```

[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2272 Reported in Senate (RS)]

                                                       Calendar No. 681

103d CONGRESS

  2d Session

                                S. 2272

_______________________________________________________________________

                                 A BILL

   To amend chapter 28 of title 35, United States Code, to provide a 
 defense to patent infringement based on prior use by certain persons, 
                        and for other purposes.

_______________________________________________________________________

           September 28 (legislative day, September 12), 1994

                       Reported with an amendment

                                                       Calendar No. 681
103d CONGRESS
  2d Session
                                S. 2272

   To amend chapter 28 of title 35, United States Code, to provide a 
 defense to patent infringement based on prior use by certain persons, 
                        and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                 July 1 (legislative day, June 7), 1994

  Mr. DeConcini (for himself and Mr. Biden) introduced the following 
    bill; which was read twice and referred to the Committee on the 
                               Judiciary

           September 28 (legislative day, September 12), 1994

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

_______________________________________________________________________

                                 A BILL

 
   To amend chapter 28 of title 35, United States Code, to provide a 
 defense to patent infringement based on prior use by certain persons, 
                        and for other purposes.

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

-S-E-C-T-I-O-N -1-. -S-H-O-R-T -T-I-T-L-E-.

    -T-h-i-s -A-c-t -m-a-y -b-e -c-i-t-e-d -a-s -t-h-e -`-`-P-a-t-e-n-t 
-P-r-i-o-r -U-s-e-r -R-i-g-h-t-s -A-c-t -o-f -1-9-9-4-'-'-.

-S-E-C-. -2-. -D-E-F-E-N-S-E -T-O -P-A-T-E-N-T -I-N-F-R-I-N-G-E-M-E-N-T 
              -B-A-S-E-D -O-N -P-R-I-O-R -U-S-E-.

    -(-a-) -I-n -G-e-n-e-r-a-l-.----C-h-a-p-t-e-r -2-8 -o-f -t-i-t-l-e 
-3-5-, -U-n-i-t-e-d -S-t-a-t-e-s -C-o-d-e-, -i-s -a-m-e-n-d-e-d -b-y 
-a-d-d-i-n-g -a-t -t-h-e -e-n-d -t-h-e-r-e-o-f -t-h-e 
-f-o-l-l-o-w-i-n-g -n-e-w -s-e-c-t-i-o-n-:
-`-`-Sec. -2-7-3-. -R-i-g-h-t-s -b-a-s-e-d -o-n -p-r-i-o-r -u-s-e-; 
              -d-e-f-e-n-s-e -t-o -i-n-f-r-i-n-g-e-m-e-n-t
    -`-`-(-a-) -D-e-f-i-n-i-t-i-o-n-s-.----F-o-r -p-u-r-p-o-s-e-s -o-f 
-t-h-i-s -s-e-c-t-i-o-n-, -t-h-e -t-e-r-m---
            -`-`-(-1-) -`-c-o-m-m-e-r-c-i-a-l-l-y -u-s-e-d-' -m-e-a-n-s 
        -t-h-e -u-s-e -i-n -i-n-t-e-r-s-t-a-t-e -o-r 
        -i-n-t-r-a-s-t-a-t-e -c-o-m-m-e-r-c-e-, -i-n-c-l-u-d-i-n-g 
