined 

as a small entity who has not been named on five or more previously filed patent applications, has not assigned, granted or conveyed a license or other ownership interest in the application and 

is not under an obligation by contract or law to do so, and does not 

have a gross income of greater than 2.5 times the Average Gross 


hsrobinson on PROD1PC76 with HEARING
85 

Income (AGI) as reported by the Secretary of Labor. An applicant 

who has assigned rights in the application can qualify as a micro 

entity under § 124(c) if the assignee or licensee is an entity with 

five or fewer employees and has a gross taxable income that does 

not exceed 2.5 times the AGI for the calendar year immediately 

preceding the year in which the examination fee is being paid. If 

the AGI for the previous year has not yet been reported, the AGI 

of the latest year for which it was reported should be used. 

The income level ceilings for micro entities under § 124(b) and (c) 

may be further adjusted to reflect annual changes in the Consumer 

Price Index (CPI). This is intended to give the Director discretion 

to adjust the income qualification for micro entity status where the 

CPI rises substantially faster than AGI. 

Because fulfilling the requirements of § 123 may be particularly 

burdensome on applicants that qualify as micro entities, such entities are exempted from the information submission requirements of 

§ 123. 

Inequitable Conduct 

Section 12(b) codifies at 35 U.S.C. § 282(c) the judicially-created 

doctrine of ‘‘inequitable conduct’’ as a defense to patent infringement. The defense of inequitable conduct was established by the 

courts as an equitable remedy aimed at deterring applicants from 

deliberately misstating or withholding information that is materially related to the examination of an application. The Federal Circuit has held that in order to prove inequitable conduct, there must 

be separate showings of: a) materiality of the information misstated or withheld and b) intent to deceive the patent office. Uncertainty has developed in the application of these standards. As such, 

this codification is intended to preserve the primary purpose of the 

defense, while also making its application more predictable and 

certain. Additionally, it is also intended that this codification will 

allay concerns patent applicants have in sharing information with 

the USPTO concerning the patentability of their inventions during 

prosecution. 

Under § 282(c)(1), three substantive elements of the defense are 

spelled out. They are: (1) the applicant (or another with the duty 

to disclose) had ‘‘the intent to mislead or deceive the patent examiner;’’ (2) in furtherance of such intent, the applicant ‘‘misrepresented or failed to disclose material information’’ to the Office; and 

(3) in the absence of the misrepresentation or nondisclosure, the 

Office would have made a prima facie finding of unpatentability. 

Under § 282(c)(2), intent must be proven as a separate element 

of the offense. Under current doctrine, some courts infer intent 

from the materiality of withheld or misrepresented information. 

The Committee believes this has lead to some unjust results. Accordingly, to prove intent under § 282(c), specific facts beyond the 

materiality of the information misstated or withheld must be proven, showing deliberate or conscious action to deceive or mislead the 

USPTO. Because intent is a subjective matter, going to state of 

mind, it may still be proven inferentially (by circumstantial rather 

than direct evidence). Still, facts independent of the materiality of 

the information must be proven to support such inference. 

In addition to the requirement that the misrepresented or withheld information be ‘‘material,’’ the information must be such that, 


hsrobinson on PROD1PC76 with HEARING
86 

had the deception not occurred, the examiner would have made a 

prima facie finding that the claimed invention was unpatentable. 

As used here, a prima facie showing of unpatentability is a showing 

that the claimed invention is unpatentable for any reason based on 

the requirements of patentability provided in 35 U.S.C. § 101, 

§ 102, § 103 or § 112, unless expressly prohibited by other parts of 

the patent statute, that may yet be overcome in a rebuttal by the 

patent applicant. The intention behind this codification is to provide clarity about which standard of materiality courts should use. 

Courts are given a range of remedies they may provide when inequitable conduct is found by § 282(c)(3). These remedies include 

denying the patent holder an injunction against the infringer, holding the claims-in-suit or those in which the inequitable conduct occurred unenforceable, holding the entire patent unenforceable, and 

holding related patents unenforceable. The discretion in remedies 

given the courts is intended to allow them to apply remedies that 

are commensurate to the level of deception and materiality found. 

While the Committee expects the courts to continue to hold patents 

unenforceable where it is proven that the actions of the applicant 

or its agents are so culpable or egregious as to constitute fraud on 

the USPTO, and thereby merit such a harsh penalty, there may be 

circumstances which warrant a less severe penalty. For instance, 

where patent attorneys or agents acting without authority, direction or knowledge of the patent applicant are found solely responsible for the inequitable conduct, a penalty less than unenforceability of the entire patent may be in order. Further, there are 

most likely other scenarios that would similarly warrant a less severe penalty than holding the entire patent unenforceable, and it 

is expected that the courts will exercise their judgment in balancing the equities of each case to decide the appropriate remedy. 

Under § 282(c)(4), attorneys and others who are licensed to practice before the USPTO may now also be held accountable for actions amounting to inequitable conduct where inequitable conduct 

is found and there is evidence that suggests such person licensed 

has engaged in inequitable conduct. These persons will be referred 

by court to the USPTO for disciplinary action. Additionally, the 

court shall order the parties to make available to the USPTO any 

evidence showing this person has engaged in inequitable conduct. 

The Committee has heard that people who engage in inequitable 

conduct are rarely held accountable for their actions. The lack of 

action by the USPTO to enforce its own rules concerning the duty 

imposed on attorneys and agents to act with candor, good faith and 

honesty before it creates the opportunity for abuse of these rules. 

As such, the intention behind this provision is to require that those 

persons found to have deceived the USPTO during patent prosecution are held accountable. 

Under § 282(d), a person asserting the inequitable conduct defense must comply with Rule 9(b) of the Federal Rules of Civil Procedure. That means the circumstances constituting inequitable conduct must be plead with particularity. The pleader must identify 

specific information showing the materiality of misstated or withheld information, as described in this section. Averments of fraud 

or conscious or deliberate behavior to mislead or deceive the 

USPTO may be made generally. This requirement is intended to 

avoid use of the defense simply as a dilatory or settlement tactic. 


hsrobinson on PROD1PC76 with HEARING
87 

SEC. 13. BEST MODE REQUIREMENT

Section 13 amends § 282(b) to eliminate as a defense to patent 

infringement the patentee’s failure to comply with the best mode 

requirement of § 112. Under current law, the defense of patent invalidity is available for failure to comply with any requirement of 

§§ 112 (specification) or 251 (reissued patents). Further, § 282(b)(3) 

is amended to strike best mode as a defense; all other defenses are 

unaffected by section 13. The best mode requirement will otherwise 

remain in § 112, where it can serve as a basis for rejection of a 

claim if it appears that the best mode contemplated by the inventor 

has not been disclosed. 

SEC. 14. REGULATORY AUTHORITY

Section 14(a) amends § 2(c) to provide guidance as to the extent 

of rulemaking authority granted the USPTO under § 2(b). Specifically, this amendment clarifies that the USPTO may make rules 

that pertain to the quality and timeliness of applications, which include establishing conditions on the use of continuations. The Committee chose to codify this amendment under § 2(c) instead of § 2(b) 

to confirm that such power was granted to the USPTO at least as 

early as enactment of Public Law 106–113 (1999), and that this 

change is only a ‘‘clarification of specific powers’’ granted in § 2(b). 

To ensure there is no ambiguity on this point, section 14(b) states 

that this language should be construed as adding no new rulemaking powers to the USPTO. 

Typically, courts will give deference to the rules promulgated by 

agencies if an Act which charges the agency with responsibility 

doesn’t speak to the issue that the rule pertains to. However, if direction on the issue can be found in the statute, any agency rules 

that conflict with the statute must be struck down. 

In In re Henriksen, 399 F.2d 253 (CCPA, 1968), the Court of 

Claims and Patent Appeals (CCPA) held that a Board of Patent 

Appeals and Interferences (BPAI) decision violated the USPTO’s 

rule making authority. The BPAI had construed a limit on the 

number of continuations an applicant could file based on a literal 

reading of 35 USC § 120 that would suggest only one or two continuations could ever be filed. The CCPA reversed the BPAI’s decision, finding that the statute placed no restrictions on the number 

of continuations an applicant may obtain and thus the BPAI’s mechanical rule on the number of continuations an applicant could file 

was inconsistent with § 120. However, later precedent in In re 

Bogese II, 303 F.3d 1362 (Fed. Cir., 2002), suggests that the 

USPTO may limit continuations when ‘‘dilatory tactics’’ are used in 

the prosecution of applications, thus leading to some confusion as 

to the nature of limits the USPTO can place on continuations 

through rulemaking. 

To resolve the ambiguity behind the USPTO’s rulemaking authority that In re Hernicksen has caused, the Committee has clarified that the USPTO has always had authority to promulgate rules 

that place limitations or conditions on patent applications, including continuation applications, that do no directly contradict any 

limitations or conditions expressly stated in statute. 


hsrobinson on PROD1PC76 with HEARING
88 

SEC. 15. TECHNICAL AMENDMENTS

Section 15 makes a number of technical changes that improve 

the formatting or organization of the patent statute. None of the 

changes in this section are intended to substantive in any way. 

SEC. 16. STUDY OF SPECIAL MASTERS IN PATENT CASES

Section 16 directs the Administrative Offices of the United States 

Courts, in consultation with the Federal Judicial Center, to study 

the use of special masters in patent infringement cases. This study 

will investigate what benefits, if any, are derived from the use of 

special masters in patent cases. The study will look into such factors as the costs and length of litigation when special masters are 

used, the role special masters are given in patent cases, the legal 

and technical background of special masters and any other factors 

that the Administrative Offices of the United States Courts or the 

Federal Judicial Center believe will assist in determining whether 

the use of special masters in patent litigation should be encouraged 

and/or supported. 

SEC. 17. RULE OF CONSTRUCTION

It is the Committee’s intention to preserve the CREATE Act as 

originally codified in 35 USC § 103(c), in the new § 102(b)(3). Section 17 explicitly states this intention and directs any inquiry to 

the purpose of the new § 102(b)(3) to the legislative history of the 

CREATE Act. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman): 

TITLE 35, UNITED STATES CODE 

* * * * * * * 

PART I—UNITED STATES PATENT AND 

TRADEMARK OFFICE 

* * * * * * * 

CHAPTER 1—ESTABLISHMENT, OFFICERS AND 

EMPLOYEES, FUNCTIONS 

Sec. 

1. Establishment. 

* * * * * * * 

ø6. Board of Patent Appeals and Interferences.¿ 

6. Patent Trial and Appeal Board. 

* * * * * * * 


hsrobinson on PROD1PC76 with HEARING
89 

§ 2. Powers and duties 

(a) * * * 

* * * * * * * 

(c) CLARIFICATION OF SPECIFIC POWERS.—(1) * * * 

* * * * * * * 

(6) The powers granted under paragraph (2) of subsection (b) 

include the authority to promulgate regulations to ensure the quality and timeliness of applications and their examination, including 

specifying circumstances under which an application for patent may 

claim the benefit under sections 120, 121 and 365(c) of the filing 

date of a prior filed application for patent. 

* * * * * * * 

ø§ 6. Board of Patent Appeals and Interferences 

ø(a) ESTABLISHMENT AND COMPOSITION.—There shall be in the 

United States Patent and Trademark Office a Board of Patent Appeals and Interferences. The Director, the Commissioner for Patents, the Commissioner for Trademarks, and the administrative 

patent judges shall constitute the Board. The administrative patent 

judges shall be persons of competent legal knowledge and scientific 

ability who are appointed by the Director. 

ø(b) DUTIES.—The Board of Patent Appeals and Interferences 

shall, on written appeal of an applicant, review adverse decisions 

of examiners upon applications for patents and shall determine priority and patentability of invention in interferences declared under 

section 135(a). Each appeal and interference shall be heard by at 

least three members of the Board, who shall be designated by the 

Director. Only the Board of Patent Appeals and Interferences may 

grant rehearings.¿ 

§ 6. Patent Trial and Appeal Board 

(a) ESTABLISHMENT AND COMPOSITION.—There shall be in the 

Office a Patent Trial and Appeal Board. The Director, the Deputy 

Director, the Commissioner for Patents, the Commissioner for 

Trademarks, and the administrative patent judges shall constitute 

the Patent Trial and Appeal Board. The administrative patent 

judges shall be persons of competent legal knowledge and scientific 

ability who are appointed by the Director. Any reference in any Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or pertaining to the Board of Patent Appeals 

and Interferences is deemed to refer to the Patent Trial and Appeal 

Board. 

(b) DUTIES.—The Patent Trial and Appeal Board shall—

(1) on written appeal of an applicant, review adverse decisions of examiners upon application for patents; 

(2) on written appeal of a patent owner, review adverse decisions of examiners upon patents in reexamination proceedings 

under chapter 30; 

(3) review appeals by patent owners and third-party requesters under section 315; 

(4) conduct post-grant opposition proceedings under chapter 

32. 


hsrobinson on PROD1PC76 with HEARING
90 

Each appeal and derivation proceeding shall be heard by at least 

3 members of the Patent Trial and Appeal Board, who shall be designated by the Director. Only the Patent Trial and Appeal Board 

may grant rehearings. The Director shall assign each post-grant review proceeding to a panel of 3 administrative patent judges. Once 

assigned, each such panel of administrative patent judges shall 

have the responsibilities under chapter 32 in connection with postgrant review proceedings. 

* * * * * * * 

§ 41. Patent fees; patent and trademark search systems 

(a) The Director shall charge the following fees: 

(1) * * * 

(6)(A) On filing an appeal from the examiner to the øBoard 

of Patent Appeals and Interferences¿ Patent Trial and Appeal 

Board, $300. 

