I

104TH CONGRESS

1ST SESSION H. R. 1659

To amend title 35, United States Code, to establish the Patent and

Trademark Office as a Government corporation, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 17, 1995

Mr. MOORHEAD (for himself and Mrs. SCHROEDER) introduced the following

bill; which was referred to the Committee on the Judiciary

A BILL

To amend title 35, United States Code, to establish the

Patent and Trademark Office as a Government corporation, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Patent and Trademark

5 Office Corporation Act of 1995’’.
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1 TITLE I—PATENT AND

2 TRADEMARK OFFICE

3 SEC. 101. ESTABLISHMENT OF PATENT AND TRADEMARK

4 OFFICE AS A CORPORATION.

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

6 to read as follows:

7 ‘‘§ 1. Establishment

8 ‘‘(a) ESTABLISHMENT.—The Patent and Trademark

9 Office is established as a wholly owned Government cor10 poration subject to chapter 91 of title 31, except as other11 wise provided in this title.

12 ‘‘(b) OFFICES.—The Patent and Trademark Office

13 shall maintain an office in the District of Columbia, or

14 the metropolitan area thereof, for the service of process

15 and papers and shall be deemed, for purposes of venue

16 in civil actions, to be a resident of the District of Colum17 bia. The Patent and Trademark Office may establish of18 fices in such other places as it considers necessary or ap19 propriate in the conduct of its business.

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

21 Patent and Trademark Office shall also be referred to as

22 the ‘Office’.’’.

23 SEC. 102. POWERS AND DUTIES.

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

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

2 ‘‘(a) IN GENERAL.—The Patent and Trademark Of3 fice shall be responsible for—

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

5 the registration of trademarks;

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

8 international patent and trademark law or the ad9 ministration of the Office, including programs to

10 recognize, identify, assess, and forecast the tech11 nology of patented inventions and their utility to in12 dustry;

13 ‘‘(3) authorizing or conducting studies and pro14 grams cooperatively with foreign patent and trade15 mark offices and international organizations, in con16 nection with the granting and issuing of patents and

17 the registration of trademarks; and

18 ‘‘(4) disseminating to the public information

19 with respect to patents and trademarks.

20 ‘‘(b) SPECIFIC POWERS.—The Office—

21 ‘‘(1) shall have perpetual succession;

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

23 shall be judicially noticed and with which letters pat24 ent, certificates of trademark registrations, and pa25 pers issued by the Office shall be authenticated;
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1 ‘‘(3) may sue and be sued in its corporate name

2 and be represented by its own attorneys in all judi3 cial and administrative proceedings;

4 ‘‘(4) may indemnify the Commissioner of Pat5 ents and Trademarks, and other officers, attorneys,

6 agents, and employees (including members of the

7 Management Advisory Board established in section

8 5), of the Office for liabilities and expenses incurred

9 within the scope of their employment;

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

11 rules, and regulations, governing the manner in

12 which its business will be conducted and the powers

13 granted to it by law will be exercised, without regard

14 to chapter 35 of title 44;

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

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

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

18 therein, as it considers necessary to carry out its

19 functions, without regard to the provisions of the

20 Federal Property and Administrative Services Act of

21 1949;

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

23 for the construction, maintenance, or management

24 and operation of facilities, and contracts for supplies

25 or services, after advertising, in such manner and at
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1 such times sufficiently in advance of opening bids, as

2 the Office determines is adequate to ensure notice

3 and an opportunity for competition, except that ad4 vertising shall not be required when the Office deter5 mines that the making of any such purchase or con6 tract without advertising is necessary, or that adver7 tising is not reasonably practicable;

8 ‘‘(B) may enter into and perform such pur9 chases and contracts for printing services, including

10 the process of composition, platemaking, presswork,

11 silk screen processes, binding, microform, and the

12 products of such processes, as it considers necessary

13 to carry out the functions of the Office, without re14 gard to sections 501 through 517 and 1101 through

15 1123 of title 44; and

16 ‘‘(C) may enter into and perform such other

17 contracts, leases, cooperative agreements, or other

18 transactions with international, foreign, and domes19 tic public agencies and private organizations, and

20 persons as is necessary in the conduct of its business

21 and on such terms as it considers appropriate;

22 ‘‘(8) may use, with their consent, services,

23 equipment, personnel, and facilities of other depart24 ments, agencies, and instrumentalities of the Fed25 eral Government, on a reimbursable basis, and to co-
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1 operate with such other departments, agencies, and

2 instrumentalities in the establishment and use of

3 services, equipment, and facilities of the Office;

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

5 General Services such services as the Administrator

6 is authorized to provide to other agencies of the

7 United States, on the same basis as those services

8 are provided to other agencies of the United States;

9 ‘‘(10) may use, with the consent of the agency,

10 government, or international organization concerned,

11 the services, records, facilities, or personnel of any

12 State or local government agency or instrumentality

13 or foreign government or international organization

14 to perform functions on its behalf;

