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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 632 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                 S. 632

To strengthen the position of the United States as the world's leading 
  innovator by amending title 35, United States Code, to protect the 
   property rights of the inventors that grow the country's economy.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 3, 2015

  Mr. Coons (for himself, Mr. Durbin, and Ms. Hirono) introduced the 
 following bill; which was read twice and referred to the Committee on 
                             the Judiciary

_______________________________________________________________________

                                 A BILL

 
To strengthen the position of the United States as the world's leading 
  innovator by amending title 35, United States Code, to protect the 
   property rights of the inventors that grow the country's economy.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Support Technology 
and Research for Our Nation's Growth Patents Act of 2015'' or the 
``STRONG Patents Act of 2015''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                      TITLE I--STRONG PATENTS ACT

Sec. 101. Findings.
Sec. 102. Inter partes review.
Sec. 103. Post-grant review.
Sec. 104. Composition of post-grant review and inter partes review 
                            panels.
Sec. 105. Reexamination of patents.
Sec. 106. Elimination of Form 18.
Sec. 107. Elimination of USPTO fee diversion.
Sec. 108. Willful infringement.
Sec. 109. Divided infringement.
Sec. 110. Institutions of higher education.
Sec. 111. Assisting small businesses in the U.S. patent system.
              TITLE II--TARGETING ROGUE AND OPAQUE LETTERS

Sec. 201. Definitions.
Sec. 202. Unfair or deceptive acts or practices in connection with the 
                            assertion of a United States patent.
Sec. 203. Enforcement by Federal Trade Commission.
Sec. 204. Preemption of State laws on patent demand letters and 
                            enforcement by State attorneys general.

                      TITLE I--STRONG PATENTS ACT

SEC. 101. FINDINGS.

    Congress finds that--
            (1) the patent property rights enshrined in the 
        Constitution of the United States provide the foundation for 
        the exceptional innovation environment in the United States;
            (2) strong patent rights encourage United States inventors 
        to invest their resources in creating new inventions;
            (3) patent protection has led to patient cures, positive 
        changes to the standard of living for all people in the United 
        States, and improvements to the agricultural, 
        telecommunications, and electronics industries, among others;
            (4) the United States patent system is an essential part of 
        the country's economic success;
            (5) strong patent protection improves the chances of 
        success for small companies and increases their chances of 
        securing financing from investors;
            (6) intellectual property-intensive industries in the 
        United States generate tens of millions of jobs for individuals 
        in the United States;
            (7) intellectual property-intensive industries in the 
        United States account for more than one-third of the country's 
        gross domestic product;
            (8) in the highly competitive global economy, the United 
        States needs to uphold strong patent protections to maintain 
        its position as the world's premier innovative country;
            (9) Congress last enacted comprehensive reforms of the 
        patent system only a few years ago, in 2011;
            (10) unintended consequences of the comprehensive 2011 
        reform of patent laws are continuing to become evident, 
        including the strategic filing of post-grant review proceedings 
        to depress stock prices and extort settlements;
            (11) the Judicial Conference of the United States is in the 
        process of making significant revisions to rules governing 
        pleadings and discovery in the Federal Rules of Civil 
        Procedure, with changes scheduled to take effect in December 
        2015;
            (12) the Supreme Court recently issued rulings in Octane 
        Fitness, LLC v. Icon Health & Fitness, Inc., 134 S.Ct. 1749 
        (2014) and Highmark Inc. v. Allcare Health Management System, 
        Inc., 134 S.Ct. 1744 (2014) that significantly reduced the 
        burden on an alleged infringer to recover attorney fees from 
        the patent owner, and increased the incidence of fees shifted 
        to the losing party; and
            (13) efforts by Congress to reform the patent system 
        without careful scrutiny create a serious risk of making it 
        more costly and difficult for legitimate innovators to protect 
        their patents from infringement, thereby weakening United 
        States companies and the United States economy.

SEC. 102. INTER PARTES REVIEW.