(B) In addition, on filing a brief in support of the appeal, 

$300, and on requesting an oral hearing in the appeal before 

the øBoard of Patent Appeals and Interferences¿ Patent Trial 

and Appeal Board, $260. 

* * * * * * * 

PART II—PATENTABILITY OF INVENTIONS 

AND GRANT OF PATENTS 

* * * * * * * 

CHAPTER 10—PATENTABILITY OF INVENTIONS 

Sec. 

100. Definitions. 

101. Inventions patentable. 

ø102. Conditions for patentability; novelty and loss of right to patent.¿ 

102. Conditions for patentability; novelty. 

* * * * * * * 

ø104. Invention made abroad.¿ 

* * * * * * * 

§ 100. Definitions 

When used in this title unless the context otherwise indicates—

(a) * * * 

* * * * * * * 

(e) The term ‘‘third-party requester’’ means a person requesting 

ex parte reexamination under section 302 øor inter partes reexamination under section 311¿ who is not the patent owner. 

(f) The term ‘‘inventor’’ means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention. 

(g) The terms ‘‘joint inventor’’ and ‘‘coinventor’’ mean any one 

of the individuals who invented or discovered the subject matter of 

a joint invention. 

(h) The ‘‘effective filing date of a claimed invention’’ is—


hsrobinson on PROD1PC76 with HEARING
91 

(1) the filing date of the patent or the application for patent 

containing the claim to the invention; or 

(2) if the patent or application for patent is entitled to a 

right of priority of any other application under section 119, 

365(a), or 365(b) or to the benefit of an earlier filing date in the 

United States under section 120, 121, or 365(c), the filing date 

of the earliest such application in which the claimed invention 

is disclosed in the manner provided by section 112(a). 

(i) The term ‘‘claimed invention’’ means the subject matter defined by a claim in a patent or an application for a patent. 

(j) The term ‘‘joint invention’’ means an invention resulting from 

the collaboration of inventive endeavors of two or more persons 

working toward the same end and producing an invention by their 

collective efforts. 

(k) The term ‘‘cancellation petitioner’’ means the real party in 

interest requesting cancellation of any claim of a patent under chapter 32 of this title and the privies of the real party in interest. 

§ 101. Inventions patentable 

øWhoever¿ (a) PATENTABLE INVENTIONS.—Whoever invents or 

discovers any new and useful process, machine, manufacture, or 

composition of matter, or any new and useful improvement thereof, 

may obtain a patent therefor, subject to the conditions and requirements of this title. 

(b) TAX PLANNING METHODS.—

(1) UNPATENTABLE SUBJECT MATTER.—A patent may not be 

obtained for a tax planning method. 

(2) DEFINITIONS.—For purposes of paragraph (1)—

(A) the term ‘‘tax planning method’’ means a plan, 

strategy, technique, or scheme that is designed to reduce, 

minimize, or defer, or has, when implemented, the effect of 

reducing, minimizing, or deferring, a taxpayer’s tax liability, but does not include the use of tax preparation software 

or other tools used solely to perform or model mathematical 

calculations or prepare tax or information returns; 

(B) the term ‘‘taxpayer’’ means an individual, entity, or 

other person (as defined in section 7701 of the Internal Revenue Code of 1986) that is subject to taxation directly, is required to prepare a tax return or information statement to 

enable one or more other persons to determine their tax liability, or is otherwise subject to a tax law; 

(C) the terms ‘‘tax’’, ‘‘tax laws’’, ‘‘tax liability’’, and ‘‘taxation’’ refer to any Federal, State, county, city, municipality, or other governmental levy, assessment, or imposition, whether measured by income, value, or otherwise; and 

(D) the term ‘‘State’’ means each of the several States, 

the District of Columbia, and any commonwealth, territory, 

or possession of the United States. 

ø§ 102. Conditions for patentability; novelty and loss of right 

to patent 

A person shall be entitled to a patent unless—

ø(a) the invention was known or used by others in this country, 

or patented or described in a printed publication in this or a forVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00091 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
92 

eign country, before the invention thereof by the applicant for patent, or 

ø(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this 

country, more than one year prior to the date of the application for 

patent in the United States, or 

ø(c) he has abandoned the invention, or 

ø(d) the invention was first patented or caused to be patented, 

or was the subject of an inventor’s certificate, by the applicant or 

his legal representatives or assigns in a foreign country prior to the 

date of the application for patent in this country on an application 

for patent or inventor’s certificate filed more than twelve months 

before the filing of the application in the United States, or 

ø(e) the invention was described in (1) an application for patent, published under section 122(b), by another filed in the United 

States before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the 

United States before the invention by the applicant for patent, except that an international application filed under the treaty defined 

in section 351(a) shall have the effects for the purposes of this subsection of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of such treaty in the English language; 

or 

ø(f) he did not himself invent the subject matter sought to be 

patented, or 

ø(g)(1) during the course of an interference conducted under 

section 135 or section 291, another inventor involved therein establishes, to the extent permitted in section 104, that before such person’s invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or (2) before 

such person’s invention thereof, the invention was made in this 

country by another inventor who had not abandoned, suppressed, 

or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of 

conception and reduction to practice of the invention, but also the 

reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other. 

ø§ 103. Conditions for patentability; non-obvious subject 

matter 

ø(a) A patent may not be obtained though the invention is not 

identically disclosed or described as set forth in section 102 of this 

title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole 

would have been obvious at the time the invention was made to a 

person having ordinary skill in the art to which said subject matter 

pertains. Patentability shall not be negatived by the manner in 

which the invention was made. 

ø(b)(1) Notwithstanding subsection (a), and upon timely election by the applicant for patent to proceed under this subsection, 

a biotechnological process using or resulting in a composition of 

matter that is novel under section 102 and nonobvious under subsection (a) of this section shall be considered nonobvious if—


hsrobinson on PROD1PC76 with HEARING
93 

ø(A) claims to the process and the composition of matter 

are contained in either the same application for patent or in 

separate applications having the same effective filing date; and 

ø(B) the composition of matter, and the process at the time 

it was invented, were owned by the same person or subject to 

an obligation of assignment to the same person. 

ø(2) A patent issued on a process under paragraph (1)—

ø(A) shall also contain the claims to the composition of 

matter used in or made by that process, or 

ø(B) shall, if such composition of matter is claimed in another patent, be set to expire on the same date as such other 

patent, notwithstanding section 154. 

ø(3) For purposes of paragraph (1), the term ‘‘biotechnological 

process’’ means—

ø(A) a process of genetically altering or otherwise inducing 

a single- or multi-celled organism to—

ø(i) express an exogenous nucleotide sequence, 

ø(ii) inhibit, eliminate, augment, or alter expression of 

an endogenous nucleotide sequence, or 

ø(iii) express a specific physiological characteristic not 

naturally associated with said organism; 

ø(B) cell fusion procedures yielding a cell line that expresses a specific protein, such as a monoclonal antibody; and 

ø(C) a method of using a product produced by a process defined by subparagraph (A) or (B), or a combination of subparagraphs (A) and (B). 

ø(c)(1) Subject matter developed by another person, which 

qualifies as prior art only under one or more of subsections (e), (f), 

and (g) of section 102 of this title, shall not preclude patentability 

under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by 

the same person or subject to an obligation of assignment to the 

same person. 

ø(2) For purposes of this subsection, subject matter developed 

by another person and a claimed invention shall be deemed to have 

been owned by the same person or subject to an obligation of assignment to the same person if—

ø(A) the claimed invention was made by or on behalf of 

parties to a joint research agreement that was in effect on or 

before the date the claimed invention was made; 

ø(B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and 

ø(C) the application for patent for the claimed invention 

discloses or is amended to disclose the names of the parties to 

the joint research agreement. 

ø(3) For purposes of paragraph (2), the term ‘‘joint research 

agreement’’ means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the 

field of the claimed invention. 

ø§ 104. Invention made abroad 

ø(a) IN GENERAL.—


hsrobinson on PROD1PC76 with HEARING
94 

ø(1) PROCEEDINGS.—In proceedings in the Patent and 

Trademark Office, in the courts, and before any other competent authority, an applicant for a patent, or a patentee, may 

not establish a date of invention by reference to knowledge or 

use thereof, or other activity with respect thereto, in a foreign 

country other than a NAFTA country or a WTO member country, except as provided in sections 119 and 365 of this title. 

ø(2) RIGHTS.—If an invention was made by a person, civil 

or military—ø(A) while domiciled in the United States, and serving 

in any other country in connection with operations by or 

on behalf of the United States, 

ø(B) while domiciled in a NAFTA country and serving 

in another country in connection with operations by or on 

behalf of that NAFTA country, or 

ø(C) while domiciled in a WTO member country and 

serving in another country in connection with operations 

by or on behalf of that WTO member country, 

that person shall be entitled to the same rights of priority in 

the United States with respect to such invention as if such invention had been made in the United States, that NAFTA 

country, or that WTO member country, as the case may be. 

ø(3) USE OF INFORMATION.—To the extent that any information in a NAFTA country or a WTO member country concerning knowledge, use, or other activity relevant to proving or 

disproving a date of invention has not been made available for 

use in a proceeding in the Patent and Trademark Office, a 

court, or any other competent authority to the same extent as 

such information could be made available in the United States, 

the Director, court, or such other authority shall draw appropriate inferences, or take other action permitted by statute, 

rule, or regulation, in favor of the party that requested the information in the proceeding. 

ø(b) DEFINITIONS.—As used in this section—

ø(1) the term ‘‘NAFTA country’’ has the meaning given 

that term in section 2(4) of the North American Free Trade 

Agreement Implementation Act; and 

ø(2) the term ‘‘WTO member country’’ has the meaning 

given that term in section 2(10) of the Uruguay Round Agreements Act.¿ 

§ 102. Conditions for patentability; novelty 

(a) NOVELTY; PRIOR ART.—A patent for a claimed invention 

may not be obtained if—

(1) the claimed invention was patented, described in a 

printed publication, in public use, or on sale—

(A) more than one year before the effective filing date 

of the claimed invention; or 

(B) one year or less before the effective filing date of the 

claimed invention, other than through disclosures made by 

the inventor or a joint inventor or by others who obtained 

the subject matter disclosed directly or indirectly from the 

inventor or a joint inventor; or 

(2) the claimed invention was described in a patent issued 

under section 151, or in an application for patent published or 


hsrobinson on PROD1PC76 with HEARING
95 

deemed published under section 122(b), in which the patent or 

application, as the case may be, names another inventor and 

was effectively filed before the effective filing date of the claimed 

invention. 

(b) EXCEPTIONS.— (1) PRIOR INVENTOR DISCLOSURE EXCEPTION.—Subject matter that would otherwise qualify as prior art based upon a disclosure under subparagraph (B) of subsection (a)(1) shall not be 

prior art to a claimed invention under that subparagraph if the 

subject matter had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or others who obtained 

the subject matter disclosed directly or indirectly from the inventor or a joint inventor. 

(2) DERIVATION, PRIOR DISCLOSURE, AND COMMON ASSIGNMENT EXCEPTIONS.—Subject matter that would otherwise qualify as prior art only under subsection (a)(2) shall not be prior 

art to a claimed invention if—

(A) the subject matter was obtained directly or indirectly from the inventor or a joint inventor; 

(B) the subject matter had been publicly disclosed by 

the inventor or a joint inventor or others who obtained the 

subject matter disclosed directly or indirectly from the inventor or a joint inventor before the date on which the application or patent referred to in subsection (a)(2) was effectively filed; or 

(C) the subject matter and the claimed invention, not 

later than the effective filing date of the claimed invention, 

were owned by the same person or subject to an obligation 

of assignment to the same person. 

(3) JOINT RESEARCH AGREEMENT EXCEPTION.—

(A) IN GENERAL.—Subject matter and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same 

person in applying the provisions of paragraph (2) if—

(i) the claimed invention was made by or on behalf 

of parties to a joint research agreement that was in effect on or before the effective filing date of the claimed 

invention; 

(ii) the claimed invention was made as a result of 

activities undertaken within the scope of the joint research agreement; and 

(iii) the application for patent for the claimed invention discloses or is amended to disclose the names 

of the parties to the joint research agreement. 

(B) For purposes of subparagraph (A), the term ‘‘joint 

research agreement’’ means a written contract, grant, or cooperative agreement entered into by two or more persons or 

entities for the performance of experimental, developmental, 

or research work in the field of the claimed invention. 

(4) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVELY

FILED.—A patent or application for patent is effectively filed 

under subsection (a)(2) with respect to any subject matter described in the patent or application— (A) as of the filing date of the patent or the application 

for patent; or 


hsrobinson on PROD1PC76 with HEARING
96 

(B) if the patent or application for patent is entitled to 

claim a right of priority under section 119, 365(a), or 

365(b) or to claim the benefit of an earlier filing date under 

section 120, 121, or 365(c), based upon one or more prior 

filed applications for patent, as of the filing date of the earliest such application that describes the subject matter. 

§ 103. Conditions for patentability; nonobvious subject matter 

A patent for a claimed invention may not be obtained though 

the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the 

prior art are such that the claimed invention as a whole would have 

been obvious before the effective filing date of the claimed invention 

to a person having ordinary skill in the art to which the claimed 

invention pertains. Patentability shall not be negated by the manner 

in which the invention was made. 

* * * * * * * 

CHAPTER 11—APPLICATION FOR PATENT 

Sec. 

