`[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1907 Reported in House (RH)]





                                                 Union Calendar No. 172

106th CONGRESS

  1st Session

                               H. R. 1907

                      [Report No. 106-287, Part I]

_______________________________________________________________________

                                 A BILL

 To amend title 35, United States Code, to provide enhanced protection 
   for inventors and innovators, protect patent terms, reduce patent 
                  litigation, and for other purposes.

_______________________________________________________________________

                             August 3, 1999

Reported with an amendment and referred to the Committee on Government 
     Reform for a period ending not later than August 3, 1999, for 
  consideration of such provisions of the bill and amendment as fall 
within the jurisdiction of that committee pursuant to clause 1(h), rule 
                                   X

                             August 3, 1999

 Committee on Government Reform discharged; committed to the Committee 
 of the Whole House on the State of the Union and ordered to be printed





                                                 Union Calendar No. 172
106th CONGRESS
  1st Session
                                H. R. 1907

                      [Report No. 106-287, Part I]

 To amend title 35, United States Code, to provide enhanced protection 
   for inventors and innovators, protect patent terms, reduce patent 
                  litigation, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 24, 1999

    Mr. Coble (for himself, Mr. Berman, Mr. Hyde, Mr. Conyers, Mr. 
 Rohrabacher, Mr. Campbell, Mr. Goodlatte, Ms. Lofgren, Mr. Delahunt, 
Mr. Pease, Mr. Wexler, and Mr. Gallegly) introduced the following bill; 
          which was referred to the Committee on the Judiciary

                             August 3, 1999

Reported with an amendment and referred to the Committee on Government 
     Reform for a period ending not later than August 3, 1999, for 
  consideration of such provisions of the bill and amendment as fall 
within the jurisdiction of that committee pursuant to clause 1(h), rule 
                                   X
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                             August 3, 1999

Additional sponsors: Mr. Cannon, Mrs. Morella, Mrs. Kelly, Mr. Smith of 
  Washington, Mrs. Tauscher, Ms. Eshoo, Mr. Largent, Mr. Bartlett of 
  Maryland, Mr. Franks of New Jersey, Mr. Frank of Massachusetts, Mr. 
Bilbray, Mr. Frost, Mr. Lantos, Mr. Sweeney, Mr. Sherman, Mr. Dooley of 
   California, Mr. McDermott, Mr. Boucher, Mr. Portman, Mr. Davis of 
Florida, Mrs. Napolitano, Mrs. Meek of Florida, Mr. Petri, Mr. Norwood, 
 Mr. Ballenger, Mrs. Johnson of Connecticut, Mr. Bryant, Mr. Rothman, 
 Mr. Ehrlich, Mr. Maloney of Connecticut, Mr. Dicks, Mr. Watt of North 
 Carolina, Mr. Dreier, Mr. McCollum, Mr. Vento, Mr. Calvert, Mr. Price 
  of North Carolina, Mr. Lewis of Georgia, Mr. Clement, Mr. Ford, Mr. 
Moran of Virginia, Mr. Etheridge, Ms. McCarthy of Missouri, Mr. Hill of 
      Montana, Mr. Castle, Mr. Mascara, Mr. Shadegg, and Mr. Wolf

                             August 3, 1999

 Committee on Government Reform discharged; committed to the Committee 
 of the Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on May 24, 
                                 1999]

_______________________________________________________________________

                                 A BILL


 
 To amend title 35, United States Code, to provide enhanced protection 
   for inventors and innovators, protect patent terms, reduce patent 
                  litigation, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Inventors Protection Act of 
1999''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

                       TITLE I--INVENTORS' RIGHTS

Sec. 101. Short title.
Sec. 102. Invention promotion services.
Sec. 103. Effective date.

                    TITLE II--FIRST INVENTOR DEFENSE

Sec. 201. Short title.
Sec. 202. Defense to patent infringement based on earlier inventor.
Sec. 203. Effective date and applicability.

                    TITLE III--PATENT TERM GUARANTEE

Sec. 301. Short title.
Sec. 302. Patent term guarantee authority.
Sec. 303. Continued examination of patent applications.
Sec. 304. Technical clarification.
Sec. 305. Effective date.

 TITLE IV--UNITED STATES PUBLICATION OF PATENT APPLICATIONS PUBLISHED 
                                 ABROAD

Sec. 401. Short title.
Sec. 402. Publication.
Sec. 403. Time for claiming benefit of earlier filing date.
Sec. 404. Provisional rights.
Sec. 405. Prior art effect of published applications.
Sec. 406. Cost recovery for publication.
Sec. 407. Conforming amendments.
Sec. 408. Effective date.

                TITLE V--PATENT LITIGATION REDUCTION ACT

Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Reexamination procedures.
Sec. 504. Conforming amendments.
Sec. 505. Report to Congress.
Sec. 506. Estoppel effect of reexamination.
Sec. 507. Effective date.

                 TITLE VI--PATENT AND TRADEMARK OFFICE

Sec. 601. Short title.

         Subtitle A--United States Patent and Trademark Office

Sec. 611. Establishment of Patent and Trademark Office.
Sec. 612. Powers and duties.
Sec. 613. Organization and management.
Sec. 614. Personnel flexibility.
Sec. 615. Public Advisory Committees.
Sec. 616. Patent and Trademark Office funding.
Sec. 617. Conforming amendments.
Sec. 618. Trademark Trial and Appeal Board.
Sec. 619. Board of Patent Appeals and Interferences.
Sec. 620. Annual report of Director.
Sec. 621. Suspension or exclusion from practice.
Sec. 622. Pay of Director.

            Subtitle B--Effective Date; Technical Amendments

Sec. 631. Effective date.
Sec. 632. Technical and conforming amendments.

                  Subtitle C--Miscellaneous Provisions

Sec. 641. References.
Sec. 642. Exercise of authorities.
Sec. 643. Savings provisions.
Sec. 644. Transfer of assets.
Sec. 645. Delegation and assignment.
Sec. 646. Authority of Director of the Office of Management and Budget 
                            with respect to functions transferred.
Sec. 647. Certain vesting of functions considered transfers.
Sec. 648. Availability of existing funds.
Sec. 649. Definitions.

               TITLE VII--MISCELLANEOUS PATENT PROVISIONS

Sec. 701. Provisional applications.
Sec. 702. International applications.
Sec. 703. Certain limitations on damages for patent infringement not 
                            applicable.
Sec. 704. Electronic filing.
Sec. 705. Study and report on biological deposits in support of 
                            biotechnology patents.
Sec. 706. Prior invention.
Sec. 707. Prior art exclusion for certain commonly assigned patents.

                       TITLE I--INVENTORS' RIGHTS

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Inventors' Rights Act''.

SEC. 102. INVENTION PROMOTION SERVICES.

    Part I of title 35, United States Code, is amended by adding after 
chapter 4 the following chapter:

               ``CHAPTER 5--INVENTION PROMOTION SERVICES

``Sec.
``51. Definitions.
``52. Contracting requirements.
``53. Standard provisions for cover notice.
``54. Reports to customer required.
``55. Mandatory contract terms.
``56. Remedies.
``57. Records of complaints.
``58. Fraudulent representation by an invention promoter.
``59. Rule of construction.
``Sec. 51. Definitions
    ``For purposes of this chapter--
            ``(1) the term `contract for invention promotion services' 
        means a contract by which an invention promoter undertakes 
        invention promotion services for a customer;
            ``(2) the term `customer' means any person, firm, 
        partnership, corporation, or other entity who enters into a 
        financial relationship or a contract with an invention promoter 
        for invention promotion services;
            ``(3) the term `invention promoter' means any person, firm, 
        partnership, corporation, or other entity who offers to perform 
        or performs for, or on behalf of, a customer any act described 
        under paragraph (4), but does not include--
                    ``(A) any department or agency of the Federal 
                Government or of a State or local government;
                    ``(B) any nonprofit, charitable, scientific, or 
                educational organization, qualified under applicable 
                State law or described under section 170(b)(1)(A) of 
                the Internal Revenue Code of 1986; or
                    ``(C) any person duly registered with, and in good 
                standing before, the United States Patent and Trademark 
                Office acting within the scope of that person's 
                registration to practice before the Patent and 
                Trademark Office, except when that person performs any 
                act described in subparagraph (B) or (C) of paragraph 
                (4); and
            ``(4) the term `invention promotion services' means, with 
        respect to an invention by a customer, any act involved in--
                    ``(A) evaluating the invention to determine its 
                protectability as some form of intellectual property, 
                other than evaluation by a person licensed by a State 
                to practice law who is acting solely within the scope 
                of that person's professional license;
                    ``(B) evaluating the invention to determine its 
                commercial potential by any person for purposes other 
                than providing venture capital; or
                    ``(C) marketing, brokering, offering to license or 
                sell, or promoting the invention or a product or 
                service in which the invention is incorporated or used, 
                except that the display only of an invention at a trade 
                show or exhibit shall not be considered to be invention 
                promotion services.
``Sec. 52. Contracting requirements
    ``(a) In General.--(1) Every contract for invention promotion 
services shall be in writing and shall be subject to the provisions of 
this chapter. A copy of the signed written contract shall be given to 
the customer at the time the customer enters into the contract.
    ``(2) If a contract is entered into for the benefit of a third 
party, the identity and address of such party shall be disclosed by 
such party's agent and such party shall be considered a customer for 
purposes of this chapter.
    ``(b) Requirements of Invention Promoter.--The invention promoter 
shall--
            ``(1) state in a written document, at the time a customer 
        enters into a contract forinvention promotion services, whether 
        the usual business practice of the invention promoter is to--
                    ``(A) seek more than 1 contract in connection with 
                an invention; or
                    ``(B) seek to perform services in connection with 
                an invention in 1 or more phases, with the performance 
                of each phase covered in 1 or more subsequent 
                contracts; and
            ``(2) supply to the customer a copy of the written document 
        together with a written summary of the usual business practices 
        of the invention promoter, including--
                    ``(A) the usual business terms of contracts; and
                    ``(B) the approximate amount of the usual fees or 
                other consideration that may be required from the 
                customer for each of the services provided by the 
                invention promoter.
    ``(c) Right of Customer To Cancel Contract.--(1) Notwithstanding 
any contractual provision to the contrary, a customer shall have the 
right to terminate a contract for invention promotion services by 
sending a written letter to the invention promoter stating the 
customer's intent to cancel the contract. The letter of termination 
must be deposited with the United States Postal Service on or before 5 
business days after the date upon which the customer or the invention 
promoter executes the contract, whichever is later.
    ``(2) Delivery of a promissory note, check, bill of exchange, or 
negotiable instrument of any kind to the invention promoter or to a 
third party for the benefit of the invention promoter, without regard 
to the date or dates appearing in such instrument, shall be deemed 
payment received by the invention promoter on the date received for 
purposes of this section.
``Sec. 53. Standard provisions for cover notice
    ``(a) Contents.--Every contract for invention promotion services 
shall have a conspicuous and legible cover sheet attached with the 
following notice imprinted in boldface type of not less than 12-point 
size:
    `YOU HAVE THE RIGHT TO TERMINATE THIS CONTRACT. TO TERMINATE THIS 
CONTRACT, YOU MUST SEND A WRITTEN LETTER TO THE COMPANY STATING YOUR 
INTENT TO CANCEL THIS CONTRACT.
    `THE LETTER OF TERMINATION MUST BE DEPOSITED WITH THE UNITED STATES 
POSTAL SERVICE ON OR BEFORE FIVE (5) BUSINESS DAYS AFTER THE DATE ON 
WHICH YOU OR THE COMPANY EXECUTE THE CONTRACT, WHICHEVER IS LATER.
    `THE TOTAL NUMBER OF INVENTIONS EVALUATED BY THE INVENTION PROMOTER 
FOR COMMERCIAL POTENTIAL IN THE PAST FIVE (5) YEARS IS XXXXX. OF THAT 
NUMBER, XXXXX RECEIVED POSITIVE EVALUATIONS AND XXXXX RECEIVED NEGATIVE 
EVALUATIONS.
    `IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION TO THE 
INVENTION PROMOTER, THE INVENTION PROMOTER MAY HAVE THE RIGHT TO SELL 
OR DISPOSE OF THE INVENTION WITHOUT YOUR CONSENT AND MAY NOT HAVE TO 
SHARE THE PROFITS WITH YOU.
    `THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH THE 
INVENTION PROMOTER IN THE PAST FIVE (5) YEARS IS XXXXX. THE TOTAL 
NUMBER OF CUSTOMERS KNOWN BY THIS INVENTION PROMOTER TO HAVE RECEIVED, 
BY VIRTUE OF THIS INVENTION PROMOTER'S PERFORMANCE, AN AMOUNT OF MONEY 
IN EXCESS OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION PROMOTER 
IS XXXXXXX. AS A RESULT OF THE EFFORTS OF THIS INVENTION PROMOTER, 
XXXXX NUMBER OF CUSTOMERS HAVE RECEIVED LICENSE AGREEMENTS FOR THEIR 
INVENTIONS.
    `THE OFFICERS OF THIS INVENTION PROMOTER HAVE COLLECTIVELY OR 
INDIVIDUALLY BEEN AFFILIATED IN THE LAST TEN (10) YEARS WITH THE 
FOLLOWING INVENTION PROMOTION COMPANIES: (LIST THE NAMES AND ADDRESSES 
OF ALL PREVIOUS INVENTION PROMOTION COMPANIES WITH WHICH THE PRINCIPAL 
OFFICERS HAVE BEEN AFFILIATED AS OWNERS, AGENTS, OR EMPLOYEES). YOU ARE 
ENCOURAGED TO CHECK WITH THE UNITED STATES PATENT AND TRADEMARK OFFICE, 
THE FEDERAL TRADE COMMISSION, YOUR STATE ATTORNEY GENERAL'S OFFICE, AND 
THE BETTER BUSINESS BUREAU FOR ANY COMPLAINTS FILED AGAINST ANY OF 
THESE COMPANIES WHICH RESULTED IN REGULATORY SANCTIONS OR OTHER 
CORRECTIVE ACTIONS.
    `YOU ARE ENCOURAGED TO CONSULT WITH AN ATTORNEY OF YOUR OWN 
CHOOSING BEFORE SIGNING THIS CONTRACT. BY PROCEEDING WITHOUT THE ADVICE 
OF AN ATTORNEY REGISTERED TO PRACTICE BEFORE THE UNITED STATES PATENT 
AND TRADEMARK OFFICE, YOU COULD LOSE ANY RIGHTS YOU MIGHT HAVE IN YOUR 
IDEA OR INVENTION.'.
    ``(b) Other Requirements for Cover Notice.--The cover notice shall 
contain the items required under subsection (a) and the name, primary 
office address, and local office address of the invention promoter, and 
may contain no other matter.
    ``(c) Disclosure of Certain Customers Not Required.--The 
requirement in the notice set forth in subsection (a) to include the 
`TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH THE INVENTION 
PROMOTER IN THE PAST FIVE (5) YEARS' need not include information with 
respect to customers who have purchased trade show services, research, 
advertising, or other nonmarketing services from the invention 
promoter, nor with respect to customers who have defaulted in their 
payment to the invention promoter.
``Sec. 54. Reports to customer required
    ``With respect to every contract for invention promotion services, 
the invention promoter shall deliver to the customer at the address 
specified in the contract, at least once every 3 months throughout the 
term of the contract, a written report that identifies the contract and 
includes--
            ``(1) a full, clear, and concise description of the 
        services performed to the date of the report and of the 
        services yet to be performed and names of all persons who it is 
        known will perform the services; and
            ``(2) the name and address of each person, firm, 
        corporation, or other entity to whom the subject matter of the 
        contract has been disclosed, the reason for each such 
        disclosure, the nature of the disclosure, and complete and 
        accurate summaries of all responses received as a result of 
        those disclosures.
``Sec. 55. Mandatory contract terms
    ``(a) Mandatory Terms.--Each contract for invention promotion 
services shall include in boldface type of not less than 12-point 
size--
            ``(1) the terms and conditions of payment and contract 
        termination rights required under section 52;
            ``(2) a statement that the customer may avoid entering into 
        the contract by not making the initial payment to the invention 
        promoter;
            ``(3) a full, clear, and concise description of the 
        specific acts or services that the invention promoter 
        undertakes to perform for the customer;
            ``(4) a statement as to whether the invention promoter 
        undertakes to construct, sell, or distribute one or more 
        prototypes, models, or devices embodying the invention of the 
        customer;
            ``(5) the full name and principal place of business of the 
        invention promoter and the name and principal place of business 
        of any parent, subsidiary, agent, independent contractor, and 
        any affiliated company or person who it is known will perform 
        any of the services or acts that the invention promoter 
        undertakes to perform for the customer;
            ``(6) if any oral or written representation of estimated or 
        projected customer earnings is given by the invention promoter 
        (or any agent, employee, officer, director, partner, or 
        independent contractor of such invention promoter), a statement 
        of that estimation or projection and a description of the data 
        upon which such representation is based;
            ``(7) the name and address of the custodian of all records 
        and correspondence relating to the contracted for invention 
        promotion services, and a statement that the invention promoter 
        is required to maintain all records and correspondence relating 
        to performance of the invention promotion services for such 
        customer for a period of not less than 2 years after expiration 
        of the term of such contract; and
            ``(8) a statement setting forth a time schedule for 
        performance of the invention promotion services, including an 
        estimated date in which such performance is expected to be 
        completed.
    ``(b) Invention Promoter as Fiduciary.--To the extent that the 
description of the specific acts or services affords discretion to the 
invention promoter with respect to what specific acts or services shall 
be performed, the invention promoter shall be deemed a fiduciary.
    ``(c) Availability of Information.--Records and correspondence 
described under subsection (a)(7) shall be made available after 7 days 
written notice to the customer or the representative of the customer to 
review and copy at a reasonable cost on the invention promoter's 
premises during normal business hours.
``Sec. 56. Remedies
    ``(a) In General.--(1) Any contract for invention promotion 
services that does not comply with the applicable provisions of this 
chapter shall be voidable at the option of the customer.
    ``(2) Any contract for invention promotion services entered into in 
reliance upon any material false, fraudulent, or misleading 
information, representation, notice, or advertisement of the invention 
promoter (or any agent, employee, officer, director, partner, or 
independent contractor of such invention promoter) shall be voidable at 
the option of the customer.
    ``(3) Any waiver by the customer of any provision of this chapter 
shall be deemed contrary to public policy and shall be void and 
unenforceable.
    ``(4) Any contract for invention promotion services which provides 
for filing for and obtaining utility, design, or plant patent 
protection shall be voidable at the option of the customer unless the 
invention promoter offers to perform or performs such act through 
aperson duly registered to practice before, and in good standing with, 
the Patent and Trademark Office.
    ``(b) Civil Action.--(1) Any customer who is injured by a violation 
of this chapter by an invention promoter or by any material false or 
fraudulent statement or representation, or any omission of material 
fact, by an invention promoter (or any agent, employee, director, 
officer, partner, or independent contractor of such invention promoter) 
or by failure of an invention promoter to make all the disclosures 
required under this chapter, may recover in a civil action against the 
invention promoter (or the officers, directors, or partners of such 
invention promoter) in addition to reasonable costs and attorneys' 
fees, the greater of--
            ``(A) $5,000; or
            ``(B) the amount of actual damages sustained by the 
        customer.
    ``(2) Notwithstanding paragraph (1), the court may increase damages 
to not more than 3 times the amount awarded, taking into account past 
complaints made against the invention promoter that resulted in 
regulatory sanctions or other corrective actions based on those record 
compiled by the Director under section 57.
    ``(c) Rebuttable Presumption of Injury.--For purposes of this 
section, substantial violation of any provision of this chapter by an 
invention promoter or execution by the customer of a contract for 
invention promotion services in reliance on any material false or 
fraudulent statements or representations or omissions of material fact 
shall establish a rebuttable presumption of injury.
``Sec. 57. Records of complaints
    ``(a) Release of Complaints.--The Director shall make all 
complaints received by the United States Patent and Trademark Office 
involving invention promoters publicly available, together with any 
response of the invention promoters.
    ``(b) Request for Complaints.--The Director may request complaints 
relating to invention promotion services from any Federal or State 
agency and include such complaints in the records maintained under 
subsection (a), together with any response of the invention promoters.
``Sec. 58. Fraudulent representation by an invention promoter
    ``Whoever, in providing invention promotion services, knowingly 
provides any false or misleading statement, representation, or omission 
of material fact to a customer or fails to make all the disclosures 
required under this chapter, shall be guilty of a misdemeanor and fined 
not more than $10,000 for each offense.
``Sec. 59. Rule of construction
    ``Except as expressly provided in this chapter, no provision of 
this chapter shall be construed to affect any obligation, right, or 
remedy provided under any other Federal or State law.''.

SEC. 103. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
60 days after the date of the enactment of this Act.

                    TITLE II--FIRST INVENTOR DEFENSE

SEC. 201. SHORT TITLE.

    This title may be cited as the ``First Inventor Defense Act''.

SEC. 202. DEFENSE TO PATENT INFRINGEMENT BASED ON EARLIER INVENTOR.

    (a) Defense.--Chapter 28 of title 35, United States Code, is 
amended by adding at the end the following new section:
``Sec. 273. Defense to infringement based on earlier inventor
    ``(a) Definitions.--For purposes of this section--
            ``(1) the terms `commercially used' and `commercial use' 
        mean use of a process or method in the United States or the use 
        of a process or method in the design, testing, or production in 
        the United States of a product or service, so long as such use 
        is in connection with an actual arm's-length sale or other 
        arm's-length commercial transfer of a product or service, 
        whether or not the subject matter at issue is accessible to or 
        otherwise known to the public, except that the subject matter 
        for which commercial marketing or use is subject to a 
        premarketing regulatory review period during which the safety 
        or efficacy of the subject matter is established, including any 
        period specified in section 156(g), shall be deemed 
        `commercially used' and in `commercial use' during such 
        regulatory review period;
            ``(2) in the case of activities performed by a nonprofit 
        research laboratory, or nonprofit entity such as a university, 
        research center, or hospital, a use for which the public is the 
        intended beneficiary shall be considered to be a use described 
        in paragraph (1), except that the use--
                    ``(A) may be asserted as a defense under this 
                section only for continued use by and in the laboratory 
                or nonprofit entity; and
                    ``(B) may not be asserted as a defense with respect 
                to any subsequent commercialization or use outside such 
                laboratory or nonprofit entity;
            ``(3) the term `process or method' means `process' as 
        defined in section 100(b), and includes any invention that 
        produces a useful end product or service which has been or 
        could have been claimed in a patent in the form of a process; 
        and
            ``(4) the `effective filing date' of a patent is the 
        earlier of the actual filing date of the application for the 
        patent or the filing date of any earlier United States, 
        foreign, or international application to which the subject 
        matter at issue is entitled under section 119, 120, or 365 of 
        this title.
    ``(b) Defense to Infringement.--.
            ``(1) In general.--It shall be a defense to an action for 
        infringement under section 271 of this title with respect to 
        any subject matter that would otherwise infringe one or more 
        claims asserting a process or method in the patent being 
        asserted against a person, if such person had, acting in good 
        faith, actually reduced the subject matter to practice at least 
        one year before the effective filing date of such patent, and 
        commercially used the subject matter before the effective 
        filing date of such patent.
            ``(2) Exhaustion of right.--The sale or other disposition, 
        of a product or service produced by a patented process or 
        method, by a person entitled to assert a defense under this 
        section with respect to that product or service shall exhaust 
        the patent owner's rights under the patent to the extent such 
        rights would have been exhausted had such sale or other 
        disposition been made by the patent owner.
            ``(3) Limitations and qualifications of defense.--The 
        defense to infringement under this section is subject to the 
        following:
                    ``(A) Patent.--A person may not assert the defense 
                under this section unless the invention for which the 
                defense is asserted is for a process or method, the 
                exclusive purpose of which is to produce a useful end 
                product or service.
                    ``(B) Derivation.--A person may not assert the 
                defense under this section if the subject matter on 
                which the defense is based was derived from the 
                patentee or persons in privity with the patentee.
                    ``(C) Not a general license.--The defense asserted 
                by a person under this section is not a general license 
                under all claims of the patent at issue, but extends 
                only to the specific subject matter claimed in the 
                patent with respect to which the person can assert a 
                defense under this chapter, except that the defense 
                shall also extend to variations in the quantity or 
                volume of use of the claimed subject matter, and to 
                improvements in the claimed subject matter that do not 
                infringe additional specifically claimed subject matter 
                of the patent.
            ``(4) Burden of proof.--A person asserting the defense 
        under this section shall have the burden of establishing the 
        defense by clear and convincing evidence.
            ``(5) Abandonment of use.--A person who has abandoned 
        commercial use of subject matter may not rely on activities 
        performed before the date of such abandonment in establishing a 
        defense under this section with respect to actions taken after 
        the date of such abandonment.
            ``(6) Personal defense.--The defense under this section may 
        be asserted only by the person who performed the acts necessary 
        to establish the defense and, except for any transfer to the 
        patent owner, the right to assert the defense shall not be 
        licensed or assigned or transferred to another person except as 
        an ancillary and subordinate part of a good faith assignment or 
        transfer for other reasons of the entire enterprise or line of 
        business to which the defense relates.
            ``(7) Limitation on sites.--A defense under this section, 
        when acquired as part of a good faith assignment or transfer of 
        an entire enterprise or line of business to which the defense 
        relates, may only be asserted for uses at sites where the 
        subject matter that would otherwise infringe one or more of the 
        claims is in use before the later of the effective filing date 
        of the patent or the date of the assignment or transfer of such 
        enterprise or line of business.
            ``(8) Unsuccessful assertion of defense.--If the defense 
        under this section is pleaded by a person who is found to 
        infringe the patent and who subsequently fails to demonstrate a 
        reasonable basis for asserting the defense, the court shall 
        find the case exceptional for the purpose of awarding 
        attorney's fees under section 285 of this title.
            ``(9) Invalidity.--A patent shall not be deemed to be 
        invalid under section 102 or 103 of this title solely because a 
        defense is raised or established under this section.''.
    (b) Conforming Amendment.--The table of sections at the beginning 
of chapter 28 of title 35, United States Code, is amended by adding at 
the end the following new item:

``273. Defense to infringement based on earlier inventor.''.

SEC. 203. EFFECTIVE DATE AND APPLICABILITY.

    This title and the amendments made by this title shall take effect 
on the date of the enactment of this Act, but shall not apply to any 
action for infringement that is pending on such date of enactment or 
with respect to any subject matter for which an adjudication of 
infringement, including a consent judgment, has been made before such 
date of enactment.

                    TITLE III--PATENT TERM GUARANTEE

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Patent Term Guarantee Act''.

