II 

114TH CONGRESS 

1ST SESSION S. 1137 

To amend title 35, United States Code, and the Leahy-Smith America Invents 

Act to make improvements and technical corrections, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 29, 2015 

Mr. GRASSLEY (for himself, Mr. LEAHY, Mr. CORNYN, Mr. SCHUMER, Mr. 

LEE, Mr. HATCH, and Ms. KLOBUCHAR) introduced the following bill; 

which was read twice and referred to the Committee on the Judiciary 

A BILL 

To amend title 35, United States Code, and the LeahySmith America Invents Act to make improvements and 

technical corrections, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Protecting American Talent and Entrepreneurship Act 

6 of 2015’’ or the ‘‘PATENT Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 


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Sec. 3. Pleading requirements for patent infringement actions. 

Sec. 4. Customer-suit exception. 

Sec. 5. Discovery limits. 

Sec. 6. Procedures and practices to implement recommendations of the Judicial 

Conference. 

Sec. 7. Fees and other expenses. 

Sec. 8. Requirement of clarity and specificity in demand letters. 

Sec. 9. Abusive demand letters. 

Sec. 10. Transparency of patent transfer. 

Sec. 11. Protection of intellectual property licenses in bankruptcy. 

Sec. 12. Small business education, outreach, and information access. 

Sec. 13. Studies on patent transactions, quality, and examination. 

Sec. 14. Technical corrections to the Leahy-Smith America Invents Act and 

other improvements. 

Sec. 15. Effective date. 

Sec. 16. Severability. 

1 SEC. 2. DEFINITIONS. 

2 (1) DIRECTOR.—The term ‘‘Director’’ means 

3 the Under Secretary of Commerce for Intellectual 

4 Property and Director of the United States Patent 

5 and Trademark Office. 

6 (2) OFFICE.—The term ‘‘Office’’ means the 

7 United States Patent and Trademark Office. 

8 SEC. 3. PLEADING REQUIREMENTS FOR PATENT INFRINGE9 MENT ACTIONS. 

10 (a) ELIMINATION OF FORM 18.—Not later than 1 

11 month after the date of enactment of this Act, the Su12 preme Court, using existing resources, shall eliminate 

13 Form 18 in the Appendix to the Federal Rules of Civil 

14 Procedure (Complaint for Patent Infringement). 

15 (b) PLEADING REQUIREMENTS.— 

16 (1) AMENDMENT.—Chapter 29 of title 35, 

17 United States Code, is amended by inserting after 

18 section 281 the following: 


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1 ‘‘§ 281A. Pleading requirements for patent infringe2 ment actions 

3 ‘‘(a) PLEADING REQUIREMENTS.—In a civil action in 

4 which a party asserts a claim for relief arising under any 

5 Act of Congress relating to patents, a party alleging in6 fringement shall include in a complaint, counterclaim, or 

7 cross-claim for patent infringement, except as provided in 

8 subsection (c), the following: 

9 ‘‘(1) An identification of each patent allegedly 

10 infringed. 

11 ‘‘(2) An identification of each claim of each pat12 ent identified under paragraph (1) that is allegedly 

13 infringed. 

14 ‘‘(3) For each claim identified under paragraph 

15 (2), an identification of each accused process, ma16 chine, manufacture, or composition of matter (re17 ferred to in this section as an ‘accused instrumen18 tality’) alleged to infringe the claim. 

19 ‘‘(4) For each accused instrumentality identi20 fied under paragraph (3), an identification with par21 ticularity, if known, of— 

22 ‘‘(A) the name or model number (or a rep23 resentative model number) of each accused in24 strumentality; or 

25 ‘‘(B) if there is no name or model number, 

26 a description of each accused instrumentality. 


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1 ‘‘(5) For each claim identified under paragraph 

2 (2), a description of the elements thereof that are al3 leged to be infringed by the accused instrumentality 

4 and how the accused instrumentality is alleged to in5 fringe those elements. 

6 ‘‘(6) For each claim of indirect infringement, a 

7 description of the acts of the alleged infringer that 

8 are alleged to contribute to or induce the direct in9 fringement. 

10 ‘‘(b) DISMISSAL FOR FAILURE TO MEET PLEADING

11 REQUIREMENTS.—The court shall, on the motion of any 

12 party, dismiss any count or counts of the complaint, coun13 terclaim, or cross-claim for patent infringement if the re14 quirements of paragraphs (1) through (6) of subsection 

15 (a) are not met with respect to such count or counts. The 

16 fact that a party pleads in accordance with subsection (c) 

17 shall not be a basis for dismissal if the party nonetheless 

18 states a plausible claim for relief sufficient under the Fed19 eral Rules of Civil Procedure. 

20 ‘‘(c) INFORMATION NOT ACCESSIBLE.—If some sub21 set of information required to comply with subsection (a) 

22 is not accessible to a party after an inquiry reasonable 

23 under the circumstances, consistent with rule 11 of the 

24 Federal Rules of Civil Procedure, an allegation requiring 

25 that information may be based upon a general description 


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1 of that information, along with a statement as to why the 

2 information is not accessible. 

3 ‘‘(d) AMENDMENT OF PLEADINGS.—Nothing in this 

4 provision shall be construed to affect a party’s leave to 

5 amend pleadings as specified in the Federal Rules of Civil 

6 Procedure. Amendments permitted by the court are sub7 ject to the pleading requirements set forth in this section. 

8 ‘‘(e) CONFIDENTIAL INFORMATION.—A party re9 quired to disclose information described under subsection 

10 (a) may file information believed to be confidential under 

11 seal, with a motion setting forth good cause for such seal12 ing. If such motion is denied by the court, the party may 

13 seek to file an amended pleading. 

14 ‘‘(f) EXEMPTION.—Subsection (a) shall not apply to 

15 a civil action that includes a claim for relief arising under 

16 section 271(e)(2). 

17 ‘‘§ 281B. Early disclosure requirements for patent in18 fringement actions 

19 ‘‘(a) DEFINITIONS.—In this section— 

20 ‘‘(1) the term ‘financial interest’— 

21 ‘‘(A) means— 

22 ‘‘(i) with regard to a patent or pat23 ents, the right of a person to receive pro24 ceeds from the assertion of the patent or 


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1 patents, including a fixed or variable por2 tion of such proceeds; and 

3 ‘‘(ii) with regard to the patentee, di4 rect or indirect ownership or control by a 

5 person of more than 20 percent of the pat6 entee; and 

7 ‘‘(B) does not mean— 

8 ‘‘(i) ownership of shares or other in9 terests in a mutual or common investment 

10 fund, unless the owner of such interest 

11 participates in the management of such 

12 fund; or 

13 ‘‘(ii) the proprietary interest of a pol14 icyholder in a mutual insurance company 

15 or a depositor in a mutual savings associa16 tion, or a similar proprietary interest, un17 less the outcome of the proceeding could 

18 substantially affect the value of such inter19 est; 

20 ‘‘(2) the term ‘patentee’ means a party in a 

21 civil action that files a pleading subject to the re22 quirements of section 281A; 

23 ‘‘(3) the term ‘proceeding’ means all stages of 

24 a civil action, including pretrial and trial proceedings 

25 and appellate review; and 


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1 ‘‘(4) the term ‘ultimate parent entity’ has the 

2 meaning given the term in section 261A. 