111. Application. 

* * * * * * * 

ø115. Oath of applicant.¿ 

115. Inventor’s oath or declaration. 

* * * * * * * 

123. Additional information. 

124. Micro entities. 

* * * * * * * 

§ 111. Application 

(a) IN GENERAL.—

(1) * * * 

(2) CONTENTS.—Such application shall include—

(A) * * * 

* * * * * * * 

(C) an oath øby the applicant¿ or declaration as prescribed by section 115 of this title. 

(3) FEE øAND OATH¿.—The application must be accompanied 

by the fee required by law. The fee øand oath¿ may be submitted after the specification and any required drawing are 

submitted, within such period and under such conditions, including the payment of a surcharge, as may be prescribed by 

the Director. 

(4) FAILURE TO SUBMIT.—Upon failure to submit the fee 

øand oath¿ within such prescribed period, the application shall 

be regarded as abandoned, unless it is shown to the satisfaction of the Director that the delay in submitting the fee øand 

oath¿ was unavoidable or unintentional. The filing date of an 

application shall be the date on which the specification and 

any required drawing are received in the Patent and Trademark Office. 

(b) PROVISIONAL APPLICATION.—


hsrobinson on PROD1PC76 with HEARING
97 

(1) * * * 

* * * * * * * 

(8) APPLICABLE PROVISIONS.—The provisions of this title 

relating to applications for patent shall apply to provisional applications for patent, except as otherwise provided, and except 

that provisional applications for patent shall not be subject to 

øsections 115, 131, 135, and 157¿ sections 131 and 135 of this 

title. 

§ 112. Specification 

øThe specification¿ (a) IN GENERAL.—The specification shall 

contain a written description of the invention, and of the manner 

and process of making and using it, in such full, clear, concise, and 

exact terms as to enable any person skilled in the art to which it 

pertains, or with which it is most nearly connected, to make and 

use the same, and shall set forth the best mode contemplated by 

the inventor øof carrying out his invention¿ or joint inventor of carrying out the invention. øThe specification¿ (b) CONCLUSION.—The specification shall 

conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the øapplicant regards as 

his invention¿ inventor or a joint inventor regards as the invention. øA claim¿ (c) FORM.—A claim may be written in independent 

or, if the nature of the case admits, in dependent or multiple dependent form. 

øSubject to the following paragraph,¿ (d) REFERENCE IN DE- PENDENT FORMS.—Subject to subsection (e), a claim in dependent 

form shall contain a reference to a claim previously set forth and 

then specify a further limitation of the subject matter claimed. A 

claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers. 

øA claim¿ (e) REFERENCE IN MULTIPLE DEPENDENT FORM.—A 

claim in multiple dependent form shall contain a reference, in the 

alternative only, to more than one claim previously set forth and 

then specify a further limitation of the subject matter claimed. A 

multiple dependent claim shall not serve as a basis for any other 

multiple dependent claim. A multiple dependent claim shall be construed to incorporate by reference all the limitations of the particular claim in relation to which it is being considered. 

øAn element¿ (f) ELEMENT IN CLAIM FOR A COMBINATION.—An 

element in a claim for a combination may be expressed as a means 

or step for performing a specified function without the recital of 

structure, material, or acts in support thereof, and such claim shall 

be construed to cover the corresponding structure, material, or acts 

described in the specification and equivalents thereof. 

* * * * * * * 

ø§ 115. Oath of applicant 

øThe applicant shall make oath that he believes himself to be 

the original and first inventor of the process, machine, manufacture, or composition of matter, or improvement thereof, for which 

he solicits a patent; and shall state of what country he is a citizen. 

Such oath may be made before any person within the United 

States authorized by law to administer oaths, or, when, made in a 


hsrobinson on PROD1PC76 with HEARING
98 

foreign country, before any diplomatic or consular officer of the 

United States authorized to administer oaths, or before any officer 

having an official seal and authorized to administer oaths in the 

foreign country in which the applicant may be, whose authority is 

proved by certificate of a diplomatic or consular officer of the 

United States, or apostille of an official designated by a foreign 

country which, by treaty or convention, accords like effect to 

apostilles of designated officials in the United States, and such 

oath shall be valid if it complies with the laws of the state or country where made. When the application is made as provided in this 

title by a person other than the inventor, the oath may be so varied 

in form that it can be made by him. For purposes of this section, 

a consular officer shall include any United States citizen serving 

overseas, authorized to perform notarial functions pursuant to section 1750 of the Revised Statutes, as amended (22 U.S.C. 4221).¿ 

§ 115. Inventor’s oath or declaration 

(a) NAMING THE INVENTOR; INVENTOR’S OATH OR DECLARATION.—An application for patent that is filed under section 111(a), 

that commences the national stage under section 363, or that is filed 

by an inventor for an invention for which an application has previously been filed under this title by that inventor shall include, or 

be amended to include, the name of the inventor of any claimed invention in the application. Except as otherwise provided in this section, each individual who is the inventor or a joint inventor of a 

claimed invention in an application for patent shall execute an oath 

or declaration in connection with the application. 

(b) REQUIRED STATEMENTS.—An oath or declaration by an individual under subsection (a) shall contain statements that—

(1) the application was made or was authorized to be made 

by individual; and 

(2) the individual believes himself or herself to be the original inventor or an original joint inventor of a claimed invention 

in the application. 

(c) ADDITIONAL REQUIREMENTS.—The Director may specify additional information relating to the inventor and the invention that 

is required to be included in an oath or declaration under subsection (a). 

(d) SUBSTITUTE STATEMENT.—

(1) IN GENERAL.—In lieu of executing an oath or declaration under subsection (a), the applicant for patent may provide 

a substitute statement under the circumstances described in 

paragraph (2) and such additional circumstances that the Director may specify by regulation. 

(2) PERMITTED CIRCUMSTANCES.—A substitute statement 

under paragraph (1) is permitted with respect to any individual 

who—

(A) is unable to file the oath or declaration under subsection (a) because the individual—

(i) is deceased; 

(ii) is under legal incapacity; or 

(iii) cannot be found or reached after diligent effort; or 


hsrobinson on PROD1PC76 with HEARING
99 

(B) is under an obligation to assign the invention and 

has refused to make the oath or declaration required under 

subsection (a). 

(3) CONTENTS.—A substitute statement under this subsection shall— (A) identify the individual with respect to whom the 

statement applies; 

(B) set forth the circumstances representing the permitted basis for the filing of the substitute statement in lieu 

of the oath or declaration under subsection (a); and 

(C) contain any additional information, including any 

showing, required by the Director. 

(e) MAKING REQUIRED STATEMENTS IN ASSIGNMENT OF

RECORD.—An individual who is under an obligation of assignment 

of an application for patent may include the required statements 

under subsections (b) and (c) in the assignment executed by the individual, in lieu of filing such statements separately. 

(f) TIME FOR FILING.—A notice of allowance under section 151 

may be provided to an applicant for patent only if the applicant for 

patent has filed each required oath or declaration under subsection 

(a) or has filed a substitute statement under subsection (d) or recorded an assignment meeting the requirements of subsection (e). 

(g) EARLIER-FILED APPLICATION CONTAINING REQUIRED STATE- MENTS OR SUBSTITUTE STATEMENT.—The requirements under this 

section shall not apply to an individual with respect to an application for patent in which the individual is named as the inventor or 

a joint inventor and that claims the benefit of an earlier filing date 

under section 120 or 365(c), if— (1) an oath or declaration meeting the requirements of subsection (a) was executed by the individual and was filed in connection with the earlier-filed application; 

(2) a substitute statement meeting the requirements of subsection (d) was filed in the earlier filed application with respect 

to the individual; or 

(3) an assignment meeting the requirements of subsection 

(e) was executed with respect to the earlier-filed application by 

the individual and was recorded in connection with the earlierfiled application. 

(h) SUPPLEMENTAL AND CORRECTED STATEMENTS; FILING ADDI- TIONAL STATEMENTS.—

(1) IN GENERAL.—Any person making a statement required 

under this section may withdraw, replace, or otherwise correct 

the statement at any time. If a change is made in the naming 

of the inventor requiring the filing of 1 or more additional 

statements under this section, such additional statements shall 

be filed in accordance with regulations established by the Director. 

(2) SUPPLEMENTAL STATEMENTS NOT REQUIRED.—If an individual has executed an oath or declaration under subsection 

(a) or an assignment meeting the requirements of subsection (e) 

with respect to an application for patent, the Director may not 

thereafter require that individual to make any additional oath, 

declaration, or other statement equivalent to those required by 

this section in connection with the application for patent or any 

patent issuing thereon. 


hsrobinson on PROD1PC76 with HEARING
100 

(3) SAVINGS CLAUSE.—No patent shall be invalid or unenforceable based upon the failure to comply with a requirement 

under this section if the failure is remedied as provided under 

paragraph (1). 

(i) ACKNOWLEDGMENT OF PENALTIES.—Any declaration or statement filed under this section must contain an acknowledgment that 

any willful false statement is punishable by fine or imprisonment, 

or both, under section 1001 of title 18. 

§ 116. Inventors 

øWhen¿ (a) JOINT INVENTIONS.—When an invention is made by 

two or more persons jointly, they shall apply for patent jointly and 

each make the required oath, except as otherwise provided in this 

title. Inventors may apply for a patent jointly even though (1) they 

did not physically work together or at the same time, (2) each did 

not make the same type or amount of contribution, or (3) each did 

not make a contribution to the subject matter of every claim of the 

patent. 

øIf a joint inventor¿ (b) OMITTED INVENTOR.—If a joint inventor refuses to join in an application for patent or cannot be found 

or reached after diligent effort, the application may be made by the 

other inventor on behalf of himself and the omitted inventor. The 

Director, on proof of the pertinent facts and after such notice to the 

omitted inventor as he prescribes, may grant a patent to the inventor making the application, subject to the same rights which the 

omitted inventor would have had if he had been joined. The omitted inventor may subsequently join in the application. 

øWhenever¿ (c) CORRECTION OF ERRORS IN APPLICATION.— Whenever through error a person is named in an application for 

patent as the inventor, or through error an inventor is not named 

in an application, and such error arose without any deceptive intention on his part, the Director may permit the application to be 

amended accordingly, under such terms as he prescribes. 

* * * * * * * 

ø§ 118. Filing by other than inventor 

øWhenever an inventor refuses to execute an application for 

patent, or cannot be found or reached after diligent effort, a person 

to whom the inventor has assigned or agreed in writing to assign 

the invention or who otherwise shows sufficient proprietary interest in the matter justifying such action, may make application for 

patent on behalf of and as agent for the inventor on proof of the 

pertinent facts and a showing that such action is necessary to preserve the rights of the parties or to prevent irreparable damage; 

and the Director may grant a patent to such inventor upon such 

notice to him as the Director deems sufficient, and on compliance 

with such regulations as he prescribes.¿ 

§ 118. Filing by other than inventor 

A person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent. 

A person who otherwise shows sufficient proprietary interest in the 

matter may make an application for patent on behalf of and as 

agent for the inventor on proof of the pertinent facts and a showing 


hsrobinson on PROD1PC76 with HEARING
101 

that such action is appropriate to preserve the rights of the parties. 

If the Director grants a patent on an application filed under this 

section by a person other than the inventor, the patent shall be 

granted to the real party in interest and upon such notice to the inventor as the Director considers to be sufficient. 

§ 119. Benefit of earlier filing date; right of priority 

(a) An application for patent for an invention filed in this country by any person who has, or whose legal representatives or assigns have, previously regularly filed an application for a patent for 

the same invention in a foreign country which affords similar privileges in the case of applications filed in the United States or to citizens of the United States, or in a WTO member country, shall have 

the same effect as the same application would have if filed in this 

country on the date on which the application for patent for the 

same invention was first filed in such foreign country, if the application in this country is filed within twelve months from the earliest date on which such foreign application was filedø; but no patent shall be granted on any application for patent for an invention 

which had been patented or described in a printed publication in 

any country more than one year before the date of the actual filing 

of the application in this country, or which had been in public use 

or on sale in this country more than one year prior to such filing¿. 

* * * * * * * 

§ 120. Benefit of earlier filing date in the United States 

An application for patent for an invention disclosed in the 

manner provided by the first paragraph of section 112 of this title 

in an application previously filed in the United States, or as provided by section 363 of this title, øwhich is filed by an inventor or 

inventors named¿ which names an inventor or joint inventor in the 

previously filed application shall have the same effect, as to such 

invention, as though filed on the date of the prior application, if 

filed before the patenting or abandonment of or termination of proceedings on the first application or on an application similarly entitled to the benefit of the filing date of the first application and if 

it contains or is amended to contain a specific reference to the earlier filed application. No application shall be entitled to the benefit 

of an earlier filed application under this section unless an amendment containing the specific reference to the earlier filed application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the 

failure to submit such an amendment within that time period as 

a waiver of any benefit under this section. The Director may establish procedures, including the payment of a surcharge, to accept an 

unintentionally delayed submission of an amendment under this 

section. 

§ 121. Divisional applications 

If two or more independent and distinct inventions are claimed 

in one application, the Director may require the application to be 

restricted to one of the inventions. If the other invention is made 

the subject of a divisional application which complies with the requirements of section 120 of this title it shall be entitled to the 


hsrobinson on PROD1PC76 with HEARING
102 

benefit of the filing date of the original application. A patent 

issuing on an application with respect to which a requirement for 

restriction under this section has been made, or on an application 

filed as a result of such a requirement, shall not be used as a reference either in the Patent and Trademark Office or in the courts 

against a divisional application or against the original application 

or any patent issued on either of them, if the divisional application 

is filed before the issuance of the patent on the other application. 