SEC. 302. PATENT TERM GUARANTEE AUTHORITY.

    (a) Adjustment of Patent Term.--Section 154(b) of title 35, United 
States Code, is amended to read as follows:
    ``(b) Adjustment of Patent Term.--
            ``(1) Patent term guarantees.--
                    ``(A) Guarantee of prompt patent and trademark 
                office responses.--Subject to the limitations under 
                paragraph (2), if the issue of an original patent is 
                delayed due to the failure of the Patent and Trademark 
                Office to--
                            ``(i) make a notification of the rejection 
                        of any claim for a patent or any objection or 
                        argument under section 132, or give or mail a 
                        written notice of allowance under section 151, 
                        within 14 months after the date on which the 
                        application was filed;
                            ``(ii) respond to a reply under section 
                        132, or to an appeal taken under section 134, 
                        within 4 months after the date on which the 
                        reply was filed or the appeal was taken;
                            ``(iii) act on an application within 4 
                        months after the date of a decision by the 
                        Board of Patent Appeals and Interferences under 
                        section 134 or 135 or a decision by a Federal 
                        court under section 141, 145, or 146 in a case 
                        in which allowable claims remain in the 
                        application; or
                            ``(iv) issue a patent within 4 months after 
                        the date on which the issue fee was paid under 
                        section 151 and all outstanding requirements 
                        were satisfied;
                the term of the patent shall be extended one day for 
                each day after the end of the period specified in 
                clause (i), (ii), (iii), or (iv), as the case may be, 
                until the action described in such clause is taken.
                    ``(B) Guarantee of no more than 3-year application 
                pendency.--Subject to the limitations under paragraph 
                (2), if the issue of an original patent is delayed due 
                to the failure of the Patent and Trademark Office to 
                issue a patent within 3 years after the actual filing 
                date of the application in the United States, not 
                including--
                            ``(i) any time consumed by continued 
                        examination of the application requested by the 
                        applicant under section 132(b);
                            ``(ii) any time consumed by a proceeding 
                        under section 135(a), any time consumed by the 
                        imposition of an order pursuant to section 181, 
                        or any time consumed by appellate review by the 
                        Board of Patent Appeals and Interferences or by 
                        a Federal court; or
                            ``(iii) any delay in the processing of the 
                        application by the Patent and Trademark Office 
                        requested by the applicant except as permitted 
                        by paragraph (2)(C),
                the term of the patent shall be extended 1 day for each 
                day after the end of that 3-year period until the 
                patent is issued.
                    ``(C) Guarantee or adjustments for delays due to 
                interferences, secrecy orders, and appeals.--Subject to 
                the limitations under paragraph (2), if the issue of an 
                original patent is delayed due to--
                            ``(i) a proceeding under section 135(a);
                            ``(ii) the imposition of an order pursuant 
                        to section 181; or
                            ``(iii) appellate review by the Board of 
                        Patent Appeals and Interferences or by a 
                        Federal court in a case in which the patent was 
                        issued pursuant to a decision in the review 
                        reversing an adverse determination of 
                        patentability,
                the term of the patent shall be extended one day for 
                each day of the pendency of the proceeding, order, or 
                review, as the case may be.
            ``(2) Limitations.--
                    ``(A) In general.--To the extent that periods of 
                delay attributable to grounds specified in paragraph 
                (1) overlap, the period of any adjustment granted under 
                this subsection shall not exceed the actual number of 
                days the issuance of the patent was delayed.
                    ``(B) Disclaimed term.--No patent the term of which 
                has been disclaimed beyond a specified date may be 
                adjusted under this section beyond the expiration date 
                specified in the disclaimer.
                    ``(C) Reduction of period of adjustment.--
                            ``(i) The period of adjustment of the term 
                        of a patent under paragraph (1) shall be 
                        reduced by a period equal to the period of time 
                        during which the applicant failed to engage in 
                        reasonable efforts to conclude prosecution of 
                        the application.
                            ``(ii) With respect to adjustments to 
                        patent term made under the authority 
of paragraph (1)(B), an applicant shall be deemed to have failed to 
engage in reasonable efforts to conclude processing or examination of 
an application for the cumulative total of any periods of time in 
excess of 3 months that are taken to respond to a notice from the 
Office making any rejection, objection, argument, or other request, 
measuring such 3-month period from the date the notice was given or 
mailed to the applicant.
                            ``(iii) The Director shall prescribe 
                        regulations establishing the circumstances that 
                        constitute a failure of an applicant to engage 
                        in reasonable efforts to conclude processing or 
                        examination of an application.
            ``(3) Procedures for patent term adjustment 
        determination.--
                    ``(A) The Director shall prescribe regulations 
                establishing procedures for the application for and 
                determination of patent term adjustments under this 
                subsection.
                    ``(B) Under the procedures established under 
                subparagraph (A), the Director shall--
                            ``(i) make a determination of the period of 
                        any patent term adjustment under this 
                        subsection, and shall transmit a notice of that 
                        determination with the written notice of 
                        allowance of the application under section 151; 
                        and
                            ``(ii) provide the applicant one 
                        opportunity to request reconsideration of any 
                        patent term adjustment determination made by 
                        the Director.
                    ``(C) The Director shall reinstate all or part of 
                the cumulative period of time of an adjustment under 
                paragraph (2)(C) if the applicant, prior to the 
                issuance of the patent, makes a showing that, in spite 
                of all due care, the applicant was unable to respond 
                within the 3-month period, but in no case shall more 
                than 3 additional months for each such response beyond 
                the original 3-month period be reinstated.
                    ``(D) The Director shall proceed to grant the 
                patent after completion of the Director's determination 
                of a patent term adjustment under the procedures 
                established under this subsection, notwithstanding any 
                appeal taken by the applicant of such determination.
            ``(4) Appeal of patent term adjustment determination.--
                    ``(A) An applicant dissatisfied with a 
                determination made by the Director under paragraph (3) 
                shall have remedy by a civil action against the 
                Director filed in the United States District Court for 
                the District of Columbia within 180 days after the 
                grant of the patent. Chapter 7 of title 5 shall apply 
                to such action. Any final judgment resulting in a 
                change to the period of adjustment of the patent term 
                shall be served on the Director, and the Director shall 
                thereafter alter the term of the patent to reflect such 
                change.
                    ``(B) The determination of a patent term adjustment 
                under this subsection shall not be subject to appeal or 
                challenge by a third party prior to the grant of the 
                patent.''.
    (b) Conforming Amendments.--
            (1) Section 282 of title 35, United States Code, is amended 
        in the fourth paragraph by striking ``156 of this title'' and 
        inserting ``154(b) or 156 of this title''.
            (2) Section 1295(a)(4)(C) of title 28, United States Code, 
        is amended by striking ``145 or 146'' and inserting ``145, 146, 
        or 154(b)''.

SEC. 303. CONTINUED EXAMINATION OF PATENT APPLICATIONS.

    Section 132 of title 35, United States Code, is amended--
            (1) in the first sentence by striking ``Whenever'' and 
        inserting ``(a) Whenever''; and
            (2) by adding at the end the following:
    ``(b) The Director shall prescribe regulations to provide for the 
continued examination of applications for patent at the request of the 
applicant. The Commissioner may establish appropriate fees for such 
continued examination and shall provide a 50 percent reduction on such 
fees for small entities that qualify for reduced fees under section 
41(h)(1) of this title.''.

SEC. 304. TECHNICAL CLARIFICATION.

    Section 156(a) of title 35, United States Code, is amended in the 
matter preceding paragraph (1) by inserting ``, which shall include any 
patent term adjustment granted under section 154(b),'' after ``the 
original expiration date of the patent''.

SEC. 305. EFFECTIVE DATE.

    (a) Sections 302 and 304.--The amendments made by sections 302 and 
304 shall take effect on the date of the enactment of this Act and, 
except for a design patent application filed under chapter 16 of title 
35, United States Code, shall apply to any application filed on or 
after the date of the enactment of this Act.
    (b) Section 303.--The amendments made by section 303 shall take 
effect 6 months after the date of the enactment of this Act.

 TITLE IV--UNITED STATES PUBLICATION OF PATENT APPLICATIONS PUBLISHED 
                                 ABROAD

SEC. 401. SHORT TITLE.

    This title may be referred to as the ``Publication of Foreign Filed 
Applications Act''.

SEC. 402. PUBLICATION.

    (a) Publication.--Section 122 of title 35, United States Code, is 
amended to read as follows:
``Sec. 122. Confidential status of applications; publication of patent 
              applications
    ``(a) Confidentiality.--Except as provided in subsection (b), 
applications for patents shall be kept in confidence by the Patent and 
Trademark Office and no information concerning any such application 
shall be given without authority of the applicant or owner unless 
necessary to carry out the provisions of an Act of Congress or in such 
special circumstances as may be determined by the Director.
    ``(b) United States Publication of Applications Published Abroad.--
            ``(1) In general.--(A) Subject to paragraph (2), each 
        application for patent, except applications for design patents 
        filed under chapter 16 and provisional applications filed under 
        section 111(b), shall be published, in accordance with 
        procedures determined by the Director, promptly upon the 
        expiration of a period of 18 months after the earliest filing 
        date for which a benefit is sought under this title. At the 
        request of the applicant, an application may be published 
        earlier than the end of such 18-month period.
            ``(B) No information concerning published patent 
        applications shall be made available to the public except as 
        the Director determines.
            ``(C) Pursuant to this title and notwithstanding any other 
        provision of law, a determination by the Director to release or 
        not to release information concerning a published patent 
        application shall be final and nonreviewable.
            ``(2) Exceptions.--(A) An application that is no longer 
        pending shall not be published.
            ``(B) An application that is subject to a secrecy order 
        under section 181 shall not be published.
            ``(C)(i) If an applicant, upon filing, makes a request that 
        an application not be published pursuant to paragraph (1), and 
        states in such request that the invention disclosed in the 
        application has not been the subject of an application filed in 
        another country, or under a multilateral international 
        agreement, that requires publication of applications 18 months 
        after filing, the application shall not be published as 
        provided in paragraph (1).
            ``(ii) An applicant may rescind a request made under clause 
        (i) at any time.
            ``(iii) An applicant who has made a request under clause 
        (i) but who subsequently files, in a foreign country or under a 
        multilateral international agreement specified in clause (i), 
        an application directed to the invention disclosed in the 
        application filed in the Patent and Trademark Office, shall 
        notify the Director of such filing not later than 45 days after 
        the date of the filing of such foreign or international 
        application. A failure of the applicant to provide such notice 
        within the prescribed period shall result in the application 
        being regarded as abandoned, unless it is shown to the 
        satisfaction of the Director that the delay in submitting the 
        notice was unintentional.
            ``(iv) If a notice is made pursuant to clause (iii), or the 
        applicant rescinds a request pursuant to clause (ii), the 
        Director shall publish the application on or as soon as is 
        practical after the date that is specified in clause (i).
            ``(v) If an applicant has filed applications in one or more 
        foreign countries, directly or through a multilateral 
        international agreement, and such foreign filed applications 
        corresponding to an application filed in the Patent and 
        Trademark Office or the description of the invention in such 
        foreign filed applications is less extensive than the 
        application or description of the invention in the application 
        filed in the Patent and Trademark Office, the applicant may 
        submit a redacted copy of the application filed in the Patent 
        and Trademark Office eliminating any part or description of the 
        invention in such application that is not also contained in any 
        of the corresponding applications filed in a foreign country. 
        The Director may only publish the redacted copy of the 
        application unless the redacted copy of the application is not 
        received within 16 months after the earliest effective filing 
        date for which a benefit is sought under this title. The 
        provisions of section 154(d) shall not apply to a claim if the 
        description of the invention published in the redacted 
        application filed under this clause with respect to the claim 
        does not enable a person skilled in the art to make and use the 
        subject matter of the claim.
    ``(c) Protest and Pre-Issuance Opposition.--The Director shall 
establish appropriate procedures to ensure that no protest or other 
form of pre-issuance opposition to the grant of a patent on an 
application may be initiated after publication of the application 
without the express written consent of the applicant.''.
    (b) Study by GAO.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study of applicants for patents who file 
        only in the United States during the 3-year period beginning on 
        the effective date of this title.
            (2) Contents.--The study conducted under paragraph (1) 
        shall--
                    (A) consider the number of such applicants for 
                patent in relation to the number of applicants who file 
                in the United States and outside the United States;
                    (B) examine how many domestic-only filers request 
                at the time of filing not to be published;
                    (C) examine how many such filers rescind that 
                request or later choose to file abroad; and
                    (D) examine the manner of entity seeking an 
                application and any correlation that may exist between 
                such manner and publication of patent applications.
            (3) Report to judiciary committees.--The Comptroller 
        General shall submit to the Committees on the Judiciary of the 
        House of Representatives and the Senate the results of the 
        study conducted under this subsection.

SEC. 403. TIME FOR CLAIMING BENEFIT OF EARLIER FILING DATE.