3 ‘‘(b) EARLY DISCLOSURE REQUIREMENTS.—Not4 withstanding the requirements of section 299B, a patentee 

5 shall disclose to the court and each adverse party, not later 

6 than 14 days after the date on which the patentee serves 

7 or files the pleading subject to the requirements of section 

8 281A— 

9 ‘‘(1) the identity of each— 

10 ‘‘(A) assignee of the patent or patents at 

11 issue, and any ultimate parent entity thereof; 

12 ‘‘(B) entity with a right to sublicense to 

13 unaffiliated entities or to enforce the patent or 

14 patents at issue, and any ultimate parent entity 

15 thereof; and 

16 ‘‘(C) entity, other than an entity the ulti17 mate parent of which is disclosed under sub18 paragraph (A) or (B), that the patentee knows 

19 to have a financial interest in— 

20 ‘‘(i) the patent or patents at issue; or 

21 ‘‘(ii) the patentee, and any ultimate 

22 parent entity thereof; and 

23 ‘‘(2) for each patent that the patentee alleges to 

24 be infringed— 


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1 ‘‘(A) a list of each complaint, counterclaim, 

2 or cross-claim filed by the patentee or an affil3 iate thereof in the United States during the 3- 

4 year period preceding the date of the filing of 

5 the action, and any other complaint, counter6 claim, or cross-claim filed in the United States 

7 during that period of which the patentee has 

8 knowledge, that asserts or asserted such patent, 

9 including— 

10 ‘‘(i) the caption; 

11 ‘‘(ii) civil action number; 

12 ‘‘(iii) the court where the action was 

13 filed; and 

14 ‘‘(iv) if applicable, any court to which 

15 the action was transferred; 

16 ‘‘(B) a statement as to whether the patent 

17 is subject to an assurance made by the party to 

18 a standards development organization to license 

19 others under such patent if— 

20 ‘‘(i) the assurance specifically identi21 fies such patent or claims therein; and 

22 ‘‘(ii) the allegation of infringement re23 lates to such standard; and 


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1 ‘‘(C) a statement as to whether the Fed2 eral Government has imposed specific licensing 

3 requirements with respect to such patent. 

4 ‘‘(c) DISCLOSURE OF FINANCIAL INTEREST.— 

5 ‘‘(1) PUBLICLY TRADED.—For purposes of sub6 section (b)(1)(C), if the financial interest is held by 

7 a corporation traded on a public stock exchange, an 

8 identification of the name of the corporation and the 

9 public exchange listing shall satisfy the disclosure re10 quirement. 

11 ‘‘(2) NOT PUBLICLY TRADED.—For purposes of 

12 subsection (b)(1)(C), if the financial interest is not 

13 held by a publicly traded corporation, the disclosure 

14 shall satisfy the disclosure requirement if the infor15 mation identifies— 

16 ‘‘(A) in the case of a partnership, the 

17 name of the partnership, the address of the 

18 principal place of business, and the name and 

19 correspondence address of the registered agent; 

20 ‘‘(B) in the case of a corporation, the 

21 name of the corporation, the location of incor22 poration, and the address of the principal place 

23 of business; and 

24 ‘‘(C) for each individual, the name and 

25 correspondence address of that individual. 


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1 ‘‘(d) PROVISION OF INFORMATION TO THE UNITED

2 STATES PATENT AND TRADEMARK OFFICE.—Not later 

3 than 1 month after the date on which the disclosures re4 quired under subsection (b) are made, the patentee shall 

5 provide to the United States Patent and Trademark Office 

6 a filing containing the information disclosed pursuant to 

7 subsection (b)(1). 

8 ‘‘(e) CONFIDENTIAL INFORMATION.— 

9 ‘‘(1) IN GENERAL.—A patentee required to dis10 close information under subsection (b) may file, 

11 under seal, information believed to be confidential, 

12 with a motion setting forth good cause for such seal13 ing. 

14 ‘‘(2) HOME ADDRESS INFORMATION.—For pur15 poses of this section, the home address of an indi16 vidual shall be considered to be confidential informa17 tion.’’. 

18 (2) CONFORMING AMENDMENT.—The table of 

19 sections for chapter 29 of title 35, United States 

20 Code, is amended by inserting after the item relating 

21 to section 281 the following new items: 

‘‘281A. Pleading requirements for patent infringement actions. 

‘‘281B. Early disclosure requirements for patent infringement actions.’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall take effect on the date of enactment of 


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1 this Act and shall apply to any action for which a com2 plaint is filed on or after that date. 

3 SEC. 4. CUSTOMER-SUIT EXCEPTION. 

4 (a) IN GENERAL.—Chapter 29 of title 35, United 

5 States Code, is amended by adding at the end the fol6 lowing: 

7 ‘‘§ 299A. Customer stay 

8 ‘‘(a) DEFINITIONS.—In this section— 

9 ‘‘(1) the term ‘covered customer’ means a re10 tailer or end user that is accused of infringing a pat11 ent or patents in dispute based on— 

12 ‘‘(A) the sale, or offer for sale, of a covered 

13 product or covered process without material 

14 modification of the product or process in a 

15 manner that is alleged to infringe a patent or 

16 patents in dispute; or 

17 ‘‘(B) the use by such retailer, the retailer’s 

18 end user customer, or an end user of a covered 

19 product or covered process without material 

20 modification of the product or process in a 

21 manner that is alleged to infringe a patent or 

22 patents in dispute; 

23 ‘‘(2) the term ‘covered manufacturer’ means a 

24 person who manufactures or supplies, or causes the 


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1 manufacture or supply of, a covered product or cov2 ered process, or a relevant part thereof; 

3 ‘‘(3) the term ‘covered process’ means a proc4 ess, method, or a relevant part thereof, that is al5 leged to infringe the patent or patents in dispute 

6 where such process, method, or relevant part thereof 

7 is implemented by an apparatus, material, system, 

8 software or other instrumentality that is provided by 

9 the covered manufacturer; 

10 ‘‘(4) the term ‘covered product’ means a compo11 nent, product, system, service, or a relevant part 

12 thereof, that— 

13 ‘‘(A) is alleged to infringe the patent or 

14 patents in dispute; or 

15 ‘‘(B) implements a process alleged to in16 fringe the patent or patents in dispute; 

17 ‘‘(5) for purposes of this section, the term ‘end 

18 user’ shall include an affiliate of such an end user, 

19 but shall not include an entity that manufactures or 

20 causes the manufacture of a covered product or cov21 ered process or a relevant part thereof; 

22 ‘‘(6) the term ‘retailer’ means an entity that 

23 generates its revenues predominately through the 

24 sale to the public of consumer goods or services, or 

25 an affiliate of such entity, but shall not include an 


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1 entity that manufactures or causes the manufacture 

2 of a covered product or covered process or a relevant 

3 part thereof; and 

4 ‘‘(7) for purposes of the definitions in para5 graphs (5) and (6), the terms ‘use’ and ‘sale’ mean 

6 the use and the sale, respectively, within the mean7 ings given those terms under section 271. 

8 ‘‘(b) MOTION FOR STAY.—In a civil action in which 

9 a party asserts a claim for relief arising under any Act 

10 of Congress relating to patents (other than an action that 

11 includes a cause of action described in section 271(e)), the 

12 court shall grant a motion to stay at least the portion of 

13 the action against a covered customer that relates to in14 fringement of a patent involving a covered product or cov15 ered process if— 

16 ‘‘(1) the covered manufacturer is a party to the 

17 action or a separate action in a Federal court of the 

18 United States involving the same patent or patents 

19 relating to the same covered product or covered 

20 process; 

21 ‘‘(2) the covered customer agrees to be bound 

22 as to issues determined in an action described in 

23 paragraph (1) without a full and fair opportunity to 

24 separately litigate any such issue, but only as to 


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1 those issues for which all other elements of the com2 mon law doctrine of issue preclusion are met; and 

3 ‘‘(3) the motion is filed after the first pleading 

4 in the action but not later than the later of— 

5 ‘‘(A) 120 days after service of the first 

6 pleading or paper in the action that specifically 

7 identifies the covered product or covered proc8 ess as a basis for the alleged infringement of 

9 the patent by the covered customer, and specifi10 cally identifies how the covered product or cov11 ered process is alleged to infringe the patent; or 

12 ‘‘(B) the date on which the first scheduling 

13 order in the case is entered. 

14 ‘‘(c) MANUFACTURER CONSENT IN CERTAIN

15 CASES.—If the covered manufacturer has been made a 

16 party to the action on motion by the covered customer, 

17 then a motion under subsection (b) may only be granted 

18 if the covered manufacturer and the covered customer 

19 agree in writing to the stay. 