øIf a divisional application is directed solely to subject matter described and claimed in the original application as filed, the Director 

may dispense with signing and execution by the inventor.¿ The validity of a patent shall not be questioned for failure of the Director 

to require the application to be restricted to one invention. 

§ 122. Confidential status of applications; publication of patent applications 

(a) * * * 

(b) PUBLICATION.— (1) * * * 

(2) EXCEPTIONS.—ø(A)¿ An application shall not be published if that application is—

ø(i)¿ (A) no longer pending; 

ø(ii)¿ (B) subject to a secrecy order under section 181 

of this title; 

ø(iii)¿ (C) a provisional application filed under section 

111(b) of this title; or 

ø(iv)¿ (D) an application for a design patent filed 

under chapter 16 of this title. 

ø(B)(i) If an applicant makes a request upon filing, certifying that the invention disclosed in the application has not 

and will not be the subject of an application filed in another 

country, or under a multilateral international agreement, that 

requires publication of applications 18 months after filing, the 

application shall not be published as provided in paragraph (1). 

ø(ii) An applicant may rescind a request made under 

clause (i) at any time. 

ø(iii) An applicant who has made a request under clause 

(i) but who subsequently files, in a foreign country or under a 

multilateral international agreement specified in clause (i), an 

application directed to the invention disclosed in the application filed in the Patent and Trademark Office, shall notify the 

Director of such filing not later than 45 days after the date of 

the filing of such foreign or international application. A failure 

of the applicant to provide such notice within the prescribed 

period shall result in the application being regarded as abandoned, unless it is shown to the satisfaction of the Director 

that the delay in submitting the notice was unintentional. 

ø(iv) If an applicant rescinds a request made under clause 

(i) or notifies the Director that an application was filed in a 

foreign country or under a multilateral international agreement specified in clause (i), the application shall be published 

in accordance with the provisions of paragraph (1) on or as 

soon as is practical after the date that is specified in clause (i). 

ø(v) If an applicant has filed applications in one or more 

foreign countries, directly or through a multilateral interVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00102 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
103 

national agreement, and such foreign filed applications corresponding to an application filed in the Patent and Trademark Office or the description of the invention in such foreign 

filed applications is less extensive than the application or description of the invention in the application filed in the Patent 

and Trademark Office, the applicant may submit a redacted 

copy of the application filed in the Patent and Trademark Office eliminating any part or description of the invention in such 

application that is not also contained in any of the corresponding applications filed in a foreign country. The Director 

may only publish the redacted copy of the application unless 

the redacted copy of the application is not received within 16 

months after the earliest effective filing date for which a benefit is sought under this title. The provisions of section 154(d) 

shall not apply to a claim if the description of the invention 

published in the redacted application filed under this clause 

with respect to the claim does not enable a person skilled in 

the art to make and use the subject matter of the claim.¿ 

* * * * * * * 

(e) PREISSUANCE SUBMISSIONS BY THIRD PARTIES.—

(1) IN GENERAL.—Any person may submit for consideration 

and inclusion in the record of a patent application, any patent, 

published patent application, or other publication of potential 

relevance to the examination of the application, if such submission is made in writing before the earlier of—

(A) the date a notice of allowance under section 151 is 

mailed in the application for patent; or 

(B) either—

(i) 6 months after the date on which the application for patent is published under section 122, or 

(ii) the date of the first rejection under section 132 

of any claim by the examiner during the examination 

of the application for patent, 

whichever occurs later. 

(2) OTHER REQUIREMENTS.—Any submission under paragraph (1) shall—

(A) set forth a concise description of the asserted relevance of each submitted document; 

(B) be accompanied by such fee as the Director may 

prescribe; and 

(C) include a statement by the submitter affirming that 

the submission was made in compliance with this section. 

§ 123. Additional information 

(a) IN GENERAL.—The Director shall, by regulation, require that 

applicants submit a search report and other information and analysis relevant to patentability. An application shall be regarded as 

abandoned if the applicant fails to submit the required search report, information, and analysis in the manner and within the time 

period prescribed by the Director. 

(b) EXCEPTION FOR MICRO ENTITIES.—Applications from microentities shall not be subject to the requirements of regulations issued 

under subsection (a). 


hsrobinson on PROD1PC76 with HEARING
104 

§ 124. Micro entities 

(a) DEFINITION.—For purposes of this title, the term ‘‘micro entity’’ means an applicant for patent who makes a certification under 

either subsection (b) or (c). 

(b) UNASSIGNED APPLICATION.—A certification under this subsection is a certification by each inventor named in the application 

that the inventor—

(1) qualifies as a small entity as defined in regulations 

issued by the Director; 

(2) has not been named on five or more previously filed patent applications; 

(3) has not assigned, granted, or conveyed, and is not under 

an obligation by contract or law to assign, grant, or convey, a 

license or any other ownership interest in the application; and 

(4) does not have a gross income, as defined in section 61(a) 

of the Internal Revenue Code of 1986, exceeding 2.5 times the 

median household income, as reported by the Bureau of the 

Census, for the most recent calendar year preceding the calendar year in which the examination fee is being paid. 

(c) ASSIGNED APPLICATION.—A certification under this subsection is a certification by each inventor named in the application 

that the inventor—

(1) qualifies as a small entity as defined in regulations 

issued by the Director and meets the requirements of subsection 

(b)(4); 

(2) has not been named on five or more previously filed patent applications; and 

(3) has assigned, granted, conveyed, or is under an obligation by contract or law to assign, grant, or convey, a license or 

other ownership interest in the application to an entity that has 

five or fewer employees and has a gross taxable income, as defined in section 61(a) of the Internal Revenue Code of 1986, that 

does not exceed 2.5 times the median household income, as reported by the Bureau of the Census, for the most recent calendar year preceding the calendar year in which the examination fee is being paid. 

* * * * * * * 

CHAPTER 12—EXAMINATION OF APPLICATION 

Sec. 

131. Examination of application. 

* * * * * * * 

ø134. Appeal to the Board of Patent Appeals and Interferences. 

ø135. Interferences.¿ 

134. Appeal to the Patent Trial and Appeal Board. 

135. Derivation proceedings. 

* * * * * * * 

ø§ 134. Appeal to the Board of Patent Appeals and Interferences¿ 

§ 134. Appeal to the Patent Trial and Appeal Board 

(a) PATENT APPLICANT.—An applicant for a patent, any of 

whose claims has been twice rejected, may appeal from the decision 


hsrobinson on PROD1PC76 with HEARING
105 

of the primary examiner to the øBoard of Patent Appeals and 

Interferences¿ Patent Trial and Appeal Board, having once paid 

the fee for such appeal. 

(b) PATENT OWNER.—A patent owner in any reexamination 

proceeding may appeal from the final rejection of any claim by the 

a primary examiner to the øBoard of Patent Appeals and Interferences¿ Patent Trial and Appeal Board, having once paid the fee 

for such appeal. 

(c) THIRD-PARTY.—A third-party requester in an inter partes 

proceeding may appeal to the øBoard of Patent Appeals and Interferences¿ Patent Trial and Appeal Board from the final decision of 

the primary examiner favorable to the patentability of any original 

or proposed amended or new claim of a patent, having once paid 

the fee for such appeal. 

ø§ 135. Interferences 

ø(a) Whenever an application is made for a patent which, in 

the opinion of the Director, would interfere with any pending application, or with any unexpired patent, an interference may be declared and the Director shall give notice of such declaration to the 

applicants, or applicant and patentee, as the case may be. The 

Board of Patent Appeals and Interferences shall determine questions of priority of the inventions and may determine questions of 

patentability. Any final decision, if adverse to the claim of an applicant, shall constitute the final refusal by the Patent and Trademark Office of the claims involved, and the Director may issue a 

patent to the applicant who is adjudged the prior inventor. A final 

judgment adverse to a patentee from which no appeal or other review has been or can be taken or had shall constitute cancellation 

of the claims involved in the patent, and notice of such cancellation 

shall be endorsed on copies of the patent distributed after such cancellation by the Patent and Trademark Office.¿ 

§ 135. Derivation proceedings 

(a) DISPUTE OVER RIGHT TO PATENT.—

(1) INSTITUTION OF DERIVATION PROCEEDING.—

(A) REQUEST FOR PROCEEDING.—An applicant may request initiation of a derivation proceeding to determine the 

right of the applicant to a patent by filing a request that 

sets forth with particularity the basis for finding that another applicant derived the claimed invention from the applicant requesting the proceeding and, without authorization, filed an application claiming such invention. Any 

such request—

(i) may only be made within 12 months after the 

earlier of—

(I) the date on which a patent is issued containing a claim that is the same or substantially 

the same as the claimed invention; or 

(II) the date of first publication of an application containing a claim that is the same or is substantially the same as the claimed invention; and 

(ii) must be made under oath, and must be supported by substantial evidence. 


hsrobinson on PROD1PC76 with HEARING
106 

(B) DETERMINATION OF DIRECTOR.— Whenever the Director determines that patents or applications for patent 

naming different individuals as the inventor interfere with 

one another because of a dispute over the right to patent 

under section 101 on the basis of a request under subparagraph (A), the Director shall institute a derivation proceeding for the purpose of determining which applicant is 

entitled to a patent. 

(2) DETERMINATION BY PATENT TRIAL AND APPEAL BOARD.— In any proceeding under this subsection, the Patent Trial and 

Appeal Board— (A) shall determine the question of the right to patent; 

(B) in appropriate circumstances, may correct the naming of the inventor in any application or patent at issue; 

and 

(C) shall issue a final decision on the right to patent. 

(3) DERIVATION PROCEEDING.—The Patent Trial and Appeal Board may defer action on a request to initiate a derivation proceeding for up to three months after the date on which 

the Director issues a patent to the applicant that filed the earlier application. 

(4) EFFECT OF FINAL DECISION.—The final decision of the 

Patent Trial and Appeal Board in a derivation proceeding, if 

adverse to the claim of an applicant, shall constitute the final 

refusal by the Patent and Trademark Office on the claims involved. The Director may issue a patent to an applicant who is 

determined by the Patent Trial and Appeal Board to have the 

right to a patent. The final decision of the Board, if adverse to 

a patentee, shall, if no appeal or other review of the decision 

has been or can be taken or had, constitute cancellation of the 

claims involved in the patent, and notice of such cancellation 

shall be endorsed on copies of the patent distributed after such 

cancellation by the Patent and Trademark Office. 

ø(b)(1) A claim¿ (b) SAME CLAIMS

(1) ISSUED PATENTS.—A claim which is the same as, or for 

the same or substantially the same subject matter as, a claim 

of an issued patent may not be made in any application unless 

such a claim is made prior to one year from the date on which 

the patent was granted. 

ø(2) A claim¿ 

(2) PUBLISHED APPLICATIONS.—A claim which is the same 

as, or for the same or substantially the same subject matter as, 

a claim of an application published under section 122(b) of this 

title may be made in an application filed after the application 

is published only if the claim is made before 1 year after the 

date on which the application is published. 

ø(c) Any agreement¿ (c) AGREEMENTS TO TERMINATE PRO- CEEDINGS.—

(1) IN GENERAL.—Any agreement or understanding between 

parties to øan interference¿ a derivation proceeding, including 

any collateral agreements referred to therein, made in connection with or in contemplation of the termination of øthe interference¿ the derivation proceeding, shall be in writing and a 

true copy thereof filed in the Patent and Trademark Office before the termination of øthe interference¿ the derivation proVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00106 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
107 

ceeding as between the said parties to the agreement or understanding. If any party filing the same so requests, the copy 

shall be kept separate from the file of øthe interference¿ the 

derivation proceeding, and made available only to Government 

agencies on written request, or to any person on a showing of 

good cause. Failure to file the copy of such agreement or understanding shall render permanently unenforceable such 

agreement or understanding and any patent of such parties involved in øthe interference¿ the derivation proceeding or any 

patent subsequently issued on any application of such parties 

so involved. The Director may, however, on a showing of good 

cause for failure to file within the time prescribed, permit the 

filing of the agreement or understanding during the six-month 

period subsequent to the termination of øthe interference¿ the 

derivation proceeding as between the parties to the agreement 

or understanding. 

øThe Director¿ 

(2) NOTICE.—The Director shall give notice to the parties 

or their attorneys of record, a reasonable time prior to said termination, of the filing requirement of this section. If the Director gives such notice at a later time, irrespective of the right 

to file such agreement or understanding within the six-month 

period on a showing of good cause, the parties may file such 

agreement or understanding within sixty days of the receipt of 

such notice. 

øAny discretionary action of the Director under this subsection 

shall be reviewable under section 10 of the Administrative Procedure Act.¿ 

(3) JUDICIAL REVIEW.—Any discretionary action of the Director under this subsection shall be reviewable under chapter 

7 of title 5. 

ø(d) Parties¿ (d) ARBITRATION.—Parties to øa patent interference¿ a derivation proceeding, within such time as may be specified by the Director by regulation, may determine such contest or 

any aspect thereof by arbitration. Such arbitration shall be governed by the provisions of title 9 to the extent such title is not inconsistent with this section. The parties shall give notice of any arbitration award to the Director, and such award shall, as between 

the parties to the arbitration, be dispositive of the issues to which 

it relates. The arbitration award shall be unenforceable until such 

notice is given. Nothing in this subsection shall preclude the Director from determining patentability of the invention involved in øthe 

interference¿ the derivation proceeding. 

* * * * * * * 

CHAPTER 13—REVIEW OF PATENT AND TRADEMARK 

OFFICE DECISIONS 

Sec. 