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

16 necessity for its obligations and expenditures and

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

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

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

20 the ‘Trademark Act of 1946’);

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

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

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

24 or any interest therein, of the Office, in carrying out

25 the functions of the Office, including for research
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1 and development and capital investment, without ap2 portionment under the provisions of subchapter II of

3 chapter 15 of title 31;

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

5 States with respect to the payment of debts from

6 bankrupt, insolvent, and decedents’ estates;

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

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

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

10 ‘‘(15) may execute, in accordance with its by11 laws, rules, and regulations, all instruments nec12 essary and appropriate in the exercise of any of its

13 powers;

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

15 insurance against any loss in connection with its

16 property, other assets, or operations either by con17 tract or by self-insurance; and

18 ‘‘(17) shall pay any settlement or judgment en19 tered against it from the funds of the Office and not

20 from amounts available under section 1304 of title

21 31.’’.

22 SEC. 103. ORGANIZATION AND MANAGEMENT.

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

24 to read as follows:
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1 ‘‘§ 3. Officers and employees

2 ‘‘(a) COMMISSIONER.—

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

4 Patent and Trademark Office shall be vested in

5 Commissioner of Patents and Trademarks (hereafter

6 in this title referred to as the ‘Commissioner’), who

7 shall be a citizen of the United States and who shall

8 be appointed by the President, by and with the ad9 vice and consent of the Senate. The Commissioner

10 shall be a person who, by reason of professional

11 background and experience in patent and trademark

12 law, is especially qualified to manage the Office.

13 ‘‘(2) DUTIES.—

14 ‘‘(A) IN GENERAL.—The Commissioner

15 shall be responsible for the management and di16 rection of the Office, including the issuance of

17 patents and the registration of trademarks.

18 ‘‘(B) ADVISING THE PRESIDENT.—The

19 Commissioner shall advise the President of all

20 activities of the Patent and Trademark Office

21 undertaken in response to obligations of the

22 United States under treaties and executive

23 agreements, or which relate to cooperative pro24 grams with those authorities of foreign govern25 ments that are responsible for granting patents

26 or registering trademarks. The Commissioner
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1 shall also recommend to the President changes

2 in law or policy which may improve the ability

3 of U.S. citizens to secure and enforce patent

4 rights or trademark rights in the United States

5 or in foreign countries.

6 ‘‘(C) CONSULTING WITH THE MANAGE7 MENT ADVISORY BOARD.—The Commissioner

8 shall consult with the Management Advisory

9 Board established in section 5 on a regular

10 basis on matters relating to the operation of the

11 Patent and Trademark Office, and shall consult

12 with the Board before submitting budgetary

13 proposals to the Office of Management and

14 Budget or changing or proposing to change pat15 ent or trademark user fees or patent or trade16 mark regulations.

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

18 term of six years, and may continue to serve until

19 a successor is appointed and assumes office. The

20 Commissioner may be reappointed to subsequent

21 terms.

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

23 taking office, take an oath to discharge faithfully the

24 duties of the Office.
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1 ‘‘(5) COMPENSATION.—The Commissioner shall

2 receive compensation at the rate of pay in effect for

3 Level II of the Executive Schedule under section

4 5313 of title 5.

5 ‘‘(6) REMOVAL.—The Commissioner may be re6 moved from office by the President only for cause.

7 ‘‘(7) DESIGNEE OF COMMISSIONER.—The Com8 missioner shall designate an officer of the Office who

9 shall be vested with the authority to act in the ca10 pacity of the Commissioner in the event of the ab11 sence or incapacity of the Commissioner.

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

13 ‘‘(1) DEPUTY COMMISSIONERS.—The Commis14 sioner shall appoint a Deputy Commissioner for Pat15 ents and a Deputy Commissioner for Trademarks

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

17 Commissioner’s term expires. The Deputy Commis18 sioner for Patents shall be a person with dem19 onstrated experience in patent law and the Deputy

20 Commissioner for Trademarks shall be a person with

21 demonstrated experience in trademark law. The

22 Deputy Commissioner for Patents and the Deputy

23 Commissioner for Trademarks shall be the principal

24 policy advisors to the Commissioner on all aspects of

25 the activities of the Office that affect the adminis-
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1 tration of patent and trademark operations, respec2 tively.

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

4 Commissioner shall—

5 ‘‘(A) appoint an Inspector General and

6 such other officers, employees (including attor7 neys), and agents of the Office as the Commis8 sioner considers necessary to carry out its func9 tions;

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

11 and employees in accordance with the policy set

12 forth in section 5301 of title 5, including com13 pensation based on performance; and

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

15 such officers and employees and delegate to

16 them such of the powers vested in the Office as

17 the Commissioner may determine.

