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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1137 Reported in Senate (RS)]

                                                       Calendar No. 203
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

                           September 8, 2015

              Reported by Mr. Grassley, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL

 
  To amend title 35, United States Code, and the Leahy-Smith America 
  Invents Act to make improvements and technical corrections, and for 
                            other purposes.

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

<DELETED>SECTION 1. SHORT TITLE; TABLE OF CONTENTS.</DELETED>

<DELETED>    (a) Short Title.--This Act may be cited as the 
``Protecting American Talent and Entrepreneurship Act of 2015'' or the 
``PATENT Act''.</DELETED>
<DELETED>    (b) Table of Contents.--The table of contents for this Act 
is as follows:</DELETED>

<DELETED>Sec. 1. Short title; table of contents.
<DELETED>Sec. 2. Definitions.
<DELETED>Sec. 3. Pleading requirements for patent infringement actions.
<DELETED>Sec. 4. Customer-suit exception.
<DELETED>Sec. 5. Discovery limits.
<DELETED>Sec. 6. Procedures and practices to implement recommendations 
                            of the Judicial Conference.
<DELETED>Sec. 7. Fees and other expenses.
<DELETED>Sec. 8. Requirement of clarity and specificity in demand 
                            letters.
<DELETED>Sec. 9. Abusive demand letters.
<DELETED>Sec. 10. Transparency of patent transfer.
<DELETED>Sec. 11. Protection of intellectual property licenses in 
                            bankruptcy.
<DELETED>Sec. 12. Small business education, outreach, and information 
                            access.
<DELETED>Sec. 13. Studies on patent transactions, quality, and 
                            examination.
<DELETED>Sec. 14. Technical corrections to the Leahy-Smith America 
                            Invents Act and other improvements.
<DELETED>Sec. 15. Effective date.
<DELETED>Sec. 16. Severability.

<DELETED>SEC. 2. DEFINITIONS.</DELETED>

        <DELETED>    (1) Director.--The term ``Director'' means the 
        Under Secretary of Commerce for Intellectual Property and 
        Director of the United States Patent and Trademark 
        Office.</DELETED>
        <DELETED>    (2) Office.--The term ``Office'' means the United 
        States Patent and Trademark Office.</DELETED>

<DELETED>SEC. 3. PLEADING REQUIREMENTS FOR PATENT INFRINGEMENT 
              ACTIONS.</DELETED>

<DELETED>    (a) Elimination of Form 18.--Not later than 1 month after 
the date of enactment of this Act, the Supreme Court, using existing 
resources, shall eliminate Form 18 in the Appendix to the Federal Rules 
of Civil Procedure (Complaint for Patent Infringement).</DELETED>
<DELETED>    (b) Pleading Requirements.--</DELETED>
        <DELETED>    (1) Amendment.--Chapter 29 of title 35, United 
        States Code, is amended by inserting after section 281 the 
        following:</DELETED>
<DELETED>``Sec. 281A. Pleading requirements for patent infringement 
              actions</DELETED>
<DELETED>    ``(a) Pleading Requirements.--In a civil action in which a 
party asserts a claim for relief arising under any Act of Congress 
relating to patents, a party alleging infringement shall include in a 
complaint, counterclaim, or cross-claim for patent infringement, except 
as provided in subsection (c), the following:</DELETED>
        <DELETED>    ``(1) An identification of each patent allegedly 
        infringed.</DELETED>
        <DELETED>    ``(2) An identification of each claim of each 
        patent identified under paragraph (1) that is allegedly 
        infringed.</DELETED>
        <DELETED>    ``(3) For each claim identified under paragraph 
        (2), an identification of each accused process, machine, 
        manufacture, or composition of matter (referred to in this 
        section as an `accused instrumentality') alleged to infringe 
        the claim.</DELETED>
        <DELETED>    ``(4) For each accused instrumentality identified 
        under paragraph (3), an identification with particularity, if 
        known, of--</DELETED>
                <DELETED>    ``(A) the name or model number (or a 
                representative model number) of each accused 
                instrumentality; or</DELETED>
                <DELETED>    ``(B) if there is no name or model number, 
                a description of each accused 
                instrumentality.</DELETED>
        <DELETED>    ``(5) For each claim identified under paragraph 
        (2), a description of the elements thereof that are alleged to 
        be infringed by the accused instrumentality and how the accused 
        instrumentality is alleged to infringe those 
        elements.</DELETED>
        <DELETED>    ``(6) For each claim of indirect infringement, a 
        description of the acts of the alleged infringer that are 
        alleged to contribute to or induce the direct 
        infringement.</DELETED>
<DELETED>    ``(b) Dismissal for Failure To Meet Pleading 
Requirements.--The court shall, on the motion of any party, dismiss any 
count or counts of the complaint, counterclaim, or cross-claim for 
patent infringement if the requirements of paragraphs (1) through (6) 
of subsection (a) are not met with respect to such count or counts. The 
fact that a party pleads in accordance with subsection (c) shall not be 
a basis for dismissal if the party nonetheless states a plausible claim 
for relief sufficient under the Federal Rules of Civil 
Procedure.</DELETED>
<DELETED>    ``(c) Information Not Accessible.--If some subset of 
information required to comply with subsection (a) is not accessible to 
a party after an inquiry reasonable under the circumstances, consistent 
with rule 11 of the Federal Rules of Civil Procedure, an allegation 
requiring that information may be based upon a general description of 
that information, along with a statement as to why the information is 
not accessible.</DELETED>
<DELETED>    ``(d) Amendment of Pleadings.--Nothing in this provision 
shall be construed to affect a party's leave to amend pleadings as 
specified in the Federal Rules of Civil Procedure. Amendments permitted 
by the court are subject to the pleading requirements set forth in this 
section.</DELETED>
<DELETED>    ``(e) Confidential Information.--A party required to 
disclose information described under subsection (a) may file 
information believed to be confidential under seal, with a motion 
setting forth good cause for such sealing. If such motion is denied by 
the court, the party may seek to file an amended pleading.</DELETED>
<DELETED>    ``(f) Exemption.--Subsection (a) shall not apply to a 
civil action that includes a claim for relief arising under section 
271(e)(2).</DELETED>
<DELETED>``Sec. 281B. Early disclosure requirements for patent 
              infringement actions</DELETED>
<DELETED>    ``(a) Definitions.--In this section--</DELETED>
        <DELETED>    ``(1) the term `financial interest'--</DELETED>
                <DELETED>    ``(A) means--</DELETED>
                        <DELETED>    ``(i) with regard to a patent or 
                        patents, the right of a person to receive 
                        proceeds from the assertion of the patent or 
                        patents, including a fixed or variable portion 
                        of such proceeds; and</DELETED>
                        <DELETED>    ``(ii) with regard to the 
                        patentee, direct or indirect ownership or 
                        control by a person of more than 20 percent of 
                        the patentee; and</DELETED>
                <DELETED>    ``(B) does not mean--</DELETED>
                        <DELETED>    ``(i) ownership of shares or other 
                        interests in a mutual or common investment 
                        fund, unless the owner of such interest 
                        participates in the management of such fund; 
                        or</DELETED>
                        <DELETED>    ``(ii) the proprietary interest of 
                        a policyholder in a mutual insurance company or 
                        a depositor in a mutual savings association, or 
                        a similar proprietary interest, unless the 
                        outcome of the proceeding could substantially 
                        affect the value of such interest;</DELETED>
        <DELETED>    ``(2) the term `patentee' means a party in a civil 
        action that files a pleading subject to the requirements of 
        section 281A;</DELETED>
        <DELETED>    ``(3) the term `proceeding' means all stages of a 
        civil action, including pretrial and trial proceedings and 
        appellate review; and</DELETED>
        <DELETED>    ``(4) the term `ultimate parent entity' has the 
        meaning given the term in section 261A.</DELETED>
<DELETED>    ``(b) Early Disclosure Requirements.--Notwithstanding the 
requirements of section 299B, a patentee shall disclose to the court 
and each adverse party, not later than 14 days after the date on which 
the patentee serves or files the pleading subject to the requirements 
of section 281A--</DELETED>
        <DELETED>    ``(1) the identity of each--</DELETED>
                <DELETED>    ``(A) assignee of the patent or patents at 
                issue, and any ultimate parent entity 
                thereof;</DELETED>
                <DELETED>    ``(B) entity with a right to sublicense to 
                unaffiliated entities or to enforce the patent or 
                patents at issue, and any ultimate parent entity 
                thereof; and</DELETED>
                <DELETED>    ``(C) entity, other than an entity the 
                ultimate parent of which is disclosed under 
                subparagraph (A) or (B), that the patentee knows to 
                have a financial interest in--</DELETED>
                        <DELETED>    ``(i) the patent or patents at 
                        issue; or</DELETED>
                        <DELETED>    ``(ii) the patentee, and any 
                        ultimate parent entity thereof; and</DELETED>
        <DELETED>    ``(2) for each patent that the patentee alleges to 
        be infringed--</DELETED>
                <DELETED>    ``(A) a list of each complaint, 
                counterclaim, or cross-claim filed by the patentee or 
                an affiliate thereof in the United States during the 3-
                year period preceding the date of the filing of the 
                action, and any other complaint, counterclaim, or 
                cross-claim filed in the United States during that 
                period of which the patentee has knowledge, that 
                asserts or asserted such patent, including--</DELETED>
                        <DELETED>    ``(i) the caption;</DELETED>
                        <DELETED>    ``(ii) civil action 
                        number;</DELETED>
                        <DELETED>    ``(iii) the court where the action 
                        was filed; and</DELETED>
                        <DELETED>    ``(iv) if applicable, any court to 
                        which the action was transferred;</DELETED>
                <DELETED>    ``(B) a statement as to whether the patent 
                is subject to an assurance made by the party to a 
                standards development organization to license others 
                under such patent if--</DELETED>
                        <DELETED>    ``(i) the assurance specifically 
                        identifies such patent or claims therein; 
                        and</DELETED>
                        <DELETED>    ``(ii) the allegation of 
                        infringement relates to such standard; 
                        and</DELETED>
                <DELETED>    ``(C) a statement as to whether the 
                Federal Government has imposed specific licensing 
                requirements with respect to such patent.</DELETED>
<DELETED>    ``(c) Disclosure of Financial Interest.--</DELETED>
        <DELETED>    ``(1) Publicly traded.--For purposes of subsection 
        (b)(1)(C), if the financial interest is held by a corporation 
        traded on a public stock exchange, an identification of the 
        name of the corporation and the public exchange listing shall 
        satisfy the disclosure requirement.</DELETED>
        <DELETED>    ``(2) Not publicly traded.--For purposes of 
        subsection (b)(1)(C), if the financial interest is not held by 
        a publicly traded corporation, the disclosure shall satisfy the 
        disclosure requirement if the information identifies--
        </DELETED>
                <DELETED>    ``(A) in the case of a partnership, the 
                name of the partnership, the address of the principal 
                place of business, and the name and correspondence 
                address of the registered agent;</DELETED>
                <DELETED>    ``(B) in the case of a corporation, the 
                name of the corporation, the location of incorporation, 
                and the address of the principal place of business; 
                and</DELETED>
                <DELETED>    ``(C) for each individual, the name and 
                correspondence address of that individual.</DELETED>
<DELETED>    ``(d) Provision of Information to the United States Patent 
and Trademark Office.--Not later than 1 month after the date on which 
the disclosures required under subsection (b) are made, the patentee 
shall provide to the United States Patent and Trademark Office a filing 
containing the information disclosed pursuant to subsection 
(b)(1).</DELETED>
<DELETED>    ``(e) Confidential Information.--</DELETED>
        <DELETED>    ``(1) In general.--A patentee required to disclose 
        information under subsection (b) may file, under seal, 
        information believed to be confidential, with a motion setting 
        forth good cause for such sealing.</DELETED>
        <DELETED>    ``(2) Home address information.--For purposes of 
        this section, the home address of an individual shall be 
        considered to be confidential information.''.</DELETED>
        <DELETED>    (2) Conforming amendment.--The table of sections 
        for chapter 29 of title 35, United States Code, is amended by 
        inserting after the item relating to section 281 the following 
        new items:</DELETED>

<DELETED>``281A. Pleading requirements for patent infringement actions.
<DELETED>``281B. Early disclosure requirements for patent infringement 
                            actions.''.
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall take effect on the date of enactment of this Act and shall apply 
to any action for which a complaint is filed on or after that 
date.</DELETED>

<DELETED>SEC. 4. CUSTOMER-SUIT EXCEPTION.</DELETED>

<DELETED>    (a) In General.--Chapter 29 of title 35, United States 
Code, is amended by adding at the end the following:</DELETED>
<DELETED>``Sec. 299A. Customer stay</DELETED>
<DELETED>    ``(a) Definitions.--In this section--</DELETED>
        <DELETED>    ``(1) the term `covered customer' means a retailer 
        or end user that is accused of infringing a patent or patents 
        in dispute based on--</DELETED>
                <DELETED>    ``(A) the sale, or offer for sale, of a 
                covered product or covered process without material 
                modification of the product or process in a manner that 
                is alleged to infringe a patent or patents in dispute; 
                or</DELETED>
                <DELETED>    ``(B) the use by such retailer, the 
                retailer's end user customer, or an end user of a 
                covered product or covered process without material 
                modification of the product or process in a manner that 
                is alleged to infringe a patent or patents in 
                dispute;</DELETED>
        <DELETED>    ``(2) the term `covered manufacturer' means a 
        person who manufactures or supplies, or causes the manufacture 
        or supply of, a covered product or covered process, or a 
        relevant part thereof;</DELETED>
        <DELETED>    ``(3) the term `covered process' means a process, 
        method, or a relevant part thereof, that is alleged to infringe 
        the patent or patents in dispute where such process, method, or 
        relevant part thereof is implemented by an apparatus, material, 
        system, software or other instrumentality that is provided by 
        the covered manufacturer;</DELETED>
        <DELETED>    ``(4) the term `covered product' means a 
        component, product, system, service, or a relevant part 
        thereof, that--</DELETED>
                <DELETED>    ``(A) is alleged to infringe the patent or 
                patents in dispute; or</DELETED>
                <DELETED>    ``(B) implements a process alleged to 
                infringe the patent or patents in dispute;</DELETED>
        <DELETED>    ``(5) for purposes of this section, the term `end 
        user' shall include an affiliate of such an end user, but shall 
        not include an entity that manufactures or causes the 
        manufacture of a covered product or covered process or a 
        relevant part thereof;</DELETED>
        <DELETED>    ``(6) the term `retailer' means an entity that 
        generates its revenues predominately through the sale to the 
        public of consumer goods or services, or an affiliate of such 
        entity, but shall not include an entity that manufactures or 
        causes the manufacture of a covered product or covered process 
        or a relevant part thereof; and</DELETED>
        <DELETED>    ``(7) for purposes of the definitions in 
        paragraphs (5) and (6), the terms `use' and `sale' mean the use 
        and the sale, respectively, within the meanings given those 
        terms under section 271.</DELETED>
<DELETED>    ``(b) Motion for Stay.--In a civil action in which a party 
asserts a claim for relief arising under any Act of Congress relating 
to patents (other than an action that includes a cause of action 
described in section 271(e)), the court shall grant a motion to stay at 
least the portion of the action against a covered customer that relates 
to infringement of a patent involving a covered product or covered 
process if--</DELETED>
        <DELETED>    ``(1) the covered manufacturer is a party to the 
        action or a separate action in a Federal court of the United 
        States involving the same patent or patents relating to the 
        same covered product or covered process;</DELETED>
        <DELETED>    ``(2) the covered customer agrees to be bound as 
        to issues determined in an action described in paragraph (1) 
        without a full and fair opportunity to separately litigate any 
        such issue, but only as to those issues for which all other 
        elements of the common law doctrine of issue preclusion are 
        met; and</DELETED>
        <DELETED>    ``(3) the motion is filed after the first pleading 
        in the action but not later than the later of--</DELETED>
                <DELETED>    ``(A) 120 days after service of the first 
                pleading or paper in the action that specifically 
                identifies the covered product or covered process as a 
                basis for the alleged infringement of the patent by the 
                covered customer, and specifically identifies how the 
                covered product or covered process is alleged to 
                infringe the patent; or</DELETED>
                <DELETED>    ``(B) the date on which the first 
                scheduling order in the case is entered.</DELETED>
<DELETED>    ``(c) Manufacturer Consent in Certain Cases.--If the 
covered manufacturer has been made a party to the action on motion by 
the covered customer, then a motion under subsection (b) may only be 
granted if the covered manufacturer and the covered customer agree in 
writing to the stay.</DELETED>
<DELETED>    ``(d) Lift of Stay.--</DELETED>
        <DELETED>    ``(1) In general.--A stay entered under this 
        section may be lifted upon grant of a motion based on a showing 
        that--</DELETED>
                <DELETED>    ``(A) the action involving the covered 
                manufacturer will not resolve major issues in the suit 
                against the covered customer, such as that a covered 
                product or covered process identified in the motion to 
                lift the stay is not a material part of the claimed 
                invention or inventions in the patent or patents in 
                dispute; or</DELETED>
                <DELETED>    ``(B) the stay unreasonably prejudices or 
                would be manifestly unjust to the party seeking to lift 
                the stay.</DELETED>
        <DELETED>    ``(2) Separate actions.--In the case of a stay 
        entered under this section based on the participation of the 
        covered manufacturer in a separate action described in 
        subsection (b)(1), a motion under paragraph (1) may only be 
        granted if the court in such separate action determines that 
        the showing required under paragraph (1) has been 
        made.</DELETED>
<DELETED>    ``(e) Waiver of Estoppel Effect.--If, following the grant 
of a motion to stay under this section, the covered manufacturer in an 
action described in subsection (b)(1)--</DELETED>
        <DELETED>    ``(1) obtains or consents to entry of a consent 
        judgment involving one or more of the issues that gave rise to 
        the stay; or</DELETED>
        <DELETED>    ``(2) fails to prosecute to a final, non-
        appealable judgment a final decision as to one or more of the 
        issues that gave rise to the stay,</DELETED>
<DELETED>the court may, upon motion, determine that such consent 
judgment or unappealed final decision shall not be binding on the 
covered customer with respect to one or more of the issues that gave 
rise to the stay based on a showing that such an outcome would 
unreasonably prejudice or be manifestly unjust to the covered customer 
in light of the circumstances of the case.</DELETED>
<DELETED>    ``(f) Rule of Construction.--Nothing in this section shall 
be construed to limit the ability of a court to grant any stay, expand 
any stay granted pursuant to this section, or grant any motion to 
intervene, if otherwise permitted by law.''.</DELETED>
<DELETED>    (b) Conforming Amendment.--The table of sections for 
chapter 29 of title 35, United States Code, is amended by adding at the 
end the following:</DELETED>

<DELETED>``299A. Customer stay.''.