        -t-h-e -u-s-e -o-f -p-r-o-c-e-s-s-e-s-, -e-q-u-i-p-m-e-n-t-, 
        -t-o-o-l-i-n-g-, -a-n-d -i-n-t-e-r-m-e-d-i-a-t-e 
        -m-a-t-e-r-i-a-l-s -i-n -t-h-e -d-e-s-i-g-n-, -t-e-s-t-i-n-g 
        -o-r -p-r-o-d-u-c-t-i-o-n -o-f -c-o-m-m-e-r-c-i-a-l 
        -p-r-o-d-u-c-t-s -w-h-e-t-h-e-r -o-r -n-o-t -s-u-c-h 
        -p-r-o-c-e-s-s-e-s-, -e-q-u-i-p-m-e-n-t-, -t-o-o-l-i-n-g-, 
        -a-n-d -i-n-t-e-r-m-e-d-i-a-t-e -m-a-t-e-r-i-a-l-s -a-r-e 
        -n-o-r-m-a-l-l-y -a-c-c-e-s-s-i-b-l-e-, -a-v-a-i-l-a-b-l-e-, 
        -o-r -o-t-h-e-r-w-i-s-e -k-n-o-w-n -t-o -t-h-e -p-u-b-l-i-c-;
            -`-`-(-2-) -`-e-f-f-e-c-t-i-v-e -a-n-d -s-e-r-i-o-u-s 
        -p-r-e-p-a-r-a-t-i-o-n-' -m-e-a-n-s -t-h-a-t -a -p-e-r-s-o-n-, 
        -i-n -t-h-e -U-n-i-t-e-d -S-t-a-t-e-s-, -h-a-s---
                    -`-`-(-A-) -r-e-d-u-c-e-d -t-o -p-r-a-c-t-i-c-e 
                -t-h-e -s-u-b-j-e-c-t -m-a-t-t-e-r -f-o-r -w-h-i-c-h 
                -r-i-g-h-t-s -b-a-s-e-d -o-n -p-r-i-o-r -u-s-e -a-r-e 
                -c-l-a-i-m-e-d-; -a-n-d
                    -`-`-(-B-) -m-a-d-e -s-e-r-i-o-u-s -p-l-a-n-s-, 
                -a-n-d -a -s-u-b-s-t-a-n-t-i-a-l -i-n-v-e-s-t-m-e-n-t 
                -o-r -m-u-c-h -o-f -t-h-e -i-n-v-e-s-t-m-e-n-t 
                -n-e-c-e-s-s-a-r-y -f-o-r -t-h-e -s-u-b-j-e-c-t 
                -m-a-t-t-e-r -t-o -b-e -c-o-m-m-e-r-c-i-a-l-l-y 
                -u-s-e-d-; -a-n-d
            -`-`-(-3-) -`-c-r-i-t-i-c-a-l -d-a-t-e-' -m-e-a-n-s -t-h-e 
        -f-i-l-i-n-g -d-a-t-e -o-r -t-h-e -p-r-i-o-r-i-t-y -d-a-t-e-, 
        -w-h-i-c-h-e-v-e-r -o-c-c-u-r-s -f-i-r-s-t-, -o-f -t-h-e 
        -a-p-p-l-i-c-a-t-i-o-n -f-o-r -p-a-t-e-n-t-.
    -`-`-(-b-) -I-n -G-e-n-e-r-a-l-.----A -p-e-r-s-o-n -s-h-a-l-l 
-n-o-t -b-e -l-i-a-b-l-e -a-s -a-n -i-n-f-r-i-n-g-e-r -u-n-d-e-r -a 
-p-a-t-e-n-t -g-r-a-n-t-e-d -t-o -a-n-o-t-h-e-r -w-i-t-h -r-e-s-p-e-c-t 
-t-o -a-n-y -s-u-b-j-e-c-t -m-a-t-t-e-r -c-l-a-i-m-e-d -i-n -t-h-e 
-p-a-t-e-n-t -t-h-a-t -s-u-c-h -p-e-r-s-o-n -h-a-d-, -a-c-t-i-n-g -i-n 
-g-o-o-d -f-a-i-t-h-, -c-o-m-m-e-r-c-i-a-l-l-y -u-s-e-d -i-n -t-h-e 
-U-n-i-t-e-d -S-t-a-t-e-s -o-r -m-a-d-e -e-f-f-e-c-t-i-v-e -a-n-d 
-s-e-r-i-o-u-s -p-r-e-p-a-r-a-t-i-o-n -t-h-e-r-e-f-o-r -i-n -t-h-e 
-U-n-i-t-e-d -S-t-a-t-e-s-, -b-e-f-o-r-e -t-h-e -c-r-i-t-i-c-a-l 
-d-a-t-e-.
    -`-`-(-c-) -L-i-m-i-t-a-t-i-o-n -o-f -D-e-f-e-n-s-e-.---
-S-u-b-j-e-c-t -t-o -s-u-b-s-e-c-t-i-o-n -(-d-)-, -r-i-g-h-t-s 
-b-a-s-e-d -o-n -p-r-i-o-r -u-s-e -u-n-d-e-r -t-h-i-s -s-e-c-t-i-o-n 
-e-x-t-e-n-d -o-n-l-y -t-o -t-h-e -c-l-a-i-m-e-d -i-n-v-e-n-t-i-o-n 
-t-h-a-t -t-h-e -p-e-r-s-o-n -c-l-a-i-m-i-n-g -r-i-g-h-t-s -b-a-s-e-d 
-o-n -p-r-i-o-r -u-s-e -w-a-s -i-n -p-o-s-s-e-s-s-i-o-n -o-f -p-r-i-o-r 
-t-o -t-h-e -c-r-i-t-i-c-a-l -d-a-t-e-.