141. Appeal to Court of Appeals for the Federal Circuit. 

* * * * * * * 

ø146. Civil action in case of interference.¿ 

146. Civil action in case of derivation proceeding. 

* * * * * * * 


hsrobinson on PROD1PC76 with HEARING
108 

§ 141. Appeal to Court of Appeals for the Federal Circuit 

An applicant dissatisfied with the decision in an appeal to the 

øBoard of Patent Appeals and Interferences¿ Patent Trial and Appeal Board under section 134 of this title may appeal the decision 

to the United States Court of Appeals for the Federal Circuit. By 

filing such an appeal the applicant waives his or her right to proceed under section 145 of this title. A patent owner, or a thirdparty requester in an inter partes reexamination proceeding, who 

is in any reexamination proceeding dissatisfied with the final decision in an appeal to the øBoard of Patent Appeals and Interferences¿ Patent Trial and Appeal Board under section 134 may 

appeal the decision only to the United States Court of Appeals for 

the Federal Circuit. A party to øan interference¿ a derivation proceeding dissatisfied with the decision of the øBoard of Patent Appeals and Interferences¿ Patent Trial and Appeal Board on the øinterference¿ derivation proceeding may appeal the decision to the 

United States Court of Appeals for the Federal Circuit, but such 

appeal shall be dismissed if any adverse party to such øinterference¿ derivation proceeding, within twenty days after the appellant has filed notice of appeal in accordance with section 142 of this 

title, files notice with the Director that the party elects to have all 

further proceedings conducted as provided in section 146 of this 

title. If the appellant does not, within thirty days after the filing 

of such notice by the adverse party, file a civil action under section 

146, the decision appealed from shall govern the further proceedings in the case. 

* * * * * * * 

§ 145. Civil action to obtain patent 

An applicant dissatisfied with the decision of the øBoard of 

Patent Appeals and Interferences¿ Patent Trial and Appeal Board 

in an appeal under section 134(a) of this title may, unless appeal 

has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the 

United States District Court for the District of Columbia if commenced within such time after such decision, not less than sixty 

days, as the Director appoints. The court may adjudge that such 

applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the øBoard of 

Patent Appeals and Interferences¿ Patent Trial and Appeal Board, 

as the facts in the case may appear and such adjudication shall authorize the Director to issue such patent on compliance with the requirements of law. All the expenses of the proceedings shall be paid 

by the applicant. 

ø§ 146. Civil action in case of interference¿ 

§ 146. Civil action in case of derivation proceeding 

øAny party¿ (a) IN GENERAL.—Any party to øan interference¿ 

a derivation proceeding dissatisfied with the decision of the øBoard 

of Patent Appeals and Interferences¿ Patent Trial and Appeal 

Board on the øinterference¿ derivation proceeding, may have remedy by civil action, if commenced within such time after such decision, not less than sixty days, as the Director appoints or as proVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00108 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
109 

vided in section 141 of this title, unless he has appealed to the 

United States Court of Appeals for the Federal Circuit, and such 

appeal is pending or has been decided. In such suits the record in 

the Patent and Trademark Office shall be admitted on motion of 

either party upon the terms and conditions as to costs, expenses, 

and the further cross-examination of the witnesses as the court imposes, without prejudice to the right of the parties to take further 

testimony. The testimony and exhibits of the record in the Patent 

and Trademark Office when admitted shall have the same effect as 

if originally taken and produced in the suit. 

øSuch suit¿ (b) PROCEDURE.—A suit under subsection (a) may 

be instituted against the party in interest as shown by the records 

of the Patent and Trademark Office at the time of the decision 

complained of, but any party in interest may become a party to the 

action. If there be adverse parties residing in a plurality of districts 

not embraced within the same state, or an adverse party residing 

in a foreign country, the United States District Court for the District of Columbia shall have jurisdiction and may issue summons 

against the adverse parties directed to the marshal of any district 

in which any adverse party resides. Summons against adverse parties residing in foreign countries may be served by publication or 

otherwise as the court directs. The Director shall not be a necessary party but he shall be notified of the filing of the suit by the 

clerk of the court in which it is filed and shall have the right to 

intervene. Judgment of the court in favor of the right of an applicant to a patent shall authorize the Director to issue such patent 

on the filing in the Patent and Trademark Office of a certified copy 

of the judgment and on compliance with the requirements of law. 

* * * * * * * 

CHAPTER 14—ISSUE OF PATENT 

Sec. 

151. Issue of patent. 

* * * * * * * 

ø157. Statutory invention registration.¿ 

* * * * * * * 

§ 154. Contents and term of patent; provisional rights 

(a) * * * 

(b) ADJUSTMENT OF PATENT TERM.—

(1) PATENT TERM GUARANTEES.—

(A) GUARANTEE OF PROMPT PATENT AND TRADEMARK

OFFICE RESPONSES.—Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due 

to the failure of the Patent and Trademark Office to—

(i) * * * 

* * * * * * * 

(iii) act on an application within 4 months after 

the date of a decision by the øBoard of Patent Appeals 

and Interferences¿ Patent Trial and Appeal Board 

under section 134 or 135 or a decision by a Federal 


hsrobinson on PROD1PC76 with HEARING
110 

court under section 141, 145, or 146 in a case in which 

allowable claims remain in the application; or 

* * * * * * * 

(B) GUARANTEE OF NO MORE THAN 3-YEAR APPLICATION

PENDENCY.—Subject to the limitations under paragraph 

(2), if the issue of an original patent is delayed due to the 

failure of the United States Patent and Trademark Office 

to issue a patent within 3 years after the actual filing date 

of the application in the United States, not including— (i) * * * 

(ii) any time consumed by a proceeding under section 135(a), any time consumed by the imposition of an 

order under section 181, or any time consumed by appellate review by the øBoard of Patent Appeals and 

Interferences¿ Patent Trial and Appeal Board or by a 

Federal court; or 

* * * * * * * 

(C) GUARANTEE OR ADJUSTMENTS FOR DELAYS DUE TO

øINTERFERENCES¿ DERIVATION PROCEEDINGS, SECRECY ORDERS, AND APPEALS.—Subject to the limitations under 

paragraph (2), if the issue of an original patent is delayed 

due to—

(i) * * * 

* * * * * * * 

(iii) appellate review by the øBoard of Patent Appeals and Interferences¿ Patent Trial and Appeal 

Boardor by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability, 

* * * * * * * 

ø§ 157. Statutory invention registration 

ø(a) Notwithstanding any other provision of this title, the Director is authorized to publish a statutory invention registration 

containing the specification and drawings of a regularly filed application for a patent without examination if the applicant—

ø(1) meets the requirements of section 112 of this title; 

ø(2) has complied with the requirements for printing, as 

set forth in regulations of the Director; 

ø(3) waives the right to receive a patent on the invention 

within such period as may be prescribed by the Director; and 

ø(4) pays application, publication, and other processing 

fees established by the Director. 

If an interference is declared with respect to such an application, 

a statutory invention registration may not be published unless the 

issue of priority of invention is finally determined in favor of the 

applicant. 

ø(b) The waiver under subsection (a)(3) of this section by an 

applicant shall take effect upon publication of the statutory invention registration. 

ø(c) A statutory invention registration published pursuant to 

this section shall have all of the attributes specified for patents in 

this title except those specified in section 183 and sections 271 


hsrobinson on PROD1PC76 with HEARING
111 

through 289 of this title. A statutory invention registration shall 

not have any of the attributes specified for patents in any other 

provision of law other than this title. A statutory invention registration published pursuant to this section shall give appropriate 

notice to the public, pursuant to regulations which the Director 

shall issue, of the preceding provisions of this subsection. The invention with respect to which a statutory invention certificate is 

published is not a patented invention for purposes of section 292 

of this title. 

ø(d) The Director shall report to the Congress annually on the 

use of statutory invention registrations. Such report shall include 

an assessment of the degree to which agencies of the Federal Government are making use of the statutory invention registration system, the degree to which it aids the management of federally developed technology, and an assessment of the cost savings to the Federal Government of the use of such procedures.¿ 

* * * * * * * 

CHAPTER 16—DESIGNS 

* * * * * * * 

§ 172. Right of priority 

The right of priority provided for by subsections (a) through (d) 

of section 119 of this title øand the time specified in section 102(d)¿ 

shall be six months in the case of designs. The right of priority provided for by section 119(e) of this title shall not apply to designs. 

* * * * * * * 

CHAPTER 17—SECRECY OF CERTAIN INVENTIONS AND 

FILING APPLICATIONS IN FOREIGN COUNTRY 

* * * * * * * 

§ 184. Filing of application in foreign country 

øExcept when¿ (a) FILING IN FOREIGN COUNTRY.—Except when 

authorized by a license obtained from the Commissioner of Patents 

a person shall not file or cause or authorize to be filed in any foreign country prior to six months after filing in the United States 

an application for patent or for the registration of a utility model, 

industrial design, or model in respect of an invention made in this 

country. A license shall not be granted with respect to an invention 

subject to an order issued by the Commissioner of Patents pursuant to section 181 of this title without the concurrence of the head 

of the departments and the chief officers of the agencies who 

caused the order to be issued. The license may be granted retroactively where an application has been filed abroad through error 

and without deceptive intent and the application does not disclose 

an invention within the scope of section 181 of this title. 

øThe term¿ (b) APPLICATION.—The term ‘‘application’’ when 

used in this chapter includes applications and any modifications, 

amendments, or supplements thereto, or divisions thereof. 

øThe scope¿ (c) SUBSEQUENT MODIFICATIONS, AMENDMENTS, 

AND SUPPLEMENTS.—The scope of a license shall permit subsequent 

modifications, amendments, and supplements containing additional 


hsrobinson on PROD1PC76 with HEARING
112 

subject matter if the application upon which the request for the license is based is not, or was not, required to be made available for 

inspection under section 181 of this title and if such modifications, 

amendments, and supplements do not change the general nature of 

the invention in a manner which would require such application to 

be made available for inspection under such section 181. In any 

case in which a license is not, or was not, required in order to file 

an application in any foreign country, such subsequent modifications, amendments, and supplements may be made, without a license, to the application filed in the foreign country if the United 

States application was not required to be made available for inspection under section 181 and if such modifications, amendments, and 

supplements do not, or did not, change the general nature of the 

invention in a manner which would require the United States application to have been made available for inspection under such 

section 181. 

* * * * * * * 

CHAPTER 18—PATENT RIGHTS IN INVENTIONS MADE 

WITH FEDERAL ASSISTANCE 

* * * * * * * 

§ 202. Disposition of rights 

(a) * * * 

* * * * * * * 

(c) Each funding agreement with a small business firm or nonprofit organization shall contain appropriate provisions to effectuate the following: 

(1) * * * 

(2) That the contractor make a written election within two 

years after disclosure to the Federal agency (or such additional 

time as may be approved by the Federal agency) whether the 

contractor will retain title to a subject invention: Provided, 

That in any case where øpublication, on sale, or public use, has 

initiated the one year statutory period in which valid patent 

protection can still be obtained in the United States¿ the 1-year 

period referred to in section 102(a) would end before the end of 

that 2-year period, the period for election may be shortened by 

the Federal agency to a date that is not more than sixty days 

prior to the end of øthe statutory¿ that 1-year period: And provided further, That the Federal Government may receive title 

to any subject invention in which the contractor does not elect 

to retain rights or fails to elect rights within such times. 

(3) That a contractor electing rights in a subject invention 

agrees to file a patent application prior to øany statutory bar 

date that may occur under this title due to publication, on sale, 

or public use¿ the expiration of the 1-year period referred to in 

section 102(a), and shall thereafter file corresponding patent 

applications in other countries in which it wishes to retain title 

within reasonable times, and that the Federal Government 

may receive title to any subject inventions in the United States 


hsrobinson on PROD1PC76 with HEARING
113 

or other countries in which the contractor has not filed patent 

applications on the subject invention within such times. 

* * * * * * * 

PART III—PATENTS AND PROTECTION OF 

PATENT RIGHTS 

Chap. Sec. 

25. Amendment and Correction of Patents ............................................ 251 

* * * * * * * 

32. Post-Grant Review Proceedings ............................................................ 321 

* * * * * * * 

CHAPTER 25—AMENDMENT AND CORRECTION OF 

PATENTS 

* * * * * * * 

§ 251. Reissue of defective patents 

øWhenever¿ (a) IN GENERAL.—Whenever any patent is, through 

error without any deceptive intention, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had 

a right to claim in the patent, the Director shall, on the surrender 

of such patent and the payment of the fee required by law, reissue 

the patent for the invention disclosed in the original patent, and 

in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall 

be introduced into the application for reissue. 

øThe Director¿ (b) MULTIPLE REISSUED PATENTS.—The Director 

may issue several reissued patents for distinct and separate parts 

of the thing patented, upon demand of the applicant, and upon payment of the required fee for a reissue for each of such reissued patents. 

øThe provisions¿ (c) APPLICABILITY OF THIS TITLE.—The provisions of this title relating to applications for patent shall be applicable to applications for reissue of a patent, except that application 

for reissue may be made and sworn to by the assignee of the entire 

interest if the application does not seek to enlarge the scope of the 

claims of the original patent. 

øNo reissued patent¿ (d) REISSUE PATENT ENLARGING SCOPE OF

CLAIMS.—No reissued patent shall be granted enlarging the scope 

of the claims of the original patent unless applied for within two 

years from the grant of the original patent. 

* * * * * * * 

§ 253. Disclaimer 

øWhenever¿ (a) IN GENERAL.—Whenever, without any deceptive intention, a claim of a patent is invalid the remaining claims 

shall not thereby be rendered invalid. A patentee, whether of the 

whole or any sectional interest therein, may, on payment of the fee 

required by law, make disclaimer of any complete claim, stating 

therein the extent of his interest in such patent. Such disclaimer 

shall be in writing, and recorded in the Patent and Trademark OfVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00113 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
114 

fice; and it shall thereafter be considered as part of the original 

patent to the extent of the interest possessed by the disclaimant 

and by those claiming under him. 