20 ‘‘(d) LIFT OF STAY.— 

21 ‘‘(1) IN GENERAL.—A stay entered under this 

22 section may be lifted upon grant of a motion based 

23 on a showing that— 

24 ‘‘(A) the action involving the covered man25 ufacturer will not resolve major issues in the 


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1 suit against the covered customer, such as that 

2 a covered product or covered process identified 

3 in the motion to lift the stay is not a material 

4 part of the claimed invention or inventions in 

5 the patent or patents in dispute; or 

6 ‘‘(B) the stay unreasonably prejudices or 

7 would be manifestly unjust to the party seeking 

8 to lift the stay. 

9 ‘‘(2) SEPARATE ACTIONS.—In the case of a stay 

10 entered under this section based on the participation 

11 of the covered manufacturer in a separate action de12 scribed in subsection (b)(1), a motion under para13 graph (1) may only be granted if the court in such 

14 separate action determines that the showing re15 quired under paragraph (1) has been made. 

16 ‘‘(e) WAIVER OF ESTOPPEL EFFECT.—If, following 

17 the grant of a motion to stay under this section, the cov18 ered manufacturer in an action described in subsection 

19 (b)(1)— 

20 ‘‘(1) obtains or consents to entry of a consent 

21 judgment involving one or more of the issues that 

22 gave rise to the stay; or 

23 ‘‘(2) fails to prosecute to a final, non-appealable 

24 judgment a final decision as to one or more of the 

25 issues that gave rise to the stay, 


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1 the court may, upon motion, determine that such consent 

2 judgment or unappealed final decision shall not be binding 

3 on the covered customer with respect to one or more of 

4 the issues that gave rise to the stay based on a showing 

5 that such an outcome would unreasonably prejudice or be 

6 manifestly unjust to the covered customer in light of the 

7 circumstances of the case. 

8 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec9 tion shall be construed to limit the ability of a court to 

10 grant any stay, expand any stay granted pursuant to this 

11 section, or grant any motion to intervene, if otherwise per12 mitted by law.’’. 

13 (b) CONFORMING AMENDMENT.—The table of sec14 tions for chapter 29 of title 35, United States Code, is 

15 amended by adding at the end the following: 

‘‘299A. Customer stay.’’. 

16 SEC. 5. DISCOVERY LIMITS. 

17 (a) AMENDMENT.—Chapter 29 of title 35, United 

18 States Code, as amended by section 4, is amended by add19 ing at the end the following: 

20 ‘‘§ 299B. Discovery in patent infringement action 

21 ‘‘(a) DISCOVERY IN PATENT INFRINGEMENT AC22 TION.— 

23 ‘‘(1) IN GENERAL.—Except as provided in sub24 sections (b) and (c), in a civil action arising under 

25 any Act of Congress relating to patents, discovery 


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1 shall be stayed during the pendency of 1 or more 

2 motions described in paragraph (2) if the motion or 

3 motions were filed prior to the first responsive plead4 ing. 

5 ‘‘(2) MOTIONS DESCRIBED.—The motions de6 scribed in this paragraph are— 

7 ‘‘(A) a motion to dismiss; 

8 ‘‘(B) a motion to transfer venue; and 

9 ‘‘(C) a motion to sever accused infringers. 

10 ‘‘(b) DISCRETION TO EXPAND SCOPE OF DIS11 COVERY.— 

12 ‘‘(1) RESOLUTION OF MOTIONS.—A court may 

13 allow limited discovery necessary to resolve a motion 

14 described in subsection (a) or a motion for prelimi15 nary relief properly raised by a party before or dur16 ing the pendency of a motion described in subsection 

17 (a). 

18 ‘‘(2) ADDITIONAL DISCOVERY.—On motion, a 

19 court may allow additional discovery if the court 

20 finds that such discovery is necessary to preserve 

21 evidence or otherwise prevent specific prejudice to a 

22 party. 

23 ‘‘(c) EXCLUSION FROM DISCOVERY LIMITATION.— 

24 ‘‘(1) VOLUNTARY EXCLUSION.—The parties to 

25 an action described in subsection (a) may voluntarily 


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1 consent to be excluded, in whole or in part, from the 

2 limitation on discovery under subsection (a). 

3 ‘‘(2) CLAIMS UNDER SECTION 271(e).—This 

4 section shall not apply to a civil action that includes 

5 a claim for relief arising under section 271(e). 

6 ‘‘(d) RULES OF CONSTRUCTION.— 

7 ‘‘(1) TIMELINE FOR RESPONSIVE PLEADINGS.— 

8 Nothing in this section shall be construed to alter 

9 the time provided by the Federal Rules of Civil Pro10 cedure for the filing of responsive pleadings. 

11 ‘‘(2) EXCHANGE OF CONTENTIONS.—Nothing 

12 in this section shall prohibit a court from ordering 

13 or local rules from requiring the exchange of conten14 tions regarding infringement, non-infringement, in15 validity or other issues, by interrogatories or other 

16 written initial disclosures, at an appropriate time de17 termined by the court.’’. 

18 (b) CONFORMING AMENDMENT.—The table of sec19 tions for chapter 29 of title 35, United States Code, as 

20 amended by section 4, is amended by inserting after the 

21 item relating to section 299A the following: 

‘‘299B. Discovery in patent infringement action.’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall take effect on the date of enactment of 

24 this Act and shall apply to any action for which a com25 plaint is filed on or after that date. 


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1 SEC. 6. PROCEDURES AND PRACTICES TO IMPLEMENT REC2 OMMENDATIONS OF THE JUDICIAL CON3 FERENCE. 

4 (a) JUDICIAL CONFERENCE RULES AND PROCE5 DURES ON DISCOVERY BURDENS AND COSTS.— 

6 (1) RULES AND PROCEDURES.—The Judicial 

7 Conference of the United States, using existing re8 sources, should develop rules and procedures to im9 plement the discovery proposals described in para10 graph (2) to address concerns regarding the 

11 asymmetries in discovery burdens and costs that 

12 may arise in a civil action arising under any Act of 

13 Congress relating to patents. 

14 (2) RULES AND PROCEDURES TO BE CONSID15 ERED.—The rules and procedures to be developed 

16 under paragraph (1) should address each of the fol17 lowing: 

18 (A) DISCOVERY OF CORE DOCUMENTARY

19 EVIDENCE.—To what extent each party to the 

20 action is entitled to receive core documentary 

21 evidence and should be responsible for the costs 

22 of producing core documentary evidence within 

23 the possession or control of each such party, 

24 and to what extent each party to the action 

25 may seek noncore documentary discovery as 


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1 otherwise provided in the Federal Rules of Civil 

2 Procedure. 

3 (B) ELECTRONIC COMMUNICATION.—If the 

4 parties request discovery of electronic commu5 nication, how such discovery should be phased 

6 to occur relative to the exchange of initial dis7 closures and core documentary evidence, and 

8 appropriate limitations to apply to such dis9 covery. 

10 (C) ADDITIONAL DOCUMENT DISCOVERY.— 

11 The manner and extent to which the following 

12 should apply: 

13 (i) IN GENERAL.—Each party to the 

14 action may seek any additional document 

15 discovery beyond core documentary evi16 dence as permitted under the Federal 

17 Rules of Civil Procedure, if such party 

18 bears the reasonable costs, including rea19 sonable attorney’s fees, of the additional 

20 document discovery. 

21 (ii) REQUIREMENTS FOR ADDITIONAL

22 DOCUMENT DISCOVERY.—Unless the par23 ties mutually agree otherwise, no party 

24 may be permitted additional document dis25 covery unless such a party posts a bond, or 


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1 provides other security, in an amount suffi2 cient to cover the expected costs of such 

3 additional document discovery, or makes a 

4 showing to the court that such party has 

5 the financial capacity to pay the costs of 

6 such additional document discovery. 