    (a) In a Foreign Country.--Section 119(b) of title 35, United 
States Code, is amended to read as follows:
    ``(b)(1) No application for patent shall be entitled to this right 
of priority unless a claim, identifying the foreign application by 
specifying its application number, country, and the day, month, and 
year of its filing, is filed in the Patent and Trademark Office at such 
time during the pendency of the application as required by the 
Director.
    ``(2) The Director may consider the failure of the applicant to 
file a timely claim for priority as a waiver of any such claim. The 
Director may establish procedures, including the payment of a 
surcharge, to accept an unintentionally delayed claim under this 
section.
    ``(3) The Director may require a certified copy of the original 
foreign application, specification, and drawings upon which it is 
based, a translation if not in the English language, and such other 
information as the Director considers necessary. Any such certification 
shall be made by the foreign intellectual property authority in which 
the foreign application was filed and show the date of the application 
and of the filing of the specification and other papers.''.
    (b) In the United States.--Section 120 of title 35, United States 
Code, is amended by adding at the end the following: ``The Director may 
determine the time period during the pendency of the application within 
which an amendment containing the specific reference to the earlier 
filed application is submitted. The Director may consider the failure 
to submit such an amendment within that time period as a waiver of any 
benefit under this section. The Director may establish procedures, 
including the payment of a surcharge, to accept unintentionally late 
submissions of amendments under this section.''.

SEC. 404. PROVISIONAL RIGHTS.

    Section 154 of title 35, United States Code, is amended--
            (1) in the section caption by inserting ``; provisional 
        rights'' after ``patent''; and
            (2) by adding at the end the following new subsection:
    ``(d) Provisional Rights.---
            ``(1) In general.--In addition to other rights provided by 
        this section, a patent shall include the right to obtain a 
        reasonable royalty from any person who, during the period 
        beginning on the date of publication of the application for 
        such patent pursuant to section 122(b), or in the case of an 
        international application filed under the treaty defined in 
        section 351(a) designating the United States under Article 
        21(2)(a) of such treaty, the date of publication of the 
        application, and ending on the date the patent is issued--
                    ``(A)(i) makes, uses, offers for sale, or sells in 
                the United States the invention as claimed in the 
                published patent application or imports such an 
                invention into the United States; or
                    ``(ii) if the invention as claimed in the published 
                patent application is a process, uses, offers for sale, 
                or sells in the United States or imports into the 
                United States products made by that process as claimed 
                in the published patent application; and
                    ``(B) had actual notice of the published patent 
                application, and in a case in which the right arising 
                under this paragraph is based upon an international 
                application designating the United States that is 
                published in a language other than English, a 
                translation of the international application into the 
                English language.
            ``(2) Right based on substantially identical inventions.--
        The right under paragraph (1) to obtain a reasonable royalty 
        shall not be available under this subsection unless the 
        invention as claimed in the patent is substantially identical 
        to the invention as claimed in the published patent 
        application.
            ``(3) time limitation on obtaining a reasonable royalty.--
        The right under paragraph (1) to obtain a reasonable royalty 
        shall be available only in an action brought not later than 6 
        years after the patent is issued. The right under paragraph (1) 
        to obtain a reasonable royalty shall not be affected by the 
        duration of the period described in paragraph (1).
            ``(4) Requirements for international applications.--
                    ``(A) Effective date.--The right under paragraph 
                (1) to obtain a reasonable royalty based upon the 
                publication under the treaty defined in section 351(a) 
                of an international application designating the United 
                States shall commence on the date on which the Patent 
                and Trademark Office receives a copy of the publication 
                under the treaty of the international application, or, 
                if the publication under the treaty of the 
                international application is in a language other than 
                English, on the date on which the Patent and Trademark 
                Office receives a translation of the international 
                application in the English language.
                    ``(B) Copies.--The Director may require the 
                applicant to provide a copy of the international 
                application and a translation thereof.
            ``(5) Issuance of patents on individual claims.--If the 
        Director in a notification to the applicant under section 132 
        indicates that one or more claims of a published application 
        are allowable, the applicant may request the issuance of a 
        patent incorporating those claims. The applicant may continue 
        prosecution of the remaining claims as provided in chapter 12 
        of this title. Any subsequently allowed claims may be 
        incorporated into the patent or issued in a separate patent, in 
        accordance with regulations adopted by the Director. The 
        Director may establish appropriate fees to cover the costs of 
        incorporating any additional claims into the patent or issuing 
        a separate patent.''.

SEC. 405. PRIOR ART EFFECT OF PUBLISHED APPLICATIONS.

    Section 102(e) of title 35, United States Code, is amended to read 
as follows:
    ``(e) the invention was described in--
            ``(1)(A) an application for patent, published pursuant to 
        section 122(b), by another filed in the United States before 
        the invention by the applicant for patent, except that an 
        international application filed under the treaty defined in 
        section 351(a) shall have the effect under this subsection of a 
        national application published under section 122(b) only if the 
        international application designating the United States was 
        published under Article 21(2)(a) of such treaty in the English 
        language, or
            ``(B) a patent granted on an application for patent by 
        another filed in the United States before the invention by the 
        applicant for patent, except that a patent shall not be deemed 
        filed in the United States for the purposes of this subsection 
        based on the filing of an international application filed under 
        the treaty defined in section 351(a), or''.

SEC. 406. COST RECOVERY FOR PUBLICATION.

    The Director of the United States Patent and Trademark Office shall 
recover the cost of early publication required by the amendment made by 
section 402 by charging a separate publication fee after notice of 
allowance is given pursuant to section 151 of title 35, United States 
Code.

SEC. 407. CONFORMING AMENDMENTS.

    The following provisions of title 35, United States Code, are 
amended:
            (1) Section 11 is amended in paragraph 1 of subsection (a) 
        by inserting ``and published applications for patents'' after 
        ``Patents''.
            (2) Section 12 is amended--
                    (A) in the section caption by inserting ``and 
                applications'' after ``patents''; and
                    (B) by inserting ``and published applications for 
                patents'' after ``patents''.
            (3) Section 13 is amended--
                    (A) in the section caption by inserting ``and 
                applications'' after ``patents''; and
                    (B) by inserting ``and published applications for 
                patents'' after ``patents''.
            (4) The item relating to section 122 in the table of 
        sections for chapter 11 is amended by inserting ``; publication 
        of patent applications'' after ``applications''.
            (5) The item relating to section 154 in the table of 
        sections for chapter 14 is amended by inserting ``; provisional 
        rights'' after ``patent''.
            (6) Section 181 is amended--
                    (A) in the first undesignated paragraph--
                            (i) by inserting ``by the publication of an 
                        application or'' after ``disclosure''; and
                            (ii) by inserting ``the publication of the 
                        application or'' after ``withhold'';
                    (B) in the second undesignated paragraph by 
                inserting ``by the publication of an application or'' 
                after ``disclosure of an invention'';
                    (C) in the third undesignated paragraph--
                            (i) by inserting ``by the publication of 
                        the application or'' after ``disclosure of the 
                        invention''; and
                            (ii) by inserting ``the publication of the 
                        application or'' after ``withhold''; and
                    (D) in the fourth undesignated paragraph by 
                inserting ``the publication of an application or'' 
                after ``and'' in the first sentence.
            (7) Section 252 is amended in the first undesignated 
        paragraph by inserting ``substantially'' before ``identical'' 
        each place it appears.
            (8) Section 284 is amended by adding at the end of the 
        second undesignated paragraph the following: ``Increased 
        damages under this paragraph shall not apply to provisional 
        rights under section 154(d) of this title.''.
            (9) Section 374 is amended to read as follows:
``Sec. 374. Publication of international application: effect
    ``The publication under the treaty defined in section 351(a) of 
this title of an international application designating the United 
States shall confer the same rights and shall have the same effect 
under this title as an application for patent published under section 
122(b), except as provided in sections 102(e) and 154(d).''.

SEC. 408. EFFECTIVE DATE.

    This title and the amendments made by this title, shall take effect 
on the date that is 1 year after the date of the enactment of this Act 
and shall apply to all applications filed under section 111 of title 
35, United States Code, on or after that date, and all applications 
complying with section 371 of title 35, United States Code, that 
resulted from international applications filed on or after that date. 
The amendments made by sections 404 and 405 shall apply to any such 
application voluntarily published by the applicant under procedures 
established under this title that is pending on the date that is 1 year 
after the date of enactment of this Act. The amendment made by section 
404 shall also apply to international applications designating the 
United States that are filed on or after the date that is 1 year after 
the date of the enactment of this Act.

                TITLE V--PATENT LITIGATION REDUCTION ACT

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Patent Litigation Reduction Act''.

SEC. 502. DEFINITIONS.

    Section 100 of title 35, United States Code, is amended by adding 
at the end the following new subsection:
    ``(e) The term `third-party requester' means a person requesting 
reexamination under section 302 of this title who is not the patent 
owner.''.

SEC. 503. REEXAMINATION PROCEDURES.

    (a) Citation of Prior Art.--Section 301 of title 35, United States 
Code, is amended to read as follows:
``Sec. 301. Citation of prior art
    ``Any person at any time may cite to the Office in writing prior 
art consisting of patents or printed publications which that person 
believes to have a bearing on the patentability of any claim of a 
particular patent. If the person explains in writing the pertinency and 
manner of applying such prior art to at least one claim of the patent, 
the citation of such prior art and the explanation thereof will become 
a part of the official file of the patent.''.
    (b) Request for Reexamination.--Section 302 of title 35, United 
States Code, is amended to read as follows:
``Sec. 302. Request for reexamination
    ``(a) In General.--Any person at any time may file a request for 
reexamination by the Office of a patent on the basis of any prior art 
cited under the provisions of section 301.
    ``(b) Requirements.--The request shall--
            ``(1) be in writing, include the identity of the real party 
        in interest, and be accompanied by payment of a reexamination 
        fee established by the Director under section 41; and
            ``(2) set forth the pertinency and manner of applying cited 
        prior art to every claim for which reexamination is requested.
    ``(c) Copy.--Unless the requesting person is the owner of the 
patent, the Director promptly shall send a copy of the request to the 
owner of record of the patent.''.
    (c) Determination of Issue by Director.--Section 303 of title 35, 
United States Code, is amended to read as follows:
``Sec. 303. Determination of issue by Director
    ``(a) Reexamination.--Not later than 3 months after the filing of a 
request for reexamination under section 302, the Director shall 
determine whether a substantial new question of patentability affecting 
any claim of the patent concerned is raised by the request, with or 
without consideration of other patents or printed publications. On the 
Director's initiative, and any time, the Director may determine whether 
a substantial new question of patentability is raised by patents and 
publications.
    ``(b) Record.--A record of the Director's determination under 
subsection (a) shall be placed in the official file of the patent, and 
a copy shall be promptly given or mailed to the owner of record of the 
patent and to the third-party requester, if any.
    ``(c) Final Decision.--A determination by the Director pursuant to 
subsection (a) shall be final and nonappealable. Upon a determination 
that no substantial new question of patentability has been raised, the 
Director may refund a portion of the reexamination fee required under 
section 302.''.
    (d) Reexamination Order by Director.--Section 304 of title 35, 
United States Code, is amended to read as follows:
``Sec. 304. Reexamination order by Director
    ``If, in a determination made under section 303(a), the Director 
finds that a substantial new question of patentability affecting a 
claim of a patent is raised, the determination shall include an order 
for reexamination of the patent for resolution of the question. The 
order may be accompanied by the initial action of the Patent and 
Trademark Office on the merits of the reexamination conducted in 
accordance with section 305.''.
    (e) Conduct of Reexamination Proceedings.--Section 305 of title 35, 
United States Code, is amended to read as follows:
``Sec. 305. Conduct of reexamination proceedings
    ``(a) In General.--Subject to subsection (b), reexamination shall 
be conducted according to the procedures established for initial 
examination under the provisions of sections 132 and 133, except as 
provided for under this section. In any reexamination proceeding under 
this chapter, the patent owner shall be permitted to propose any 
amendment to the patent and a new claim or claims, except that no 
proposed amended or new claim enlarging the scope of the claims of the 
patent shall be permitted.
    ``(b) Response.--(1) This subsection shall apply to any 
reexamination proceeding in which the order for reexamination is based 
upon a request by a third-party requester.
    ``(2) With the exception of the reexamination request, any document 
filed by either the patent owner or the third-party requester shall be 
served on the other party. In addition, the third-party requester shall 
receive a copy of any communication sent by the Office to the patent 
owner concerning the patent subject to the reexamination proceeding.
    ``(3) Each time that the patent owner files a response to an action 
on the merits from the Patent and Trademark Office, the third-party 
requester shall have one opportunity to file written comments 
addressing issues raised by the action of the Office or the patent 
owner's response thereto, if those written comments are received by the 
Office within 30 days after the date of service of the patent owner's 
response.
    ``(c) Special Dispatch.--Unless otherwise provided by the Director 
for good cause, all reexamination proceedings under this section, 
including any appeal to the Board of Patent Appeals and Interferences, 
shall be conducted with special dispatch within the Office.''.
    (f) Appeal.--Section 306 of title 35, United States Code, is 
amended to read as follows:
``Sec. 306. Appeal
    ``(a) Patent Owner.--The patent owner involved in a reexamination 
proceeding under this chapter--
            ``(1) may appeal under the provisions of section 134, and 
        may appeal under the provisions of sections 141 through 144, 
        with respect to any decision adverse to the patentability of 
        any original or proposed amended or new claim of the patent; 
        and
            ``(2) may be a party to any appeal taken by a third-party 
        requester under subsection (b).
    ``(b) Third-Party Requester.--A third-party requester may--
            ``(1) appeal under the provisions of section 134, and may 
        appeal under the provisions of sections 141 through 144, with 
        respect to any final decision favorable to the patentability of 
        any original or proposed amended or new claim of the patent; or
            ``(2) be a party to any appeal taken by the patent owner, 
        subject to subsection (c).
    ``(c) Civil Action.--A third-party requester whose request for a 
reexamination results in an order under section 304 is estopped from 
asserting at a later time, in any civil action arising in whole or in 
part under section 1338 of title 28, the invalidity of any claim 
finally determined to be valid and patentable on any ground which the 
third-party requester raised or could have raised during the 
reexamination proceedings. This subsection does not prevent the 
assertion of invalidity based on newly discovered prior art unavailable 
to the third-party requester and the Patent and Trademark Office at the 
time of the reexamination proceedings.''.
    (g) Reexamination Prohibited; Stay of Litigation.--
            (1) In general.--Chapter 30 of title 35, United States 
        Code, is amended by adding at the end the following new 
        sections:
``Sec. 308. Reexamination prohibited
    ``(a) Order for Reexamination.--Notwithstanding any provision of 
this chapter, once an order for reexamination of a patent has been 
issued under section 304, neither the patent owner nor the third-party 
requester, if any, nor privies of either, may file a subsequent request 
for reexamination of the patent until a reexamination certificate is 
issued and published under section 307, unless authorized by the 
Director.
    ``(b) Final Decision.--Once a final decision has been entered 
against a party in a civil action arising in whole or in part under 
section 1338 of title 28 that the party has not sustained its burden of 
proving the invalidity of any patent claim in suit or if a final 
decision in a reexamination proceeding instituted by a third-party 
requester is favorable to the patentability of any original or proposed 
amended or new claim of the patent then neither that party nor its 
privies may thereafter request reexamination of any such patent claim 
on the basis of issues which that party or its privies raised or could 
have raised in such civil action or reexamination proceeding, and a 
reexamination requested by that party or its privies on the basis of 
such issues may not thereafter be maintained by the Office, 
notwithstanding any other provision of this chapter. This subsection 
does not prevent the assertion of invalidity based on newly discovered 
prior art unavailable to the third-party requester and the Patent and 
Trademark Office at the time of the reexamination proceedings.
``Sec. 309. Stay of litigation
    ``Once an order for reexamination of a patent has been issued under 
section 304, the patent owner may obtain a stay of any pending 
litigation which involves an issue of patentability of any claims of 
the patent which are the subject of the reexamination order, unless the 
court before which such litigation is pending determines that a stay 
would not serve the interests of justice.''.
            (2) Technical and conforming amendment.--The table of 
        sections for chapter 30 of title 35, United States Code, is 
        amended to read as follows:

   ``CHAPTER 30--PRIOR ART CITATIONS TO OFFICE AND REEXAMINATION OF 
                                PATENTS

``Sec.
``301. Citation of prior art.
``302. Request for reexamination.
``303. Determination of issue by Director.
``304. Reexamination order by Director.
``305. Conduct of reexamination proceedings.
``306. Appeal.
``307. Certificate of patentability, unpatentability, and claim 
                            cancellation.
``308. Reexamination prohibited.
``309. Stay of litigation.''.

SEC. 504. CONFORMING AMENDMENTS.

    (a) Patent Fees; Patent Search Systems.--Section 41(a)(7) of title 
35, United States Code, is amended to read as follows:
            ``(7) On filing each petition for the revival of an 
        unintentionally abandoned application for a patent, for the 
        unintentionally delayed payment of the fee for issuing each 
        patent, or for an unintentionally delayed response by the 
        patent owner in a reexamination proceeding, $1,210, unless the 
        petition is filed under section 133 or 151 of this title, in 
        which case the fee shall be $110.''.
    (b) Appeal to the Board of Patent Appeals and Interferences.--
Section 134 of title 35, United States Code, is amended to read as 
follows:
``Sec. 134. Appeal to the Board of Patent Appeals and Interferences
    ``(a) Patent Applicant.--An applicant for a patent, any of whose 
claims has been twice rejected, may appeal from the decision of the 
primary examiner to the Board of Patent Appeals and Interferences, 
having once paid the fee for such appeal.
    ``(b) Patent Owner.--A patent owner in a reexamination proceeding 
may appeal from the final rejection of any claim by the primary 
examiner to the Board of Patent Appeals and Interferences, having once 
paid the fee for such appeal.
    ``(c) Third-Party.--A third-party requester may appeal to the Board 
of Patent Appeals and Interferences from the final decision of the 
primary examiner favorable to the patentability of any original or 
proposed amended or new claim of a patent, having once paid the fee for 
such appeal.''.
    (c) Appeal to Court of Appeals for the Federal Circuit.--Section 
141 of title 35, United States Code, is amended by adding the following 
after the second sentence: ``A patent owner or third-party requester in 
a reexamination proceeding dissatisfied with the final decision in an 
appeal to the Board of Patent Appeals and Interferences under section 
134 may appeal the decision only to the United States Court of Appeals 
for the Federal Circuit.''.
    (d) Proceedings on Appeal.--Section 143 of title 35, United States 
Code, is amended by amending the third sentence to read as follows: 
``In ex parte and reexamination cases, the Director shall submit to the 
court in writing the grounds for the decision of the Patent and 
Trademark Office, addressing all the issues involved in the appeal.''.
    (e) Civil Action To Obtain Patent.--Section 145 of title 35, United 
States Code, is amended in the first sentence by inserting ``(a)'' 
after ``section 134''.

SEC. 505. REPORT TO CONGRESS.

    Not later than 5 years after the effective date of this title, the 
Director of the United States Patent and Trademark Office shall submit 
to the Congress a report evaluating whether the reexamination 
proceedings established under the amendments made by this title are 
inequitable to any of the parties in interest and, if so, the report 
shall contain recommendations for changes to the amendments made by 
this title to remove such inequity.

SEC. 506. ESTOPPEL EFFECT OF REEXAMINATION.

    Any party who requests a reexamination under section 302 of title 
35, United States Code, is estopped from challenging at a later time, 
in any civil action, any fact determined during the process of such 
reexamination. If this section is held to be unenforceable, the 
enforceability of the rest of this title or of this Act shall not be 
denied as a result.

SEC. 507. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
on the date that is 1 year after the date of the enactment of this Act 
and shall apply to all reexamination requests filed on or after such 
date.

                 TITLE VI--PATENT AND TRADEMARK OFFICE

SEC. 601. SHORT TITLE.

    This title may be cited as the ``Patent and Trademark Office 
Efficiency Act''.

         Subtitle A--United States Patent and Trademark Office

SEC. 611. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE.

    Section 1 of title 35, United States Code, is amended to read as 
follows:
``Sec. 1. Establishment
    ``(a) Establishment.--The United States Patent and Trademark Office 
is established as an agency of the United States, within the Department 
of Commerce. In carrying out its functions, the United States Patent 
and Trademark Office shall be subject to the policy direction of the 
Secretary of Commerce, but otherwise shall retain responsibility for 
decisions regarding the management and administration of its operations 
and shall exercise independent control of its budget allocations and 
expenditures, personnel decisions and processes, procurements, and 
other administrative and management functions in accordance with this 
title and applicable provisions of law. Those operations designed to 
grant and issue patents and those operations which are designed to 
facilitate the registration of trademarks shall be treated as separate 
operating units within the Office.
    ``(b) Offices.--The United States Patent and Trademark Office shall 
maintain its principal office in the metropolitan Washington, DC, area, 
for the service of process and papers and for the purpose of carrying 
out its functions. The United States Patent and Trademark Office shall 
be deemed, for purposes of venue in civil actions, to be a resident of 
the district in which its principal office is located, except where 
jurisdiction is otherwise provided by law. The United States Patent and 
Trademark Office may establish satellite offices in such other places 
in the United States as it considers necessary and appropriate in the 
conduct of its business.
    ``(c) Reference.--For purposes of this title, the United States 
Patent and Trademark Office shall also be referred to as the `Office' 
and the `Patent and Trademark Office'.''.

SEC. 612. POWERS AND DUTIES.

    Section 2 of title 35, United States Code, is amended to read as 
follows:
``Sec. 2. Powers and duties
    ``(a) In General.--The United States Patent and Trademark Office, 
subject to the policy direction of the Secretary of Commerce--
            ``(1) shall be responsible for the granting and issuing of 
        patents and the registration of trademarks; and
            ``(2) shall be responsible for disseminating to the public 
        information with respect to patents and trademarks.
    ``(b) Specific Powers.--The Office--
            ``(1) shall adopt and use a seal of the Office, which shall 
        be judicially noticed and with which letters patent, 
        certificates of trademark registrations, and papers issued by 
        the Office shall be authenticated;
            ``(2) may establish regulations, not inconsistent with law, 
        which--
                    ``(A) shall govern the conduct of proceedings in 
                the Office;
                    ``(B) shall be made after notice and opportunity 
                for full participation by interested public and private 
                parties;
                    ``(C) shall facilitate and expedite the processing 
                of patent applications, particularly those which can be 
                filed, stored, processed, searched, and retrieved 
                electronically, subject to the provisions of section 
                122 relating to the confidential status of 
                applications;
                    ``(D) may govern the recognition and conduct of 
                agents, attorneys, or other persons representing 
                applicants or other parties before the Office, and may 
                require them, before being recognized as 
                representatives of applicants or other persons, to show 
                that they are of good moral character and reputation 
                and are possessed of the necessary qualifications to 
                render to applicants or other persons valuable service, 
                advice, and assistance in the presentation or 
                prosecution of their applications or other business 
                before the Office;
                    ``(E) shall recognize the public interest in 
                continuing to safeguard broad access to the United 
                States patent system through the reduced fee structure 
                for small entities under section 41(b)(1) of this 
                title; and
                    ``(F) provide for the development of a performance-
                based process that includes quantitative and 
                qualitative measures and standards for evaluating cost-
                effectiveness and is consistent with the principles of 
                impartiality and competitiveness;
            ``(3) may acquire, construct, purchase, lease, hold, 
        manage, operate, improve, alter, and renovate any real, 
        personal, or mixed property, or any interest therein, as it 
        considers necessary to carry out its functions;
            ``(4)(A) may make such purchases, contracts for the 
        construction, maintenance, or management and operation of 
        facilities, and contracts for supplies or services, without 
        regard to the provisions of the Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 471 and 
        following), the Public Buildings Act (40 U.S.C. 601 and 
        following), and the Stewart B. McKinney Homeless Assistance Act 
        (42 U.S.C.11301 and following); and
            ``(B) may enter into and perform such purchases and 
        contracts for printing services, including the process of 
        composition, platemaking, presswork, silk screen processes, 
        binding, microform, and the products of such processes, as it 
        considers necessary to carry out the functions of the Office, 
        without regard to sections 501 through 517 and 1101 through 
        1123 of title 44;
            ``(5) may use, with their consent, services, equipment, 
        personnel, and facilities of other departments, agencies, and 
        instrumentalities of the Federal Government, on a reimbursable 
        basis, and cooperate with such other departments, agencies, and 
        instrumentalities in the establishment and use of services, 
        equipment, and facilities of the Office;
            ``(6) may, when the Director determines that it is 
        practicable, efficient, and cost-effective to do so, use, with 
        the consent of the United States and the agency, government, or 
        international organization concerned, the services, records, 
        facilities, or personnel of any State or local government 
        agency or instrumentality or foreign government or 
        international organization to perform functions on its behalf;
            ``(7) may retain and use all of its revenues and receipts, 
        including revenues from the sale, lease, or disposal of any 
        real, personal, or mixed property, or any interest therein, of 
        the Office;
            ``(8) in coordination with the Under Secretary of Commerce 
        for International Trade, shall promote exports of goods and 
        services of the United States industries that rely on 
        intellectual property;
            ``(9) shall advise the President, through the Secretary of 
        Commerce, on national and certain international intellectual 
        property policy issues;
            ``(10) shall advise Federal departments and agencies on 
        matters of intellectual property policy in the United States 
        and intellectual property protection in other countries;
            ``(11) shall provide guidance, as appropriate, with respect 
        to proposals by agencies to assist foreign governments and 
        international intergovernmental organizations on matters of 
        intellectual property protection;
            ``(12) may conduct programs, studies, or exchanges of items 
        or services regarding domestic and international intellectual 
        property law and the effectiveness of intellectual property 
        protection domestically and throughout the world;
            ``(13)(A) shall advise the Secretary of Commerce on 
        programs and studies relating to intellectual property policy 
        that are conducted, or authorized to be conducted, 
        cooperatively with foreign intellectual property offices and 
        international intergovernmental organizations; and
            ``(B) may conduct programs and studies described in 
        subparagraph (A); and
            ``(14)(A) in coordination with the Department of State, may 
        conduct programs and studies cooperatively with foreign 
        intellectual property offices and international 
        intergovernmental organizations; and
            ``(B) with the concurrence of the Secretary of State, may 
        authorize the transfer of not to exceed $100,000 in any year to 
        the Department of State for the purpose of making special 
        payments to international intergovernmental organizations for 
        studies and programs for advancing international cooperation 
        concerning patents, trademarks, and other matters.
    ``(c) Clarification of Specific Powers.--(1) The special payments 
under paragraph (14)(B) shall be in addition to any other payments or 
contributions to international organizations described in paragraph 
(14)(B) and shall not be subject to any limitations imposed by law on 
the amounts of such other payments or contributions by the United 
States Government.
    ``(2) Nothing in subsection (b) shall derogate from the duties of 
the Secretary of State or from the duties of the United States Trade 
Representative as set forth in section 141 of the Trade Act of 1974 (19 
U.S.C. 2171).
    ``(3) Nothing in subsection (b) shall derogate from the duties and 
functions of the Register of Copyrights or otherwise alter current 
authorities relating to copyright matters.
    ``(4) In exercising the Director's powers under paragraphs (3) and 
(4)(A) of subsection (b), the Director shall consult with the 
Administrator of General Services.
    ``(d) Construction.--Nothing in this section shall be construed to 
nullify, void, cancel, or interrupt any pending request-for-proposal 
let or contract issued by the General Services Administration for the 
specific purpose of relocating or leasing space to the United States 
Patent and Trademark Office.''.