SEC. 5. DISCOVERY LIMITS.

<DELETED>    (a) Amendment.--Chapter 29 of title 35, United States 
Code, as amended by section 4, is amended by adding at the end the 
following:</DELETED>
<DELETED>``Sec. 299B. Discovery in patent infringement action</DELETED>
<DELETED>    ``(a) Discovery in Patent Infringement Action.--</DELETED>
        <DELETED>    ``(1) In general.--Except as provided in 
        subsections (b) and (c), in a civil action arising under any 
        Act of Congress relating to patents, discovery shall be stayed 
        during the pendency of 1 or more motions described in paragraph 
        (2) if the motion or motions were filed prior to the first 
        responsive pleading.</DELETED>
        <DELETED>    ``(2) Motions described.--The motions described in 
        this paragraph are--</DELETED>
                <DELETED>    ``(A) a motion to dismiss;</DELETED>
                <DELETED>    ``(B) a motion to transfer venue; 
                and</DELETED>
                <DELETED>    ``(C) a motion to sever accused 
                infringers.</DELETED>
<DELETED>    ``(b) Discretion To Expand Scope of Discovery.--</DELETED>
        <DELETED>    ``(1) Resolution of motions.--A court may allow 
        limited discovery necessary to resolve a motion described in 
        subsection (a) or a motion for preliminary relief properly 
        raised by a party before or during the pendency of a motion 
        described in subsection (a).</DELETED>
        <DELETED>    ``(2) Additional discovery.--On motion, a court 
        may allow additional discovery if the court finds that such 
        discovery is necessary to preserve evidence or otherwise 
        prevent specific prejudice to a party.</DELETED>
<DELETED>    ``(c) Exclusion From Discovery Limitation.--</DELETED>
        <DELETED>    ``(1) Voluntary exclusion.--The parties to an 
        action described in subsection (a) may voluntarily consent to 
        be excluded, in whole or in part, from the limitation on 
        discovery under subsection (a).</DELETED>
        <DELETED>    ``(2) Claims under section 271(e).--This section 
        shall not apply to a civil action that includes a claim for 
        relief arising under section 271(e).</DELETED>
<DELETED>    ``(d) Rules of Construction.--</DELETED>
        <DELETED>    ``(1) Timeline for responsive pleadings.--Nothing 
        in this section shall be construed to alter the time provided 
        by the Federal Rules of Civil Procedure for the filing of 
        responsive pleadings.</DELETED>
        <DELETED>    ``(2) Exchange of contentions.--Nothing in this 
        section shall prohibit a court from ordering or local rules 
        from requiring the exchange of contentions regarding 
        infringement, non-infringement, invalidity or other issues, by 
        interrogatories or other written initial disclosures, at an 
        appropriate time determined by the court.''.</DELETED>
<DELETED>    (b) Conforming Amendment.--The table of sections for 
chapter 29 of title 35, United States Code, as amended by section 4, is 
amended by inserting after the item relating to section 299A the 
following:</DELETED>

<DELETED>``299B. Discovery in patent infringement action.''.
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall take effect on the date of enactment of this Act and shall apply 
to any action for which a complaint is filed on or after that 
date.</DELETED>

<DELETED>SEC. 6. PROCEDURES AND PRACTICES TO IMPLEMENT RECOMMENDATIONS 
              OF THE JUDICIAL CONFERENCE.</DELETED>

<DELETED>    (a) Judicial Conference Rules and Procedures on Discovery 
Burdens and Costs.--</DELETED>
        <DELETED>    (1) Rules and procedures.--The Judicial Conference 
        of the United States, using existing resources, should develop 
        rules and procedures to implement the discovery proposals 
        described in paragraph (2) to address concerns regarding the 
        asymmetries in discovery burdens and costs that may arise in a 
        civil action arising under any Act of Congress relating to 
        patents.</DELETED>
        <DELETED>    (2) Rules and procedures to be considered.--The 
        rules and procedures to be developed under paragraph (1) should 
        address each of the following:</DELETED>
                <DELETED>    (A) Discovery of core documentary 
                evidence.--To what extent each party to the action is 
                entitled to receive core documentary evidence and 
                should be responsible for the costs of producing core 
                documentary evidence within the possession or control 
                of each such party, and to what extent each party to 
                the action may seek noncore documentary discovery as 
                otherwise provided in the Federal Rules of Civil 
                Procedure.</DELETED>
                <DELETED>    (B) Electronic communication.--If the 
                parties request discovery of electronic communication, 
                how such discovery should be phased to occur relative 
                to the exchange of initial disclosures and core 
                documentary evidence, and appropriate limitations to 
                apply to such discovery.</DELETED>
                <DELETED>    (C) Additional document discovery.--The 
                manner and extent to which the following should 
                apply:</DELETED>
                        <DELETED>    (i) In general.--Each party to the 
                        action may seek any additional document 
                        discovery beyond core documentary evidence as 
                        permitted under the Federal Rules of Civil 
                        Procedure, if such party bears the reasonable 
                        costs, including reasonable attorney's fees, of 
                        the additional document discovery.</DELETED>
                        <DELETED>    (ii) Requirements for additional 
                        document discovery.--Unless the parties 
                        mutually agree otherwise, no party may be 
                        permitted additional document discovery unless 
                        such a party posts a bond, or provides other 
                        security, in an amount sufficient to cover the 
                        expected costs of such additional document 
                        discovery, or makes a showing to the court that 
                        such party has the financial capacity to pay 
                        the costs of such additional document 
                        discovery.</DELETED>
                        <DELETED>    (iii) Good cause modification.--A 
                        court, upon motion and for good cause shown, 
                        may modify the requirements of subparagraphs 
                        (A) and (B) and any definition under paragraph 
                        (3). Not later than 30 days after the pretrial 
                        conference under rule 16 of the Federal Rules 
                        of Civil Procedure, the parties shall jointly 
                        submit any proposed modifications of the 
                        requirements of subparagraphs (A) and (B) and 
                        any definition under paragraph (3), unless the 
                        parties do not agree, in which case each party 
                        shall submit any proposed modification of such 
                        party and a summary of the disagreement over 
                        the modification.</DELETED>
                        <DELETED>    (iv) Computer code.--A court, upon 
                        motion and for good cause shown, may determine 
                        that computer code should be included in the 
                        discovery of core documentary evidence. The 
                        discovery of computer code shall occur after 
                        the parties have exchanged initial disclosures 
                        and other core documentary evidence.</DELETED>
                <DELETED>    (D) Discovery sequence and scope.--The 
                manner and extent to which the parties shall discuss 
                and address in the written report filed pursuant to 
                rule 26(f) of the Federal Rules of Civil Procedure the 
                views and proposals of each party on the 
                following:</DELETED>
                        <DELETED>    (i) When the discovery of core 
                        documentary evidence should be 
                        completed.</DELETED>
                        <DELETED>    (ii) Whether additional document 
                        discovery will be sought under subparagraph 
                        (C).</DELETED>
                        <DELETED>    (iii) Any issues about 
                        infringement, invalidity, or damages that, if 
                        resolved before the additional discovery 
                        described in subparagraph (C) commences, might 
                        simplify or streamline the case.</DELETED>
        <DELETED>    (3) Scope of documentary evidence.--In developing 
        rules or procedures under this section, the Judicial Conference 
        should consider which kinds of evidence constitute ``core 
        documentary evidence''.</DELETED>
        <DELETED>    (4) Definitions.--In this subsection the term 
        ``electronic communication'' means any form of electronic 
        communication, including email, text message, or instant 
        message.</DELETED>
<DELETED>    (b) Judicial Conference Patent Case Management.--The 
Judicial Conference of the United States, using existing resources, 
should develop case management procedures to be implemented by the 
United States district courts and the United States Court of Federal 
Claims for any civil action arising under any Act of Congress relating 
to patents, including initial disclosure and early case management 
conference practices that--</DELETED>
        <DELETED>    (1) will identify any potential dispositive issues 
        of the case; and</DELETED>
        <DELETED>    (2) focus on early summary judgment motions when 
        resolution of issues may lead to expedited disposition of the 
        case.</DELETED>

SEC. 7. FEES AND OTHER EXPENSES.

<DELETED>    (a) Sense of Congress.--It is the sense of Congress that, 
in patent cases, reasonable attorney fees should be paid by a non-
prevailing party whose litigation position or conduct is not 
objectively reasonable. As the Supreme Court wrote in adopting this 
legal standard in the context of fee shifting under section 1447 of 
title 28, United States Code, this standard is intended to strike a 
balance; in patent cases, a more appropriate balance between protecting 
the right of a patent holder to enforce its patent on the one hand, and 
deterring abuses in patent litigation and threats thereof on the 
other.</DELETED>
<DELETED>    (b) Amendment.--Section 285 of title 35, United States 
Code, is amended to read as follows:</DELETED>
<DELETED>``Sec. 285. Fees and other expenses</DELETED>
<DELETED>    ``(a) Award.--In connection with a civil action in which 
any party asserts a claim for relief arising under any Act of Congress 
relating to patents, upon motion by a prevailing party, the court shall 
determine whether the position of the non-prevailing party was 
objectively reasonable in law and fact, and whether the conduct of the 
non-prevailing party was objectively reasonable. If the court finds 
that the position of the non-prevailing party was not objectively 
reasonable in law or fact or that the conduct of the non-prevailing 
party was not objectively reasonable, the court shall award reasonable 
attorney fees to the prevailing party unless special circumstances 
would make an award unjust.</DELETED>
<DELETED>    ``(b) Covenant Not To Sue.--A party to a civil action who 
asserts a claim for relief arising under any Act of Congress relating 
to patents against another party, and who subsequently unilaterally (i) 
seeks dismissal of the action without consent of the other party and 
(ii) extends to such other party a covenant not to sue for infringement 
with respect to the patent or patents at issue, may be the subject of a 
motion for attorney fees under subsection (a) as if it were a non-
prevailing party, unless the party asserting such claim would have been 
entitled, at the time that such covenant was extended, to dismiss 
voluntarily the action without a court order under rule 41 of the 
Federal Rules of Civil Procedure, or the interests of justice require 
otherwise.</DELETED>
<DELETED>    ``(c) Recovery of Award.--</DELETED>
        <DELETED>    ``(1) Certification; disclosure of interested 
        parties.--</DELETED>
                <DELETED>    ``(A) Initial statement.--A party 
                defending against a claim of infringement may file, not 
                later than 14 days before a scheduling conference is to 
                be held or a scheduling order is due under rule 16(b) 
                of the Federal Rules of Civil Procedure, a statement 
                that such party holds a good faith belief, based on 
                publicly-available information and any other 
                information known to such party, that the primary 
                business of the party alleging infringement is the 
                assertion and enforcement of patents or the licensing 
                resulting therefrom.</DELETED>
                <DELETED>    ``(B) Certification.--Not later than 45 
                days after being served with an initial statement under 
                subparagraph (A), a party alleging infringement shall 
                file a certification that--</DELETED>
                        <DELETED>    ``(i) establishes and certifies to 
                        the court, under oath, that it will have 
                        sufficient funds available to satisfy any award 
                        of reasonable attorney fees under this section 
                        if an award is assessed;</DELETED>
                        <DELETED>    ``(ii) demonstrates that its 
                        primary business is not the assertion and 
                        enforcement of patents or the licensing 
                        resulting therefrom;</DELETED>
                        <DELETED>    ``(iii) identifies interested 
                        parties, if any, as defined in paragraph (2) of 
                        this subsection; or</DELETED>
                        <DELETED>    ``(iv) states that it has no such 
                        interested parties.</DELETED>
                <DELETED>A party alleging infringement shall have an 
                ongoing obligation to supplement its certification 
                under this subparagraph within 30 days after a material 
                change to the information provided in its 
                certification.</DELETED>
                <DELETED>    ``(C) Notice to interested party.--A party 
                that files a certification under subparagraph (B)(iii) 
                shall, prior to filing the certification, provide each 
                identified interested party actual notice in writing by 
                service of notice in any district where the interested 
                party may be found, such that jurisdiction shall be 
                established over each interested party to the action 
                for purposes of enforcing an award of attorney fees 
                under this section, consistent with the Constitution of 
                the United States. The notice shall identify the 
                action, the parties, the patents at issue, and the 
                interest qualifying the party to be an interested 
                party. The notice shall inform the recipient that the 
                recipient may be held accountable under this subsection 
                for any award of attorney fees, or a portion thereof, 
                resulting from the action in the event the party 
                alleging infringement cannot satisfy the full amount of 
                such an award, unless the recipient renounces its 
                interest pursuant to subparagraph (E) or is otherwise 
                exempt from the applicability of this 
                subsection.</DELETED>
                <DELETED>    ``(D) Accountability for interested 
                parties.--Any interested parties who are timely served 
                with actual notice pursuant to subparagraph (C) and do 
                not renounce their interests pursuant to subparagraph 
                (E) or are not otherwise exempt from the applicability 
                of this subsection may be held accountable for any 
                fees, or a portion thereof, awarded under this section 
                in the event that the party alleging infringement 
                cannot satisfy the full amount of the award. If a true 
                and correct certification under clause (i) or (ii) of 
                subparagraph (B) is timely filed with the court, 
                interested parties shall not be subject to this 
                subparagraph.</DELETED>
                <DELETED>    ``(E) Renunciation of interest.--Any 
                recipient of a notice under subparagraph (C) may submit 
                a statement of renunciation of interest in a binding 
                document with notice to the court and parties in the 
                action not later than 120 days after receipt of the 
                notice under subparagraph (C). The statement shall be 
                required to renounce only such interest as would 
                qualify the recipient as an interested party.</DELETED>
                <DELETED>    ``(F) Institutions of higher education 
                exception.--Any institution of higher education (as 
                defined in section 101(a) of the Higher Education Act 
                of 1965 (20 U.S.C. 1001(a)) or under equivalent laws in 
                foreign jurisdictions), or a non-profit technology 
                transfer organization whose primary purpose is to 
                facilitate the commercialization of technologies 
                developed by 1 or more institutions of higher 
                education, may exempt itself from the applicability of 
                this subsection by filing a certification that it 
                qualifies for the exception provided for in this 
                subparagraph with the court and providing notice to the 
                parties.</DELETED>
                <DELETED>    ``(G) Interest of justice exception.--Any 
                recipient of a notice under subparagraph (C) may 
                intervene in the action for purposes of contesting its 
                identification as an interested party or its liability 
                under this subsection, and a court may exempt any party 
                identified as an interested party from the 
                applicability of this subsection as the interest of 
                justice requires.</DELETED>
        <DELETED>    ``(2) Interested party.--In this section, the term 
        `interested party'--</DELETED>
                <DELETED>    ``(A) means a person who has a substantial 
                financial interest related to the proceeds from any 
                settlement, license, or damages award resulting from 
                the enforcement of the patent in the action by the 
                party alleging infringement;</DELETED>
                <DELETED>    ``(B) does not include an attorney or law 
                firm providing legal representation in the action if 
                the sole basis for the financial interest of the 
                attorney or law firm in the outcome of the action 
                arises from the attorney or law firm's receipt of 
                compensation reasonably related to the provision of the 
                legal representation;</DELETED>
                <DELETED>    ``(C) does not include a person who has 
                assigned all right, title, and interest in a patent, 
                except for passive receipt of income, to an entity 
                described in paragraph (1)(F), or who has a right to 
                receive any portion of such passive income; 
                and</DELETED>
                <DELETED>    ``(D) does not include a person who would 
                be an interested party under subparagraph (A) but whose 
                financial interest is based solely on an equity or 
                security interest established when the party alleging 
                infringement's primary business was not the assertion 
                and enforcement of patents or the licensing resulting 
                therefrom.</DELETED>
<DELETED>    ``(d) Claims Under Section 271(e).--</DELETED>
        <DELETED>    ``(1) Applicability.--Subsections (a), (b), and 
        (c) shall not apply to a civil action that includes a claim for 
        relief arising under section 271(e).</DELETED>
        <DELETED>    ``(2) Award in certain claims under section 
        271(e).--In a civil action that includes a claim for relief 
        arising under section 271(e), the court may in exceptional 
        cases award reasonable attorney fees to the prevailing 
        party.''.</DELETED>
<DELETED>    (c) Conforming Amendment and Amendment.--</DELETED>
        <DELETED>    (1) Conforming amendment.--The item relating to 
        section 285 of the table of sections for chapter 29 of title 
        35, United States Code, is amended to read as 
        follows:</DELETED>