    -`-`-(-d-) -C-e-r-t-a-i-n -V-a-r-i-a-t-i-o-n-s -a-n-d 
-I-m-p-r-o-v-e-m-e-n-t-s -N-o-t -a-n -I-n-f-r-i-n-g-e-m-e-n-t-.---
-T-h-e -r-i-g-h-t-s -b-a-s-e-d -o-n -p-r-i-o-r -u-s-e -u-n-d-e-r 
-t-h-i-s -s-e-c-t-i-o-n -s-h-a-l-l -i-n-c-l-u-d-e -t-h-e -r-i-g-h-t 
-t-o -m-a-k-e -a-n-d -u-s-e -v-a-r-i-a-t-i-o-n-s -o-r 
-i-m-p-r-o-v-e-m-e-n-t-s-, -i-n-c-l-u-d-i-n-g -v-a-r-i-a-t-i-o-n-s -i-n 
-t-h-e -q-u-a-n-t-i-t-y -o-r -v-o-l-u-m-e -o-f -s-u-c-h -u-s-e-. 
-S-u-c-h -v-a-r-i-a-t-i-o-n-s -o-r -i-m-p-r-o-v-e-m-e-n-t-s -m-a-y 
-n-o-t -i-n-f-r-i-n-g-e -a-d-d-i-t-i-o-n-a-l -c-l-a-i-m-s -o-f -t-h-e 
-p-a-t-e-n-t-.
    -`-`-(-e-) -Q-u-a-l-i-f-i-c-a-t-i-o-n-s-.----(-1-) -T-h-e 
-r-i-g-h-t-s -b-a-s-e-d -o-n -p-r-i-o-r -u-s-e -u-n-d-e-r -t-h-i-s 
-s-e-c-t-i-o-n -a-r-e -p-e-r-s-o-n-a-l -a-n-d -s-h-a-l-l -n-o-t -b-e 
-l-i-c-e-n-s-e-d -o-r -a-s-s-i-g-n-e-d -o-r -t-r-a-n-s-f-e-r-r-e-d -t-o 
-a-n-o-t-h-e-r -e-x-c-e-p-t -i-n -c-o-n-n-e-c-t-i-o-n -w-i-t-h -t-h-e 
-a-s-s-i-g-n-m-e-n-t -o-r -t-r-a-n-s-f-e-r -o-f -t-h-e -e-n-t-i-r-e 
-b-u-s-i-n-e-s-s -o-r -e-n-t-e-r-p-r-i-s-e -t-o -w-h-i-c-h -t-h-e 
-r-i-g-h-t-s -r-e-l-a-t-e-.