18 The Office shall not be subject to any administratively or

19 statutorily imposed limitation on positions or personnel,

20 and no positions or personnel of the Office shall be taken

21 into account for purposes of applying any such limitation,

22 except to the extent otherwise specifically provided by stat23 ute with respect to the Office.

24 ‘‘(c) LIMITS ON COMPENSATION.—Except as other25 wise provided in this title or any other provision of law,
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1 the basic pay of an officer or employee of the Office for

2 any calendar year may not exceed the annual rate of basic

3 pay in effect for level III of the Executive Schedule under

4 section 5314 of title 5. The Commissioner shall by regula5 tion establish a limitation on the total compensation pay6 able to officers or employees of the Office, consistent with

7 the limitation under section 5307 of title 5.

8 ‘‘(d) APPLICABILITY OF TITLE 5 GENERALLY.—Ex9 cept as otherwise provided in this section, officers and em10 ployees of the Office shall be subject to the provisions of

11 title 5 relating to Federal employees.

12 ‘‘(e) TITLE 5 EXCLUSIONS.—The following provi13 sions of title 5 shall not apply to the Office or its officers

14 and employees:

15 ‘‘(1) Chapter 31 (relating to authority for em16 ployment).

17 ‘‘(2) Chapter 33 (relating to examination, selec18 tion, and placement), except that the provisions re19 lating to a preference eligible shall apply to the Of20 fice and its employees.

21 ‘‘(3) Chapter 35 (relating to retention pref22 erence, restoration, and reemployment).

23 ‘‘(4) Chapter 43 (relating to performance ap24 praisal).

25 ‘‘(5) Chapter 45 (relating to incentive awards).
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1 ‘‘(6) Chapter 51 (relating to classification).

2 ‘‘(7) Subchapter III of chapter 53 (relating to

3 General Schedule pay rates).

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

5 BENEFITS.—Officers and employees of the Office shall re6 main subject to chapters 83 (relating to the Civil Service

7 Retirement System), 84 (relating to the Federal Employ8 ees’ Retirement System), 87 (relating to life insurance),

9 and 89 (relating to health insurance) of title 5, except that

10 the Office may, with respect to officers and employees of

11 the Office, by regulation—

12 ‘‘(1) provide for benefits to supplement the ben13 efits otherwise provided under such chapter 83 or

14 84, as the case may be; or

15 ‘‘(2) change the benefits provided under such

16 chapter 87 or 89, so long as the changes do not re17 sult in benefits under either chapter becoming, on

18 the whole, less favorable than the benefits which

19 would then otherwise be available under such chap20 ter had such changes not been made.

21 ‘‘(g) LABOR-MANAGEMENT RELATIONS.—Chapter 71

22 of title 5 (relating to labor-management relations) shall

23 apply with respect to the Office and its employees, except

24 that—
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1 ‘‘(1) the Office shall not bargain over the estab2 lishment, implementation, amendment, or repeal

3 of—

4 ‘‘(A) any system of classification of em5 ployees;

6 ‘‘(B) any compensation system, including

7 wages and compensation based on performance,

8 and contributions of the Office to the retire9 ment and benefits programs; or

10 ‘‘(C) any system to determine qualifica11 tions and procedures for employment; and

12 ‘‘(2) in any other matter, the Office may nego13 tiate only with respect to—

14 ‘‘(A) procedures which management offi15 cials of the Office observe in exercising any au16 thority under section 7106 of title 5; and

17 ‘‘(B) appropriate arrangements for employ18 ees adversely affected by the exercise of any au19 thority under section 7106 of title 5.

20 ‘‘(h) CARRYOVER OF PERSONNEL.—

21 ‘‘(1) TO THE OFFICE.—Effective as of the ef22 fective date of the Patent and Trademark Office

23 Corporation Act of 1995, all officers and employees

24 of the Patent and Trademark Office on the day be-
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1 fore such effective date shall become officers and

2 employees of the Office, without a break in service.

3 ‘‘(2) 1-YEAR PROTECTIONS.—No individual who

4 so becomes an officer or employee of the Office shall,

5 for a period of 1 year after the effective date de6 scribed in paragraph (1), be subject to separation or

7 to any reduction in compensation as a consequence

8 of the establishment of the Office as a Government

9 corporation.

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

11 sick and annual leave and compensatory time accu12 mulated under title 5 before the effective date de13 scribed in paragraph (1), by officers or employees of

14 the Patent and Trademark Office who so become of15 ficers or employees of the Office, are obligations of

16 the Office.