<DELETED>``285. Fees and other expenses.''.
        <DELETED>    (2) Amendment.--Section 273 of title 35, United 
        States Code, is amended by striking subsections (f) and 
        (g).</DELETED>
<DELETED>    (d) Effective Date.--The amendments made by this section 
shall take effect on the date of enactment of this Act and shall apply 
to any action filed on or after such date.</DELETED>

<DELETED>SEC. 8. REQUIREMENT OF CLARITY AND SPECIFICITY IN DEMAND 
              LETTERS.</DELETED>

<DELETED>    (a) In General.--Chapter 29 of title 35, United States 
Code, as amended by section 5, is amended by adding at the end the 
following:</DELETED>
<DELETED>``Sec. 299C. Pre-suit written notice</DELETED>
<DELETED>    ``(a) Applicability.--Subsection (b) shall not apply--
</DELETED>
        <DELETED>    ``(1) to written communication between parties--
        </DELETED>
                <DELETED>    ``(A) regarding existing licensing 
                agreements;</DELETED>
                <DELETED>    ``(B) as part of an ongoing licensing 
                negotiation, provided that the initial written notice 
                complied with the requirements of subsection (b) of 
                this section; or</DELETED>
                <DELETED>    ``(C) sent after the initial written 
                notice, provided that the initial written notice 
                complied with the requirements of subsection (b) of 
                this section; or</DELETED>
        <DELETED>    ``(2) if the court determines it is in the 
        interest of justice to waive the requirements of subsection 
        (b).</DELETED>
<DELETED>    ``(b) Written Notification Requirements.--</DELETED>
        <DELETED>    ``(1) In general.--In a civil action alleging 
        infringement of a patent in which the plaintiff has provided 
        written notice of the accusation of infringement to the party 
        accused of infringement prior to filing the action, the initial 
        written notice shall contain the information required under 
        paragraph (2) or be subject to paragraph (3).</DELETED>
        <DELETED>    ``(2) Required information provided in initial 
        written notice.--The initial written notice described in 
        paragraph (1) shall contain, at a minimum--</DELETED>
                <DELETED>    ``(A) an identification of--</DELETED>
                        <DELETED>    ``(i) each patent believed to be 
                        infringed, including the patent number; 
                        and</DELETED>
                        <DELETED>    ``(ii) at least one claim of each 
                        patent that is believed to be 
                        infringed;</DELETED>
                <DELETED>    ``(B) an identification of each product, 
                process, apparatus, or chemical composition, including 
                any manufacturer thereof, that is believed to infringe 
                one or more claims of each patent under subparagraph 
                (A);</DELETED>
                <DELETED>    ``(C) a clear and detailed description of 
                the reasons why the plaintiff believes each patent 
                identified under subparagraph (A) is 
                infringed;</DELETED>
                <DELETED>    ``(D) notice to the intended recipient 
                that the intended recipient may have the right to a 
                stay of any suit in accordance with section 
                299A;</DELETED>
                <DELETED>    ``(E) the identity of any person with the 
                right to enforce each patent under subparagraph (A); 
                and</DELETED>
                <DELETED>    ``(F) if compensation is proposed, a short 
                and plain statement as to how that proposed 
                compensation was determined.</DELETED>
        <DELETED>    ``(3) Additional time to respond.--If the initial 
        written notice provided to the defendant prior to the filing of 
        the civil action did not contain the information required by 
        paragraph (2), the defendant's time to respond to the complaint 
        shall be extended by an additional 30 days.''.</DELETED>
<DELETED>    (b) Conforming Amendment.--The table of sections for 
chapter 29 of title 35, United States Code, as amended by section 5, is 
amended by adding at the end the following:</DELETED>

<DELETED>``299C. Pre-suit written notice.''.
<DELETED>    (c) Willful Infringement.--Section 284 of title 35, United 
States Code, is amended--</DELETED>
        <DELETED>    (1) in the first undesignated paragraph, by 
        striking ``Upon finding'' and inserting ``(a) In General.--Upon 
        finding'';</DELETED>
        <DELETED>    (2) in the second undesignated paragraph, by 
        striking ``When the damages'' and inserting ``(b) Assessment by 
        Court; Treble Damages.--When the damages'';</DELETED>
        <DELETED>    (3) by inserting after subsection (b), as 
        designated by subparagraph (B), the following:</DELETED>
<DELETED>    ``(c) Willful Infringement.--A claimant seeking to 
establish willful infringement may not rely on evidence of pre-suit 
notification of infringement unless that notification complies with the 
standards set out in section 299C(b)(2).''; and</DELETED>
        <DELETED>    (4) in the last undesignated paragraph, by 
        striking ``The court'' and inserting ``(d)  Expert Testimony.--
        The court''.</DELETED>
<DELETED>    (d) Effective Date.--The amendments made by this section 
shall take effect on the date that is 1 year after the date of 
enactment of this Act and shall apply to any action for which a 
complaint is filed on or after that date.</DELETED>

<DELETED>SEC. 9. ABUSIVE DEMAND LETTERS.</DELETED>

<DELETED>    (a) Bad-Faith Demand Letters.--Chapter 29 of title 35, 
United States Code, as amended by section 8, is amended by adding at 
the end the following:</DELETED>
<DELETED>``Sec. 299D. Bad-faith demand letters</DELETED>
<DELETED>    ``(a) Definition.--In this section, the term `affiliated 
person' means a person affiliated with the intended recipient of a 
written communication.</DELETED>
<DELETED>    ``(b) Civil Penalties for Certain Unfair or Deceptive Acts 
or Practices in Connection With Abusive Demand Letters.--A person who 
commits an unfair or deceptive act or practice within the meaning of 
section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 
45(a)(1)), in connection with the assertion of a United States patent, 
and who engages in the widespread sending of written communications 
representing that the intended recipients, or any persons affiliated 
with those recipients, are or may be infringing, or have or may have 
infringed, the patent and may bear liability or owe compensation to 
another, shall be deemed to have violated a rule defining an unfair or 
deceptive act or practice described under section 18(a)(1)(B) of the 
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)) if--</DELETED>
        <DELETED>    ``(1)(A) the communications falsely--</DELETED>
                <DELETED>    ``(i) represent that administrative or 
                judicial relief has been sought against the recipient 
                or others; or</DELETED>
                <DELETED>    ``(ii) threaten litigation if compensation 
                is not paid, the infringement issue is not otherwise 
                resolved, or the communication is not responded to; 
                and</DELETED>
        <DELETED>    ``(B) there is a pattern of false statements or 
        threats described in subparagraph (A) having been made without 
        litigation or other relief then having been pursued;</DELETED>
        <DELETED>    ``(2) the assertions contained in the 
        communications lack a reasonable basis in fact or law, 
        because--</DELETED>
                <DELETED>    ``(A) the person asserting the patent is 
                not a person, or does not represent a person, with the 
                current right to license the patent to, or to enforce 
                the patent against, the intended recipients or any 
                affiliated persons;</DELETED>
                <DELETED>    ``(B) the communications seek compensation 
                on account of activities undertaken after the patent 
                has expired;</DELETED>
                <DELETED>    ``(C) the communications seek compensation 
                for a patent that has been held to be invalid or 
                unenforceable in a final judicial or administrative 
                proceeding that is unappealable or for which any 
                opportunity for appeal is no longer 
                available;</DELETED>
                <DELETED>    ``(D) the communications seek compensation 
                for activities by the recipient that the sender knows 
                do not infringe the patent because such activities are 
                authorized by the patentee;</DELETED>
                <DELETED>    ``(E) the communications falsely represent 
                that an investigation of the recipient's alleged 
                infringement has occurred; or</DELETED>
                <DELETED>    ``(F) the communications falsely state 
                that litigation has been filed against, or a license 
                has been paid by persons similarly situated to the 
                recipient; or</DELETED>
        <DELETED>    ``(3) the content of the written communications is 
        likely to materially mislead a reasonable recipient because the 
        content fails to include facts reasonably necessary to inform 
        the recipient--</DELETED>
                <DELETED>    ``(A) of the identity of the person 
                asserting a right to license the patent to, or enforce 
                the patent against, the intended recipient or any 
                affiliated person;</DELETED>
                <DELETED>    ``(B) of the patent issued by the United 
                States Patent and Trademark Office alleged to have been 
                infringed; and</DELETED>
                <DELETED>    ``(C) if infringement or the need to pay 
                compensation for a license is alleged, of an 
                identification of at least one product, service, or 
                other activity of the recipient that is alleged to 
                infringe the identified patent or patents and, unless 
                the information is not readily accessible, an 
                explanation of the basis for such allegation.</DELETED>
<DELETED>    ``(c) Enforcement by Federal Trade Commission.--</DELETED>
        <DELETED>    ``(1) Powers of commission.--The Federal Trade 
        Commission shall enforce this section in the same manner, by 
        the same means, and with the same jurisdiction, powers, and 
        duties as though all applicable terms and provisions of the 
        Federal Trade Commission Act (15 U.S.C. 41 et seq.) were 
        incorporated into and made a part of this section.</DELETED>
        <DELETED>    ``(2) Privileges and immunities.--Any person who 
        engages in an act or practice described in subsection (b) shall 
        be subject to the penalties and entitled to the privileges and 
        immunities provided in the Federal Trade Commission Act (15 
        U.S.C. 41 et seq.).''.</DELETED>
<DELETED>    (b) Technical and Conforming Amendment.--The table of 
sections for chapter 29 of title 35, United States Code, as amended by 
section 8, is amended by inserting after the item relating to section 
299C the following:</DELETED>

<DELETED>``299D. Bad-faith demand letters.''.

<DELETED>SEC. 10. TRANSPARENCY OF PATENT TRANSFER.</DELETED>

<DELETED>    (a) Patent and Trademark Office Proceedings.--</DELETED>
        <DELETED>    (1) In general.--Chapter 26 of title 35, United 
        States Code, is amended by inserting after section 261 the 
        following:</DELETED>
<DELETED>``Sec. 261A. Disclosure of information relating to patent 
              ownership</DELETED>
<DELETED>    ``(a) Definitions.--In this section:</DELETED>
        <DELETED>    ``(1) Period of noncompliance.--The term `period 
        of noncompliance' refers to a period of time during which the 
        assignee or the ultimate parent entity of an assignee of a 
        patent has not been disclosed to the United States Patent and 
        Trademark Office in accordance with this section.</DELETED>
        <DELETED>    ``(2) Ultimate patent entity.--</DELETED>
                <DELETED>    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `ultimate parent entity' has 
                the meaning given such term in section 801.1(a)(3) of 
                title 16, Code of Federal Regulations, or any successor 
                regulation.</DELETED>
                <DELETED>    ``(B) Modification of definition.--The 
                Director may by regulation modify the definition of the 
                term `ultimate parent entity'.</DELETED>
<DELETED>    ``(b) Requirement To Disclose Assignment.--An assignment 
of all substantial rights in an issued patent shall be recorded in the 
Patent and Trademark Office--</DELETED>
        <DELETED>    ``(1) not later than the date on which the patent 
        is issued; and</DELETED>
        <DELETED>    ``(2) when any subsequent assignment is made that 
        results in a change to the ultimate parent entity--</DELETED>
                <DELETED>    ``(A) not later than 3 months after the 
                date on which such assignment is made; or</DELETED>
                <DELETED>    ``(B) in the case of an assignment made as 
                part of a corporate acquisition that meets the 
                reporting thresholds under section 7A(a)(2) of the 
                Clayton Act (15 U.S.C. 18a(a)(2)), not later than 6 
                months after the closing date of such 
                acquisition.</DELETED>
<DELETED>    ``(c) Disclosure Requirements.--A disclosure under 
subsection (b) shall include the name of the assignee and the ultimate 
parent entity of the assignee.</DELETED>
<DELETED>    ``(d) Failure To Comply.--In a civil action in which a 
party asserts a claim for infringement of a patent, if there was a 
failure to comply with subsection (b) for the patent--</DELETED>
        <DELETED>    ``(1) the party asserting infringement of the 
        patent may not recover increased damages under section 284 or 
        attorney fees under section 285 with respect to infringing 
        activities taking place during any period of noncompliance, 
        unless the denial of such damages or fees would be manifestly 
        unjust; and</DELETED>
        <DELETED>    ``(2) the court shall award to a prevailing 
        accused infringer reasonable attorney fees and expenses 
        incurred in discovering the identity of any undisclosed entity 
        required to be disclosed under subsection (b), unless such 
        sanctions would be manifestly unjust.''.</DELETED>
        <DELETED>    (2) Applicability.--The amendment made by 
        paragraph (1) shall apply to any patent for which a notice of 
        allowance is issued on or after the date of enactment of this 
        Act.</DELETED>
        <DELETED>    (3) Conforming amendment.--The table of sections 
        for chapter 26 of title 35, United States Code, is amended by 
        adding at the end the following new item:</DELETED>

<DELETED>``261A. Disclosure of information relating to patent 
                            ownership.''.
<DELETED>    (b) Regulations.--The Director may promulgate such 
regulations as are necessary to establish a registration fee in an 
amount sufficient to recover the estimated costs of administering 
section 261A of title 35, United States Code, as added by subsection 
(a), to facilitate the collection and maintenance of the information 
required by the amendments made by this section and section 3(b) of 
this Act, and to ensure the timely disclosure of such information to 
the public.</DELETED>

<DELETED>SEC. 11. PROTECTION OF INTELLECTUAL PROPERTY LICENSES IN 
              BANKRUPTCY.</DELETED>

<DELETED>    (a) In General.--Section 1522 of title 11, United States 
Code, is amended by adding at the end the following:</DELETED>
<DELETED>    ``(e) Section 365(n) shall apply to cases under this 
chapter. If the foreign representative rejects or repudiates a contract 
under which the debtor is a licensor of intellectual property, the 
licensee under such contract shall be entitled to make the election and 
exercise the rights described in section 365(n).''.</DELETED>
<DELETED>    (b) Trademarks.--</DELETED>
        <DELETED>    (1) Amendment.--Section 101(35A) of title 11, 
        United States Code, is amended--</DELETED>
                <DELETED>    (A) in subparagraph (E), by striking 
                ``or'';</DELETED>
                <DELETED>    (B) in subparagraph (F), by adding ``or'' 
                at the end; and</DELETED>
                <DELETED>    (C) by adding after subparagraph (F) the 
                following new subparagraph:</DELETED>
                <DELETED>    ``(G) a trademark, service mark, or trade 
                name, as those terms are defined in section 45 of the 
                Act of July 5, 1946 (commonly referred to as the 
                `Trademark Act of 1946' (15 U.S.C. 1127));''.</DELETED>
        <DELETED>    (2) Conforming amendment.--Section 365(n)(2) of 
        title 11, United States Code, is amended--</DELETED>
                <DELETED>    (A) in subparagraph (B)--</DELETED>
                        <DELETED>    (i) by striking ``royalty 
                        payments'' and inserting ``royalty or other 
                        payments''; and</DELETED>
                        <DELETED>    (ii) by striking ``and'' after the 
                        semicolon;</DELETED>
                <DELETED>    (B) in subparagraph (C), by striking the 
                period at the end of clause (ii) and inserting ``; 
                and''; and</DELETED>
                <DELETED>    (C) by adding at the end the following new 
                subparagraph:</DELETED>
                <DELETED>    ``(D) in the case of a trademark, service 
                mark, or trade name, the licensee shall not be relieved 
                of any of its obligations to maintain the quality of 
                the products and services offered under or in 
                connection with the licensed trademark, service mark or 
                trade name, and the trustee shall retain the right to 
                oversee and enforce quality control for said products 
                and/or services.''.</DELETED>
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall take effect on the date of enactment of this Act and shall apply 
to any case that is pending on, or for which a petition or complaint is 
filed on or after, such date of enactment.</DELETED>