SEC. 613. ORGANIZATION AND MANAGEMENT.

    Section 3 of title 35, United States Code, is amended to read as 
follows:
``Sec. 3. Officers and employees
    ``(a) Under Secretary and Director.--
            ``(1) In general.--The powers and duties of the United 
        States Patent and Trademark Office shall be vested in an Under 
        Secretary of Commerce for Intellectual Property and Director of 
        the United States Patent and Trademark Office (in this title 
        referred to as the `Director'), who shall be a citizen of the 
        United States and who shall be appointed by the President, by 
        and with the advice and consent of the Senate. The Director 
        shall be a person who has a professional background and 
        experience in patent or trademark law. The Director shall be 
        responsible for providing policy direction and management 
        supervision for the Office.
            ``(2) Duties.--
                    ``(A) In general.--The Director shall be 
                responsible for the supervision and direction of the 
                Office, including the issuance of patents and the 
                registration of trademarks, and shall perform these 
                duties in a fair, impartial, and equitable manner.
                    ``(B) Consulting with the public advisory 
                committees.--The Director shall consult with the Patent 
                Public Advisory Committee established in section 5 on a 
                regular basis on matters relating to the patent 
                operations of the Office, shall consult with the 
                Trademark Public Advisory Committee established in 
                section 5 on a regular basis on matters relating to the 
                trademark operations of the Office, and shall consult 
                with the respective Public Advisory Committee before 
                submitting budgetary proposals to the Office of 
                Management and Budget or changing or proposing to 
                change patent or trademark user fees or patent or 
                trademark regulations, as the case may be.
                    ``(C) Security clearances.--The Director, in 
                consultation with the Director of the Office of 
                Personnel Management, shall maintain a program for 
                identifying national security positions and providing 
                for appropriate security clearances.
            ``(3) Oath.--The Director shall, before taking office, take 
        an oath to discharge faithfully the duties of the Office.
            ``(4) Compensation.--In addition to the Director's pay as 
        prescribed in section 5314 of title 5, the Director may receive 
        a bonus in an amount up to, but not in excess of, 50 percent of 
        the Director's annual rate of pay, based upon an evaluation by 
        the Secretary of Commerce of the Director's performance as 
        defined in an annual performance agreement between the Director 
        and the Secretary. The annual performance agreement shall 
        incorporate measurable organization and individual goals in key 
        operational areas as delineated in an annual performance plan 
        agreed to by the Director and the Secretary and made public in 
        the annual report of the Director. Payment of a bonus under 
        this paragraph may be made to the Director only to the extent 
        that such payment does not cause the Director's total aggregate 
        compensation in a calendar year to equal or exceed the amount 
        of the salary of the President under section 102 of title 3.
            ``(5) Removal.--The Director may be removed from office by 
        the President. The President shall provide notification of any 
        such removal to both Houses of Congress.
    ``(b) Officers and Employees of the Office.--
            ``(1) Deputy under secretary and deputy director.--The 
        Director shall appoint a Deputy Under Secretary of Commerce for 
        Intellectual Property and Deputy Director of the United States 
        Patent and Trademark Office who shall be vested with the 
        authority to act in the capacity of the Director in the event 
        of the absence or incapacity of the Director. The Deputy Under 
        Secretary and Deputy Director shall be a citizen of the United 
        States who has a professional background and experience in 
        patent or trademark law.
            ``(2) Commissioners.--
                    ``(A) Appointment and duties.--The Secretary of 
                Commerce shall appoint a Commissioner for Patents and a 
                Commissioner for Trademarks. The Commissioner for 
                Patents shall be a citizen of the United States with 
                demonstrated management ability and professional 
                background and experience in patent law and serve for a 
                term of 5 years. The Commissioner for Trademarks shall 
be a citizen of the United States with demonstrated management ability 
and professional background and experience in trademark law and serve 
for a term of 5 years. The Commissioner for Patents and the 
Commissioner for Trademarks shall serve as the chief operating officers 
for the operations of the Office relating to patents and trademarks, 
respectively, and shall be responsible for the management and direction 
of all aspects of the activities of the Office that affect the 
administration of patent and trademark operations, respectively. The 
Secretary may reappoint a Commissioner to subsequent terms of 5 years 
as long as the performance of the Commissioner as set forth in the 
performance agreement in subparagraph (B) is satisfactory.
                    ``(B) Salary and performance agreement.--The 
                Commissioners shall be paid an annual rate of basic pay 
                not to exceed the maximum rate of basic pay for the 
                Senior Executive Service established under section 5382 
                of title 5, United States Code, including any 
                applicable locality-based comparability payment that 
                may be authorized under section 5304(h)(2)(C) of title 
                5. The compensation of the Commissioners shall be 
                considered for purposes of section 207(c)(2)(A) of 
                title 18, United States Code, to be the equivalent of 
                that described under clause (ii) of section 
                207(c)(2)(A) of title 18. In addition, the 
                Commissioners may receive a bonus in an amount of up 
                to, but not in excess of, 50 percent of the 
                Commissioner's annual rate of basic pay, based upon an 
                evaluation by the Secretary of Commerce, acting through 
                the Director, of the Commissioners' performance as 
                defined in an annual performance agreement between the 
                Commissioners and the Secretary. The annual performance 
                agreements shall incorporate measurable organization 
                and individual goals in key operational areas as 
                delineated in an annual performance plan agreed to by 
                the Commissioners and the Secretary. Payment of a bonus 
                under this subparagraph may be made to the 
                Commissioners only to the extent that such payment does 
                not cause the Commissioners' total aggregate 
                compensation in a calendar year to equal or exceed the 
                amount of the salary of the President under section 102 
                of title 3.
                    ``(C) Removal.--The Commissioners may be removed 
                from office by the Secretary for misconduct or 
                nonsatisfactory performance under the performance 
                agreement described in subparagraph (B). The Secretary 
                shall provide notification of any such removal to both 
                Houses of Congress.
            ``(3) Other officers and employees.--The Director shall--
                    ``(A) appoint such officers, employees (including 
                attorneys), and agents of the Office as the Director 
                considers necessary to carry out the functions of the 
                Office; and
                    ``(B) define the title, authority, and duties of 
                such officers and employees and delegate to them such 
                of the powers vested in the Office as the Director may 
                determine.
        The Office shall not be subject to any administratively or 
        statutorily imposed limitation on positions or personnel, and 
        no positions or personnel of the Office shall be taken into 
        account for purposes of applying any such limitation.
            ``(4) Training of examiners.--The Patent and Trademark 
        Office shall develop an incentive program to retain as 
        employees patent and trademark examiners of the primary 
        examiner grade or higher who are eligible for retirement, for 
        the sole purpose of training patent and trademark examiners.
    ``(c) Continued Applicability of Title 5.--Officers and employees 
of the Office shall be subject to the provisions of title 5 relating to 
Federal employees.
    ``(d) Adoption of Existing Labor Agreements.--The Office shall 
adopt all labor agreements which are in effect, as of the day before 
the effective date of the Patent and Trademark Office Efficiency Act, 
with respect to such Office (as then in effect).
    ``(e) Carryover of Personnel.--
            ``(1) From pto.--Effective as of the effective date of the 
        Patent and Trademark Office Efficiency Act, all officers and 
        employees of the Patent and Trademark Office on the day before 
        such effective date shall become officers and employees of the 
        Office, without a break in service.
            ``(2) Other personnel.--Any individual who, on the day 
        before the effective date of the Patent and Trademark Office 
        Efficiency Act, is an officer or employee of the Department of 
        Commerce (other than an officer or employee under paragraph 
        (1)) shall be transferred to the Office, as necessary to carry 
        out the purposes of this Act, if--
                    ``(A) such individual serves in a position for 
                which a major function is the performance of work 
                reimbursed by the Patent and Trademark Office, as 
                determined by the Secretary of Commerce;
                    ``(B) such individual serves in a position that 
                performed work in support of the Patent and Trademark 
                Office during at least half of the incumbent's work 
                time, as determined by the Secretary of Commerce; or
                    ``(C) such transfer would be in the interest of the 
                Office, as determined by the Secretary of Commerce in 
                consultation with the Director.
        Any transfer under this paragraph shall be effective as of the 
        same effective date as referred to in paragraph (1), and shall 
        be made without a break in service.
            ``(3) Accumulated leave.--The amount of sick and annual 
        leave and compensatory time accumulated under title 5 before 
        the effective date described in paragraph (1), by those 
        becoming officers or employees of the Office pursuant to this 
        subsection, are obligations of the Office.
    ``(f) Transition Provisions.--
            ``(1) Interim appointment of director.--On or after the 
        effective date of the Patent and Trademark Office Efficiency 
        Act, the President shall appoint an individual to serve as the 
        Director until the date on which a Director qualifies under 
        subsection (a). The President shall not make more than one such 
        appointment under this subsection.
            ``(2) Continuation in office of certain officers.--(A) The 
        individual serving as the Assistant Commissioner for Patents on 
        the day before the effective date of the Patent and Trademark 
        Office Efficiency Act may serve as the Commissioner for Patents 
        until the date on which a Commissioner for Patents is appointed 
        under subsection (b).
            ``(B) The individual serving as the Assistant Commissioner 
        for Trademarks on the day before the effective date of the 
        Patent and Trademark Office Efficiency Act may serve as the 
        Commissioner for Trademarks until the date on which a 
        Commissioner for Trademarks is appointed under subsection 
        (b).''.

SEC. 614. PUBLIC ADVISORY COMMITTEES.

    Chapter 1 of part I of title 35, United States Code, is amended by 
inserting after section 4 the following:
``Sec. 5. Patent and Trademark Office Public Advisory Committees
    ``(a) Establishment of Public Advisory Committees.--
            ``(1) Appointment.--The United States Patent and Trademark 
        Office shall have a Patent Public Advisory Committee and a 
        Trademark Public Advisory Committee, each of which shall have 9 
        voting members who shall be appointed by the Secretary of 
        Commerce and serve at the pleasure of the Secretary of 
        Commerce. Members of each Public Advisory Committee shall be 
        appointed for a term of 3 years, except that of the members 
        first appointed, 3 shall be appointed for a term of 1 year, and 
        3 shall be appointed for a term of 2 years. In making 
        appointments to each Committee, the Secretary of Commerce shall 
        consider the risk of loss of competitive advantage in 
        international commerce or other harm to United States companies 
        as a result of such appointments.
            ``(2) Chair.--The Secretary shall designate a chair of each 
        Advisory Committee, whose term as chair shall be for 3 years.
            ``(3) Timing of appointments.--Initial appointments to each 
        Advisory Committee shall be made within 3 months after the 
        effective date of the Patent and Trademark Office Efficiency 
        Act. Vacancies shall be filled within 3 months after they 
        occur.
    ``(b) Basis for Appointments.--Members of each Advisory Committee--
            ``(1) shall be citizens of the United States who shall be 
        chosen so as to represent the interests of diverse users of the 
        Patent and Trademark Office with respect to patents, in the 
        case of the Patent Public Advisory Committee, and with respect 
        to trademarks, in the case of the Trademark Public Advisory 
        Committee;
            ``(2) shall include members who represent small and large 
        entity applicants located in the United States in proportion to 
        the number of applications filed by such members, but in no 
        case shall members who represent small entity patent 
        applicants, including small business concerns, independent 
        inventors, and nonprofit organizations, constitute less than 25 
        percent of the members of the Patent Public Advisory Committee; 
        and
            ``(3) shall include individuals with substantial background 
        and achievement in finance, management, labor relations, 
        science, technology, and office automation.
In addition to the voting members, each Advisory Committee shall 
include a representative of each labor organization recognized by the 
Patent and Trademark Office. Such representatives shall be nonvoting 
members of the Advisory Committee to which they are appointed.
    ``(c) Meetings.--Each Advisory Committee shall meet at the call of 
the chair to consider an agenda set by the Chair.
    ``(d) Duties.--Each Advisory Committee shall--
            ``(1) review the policies, goals, performance, budget, and 
        user fees of the Patent and Trademark Office with respect to 
        patents, in the case of the Patent Public Advisory Committee, 
        and with respect to Trademarks, in the case of the Trademark 
        Public Advisory Committee, and advise the Director on these 
        matters;
            ``(2) within 60 days after the end of each fiscal year--
                    ``(A) prepare an annual report on the matters 
                referred to in paragraph (1);
                    ``(B) transmit the report to the Secretary of 
                Commerce, the President, and the Committees on the 
                Judiciary of the Senate and the House of 
                Representatives; and
                    ``(C) publish the report in the Official Gazette of 
                the Patent and Trademark Office.
    ``(e) Compensation.--Each member of each Advisory Committee shall 
be compensated for each day (including travel time) during which such 
member is attending meetings or conferences of that Advisory Committee 
or otherwise engaged in the business of that Advisory Committee, at the 
rate which is the daily equivalent of the annual rate of basic pay in 
effect for level III of the Executive Schedule under section 5314 of 
title 5. While away from such member's home or regular place of 
business such member shall be allowed travel expenses, including per 
diem in lieu of subsistence, as authorized by section 5703 of title 5.
    ``(f) Access to Information.--Members of each Advisory Committee 
shall be provided access to records and information in the Patent and 
Trademark Office, except for personnel or other privileged information 
and information concerning patent applications required to be kept in 
confidence by section 122.
    ``(g) Applicability of Certain Ethics Laws.--Members of each 
Advisory Committee shall be special Government employees within the 
meaning of section 202 of title 18.
    ``(h) Inapplicability of Federal Advisory Committee Act.--The 
Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to each 
Advisory Committee.
    ``(i) Open Meetings.--The meetings of each Advisory Committee shall 
be open to the public, except that each Advisory Committee may by 
majority vote meet in executive session when considering personnel or 
other confidential information.''.