øIn like manner¿ (b) ADDITIONAL DISCLAIMER OR DEDICA- TION.—In the manner set forth in subsection (a), any patentee or 

applicant may disclaim or dedicate to the public the entire term, 

or any terminal part of the term, of the patent granted or to be 

granted. 

* * * * * * * 

§ 256. Correction of named inventor 

øWhenever¿ (a) CORRECTION.—Whenever through error a person is named in an issued patent as the inventor, or through error 

an inventor is not named in an issued patent and such error arose 

without any deceptive intention on his part, the Director may, on 

application of all the parties and assignees, with proof of the facts 

and such other requirements as may be imposed, issued a certificate correcting such error. 

øThe error¿ (b) PATENT VALID IF ERROR CORRECTED.—The error 

of omitting inventors or naming persons who are not inventors 

shall not invalidate the patent in which such error occurred if it 

can be corrected as provided in this section. The court before which 

such matter is called in question may order correction of the patent 

on notice and hearing of all parties concerned and the Director 

shall issue a certificate accordingly. 

* * * * * * * 

CHAPTER 28—INFRINGEMENT OF PATENTS 

Sec. 

271. Infringement of patent. 

272. Temporary presence in the United States. 

ø273. Defense to infringement based on earlier inventor.¿ 

273. Special defenses to and exemptions from infringement. 

* * * * * * * 

ø§ 273. Defense to infringement based on earlier inventor¿ 

§ 273. Special defenses to and exemptions from infringement 

(a) DEFINITIONS.—For purposes of this section— (1) the terms ‘‘commercially used’’ and ‘‘commercial use’’ mean use øof a method¿ in the United States, so long as such 

use is in connection with an internal commercial use or an actual arm’s-length sale or other arm’s-length commercial transfer of a useful end result, whether or not the subject matter 

at issue is accessible to or otherwise known to the public, except that the subject matter for which commercial marketing 

or use is subject to a premarketing regulatory review period 

during which the safety or efficacy of the subject matter is established, including any period specified in section 156(g), shall 

be deemed ‘‘commercially used’’ and in ‘‘commercial use’’ during 

such regulatory øreview period;¿ review period; and 

(2) in the case of activities performed by a nonprofit research laboratory, or nonprofit entity such as a university, research center, or hospital, a use for which the public is the inVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00114 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
115 

tended beneficiary shall be considered to be a use described in 

paragraph (1), except that the use— (A) * * * 

(B) may not be asserted as a defense with respect to 

any subsequent commercialization or use outside such laboratory or nonprofit entityø;¿. ø(3) the term ‘‘method’’ means a method of doing or conducting business; and 

ø(4) the ‘‘effective filing date’’ of a patent is the earlier of 

the actual filing date of the application for the patent or the 

filing date of any earlier United States, foreign, or international application to which the subject matter at issue is entitled under section 119, 120, or 365 of this title.¿ 

(b) DEFENSE TO INFRINGEMENT.— (1) IN GENERAL.—It shall be a defense to an action for infringement under section 271 of this title with respect to any 

subject matter that would otherwise infringe one or more 

claims øfor a method¿ in the patent being asserted against a 

person, if such person had, acting in good faith, actually reduced the subject matter to practice øat least 1 year before the 

effective filing date of such patent, and commercially used the 

subject matter before the effective filing date of such patent.¿ 

and commercially used, or made substantial preparations for 

commercial use of, the subject matter before the effective filing 

date of the claimed invention. 

(2) EXHAUSTION OF RIGHT.—øThe sale or other disposition 

of a useful end product produced by a patented method¿ The 

sale or other disposition of subject matter that qualifies for the 

defense set forth in this section, by a person entitled to assert 

øa defense under this section with respect to that useful end 

result¿ such defense shall exhaust the patent owner’s rights 

under the patent to the extent such rights would have been exhausted had such sale or other disposition been made by the 

patent owner. 

(3) LIMITATIONS AND QUALIFICATIONS OF DEFENSE.—The 

defense to infringement under this section is subject to the following: 

ø(A) PATENT.—A person may not assert the defense 

under this section unless the invention for which the defense is asserted is for a method.¿ 

ø(B)¿ (A) DERIVATION.—A person may not assert the 

defense under this section if the subject matter on which 

the defense is based was derived from the patentee or persons in privity with the patentee. 

ø(C)¿ (B) NOT A GENERAL LICENSE.—The defense asserted by a person under this section is not a general license under all claims of the patent at issue, but extends 

only to the specific subject matter claimed in the patent 

with respect to which the person can assert a defense 

under this chapter, except that the defense shall also extend to variations in the quantity or volume of use of the 

claimed subject matter, and to improvements in the 

claimed subject matter that do not infringe additional specifically claimed subject matter of the patent. 

* * * * * * * 


hsrobinson on PROD1PC76 with HEARING
116 

(7) LIMITATION ON SITES.—A defense under this section, 

when acquired as part of a good faith assignment or transfer 

of an entire enterprise or line of business to which the defense 

relates, may only be asserted for uses at sites where the subject matter that would otherwise infringe one or more of the 

claims is in use before the later of the effective filing date øof 

the patent¿ of the claimed invention or the date of the assignment or transfer of such enterprise or line of business. 

* * * * * * * 

CHAPTER 29—REMEDIES FOR INFRINGEMENT OF 

PATENT, AND OTHER ACTIONS 

Sec. 

281. Remedy for infringement of patent. 

* * * * * * * 

ø291. Interfering patents.¿ 

* * * * * * * 

§ 282. Presumption of validity; defenses 

øA patent¿ (a) IN GENERAL.—A patent shall be presumed valid. 

Each claim of a patent (whether in independent, dependent, or 

multiple dependent form) shall be presumed valid independently of 

the validity of other claims; dependent or multiple dependent 

claims shall be presumed valid even though dependent upon an invalid claim. Notwithstanding the preceding sentence, if a claim to 

a composition of matter is held invalid and that claim was the 

basis of a determination of nonobviousness under section 103(b)(1), 

the process shall no longer be considered nonobvious solely on the 

basis of section 103(b)(1). The burden of establishing invalidity of 

a patent or any claim thereof shall rest on the party asserting such 

invalidity. 

øThe following¿ (b) DEFENSES.—The following shall be defenses in any action involving the validity or infringement of a patent and shall be pleaded: 

(1) Noninfringement, absence of liability for infringement 

or unenforceabilityø,¿. 

(2) Invalidity of the patent or any claim in suit on any 

ground specified in part II of this title as a condition for 

patentabilityø,¿. 

ø(3) Invalidity of the patent or any claim in suit for failure 

to comply with any requirement of sections 112 or 251 of this 

title,¿ 

(3) Invalidity of the patent or any claim in suit for failure 

to comply with—

(A) any requirement of section 112 of this title, other 

than the requirement that the specification shall set forth 

the best mode contemplated by the inventor of carrying out 

his invention; or 

(B) any requirement of section 251 of this title. 

(4) Any other fact or act made a defense by this title. 

(c) INEQUITABLE CONDUCT.—

(1) DEFENSE.—A patent may be held to be unenforceable, or 

other remedy imposed under paragraph (3), for inequitable conVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00116 Fmt 6659 Sfmt 6603 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
117 

duct only if it is established, by clear and convincing evidence, 

that—

(A) the patentee, its agents, or another person with a 

duty of disclosure to the Office, with the intent to mislead 

or deceive the patent examiner, misrepresented or failed to 

disclose material information concerning a matter or proceeding before the Office; and 

(B) in the absence of such deception, the Office, acting 

reasonably, would, on the record before it, have made a 

prima facie finding of unpatentability. 

(2) INTENT.—In order to prove intent to mislead or deceive 

under paragraph (1), specific facts beyond materiality of the information submitted or not disclosed must be proven that support an inference of intent to mislead or deceive the Patent and 

Trademark Office. Facts support an inference of intent if they 

show circumstances that indicate conscious or deliberate behavior on the part of the patentee, its agents, or another person 

with a duty of disclosure to the Office, to not disclose material 

information or to submit materially false information. 

(3) REMEDY.—Upon a finding of inequitable conduct, the 

court shall balance the equities to determine which of the following remedies to impose: 

(A) Denying equitable relief to the patent holder and 

limiting the remedy for infringement to damages. 

(B) Holding the claims-in-suit, or the claims in which 

inequitable conduct occurred, unenforceable. 

(C) Holding the patent unenforceable. 

(D) Holding the claims of a related patent unenforceable. 

(4) ATTORNEY MISCONDUCT.—Upon a finding of inequitable 

conduct, if there is evidence that the conduct can be attributable 

to a person or persons authorized to practice before the Office, 

the court shall refer the matter to the Office for appropriate disciplinary action under section 32, and shall order the parties to 

preserve and make available to the Office any materials that 

may be relevant to the determination under section 32. 

øIn actions¿ (d) NOTICE OF ACTIONS; PLEADING.—In actions involving the validity or infringement of a patent the party asserting 

invalidity or noninfringement shall give notice in the pleadings or 

otherwise in writing to the adverse party at least thirty days before 

the trial, of the country, number, date, and name of the patentee 

of any patent, the title, date, and page numbers of any publication 

to be relied upon as anticipation of the patent in suit or, except in 

actions in the United States Court of Federal Claims, as showing 

the state of the art, and the name and address of any person who 

may be relied upon as the prior inventor or as having prior knowledge of or as having previously used or offered for sale the invention of the patent in suit. In the absence of such notice proof of the 

said matters may not be made at the trial except on such terms 

as the court requires. In an action involving any allegation of inequitable conduct under subsection (c), the party asserting this defense or claim shall comply with the pleading requirements set forth 

in Rule 9(b) of the Federal Rules of Civil Procedure. øInvalidity¿ 


hsrobinson on PROD1PC76 with HEARING
118 

(e) EXTENSION OF PATENT TERM.—Invalidity of the extension of 

a patent term or any portion thereof under section 154(b) or 156 

of this title because of the material failure— (1) by the applicant for the extension, or 

(2) by the Director, 

to comply with the requirements of such section shall be a defense 

in any action involving the infringement of a patent during the period of the extension of its term and shall be pleaded. A due diligence determination under section 156(d)(2) is not subject to review 

in such an action. 

* * * * * * * 

§ 284. Damages 

øUpon¿ (a) IN GENERAL.—Upon finding for the claimant the 

court shall award the claimant damages adequate to compensate 

for the infringement, but in no event less than a reasonable royalty 

for the use made of the invention by the infringer, together with 

interest and costs as fixed by the court. 

(b) REASONABLE ROYALTY.— (1) IN GENERAL.— An award pursuant to subsection (a) 

that is based upon a reasonable royalty shall be determined in 

accordance with this subsection. Based on the facts of the case, 

the court shall determine whether paragraph (2), (3), or (5) will 

be used by the court or the jury in calculating a reasonable royalty. The court shall identify the factors that are relevant to the 

determination of a reasonable royalty under the applicable 

paragraph, and the court or jury, as the case may be, shall consider only those factors in making the determination. 

(2) RELATIONSHIP OF DAMAGES TO CONTRIBUTIONS OVER

PRIOR ART.—The court shall conduct an analysis to ensure that 

a reasonable royalty under subsection (a) is applied only to that 

economic value properly attributable to the patent’s specific contribution over the prior art. The court shall exclude from the 

analysis the economic value properly attributable to the prior 

art, and other features or improvements, whether or not themselves patented, that contribute economic value to the infringing 

product or process. 

(3) ENTIRE MARKET VALUE.—Unless the claimant shows 

that the patent’s specific contribution over the prior art is the 

predominant basis for market demand for an infringing product or process, damages may not be based upon the entire market value of the products or processes involved that satisfy that 

demand. 

(4) COMBINATION INVENTIONS.—For purposes of paragraphs 

(2) and (3), in the case of a combination invention the elements 

of which are present individually in the prior art, the patentee 

may show that the contribution over the prior art may include 

the value of the additional function resulting from the combination, as well as the enhanced value, if any, of some or all of the 

prior art elements resulting from the combination. 

(5) OTHER FACTORS.—In determining a reasonable royalty, 

the court may also consider, or direct the jury to consider, the 

terms of any nonexclusive marketplace licensing of the invention, where appropriate, as well as any other relevant factors 

under applicable law. 


hsrobinson on PROD1PC76 with HEARING
119 

øWhen the damages are not found by a jury, the court shall 

assess them. In either event the court may increase the damages 

up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights 

under section 154(d) of this title.¿ 

(c) WILLFUL INFRINGEMENT.—

(1) INCREASED DAMAGES.—A court that has determined that 

the infringer has willfully infringed a patent or patents may increase the damages up to three times the amount of damages 

found or assessed under subsection (a), except that increased 

damages under this paragraph shall not apply to provisional 

rights under section 154(d). 

(2) PERMITTED GROUNDS FOR WILLFULNESS.—A court may 

find that an infringer has willfully infringed a patent only if 

the patent owner presents clear and convincing evidence that—

(A) after receiving written notice from the patentee—

(i) alleging acts of infringement in a manner sufficient to give the infringer an objectively reasonable apprehension of suit on such patent, and 

(ii) identifying with particularity each claim of the 

patent, each product or process that the patent owner 

alleges infringes the patent, and the relationship of 

such product or process to such claim, 

the infringer, after a reasonable opportunity to investigate, 

thereafter performed one or more of the alleged acts of infringement; 

(B) the infringer intentionally copied the patented invention with knowledge that it was patented; or 

(C) after having been found by a court to have infringed that patent, the infringer engaged in conduct that 

was not colorably different from the conduct previously 

found to have infringed the patent, and that resulted in a 

separate finding of infringement of the same patent. 