<DELETED>SEC. 12. SMALL BUSINESS EDUCATION, OUTREACH, AND INFORMATION 
              ACCESS.</DELETED>

<DELETED>    (a) Small Business Education and Outreach.--</DELETED>
        <DELETED>    (1) Resources for small business.--Using existing 
        resources, the Director shall develop educational resources for 
        small businesses to address concerns arising from patent 
        infringement.</DELETED>
        <DELETED>    (2) Small business patent ombudsman.--The existing 
        small business patent outreach programs of the Office, in 
        consultation with the relevant offices at the Small Business 
        Administration and the Minority Business Development Agency, 
        shall provide education and awareness regarding resources 
        available for those persons responding to allegations of patent 
        infringement.</DELETED>
<DELETED>    (b) Improving Information Transparency for Small Business 
and the United States Patent and Trademark Office Users.--</DELETED>
        <DELETED>    (1) Web site.--Using existing resources, the 
        Director shall create a user-friendly section on the official 
        Web site of the Office to notify the public when a patent case 
        is brought in Federal court and, with respect to each patent at 
        issue in such case, the Director shall include--</DELETED>
                <DELETED>    (A) information disclosed under section 
                261A of title 35, United States Code, as added by 
                section 10, and section 281B(b) of title 35, United 
                States Code, as added by section 3; and</DELETED>
                <DELETED>    (B) any other information the Director 
                determines to be relevant.</DELETED>
        <DELETED>    (2) Format.--In order to promote accessibility for 
        the public, the information described in paragraph (1) shall be 
        searchable by patent number, patent art area, and 
        entity.</DELETED>

<DELETED>SEC. 13. STUDIES ON PATENT TRANSACTIONS, QUALITY, AND 
              EXAMINATION.</DELETED>

<DELETED>    (a) Study on Secondary Market Oversight for Patent 
Transactions To Promote Transparency and Ethical Business Practices.--
</DELETED>
        <DELETED>    (1) Study required.--The Director, in consultation 
        with the Secretary of Commerce, the Secretary of the Treasury, 
        the Chairman of the Securities and Exchange Commission, the 
        heads of other relevant agencies, and interested parties, 
        shall, using existing resources of the Office, conduct a 
        study--</DELETED>
                <DELETED>    (A) to develop legislative recommendations 
                to ensure greater transparency and accountability in 
                patent transactions occurring on the secondary 
                market;</DELETED>
                <DELETED>    (B) to examine the economic impact that 
                the patent secondary market has on the United 
                States;</DELETED>
                <DELETED>    (C) to examine licensing and other 
                oversight requirements that may be placed on the patent 
                secondary market, including on the participants in such 
                markets, to ensure that the market is a level playing 
                field and that brokers in the market have the requisite 
                expertise and adhere to ethical business practices; 
                and</DELETED>
                <DELETED>    (D) to examine the requirements placed on 
                other markets.</DELETED>
        <DELETED>    (2) Report on study.--Not later than 18 months 
        after the date of enactment of this Act, the Director shall 
        submit a report to the Committee on the Judiciary of the House 
        of Representatives and the Committee on the Judiciary of the 
        Senate on the findings and recommendations of the Director from 
        the study required under paragraph (1).</DELETED>
<DELETED>    (b) Study on Patent Small Claims Procedures.--</DELETED>
        <DELETED>    (1) Study required.--</DELETED>
                <DELETED>    (A) In general.--The Director of the 
                Administrative Office of the United States Courts, in 
                consultation with the Director of the Federal Judicial 
                Center and the United States Patent and Trademark 
                Office, shall, using existing resources, conduct a 
                study to examine the idea of developing a pilot program 
                for patent small claims procedures in certain judicial 
                districts within the existing patent pilot program 
                mandated by Public Law 111-349.</DELETED>
                <DELETED>    (B) Contents of study.--The study under 
                subparagraph (A) shall examine--</DELETED>
                        <DELETED>    (i) the necessary criteria for 
                        using small claims procedures;</DELETED>
                        <DELETED>    (ii) the costs that would be 
                        incurred for establishing, maintaining, and 
                        operating such a pilot program; and</DELETED>
                        <DELETED>    (iii) the steps that would be 
                        taken to ensure that the procedures used in the 
                        pilot program are not misused for abusive 
                        patent litigation.</DELETED>
        <DELETED>    (2) Report on study.--Not later than 1 year after 
        the date of enactment of this Act, the Director of the 
        Administrative Office of the United States Courts shall submit 
        a report to the Committee on the Judiciary of the House of 
        Representatives and the Committee on the Judiciary of the 
        Senate on the findings and recommendations of the Director of 
        the Administrative Office from the study required under 
        paragraph (1).</DELETED>
<DELETED>    (c) Study on Business Method Patent Quality.--</DELETED>
        <DELETED>    (1) GAO study.--The Comptroller General of the 
        United States shall, using existing resources, conduct a study 
        on the volume and nature of litigation involving business 
        method patents.</DELETED>
        <DELETED>    (2) Contents of study.--The study required under 
        paragraph (1) shall focus on examining the quality of business 
        method patents asserted in suits alleging patent infringement, 
        and may include an examination of any other areas that the 
        Comptroller General determines to be relevant.</DELETED>
        <DELETED>    (3) Report to congress.--Not later than 1 year 
        after the date of enactment of this Act, the Comptroller 
        General shall submit to the Committee on the Judiciary of the 
        House of Representatives and the Committee on the Judiciary of 
        the Senate a report on the findings and recommendations from 
        the study required by this subsection, including 
        recommendations for any changes to laws or regulations that the 
        Comptroller General considers appropriate on the basis of the 
        study.</DELETED>

<DELETED>SEC. 14. TECHNICAL CORRECTIONS TO THE LEAHY-SMITH AMERICA 
              INVENTS ACT AND OTHER IMPROVEMENTS.</DELETED>

<DELETED>    (a) Section 325(e)(2) of title 35, United States Code, is 
amended by striking ``or reasonably could have raised''.</DELETED>
<DELETED>    (b) PTO Patent Reviews.--</DELETED>
        <DELETED>    (1) Clarification.--</DELETED>
                <DELETED>    (A) Scope of prior art.--Section 
                18(a)(1)(C)(i) of the Leahy-Smith America Invents Act 
                (35 U.S.C. 321 note) is amended by striking ``section 
                102(a)'' and inserting ``subsection (a) or (e) of 
                section 102''.</DELETED>
                <DELETED>    (B) Effective date.--The amendment made by 
                subparagraph (A) shall take effect on the date of the 
                enactment of this Act and shall apply to any proceeding 
                pending on, or filed on or after, such date of 
                enactment.</DELETED>
        <DELETED>    (2) Authority to waive fee.--Subject to available 
        resources, the Director may waive payment of a filing fee for a 
        transitional proceeding described under section 18(a) of the 
        Leahy-Smith America Invents Act (35 U.S.C. 321 note).</DELETED>
<DELETED>    (c) Technical Corrections.--</DELETED>
        <DELETED>    (1) Novelty.--</DELETED>
                <DELETED>    (A) Amendment.--Section 102(b)(1)(A) of 
                title 35, United States Code, is amended by striking 
                ``the inventor or joint inventor or by another'' and 
                inserting ``the inventor or a joint inventor or 
                another''.</DELETED>
                <DELETED>    (B) Effective date.--The amendment made by 
                subparagraph (A) shall be effective as if included in 
                the amendment made by section 3(b)(1) of the Leahy-
                Smith America Invents Act (Public Law 112-
                29).</DELETED>
        <DELETED>    (2) Inventor's oath or declaration.--</DELETED>
                <DELETED>    (A) Requirement to execute.--Section 
                115(a) of title 35, United States Code, is amended in 
                the second sentence by striking ``shall execute'' and 
                inserting ``may be required by the Director to 
                execute''.</DELETED>
                <DELETED>    (B) Effective date.--The amendment made by 
                subparagraph (A) shall be effective as if included in 
                the amendment made by section 4(a)(1) of the Leahy-
                Smith America Invents Act (Public Law 112-
                29).</DELETED>
        <DELETED>    (3) Assignee filers.--</DELETED>
                <DELETED>    (A) Benefit of earlier filing date; right 
                of priority.--Section 119(e)(1) of title 35, United 
                States Code, is amended, in the first sentence, by 
                striking ``by an inventor or inventors named'' and 
                inserting ``that names the inventor or a joint 
                inventor''.</DELETED>
                <DELETED>    (B) Benefit of earlier filing date in the 
                united states.--Section 120 of title 35, United States 
                Code, is amended, in the first sentence, by striking 
                ``names an inventor or joint inventor'' and inserting 
                ``names the inventor or a joint inventor''.</DELETED>
                <DELETED>    (C) Effective date.--The amendments made 
                by this paragraph shall take effect on the date of the 
                enactment of this Act and shall apply to any patent 
                application, and any patent issuing from such 
                application, that is filed on or after September 16, 
                2012.</DELETED>
        <DELETED>    (4) Derived patents.--</DELETED>
                <DELETED>    (A) Amendment.--Section 291(b) of title 
                35, United States Code, is amended by striking ``or 
                joint inventor'' and inserting ``or a joint 
                inventor''.</DELETED>
                <DELETED>    (B) Effective date.--The amendment made by 
                subparagraph (A) shall be effective as if included in 
                the amendment made by section 3(h)(1) of the Leahy-
                Smith America Invents Act (Public Law 112-
                29).</DELETED>
        <DELETED>    (5) Specification.--Notwithstanding section 4(e) 
        of the Leahy-Smith America Invents Act (Public Law 112-29; 125 
        Stat. 297), the amendments made by subsections (c) and (d) of 
        section 4 of such Act shall apply to any proceeding or matter 
        that is pending on, or filed on or after, the date of the 
        enactment of this Act.</DELETED>
        <DELETED>    (6) Time limit for commencing misconduct 
        proceedings.--</DELETED>
                <DELETED>    (A) Amendment.--The fourth sentence of 
                section 32 of title 35, United States Code, is amended 
                by striking ``1 year'' and inserting ``18 
                months''.</DELETED>
                <DELETED>    (B) Effective date.--The amendment made by 
                this paragraph shall take effect on the date of the 
                enactment of this Act and shall apply to any action in 
                which the Office files a complaint on or after such 
                date of enactment.</DELETED>
        <DELETED>    (7) Patent owner response.--</DELETED>
                <DELETED>    (A) Conduct of inter partes review.--
                Paragraph (8) of section 316(a) of title 35, United 
                States Code, is amended by striking ``the petition 
                under section 313'' and inserting ``the petition under 
                section 311''.</DELETED>
                <DELETED>    (B) Conduct of post-grant review.--
                Paragraph (8) of section 326(a) of title 35, United 
                States Code, is amended by striking ``the petition 
                under section 323'' and inserting ``the petition under 
                section 321''.</DELETED>
                <DELETED>    (C) Effective date.--The amendments made 
                by this paragraph shall take effect on the date of the 
                enactment of this Act.</DELETED>
<DELETED>    (d) Management of the United States Patent and Trademark 
Office.--</DELETED>
        <DELETED>    (1) In general.--Section 3(b)(1) of title 35, 
        United States Code, is amended in the first sentence--
        </DELETED>
                <DELETED>    (A) by striking ``be vested with the 
                authority to act in the capacity of the'' and inserting 
                ``serve as Acting,''; and</DELETED>
                <DELETED>    (B) by inserting before the period ``or in 
                the event of a vacancy in the office of the 
                Director.''.</DELETED>
        <DELETED>    (2) Effective date.--The amendments made by 
        paragraph (1) shall take effect on the date of enactment of 
        this Act and shall apply with respect to appointments and 
        vacancies occurring before, on, or after the date of enactment 
        of this Act.</DELETED>

<DELETED>SEC. 15. EFFECTIVE DATE.</DELETED>

<DELETED>    Except as otherwise provided in this Act, the provisions 
of this Act shall take effect on the date of enactment of this Act, and 
shall apply to any patent issued, or any action filed, on or after that 
date.</DELETED>

<DELETED>SEC. 16. SEVERABILITY.</DELETED>

<DELETED>    If any provision of this Act, or an amendment made by this 
Act, or the application of such provision or amendment to any person or 
circumstance, is held to be invalid, the remainder of this Act, or an 
amendment made by this Act, or the application of such provision to 
other persons or circumstances, shall not be affected.</DELETED>

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Protecting 
American Talent and Entrepreneurship Act of 2015'' or the ``PATENT 
Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
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. Inter partes review and post-grant proceedings.
Sec. 12. Protection of intellectual property licenses in bankruptcy.
Sec. 13. Small business education, outreach, and information access.
Sec. 14. Studies on patent transactions, quality, and examination.
Sec. 15. Technical corrections to the Leahy-Smith America Invents Act 
                            and other improvements.
Sec. 16. Institutions of higher education and nonprofit research.
Sec. 17. Effective date.
Sec. 18. Severability.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Director.--The term ``Director'' means the Under 
        Secretary of Commerce for Intellectual Property and Director of 
        the United States Patent and Trademark Office.
            (2) Office.--The term ``Office'' means the United States 
        Patent and Trademark Office.

SEC. 3. PLEADING REQUIREMENTS FOR PATENT INFRINGEMENT ACTIONS.

    (a) Elimination of Form 18.--Not later than 1 month after the date 
of enactment of this Act, the Supreme Court, using existing resources, 
shall eliminate Form 18 in the Appendix to the Federal Rules of Civil 
Procedure (Complaint for Patent Infringement).
    (b) Pleading Requirements.--
            (1) Amendment.--Chapter 29 of title 35, United States Code, 
        is amended by inserting after section 281 the following:
``Sec. 281A. Pleading requirements for patent infringement actions
    ``(a) Pleading Requirements.--In a civil action in which a party 
asserts a claim for relief arising under any Act of Congress relating 
to patents, a party alleging infringement shall include in a complaint, 
counterclaim, or cross-claim for patent infringement, except as 
provided in subsection (c), the following:
            ``(1) An identification of each patent allegedly infringed.
            ``(2) An identification of each claim of each patent 
        identified under paragraph (1) that is allegedly infringed.
            ``(3) For each claim identified under paragraph (2), an 
        identification of each accused process, machine, manufacture, 
        or composition of matter (referred to in this section as an 
        `accused instrumentality') alleged to infringe the claim.
            ``(4) For each accused instrumentality identified under 
        paragraph (3), an identification with particularity, if known, 
        of--
                    ``(A) the name or model number (or a representative 
                model number) of each accused instrumentality; or
                    ``(B) if there is no name or model number, a 
                description of each accused instrumentality.
            ``(5) For each claim identified under paragraph (2), a 
        description of the elements thereof that are alleged to be 
        infringed by the accused instrumentality and how the accused 
        instrumentality is alleged to infringe those elements.
            ``(6) For each claim of indirect infringement, a 
        description of the acts of the alleged infringer that are 
        alleged to contribute to or induce the direct infringement.
    ``(b) Dismissal for Failure To Meet Pleading Requirements.--The 
court shall, on the motion of any party, dismiss any count or counts of 
the complaint, counterclaim, or cross-claim for patent infringement if 
the requirements of paragraphs (1) through (6) of subsection (a) are 
not met with respect to such count or counts. The fact that a party 
pleads in accordance with subsection (c) shall not be a basis for 
dismissal if the party nonetheless states a plausible claim for relief 
sufficient under the Federal Rules of Civil Procedure.
    ``(c) Information Not Accessible.--If some subset of information 
required to comply with subsection (a) is not accessible to a party 
after an inquiry reasonable under the circumstances, consistent with 
rule 11 of the Federal Rules of Civil Procedure, an allegation 
requiring that information may be based upon a general description of 
that information, along with a statement as to why the information is 
not accessible.
    ``(d) Amendment of Pleadings.--Nothing in this provision shall be 
construed to affect a party's leave to amend pleadings as specified in 
the Federal Rules of Civil Procedure. Amendments permitted by the court 
are subject to the pleading requirements set forth in this section.
    ``(e) Confidential Information.--A party required to disclose 
information described under subsection (a) may file information 
believed to be confidential under seal, with a motion setting forth 
good cause for such sealing. If such motion is denied by the court, the 
party may seek to file an amended pleading.
    ``(f) Exemption.--Subsection (a) shall not apply to a civil action 
that includes a claim for relief arising under section 271(e).
``Sec. 281B. Early disclosure requirements for patent infringement 
              actions
    ``(a) Definitions.--In this section--
            ``(1) the term `financial interest'--
                    ``(A) means--
                            ``(i) with regard to a patent or patents, 
                        the right of a person to receive proceeds from 
                        the assertion of the patent or patents, 
                        including a fixed or variable portion of such 
                        proceeds; and
                            ``(ii) with regard to the patentee, direct 
                        or indirect ownership or control by a person of 
                        more than 20 percent of the patentee; and
                    ``(B) does not mean--
                            ``(i) ownership of shares or other 
                        interests in a mutual or common investment 
                        fund, unless the owner of such interest 
                        participates in the management of such fund; or
                            ``(ii) the proprietary interest of a 
                        policyholder in a mutual insurance company or a 
                        depositor in a mutual savings association, or a 
                        similar proprietary interest, unless the 
                        outcome of the proceeding could substantially 
                        affect the value of such interest;
            ``(2) the term `patentee' means a party in a civil action 
        that files a pleading subject to the requirements of section 
        281A;
            ``(3) the term `proceeding' means all stages of a civil 
        action, including pretrial and trial proceedings and appellate 
        review; and
            ``(4) the term `ultimate parent entity' has the meaning 
        given the term in section 261A.
    ``(b) Early Disclosure Requirements.--Notwithstanding the 
requirements of section 299B, a patentee shall disclose to the court 
and each adverse party, not later than 14 days after the date on which 
the patentee serves or files the pleading subject to the requirements 
of section 281A--
            ``(1) the identity of each--
                    ``(A) assignee of the patent or patents at issue, 
                and any ultimate parent entity thereof;
                    ``(B) entity with a right to sublicense to 
                unaffiliated entities or to enforce the patent or 
                patents at issue, and any ultimate parent entity 
                thereof; and
                    ``(C) entity, other than an entity the ultimate 
                parent of which is disclosed under subparagraph (A) or 
                (B), that the patentee knows to have a financial 
                interest in--
                            ``(i) the patent or patents at issue; or
                            ``(ii) the patentee, and any ultimate 
                        parent entity thereof; and
            ``(2) for each patent that the patentee alleges to be 
        infringed--
                    ``(A) a list of each complaint, counterclaim, or 
                cross-claim filed by the patentee or an affiliate 
                thereof in the United States during the 3-year period 
                preceding the date of the filing of the action, and any 
                other complaint, counterclaim, or cross-claim filed in 
                the United States during that period of which the 
                patentee has knowledge, that asserts or asserted such 
                patent, including--
                            ``(i) the caption;
                            ``(ii) the civil action number;
                            ``(iii) the court where the action was 
                        filed; and
                            ``(iv) if applicable, any court to which 
                        the action was transferred;
                    ``(B) a statement as to whether the patent is 
                subject to an assurance made by the party to a 
                standards development organization to license others 
                under such patent if--
                            ``(i) the assurance specifically identifies 
                        such patent or claims therein; and
                            ``(ii) the allegation of infringement 
                        relates to such standard; and
                    ``(C) a statement as to whether the Federal 
                Government has imposed specific licensing requirements 
                with respect to such patent.
    ``(c) Disclosure of Financial Interest.--
            ``(1) Publicly traded.--For purposes of subsection 
        (b)(1)(C), if the financial interest is held by a corporation 
        traded on a public stock exchange, an identification of the 
        name of the corporation and the public exchange listing shall 
        satisfy the disclosure requirement.
            ``(2) Not publicly traded.--For purposes of subsection 
        (b)(1)(C), if the financial interest is not held by a publicly 
        traded corporation, the disclosure shall satisfy the disclosure 
        requirement if the information identifies--
                    ``(A) in the case of a partnership, the name of the 
                partnership, the address of the principal place of 
                business, and the name and correspondence address of 
                the registered agent;
                    ``(B) in the case of a corporation, the name of the 
                corporation, the location of incorporation, and the 
                address of the principal place of business; and
                    ``(C) for each individual, the name and 
                correspondence address of that individual.
    ``(d) Provision of Information to the United States Patent and 
Trademark Office.--Not later than 1 month after the date on which the 
disclosures required under subsection (b) are made, the patentee shall 
provide to the United States Patent and Trademark Office a filing 
containing the information disclosed pursuant to subsection (b)(1).
    ``(e) Confidential Information.--
            ``(1) In general.--A patentee required to disclose 
        information under subsection (b) may file, under seal, 
        information believed to be confidential, with a motion setting 
        forth good cause for such sealing.
            ``(2) Home address information.--For purposes of this 
        section, the home address of an individual shall be considered 
        to be confidential information.''.
            (2) Conforming amendment.--The table of sections for 
        chapter 29 of title 35, United States Code, is amended by 
        inserting after the item relating to section 281 the following 
        new items:

``281A. Pleading requirements for patent infringement actions.
``281B. Early disclosure requirements for patent infringement 
                            actions.''.

SEC. 4. CUSTOMER-SUIT EXCEPTION.

    (a) In General.--Chapter 29 of title 35, United States Code, is 
amended by adding at the end the following:
``Sec. 299A. Customer stay
    ``(a) Definitions.--In this section--
            ``(1) the term `covered customer' means a retailer or end 
        user that is accused of infringing a patent or patents in 
        dispute based on--
                    ``(A) the sale, or offer for sale, of a covered 
                product or covered process without material 
                modification of the product or process in a manner that 
                is alleged to infringe a patent or patents in dispute; 
                or
                    ``(B) the use by such retailer, the retailer's end 
                user customer, or an end user of a covered product or 
                covered process without material modification of the 
                product or process in a manner that is alleged to 
                infringe a patent or patents in dispute;
            ``(2) the term `covered manufacturer' means a person who 
        manufactures or supplies, or causes the manufacture or supply 
        of, a covered product or covered process, or a relevant part 
        thereof;
            ``(3) the term `covered process' means a process, method, 
        or a relevant part thereof, that is alleged to infringe the 
        patent or patents in dispute where such process, method, or 
        relevant part thereof is implemented by an apparatus, material, 
        system, software or other instrumentality that is provided by 
        the covered manufacturer;
            ``(4) the term `covered product' means a component, 
        product, system, service, or a relevant part thereof, that--
                    ``(A) is alleged to infringe the patent or patents 
                in dispute; or
                    ``(B) implements a process alleged to infringe the 
                patent or patents in dispute;
            ``(5) for purposes of this section, the term `end user' 
        shall include an affiliate of such an end user, but shall not 
        include an entity that manufactures or causes the manufacture 
        of a covered product or covered process or a relevant part 
        thereof;
            ``(6) the term `retailer' means an entity that generates 
        its revenues predominately through the sale to the public of 
        consumer goods or services, or an affiliate of such entity, but 
        shall not include an entity that manufactures or causes the 
        manufacture of a covered product or covered process or a 
        relevant part thereof; and
            ``(7) for purposes of the definitions in paragraphs (5) and 
        (6), the terms `use' and `sale' mean the use and the sale, 
        respectively, within the meanings given those terms under 
        section 271.
    ``(b) Motion for Stay.--In a civil action in which a party asserts 
a claim for relief arising under any Act of Congress relating to 
patents (other than an action that includes a cause of action described 
in section 271(e)), the court shall grant a motion to stay at least the 
portion of the action against a covered customer that relates to 
infringement of a patent involving a covered product or covered process 
if--
            ``(1) the covered manufacturer is a party to the action or 
        a separate action in a Federal court of the United States 
        involving the same patent or patents relating to the same 
        covered product or covered process;
            ``(2) the covered customer agrees to be bound as to issues 
        determined in an action described in paragraph (1) without a 
        full and fair opportunity to separately litigate any such 
        issue, but only as to those issues for which all other elements 
        of the common law doctrine of issue preclusion are met; and
            ``(3) the motion is filed after the first pleading in the 
        action but not later than the later of--
                    ``(A) 90 days after service of the first pleading 
                or paper in the action that specifically identifies the 
                covered product or covered process as a basis for the 
                alleged infringement of the patent by the covered 
                customer, and specifically identifies how the covered 
                product or covered process is alleged to infringe the 
                patent; or
                    ``(B) the date on which the first scheduling order 
                in the case is entered.
    ``(c) Manufacturer Consent in Certain Cases.--If the covered 
manufacturer has been made a party to the action on motion by the 
covered customer, then a motion under subsection (b) may only be 
granted if the covered manufacturer and the covered customer agree in 
writing to the stay.
    ``(d) Lift of Stay.--
            ``(1) In general.--A stay entered under this section may be 
        lifted upon grant of a motion based on a showing that--
                    ``(A) the action involving the covered manufacturer 
                will not resolve major issues in the suit against the 
                covered customer, such as that a covered product or 
                covered process identified in the motion to lift the 
                stay is not a material part of the claimed invention or 
                inventions in the patent or patents in dispute; or
                    ``(B) the stay unreasonably prejudices or would be 
                manifestly unjust to the party seeking to lift the 
                stay.
            ``(2) Separate actions.--In the case of a stay entered 
        under this section based on the participation of the covered 
        manufacturer in a separate action described in subsection 
        (b)(1), a motion under paragraph (1) may only be granted if the 
        court in such separate action determines that the showing 
        required under paragraph (1) has been made.
    ``(e) Waiver of Estoppel Effect.--If, following the grant of a 
motion to stay under this section, the covered manufacturer in an 
action described in subsection (b)(1)--
            ``(1) obtains or consents to entry of a consent judgment 
        involving one or more of the issues that gave rise to the stay; 
        or
            ``(2) fails to prosecute to a final, non-appealable 
        judgment a final decision as to one or more of the issues that 
        gave rise to the stay,
the court may, upon motion, determine that such consent judgment or 
unappealed final decision shall not be binding on the covered customer 
with respect to one or more of the issues that gave rise to the stay 
based on a showing that such an outcome would unreasonably prejudice or 
be manifestly unjust to the covered customer in light of the 
circumstances of the case.
    ``(f) Rule of Construction.--Nothing in this section shall be 
construed to limit the ability of a court to grant any stay, expand any 
stay granted pursuant to this section, or grant any motion to 
intervene, if otherwise permitted by law.''.
    (b) Conforming Amendment.--The table of sections for chapter 29 of 
title 35, United States Code, is amended by adding at the end the 
following:

``299A. Customer stay.''.

SEC. 5. DISCOVERY LIMITS.

    (a) Amendment.--Chapter 29 of title 35, United States Code, as 
amended by section 4, is amended by adding at the end the following:
``Sec. 299B. Discovery in patent infringement action
    ``(a) Discovery in Patent Infringement Action.--
            ``(1) In general.--Except as provided in subsections (b) 
        and (c), in a civil action arising under any Act of Congress 
        relating to patents, discovery shall be stayed during the 
        pendency of 1 or more motions described in paragraph (2) if the 
        motion or motions were filed prior to the first responsive 
        pleading.
            ``(2) Motions described.--The motions described in this 
        paragraph are--
                    ``(A) a motion to dismiss;
                    ``(B) a motion to transfer venue; and
                    ``(C) a motion to sever accused infringers.
    ``(b) Discretion To Expand Scope of Discovery.--
            ``(1) Resolution of motions.--A court may allow limited 
        discovery necessary to resolve a motion described in subsection 
        (a) or a motion for preliminary relief properly raised by a 
        party before or during the pendency of a motion described in 
        subsection (a).
            ``(2) Additional discovery.--On motion, a court may allow 
        additional discovery if the court finds that such discovery is 
        necessary to preserve evidence or otherwise prevent specific 
        prejudice to a party.
    ``(c) Exclusion From Discovery Limitation.--
            ``(1) Voluntary exclusion.--The parties to an action 
        described in subsection (a) may voluntarily consent to be 
        excluded, in whole or in part, from the limitation on discovery 
        under subsection (a).
            ``(2) Claims under section 271(e).--This section shall not 
        apply to a civil action that includes a claim for relief 
        arising under section 271(e).
    ``(d) Rules of Construction.--
            ``(1) Timeline for responsive pleadings.--Nothing in this 
        section shall be construed to alter the time provided by the 
        Federal Rules of Civil Procedure for the filing of responsive 
        pleadings.
            ``(2) Exchange of contentions.--Nothing in this section 
        shall prohibit a court from ordering, or local rules from 
        requiring, the exchange of contentions regarding infringement, 
        non-infringement, invalidity, or other issues, by 
        interrogatories or other written initial disclosures, at an 
        appropriate time determined by the court.''.
    (b) Conforming Amendment.--The table of sections for chapter 29 of 
title 35, United States Code, as amended by section 4, is amended by 
inserting after the item relating to section 299A the following:

``299B. Discovery in patent infringement action.''.

SEC. 6. PROCEDURES AND PRACTICES TO IMPLEMENT RECOMMENDATIONS OF THE 
              JUDICIAL CONFERENCE.

    (a) Judicial Conference Rules and Procedures on Discovery Burdens 
and Costs.--
            (1) Rules and procedures.--The Judicial Conference of the 
        United States, using existing resources, should develop rules 
        and procedures to implement the discovery proposals described 
        in paragraph (2) to address concerns regarding the asymmetries 
        in discovery burdens and costs that may arise in a civil action 
        arising under any Act of Congress relating to patents.
            (2) Rules and procedures to be considered.--The rules and 
        procedures to be developed under paragraph (1) should address 
        each of the following:
                    (A) Discovery of core documentary evidence.--To 
                what extent each party to the action is entitled to 
                receive core documentary evidence and should be 
                responsible for the costs of producing core documentary 
                evidence within the possession or control of each such 
                party, and to what extent each party to the action may 
                seek noncore documentary discovery as otherwise 
                provided in the Federal Rules of Civil Procedure.
                    (B) Electronic communication.--If the parties 
                request discovery of electronic communication, how such 
                discovery should be phased to occur relative to the 
                exchange of initial disclosures and core documentary 
                evidence, and appropriate limitations to apply to such 
                discovery.
                    (C) Additional document discovery.--The manner and 
                extent to which the following should apply:
                            (i) In general.--Each party to the action 
                        may seek any additional document discovery 
                        beyond core documentary evidence as permitted 
                        under the Federal Rules of Civil Procedure, if 
                        such party bears the reasonable costs, 
                        including reasonable attorney's fees, of the 
                        additional document discovery.
                            (ii) Requirements for additional document 
                        discovery.--Unless the parties mutually agree 
                        otherwise, no party may be permitted additional 
                        document discovery unless such a party posts a 
                        bond, or provides other security, in an amount 
                        sufficient to cover the expected costs of such 
                        additional document discovery, or makes a 
                        showing to the court that such party has the 
                        financial capacity to pay the costs of such 
                        additional document discovery.
                            (iii) Good cause modification.--A court, 
                        upon motion and for good cause shown, may 
                        modify the requirements of subparagraphs (A) 
                        and (B) and any definition under paragraph (3). 
                        Not later than 30 days after the pretrial 
                        conference under rule 16 of the Federal Rules 
                        of Civil Procedure, the parties shall jointly 
                        submit any proposed modifications of the 
                        requirements of subparagraphs (A) and (B) and 
                        any definition under paragraph (3), unless the 
                        parties do not agree, in which case each party 
                        shall submit any proposed modification of such 
                        party and a summary of the disagreement over 
                        the modification.
                            (iv) Computer code.--A court, upon motion 
                        and for good cause shown, may determine that 
                        computer code should be included in the 
                        discovery of core documentary evidence. The 
                        discovery of computer code shall occur after 
                        the parties have exchanged initial disclosures 
                        and other core documentary evidence.
                    (D) Discovery sequence and scope.--The manner and 
                extent to which the parties shall discuss and address 
                in the written report filed pursuant to rule 26(f) of 
                the Federal Rules of Civil Procedure the views and 
                proposals of each party on the following:
                            (i) When the discovery of core documentary 
                        evidence should be completed.
                            (ii) Whether additional document discovery 
                        will be sought under subparagraph (C).
                            (iii) Any issues about infringement, 
                        invalidity, or damages that, if resolved before 
                        the additional discovery described in 
                        subparagraph (C) commences, might simplify or 
                        streamline the case.
            (3) Scope of documentary evidence.--In developing rules or 
        procedures under this section, the Judicial Conference should 
        consider which kinds of evidence constitute ``core documentary 
        evidence''.
            (4) Definitions.--In this subsection, the term ``electronic 
        communication'' means any form of electronic communication, 
        including email, text message, or instant message.
    (b) Judicial Conference Patent Case Management.--The Judicial 
Conference of the United States, using existing resources, should 
develop case management procedures to be implemented by the United 
States district courts and the United States Court of Federal Claims 
for any civil action arising under any Act of Congress relating to 
patents, including initial disclosure and early case management 
conference practices that--
            (1) will identify any potential dispositive issues of the 
        case; and
            (2) focus on early summary judgment motions when resolution 
        of issues may lead to expedited disposition of the case.

SEC. 7. FEES AND OTHER EXPENSES.