17 ‘‘(4) CONTINUATION IN OFFICE OF CERTAIN

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

21 Office Corporation Act of 1995 may serve as the

22 Commissioner for a period of 1 year beginning on

23 such effective date or, if earlier, until a Commis24 sioner has been appointed under subsection (a).
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1 ‘‘(B) The individual serving as the Assistant

2 Commissioner for Patents on the day before the ef3 fective date of the Patent and Trademark Office

4 Corporation Act of 1995 may serve as the Deputy

5 Commissioner for Patents for a period of 1 year be6 ginning on such effective date or, if earlier, until a

7 Deputy Commissioner for Patents has been ap8 pointed under subsection (b).

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

10 Commissioner for Trademarks on the day before the

11 effective date of the Patent and Trademark Office

12 Corporation Act of 1995 may serve as the Deputy

13 Commissioner for Trademarks for a period of 1 year

14 beginning on such effective date or, if earlier, until

15 a Deputy Commissioner for Trademarks has been

16 appointed under subsection (b).

17 ‘‘(i) COMPETITIVE STATUS.—For purposes of ap18 pointment to a position in the competitive service for

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

20 such officer or employee shall—

21 ‘‘(1) not forfeit any competitive status, acquired

22 by such officer or employee before the effective date

23 of the Patent and Trademark Office Corporation Act

24 of 1995, by reason of becoming an officer or em25 ployee of the Office pursuant to subsection (h)(1); or
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1 ‘‘(2) if not covered by paragraph (1), acquire

2 competitive status after completing at least 1 year of

3 continuous service under a nontemporary appoint4 ment to a position within the Office (taking into ac5 count such service, performed before the effective

6 date described in paragraph (1), as may be appro7 priate).

8 ‘‘(j) SAVINGS PROVISIONS.—All orders, determina9 tions, rules, and regulations regarding compensation and

10 benefits and other terms and conditions of employment,

11 in effect for the Office and its officers and employees im12 mediately before the effective date of the Patent and

13 Trademark Office Corporation Act of 1995, shall continue

14 in effect with respect to the Office and its officers and

15 employees until modified, superseded, or set aside by the

16 Office or a court of appropriate jurisdiction or by oper17 ation of law.’’.

18 SEC. 104. MANAGEMENT ADVISORY BOARD.

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

20 is amended by inserting after section 4 the following:

21 ‘‘§ 5. Patent and Trademark Office Management Advi22 sory Board

23 ‘‘(a) COMPENSATION.—

24 ‘‘(1) APPOINTMENT.—The Patent and Trade25 mark Office shall have a Management Advisory
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1 Board (hereafter in this title referred to as the

2 ‘Board’) of 18 members, 6 of whom shall be ap3 pointed by the President, 6 of whom shall be ap4 pointed by the Speaker of the House of Representa5 tives, and 6 of whom shall be appointed by the

6 President pro tempore of the Senate. Not more than

7 4 of the 6 members appointed by each appointing

8 authority shall be members of the same political

9 party.

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

11 appointed for a term of 6 years each, except that of

12 the members first appointed by each appointing au13 thority, 1 shall be for a term of 1 year, 1 shall be

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

15 years, 1 shall be for a term of 4 years, and 1 shall

16 be for a term of 5 years. No member may serve

17 more than 1 term.

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

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

20 3 years.

21 ‘‘(4) TIMING OF APPOINTMENTS.—Initial ap22 pointments to the Board shall be made within 3

23 months after the effective date of the Patent and

24 Trademark Office Corporation Act of 1995, and va-
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1 cancies shall be filled within 3 months after they

2 occur.

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

4 the manner in which the original appointment was

5 made under this subsection. Members appointed to

6 fill a vacancy occurring before the expiration of the

7 term for which the member’s predecessor was ap8 pointed shall be appointed only for the remainder of

9 that term. A member may serve after the expiration

10 of that member’s term until a successor is ap11 pointed.

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

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

14 chosen so as to represent the interests of diverse users

15 of the Patent and Trademark Office, and shall include in16 dividuals with substantial background and achievement in

17 corporate finance and management.

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

19 Members of the Board shall be special Government em20 ployees within the meaning of section 202 of title 18.

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

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

23 ‘‘(e) DUTIES.—The Board shall—

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

25 budget, and user fees of the Patent and Trademark
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1 Office, and advise the Commissioner on these mat2 ters; and

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

4 year, prepare an annual report on the matters re5 ferred to in paragraph (1), transmit the report to

6 the President and the Committees on the Judiciary

7 of the Senate and the House of Representatives, and

8 publish the report in the Patent and Trademark Of9 fice Official Gazette.

10 ‘‘(f) STAFF.—The Board shall employ a staff and

11 procure support services for the staff adequate to enable

12 the Board to carry out its functions, using funds available

13 to the Commissioner under section 42 of this title. Persons

14 employed by the Board shall receive compensation as de15 termined by the Board, serve in accordance with terms

16 and conditions of employment established by the Board,

17 and be subject solely to the direction of the Board, not18 withstanding any other provision of law.