7 (iii) GOOD CAUSE MODIFICATION.—A 

8 court, upon motion and for good cause 

9 shown, may modify the requirements of 

10 subparagraphs (A) and (B) and any defini11 tion under paragraph (3). Not later than 

12 30 days after the pretrial conference under 

13 rule 16 of the Federal Rules of Civil Pro14 cedure, the parties shall jointly submit any 

15 proposed modifications of the requirements 

16 of subparagraphs (A) and (B) and any def17 inition under paragraph (3), unless the 

18 parties do not agree, in which case each 

19 party shall submit any proposed modifica20 tion of such party and a summary of the 

21 disagreement over the modification. 

22 (iv) COMPUTER CODE.—A court, upon 

23 motion and for good cause shown, may de24 termine that computer code should be in25 cluded in the discovery of core documenVerDate Sep 11 2014 06:09 May 09, 2015 Jkt 049200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S1137.IS S1137

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1 tary evidence. The discovery of computer 

2 code shall occur after the parties have ex3 changed initial disclosures and other core 

4 documentary evidence. 

5 (D) DISCOVERY SEQUENCE AND SCOPE.— 

6 The manner and extent to which the parties 

7 shall discuss and address in the written report 

8 filed pursuant to rule 26(f) of the Federal 

9 Rules of Civil Procedure the views and pro10 posals of each party on the following: 

11 (i) When the discovery of core docu12 mentary evidence should be completed. 

13 (ii) Whether additional document dis14 covery will be sought under subparagraph 

15 (C). 

16 (iii) Any issues about infringement, 

17 invalidity, or damages that, if resolved be18 fore the additional discovery described in 

19 subparagraph (C) commences, might sim20 plify or streamline the case. 

21 (3) SCOPE OF DOCUMENTARY EVIDENCE.—In 

22 developing rules or procedures under this section, 

23 the Judicial Conference should consider which kinds 

24 of evidence constitute ‘‘core documentary evidence’’. 


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1 (4) DEFINITIONS.—In this subsection the term 

2 ‘‘electronic communication’’ means any form of elec3 tronic communication, including email, text message, 

4 or instant message. 

5 (b) JUDICIAL CONFERENCE PATENT CASE MANAGE6 MENT.—The Judicial Conference of the United States, 

7 using existing resources, should develop case management 

8 procedures to be implemented by the United States dis9 trict courts and the United States Court of Federal Claims 

10 for any civil action arising under any Act of Congress re11 lating to patents, including initial disclosure and early case 

12 management conference practices that— 

13 (1) will identify any potential dispositive issues 

14 of the case; and 

15 (2) focus on early summary judgment motions 

16 when resolution of issues may lead to expedited dis17 position of the case. 

18 SEC. 7. FEES AND OTHER EXPENSES. 

19 (a) SENSE OF CONGRESS.—It is the sense of Con20 gress that, in patent cases, reasonable attorney fees should 

21 be paid by a non-prevailing party whose litigation position 

22 or conduct is not objectively reasonable. As the Supreme 

23 Court wrote in adopting this legal standard in the context 

24 of fee shifting under section 1447 of title 28, United 

25 States Code, this standard is intended to strike a balance; 


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1 in patent cases, a more appropriate balance between pro2 tecting the right of a patent holder to enforce its patent 

3 on the one hand, and deterring abuses in patent litigation 

4 and threats thereof on the other. 

5 (b) AMENDMENT.—Section 285 of title 35, United 

6 States Code, is amended to read as follows: 

7 ‘‘§ 285. Fees and other expenses 

8 ‘‘(a) AWARD.—In connection with a civil action in 

9 which any party asserts a claim for relief arising under 

10 any Act of Congress relating to patents, upon motion by 

11 a prevailing party, the court shall determine whether the 

12 position of the non-prevailing party was objectively reason13 able in law and fact, and whether the conduct of the non14 prevailing party was objectively reasonable. If the court 

15 finds that the position of the non-prevailing party was not 

16 objectively reasonable in law or fact or that the conduct 

17 of the non-prevailing party was not objectively reasonable, 

18 the court shall award reasonable attorney fees to the pre19 vailing party unless special circumstances would make an 

20 award unjust. 

21 ‘‘(b) COVENANT NOT TO SUE.—A party to a civil ac22 tion who asserts a claim for relief arising under any Act 

23 of Congress relating to patents against another party, and 

24 who subsequently unilaterally (i) seeks dismissal of the ac25 tion without consent of the other party and (ii) extends 


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1 to such other party a covenant not to sue for infringement 

2 with respect to the patent or patents at issue, may be the 

3 subject of a motion for attorney fees under subsection (a) 

4 as if it were a non-prevailing party, unless the party as5 serting such claim would have been entitled, at the time 

6 that such covenant was extended, to dismiss voluntarily 

7 the action without a court order under rule 41 of the Fed8 eral Rules of Civil Procedure, or the interests of justice 

9 require otherwise. 

10 ‘‘(c) RECOVERY OF AWARD.— 

11 ‘‘(1) CERTIFICATION; DISCLOSURE OF INTER12 ESTED PARTIES.— 

13 ‘‘(A) INITIAL STATEMENT.—A party de14 fending against a claim of infringement may 

15 file, not later than 14 days before a scheduling 

16 conference is to be held or a scheduling order 

17 is due under rule 16(b) of the Federal Rules of 

18 Civil Procedure, a statement that such party 

19 holds a good faith belief, based on publicly20 available information and any other information 

21 known to such party, that the primary business 

22 of the party alleging infringement is the asser23 tion and enforcement of patents or the licensing 

24 resulting therefrom. 


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1 ‘‘(B) CERTIFICATION.—Not later than 45 

2 days after being served with an initial state3 ment under subparagraph (A), a party alleging 

4 infringement shall file a certification that— 

5 ‘‘(i) establishes and certifies to the 

6 court, under oath, that it will have suffi7 cient funds available to satisfy any award 

8 of reasonable attorney fees under this sec9 tion if an award is assessed; 

10 ‘‘(ii) demonstrates that its primary 

11 business is not the assertion and enforce12 ment of patents or the licensing resulting 

13 therefrom; 

14 ‘‘(iii) identifies interested parties, if 

15 any, as defined in paragraph (2) of this 

16 subsection; or 

17 ‘‘(iv) states that it has no such inter18 ested parties. 

19 A party alleging infringement shall have an on20 going obligation to supplement its certification 

21 under this subparagraph within 30 days after a 

22 material change to the information provided in 

23 its certification. 

24 ‘‘(C) NOTICE TO INTERESTED PARTY.—A 

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1 graph (B)(iii) shall, prior to filing the certifi2 cation, provide each identified interested party 

3 actual notice in writing by service of notice in 

4 any district where the interested party may be 

5 found, such that jurisdiction shall be estab6 lished over each interested party to the action 

7 for purposes of enforcing an award of attorney 

8 fees under this section, consistent with the Con9 stitution of the United States. The notice shall 

10 identify the action, the parties, the patents at 

11 issue, and the interest qualifying the party to 

12 be an interested party. The notice shall inform 

13 the recipient that the recipient may be held ac14 countable under this subsection for any award 

15 of attorney fees, or a portion thereof, resulting 

16 from the action in the event the party alleging 

17 infringement cannot satisfy the full amount of 

18 such an award, unless the recipient renounces 

19 its interest pursuant to subparagraph (E) or is 

20 otherwise exempt from the applicability of this 

21 subsection. 

22 ‘‘(D) ACCOUNTABILITY FOR INTERESTED

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1 ests pursuant to subparagraph (E) or are not 

2 otherwise exempt from the applicability of this 

3 subsection may be held accountable for any 

4 fees, or a portion thereof, awarded under this 

5 section in the event that the party alleging in6 fringement cannot satisfy the full amount of the 

7 award. If a true and correct certification under 

8 clause (i) or (ii) of subparagraph (B) is timely 

9 filed with the court, interested parties shall not 

10 be subject to this subparagraph. 