    (a) Sense of Congress.--It is the sense of Congress that, in patent 
cases, reasonable attorney fees should be paid by a non-prevailing 
party whose litigation position or conduct is not objectively 
reasonable. As the Supreme Court wrote in adopting this legal standard 
in the context of fee shifting under section 1447 of title 28, United 
States Code, this standard is intended to strike a balance; in patent 
cases, a more appropriate balance between protecting the right of a 
patent holder to enforce its patent on the one hand, and deterring 
abuses in patent litigation and threats thereof on the other.
    (b) Amendment.--Section 285 of title 35, United States Code, is 
amended to read as follows:
``Sec. 285. Fees and other expenses
    ``(a) Award.--In connection with a civil action in which any party 
asserts a claim for relief arising under any Act of Congress relating 
to patents, upon motion by a prevailing party, the court shall 
determine whether the position of the non-prevailing party was 
objectively reasonable in law and fact, and whether the conduct of the 
non-prevailing party was objectively reasonable. If the court finds 
that the position of the non-prevailing party was not objectively 
reasonable in law or fact or that the conduct of the non-prevailing 
party was not objectively reasonable, the court shall award reasonable 
attorney fees to the prevailing party unless special circumstances, 
such as undue economic hardship to a named inventor or an institution 
of higher education (as defined in section 101(a) of the Higher 
Education Act of 1965 (20 U.S.C. 1001(a))), would make an award unjust. 
The prevailing party shall bear the burden of demonstrating that the 
prevailing party is entitled to an award.
    ``(b) Covenant Not To Sue.--A party to a civil action who asserts a 
claim for relief arising under any Act of Congress relating to patents 
against another party, and who subsequently unilaterally (i) seeks 
dismissal of the action without consent of the other party and (ii) 
extends to such other party a covenant not to sue for infringement with 
respect to the patent or patents at issue, may be the subject of a 
motion for attorney fees under subsection (a) as if it were a non-
prevailing party, unless the party asserting such claim would have been 
entitled, at the time that such covenant was extended, to dismiss 
voluntarily the action without a court order under rule 41 of the 
Federal Rules of Civil Procedure, or the interests of justice require 
otherwise.
    ``(c) Recovery of Award.--
            ``(1) Certification; disclosure of interested parties.--
                    ``(A) Initial statement.--A party defending against 
                a claim of infringement may file, not later than 14 
                days before a scheduling conference is to be held or a 
                scheduling order is due under rule 16(b) of the Federal 
                Rules of Civil Procedure, a statement that such party 
                holds a good faith belief, based on publicly-available 
                information and any other information known to such 
                party, that the primary business of the party alleging 
                infringement is the assertion and enforcement of 
                patents or the licensing resulting therefrom.
                    ``(B) Certification.--Not later than 45 days after 
                being served with an initial statement under 
                subparagraph (A), a party alleging infringement shall 
                file a certification that--
                            ``(i) establishes and certifies to the 
                        court, under oath, that it will have sufficient 
                        funds available to satisfy any award of 
                        reasonable attorney fees under this section if 
                        an award is assessed;
                            ``(ii) demonstrates that its primary 
                        business is not the assertion and enforcement 
                        of patents or the licensing resulting 
                        therefrom;
                            ``(iii) identifies interested parties, if 
                        any, as defined in paragraph (2) of this 
                        subsection; or
                            ``(iv) states that it has no such 
                        interested parties.
                A party alleging infringement shall have an ongoing 
                obligation to supplement its certification under this 
                subparagraph within 30 days after a material change to 
                the information provided in its certification.
                    ``(C) Notice to interested party.--A party that 
                files a certification under subparagraph (B)(iii) 
                shall, prior to filing the certification, provide each 
                identified interested party actual notice in writing by 
                service of notice in any district where the interested 
                party may be found, such that jurisdiction shall be 
                established over each interested party to the action 
                for purposes of enforcing an award of attorney fees 
                under this section, consistent with the Constitution of 
                the United States. The notice shall identify the 
                action, the parties, the patents at issue, and the 
                interest qualifying the party to be an interested 
                party. The notice shall inform the recipient that the 
                recipient may be held accountable under this subsection 
                for any award of attorney fees, or a portion thereof, 
                resulting from the action in the event the party 
                alleging infringement cannot satisfy the full amount of 
                such an award, unless the recipient renounces its 
                interest pursuant to subparagraph (E) or is otherwise 
                exempt from the applicability of this subsection.
                    ``(D) Accountability for interested parties.--Any 
                interested parties who are timely served with actual 
                notice pursuant to subparagraph (C) and do not renounce 
                their interests pursuant to subparagraph (E) or are not 
                otherwise exempt from the applicability of this 
                subsection may be held accountable for any fees, or a 
                portion thereof, awarded under this section in the 
                event that the party alleging infringement cannot 
                satisfy the full amount of the award. If a true and 
                correct certification under clause (i) or (ii) of 
                subparagraph (B) is timely filed with the court, 
                interested parties shall not be subject to this 
                subparagraph.
                    ``(E) Renunciation of interest.--Any recipient of a 
                notice under subparagraph (C) may submit a statement of 
                renunciation of interest in a binding document with 
                notice to the court and parties in the action not later 
                than 90 days after receipt of the notice under 
                subparagraph (C). The statement shall be required to 
                renounce only such interest as would qualify the 
                recipient as an interested party.
                    ``(F) Institutions of higher education exception.--
                Any institution of higher education (as defined in 
                section 101(a) of the Higher Education Act of 1965 (20 
                U.S.C. 1001(a)) or under equivalent laws in foreign 
                jurisdictions), or a non-profit technology transfer 
                organization whose primary purpose is to facilitate the 
                commercialization of technologies developed by 1 or 
                more institutions of higher education, may exempt 
                itself from the applicability of this subsection by 
                filing a certification that it qualifies for the 
                exception provided for in this subparagraph with the 
                court and providing notice to the parties.
                    ``(G) Interest of justice exception.--Any recipient 
                of a notice under subparagraph (C) may intervene in the 
                action for purposes of contesting its identification as 
                an interested party or its liability under this 
                subsection, and a court may exempt any party identified 
                as an interested party from the applicability of this 
                subsection as the interest of justice requires.
            ``(2) Interested party.--In this section, the term 
        `interested party'--
                    ``(A) means a person who has a substantial 
                financial interest related to the proceeds from any 
                settlement, license, or damages award resulting from 
                the enforcement of the patent in the action by the 
                party alleging infringement;
                    ``(B) does not include an attorney or law firm 
                providing legal representation in the action if the 
                sole basis for the financial interest of the attorney 
                or law firm in the outcome of the action arises from 
                the attorney or law firm's receipt of compensation 
                reasonably related to the provision of the legal 
                representation;
                    ``(C) does not include a person who has assigned 
                all right, title, and interest in a patent, except for 
                passive receipt of income, to an entity described in 
                paragraph (1)(F), or who has a right to receive any 
                portion of such passive income;
                    ``(D) does not include a person who would be an 
                interested party under subparagraph (A) but whose 
                financial interest is based solely on an equity or 
                security interest established when the party alleging 
                infringement's primary business was not the assertion 
                and enforcement of patents or the licensing resulting 
                therefrom; and
                    ``(E) does not include a depository institution as 
                defined in section 19(b)(1)(A) of the Federal Reserve 
                Act (12 U.S.C. 461(b)(1)(A)) if the sole basis for the 
                financial interest arises from a loan or other debt 
                obligation.
    ``(d) Claims Under Section 271(e).--
            ``(1) Applicability.--Subsections (a), (b), and (c) shall 
        not apply to a civil action that includes a claim for relief 
        arising under section 271(e).
            ``(2) Award in certain claims under section 271(e).--In a 
        civil action that includes a claim for relief arising under 
        section 271(e), the court may in exceptional cases award 
        reasonable attorney fees to the prevailing party.''.
    (c) Conforming Amendment and Amendment.--
            (1) Conforming amendment.--The item relating to section 285 
        of the table of sections for chapter 29 of title 35, United 
        States Code, is amended to read as follows:

``285. Fees and other expenses.''.
            (2) Amendment.--Section 273 of title 35, United States 
        Code, is amended by striking subsections (f) and (g).

SEC. 8. REQUIREMENT OF CLARITY AND SPECIFICITY IN DEMAND LETTERS.

    (a) In General.--Chapter 29 of title 35, United States Code, as 
amended by section 5, is amended by adding at the end the following:
``Sec. 299C. Pre-suit written notice
    ``(a) Applicability.--Subsection (b) shall not apply--
            ``(1) to written communication between parties--
                    ``(A) regarding existing licensing agreements;
                    ``(B) as part of an ongoing licensing negotiation, 
                provided that the initial written notice complied with 
                the requirements of subsection (b) of this section; or
                    ``(C) sent after the initial written notice, 
                provided that the initial written notice complied with 
                the requirements of subsection (b) of this section; or
            ``(2) if the court determines it is in the interest of 
        justice to waive the requirements of subsection (b).
    ``(b) Written Notification Requirements.--
            ``(1) In general.--In a civil action alleging infringement 
        of a patent in which the plaintiff has provided written notice 
        of the accusation of infringement to the party accused of 
        infringement prior to filing the action, the initial written 
        notice shall be subject to paragraph (4) if it does not contain 
        the information required under paragraph (2) or if it contains 
        a specific monetary amount described in paragraph (3).
            ``(2) Required information provided in initial written 
        notice.--The initial written notice described in paragraph (1) 
        shall contain, at a minimum--
                    ``(A) an identification of--
                            ``(i) each patent believed to be infringed, 
                        including the patent number; and
                            ``(ii) at least one claim of each patent 
                        that is believed to be infringed;
                    ``(B) an identification of each product, process, 
                apparatus, or chemical composition, including any 
                manufacturer thereof, that is believed to infringe one 
                or more claims of each patent under subparagraph (A);
                    ``(C) a clear and detailed description of the 
                reasons why the plaintiff believes each patent 
                identified under subparagraph (A) is infringed;
                    ``(D) notice to the intended recipient that the 
                intended recipient may have the right to a stay of any 
                suit in accordance with section 299A; and
                    ``(E) the identity of any person with the right to 
                enforce each patent under subparagraph (A).
            ``(3) Specific monetary amounts in demand letters.--Except 
        with the consent of the intended recipient, the initial written 
        notice described in paragraph (1) is prohibited from 
        containing--
                    ``(A) a request for, demand for, or offer to accept 
                a specific monetary amount in exchange for a license, 
                settlement, or similar agreement to resolve allegations 
                of patent infringement; or
                    ``(B) a specific monetary amount demanded based on 
                the cost of legal defense in a lawsuit concerning any 
                asserted claim or claims.
            ``(4) Additional time to respond.--If the initial written 
        notice provided to the defendant prior to the filing of the 
        civil action did not contain the information required by 
        paragraph (2), or contained a statement prohibited under 
        paragraph (3), the defendant's time to respond to the complaint 
        shall be extended by an additional 30 days.''.
    (b) Conforming Amendment.--The table of sections for chapter 29 of 
title 35, United States Code, as amended by section 5, is amended by 
adding at the end the following:

``299C. Pre-suit written notice.''.
    (c) Willful Infringement.--Section 284 of title 35, United States 
Code, is amended--
            (1) in the first undesignated paragraph, by striking ``Upon 
        finding'' and inserting ``(a) In General.--Upon finding'';
            (2) in the second undesignated paragraph, by striking 
        ``When the damages'' and inserting ``(b) Assessment by Court; 
        Treble Damages.--When the damages'';
            (3) by inserting after subsection (b), as designated by 
        paragraph (2), the following:
    ``(c) Willful Infringement.--A claimant seeking to establish 
willful infringement may not rely on evidence of pre-suit notification 
of infringement unless that notification complies with the standards 
set out in paragraphs (2) and (3) of section 299C(b).''; and
            (4) in the last undesignated paragraph, by striking ``The 
        court'' and inserting ``(d)  Expert Testimony.--The court''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date that is 1 year after the date of enactment of this 
Act and shall apply to any action for which a complaint is filed on or 
after that date.

SEC. 9. ABUSIVE DEMAND LETTERS.

    (a) Bad-Faith Demand Letters.--Chapter 29 of title 35, United 
States Code, as amended by section 8, is amended by adding at the end 
the following:
``Sec. 299D. Bad-faith demand letters
    ``(a) Definition.--In this section, the term `affiliated person' 
means a person affiliated with the intended recipient of a written 
communication.
    ``(b) Civil Penalties for Certain Unfair or Deceptive Acts or 
Practices in Connection With Abusive Demand Letters.--An unfair or 
deceptive act or practice within the meaning of section 5(a)(1) of the 
Federal Trade Commission Act (15 U.S.C. 45(a)(1)), in connection with 
the widespread sending of written communications representing that the 
intended recipients, or any persons affiliated with those recipients, 
are or may be infringing, or have or may have infringed, a patent and 
may bear liability or owe compensation to another, shall be treated as 
a violation of a rule defining an unfair or deceptive act or practice 
described under section 18(a)(1)(B) of the Federal Trade Commission Act 
(15 U.S.C. 57a(a)(1)(B)) if--
            ``(1)(A) the communications falsely--
                    ``(i) represent that administrative or judicial 
                relief has been sought against the recipient or others; 
                or
                    ``(ii) threaten litigation if compensation is not 
                paid, the infringement issue is not otherwise resolved, 
                or the communication is not responded to; and
            ``(B) there is a pattern of false representations or 
        threats described in subparagraph (A) having been made without 
        litigation or other relief then having been pursued;
            ``(2) the assertions contained in the communications lack a 
        reasonable basis in fact or law, because--
                    ``(A) the person asserting the patent is not a 
                person, or does not represent a person, with the 
                current right to license the patent to, or to enforce 
                the patent against, the intended recipients or any 
                affiliated persons;
                    ``(B) the communications seek compensation on 
                account of activities undertaken after the patent has 
                expired;
                    ``(C) the communications seek compensation for a 
                patent that has been held to be invalid or 
                unenforceable in a final judicial or administrative 
                proceeding that is unappealable or for which any 
                opportunity for appeal is no longer available;
                    ``(D) the communications seek compensation for 
                activities by the recipient that the sender knows do 
                not infringe the patent because such activities are 
                authorized by the patentee;
                    ``(E) the communications falsely represent that an 
                investigation of the recipient's alleged infringement 
                has occurred; or
                    ``(F) the communications falsely represent that 
                litigation has been filed against, or a license has 
                been paid by, persons similarly situated to the 
                recipient; or
            ``(3) the content of the written communications is likely 
        to materially mislead a reasonable recipient because the 
        content fails to include facts reasonably necessary to inform 
        the recipient--
                    ``(A) of the identity of the person asserting a 
                right to license the patent to, or enforce the patent 
                against, the intended recipient or any affiliated 
                person;
                    ``(B) of the patent issued by the United States 
                Patent and Trademark Office alleged to have been 
                infringed; and
                    ``(C) if infringement or the need to pay 
                compensation for a license is alleged, of an 
                identification of at least one product, service, or 
                other activity of the recipient that is alleged to 
                infringe the identified patent or patents and, unless 
                the information is not readily accessible, an 
                explanation of the basis for such allegation.
    ``(c) Enforcement by Federal Trade Commission.--
            ``(1) Powers of commission.--The Federal Trade Commission 
        shall enforce this section in the same manner, by the same 
        means, and with the same jurisdiction, powers, and duties as 
        though all applicable terms and provisions of the Federal Trade 
        Commission Act (15 U.S.C. 41 et seq.) were incorporated into 
        and made a part of this section.
            ``(2) Privileges and immunities.--Any person who engages in 
        an act or practice described in subsection (b) shall be subject 
        to the penalties and entitled to the privileges and immunities 
        provided in the Federal Trade Commission Act (15 U.S.C. 41 et 
        seq.).
    ``(d) Authority Preserved.--Nothing in this section shall be 
construed to--
            ``(1) limit, modify, or expand the authority of the Federal 
        Trade Commission under any other provision of law; or
            ``(2) alter any defense currently available under the 
        Federal Trade Commission Act (15 U.S.C. 41 et seq.).''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 29 of title 35, United States Code, as amended by section 8, is 
amended by inserting after the item relating to section 299C the 
following:

``299D. Bad-faith demand letters.''.

SEC. 10. TRANSPARENCY OF PATENT TRANSFER.

    (a) Patent and Trademark Office Proceedings.--
            (1) In general.--Chapter 26 of title 35, United States 
        Code, is amended by inserting after section 261 the following:
``Sec. 261A. Disclosure of information relating to patent ownership
    ``(a) Definitions.--In this section:
            ``(1) Period of noncompliance.--The term `period of 
        noncompliance' refers to a period of time during which the 
        assignee or the ultimate parent entity of an assignee of a 
        patent has not been disclosed to the United States Patent and 
        Trademark Office in accordance with this section.
            ``(2) Ultimate parent entity.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `ultimate parent entity' has 
                the meaning given such term in section 801.1(a)(3) of 
                title 16, Code of Federal Regulations, or any successor 
                regulation.
                    ``(B) Modification of definition.--The Director may 
                by regulation modify the definition of the term 
                `ultimate parent entity'.
    ``(b) Requirement To Disclose Assignment.--An assignment of all 
substantial rights in an issued patent shall be recorded in the Patent 
and Trademark Office--
            ``(1) not later than the date on which the patent is 
        issued; and
            ``(2) when any subsequent assignment is made that results 
        in a change to the ultimate parent entity--
                    ``(A) not later than 3 months after the date on 
                which such assignment is made; or
                    ``(B) in the case of an assignment made as part of 
                a corporate acquisition that meets the reporting 
                thresholds under section 7A(a)(2) of the Clayton Act 
                (15 U.S.C. 18a(a)(2)), not later than 6 months after 
                the closing date of such acquisition.
    ``(c) Disclosure Requirements.--A disclosure under subsection (b) 
shall include the name of the assignee and the ultimate parent entity 
of the assignee.
    ``(d) Failure To Comply.--In a civil action in which a party 
asserts a claim for infringement of a patent, if there was a failure to 
comply with subsection (b) for the patent--
            ``(1) the party asserting infringement of the patent may 
        not recover increased damages under section 284 or attorney 
        fees under section 285 with respect to infringing activities 
        taking place during any period of noncompliance, unless the 
        denial of such damages or fees would be manifestly unjust; and
            ``(2) the court shall award to a prevailing accused 
        infringer reasonable attorney fees and expenses incurred in 
        discovering the identity of any undisclosed entity required to 
        be disclosed under subsection (b), unless such sanctions would 
        be manifestly unjust.''.
            (2) Applicability.--The amendment made by paragraph (1) 
        shall apply to any patent for which a notice of allowance is 
        issued on or after the date of enactment of this Act.
            (3) Conforming amendment.--The table of sections for 
        chapter 26 of title 35, United States Code, is amended by 
        adding at the end the following new item:

``261A. Disclosure of information relating to patent ownership.''.
    (b) Regulations.--The Director may promulgate such regulations as 
are necessary to establish a registration fee in an amount sufficient 
to recover the estimated costs of administering section 261A of title 
35, United States Code, as added by subsection (a), to facilitate the 
collection and maintenance of the information required by the 
amendments made by this section and section 3(b) of this Act, and to 
ensure the timely disclosure of such information to the public.