SEC. 615. PATENT AND TRADEMARK OFFICE FUNDING.

    Section 42(c) of title 35, United States Code, is amended in the 
second sentence--
            (1) by striking ``Fees available'' and inserting ``All fees 
        available''; and
            (2) by striking ``may'' and inserting ``shall''.

SEC. 616. CONFORMING AMENDMENTS.

    (a) Duties.--Chapter 1 of title 35, United States Code, is amended 
by striking section 6.
    (b) Regulations for Agents and Attorneys.--Section 31 of title 35, 
United States Code, and the item relating to such section in the table 
of sections for chapter 3 of title 35, United States Code, are 
repealed.

SEC. 617. TRADEMARK TRIAL AND APPEAL BOARD.

    Section 17 of the Act of July 5, 1946 (commonly referred to as the 
``Trademark Act of 1946'') (15 U.S.C. 1067) is amended to read as 
follows:
    ``Sec. 17. (a) In every case of interference, opposition to 
registration, application to register as a lawful concurrent user, or 
application to cancel the registration of a mark, the Director shall 
give notice to all parties and shall direct a Trademark Trial and 
Appeal Board to determine and decide the respective rights of 
registration.
    ``(b) The Trademark Trial and Appeal Board shall include the 
Director, the Commissioner for Patents, the Commissioner for 
Trademarks, and administrative trademark judges who are appointed by 
the Director.''.

SEC. 618. BOARD OF PATENT APPEALS AND INTERFERENCES.

    Chapter 1 of title 35, United States Code, is amended--
            (1) by striking section 7 and redesignating sections 8 
        through 14 as sections 7 through 13, respectively; and
            (2) by inserting after section 5 the following:
``Sec. 6. Board of Patent Appeals and Interferences
    ``(a) Establishment and Composition.--There shall be in the United 
States Patent and Trademark Office a Board of Patent Appeals and 
Interferences. The Director, the Commissioner for Patents, the 
Commissioner for Trademarks, and the administrative patent judges shall 
constitute the Board. The administrative patent judges shall be persons 
of competent legal knowledge and scientific ability who are appointed 
by the Director.
    ``(b) Duties.--The Board of Patent Appeals and Interferences shall, 
on written appeal of an applicant, review adverse decisions of 
examiners upon applications for patents and shall determine priority 
and patentability of invention in interferences declared under section 
135(a). Each appeal and interference shall be heard by at least 3 
members of the Board, who shall be designated by the Director. Only the 
Board of Patent Appeals and Interferences may grant rehearings.''.

SEC. 619. ANNUAL REPORT OF DIRECTOR.

    Section 13 of title 35, United States Code, as redesignated by 
section 618 of this Act, is amended to read as follows:
``Sec. 13. Annual report to Congress
    ``The Director shall report to the Congress, not later than 180 
days after the end of each fiscal year, the moneys received and 
expended by the Office, the purposes for which the moneys were spent, 
the quality and quantity of the work of the Office, the nature of 
training provided to examiners, the evaluation of the Director and the 
Commissioners by the Secretary of Commerce, the Director's and the 
Commissioners' compensation, and other information relating to the 
Office.''.

SEC. 620. SUSPENSION OR EXCLUSION FROM PRACTICE.

    Section 32 of title 35, United States Code, is amended by inserting 
before the last sentence the following: ``The Director shall have the 
discretion to designate any attorney who is an officer or employee of 
the United States Patent and Trademark Office to conduct the hearing 
required by this section.''.

SEC. 621. PAY OF DIRECTOR.

    Section 5314 of title 5, United States Code, is amended by striking
            ``Assistant Secretary of Commerce and Commissioner of 
        Patents and Trademarks.''
and inserting
            ``Under Secretary of Commerce for Intellectual Property and 
        Director of the United States Patent and Trademark Office.''.

            Subtitle B--Effective Date; Technical Amendments

SEC. 631. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
4 months after the date of the enactment of this Act.

SEC. 632. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Amendments to Title 35.--
            (1) The item relating to part I in the table of parts for 
        chapter 35, United States Code, is amended to read as follows:

``I. United States Patent and Trademark Office..............       1''.
            (2) The heading for part I of title 35, United States Code, 
        is amended to read as follows:

         ``PART I--UNITED STATES PATENT AND TRADEMARK OFFICE''.

            (3) The table of chapters for part I of title 35, United 
        States Code, is amended by amending the item relating to 
        chapter 1 to read as follows:

``1. Establishment, Officers and Employees, Functions.......       1''.
            (4) The table of sections for chapter 1 of title 35, United 
        States Code, is amended to read as follows:

     ``CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS

``Sec.
``1. Establishment.
``2. Powers and duties.
``3. Officers and employees.
``4. Restrictions on officers and employees as to interest in patents.
``5. Patent and Trademark Office Public Advisory Committee.
``6. Board of Patent Appeals and Interferences.
``7. Library.
``8. Classification of patents.
``9. Certified copies of records.
``10. Publications.
``11. Exchange of copies of patents and applications with foreign 
                            countries.
``12. Copies of patents and applications for public libraries.
``13. Annual report to Congress.''.
            (5) Section 41(h) of title 35, United States Code, is 
        amended by striking ``Commissioner of Patents and Trademarks'' 
        and inserting ``Director''.
            (6) Section 155 of title 35, United States Code, is amended 
        by striking ``Commissioner of Patents and Trademarks'' and 
        inserting ``Director''.
            (7) Section 155A(c) of title 35, United States Code, is 
        amended by striking ``Commissioner of Patents and Trademarks'' 
        and inserting ``Director''.
            (8)(A) Except as provided in subparagraph (B), title 35, 
        United States Code, is amended by striking ``Commissioner'' 
        each place it appears and inserting ``Director''.
            (B) Chapter 17 of title 35, United States Code, is amended 
        by striking ``Commissioner'' each place it appears and 
        inserting ``Commissioner of Patents''.
            (9) Section 41(a)(8)(A) of title 35, United States Code, is 
        amended by striking ``On'' and inserting ``on''.
            (10) Section 157(d) of title 35, United States Code, is 
        amended by striking ``Secretary of Commerce'' and inserting 
        ``Director''.
            (11) Section 181 of title 35, United States Code, is 
        amended in the third paragraph by striking ``Secretary of 
        Commerce under rules prescribed by him'' and inserting 
        ``Director under rules prescribed by the Patent and Trademark 
        Office''.
            (12) Section 188 of title 35, United States Code, is 
        amended by striking ``Secretary of Commerce'' and inserting 
        ``Patent and Trademark Office''.
            (13) Section 202(a) of title 35, United States Code, is 
        amended--
                    (A) by striking ``iv)'' and inserting ``(iv)''; and
                    (B) by striking the second period after 
                ``Department of Energy'' at the end of the first 
                sentence.
    (b) Other Provisions of Law.--
            (1)(A) Section 45 of the Act of July 5, 1946 (commonly 
        referred to as the ``Trademark Act of 1946''; 15 U.S.C. 1127), 
        is amended by striking ``The term `Commissioner'' means the 
        Commissioner of Patents and Trademarks.' and inserting ``The 
        term `Director' means the Director of the United States Patent 
        and Trademark Office.''.
            (B) The Act of July 5, 1946 (commonly referred to as the 
        ``Trademark Act of 1946''; 15 U.S.C. 1051 and following), 
        except for section 17, as amended by section 617 of this Act, 
        is amended by striking ``Commissioner'' each place it appears 
        and inserting ``Director''.
            (2) Section 500(e) of title 5, United States Code, is 
        amended by striking ``Patent Office'' and inserting ``United 
        States Patent and Trademark Office''.
            (3) Section 5102(c)(23) of title 5, United States Code, is 
        amended to read as follows:
            ``(23) administrative patent judges and designated 
        administrative patent judges in the United States Patent and 
        Trademark Office;''.
            (4) Section 5316 of title 5, United States Code (5 U.S.C. 
        5316) is amended by striking ``Commissioner of Patents, 
        Department of Commerce.'', `Deputy Commissioner of Patents and 
        Trademarks.'', ``Assistant Commissioner for Patents.'', and 
        `Assistant Commissioner for Trademarks.''.
            (5) Section 9(p)(1)(B) of the Small Business Act (15 U.S.C. 
        638(p)(1)(B)) is amended to read as follows:
                    ``(B) the Director of the United States Patent and 
                Trademark Office; and''.
            (6) Section 12 of the Act of February 14, 1903 (15 U.S.C. 
        1511) is amended by striking ``(d) Patent and Trademark 
        Office;'' and redesignating subsections (a) through (g) as 
        paragraphs (1) through (6), respectively and indenting the 
        paragraphs as so redesignated 2 ems to the right.
            (7) Section 19 of the Tennessee Valley Authority Act of 
        1933 (16 U.S.C. 831r) is amended--
                    (A) by striking ``Patent Office of the United 
                States'' and inserting ``United States Patent and 
                Trademark Office''; and
                    (B) by striking ``Commissioner of Patents'' and 
                inserting ``Director of the United States Patent and 
                Trademark Office''.
            (8) Section 182(b)(2)(A) of the Trade Act of 1974 (19 
        U.S.C. 2242(b)(2)(A)) is amended by striking ``Commissioner of 
        Patents and Trademarks'' and inserting ``Director of the United 
        States Patent and Trademark Office''.
            (9) Section 302(b)(2)(D) of the Trade Act of 1974 (19 
        U.S.C. 2412(b)(2)(D)) is amended by striking ``Commissioner of 
        Patents and Trademarks'' and inserting ``Director of the United 
        States Patent and Trademark Office''.
            (10) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) 
        is amended by striking ``Patent Office'' and inserting ``United 
        States Patent and Trademark Office''.
            (11) Sections 505(m) and 512(o) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each 
        amended by striking ``Patent and Trademark Office of the 
        Department of Commerce'' and inserting ``United States Patent 
        and Trademark Office''.
            (12) Section 702(d) of the Federal Food, Drug, and Cosmetic 
        Act (21 U.S.C. 372(d)) is amended by striking ``Commissioner of 
        Patents'' and inserting ``Director of the United States Patent 
        and Trademark Office'' and by striking ``Commissioner'' and 
        inserting ``Director''.
            (13) Section 105(e) of the Federal Alcohol Administration 
        Act (27 U.S.C. 205(e)) is amended by striking ``United States 
        Patent Office'' and inserting ``United States Patent and 
        Trademark Office''.
            (14) Section 1295(a)(4) of title 28, United States Code, is 
        amended--
                    (A) in subparagraph (A) by inserting ``United 
                States'' before ``Patent and Trademark''; and
                    (B) in subparagraph (B) by striking ``Commissioner 
                of Patents and Trademarks'' and inserting ``Director of 
                the United States Patent and Trademark Office''.
            (15) Chapter 115 of title 28, United States Code, is 
        amended--
                    (A) in the item relating to section 1744 in the 
                table of sections by striking ``Patent Office'' and 
                inserting ``United States Patent and Trademark 
                Office'';
                    (B) in section 1744--
                            (i) by striking ``Patent Office'' each 
                        place it appears in the text and section 
                        heading and inserting ``United States Patent 
                        and Trademark Office'';
                            (ii) by striking ``Commissioner of 
                        Patents'' and inserting ``Director of the 
                        United States Patent and Trademark Office''; 
                        and
                    (C) by striking ``Commissioner'' and inserting 
                ``Director''.
            (16) Section 1745 of title 28, United States Code, is 
        amended by striking ``United States Patent Office'' and 
        inserting ``United States Patent and Trademark Office''.
            (17) Section 1928 of title 28, United States Code, is 
        amended by striking ``Patent Office'' and inserting ``United 
        States Patent and Trademark Office''.
            (18) Section 151 of the Atomic Energy Act of 1954 (42 
        U.S.C. 2181) is amended in subsections c. and d. by striking 
        ``Commissioner of Patents'' and inserting ``Director of the 
        United States Patent and Trademark Office''.
            (19) Section 152 of the Atomic Energy Act of 1954 (42 
        U.S.C. 2182) is amended by striking ``Commissioner of Patents'' 
        each place it appears and inserting ``Director of the United 
        States Patent and Trademark Office''.
            (20) Section 305 of the National Aeronautics and Space Act 
        of 1958 (42 U.S.C. 2457) is amended--
                    (A) in subsection (c) by striking ``Commissioner of 
                Patents'' and inserting ``Director of the United States 
                Patent and Trademark Office (hereafter in this section 
                referred to as the `Director')''; and
                    (B) by striking ``Commissioner'' each subsequent 
                place it appears and inserting ``Director''.
            (21) Section 12(a) of the Solar Heating and Cooling 
        Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by 
        striking ``Commissioner of the Patent Office'' and inserting 
        ``Director of the United States Patent and Trademark Office''.
            (22) Section 1111 of title 44, United States Code, is 
        amended by striking ``the Commissioner of Patents,''.
            (23) Section 1114 of title 44, United States Code, is 
        amended by striking ``the Commissioner of Patents,''.
            (24) Section 1123 of title 44, United States Code, is 
        amended by striking ``the Patent Office,''.
            (25) Sections 1337 and 1338 of title 44, United States 
        Code, and the items relating to those sections in the table of 
        contents for chapter 13 of such title, are repealed.
            (26) Section 10(i) of the Trading with the enemy Act (50 
        U.S.C. App. 10(i)) is amended by striking ``Commissioner of 
        Patents'' and inserting ``Director of the United States Patent 
        and Trademark Office''.
            (27) Section 11 of the Inspector General Act of 1978 (5 
        U.S.C. App.) is amended--
                    (A) in paragraph (1)--
                            (i) by striking ``and'' before ``the chief 
                        executive officer of the Resolution Trust 
                        Corporation;'';
                            (ii) by striking ``and'' before ``the 
                        Chairperson of the Federal Deposit Insurance 
                        Corporation;'';
                            (iii) by striking ``or'' before ``the 
                        Commissioner of Social Security,''; and
                            (iv) by inserting ``or the Director of the 
                        United States Patent and Trademark Office;'' 
                        after ``Social Security Administration;''; and
                    (B) in paragraph (2)--
                            (i) by striking ``or'' before ``the 
                        Veterans' Administration,''; and
                            (ii) by striking ``or the Social Security 
                        Administration'' and inserting ``the Social 
                        Security Administration, or the United States 
                        Patent and Trademark Office''.