(3) LIMITATIONS ON WILLFULNESS.—(A) A court may not 

find that an infringer has willfully infringed a patent under 

paragraph (2) for any period of time during which the infringer 

had an informed good faith belief that the patent was invalid 

or unenforceable, or would not be infringed by the conduct later 

shown to constitute infringement of the patent. 

(B) An informed good faith belief within the meaning of 

subparagraph (A) may be established by—

(i) reasonable reliance on advice of counsel; 

(ii) evidence that the infringer sought to modify its conduct to avoid infringement once it had discovered the patent; or 

(iii) other evidence a court may find sufficient to establish such good faith belief. 

(C) The decision of the infringer not to present evidence of 

advice of counsel is not relevant to a determination of willful 

infringement under paragraph (2). 

(4) LIMITATION ON PLEADING.—Before the date on which a 

court determines that the patent in suit is not invalid, is enforceable, and has been infringed by the infringer, a patentee 

may not plead and a court may not determine that an infringer 


hsrobinson on PROD1PC76 with HEARING
120 

has willfully infringed a patent. The court’s determination of an 

infringer’s willfulness shall be made without a jury. 

øThe court¿ (d) EXPERT TESTIMONY.—The court may receive 

expert testimony as an aid to the determination of damages or of 

what royalty would be reasonable under the circumstances. 

* * * * * * * 

§ 287. Limitation on damages and other remedies; marking 

and notice 

(a) * * * 

* * * * * * * 

(c)(1) * * * 

* * * * * * * 

(4) This subsection shall not apply to any patent issued based 

on an application øthe earliest effective filing date of which is prior 

to¿ which has an effective filing date before September 30, 1996. 

* * * * * * * 

ø§ 291. Interfering patents 

øThe owner of an interfering patent may have relief against 

the owner of another by civil action, and the court may adjudge the 

question of the validity of any of the interfering patents, in whole 

or in part. The provisions of the second paragraph of section 146 

of this title shall apply to actions brought under this section.¿ 

* * * * * * * 

ø§ 301. Citation of prior art 

øAny person at any time may cite to the Office in writing prior 

art consisting of patents or printed publications which that person 

believes to have a bearing on the patentability of any claim of a 

particular patent. If the person explains in writing the pertinency 

and manner of applying such prior art to at least one claim of the 

patent, the citation of such prior art and the explanation thereof 

will become a part of the official file of the patent. At the written 

request of the person citing the prior art, his or her identity will 

be excluded from the patent file and kept confidential.¿ 

§ 301. Citation of prior art 

(a) IN GENERAL.—Any person at any time may cite to the Office 

in writing—

(1) prior art consisting of patents or printed publications 

which that person believes to have a bearing on the patentability of any claim of a particular patent; or 

(2) written statements of the patent owner filed in a proceeding before a Federal court or the Patent and Trademark Office in which the patent owner takes a position on the scope of 

one or more patent claims. 

(b) SUBMISSIONS PART OF OFFICIAL FILE.—If the person citing 

prior art or written submissions under subsection (a) explains in 

writing the pertinence and manner of applying the prior art or written submissions to at least one claim of the patent, the citation of 

the prior art or written submissions (as the case may be) and the 


hsrobinson on PROD1PC76 with HEARING
121 

explanation thereof shall become a part of the official file of the patent. 

(c) PROCEDURES FOR WRITTEN STATEMENTS.— (1) SUBMISSION OF ADDITIONAL MATERIALS.—A party that 

submits written statements under subsection (a)(2) in a proceeding shall include any other documents, pleadings, or evidence from the proceeding that address the patent owner’s statements or the claims addressed by the written statements. 

(2) LIMITATION ON USE OF STATEMENTS.—Written statements submitted under subsection (a)(2) shall not be considered 

for any purpose other than to determine the proper meaning of 

the claims that are the subject of the request in a proceeding ordered pursuant to section 304 or 313. Any such written statements, and any materials submitted under paragraph (1), that 

are subject to an applicable protective order shall be redacted 

to exclude information subject to the order. 

(d) IDENTITY WITHHELD.—Upon the written request of the person citing prior art or written statements under subsection (a), the 

person’s identity shall be excluded from the patent file and kept confidential. 

* * * * * * * 

§ 303. Determination of issue by Director 

ø(a) Within three months following the filing of a request for 

reexamination under the provisions of section 302 of this title, the 

Director will determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by 

the request, with or without consideration of other patents or printed publications. On his own initiative, and any time, the Director 

may determine whether a substantial new question of patentability 

is raised by patents and publications discovered by him or cited 

under the provisions of section 301 of this title. The existence of a 

substantial new question of patentability is not precluded by the 

fact that a patent or printed publication was previously cited by or 

to the Office or considered by the Office.¿ 

(a) Within three months after the owner of a patent files a request for reexamination under section 302, the Director shall determine whether a substantial new question of patentability affecting 

any claim of the patent concerned is raised by the request, with or 

without consideration of other patents or printed publications. On 

the Director’s own initiative, and at any time, the Director may determine whether a substantial new question of patentability is 

raised by patents and publications discovered by the Director, is 

cited under section 301, or is cited by any person other than the 

owner of the patent under section 302 or section 311. The existence 

of a substantial new question of patentability is not precluded by 

the fact that a patent or printed publication was previously cited by 

or to the Office or considered by the Office. 

* * * * * * * 

§ 305. Conduct of reexamination proceedings 

After the times for filing the statement and reply provided for 

by section 304 of this title have expired, reexamination will be conducted according to the procedures established for initial examinaVerDate Aug 31 2005 23:27 Sep 04, 2007 Jkt 059006 PO 00000 Frm 00121 Fmt 6659 Sfmt 6601 E:\HR\OC\HR314.XXX HR314

hsrobinson on PROD1PC76 with HEARING
122 

tion under the provisions of sections 132 and 133 of this title. In 

any reexamination proceeding under this chapter, the patent owner 

will be permitted to propose any amendment to his patent and a 

new claim or claims thereto, in order to distinguish the invention 

as claimed from the prior art cited under the provisions of section 

301 of this title, or in response to a decision adverse to the patentability of a claim of a patent. No proposed amended or new claim 

enlarging the scope of a claim of the patent will be permitted in 

a reexamination proceeding under this chapter. All reexamination 

proceedings under this section, including any appeal to the øBoard 

of Patent Appeals and Interferences¿ Patent Trial and Appeal 

Board, will be conducted with special dispatch within the Office. 

* * * * * * * 

§ 314. Conduct of inter partes reexamination proceedings 

(a) IN GENERAL.—Except as otherwise provided in this section, 

reexamination shall be øconducted according to the procedures established for initial examination under the provisions of sections 

132 and 133¿ heard by an administrative patent judge in accordance with procedures which the Director shall establish. In any 

inter partes reexamination proceeding under this chapter, the patent owner shall be permitted to propose any amendment to the patent and a new claim or claims, except that no proposed amended 

or new claim enlarging the scope of the claims of the patent shall 

be permitted. 

(b) RESPONSE.—(1) With the exception of the inter partes reexamination request, any document filed by either the patent owner 

or the third-party requester shall be served on the other party. In 

addition, the Office shall send to the third-party requester a copy 

of any communication sent by the Office to the patent owner concerning the patent subject to the inter partes reexamination proceeding. 

ø(2) Each time that the patent owner files a response to an action on the merits from the Patent and Trademark Office, the 

third-party requester shall have one opportunity to file written 

comments addressing issues raised by the action of the Office or 

the patent owner’s response thereto, if those written comments are 

received by the Office within 30 days after the date of service of 

the patent owner’s response.¿ 

(2) The third-party requester shall have the opportunity to file 

written comments on any action on the merits by the Office in the 

inter partes reexamination proceeding, and on any response that the 

patent owner files to such an action, if those written comments are 

received by the Office within 60 days after the date of service on the 

third-party requester of the Office action or patent owner response, 

as the case may be. 

(c) SPECIAL DISPATCH.—Unless otherwise provided by the Director for good cause, all inter partes reexamination proceedings 

under this section, including any appeal to the øBoard of Patent 

Appeals and Interferences¿ Patent Trial and Appeal Board, shall 

be conducted with special dispatch within the Office. 

(d) ORAL HEARING.—At the request of a third party requestor 

or the patent owner, the administrative patent judge shall conduct 

an oral hearing, unless the judge finds cause lacking for such hearing. 


hsrobinson on PROD1PC76 with HEARING
123 

§ 315. Appeal 

(a) * * * 

* * * * * * * 

(c) CIVIL ACTION.—A third-party requester whose request for 

an inter partes reexamination results in an order under section 313 

is estopped from asserting at a later time, in any civil action arising in whole or in part under section 1338 of title 28, the invalidity 

of any claim finally determined to be valid and patentable on any 

ground which the third-party requester raised øor could have 

raised¿ during the inter partes reexamination proceedings. This 

subsection does not prevent the assertion of invalidity based on 

newly discovered prior art unavailable to the third-party requester 

and the Patent and Trademark Office at the time of the inter 

partes reexamination proceedings. 

* * * * * * * 

§ 317. Inter partes reexamination prohibited 

(a) * * * 

(b) øFINAL DECISION.—Once a final decision has been entered¿ 

DISTRICT COURT DECISION.—Once the judgment of the district court 

has been entered against a party in a civil action arising in whole 

or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in 

suit or if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the 

patentability of any original or proposed amended or new claim of 

the patent, then neither that party nor its privies may thereafter 

request an inter partes reexamination of any such patent claim on 

the basis of issues which that party or its privies raised or could 

have raised in such civil action or inter partes reexamination proceeding, and an inter partes reexamination requested by that party 

or its privies on the basis of such issues may not thereafter be 

maintained by the Office, notwithstanding any other provision of 

this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the thirdparty requester and the Patent and Trademark Office at the time 

of the inter partes reexamination proceedings. 

* * * * * * * 

CHAPTER 32—POST-GRANT REVIEW PROCEDURES 

Sec. 

321. Petition for post-grant review. 

322. Timing and bases of petition. 

323. Requirements of petition. 

324. Prohibited filings. 

325. Submission of additional information; showing of sufficient grounds. 

326. Conduct of post-grant review proceedings. 

327. Patent owner response. 

328. Proof and evidentiary standards. 

329. Amendment of the patent. 

330. Decision of the Board. 

331. Effect of decision. 

332. Settlement. 

333. Relationship to other pending proceedings. 

334. Effect of decisions rendered in civil action on post-grant review proceedings. 


hsrobinson on PROD1PC76 with HEARING
124 

335. Effect of final decision on future proceedings. 

336. Appeal. 

§ 321. Petition for post-grant review 

Subject to sections 322, 324, 332, and 333, a person who is not 

the patent owner may file with the Office a petition for cancellation 

seeking to institute a post-grant review proceeding to cancel as 

unpatentable any claim of a patent on any ground that could be 

raised under paragraph (2) or (3) of section 282(b) (relating to invalidity of the patent or any claim). The Director shall establish, by 

regulation, fees to be paid by the person requesting the proceeding, 

in such amounts as the Director determines to be reasonable. 

§ 322. Timing and bases of petition 

A post-grant proceeding may be instituted under this chapter 

pursuant to a cancellation petition filed under section 321 only if—

(1) the petition is filed not later than 12 months after the 

grant of the patent or issuance of a reissue patent, as the case 

may be; or 

(2) the patent owner consents in writing to the proceeding. 

§ 323. Requirements of petition 

A cancellation petition filed under section 321 may be considered only if—

(1) the petition is accompanied by payment of the fee established by the Director under section 321; 

(2) the petition identifies the cancellation petitioner; 

(3) the petition sets forth in writing the basis for the cancellation, identifying each claim challenged and providing such 

information as the Director may require by regulation, and includes copies of patents and printed publications that the cancellation petitioner relies upon in support of the petition; and 

(4) the petitioner provides copies of those documents to the 

patent owner or, if applicable, the designated representative of 

the patent owner. 

§ 324. Prohibited filings 

A post-grant review proceeding may not be instituted under section 322 if the petition for cancellation requesting the proceeding 

identifies the same cancellation petitioner and the same patent as 

a previous petition for cancellation filed under such section. 

§ 325. Submission of additional information; showing of sufficient grounds 

(a) IN GENERAL.—The cancellation petitioner shall file such additional information with respect to the petition as the Director may 

require. For each petition submitted under section 321, the Director 

shall determine if the written statement, and any evidence submitted with the request, establish that a substantial question of patentability exists for at least one claim in the patent. The Director 

may initiate a post-grant review proceeding if the Director determines that the information presented provides sufficient grounds to 

believe that there is a substantial question of patentability concerning one or more claims of the patent at issue. 


hsrobinson on PROD1PC76 with HEARING
125 

(b) NOTIFICATION; DETERMINATIONS NOT REVIEWABLE.—The 

Director shall notify the patent owner and each petitioner in writing 

of the Director’s determination under subsection (a), including a determination to deny the petition. The Director shall make that determination in writing not later than 60 days after receiving the petition. Any determination made by the Director under subsection (a), 

including whether or not to institute a post-grant review proceeding 

or to deny the petition, shall not be reviewable. 