19 ‘‘(g) COMPENSATION.—Members of the Board may

20 accept reimbursement for expenses incurred in attending

21 meetings of the Board and compensation not to exceed

22 $1000 per day for each day in attendance at meetings of

23 the Board.

24 ‘‘(h) ACCESS TO INFORMATION.—Members of the

25 Board shall be provided access to records and information
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1 in the Patent and Trademark Office, except for personnel

2 or other privileged information and information concern3 ing patent applications required to be kept in confidence

4 by section 122 of this title.

5 ‘‘(i) APPLICABILITY OF FEDERAL ADVISORY COM6 MITTEE ACT.—The provisions of the Federal Advisory

7 Committee Act (5 U.S.C. App.) shall not apply to meet8 ings of the Board, but all meetings of the Board shall be

9 announced in the Federal Register at least 30 days in ad10 vance and all meetings shall be open to the public unless

11 closed by the Board for good cause.’’.

12 SEC. 105. INDEPENDENCE FROM DEPARTMENT OF COM13 MERCE.

14 Section 6 of title 35, United States Code, is amend15 ed—

16 (1) by striking ‘‘, under the direction of the

17 Secretary of Commerce,’’ each place it appears; and

18 (2) by striking ‘‘, subject to the approval of the

19 Secretary of Commerce,’’.

20 SEC. 106. TRADEMARK TRIAL AND APPEAL BOARD.

21 Section 17 of the Act of July 5, 1946 (commonly re22 ferred to as the ‘‘Trademark Act of 1946’’) (15 U.S.C.

23 1067) is amended to read as follows:

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

25 to registration, application to register as a lawful concur-
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1 rent user, or application to cancel the registration of a

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

3 shall direct a Trademark Trial and Appeal Board to deter4 mine and decide the respective rights of registration.

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

6 include the Commissioner, the Deputy Commissioner for

7 Patents, the Deputy Commissioner for Trademarks, and

8 members competent in trademark law who are appointed

9 by the Commissioner.’’.

10 SEC. 107. BOARD OF PATENT APPEALS AND INTER11 FERENCES.

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

13 to read as follows:

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

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

16 shall be in the Patent and Trademark Corporation a

17 Board of Patent Appeals and Interferences. The Commis18 sioner, the Deputy Commissioner for Patents, the Deputy

19 Commissioner for Trademarks, the officer principally re20 sponsible for the examination of patents, the officer prin21 cipally responsible for the examination of trademarks, and

22 the examiners-in-chief shall constitute the Board. The ex23 aminers-in-chief shall be persons of competent legal knowl24 edge and scientific ability.
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1 ‘‘(b) DUTIES.—The Board of Patent Appeals and

2 Interferences shall, on written appeal of an applicant, re3 view adverse decisions of examiners upon applications for

4 patents and shall determine priority and patentability of

5 invention in interferences declared under section 135(a)

6 of this title. Each appeal and interference shall be heard

7 by at least 3 members of the Board, who shall be des8 ignated by the Commissioner. Only the Board of Patent

9 Appeals and Interferences may grant rehearings.’’.

10 SEC. 108. SUITS BY AND AGAINST THE CORPORATION.

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

12 is amended—

13 (1) by redesignating sections 8 through 14 as

14 sections 9 through 15; and

15 (2) by inserting after section 7 the following

16 new section:

17 ‘‘§ 8. Suits by and against the Corporation

18 ‘‘(a) IN GENERAL.—

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

20 Any civil action, suit, or proceeding to which the

21 Patent and Trademark Office is a party is deemed

22 to arise under the laws of the United States. Exclu23 sive jurisdiction over all civil actions by or against

24 the Office is in the Federal courts as provided by

25 law.
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1 ‘‘(2) CONTRACT CLAIMS.—Any action, suit, or

2 proceeding against the Office founded upon contract

3 shall be subject to the limitations and exclusive rem4 edy provided in section 1346(a)(2) and sections

5 1491 through 1509 of title 28, whether or not such

6 contract claims are cognizable under the sections

7 507, 1346, 1402, 1491, 1496, 1497, 1501, 1503,

8 2071, 2072, 2411, 2501, 2512 of title 28). For pur9 poses of the Contract Disputes Act of 1978 (41

10 U.S.C. 601 and following), the Commissioner shall

11 be deemed to be the agency head with respect to

12 contract claims arising with respect to the Office.

13 ‘‘(3) TORT CLAIMS.—Any action, suit, or pro14 ceeding against the Office founded upon tort shall be

15 subject to the limitations and exclusive remedies pro16 vided in section 1346(b) and sections 2671 through

17 2680 of title 28, whether or not such tort claims are

18 cognizable under section 1346(b) of title 28.

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

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

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

22 be issued against property of the Office.