    -`-`-(-2-) -A -p-e-r-s-o-n -m-a-y -n-o-t -c-l-a-i-m -r-i-g-h-t-s 
-b-a-s-e-d -o-n -p-r-i-o-r -u-s-e -u-n-d-e-r -t-h-i-s -s-e-c-t-i-o-n 
-i-f -t-h-e -a-c-t-i-v-i-t-y -u-n-d-e-r -w-h-i-c-h -s-u-c-h 
-p-e-r-s-o-n -c-l-a-i-m-s -t-h-e -r-i-g-h-t-s -w-a-s---
            -`-`-(-A-) -b-a-s-e-d -o-n -i-n-f-o-r-m-a-t-i-o-n 
        -o-b-t-a-i-n-e-d -o-r -d-e-r-i-v-e-d -f-r-o-m -t-h-e 
        -p-a-t-e-n-t-e-e -o-r -t-h-o-s-e -i-n -p-r-i-v-i-t-y -w-i-t-h 
        -t-h-e -p-a-t-e-n-t-e-e-; -o-r
            -`-`-(-B-) -a-b-a-n-d-o-n-e-d -o-n -o-r -a-f-t-e-r -t-h-e 
        -c-r-i-t-i-c-a-l -d-a-t-e-, -e-x-c-e-p-t -t-h-a-t -f-o-r 
        -a-b-a-n-d-o-n-m-e-n-t -w-h-i-c-h -o-c-c-u-r-s -a-f-t-e-r 
        -t-h-e -c-r-i-t-i-c-a-l -d-a-t-e-, -r-i-g-h-t-s -b-a-s-e-d -o-n 
        -p-r-i-o-r -u-s-e -m-a-y -b-e -u-s-e-d -a-s -a -d-e-f-e-n-s-e 
        -t-o -i-n-f-r-i-n-g-e-m-e-n-t -f-o-r -t-h-a-t -p-e-r-i-o-d -o-f 
        -a-c-t-i-v-i-t-y -w-h-i-c-h -o-c-c-u-r-r-e-d -p-r-i-o-r -t-o 
        -a-b-a-n-d-o-n-m-e-n-t -i-f -s-u-c-h -a-c-t-i-v-i-t-y 
        -w-o-u-l-d -o-t-h-e-r-w-i-s-e-, -i-n -t-h-e -a-b-s-e-n-c-e -o-f 
        -a-b-a-n-d-o-n-m-e-n-t-, -h-a-v-e -b-e-e-n -a-l-l-o-w-e-d 
        -u-n-d-e-r -t-h-i-s -s-e-c-t-i-o-n-.
    -`-`-(-3-) -T-h-e -r-i-g-h-t-s -b-a-s-e-d -o-n -p-r-i-o-r -u-s-e 
-u-n-d-e-r -t-h-i-s -s-e-c-t-i-o-n -a-r-e -n-o-t -a -g-e-n-e-r-a-l 
-l-i-c-e-n-s-e -u-n-d-e-r -a-l-l -c-l-a-i-m-s -o-f -t-h-e 
-p-a-t-e-n-t-, -b-u-t -a-r-e -r-e-s-t-r-i-c-t-e-d -i-n -s-c-o-p-e -t-o 
-c-o-v-e-r -o-n-l-y -t-h-a-t -s-u-b-j-e-c-t -m-a-t-t-e-r -c-l-a-i-m-e-d 
-i-n -t-h-e -p-a-t-e-n-t -t-h-a-t -h-a-s -b-e-e-n 
-c-o-m-m-e-r-c-i-a-l-l-y -u-s-e-d-, -o-r -f-o-r -w-h-i-c-h -t-h-e-r-e 
-h-a-s -b-e-e-n -e-f-f-e-c-t-i-v-e -a-n-d -s-e-r-i-o-u-s 
-p-r-e-p-a-r-a-t-i-o-n-, -i-n -t-h-e -U-n-i-t-e-d -S-t-a-t-e-s-, 
-b-e-f-o-r-e -t-h-e -c-r-i-t-i-c-a-l -d-a-t-e-.
    -`-`-(-f-) -B-u-r-d-e-n -o-f -P-r-o-o-f-.----I-n -a-n-y 
-a-c-t-i-o-n -i-n -w-h-i-c-h -a -p-e-r-s-o-n -c-l-a-i-m-s -a 
-d-e-f-e-n-s-e -t-o -i-n-f-r-i-n-g-e-m-e-n-t -u-n-d-e-r -t-h-i-s 
-s-e-c-t-i-o-n -t-h-e -b-u-r-d-e-n -o-f -p-r-o-o-f -f-o-r 
-e-s-t-a-b-l-i-s-h-i-n-g -t-h-e -d-e-f-e-n-s-e -s-h-a-l-l -b-e -o-n 
-t-h-e -p-e-r-s-o-n -c-l-a-i-m-i-n-g -r-i-g-h-t-s -b-a-s-e-d -o-n 
-p-r-i-o-r -u-s-e-.-'-'-.