11 ‘‘(E) RENUNCIATION OF INTEREST.—Any 

12 recipient of a notice under subparagraph (C) 

13 may submit a statement of renunciation of in14 terest in a binding document with notice to the 

15 court and parties in the action not later than 

16 120 days after receipt of the notice under sub17 paragraph (C). The statement shall be required 

18 to renounce only such interest as would qualify 

19 the recipient as an interested party. 

20 ‘‘(F) INSTITUTIONS OF HIGHER EDU21 CATION EXCEPTION.—Any institution of higher 

22 education (as defined in section 101(a) of the 

23 Higher Education Act of 1965 (20 U.S.C. 

24 1001(a)) or under equivalent laws in foreign ju25 risdictions), or a non-profit technology transfer 


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1 organization whose primary purpose is to facili2 tate the commercialization of technologies devel3 oped by 1 or more institutions of higher edu4 cation, may exempt itself from the applicability 

5 of this subsection by filing a certification that 

6 it qualifies for the exception provided for in this 

7 subparagraph with the court and providing no8 tice to the parties. 

9 ‘‘(G) INTEREST OF JUSTICE EXCEPTION.— 

10 Any recipient of a notice under subparagraph 

11 (C) may intervene in the action for purposes of 

12 contesting its identification as an interested 

13 party or its liability under this subsection, and 

14 a court may exempt any party identified as an 

15 interested party from the applicability of this 

16 subsection as the interest of justice requires. 

17 ‘‘(2) INTERESTED PARTY.—In this section, the 

18 term ‘interested party’— 

19 ‘‘(A) means a person who has a substantial 

20 financial interest related to the proceeds from 

21 any settlement, license, or damages award re22 sulting from the enforcement of the patent in 

23 the action by the party alleging infringement; 

24 ‘‘(B) does not include an attorney or law 

25 firm providing legal representation in the action 


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1 if the sole basis for the financial interest of the 

2 attorney or law firm in the outcome of the ac3 tion arises from the attorney or law firm’s re4 ceipt of compensation reasonably related to the 

5 provision of the legal representation; 

6 ‘‘(C) does not include a person who has as7 signed all right, title, and interest in a patent, 

8 except for passive receipt of income, to an enti9 ty described in paragraph (1)(F), or who has a 

10 right to receive any portion of such passive in11 come; and 

12 ‘‘(D) does not include a person who would 

13 be an interested party under subparagraph (A) 

14 but whose financial interest is based solely on 

15 an equity or security interest established when 

16 the party alleging infringement’s primary busi17 ness was not the assertion and enforcement of 

18 patents or the licensing resulting therefrom. 

19 ‘‘(d) CLAIMS UNDER SECTION 271(e).— 

20 ‘‘(1) APPLICABILITY.—Subsections (a), (b), and 

21 (c) shall not apply to a civil action that includes a 

22 claim for relief arising under section 271(e). 

23 ‘‘(2) AWARD IN CERTAIN CLAIMS UNDER SEC24 TION 271(e).—In a civil action that includes a claim 

25 for relief arising under section 271(e), the court may 


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1 in exceptional cases award reasonable attorney fees 

2 to the prevailing party.’’. 

3 (c) CONFORMING AMENDMENT AND AMENDMENT.— 

4 (1) CONFORMING AMENDMENT.—The item re5 lating to section 285 of the table of sections for 

6 chapter 29 of title 35, United States Code, is 

7 amended to read as follows: 

‘‘285. Fees and other expenses.’’. 

8 (2) AMENDMENT.—Section 273 of title 35, 

9 United States Code, is amended by striking sub10 sections (f) and (g). 

11 (d) EFFECTIVE DATE.—The amendments made by 

12 this section shall take effect on the date of enactment of 

13 this Act and shall apply to any action filed on or after 

14 such date. 

15 SEC. 8. REQUIREMENT OF CLARITY AND SPECIFICITY IN 

16 DEMAND LETTERS. 

17 (a) IN GENERAL.—Chapter 29 of title 35, United 

18 States Code, as amended by section 5, is amended by add19 ing at the end the following: 

20 ‘‘§ 299C. Pre-suit written notice 

21 ‘‘(a) APPLICABILITY.—Subsection (b) shall not 

22 apply— 

23 ‘‘(1) to written communication between par24 ties— 


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1 ‘‘(A) regarding existing licensing agree2 ments; 

3 ‘‘(B) as part of an ongoing licensing nego4 tiation, provided that the initial written notice 

5 complied with the requirements of subsection 

6 (b) of this section; or 

7 ‘‘(C) sent after the initial written notice, 

8 provided that the initial written notice complied 

9 with the requirements of subsection (b) of this 

10 section; or 

11 ‘‘(2) if the court determines it is in the interest 

12 of justice to waive the requirements of subsection 

13 (b). 

14 ‘‘(b) WRITTEN NOTIFICATION REQUIREMENTS.— 

15 ‘‘(1) IN GENERAL.—In a civil action alleging in16 fringement of a patent in which the plaintiff has 

17 provided written notice of the accusation of infringe18 ment to the party accused of infringement prior to 

19 filing the action, the initial written notice shall con20 tain the information required under paragraph (2) 

21 or be subject to paragraph (3). 

22 ‘‘(2) REQUIRED INFORMATION PROVIDED IN

23 INITIAL WRITTEN NOTICE.—The initial written no24 tice described in paragraph (1) shall contain, at a 

25 minimum— 


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1 ‘‘(A) an identification of— 

2 ‘‘(i) each patent believed to be in3 fringed, including the patent number; and 

4 ‘‘(ii) at least one claim of each patent 

5 that is believed to be infringed; 

6 ‘‘(B) an identification of each product, 

7 process, apparatus, or chemical composition, in8 cluding any manufacturer thereof, that is be9 lieved to infringe one or more claims of each 

10 patent under subparagraph (A); 

11 ‘‘(C) a clear and detailed description of the 

12 reasons why the plaintiff believes each patent 

13 identified under subparagraph (A) is infringed; 

14 ‘‘(D) notice to the intended recipient that 

15 the intended recipient may have the right to a 

16 stay of any suit in accordance with section 

17 299A; 

18 ‘‘(E) the identity of any person with the 

19 right to enforce each patent under subpara20 graph (A); and 

21 ‘‘(F) if compensation is proposed, a short 

22 and plain statement as to how that proposed 

23 compensation was determined. 

24 ‘‘(3) ADDITIONAL TIME TO RESPOND.—If the 

25 initial written notice provided to the defendant prior 


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1 to the filing of the civil action did not contain the 

2 information required by paragraph (2), the defend3 ant’s time to respond to the complaint shall be ex4 tended by an additional 30 days.’’. 

5 (b) CONFORMING AMENDMENT.—The table of sec6 tions for chapter 29 of title 35, United States Code, as 

7 amended by section 5, is amended by adding at the end 

8 the following: 

‘‘299C. Pre-suit written notice.’’. 

9 (c) WILLFUL INFRINGEMENT.—Section 284 of title 

10 35, United States Code, is amended— 

11 (1) in the first undesignated paragraph, by 

12 striking ‘‘Upon finding’’ and inserting ‘‘(a) IN GEN13 ERAL.—Upon finding’’; 

14 (2) in the second undesignated paragraph, by 

15 striking ‘‘When the damages’’ and inserting ‘‘(b) AS16 SESSMENT BY COURT; TREBLE DAMAGES.—When 

17 the damages’’; 

18 (3) by inserting after subsection (b), as des19 ignated by subparagraph (B), the following: 

20 ‘‘(c) WILLFUL INFRINGEMENT.—A claimant seeking 

21 to establish willful infringement may not rely on evidence 

22 of pre-suit notification of infringement unless that notifi23 cation complies with the standards set out in section 

24 299C(b)(2).’’; and 


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1 (4) in the last undesignated paragraph, by 

2 striking ‘‘The court’’ and inserting ‘‘(d) EXPERT

3 TESTIMONY.—The court’’. 

4 (d) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect on the date that is 1 year 

6 after the date of enactment of this Act and shall apply 

7 to any action for which a complaint is filed on or after 

8 that date. 