SEC. 11. INTER PARTES REVIEW AND POST-GRANT PROCEEDINGS.

    (a) Amendments to Chapter 31.--Chapter 31 of title 35, United 
States Code, is amended--
            (1) in section 313--
                    (A) by striking ``If an'' and inserting ``(a) In 
                General.--If an''; and
                    (B) by adding at the end the following:
    ``(b) Supporting Evidence.--A preliminary response filed under 
subsection (a) may be supported by affidavits or declarations of 
supporting evidence and opinions, or such other information as the 
Director may require by regulation. The petitioner may seek leave to 
file a reply to respond to new issues raised in the preliminary 
response, within a time period set by the Director.'';
            (2) in section 314--
                    (A) in subsection (a)--
                            (i) by striking ``The Director'' and 
                        inserting the following:
            ``(1) The Director'';
                            (ii) by inserting ``and any reply'' after 
                        ``any response''; and
                            (iii) by adding at the end the following:
            ``(2) The Director may choose not to institute a proceeding 
        under this section if the Director determines that institution 
        would not serve the interests of justice. In making this 
        determination, the Director shall consider, among other 
        appropriate factors, whether the grounds of unpatentability on 
        prior art or arguments set forth in the petition are the same 
        or substantially the same as those considered and decided in a 
        prior judicial proceeding, or in a prior proceeding before the 
        Office involving the same claim or claims (including a decision 
        by the Director not to institute a proceeding under this 
        chapter), and whether there is another proceeding or matter 
        involving the same patent pending before the Office.
            ``(3) An inter partes review shall not be instituted on the 
        basis that the evidentiary standard before the Office differs 
        from the evidentiary standard that was used in a proceeding 
        before a court of the United States to adjudicate the claim or 
        claims challenged in the petition.''; and
                    (B) in subsection (b)--
                            (i) in paragraph (1), by striking 
                        ``receiving a preliminary response to the 
                        petition'' and inserting ``receiving the last 
                        of a preliminary response to the petition or a 
                        reply''; and
                            (ii) in paragraph (2)--
                                    (I) by striking ``is filed, the'' 
                                and inserting ``is filed or reply is 
                                requested, the''; and
                                    (II) by inserting ``or reply may be 
                                requested'' after ``may be filed'';
            (3) in section 315--
                    (A) by amending subsection (b) to read as follows:
    ``(b) Patent Owner's Action.--An inter partes review may not be 
instituted with respect to a particular claim of a patent if the 
petition requesting the proceeding is filed more than 1 year after the 
date on which the petitioner, real party in interest, or privy of the 
petitioner is served with a complaint alleging infringement of that 
patent claim. The time limitation set forth in the preceding sentence 
shall not apply to a request for joinder under subsection (c).'';
                    (B) in subsection (c), by adding at the end the 
                following: ``A petitioner may petition to add 
                additional patent claims in an instituted inter partes 
                review in which the petitioner is a party, if such 
                petition is made within 1 year after the date on which 
                that petitioner, or the real party in interest or privy 
                of that petitioner, is served with an amended complaint 
                or other paper in a pending litigation for the first 
                time alleging infringement by one or more of them of 
                those patent claims to be added.''; and
                    (C) in subsection (e), by adding at the end the 
                following:
            ``(3) Representation by either party.--A party in an inter 
        partes review of a claim in a patent under this chapter, or the 
        real party in interest or privy of such party, shall be bound 
        in a subsequent proceeding before the Office or civil action in 
        a court of the United States by any representations regarding 
        claim construction made by the party during the inter partes 
        review with respect to the prosecution history of the patent 
        that were finally adopted by the Office in deciding the inter 
        partes review.''; and
            (4) in section 316--
                    (A) in subsection (a)--
                            (i) in paragraph (5), by redesignating 
                        subparagraphs (A) and (B) as clauses (i) and 
                        (ii), respectively, and by adjusting the 
                        margins accordingly;
                            (ii) by redesignating paragraphs (1) 
                        through (13) as subparagraphs (A) through (M), 
                        respectively, and adjusting the margins 
                        accordingly;
                            (iii) by striking ``The Director shall 
                        prescribe regulations--'' and inserting the 
                        following:
            ``(1) In general.--The Director shall prescribe 
        regulations--'';
                            (iv) by amending subparagraph (J), as 
                        redesignated, to read as follows:
                    ``(J) providing either party with the right to have 
                testimony (including cross examination of adverse 
                witnesses) heard live by the panel deciding the review 
                where the panel finds that such testimony would 
                facilitate resolution of the case because genuine 
                issues of material fact, conflicting expert opinions, 
                or issues of witness credibility exist, followed by an 
                oral hearing before that panel as part of the 
                proceeding;'';
                            (v) in subparagraph (L), as redesignated, 
                        by striking ``and'';
                            (vi) in subparagraph (M), as redesignated, 
                        by striking the period at the end and inserting 
                        the following: ``, including not less than 1 
                        meaningful opportunity to respond to any 
                        substitute claim offered as an amendment to the 
                        patent under subsection (d);''; and
                            (vii) by adding at the end the following:
                    ``(N) providing that for all purposes under this 
                chapter--
                            ``(i) each claim of a patent shall be 
                        construed as such claim would be in a civil 
                        action to invalidate a patent under section 
                        282(b), including construing each claim of the 
                        patent in accordance with the ordinary and 
                        customary meaning of such claim as understood 
                        by one of ordinary skill in the art and the 
                        prosecution history pertaining to the patent; 
                        and
                            ``(ii) if a court of the United States has 
                        previously construed the claim or a claim term, 
                        or made a determination as to the patent's 
                        validity, in a proceeding or an action in which 
                        the patent owner was a party, the Office shall 
                        consider such claim construction or 
                        determination; and
                    ``(O) requiring that all decisions of the Patent 
                Trial and Appeal Board in its proceedings be available 
                to the public in an easily accessible, searchable form.
            ``(2) Requirements.--The regulations prescribed under 
        paragraph (1)(I) shall provide that--
                    ``(A) an amendment to propose 1 or more substitute 
                claims shall be made in the patent holder's first paper 
                following institution (other than a request for 
                rehearing) and not later than 30 days after the 
                institution of the proceeding, unless otherwise agreed 
                to by the parties;
                    ``(B) any substitute claim must narrow the scope of 
                the cancelled claim and may not introduce new subject 
                matter;
                    ``(C) any amendment shall respond to a ground of 
                unpatentability involved in the trial;
                    ``(D) the petitioner shall have a meaningful 
                opportunity to file a written response as to whether 
                the substitute claim meets the requirements of 
                subparagraphs (A) through (C) and whether the 
                substitute claim is unpatentable; and
                    ``(E) if a substitute claim meets the requirements 
                of subparagraphs (A) through (C), the petitioner shall 
                have the burden of proving a proposition of 
                unpatentability of the substitute claim by a 
                preponderance of the evidence.'';
                    (B) in subsection (b), by inserting ``the interests 
                in clarity in scope and reliance on intellectual 
                property rights,'' after ``patent system,''; and
                    (C) in subsection (e)--
                            (i) by striking ``In an inter partes'' and 
                        inserting ``(1) In general.--In an inter 
                        partes'';
                            (ii) by striking ``the petitioner'' and 
                        inserting ``the challenged patent shall be 
                        presumed to be valid. The petitioner''; and
                            (iii) by adding at the end the following:
            ``(2) Rule of construction.--Nothing in this subsection 
        shall be construed to impact the operation of section 282(a) in 
        proceedings in a court of the United States.''.
    (b) Amendments to Chapter 32.--Chapter 32 of title 35, United 
States Code, is amended--
            (1) in section 323--
                    (A) by striking ``If a post-grant'' and inserting 
                ``(a) In General.--If a post-grant''; and
                    (B) by adding at the end the following:
    ``(b) Supporting Evidence.--A preliminary response filed under 
subsection (a) may be supported by affidavits or declarations of 
supporting evidence and opinions, or such other information as the 
Director may require by regulation. The petitioner may seek leave to 
file a reply to respond to new issues raised in the preliminary 
response, within a time period set by the Director.'';
            (2) in section 324--
                    (A) in subsection (a)--
                            (i) by striking ``The Director'' and 
                        inserting the following:
            ``(1) The Director''; and
                            (ii) by adding at the end the following:
            ``(2) The Director may choose not to institute a proceeding 
        under this section if the Director determines that institution 
        would not serve the interests of justice. In making this 
        determination, the Director shall consider, among other 
        appropriate factors, the grounds of unpatentability on prior 
        art or arguments set forth in the petition are the same or 
        substantially the same as those considered and decided in a 
        prior judicial proceeding, or in a prior proceeding before the 
        Office involving the same claim or claims (including a decision 
        by the Director not to institute a proceeding under this 
        chapter), and whether there is another proceeding or matter 
        involving the same patent pending before the Office.''; and
                    (B) in subsection (c)--
                            (i) in paragraph (1), by striking 
                        ``receiving a preliminary response to the 
                        petition'' and inserting ``receiving the last 
                        of a preliminary response to the petition or a 
                        reply''; and
                            (ii) in paragraph (2)--
                                    (I) by striking ``is filed, the'' 
                                and inserting ``is filed or reply is 
                                requested, the''; and
                                    (II) by inserting ``or reply may be 
                                requested'' after ``may be filed'';
            (3) in section 325(e), by adding at the end the following:
            ``(3) Representations by either party.--A party in a post 
        grant review of a claim in a patent under this chapter, or the 
        real party in interest or privy of such party, shall be bound 
        in a subsequent proceeding before the Office or civil action in 
        a court of the United States by any representations regarding 
        claim construction made by the party during the post grant 
        review with respect to the prosecution history of the patent 
        that were finally adopted by the Office in deciding the post 
        grant review.''; and
            (4) in section 326--
                    (A) in subsection (a)--
                            (i) by redesignating paragraphs (1) through 
                        (12) as subparagraphs (A) through (L), 
                        respectively, and adjusting the margins 
                        accordingly;
                            (ii) by striking ``The Director shall 
                        prescribe regulations--'' and inserting the 
                        following:
            ``(1) In general.--The Director shall prescribe 
        regulations--'';
                            (iii) by amending subparagraph (J), as 
                        redesignated, to read as follows:
                    ``(J) providing either party with the right to have 
                testimony (including cross examination of adverse 
                witnesses) heard live by the panel deciding the review 
                where the panel finds that such testimony would 
                facilitate resolution of the case because genuine 
                issues of material fact, conflicting expert opinions, 
                or issues of witness credibility exist, followed by an 
                oral hearing before that panel as part of the 
                proceeding;'';
                            (iv) in subparagraph (K), as redesignated, 
                        by striking ``and'' at the end;
                            (v) in subparagraph (L), as redesignated, 
                        by striking the period at the end and inserting 
                        the following: ``, including not less than 1 
                        meaningful opportunity to respond to any 
                        substitute claim offered as an amendment to the 
                        patent under subsection (d);''; and
                            (vi) by adding at the end the following:
                    ``(M) providing that for all purposes under this 
                chapter--
                            ``(i) each claim of a patent shall be 
                        construed as such claim would be in a civil 
                        action to invalidate a patent under section 
                        282(b), including construing each claim of the 
                        patent in accordance with the ordinary and 
                        customary meaning of such claim as understood 
                        by one of ordinary skill in the art and the 
                        prosecution history pertaining to the patent; 
                        and
                            ``(ii) if a court of the United States has 
                        previously construed the claim or a claim term, 
                        or made a determination as to the patent's 
                        validity, in a proceeding or an action in which 
                        the patent owner was a party, the Office shall 
                        consider such claim construction or 
                        determination; and
                    ``(N) requiring that all decisions of the Patent 
                Trial and Appeal Board in its proceedings be available 
                to the public in an easily accessible, searchable form.
            ``(2) Requirements.--The regulations prescribed under 
        paragraph (1)(I) shall provide that--
                    ``(A) an amendment to propose 1 or more substitute 
                claims shall be made in the patent holder's first paper 
                following institution (other than a request for a 
                rehearing) and not later than 30 days after the 
                institution of the proceeding, unless otherwise agreed 
                to by the parties;
                    ``(B) any substitute claim must narrow the scope of 
                the cancelled claim and may not introduce new subject 
                matter;
                    ``(C) any amendment shall respond to a ground of 
                unpatentability involved in the trial;
                    ``(D) the petitioner shall have a meaningful 
                opportunity to file a written response as to whether 
                the substitute claim meets the requirements of 
                subparagraphs (A) through (C) and whether the 
                substitute claim is unpatentable; and
                    ``(E) if a substitute claim meets the requirements 
                of subparagraphs (A) through (C), the petitioner shall 
                have the burden of proving a proposition of 
                unpatentability of the substitute claim by a 
                preponderance of the evidence.'';
                    (B) in subsection (b), by inserting ``the interests 
                in clarity in scope and reliance on intellectual 
                property rights,'' after ``patent system,''; and
                    (C) in subsection (e)--
                            (i) by striking ``In a post-grant'' and 
                        inserting ``(1) In general.--In a post-grant'';
                            (ii) by striking ``the petitioner'' and 
                        inserting ``the challenged patent shall be 
                        presumed to be valid. The petitioner''; and
                            (iii) by adding at the end the following:
            ``(2) Rule of construction.--Nothing in this subsection 
        shall be construed to impact the operation of section 282(a) in 
        proceedings in a court of the United States.''.
    (c) Director Requirements.--
            (1) Three-member panels.--Not later than 1 year after the 
        date of enactment of this Act, the Director shall prescribe 
        regulations governing the composition of panels convened to 
        adjudicate a post-grant review or inter partes review under 
        section 6 of title 35, United States Code, to ensure that the 
        panel adjudicating such proceeding consists of not more than 1 
        individual, if any, who participated in the decision to 
        institute such proceeding. Such regulations may prescribe that 
        the decision to institute a proceeding shall be made by 
        designees of the Director other than members of the Patent 
        Trial and Appeal Board.
            (2) Representations to the office.--
                    (A) Regulations.--Not later than 1 year after the 
                date of enactment of this Act, the Director shall issue 
                regulations to make clear that an attorney or 
                unrepresented party presenting a statement, petition, 
                or other submission to the Office does so under an 
                obligation substantially similar to the obligations 
                contained in rule 11 of the Federal Rules of Civil 
                Procedure.
                    (B) Interaction with existing rules.--Regulations 
                promulgated under this paragraph shall not be construed 
                to undermine or otherwise limit existing regulations 
                governing professional conduct before the Office, 
                including regulations recognizing the duty of candor 
                and good faith, the duty to disclose in a proceeding 
                under section 311 or 321 of title 35, United States 
                Code, information that is inconsistent with a position 
                advanced by the party during such proceeding, and the 
                duty to disclose information material to patentability.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        Director shall, not later than the date that is 1 year after 
        the date of enactment of this Act, issue regulations 
        implementing the amendments made by this section to chapters 31 
        and 32 of title 35, United States Code.
            (2) Exception.--The Director shall, not later than the date 
        that is 6 months after the date of enactment of this Act, issue 
        regulations implementing the amendments made by this section to 
        paragraph (10) of sections 316(a) and 326(a) of title 35, 
        United States Code, the amendment adding paragraph (14) to 
        section 316(a) of title 35, United States Code, and the 
        amendment adding paragraph (13) to section 326(a) of title 35, 
        United States Code.
            (3) Regulations.--The regulations issued under this section 
        shall take effect on the date on which they are issued and 
        shall apply to all proceedings under chapters 31 and 32 of 
        title 35, United States Code, for which a petition for review 
        under section 311 or 321 of title 35, United States Code, is 
        filed on or after such date of issuance.

SEC. 12. PROTECTION OF INTELLECTUAL PROPERTY LICENSES IN BANKRUPTCY.