    -(-b-) -T-e-c-h-n-i-c-a-l -a-n-d -C-o-n-f-o-r-m-i-n-g 
-A-m-e-n-d-m-e-n-t-.----T-h-e -t-a-b-l-e -o-f -s-e-c-t-i-o-n-s -f-o-r 
-c-h-a-p-t-e-r -2-8 -o-f -t-i-t-l-e -3-5-, -U-n-i-t-e-d -S-t-a-t-e-s 
-C-o-d-e-, -i-s -a-m-e-n-d-e-d -b-y -a-d-d-i-n-g -a-t -t-h-e -e-n-d 
-t-h-e-r-e-o-f -t-h-e -f-o-l-l-o-w-i-n-g-:

-`-`-2-7-3-. -R-i-g-h-t-s -b-a-s-e-d -o-n -p-r-i-o-r -u-s-e-; 
                            -d-e-f-e-n-s-e -t-o 
                            -i-n-f-r-i-n-g-e-m-e-n-t-.-'-'-.

-S-E-C-. -3-. -E-F-F-E-C-T-I-V-E -D-A-T-E-.

    -T-h-e -p-r-o-v-i-s-i-o-n-s -o-f -t-h-i-s -A-c-t -a-n-d -t-h-e 
-a-m-e-n-d-m-e-n-t-s -m-a-d-e -b-y -t-h-i-s -A-c-t -s-h-a-l-l -t-a-k-e 
-e-f-f-e-c-t -o-n -t-h-e -d-a-t-e -o-f -t-h-e -e-n-a-c-t-m-e-n-t -o-f 
-t-h-i-s -A-c-t-.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Patent Prior User Rights Act of 
1994''.

SEC. 2. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR USE.

    (a) In General.--Chapter 28 of title 35, United States Code, is 
amended by adding at the end thereof the following new section:
``Sec. 273. Rights based on prior use; defense to infringement
    ``(a) Definitions.--For purposes of this section, the term--
            ``(1) `commercially used' means the use in interstate or 
        intrastate commerce, including the use of processes, equipment, 
        tooling, and intermediate materials in the design, testing, or 
        production of commercial products whether or not such 
        processes, equipment, tooling, and intermediate materials are 
        normally accessible, available, or otherwise known to the 
        public;
            ``(2) `effective and serious preparation' means that a 
        person has, in the United States--
                    ``(A) actually reduced to practice the subject 
                matter for which rights based on prior use are claimed; 
                and
                    ``(B) made serious plans, and a substantial 
                investment or a substantial portion of the total 
                investment necessary for the subject matter to be 
                commercially used; and
            ``(3) `effective filing date' means the earlier of the 
        actual filing date of the application for patent or the filing 
        date of any earlier United States, foreign, or international 
        application to which the subject matter at issue is entitled 
        under sections 119, 120, or 365 of this title.
    ``(b) In General.--A person shall not be liable as an infringer 
under section 271 of this title with respect to any subject matter 
claimed in the patent being asserted that such person had, acting in 
good faith, commercially used in the United States or made effective 
and serious preparation therefore in the United States, before the 
effective filing date.
    ``(c) Limitation of Defense.--Rights based on prior use under this 
section are not a general license under all claims of the patent, but 
subject to subsection (d), extend only to the claimed invention that 
the person claiming rights based on prior use was in possession of 
prior to the effective filing date.
    ``(d) Certain Variations and Improvements Not an Infringement.--The 
rights based on prior use under this section shall include the right to 
vary the quantity or volume of commercial use or to make improvements 
that do not infringe additional claims of the patent.
    ``(e) Qualifications.--(1) The rights based on prior use under this 
section are personal and shall not be licensed or assigned or 
transferred to another except in connection with the good faith 
assignment or transfer of the entire business or enterprise or the 
entire line of business or enterprise to which the rights relate.
    ``(2) A person may not claim rights based on prior use under this 
section if the activity under which such person claims the rights was--
            ``(A) based on information obtained or derived from the 
        patentee or those in privity with the patentee; or
            ``(B) abandoned on or after the effective filing date, 
        except that for abandonment which occurs after the effective 
        filing date, rights based on prior use may be used as a defense 
        to infringement for that period of activity which occurred 
        prior to abandonment if such activity would otherwise, in the 
        absence of abandonment, have been allowed under this section.
    ``(f) Burden of Proof.--In any action in which a person claims a 
defense to infringement under this section the burden of proof for 
establishing the defense shall be on the person claiming rights based 
on prior use.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 28 of title 35, United States Code, is amended by adding at the 
end thereof the following:

``273. Rights based on prior use; defense to infringement.''.

SEC. 3. EFFECTIVE DATE.

    The provisions of this Act and the amendments made by this Act 
shall take effect on the date of the enactment of this Act.
```