9 SEC. 9. ABUSIVE DEMAND LETTERS. 

10 (a) BAD-FAITH DEMAND LETTERS.—Chapter 29 of 

11 title 35, United States Code, as amended by section 8, 

12 is amended by adding at the end the following: 

13 ‘‘§ 299D. Bad-faith demand letters 

14 ‘‘(a) DEFINITION.—In this section, the term ‘affili15 ated person’ means a person affiliated with the intended 

16 recipient of a written communication. 

17 ‘‘(b) CIVIL PENALTIES FOR CERTAIN UNFAIR OR DE18 CEPTIVE ACTS OR PRACTICES IN CONNECTION WITH

19 ABUSIVE DEMAND LETTERS.—A person who commits an 

20 unfair or deceptive act or practice within the meaning of 

21 section 5(a)(1) of the Federal Trade Commission Act (15 

22 U.S.C. 45(a)(1)), in connection with the assertion of a 

23 United States patent, and who engages in the widespread 

24 sending of written communications representing that the 

25 intended recipients, or any persons affiliated with those 


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1 recipients, are or may be infringing, or have or may have 

2 infringed, the patent and may bear liability or owe com3 pensation to another, shall be deemed to have violated a 

4 rule defining an unfair or deceptive act or practice de5 scribed under section 18(a)(1)(B) of the Federal Trade 

6 Commission Act (15 U.S.C. 57a(a)(1)(B)) if— 

7 ‘‘(1)(A) the communications falsely— 

8 ‘‘(i) represent that administrative or judi9 cial relief has been sought against the recipient 

10 or others; or 

11 ‘‘(ii) threaten litigation if compensation is 

12 not paid, the infringement issue is not other13 wise resolved, or the communication is not re14 sponded to; and 

15 ‘‘(B) there is a pattern of false statements or 

16 threats described in subparagraph (A) having been 

17 made without litigation or other relief then having 

18 been pursued; 

19 ‘‘(2) the assertions contained in the commu20 nications lack a reasonable basis in fact or law, be21 cause— 

22 ‘‘(A) the person asserting the patent is not 

23 a person, or does not represent a person, with 

24 the current right to license the patent to, or to 


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1 enforce the patent against, the intended recipi2 ents or any affiliated persons; 

3 ‘‘(B) the communications seek compensa4 tion on account of activities undertaken after 

5 the patent has expired; 

6 ‘‘(C) the communications seek compensa7 tion for a patent that has been held to be in8 valid or unenforceable in a final judicial or ad9 ministrative proceeding that is unappealable or 

10 for which any opportunity for appeal is no 

11 longer available; 

12 ‘‘(D) the communications seek compensa13 tion for activities by the recipient that the send14 er knows do not infringe the patent because 

15 such activities are authorized by the patentee; 

16 ‘‘(E) the communications falsely represent 

17 that an investigation of the recipient’s alleged 

18 infringement has occurred; or 

19 ‘‘(F) the communications falsely state that 

20 litigation has been filed against, or a license has 

21 been paid by persons similarly situated to the 

22 recipient; or 

23 ‘‘(3) the content of the written communications 

24 is likely to materially mislead a reasonable recipient 


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1 because the content fails to include facts reasonably 

2 necessary to inform the recipient— 

3 ‘‘(A) of the identity of the person asserting 

4 a right to license the patent to, or enforce the 

5 patent against, the intended recipient or any af6 filiated person; 

7 ‘‘(B) of the patent issued by the United 

8 States Patent and Trademark Office alleged to 

9 have been infringed; and 

10 ‘‘(C) if infringement or the need to pay 

11 compensation for a license is alleged, of an 

12 identification of at least one product, service, or 

13 other activity of the recipient that is alleged to 

14 infringe the identified patent or patents and, 

15 unless the information is not readily accessible, 

16 an explanation of the basis for such allegation. 

17 ‘‘(c) ENFORCEMENT BY FEDERAL TRADE COMMIS18 SION.— 

19 ‘‘(1) POWERS OF COMMISSION.—The Federal 

20 Trade Commission shall enforce this section in the 

21 same manner, by the same means, and with the 

22 same jurisdiction, powers, and duties as though all 

23 applicable terms and provisions of the Federal Trade 

24 Commission Act (15 U.S.C. 41 et seq.) were incor25 porated into and made a part of this section. 


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1 ‘‘(2) PRIVILEGES AND IMMUNITIES.—Any per2 son who engages in an act or practice described in 

3 subsection (b) shall be subject to the penalties and 

4 entitled to the privileges and immunities provided in 

5 the Federal Trade Commission Act (15 U.S.C. 41 et 

6 seq.).’’. 

7 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

8 The table of sections for chapter 29 of title 35, United 

9 States Code, as amended by section 8, is amended by in10 serting after the item relating to section 299C the fol11 lowing: 

‘‘299D. Bad-faith demand letters.’’. 

12 SEC. 10. TRANSPARENCY OF PATENT TRANSFER. 

13 (a) PATENT AND TRADEMARK OFFICE PRO14 CEEDINGS.— 

15 (1) IN GENERAL.—Chapter 26 of title 35, 

16 United States Code, is amended by inserting after 

17 section 261 the following: 

18 ‘‘§ 261A. Disclosure of information relating to patent 

19 ownership 

20 ‘‘(a) DEFINITIONS.—In this section: 

21 ‘‘(1) PERIOD OF NONCOMPLIANCE.—The term 

22 ‘period of noncompliance’ refers to a period of time 

23 during which the assignee or the ultimate parent en24 tity of an assignee of a patent has not been disclosed 


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1 to the United States Patent and Trademark Office 

2 in accordance with this section. 

3 ‘‘(2) ULTIMATE PATENT ENTITY.— 

4 ‘‘(A) IN GENERAL.—Except as provided in 

5 subparagraph (B), the term ‘ultimate parent 

6 entity’ has the meaning given such term in sec7 tion 801.1(a)(3) of title 16, Code of Federal 

8 Regulations, or any successor regulation. 

9 ‘‘(B) MODIFICATION OF DEFINITION.—The 

10 Director may by regulation modify the defini11 tion of the term ‘ultimate parent entity’. 

12 ‘‘(b) REQUIREMENT TO DISCLOSE ASSIGNMENT.— 

13 An assignment of all substantial rights in an issued patent 

14 shall be recorded in the Patent and Trademark Office— 

15 ‘‘(1) not later than the date on which the pat16 ent is issued; and 

17 ‘‘(2) when any subsequent assignment is made 

18 that results in a change to the ultimate parent enti19 ty— 

20 ‘‘(A) not later than 3 months after the 

21 date on which such assignment is made; or 

22 ‘‘(B) in the case of an assignment made as 

23 part of a corporate acquisition that meets the 

24 reporting thresholds under section 7A(a)(2) of 

25 the Clayton Act (15 U.S.C. 18a(a)(2)), not 


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1 later than 6 months after the closing date of 

2 such acquisition. 

3 ‘‘(c) DISCLOSURE REQUIREMENTS.—A disclosure 

4 under subsection (b) shall include the name of the assignee 

5 and the ultimate parent entity of the assignee. 

6 ‘‘(d) FAILURE TO COMPLY.—In a civil action in 

7 which a party asserts a claim for infringement of a patent, 

8 if there was a failure to comply with subsection (b) for 

9 the patent— 

10 ‘‘(1) the party asserting infringement of the 

11 patent may not recover increased damages under 

12 section 284 or attorney fees under section 285 with 

13 respect to infringing activities taking place during 

14 any period of noncompliance, unless the denial of 

15 such damages or fees would be manifestly unjust; 

16 and 

17 ‘‘(2) the court shall award to a prevailing ac18 cused infringer reasonable attorney fees and ex19 penses incurred in discovering the identity of any 

20 undisclosed entity required to be disclosed under 

21 subsection (b), unless such sanctions would be mani22 festly unjust.’’. 