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

24 The Office shall be substituted as defendant in any

25 civil action, suit, or proceeding against an officer or
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1 employee of the Office, if the Office determines that

2 the employee was acting within the scope of the offi3 cer or employee’s employment with the Office. If the

4 Office refuses to certify scope of employment, the of5 ficer or employee may at any time before trial peti6 tion the court to find and certify that the officer or

7 employee was acting within the scope of the officer

8 or employee’s employment. Upon certification by the

9 court, the Office shall be substituted as the party

10 defendant. A copy of the petition shall be served

11 upon the Office.

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

13 ‘‘(1) EXERCISE BY OFFICE OF ATTORNEY GEN14 ERAL’S AUTHORITIES.—Except as provided in this

15 section, in relation to all judicial proceedings in

16 which the Office or an officer or employee thereof is

17 a party or in which the officer or employee thereof

18 is interested and which arise from or relate to offi19 cers or employees thereof acting within the scope of

20 their employment, torts, contracts, property, reg21 istration of patent and trademark practitioners, pat22 ents or trademarks, or fees, the officer or employee

23 thereof may exercise, without prior authorization

24 from the Attorney General, the authorities and du25 ties that otherwise would be exercised by the Attor-
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1 ney General on behalf of the officer or employee

2 thereof under title 28, and other laws. In all other

3 judicial or administrative proceedings in which the

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

5 party or is interested, the Office may exercise these

6 authorities and duties only after obtaining author7 ization from the Attorney General.

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

9 The Attorney General may file an appearance on be10 half of the Office or an employee of the Office, with11 out the consent of the Office, in any suit in which

12 the Office is a party and represent the Office with

13 exclusive authority in the conduct, settlement, or

14 compromise of that suit.

15 ‘‘(3) CONSULTATIONS WITH AND ASSISTANCE

16 BY ATTORNEY GENERAL.—The Office may consult

17 with the Attorney General concerning any legal mat18 ter, and the Attorney General shall provide advice

19 and assistance to the Office, including representing

20 the Office in litigation, if requested by the Office.

21 ‘‘(4) REPRESENTATION BEFORE SUPREME

22 COURT.—The Attorney General shall represent the

23 Office in all cases before the United States Supreme

24 Court.
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1 ‘‘(5) QUALIFICATIONS OF ATTORNEYS.—An at2 torney admitted to practice to the bar of the highest

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

4 the District of Columbia and appointed by the Office

5 may represent the Office in any legal proceeding in

6 which the Office or an officer or employee of the Of7 fice is a party or interested, regardless of whether

8 the attorney is a resident of the jurisdiction in which

9 the proceeding is held and notwithstanding any

10 other prerequisites of qualification or appearance re11 quired by the court or administrative body.’’.

12 SEC. 109. ANNUAL REPORT OF COMMISSIONER.

13 Section 15 of title 35, United States Code, as redesig14 nated by section 108 of this Act, is amended to read as

15 follows:

16 ‘‘§ 15. Annual report to Congress

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

18 later than 90 days after the end of each fiscal year, the

19 moneys received and expended by the Office, the purposes

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

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

22 to the Office.’’.

23 SEC. 110. SUSPENSION OR EXCLUSION FROM PRACTICE.

24 Section 32 of title 35, United States Code, is amend25 ed by inserting before the last sentence the following: ‘‘The
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1 Commissioner shall have the discretion to designate any

2 officer or employee of the Patent and Trademark Office

3 to conduct the hearing required by this section.’’.

4 SEC. 111. FUNDING.

5 Section 42 of title 35, United States Code, is amend6 ed to read as follows:

7 ‘‘§ 42. Patent and Trademark Office funding

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

9 services performed by or materials furnished by the Patent

10 and Trademark Office shall be payable to the Office.

11 ‘‘(b) USE OF MONEYS.—Moneys of the Patent and

12 Trademark Office not otherwise used to carry out the

13 functions of the Office shall be kept in cash on hand or

14 on deposit, or invested in obligations of the United States

15 or guaranteed by the United States, or in obligations or

16 other instruments which are lawful investments for fidu17 ciary, trust, or public funds. Fees available to the Commis18 sioner under this title shall be used exclusively for the

19 processing of patent applications and for other services

20 and materials relating to patents. Fees available to the

21 Commissioner under section 31 of the Act of July 5, 1946

22 (commonly referred to as the ‘Trademark Act of 1946’)

23 (15 U.S.C. 1113) shall be used exclusively for the process24 ing of trademark registrations and for other services and

25 materials relating to trademarks.
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1 ‘‘(c) BORROWING AUTHORITY.—The Patent and

2 Trademark Office is authorized to issue from time to time

3 for purchase by the Secretary of the Treasury its deben4 tures, bonds, notes, and other evidences of indebtedness

5 (hereafter in this subsection referred to as ‘obligations’)

6 in an amount not exceeding $2,000,000 outstanding at

7 any one time, to assist in financing its activities. Such ob8 ligations shall be redeemable at the option of the Office

9 before maturity in the manner stipulated in such obliga10 tions and shall have such maturity as is determined by

11 the Office with the approval of the Secretary of the Treas12 ury. Each such obligation issued to the Treasury shall

13 bear interest at a rate not less than the current yield on

14 outstanding marketable obligations of the United States

15 of comparable maturity during the month preceding the

16 issuance of the obligation as determined by the Secretary

17 of the Treasury. The Secretary of the Treasury shall pur18 chase any obligations of the Office issued under this sub19 section and for such purpose the Secretary of the Treasury

20 is authorized to use as a public-debt transaction the pro21 ceeds of any securities issued under chapter 31 of title

22 31, and the purposes for which securities may be issued

23 under that chapter are extended to include such purpose.