    (a) In General.--Section 1522 of title 11, United States Code, is 
amended by adding at the end the following:
    ``(e) Section 365(n) shall apply to cases under this chapter. If 
the foreign representative rejects or repudiates a contract under which 
the debtor is a licensor of intellectual property, the licensee under 
such contract shall be entitled to make the election and exercise the 
rights described in section 365(n).''.
    (b) Trademarks.--
            (1) Amendment.--Section 101(35A) of title 11, United States 
        Code, is amended--
                    (A) in subparagraph (E), by striking ``or'';
                    (B) in subparagraph (F), by adding ``or'' at the 
                end; and
                    (C) by adding after subparagraph (F) the following 
                new subparagraph:
                    ``(G) a trademark, service mark, or trade name, as 
                those terms are defined in section 45 of the Act of 
                July 5, 1946 (commonly referred to as the `Trademark 
                Act of 1946' (15 U.S.C. 1127));''.
            (2) Conforming amendment.--Section 365(n)(2) of title 11, 
        United States Code, is amended--
                    (A) in subparagraph (B)--
                            (i) by striking ``royalty payments'' and 
                        inserting ``royalty or other payments''; and
                            (ii) by striking ``and'' after the 
                        semicolon;
                    (B) in subparagraph (C), by striking the period at 
                the end of clause (ii) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) in the case of a trademark, service mark, or 
                trade name, the licensee shall not be relieved of any 
                of its obligations to maintain the quality of the 
                products and services offered under or in connection 
                with the licensed trademark, service mark, or trade 
                name, and the trustee shall retain the right to oversee 
                and enforce quality control for said products and/or 
                services.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act and shall apply to any case 
that is pending on, or for which a petition or complaint is filed on or 
after, such date of enactment.

SEC. 13. SMALL BUSINESS EDUCATION, OUTREACH, AND INFORMATION ACCESS.

    (a) Small Business Education and Outreach.--
            (1) Resources for small business.--Using existing 
        resources, the Director shall develop educational resources for 
        small businesses to address concerns arising from patent 
        infringement.
            (2) Small business patent ombudsman.--The existing small 
        business patent outreach programs of the Office, in 
        consultation with the relevant offices at the Small Business 
        Administration and the Minority Business Development Agency, 
        shall provide education and awareness regarding resources 
        available for those persons responding to allegations of patent 
        infringement.
    (b) Improving Information Transparency for Small Business and the 
United States Patent and Trademark Office Users.--
            (1) Web site.--Using existing resources, the Director shall 
        create a user-friendly section on the official Web site of the 
        Office to notify the public when a patent case is brought in 
        Federal court and, with respect to each patent at issue in such 
        case, the Director shall include--
                    (A) information disclosed under section 261A of 
                title 35, United States Code, as added by section 10, 
                and section 281B(b) of title 35, United States Code, as 
                added by section 3; and
                    (B) any other information the Director determines 
                to be relevant.
            (2) Format.--In order to promote accessibility for the 
        public, the information described in paragraph (1) shall be 
        searchable by patent number, patent art area, and entity.

SEC. 14. STUDIES ON PATENT TRANSACTIONS, QUALITY, AND EXAMINATION.

    (a) Study on Secondary Market Oversight for Patent Transactions To 
Promote Transparency and Ethical Business Practices.--
            (1) Study required.--The Director, in consultation with the 
        Secretary of Commerce, the Secretary of the Treasury, the 
        Chairman of the Securities and Exchange Commission, the heads 
        of other relevant agencies, and interested parties, shall, 
        using existing resources of the Office, conduct a study--
                    (A) to develop legislative recommendations to 
                ensure greater transparency and accountability in 
                patent transactions occurring on the secondary market;
                    (B) to examine the economic impact that the patent 
                secondary market has on the United States;
                    (C) to examine licensing and other oversight 
                requirements that may be placed on the patent secondary 
                market, including on the participants in such markets, 
                to ensure that the market is a level playing field and 
                that brokers in the market have the requisite expertise 
                and adhere to ethical business practices; and
                    (D) to examine the requirements placed on other 
                markets.
            (2) Report on study.--Not later than 18 months after the 
        date of enactment of this Act, the Director shall submit a 
        report to the Committee on the Judiciary of the House of 
        Representatives and the Committee on the Judiciary of the 
        Senate on the findings and recommendations of the Director from 
        the study required under paragraph (1).
    (b) Study on Patent Small Claims Procedures.--
            (1) Study required.--
                    (A) In general.--The Director of the Administrative 
                Office of the United States Courts, in consultation 
                with the Director of the Federal Judicial Center and 
                the United States Patent and Trademark Office, shall, 
                using existing resources, conduct a study to examine 
                the idea of developing a pilot program for patent small 
                claims procedures in certain judicial districts within 
                the existing patent pilot program mandated by Public 
                Law 111-349.
                    (B) Contents of study.--The study under 
                subparagraph (A) shall examine--
                            (i) the necessary criteria for using small 
                        claims procedures;
                            (ii) the costs that would be incurred for 
                        establishing, maintaining, and operating such a 
                        pilot program; and
                            (iii) the steps that would be taken to 
                        ensure that the procedures used in the pilot 
                        program are not misused for abusive patent 
                        litigation.
            (2) Report on study.--Not later than 1 year after the date 
        of enactment of this Act, the Director of the Administrative 
        Office of the United States Courts shall submit a report to the 
        Committee on the Judiciary of the House of Representatives and 
        the Committee on the Judiciary of the Senate on the findings 
        and recommendations of the Director of the Administrative 
        Office from the study required under paragraph (1).
    (c) Study on Business Method Patent Quality.--
            (1) GAO study.--The Comptroller General of the United 
        States shall, using existing resources, conduct a study on the 
        volume and nature of litigation involving business method 
        patents.
            (2) Contents of study.--The study required under paragraph 
        (1) shall focus on examining the quality of business method 
        patents asserted in suits alleging patent infringement, and may 
        include an examination of any other areas that the Comptroller 
        General determines to be relevant.
            (3) Report to congress.--Not later than 1 year after the 
        date of enactment of this Act, the Comptroller General shall 
        submit to the Committee on the Judiciary of the House of 
        Representatives and the Committee on the Judiciary of the 
        Senate a report on the findings and recommendations from the 
        study required by this subsection, including recommendations 
        for any changes to laws or regulations that the Comptroller 
        General considers appropriate on the basis of the study.

SEC. 15. TECHNICAL CORRECTIONS TO THE LEAHY-SMITH AMERICA INVENTS ACT 
              AND OTHER IMPROVEMENTS.

    (a) Estoppel.--Section 325(e)(2) of title 35, United States Code, 
is amended by striking ``or reasonably could have raised''.
    (b) PTO Patent Reviews.--
            (1) Clarification.--
                    (A) Scope of prior art.--Section 18(a)(1)(C)(i) of 
                the Leahy-Smith America Invents Act (35 U.S.C. 321 
                note) is amended by striking ``section 102(a)'' and 
                inserting ``subsection (a) or (e) of section 102''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall take effect on the date of the 
                enactment of this Act and shall apply to any proceeding 
                pending on, or filed on or after, such date of 
                enactment.
            (2) Authority to waive fee.--Subject to available 
        resources, the Director may waive payment of a filing fee for a 
        transitional proceeding described under section 18(a) of the 
        Leahy-Smith America Invents Act (35 U.S.C. 321 note).
    (c) Technical Corrections.--
            (1) Novelty.--
                    (A) Amendment.--Section 102(b)(1)(A) of title 35, 
                United States Code, is amended by striking ``the 
                inventor or joint inventor or by another'' and 
                inserting ``the inventor or a joint inventor or 
                another''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall be effective as if included in 
                the amendment made by section 3(b)(1) of the Leahy-
                Smith America Invents Act (Public Law 112-29).
            (2) Inventor's oath or declaration.--
                    (A) Requirement to execute.--Section 115(a) of 
                title 35, United States Code, is amended in the second 
                sentence by striking ``shall execute'' and inserting 
                ``may be required by the Director to execute''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall be effective as if included in 
                the amendment made by section 4(a)(1) of the Leahy-
                Smith America Invents Act (Public Law 112-29).
            (3) Assignee filers.--
                    (A) Benefit of earlier filing date; right of 
                priority.--Section 119(e)(1) of title 35, United States 
                Code, is amended, in the first sentence, by striking 
                ``by an inventor or inventors named'' and inserting 
                ``that names the inventor or a joint inventor''.
                    (B) Benefit of earlier filing date in the united 
                states.--Section 120 of title 35, United States Code, 
                is amended, in the first sentence, by striking ``names 
                an inventor or joint inventor'' and inserting ``names 
                the inventor or a joint inventor''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall take effect on the date of the 
                enactment of this Act and shall apply to any patent 
                application, and any patent issuing from such 
                application, that is filed on or after September 16, 
                2012.
            (4) Derived patents.--
                    (A) Amendment.--Section 291(b) of title 35, United 
                States Code, is amended by striking ``or joint 
                inventor'' and inserting ``or a joint inventor''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall be effective as if included in 
                the amendment made by section 3(h)(1) of the Leahy-
                Smith America Invents Act (Public Law 112-29).
            (5) Specification.--Notwithstanding section 4(e) of the 
        Leahy-Smith America Invents Act (Public Law 112-29; 125 Stat. 
        297), the amendments made by subsections (c) and (d) of section 
        4 of such Act shall apply to any proceeding or matter that is 
        pending on, or filed on or after, the date of the enactment of 
        this Act.
            (6) Time limit for commencing misconduct proceedings.--
                    (A) Amendment.--The fourth sentence of section 32 
                of title 35, United States Code, is amended by striking 
                ``1 year'' and inserting ``18 months''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall take effect on the date of the 
                enactment of this Act and shall apply to any action in 
                which the Office files a complaint on or after such 
                date of enactment.
            (7) Patent owner response.--
                    (A) Conduct of inter partes review.--Paragraph (8) 
                of section 316(a) of title 35, United States Code, is 
                amended by striking ``the petition under section 313'' 
                and inserting ``the petition under section 311''.
                    (B) Conduct of post-grant review.--Paragraph (8) of 
                section 326(a) of title 35, United States Code, is 
                amended by striking ``the petition under section 323'' 
                and inserting ``the petition under section 321''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall take effect on the date of the 
                enactment of this Act.
            (8) Global worksharing.--Section 122 of title 35, United 
        States Code, is amended--
                    (A) in subsection (a), by striking ``subsection 
                (b)'' and inserting ``subsections (b) and (f)''; and
                    (B) by adding at the end the following:
    ``(f) Foreign or International Filing.--The Director may provide 
information concerning an application for a patent to a foreign country 
or international intergovernmental organization if a corresponding 
application is filed in such foreign country or with such international 
intergovernmental organization. If the corresponding application is an 
international application, such information may also be provided to an 
International Searching Authority, an International Preliminary 
Examining Authority, and the International Bureau (as defined in 
section 351).''.
            (9) Appointments clarification.--Section 3(b)(3) of title 
        35, United State Code, is amended--
                    (A) by redesignating subparagraphs (A) and (B) as 
                subparagraphs (B) and (C), respectively;
                    (B) by inserting before subparagraph (B), as 
                redesignated, the following:
                    ``(A) nominate, for appointment by the Secretary of 
                Commerce, such officers as the Director considers 
                necessary to carry out the functions of the Office and 
                who may exercise any authority delegated by the 
                Director or a Commissioner;''; and
                    (C) in subparagraph (B), as redesignated, by 
                striking ``officers, employees (including attorneys),'' 
                and inserting ``employees (including attorneys)''.
            (10) Public advisory committees.--Section 5(h) of title 35, 
        United States Code, is amended by inserting before the period 
        at the end the following: ``, except that members of each 
        Advisory Committee shall be considered to be serving on an 
        advisory committee within the meaning of the Federal Advisory 
        Committee Act for purposes of section 208(b)(3) of title 18''.
            (11) Electronic filing timezone alignment.--
                    (A) Amendment.--Section 21 of title 35, United 
                States Code, is amended by--
                            (i) redesignating subsection (b) as 
                        subsection (c), and
                            (ii) inserting after subsection (a) the 
                        following:
    ``(b) The Director may by rule prescribe that any paper or fee 
required to be filed in the United States Patent and Trademark Office 
will be considered filed in the Office on the date on which it is 
submitted using the electronic filing system prescribed by the Director 
or would have been submitted but for filing system interruptions or 
emergencies designated by the Director.''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall take effect on the date that is 1 year 
                after the date of enactment of this Act and shall apply 
                to papers or fees that are filed on or after that 
                effective date.
    (d) Management of the United States Patent and Trademark Office.--
            (1) In general.--Section 3(b)(1) of title 35, United States 
        Code, is amended in the first sentence--
                    (A) by striking ``be vested with the authority to 
                act in the capacity of the'' and inserting ``serve as 
                Acting''; and
                    (B) by inserting before the period ``or in the 
                event of a vacancy in the office of the Director''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect on the date of enactment of this Act and 
        shall apply with respect to appointments and vacancies 
        occurring before, on, or after the date of enactment of this 
        Act.
    (e) Extension of Fee Setting Authority.--Section 10(i)(2) of the 
Leahy-Smith America Invents Act (Public Law 112-29; 125 Stat. 319) is 
amended by striking ``7-year'' and inserting ``14-year''.
    (f) Patents for Humanity Program.--
            (1) Short title.--This subsection may be cited as the 
        ``Patents for Humanity Program Improvement Act''.
            (2) Transferability of acceleration certificates.--A holder 
        of an acceleration certificate issued pursuant to the Patents 
        for Humanity Program (established in the notice entitled 
        ``Humanitarian Awards Pilot Program'', published at 77 Fed. 
        Reg. 6544 (February 8, 2012)), or any successor thereto, of the 
        United States Patent and Trademark Office, may transfer 
        (including by sale) the entitlement to such acceleration 
        certificate to another person.
            (3) Requirement.--An acceleration certificate transferred 
        under paragraph (1) shall be subject to any other applicable 
        limitations under the notice entitled ``Humanitarian Awards 
        Pilot Program'', published at 77 Fed. Reg. 6544 (February 8, 
        2012), or any successor thereto.

SEC. 16. INSTITUTIONS OF HIGHER EDUCATION AND NONPROFIT RESEARCH.

    Section 123(d) of title 35, United States Code, is amended to read 
as follows:
    ``(d) Institutions of Higher Education and Nonprofit Research 
Organizations.--For purposes of this section, a micro entity shall 
include an applicant who certifies that--
            ``(1) the applicant's employer, from which the applicant 
        obtains the majority of the applicant's income, is an 
        institution of higher education as defined in section 101(a) of 
        the Higher Education Act of 1965 (20 U.S.C. 1001(a)), or a 
        comparable organization outside the United States;
            ``(2) the applicant has assigned, granted, conveyed, or is 
        under an obligation by contract or law, to assign, grant, or 
        convey, a license or other ownership interest in the particular 
        applications to such an institution of higher education;
            ``(3) the applicant is an institution of higher education 
        as defined in section 101(a) of the Higher Education Act of 
        1965 (20 U.S.C. 1001(a)), or a comparable organization outside 
        the United States;
            ``(4) the applicant is an organization described in section 
        501(c)(3) of the Internal Revenue Code of 1986 and exempt from 
        taxation under section 501(a) of such Code, or a comparable 
        organization outside the United States, that holds title to 
        patents and patent applications on behalf of such an 
        institution of higher education for the purpose of facilitating 
        commercialization of the technologies of the patents and patent 
        applications; or
            ``(5) the applicant is an organization described in section 
        501(c)(3) of the Internal Revenue Code of 1986 and exempt from 
        taxation under section 501(a) of such Code and certifies that--
                    ``(A) the applicant performs, at least in part, 
                research or development activities for the Federal 
                Government; or
                    ``(B) the applicant has assigned, granted, or 
                conveyed, or is under an obligation by contract or law 
                to assign, grant, or convey, a license or other 
                ownership interest in the particular applications to an 
                organization described in section 501(c)(3) of the 
                Internal Revenue Code of 1986 and exempt from taxation 
                under section 501(a) of such Code that performs, at 
                least in part, research or development activities for 
                the Federal Government.''.

SEC. 17. EFFECTIVE DATE.

    Except as otherwise provided in this Act, this Act and the 
amendments made by this Act shall take effect on the date of enactment 
of this Act, and shall apply to any patent issued, or any action filed, 
on or after that date.

SEC. 18. SEVERABILITY.

    If any provision of this Act, or an amendment made by this Act, or 
the application of such provision or amendment to any person or 
circumstance, is held to be invalid, the remainder of this Act, or an 
amendment made by this Act, or the application of such provision to 
other persons or circumstances, shall not be affected.
                                                       Calendar No. 203

114th CONGRESS

  1st Session

                                S. 1137

_______________________________________________________________________

                                 A BILL

  To amend title 35, United States Code, and the Leahy-Smith America 
  Invents Act to make improvements and technical corrections, and for 
                            other purposes.

_______________________________________________________________________

                           September 8, 2015

                       Reported with an amendment
```