23 (2) APPLICABILITY.—The amendment made by 

24 paragraph (1) shall apply to any patent for which a 


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1 notice of allowance is issued on or after the date of 

2 enactment of this Act. 

3 (3) CONFORMING AMENDMENT.—The table of 

4 sections for chapter 26 of title 35, United States 

5 Code, is amended by adding at the end the following 

6 new item: 

‘‘261A. Disclosure of information relating to patent ownership.’’. 

7 (b) REGULATIONS.—The Director may promulgate 

8 such regulations as are necessary to establish a registra9 tion fee in an amount sufficient to recover the estimated 

10 costs of administering section 261A of title 35, United 

11 States Code, as added by subsection (a), to facilitate the 

12 collection and maintenance of the information required by 

13 the amendments made by this section and section 3(b) of 

14 this Act, and to ensure the timely disclosure of such infor15 mation to the public. 

16 SEC. 11. PROTECTION OF INTELLECTUAL PROPERTY LI17 CENSES IN BANKRUPTCY. 

18 (a) IN GENERAL.—Section 1522 of title 11, United 

19 States Code, is amended by adding at the end the fol20 lowing: 

21 ‘‘(e) Section 365(n) shall apply to cases under this 

22 chapter. If the foreign representative rejects or repudiates 

23 a contract under which the debtor is a licensor of intellec24 tual property, the licensee under such contract shall be 


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1 entitled to make the election and exercise the rights de2 scribed in section 365(n).’’. 

3 (b) TRADEMARKS.— 

4 (1) AMENDMENT.—Section 101(35A) of title 

5 11, United States Code, is amended— 

6 (A) in subparagraph (E), by striking ‘‘or’’; 

7 (B) in subparagraph (F), by adding ‘‘or’’ 

8 at the end; and 

9 (C) by adding after subparagraph (F) the 

10 following new subparagraph: 

11 ‘‘(G) a trademark, service mark, or trade 

12 name, as those terms are defined in section 45 

13 of the Act of July 5, 1946 (commonly referred 

14 to as the ‘Trademark Act of 1946’ (15 U.S.C. 

15 1127));’’. 

16 (2) CONFORMING AMENDMENT.—Section 

17 365(n)(2) of title 11, United States Code, is amend18 ed— 

19 (A) in subparagraph (B)— 

20 (i) by striking ‘‘royalty payments’’ 

21 and inserting ‘‘royalty or other payments’’; 

22 and 

23 (ii) by striking ‘‘and’’ after the semi24 colon; 


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1 (B) in subparagraph (C), by striking the 

2 period at the end of clause (ii) and inserting ‘‘; 

3 and’’; and 

4 (C) by adding at the end the following new 

5 subparagraph: 

6 ‘‘(D) in the case of a trademark, service 

7 mark, or trade name, the licensee shall not be 

8 relieved of any of its obligations to maintain the 

9 quality of the products and services offered 

10 under or in connection with the licensed trade11 mark, service mark or trade name, and the 

12 trustee shall retain the right to oversee and en13 force quality control for said products and/or 

14 services.’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall take effect on the date of enactment of 

17 this Act and shall apply to any case that is pending on, 

18 or for which a petition or complaint is filed on or after, 

19 such date of enactment. 

20 SEC. 12. SMALL BUSINESS EDUCATION, OUTREACH, AND IN21 FORMATION ACCESS. 

22 (a) SMALL BUSINESS EDUCATION AND OUT23 REACH.— 

24 (1) RESOURCES FOR SMALL BUSINESS.—Using 

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1 cational resources for small businesses to address 

2 concerns arising from patent infringement. 

3 (2) SMALL BUSINESS PATENT OMBUDSMAN.— 

4 The existing small business patent outreach pro5 grams of the Office, in consultation with the relevant 

6 offices at the Small Business Administration and the 

7 Minority Business Development Agency, shall pro8 vide education and awareness regarding resources 

9 available for those persons responding to allegations 

10 of patent infringement. 

11 (b) IMPROVING INFORMATION TRANSPARENCY FOR

12 SMALL BUSINESS AND THE UNITED STATES PATENT AND

13 TRADEMARK OFFICE USERS.— 

14 (1) WEB SITE.—Using existing resources, the 

15 Director shall create a user-friendly section on the 

16 official Web site of the Office to notify the public 

17 when a patent case is brought in Federal court and, 

18 with respect to each patent at issue in such case, the 

19 Director shall include— 

20 (A) information disclosed under section 

21 261A of title 35, United States Code, as added 

22 by section 10, and section 281B(b) of title 35, 

23 United States Code, as added by section 3; and 

24 (B) any other information the Director de25 termines to be relevant. 


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1 (2) FORMAT.—In order to promote accessibility 

2 for the public, the information described in para3 graph (1) shall be searchable by patent number, pat4 ent art area, and entity. 

5 SEC. 13. STUDIES ON PATENT TRANSACTIONS, QUALITY, 

6 AND EXAMINATION. 

7 (a) STUDY ON SECONDARY MARKET OVERSIGHT FOR

8 PATENT TRANSACTIONS TO PROMOTE TRANSPARENCY

9 AND ETHICAL BUSINESS PRACTICES.— 

10 (1) STUDY REQUIRED.—The Director, in con11 sultation with the Secretary of Commerce, the Sec12 retary of the Treasury, the Chairman of the Securi13 ties and Exchange Commission, the heads of other 

14 relevant agencies, and interested parties, shall, using 

15 existing resources of the Office, conduct a study— 

16 (A) to develop legislative recommendations 

17 to ensure greater transparency and account18 ability in patent transactions occurring on the 

19 secondary market; 

20 (B) to examine the economic impact that 

21 the patent secondary market has on the United 

22 States; 

23 (C) to examine licensing and other over24 sight requirements that may be placed on the 

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1 ticipants in such markets, to ensure that the 

2 market is a level playing field and that brokers 

3 in the market have the requisite expertise and 

4 adhere to ethical business practices; and 

5 (D) to examine the requirements placed on 

6 other markets. 

7 (2) REPORT ON STUDY.—Not later than 18 

8 months after the date of enactment of this Act, the 

9 Director shall submit a report to the Committee on 

10 the Judiciary of the House of Representatives and 

11 the Committee on the Judiciary of the Senate on the 

12 findings and recommendations of the Director from 

13 the study required under paragraph (1). 

14 (b) STUDY ON PATENT SMALL CLAIMS PROCE15 DURES.— 

16 (1) STUDY REQUIRED.— 

17 (A) IN GENERAL.—The Director of the 

18 Administrative Office of the United States 

19 Courts, in consultation with the Director of the 

20 Federal Judicial Center and the United States 

21 Patent and Trademark Office, shall, using ex22 isting resources, conduct a study to examine the 

23 idea of developing a pilot program for patent 

24 small claims procedures in certain judicial disVerDate Sep 11 2014 06:09 May 09, 2015 Jkt 049200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S1137.IS S1137

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1 tricts within the existing patent pilot program 

2 mandated by Public Law 111–349. 

3 (B) CONTENTS OF STUDY.—The study 

4 under subparagraph (A) shall examine— 

5 (i) the necessary criteria for using 

6 small claims procedures; 

7 (ii) the costs that would be incurred 

8 for establishing, maintaining, and oper9 ating such a pilot program; and 

10 (iii) the steps that would be taken to 

11 ensure that the procedures used in the 

12 pilot program are not misused for abusive 

13 patent litigation. 

14 (2) REPORT ON STUDY.—Not later than 1 year 

15 after the date of enactment of this Act, the Director 

16 of the Administrative Office of the United States 

17 Courts shall submit a report to the Committee on 

18 the Judiciary of the House of Representatives and 

19 the Committee on the Judiciary of the Senate on the 

20 findings and recommendations of the Director of the 

21 Administrative Office from the study required under 

22 paragraph (1). 