24 Payment under this subsection of the purchase price of

25 such obligations of the Patent and Trademark Office shall
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1 be treated as public debt transactions of the United

2 States.’’.

3 SEC. 112. AUDITS.

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

5 amended by adding at the end the following new section:

6 ‘‘§ 43. Audits

7 ‘‘(a) IN GENERAL.—Financial statements of the Pat8 ent and Trademark Office shall be prepared on an annual

9 basis in accordance with generally accepted accounting

10 principles. Such statements shall be audited by an inde11 pendent certified public accountant chosen by the Sec12 retary. The audit shall be conducted in accordance with

13 standards that are consistent with generally accepted Gov14 ernment auditing standards and other standards estab15 lished by the Comptroller General, and with the generally

16 accepted auditing standards of the private sector, to the

17 extent feasible.

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

19 Comptroller General may review any audit of the financial

20 statement of the Patent and Trademark Office that is con21 ducted under subsection (a). The Comptroller General

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

23 any such review and shall include in such report appro24 priate recommendations.
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1 ‘‘(c) AUDIT BY COMPTROLLER GENERAL.—The

2 Comptroller General may audit the financial statements

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

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

5 Comptroller General for the cost of any audit conducted

6 under this subsection.

7 ‘‘(d) ACCESS TO OFFICE RECORDS.—All books, fi8 nancial records, report files, memoranda, and other prop9 erty that the Comptroller General deems necessary for the

10 performance of any audit shall be made available to the

11 Comptroller General.

12 ‘‘(e) APPLICABILITY IN LIEU OF TITLE 31 PROVI13 SIONS.—This section applies to the Office in lieu of the

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

15 SEC. 113. TRANSFER.

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

17 provided in this Act, there are transferred to, and vested

18 in, the Patent and Trademark Office all functions, powers,

19 and duties vested by law in the Secretary of Commerce

20 or the Department of Commerce or in the officers or com21 ponents in the Department of Commerce with respect to

22 the authority to grant patents and register trademarks,

23 and in the Patent and Trademark Office, as in effect on

24 the day before the effective date of this Act, and in the

25 officers and components of such Office.
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1 (b) TRANSFER OF FUNDS AND PROPERTY.—The

2 Secretary of Commerce shall transfer to the Patent and

3 Trademark Office, on the effective date of this Act, so

4 much of the assets, liabilities, contracts, property, records,

5 and unexpended and unobligated balances of appropria6 tions, authorizations, allocations, and other funds em7 ployed, held, used, arising from, available to, or to be

8 made available to the Department of Commerce, including

9 funds set aside for accounts receivable which are related

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

11 Patent and Trademark Office by this Act.

12 (c) TRANSFER OF SURCHARGE FUND.—On the effec13 tive date of this Act, there are transferred to the Patent

14 and Trademark Office those residual and unappropriated

15 balances remaining as of the effective date within the Pat16 ent and Trademark Office Surcharge Fund established by

17 section 10101(b) of the Omnibus Budget Reconciliation

18 Act of 1990 (35 U.S.C. 41 note).

19 TITLE II—EFFECTIVE DATE;

20 TECHNICAL AMENDMENTS

21 SEC. 201. EFFECTIVE DATE.

22 This Act shall take effect 6 months after the date

23 of the enactment of this Act.

24 SEC. 202. TECHNICAL AND CONFORMING AMENDMENTS.

25 (a) AMENDMENTS TO TITLE 35.—
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1 (1) The table of contents for part I of title 35,

2 United States Code, is amended by amending the

3 item relating to chapter 1 to read as follows:

4 (2) The table of sections for chapter 1 of title

5 35, United States Code, is amended to read as fol6 lows:

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

7 ‘‘CHAPTER 1—ESTABLISHMENT, OFFICERS

8 AND EMPLOYEES FUNCTIONS

‘‘Sec.

‘‘1. Establishment.

‘‘2. Powers and duties.

‘‘3. Officers and employees.

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

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

‘‘6. Duties of Commissioner.

‘‘7. Board of Patent Appeals and Interferences.

‘‘8. Suits by and against the Corporation.

‘‘9. Library.