§ 326. Conduct of post-grant review proceedings 

(a) IN GENERAL.—The Director shall prescribe regulations, in 

accordance with section 2(b)(2)— (1) establishing and governing post-grant review proceedings under this chapter and their relationship to other proceedings under this title; 

(2) establishing procedures for the submission of supplemental information after the petition for cancellation is filed; 

and 

(3) setting forth procedures for discovery of relevant evidence, including that such discovery shall be limited to evidence 

directly related to factual assertions advanced by either party in 

the proceeding, and the procedures for obtaining such evidence 

shall be consistent with the purpose and nature of the proceeding. 

(b) POST-GRANT REGULATIONS.—Regulations under subsection 

(a)(1)— (1) shall require that the final determination in a postgrant proceeding issue not later than one year after the date on 

which the post-grant review proceeding is instituted under this 

chapter, except that, for good cause shown, the Director may extend the 1-year period by not more than six months; 

(2) shall provide for discovery upon order of the Director; 

(3) shall provide for publication of notice in the Federal 

Register of the filing of a petition for post-grant review under 

this chapter, for publication of the petition, and documents, orders, and decisions relating to the petition, on the website of the 

Patent and Trademark Office, and for filings under seal exempt 

from publication requirements; 

(4) shall prescribe sanctions for abuse of discovery, abuse of 

process, or any other improper use of the proceeding, such as to 

harass or to cause unnecessary delay or unnecessary increase in 

the cost of the proceeding; 

(5) may provide for protective orders governing the exchange and submission of confidential information; and 

(6) shall ensure that any information submitted by the patent owner in support of any amendment entered under section 

329 is made available to the public as part of the prosecution 

history of the patent. 

(c) CONSIDERATIONS.—In prescribing regulations under this section, the Director shall consider the effect on the economy, the integrity of the patent system, and the efficient administration of the Office. 

(d) CONDUCT OF PROCEEDING.—The Patent Trial and Appeal 

Board shall, in accordance with section 6(b), conduct each postgrant review proceeding authorized by the Director. 


hsrobinson on PROD1PC76 with HEARING
126 

§ 327. Patent owner response 

After a post-grant proceeding under this chapter has been instituted with respect to a patent, the patent owner shall have the right 

to file, within a time period set by the Director, a response to the 

cancellation petition. The patent owner shall file with the response, 

through affidavits or declarations, any additional factual evidence 

and expert opinions on which the patent owner relies in support of 

the response. 

§ 328. Proof and evidentiary standards 

(a) IN GENERAL.—The presumption of validity set forth in section 282 shall not apply in a challenge to any patent claim under 

this chapter. 

(b) BURDEN OF PROOF.—The party advancing a proposition 

under this chapter shall have the burden of proving that proposition 

by a preponderance of the evidence. 

§ 329. Amendment of the patent 

(a) IN GENERAL.—In response to a challenge in a petition for 

cancellation, the patent owner may file one motion to amend the 

patent in one or more of the following ways: 

(1) Cancel any challenged patent claim. 

(2) For each challenged claim, propose a substitute claim. 

(3) Amend the patent drawings or otherwise amend the patent other than the claims. 

(b) ADDITIONAL MOTIONS.—Additional motions to amend may 

be permitted only for good cause shown. 

(c) SCOPE OF CLAIMS.—An amendment under this section may 

not enlarge the scope of the claims of the patent or introduce new 

matter. 

§ 330. Decision of the board 

If the post-grant review proceeding is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall 

issue a final written decision with respect to the patentability of any 

patent claim challenged and any new claim added under section 

329. 

§ 331. Effect of decision 

(a) IN GENERAL.—If the Patent Trial and Appeal Board issues 

a final decision under section 330 and the time for appeal has expired or any appeal proceeding has terminated, the Director shall 

issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable and incorporating in the patent 

by operation of the certificate any new claim determined to be patentable. 

(b) NEW CLAIMS.—Any new claim held to be patentable and incorporated into a patent in a post-grant review proceeding shall 

have the same effect as that specified in section 252 for reissued patents on the right of any person who made, purchased, offered to sell, 

or used within the United States, or imported into the United 

States, anything patented by such new claim, or who made substantial preparations therefor, before a certificate under subsection (a) of 

this section is issued. 


hsrobinson on PROD1PC76 with HEARING
127 

§ 332. Settlement 

(a) IN GENERAL.—A post-grant review proceeding shall be terminated with respect to any petitioner upon the joint request of the 

petitioner and the patent owner, unless the Patent Trial and Appeal 

Board has issued a written decision before the request for termination is filed. If the post-grant review proceeding is terminated 

with respect to a petitioner under this paragraph, no estoppel shall 

apply to that petitioner. If no petitioner remains in the proceeding, 

the panel of administrative patent judges assigned to the proceeding 

shall terminate the proceeding. 

(b) AGREEMENT IN WRITING.—Any agreement or understanding 

between the patent owner and a petitioner, including any collateral 

agreements referred to in the agreement or understanding, that is 

made in connection with or in contemplation of the termination of 

a post-grant review proceeding, must be in writing. A post-grant review proceeding as between the parties to the agreement or understanding may not be terminated until a copy of the agreement or 

understanding, including any such collateral agreements, has been 

filed in the Office. If any party filing such an agreement or understanding requests, the agreement or understanding shall be kept 

separate from the file of the post-grant review proceeding, and shall 

be made available only to Government agencies on written request, 

or to any person on a showing of good cause. 

§ 333. Relationship to other pending proceedings 

(a) IN GENERAL.—Notwithstanding subsection 135(a), sections 

251 and 252, and chapter 30, the Director may determine the manner in which any reexamination proceeding, reissue proceeding, interference proceeding (commenced before the effective date provided 

in section 3(k) of the Patent Reform Act of 2007), derivation proceeding, or post-grant review proceeding, that is pending during a 

post-grant review proceeding, may proceed, including providing for 

stay, transfer, consolidation, or termination of any such proceeding. 

(b) STAYS.—The Director may stay a post-grant review proceeding if a pending civil action for infringement addresses the 

same or substantially the same questions of patentability. 

§ 334. Effect of decisions rendered in civil action on postgrant review proceedings 

If a final decision is entered against a party in a civil action 

arising in whole or in part under section 1338 of title 28 establishing that the party has not sustained its burden of proving the 

invalidity of any patent claim—

(1) that party to the civil action and the privies of that 

party may not thereafter request a post-grant review proceeding 

on that patent claim on the basis of any grounds, under the 

provisions of section 321, which that party or the privies of that 

party raised or could have raised; and 

(2) the Director may not thereafter maintain a post-grant 

review proceeding that was requested, before the final decision 

was so entered, by that party or the privies of that party on the 

basis of such grounds. 


hsrobinson on PROD1PC76 with HEARING
128 

§ 335. Effect of final decision on future proceedings 

If a final decision under section 330 is favorable to the patentability of any original or new claim of the patent challenged by the 

cancellation petitioner, the cancellation petitioner may not thereafter, based on any ground that the cancellation petitioner raised 

during the post-grant review proceeding—

(1) request or pursue a reexamination of such claim under 

chapter 31; 

(2) request or pursue a derivation proceeding with respect 

to such claim; 

(3) request or pursue a post-grant review proceeding under 

this chapter with respect to such claim; or 

(4) assert the invalidity of any such claim in any civil action arising in whole or in part under section 1338 of title 28. 

§ 336. Appeal 

A party dissatisfied with the final determination of the Patent 

Trial and Appeal Board in a post-grant proceeding under this chapter may appeal the determination under sections 141 through 144. 

Any party to the post-grant proceeding shall have the right to be a 

party to the appeal. 

* * * * * * * 

§ 363. International application designating the United 

States: Effect 

An international application designating the United States 

shall have the effect, from its international filing date under article 

11 of the treaty, of a national application for patent regularly filed 

in the Patent and Trademark Office øexcept as otherwise provided 

in section 102(e) of this title¿. 

* * * * * * * 

CHAPTER 37—NATIONAL STAGE 

* * * * * * * 

§ 374. Publication of international application 

The publication under the treaty defined in section 351(a) of 

this title, of an international application designating the United 

States shall be deemed a publication under section 122(b), except 

as provided in øsections 102(e) and 154(d)¿ section 154(d) of this 

title. 

The publication under the treaty of an international application shall confer no rights and shall have no effect under this title 

other than that of a printed publication. 

§ 375. Patent issued on international application: Effect 

(a) A patent may be issued by the Director based on an international application designating the United States, in accordance 

with the provisions of this title. øSubject to section 102(e) of this 

title, such¿ Such patent shall have the force and effect of a patent 


hsrobinson on PROD1PC76 with HEARING
129 

issued on a national application filed under the provisions of chapter 11 of this title. 

* * * * * * * 

TITLE 28, UNITED STATES CODE 

* * * * * * * 

PART IV—JURISDICTION AND VENUE 

* * * * * * * 

CHAPTER 83—COURTS OF APPEALS 

* * * * * * * 

§ 1292. Interlocutory decisions 

(a) * * * 

* * * * * * * 

(c) THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL

CIRCUIT SHALL HAVE EXCLUSIVE JURISDICTION.—

(1) of an appeal from an interlocutory order or decree described in subsection (a) or (b) of this section in any case over 

which the court would have jurisdiction of an appeal under section 1295 of this title; øand¿ 

(2) of an appeal from a judgment in a civil action for patent infringement which would otherwise be appealable to the 

United States Court of Appeals for the Federal Circuit and is 

final except for an accountingø.¿; and 

(3) of an appeal from an interlocutory order or decree determining construction of claims in a civil action for patent infringement under section 271 of title 35. 

Application for an appeal under paragraph (3) shall be made to the 

court within 10 days after entry of the order or decree. The district 

court shall have discretion whether to approve the application and, 

if so, whether to stay proceedings in the district court during pendency of the appeal. 

* * * * * * * 

§ 1295. Jurisdiction of the United States Court of Appeals for 

the Federal Circuit 

(a) THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL

CIRCUIT SHALL HAVE EXCLUSIVE JURISDICTION.—

(1) * * * 

* * * * * * * 

(4) OF AN APPEAL FROM A DECISION OF.—

ø(A) the Board of Patent Appeals and Interferences of 

the United States Patent and Trademark Office with respect to patent applications and interferences, at the instance of an applicant for a patent or any party to a patent 

interference, and any such appeal shall waive the right of 


hsrobinson on PROD1PC76 with HEARING
130 

such applicant or party to proceed under section 145 or 

146 of title 35;¿ 

(A) the Patent Trial and Appeal Board of the United 

States Patent and Trademark Office with respect to patent 

applications, derivation proceedings, and post-grant review 

proceedings, at the instance of an applicant for a patent or 

any party to a patent interference (commenced before the effective date provided in section 3(k) of the Patent Reform 

Act of 2007), derivation proceeding, or post-grant review 

proceeding, and any such appeal shall waive any right of 

such applicant or party to proceed under section 145 or 146 

of title 35; 

* * * * * * * 

CHAPTER 87—DISTRICT COURTS; VENUE 

* * * * * * * 

§ 1400. Patents and copyrights, mask works, and designs 

(a) * * * 

ø(b) Any civil action for patent infringement may be brought 

in the judicial district where the defendant resides, or where the 

defendant has committed acts of infringement and has a regular 

and established place of business.¿ 

(b) Notwithstanding section 1391 of this title, in any civil action 

arising under any Act of Congress relating to patents, a party shall 

not manufacture venue by assignment, incorporation, or otherwise 

to invoke the venue of a specific district court. 

(c) Notwithstanding section 1391 of this title, any civil action 

for patent infringement or any action for declaratory judgment may 

be brought only in a judicial district— (1) where the defendant has its principal place of business 

or in the location or place in which the defendant is incorporated, or, for foreign corporations with a United States subsidiary, where the defendant’s primary United States subsidiary 

has its principal place of business or in the location or place in 

which the defendants primary United States subsidiary is incorporated; 

(2) where the defendant has committed a substantial portion of the acts of infringement and has a regular and established physical facility that the defendant controls and that 

constitutes a substantial portion of the operations of the defendant; 

(3) where the primary plaintiff resides, if the primary 

plaintiff in the action is an institution of higher education as 

defined under section 101(a) of the Higher Education Act of 

1965 (20 U.S.C. 1001(a)); or 

(4) where the plaintiff resides, if the plaintiff or a subsidiary of the plaintiff has an established physical facility in 

such district dedicated to research, development, or manufacturing that is operated by full-time employees of the plaintiff or 

such subsidiary, or if the sole plaintiff in the action is an individual inventor who is a natural person and who qualifies at 

the time such action is filed as a micro entity under section 124 

of title 35. 


hsrobinson on PROD1PC76 with HEARING
131 

(d) If the plaintiff brings a civil action for patent infringement 

in a judicial district under subsection (c), the district court may 

transfer that action to any other district or division where— (1) the defendant has substantial evidence or witnesses; 

and 

(2) venue would be appropriate under section 1391 of this 

title, if such transfer would be appropriate under section 1404 

of this title. 

* * * * * * * 

SECTION 4607 OF THE INTELLECTUAL PROPERTY AND 

COMMUNICATIONS OMNIBUS REFORM ACT OF 1999 

øSEC. 4607. ESTOPPEL EFFECT OF REEXAMINATION. 

øAny party who requests an inter partes reexamination under 

section 311 of title 35, United States Code, is estopped from challenging at a later time, in any civil action, any fact determined during the process of such reexamination, except with respect to a fact 

determination later proved to be erroneous based on information 

unavailable at the time of the inter partes reexamination decision. 

If this section is held to be unenforceable, the enforceability of the 

remainder of this subtitle or of this title shall not be denied as a 

result.¿ 

Æ 


hsrobinson on PROD1PC76 with HEARING