                  Subtitle C--Miscellaneous Provisions

SEC. 641. REFERENCES.

    (a) In General.--Any reference in any other Federal law, Executive 
order, rule, regulation, or delegation of authority, or any document of 
or pertaining to a department or office from which a function is 
transferred by this title--
            (1) to the head of such department or office is deemed to 
        refer to the head of the department or office to which such 
        function is transferred; or
            (2) to such department or office is deemed to refer to the 
        department or office to which such function is transferred.
    (b) Specific References.--Any reference in any other Federal law, 
Executive order, rule, regulation, or delegation of authority, or any 
document of or pertaining to the Patent and Trademark Office--
            (1) to the Commissioner of Patents and Trademarks is deemed 
        to refer to the Director of the United States Patent and 
        Trademark Office;
            (2) to the Assistant Commissioner for Patents is deemed to 
        refer to the Commissioner for Patents; or
            (3) to the Assistant Commissioner for Trademarks is deemed 
        to refer to the Commissioner for Trademarks.

SEC. 642. EXERCISE OF AUTHORITIES.

    Except as otherwise provided by law, a Federal official to whom a 
function is transferred by this title may, for purposes of performing 
the function, exercise all authorities under any other provision of law 
that were available with respect to the performance of that function to 
the official responsible for the performance of the function 
immediately before the effective date of the transfer of the function 
under this title.

SEC. 643. SAVINGS PROVISIONS.

    (a) Legal Documents.--All orders, determinations, rules, 
regulations, permits, grants, loans, contracts, agreements, 
certificates, licenses, and privileges--
            (1) that have been issued, made, granted, or allowed to 
        become effective by the President, the Secretary of Commerce, 
        any officer or employee of any office transferred by this 
        title, or any other Government official, or by a court of 
        competent jurisdiction, in the performance of any function that 
        is transferred by this title, and
            (2) that are in effect on the effective date of such 
        transfer (or become effective after such date pursuant to their 
        terms as in effect on such effective date), shall continue in 
        effect according to their terms until modified, terminated, 
        superseded, set aside, or revoked in accordance with law by the 
        President, any other authorized official, a court of competent 
        jurisdiction, or operation of law.
    (b) Proceedings.--This title shall not affect any proceedings or 
any application for any benefits, service, license, permit, 
certificate, or financial assistance pending on the effective date of 
this title before an office transferred by this title, but such 
proceedings and applications shall be continued. Orders shall be issued 
in such proceedings, appeals shall be taken therefrom, and payments 
shall be made pursuant to such orders, as if this title had not been 
enacted, and orders issued in any such proceeding shall continue in 
effect until modified, terminated, superseded, or revoked by a duly 
authorized official, by a court of competent jurisdiction, or by 
operation of law. Nothing in this subsection shall be considered to 
prohibit the discontinuance or modification of any such proceeding 
under the same terms and conditions and to the same extent that such 
proceeding could have been discontinued or modified if this title had 
not been enacted.
    (c) Suits.--This title shall not affect suits commenced before the 
effective date of this title, and in all such suits, proceedings shall 
be had, appeals taken, and judgments rendered in the same manner and 
with the same effect as if this title had not been enacted.
    (d) Nonabatement of Actions.--No suit, action, or other proceeding 
commenced by or against the Department of Commerce or the Secretary of 
Commerce, or by or against any individual in the official capacity of 
such individual as an officer or employee of an office transferred by 
this title, shall abate by reason of the enactment of this title.
    (e) Continuance of Suits.--If any Government officer in the 
official capacity of such officer is party to a suit with respect to a 
function of the officer, and under this title such function is 
transferred to any other officer or office, then such suit shall be 
continued with the other officer or the head of such other office, as 
applicable, substituted or added as a party.
    (f) Administrative Procedure and Judicial Review.--Except as 
otherwise provided by this title, any statutory requirements relating 
to notice, hearings, action upon the record, or administrative or 
judicial review that apply to any function transferred by this title 
shall apply to the exercise of such function by the head of the Federal 
agency, and other officers of the agency, to which such function is 
transferred by this title.

SEC. 644. TRANSFER OF ASSETS.

    Except as otherwise provided in this title, so much of the 
personnel, property, records, and unexpended balances of 
appropriations, allocations, and other funds employed, used, held, 
available, or to be made available in connection with a function 
transferred to an official or agency by this title shall be available 
to the official or the head of that agency, respectively, at such time 
or times as the Director of the Office of Management and Budget directs 
for use in connection with the functions transferred.

SEC. 645. DELEGATION AND ASSIGNMENT.

    Except as otherwise expressly prohibited by law or otherwise 
provided in this title, an official to whom functions are transferred 
under this title (including the head of any office to which functions 
are transferred under this title) may delegate any of the functions so 
transferred to such officers and employees of the office of the 
official as the official may designate, and may authorize successive 
redelegations of such functions as may be necessary or appropriate. No 
delegation of functions under this section or under any other provision 
of this title shall relieve the official to whom a function is 
transferred under this title of responsibility for the administration 
of the function.

SEC. 646. AUTHORITY OF DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET 
              WITH RESPECT TO FUNCTIONS TRANSFERRED.

    (a) Determinations.--If necessary, the Director of the Office of 
Management and Budget shall make any determination of the functions 
that are transferred under this title.
    (b) Incidental Transfers.--The Director of the Office of Management 
and Budget, at such time or times as the Director shall provide, may 
make such determinations as may be necessary with regard to the 
functions transferred by this title, and to make such additional 
incidental dispositions of personnel, assets, liabilities, grants, 
contracts, property, records, and unexpended balances of 
appropriations, authorizations, allocations, and other funds held, 
used, arising from, available to, or to be made available in connection 
with such functions, as may be necessary to carry out the provisions of 
this title. The Director shall provide for the termination of the 
affairs of all entities terminated by this title and for such further 
measures and dispositions as may be necessary to effectuate the 
purposes of this title.

SEC. 647. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.

    For purposes of this title, the vesting of a function in a 
department or office pursuant to reestablishment of an office shall be 
considered to be the transfer of the function.

SEC. 648. AVAILABILITY OF EXISTING FUNDS.

    Existing appropriations and funds available for the performance of 
functions, programs, and activities terminated pursuant to this title 
shall remain available, for the duration of their period of 
availability, for necessary expenses in connection with the termination 
and resolution of such functions, programs, and activities, subject to 
the submission of a plan to the Committees on Appropriations of the 
House and Senate in accordance with the procedures set forth in section 
605 of the Departments of Commerce, Justice, and State, the Judiciary, 
and Related Agencies Appropriations Act, 1999, as contained in Public 
Law 105-277.

SEC. 649. DEFINITIONS.

    For purposes of this title--
            (1) the term ``function'' includes any duty, obligation, 
        power, authority, responsibility, right, privilege, activity, 
        or program; and
            (2) the term ``office'' includes any office, 
        administration, agency, bureau, institute, council, unit, 
        organizational entity, or component thereof.

               TITLE VII--MISCELLANEOUS PATENT PROVISIONS

SEC. 701. PROVISIONAL APPLICATIONS.

    (a) Abandonment.--Section 111(b)(5) of title 35, United States 
Code, is amended to read as follows:
            ``(5) Abandonment.--Notwithstanding the absence of a claim, 
        upon timely request and as prescribed by the Commissioner, a 
        provisional application may be treated as an application filed 
        under subsection (a). Subject to section 119(e)(3) of this 
        title, if no such request is made, the provisional application 
        shall be regarded as abandoned 12 months after the filing date 
        of such application and shall not be subject to revival 
        thereafter.''.
    (b) Technical Amendment Relating to Weekends and Holidays.--Section 
119(e) of title 35, United States code, is amended by adding at the end 
the following:
    ``(3) If the day that is 12 months after the filing date of a 
provisional application falls on a Saturday, Sunday, or Federal holiday 
within the District of Columbia, the period of pendency of the 
provisional application shall be extended to the next succeeding 
secular or business day.''.
    (c) Elimination of Copendency Requirement.--Section 119(e)(2) of 
title 35, United States Code, is amended by striking ``and the 
provisional application was pending on the filing date of the 
application for patent under section 111(a) or section 363 of this 
title''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act and shall apply to any 
provisional application filed on or after June 8, 1995, except that the 
amendments made by subsections (b) and (c) shall have no effect with 
respect to any patent which is the subject of litigation in an action 
commenced before such date of enactment.

SEC. 702. INTERNATIONAL APPLICATIONS.

    Section 119 of title 35, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by inserting ``in a WTO member country or'' 
                after ``patent for the same invention''; and
                    (B) by inserting ``such WTO member country or'' 
                after ``first filed in'';
            (2) in subsection (c), by inserting ``WTO member country 
        or'' after ``application in the same''; and
            (3) by adding at the end the following:
    ``(f) Applications for plant breeder's rights filed in a WTO member 
country (or in a foreign UPOV Contracting Party) shall have the same 
effect for the purpose of the right of priority under subsections (a) 
through (c) of this section as applications for patent, subject to the 
same conditions and requirements of this section as apply to 
applications for patents.
    ``(g) As used in this section--
            ``(1) the term `WTO member country' has the meaning given 
        that term in section 2(10) of the Uruguay Round Agreements Act; 
        and
            ``(2) the term `UPOV Contracting Party' means a member of 
        the International Convention for the Protection of New 
        Varieties of Plants.''.

SEC. 703. CERTAIN LIMITATIONS ON DAMAGES FOR PATENT INFRINGEMENT NOT 
              APPLICABLE.

    Section 287(c)(4) of title 35, United States Code, is amended by 
striking ``before the date of enactment of this subsection'' and 
inserting ``based on an application the earliest effective filing date 
of which is prior to September 30, 1996''.

SEC. 704. ELECTRONIC FILING.

    Section 22 of title 35, United States Code, is amended by striking 
``printed or typewritten'' and inserting ``printed, typewritten, or on 
an electronic medium''.

SEC. 705. STUDY AND REPORT ON BIOLOGICAL DEPOSITS IN SUPPORT OF 
              BIOTECHNOLOGY PATENTS.

    (a) In General.--No later than 6 months after the date of the 
enactment of this Act, the Comptroller General of the United States, in 
consultation with the Director of the United States Patent and 
Trademark Office, shall conduct a study and submit a report to the 
Congress on the potential risks to the United States biotechnology 
industry relating to biological deposits in support of biotechnology 
patents.
    (b) Contents.--The study conducted under this section shall 
include--
            (1) an examination of the risk of export and the risk of 
        transfers to third parties of biological deposits, and the 
        risks posed by the change to 18-month publication requirements 
        made by this Act;
            (2) an analysis of comparative legal and regulatory 
        regimes; and
            (3) any related recommendations.
    (c) Consideration of Report.--In drafting regulations affecting 
biological deposits (including any modification of title 37, Code of 
Federal Regulations, section 1.801 et seq.), the Patent and Trademark 
Office shall consider the recommendations of the study conducted under 
this section.

SEC. 706. PRIOR INVENTION.

    Section 102(g) of title 35, United States Code, is amended to read 
as follows:
    ``(g)(1) during the course of an interference conducted under 
section 135 or section 291, another inventor involved therein 
establishes, to the extent permitted in section 104, that before such 
person's invention thereof the invention was made by such other 
inventor and not abandoned, suppressed, or concealed, or (2) before 
such person's invention thereof, the invention was made in this country 
by another inventor who had not abandoned, suppressed, or concealed it. 
In determining priority of invention under this subsection, there shall 
be considered not only the respective dates of conception and reduction 
to practice of the invention, but also the reasonable diligence of one 
who was first to conceive and last to reduce to practice, from a time 
prior to conception by the other.''.

SEC. 707. PRIOR ART EXCLUSION FOR CERTAIN COMMONLY ASSIGNED PATENTS.

    (a) Prior Art Exclusion.--Section 103(c) of title 35, United States 
Code, is amended by striking ``subsection (f) or (g)'' and inserting 
``one or more of subsections (e), (f), and (g)''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to any application for patent filed on or after the date of the 
enactment of this Act.`