‘‘10. Classification of patents.

‘‘11. Certified copies of records.

‘‘12. Publications.

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

‘‘14. Copies of patents for public libraries.

‘‘15. Annual report to Congress.’’.

9 (3) The table of contents for chapter 4 of part I of

10 title 35, United States Code, is amended by adding at the

11 end the following new item:

‘‘43. Audits.’’.

12 (b) OTHER PROVISIONS OF LAW.—

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

14 Code, is amended by adding at the end the follow15 ing:
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1 ‘‘(O) the Patent and Trademark Office.’’.

2 (2) Section 602(d) of the Federal Property and

3 Administrative Services Act of 1949 (40 U.S.C. 474)

4 is amended—

5 (A) in paragraph (20) by striking ‘‘or’’

6 after the semicolon;

7 (B) in paragraph (21) by striking the pe8 riod and inserting ‘‘; or’’; and

9 (C) by adding at the end the following:

10 ‘‘(22) the Patent and Trademark Office.’’.

11 (3) Section 500(e) of title 5, United States

12 Code (5 U.S.C. 500(e)) is amended by striking

13 ‘‘Patent Office’’ and inserting ‘‘Patent and Trade14 mark Office’’.

15 (4) Section 5102(c)(23) of title 5, United

16 States Code, is amended by striking ‘‘Department of

17 Commerce’’.

18 (5) Section 5316 of title 5, United States Code

19 (5 U.S.C. 5316) is amended by striking ‘‘Commis20 sioner of Patents, Department of Commerce.’’,

21 ‘‘Deputy Commissioner of Patents and Trade22 marks.’’, ‘‘Assistant Commissioner for Patents.’’,

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

24 (6) Section 4 of the Act of February 14, 1903

25 (15 U.S.C. 1511) is amended by striking ‘‘(d) Pat-
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1 ent and Trademark Office;’’ and redesignating sub2 sections (a) through (g) as paragraphs (1) through

3 (6), respectively.

4 (7) The Act of April 12, 1892 (27 Stat. 395;

5 20 U.S.C. 91) is amended by striking ‘‘Patent Of6 fice’’ and inserting ‘‘Patent and Trademark Office’’.

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

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

9 and 360b(o)) are each amended by striking ‘‘of the

10 Department of Commerce’’.

11 (9) Section 105(e) of the Federal Alcohol Ad12 ministration Act (27 U.S.C. 205(e)) is amended by

13 striking ‘‘Patent Office’’ and inserting ‘‘Patent and

14 Trademark Office’’.

15 (10) Section 1744 of title 28, United States

16 Code is amended—

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

18 it appears and inserting ‘‘Patent and Trade19 mark Office’’; and

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

21 and inserting ‘‘Commissioner of Patents and

22 Trademarks’’.

23 (11) Section 1745 of title 28, United States

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

3 (12) Section 1928 of title 28, United States

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

5 inserting ‘‘Patent and Trademark Office’’.

6 (13) Section 160 of the Atomic Energy Act of

7 1954 (42 U.S.C. 2190) is amended—

8 (A) by striking ‘‘Patent Office’’ and insert9 ing ‘‘Patent and Trademark Office’’; and

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

11 and inserting ‘‘Commissioner of Patents and

12 Trademarks’’.

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

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

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

16 inserting ‘‘Commissioner of Patents and Trade17 marks’’.

18 (15) Section 12(a) of the Solar Heating and

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

20 5510(a)) is amended by striking ‘‘Commissioner of

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

22 Patents and Trademarks’’.

23 (16) Section 1111 of title 44, United States

24 Code, is amended by striking ‘‘Commissioner of Pat-
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1 ents’’ and inserting ‘‘Commissioner of Patents and

2 Trademarks’’.

3 (17) Sections 1114 and 1123 of title 44, United

4 States Code, are each amended by striking ‘‘Com5 missioner of Patents’’.

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

7 States Code, and the items relating to those sections

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

9 are repealed.

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

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

12 striking ‘‘Commissioner of Patents’’ and inserting

13 ‘‘Commissioner of Patents and Trademarks’’.

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

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

16 ‘‘the Patent and Trademark Office,’’, after ‘‘the

17 Panama Canal Commission,’’.

18 (21) Section 255(g)(1)(A) of the Balanced

19 Budget and Emergency Deficit Control Act of 1985

20 (2 U.S.C. 905(g)(1)(A)) is amended by inserting

21 after the item relating to the United States Enrich22 ment Corporation the following new item:

23 ‘‘Patent and Trademark Office;’’.

24 (22) Section 10101(b)(2)(B) of the Omnibus

25 Budget Reconciliation Act of 1990 (35 U.S.C. 41
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1 note) is amended by striking ‘‘, to the extent pro2 vided in appropriation Acts,’’ and inserting ‘‘without

3 appropriation’’.

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