23 (c) STUDY ON BUSINESS METHOD PATENT QUAL24 ITY.— 


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1 (1) GAO STUDY.—The Comptroller General of 

2 the United States shall, using existing resources, 

3 conduct a study on the volume and nature of litiga4 tion involving business method patents. 

5 (2) CONTENTS OF STUDY.—The study required 

6 under paragraph (1) shall focus on examining the 

7 quality of business method patents asserted in suits 

8 alleging patent infringement, and may include an ex9 amination of any other areas that the Comptroller 

10 General determines to be relevant. 

11 (3) REPORT TO CONGRESS.—Not later than 1 

12 year after the date of enactment of this Act, the 

13 Comptroller General shall submit to the Committee 

14 on the Judiciary of the House of Representatives 

15 and the Committee on the Judiciary of the Senate 

16 a report on the findings and recommendations from 

17 the study required by this subsection, including rec18 ommendations for any changes to laws or regula19 tions that the Comptroller General considers appro20 priate on the basis of the study. 

21 SEC. 14. TECHNICAL CORRECTIONS TO THE LEAHY-SMITH 

22 AMERICA INVENTS ACT AND OTHER IM23 PROVEMENTS. 

24 (a) Section 325(e)(2) of title 35, United States Code, 

25 is amended by striking ‘‘or reasonably could have raised’’. 


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1 (b) PTO PATENT REVIEWS.— 

2 (1) CLARIFICATION.— 

3 (A) SCOPE OF PRIOR ART.—Section 

4 18(a)(1)(C)(i) of the Leahy-Smith America In5 vents Act (35 U.S.C. 321 note) is amended by 

6 striking ‘‘section 102(a)’’ and inserting ‘‘sub7 section (a) or (e) of section 102’’. 

8 (B) EFFECTIVE DATE.—The amendment 

9 made by subparagraph (A) shall take effect on 

10 the date of the enactment of this Act and shall 

11 apply to any proceeding pending on, or filed on 

12 or after, such date of enactment. 

13 (2) AUTHORITY TO WAIVE FEE.—Subject to 

14 available resources, the Director may waive payment 

15 of a filing fee for a transitional proceeding described 

16 under section 18(a) of the Leahy-Smith America In17 vents Act (35 U.S.C. 321 note). 

18 (c) TECHNICAL CORRECTIONS.— 

19 (1) NOVELTY.— 

20 (A) AMENDMENT.—Section 102(b)(1)(A) 

21 of title 35, United States Code, is amended by 

22 striking ‘‘the inventor or joint inventor or by 

23 another’’ and inserting ‘‘the inventor or a joint 

24 inventor or another’’. 


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1 (B) EFFECTIVE DATE.—The amendment 

2 made by subparagraph (A) shall be effective as 

3 if included in the amendment made by section 

4 3(b)(1) of the Leahy-Smith America Invents 

5 Act (Public Law 112–29). 

6 (2) INVENTOR’S OATH OR DECLARATION.— 

7 (A) REQUIREMENT TO EXECUTE.—Section 

8 115(a) of title 35, United States Code, is 

9 amended in the second sentence by striking 

10 ‘‘shall execute’’ and inserting ‘‘may be required 

11 by the Director to execute’’. 

12 (B) EFFECTIVE DATE.—The amendment 

13 made by subparagraph (A) shall be effective as 

14 if included in the amendment made by section 

15 4(a)(1) of the Leahy-Smith America Invents 

16 Act (Public Law 112–29). 

17 (3) ASSIGNEE FILERS.— 

18 (A) BENEFIT OF EARLIER FILING DATE; 

19 RIGHT OF PRIORITY.—Section 119(e)(1) of title 

20 35, United States Code, is amended, in the first 

21 sentence, by striking ‘‘by an inventor or inven22 tors named’’ and inserting ‘‘that names the in23 ventor or a joint inventor’’. 

24 (B) BENEFIT OF EARLIER FILING DATE IN

25 THE UNITED STATES.—Section 120 of title 35, 


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1 United States Code, is amended, in the first 

2 sentence, by striking ‘‘names an inventor or 

3 joint inventor’’ and inserting ‘‘names the inven4 tor or a joint inventor’’. 

5 (C) EFFECTIVE DATE.—The amendments 

6 made by this paragraph shall take effect on the 

7 date of the enactment of this Act and shall 

8 apply to any patent application, and any patent 

9 issuing from such application, that is filed on or 

10 after September 16, 2012. 

11 (4) DERIVED PATENTS.— 

12 (A) AMENDMENT.—Section 291(b) of title 

13 35, United States Code, is amended by striking 

14 ‘‘or joint inventor’’ and inserting ‘‘or a joint in15 ventor’’. 

16 (B) EFFECTIVE DATE.—The amendment 

17 made by subparagraph (A) shall be effective as 

18 if included in the amendment made by section 

19 3(h)(1) of the Leahy-Smith America Invents 

20 Act (Public Law 112–29). 

21 (5) SPECIFICATION.—Notwithstanding section 

22 4(e) of the Leahy-Smith America Invents Act (Pub23 lic Law 112–29; 125 Stat. 297), the amendments 

24 made by subsections (c) and (d) of section 4 of such 

25 Act shall apply to any proceeding or matter that is 


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1 pending on, or filed on or after, the date of the en2 actment of this Act. 

3 (6) TIME LIMIT FOR COMMENCING MISCONDUCT

4 PROCEEDINGS.— 

5 (A) AMENDMENT.—The fourth sentence of 

6 section 32 of title 35, United States Code, is 

7 amended by striking ‘‘1 year’’ and inserting 

8 ‘‘18 months’’. 

9 (B) EFFECTIVE DATE.—The amendment 

10 made by this paragraph shall take effect on the 

11 date of the enactment of this Act and shall 

12 apply to any action in which the Office files a 

13 complaint on or after such date of enactment. 

14 (7) PATENT OWNER RESPONSE.— 

15 (A) CONDUCT OF INTER PARTES RE16 VIEW.—Paragraph (8) of section 316(a) of title 

17 35, United States Code, is amended by striking 

18 ‘‘the petition under section 313’’ and inserting 

19 ‘‘the petition under section 311’’. 

20 (B) CONDUCT OF POST-GRANT REVIEW.— 

21 Paragraph (8) of section 326(a) of title 35, 

22 United States Code, is amended by striking 

23 ‘‘the petition under section 323’’ and inserting 

24 ‘‘the petition under section 321’’. 


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1 (C) EFFECTIVE DATE.—The amendments 

2 made by this paragraph shall take effect on the 

3 date of the enactment of this Act. 

4 (d) MANAGEMENT OF THE UNITED STATES PATENT

5 AND TRADEMARK OFFICE.— 

6 (1) IN GENERAL.—Section 3(b)(1) of title 35, 

7 United States Code, is amended in the first sen8 tence— 

9 (A) by striking ‘‘be vested with the author10 ity to act in the capacity of the’’ and inserting 

11 ‘‘serve as Acting,’’; and 

12 (B) by inserting before the period ‘‘or in 

13 the event of a vacancy in the office of the Di14 rector.’’. 

15 (2) EFFECTIVE DATE.—The amendments made 

16 by paragraph (1) shall take effect on the date of en17 actment of this Act and shall apply with respect to 

18 appointments and vacancies occurring before, on, or 

19 after the date of enactment of this Act. 

20 SEC. 15. EFFECTIVE DATE. 

21 Except as otherwise provided in this Act, the provi22 sions of this Act shall take effect on the date of enactment 

23 of this Act, and shall apply to any patent issued, or any 

24 action filed, on or after that date. 


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1 SEC. 16. SEVERABILITY. 

2 If any provision of this Act, or an amendment made 

3 by this Act, or the application of such provision or amend4 ment to any person or circumstance, is held to be invalid, 

5 the remainder of this Act, or an amendment made by this 

6 Act, or the application of such provision to other persons 

7 or circumstances, shall not be affected. 

Æ 


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