    (a) Claim Construction.--Section 316(a) of title 35, United States 
Code, is amended--
            (1) in paragraph (12), by striking ``; and'' and inserting 
        a semicolon;
            (2) in paragraph (13), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(14) providing that for all purposes under this chapter--
                    ``(A) each claim of a patent shall be construed as 
                the claim would be construed under section 282(b) in an 
                action to invalidate a patent, including by construing 
                each claim of the patent in accordance with--
                            ``(i) the ordinary and customary meaning of 
                        the claim as understood by a person having 
                        ordinary skill in the art to which the claimed 
                        invention pertains; and
                            ``(ii) the prosecution history pertaining 
                        to the patent; and
                    ``(B) if a court has previously construed a claim 
                of a patent or a claim term in a civil action to which 
                the patent owner was a party, the Office shall consider 
                that claim construction.''.
    (b) Amendment of Claims.--Section 316(d) of title 35, United States 
Code, is amended to read as follows:
    ``(d) Amendment of the Patent.--
            ``(1) In general.--During an inter partes review instituted 
        under this chapter, the patent owner may move to amend the 
        patent in 1 or more of the following ways:
                    ``(A) Cancel any challenged patent claim.
                    ``(B) For each challenged claim, propose a 
                reasonable number of substitute claims.
            ``(2) Initial amendment.--If the patent owner has not 
        amended the patent under this subsection, a motion to amend 
        filed by the patent owner shall be granted if the proposed 
        number of substitute claims is reasonable.
            ``(3) Additional amendments.--
                    ``(A) Permission to file motions.--If the patent 
                owner has amended the patent under this subsection, 
                additional motions to amend may be permitted upon--
                            ``(i) the joint request of the petitioner 
                        and the patent owner to materially advance the 
                        settlement of a proceeding under section 317; 
                        or
                            ``(ii) the request of the patent owner for 
                        good cause shown.
                    ``(B) Discretion to grant motions.--The Patent 
                Trial and Appeal Board shall determine, in its 
                discretion, whether to grant or deny a motion filed 
                under this paragraph.
            ``(4) Scope of claims.--An amendment to a patent under this 
        subsection may not enlarge the scope of the claims of the 
        patent or introduce new matter.''.
    (c) Burden of Proof.--Section 316(e) of title 35, United States 
Code, is amended to read as follows:
    ``(e) Evidentiary Standards.--
            ``(1) Presumption of validity.--The presumption of validity 
        under section 282(a) shall apply to a previously issued claim 
        that is challenged during a proceeding under this chapter.
            ``(2) Burdens of proof.--In an inter partes review 
        instituted under this chapter, the petitioner shall have the 
        burden of proving--
                    ``(A) a proposition of unpatentability of a 
                previously issued claim by clear and convincing 
                evidence; and
                    ``(B) a proposition of unpatentability of a 
                proposed amended claim by a preponderance of the 
                evidence.''.
    (d) Standing.--Section 311 of title 35, United States Code, is 
amended by adding at the end the following:
    ``(d) Persons That May Petition.--
            ``(1) Definition.--In this subsection, the term `charged 
        with infringement' means a real and substantial controversy 
        regarding infringement of a patent exists such that the 
        petitioner would have standing to bring a declaratory judgment 
        action in Federal court.
            ``(2) Necessary conditions.--A person may not file with the 
        Office a petition to institute an inter partes review of a 
        patent unless the person, or a real party in interest or privy 
        of the person, has been--
                    ``(A) sued for infringement of the patent; or
                    ``(B) charged with infringement under the 
                patent.''.
    (e) Discovery of Real Party in Interest.--Section 316(a)(5) of 
title 35, United States Code, is amended to read as follows:
            ``(5) setting forth standards and procedures for discovery 
        of relevant evidence, including that such discovery shall be 
        limited to--
                    ``(A) the deposition of witnesses submitting 
                affidavits or declarations;
                    ``(B) evidence identifying the petitioner's real 
                parties in interest; and
                    ``(C) what is otherwise necessary in the interest 
                of justice;''.
    (f) Evidence Supporting Preliminary Response.--Section 313 of title 
35, United States Code, is amended--
            (1) by striking ``If an'' and inserting the following:
    ``(a) In General.--If an''; and
            (2) by adding at the end the following:
    ``(b) Supporting Evidence.--In filing a preliminary response under 
subsection (a), the patent owner may present any supporting evidence 
that the petitioner is permitted to present under section 312(a)(3).
    ``(c) Reply and Surreply.--If the Patent Trial and Appeal Board 
permits the petitioner to submit a reply to a preliminary response 
filed under subsection (a) and the petitioner presents additional 
evidence in that reply, the patent owner may submit a brief surreply, 
which shall be limited to addressing the additional evidence, including 
with appropriate rebuttal evidence.''.
    (g) Coordination of Proceedings.--Section 314(a) of title 35, 
United States Code, is amended--
            (1) by striking ``Threshold.--The Director'' and inserting 
        the following: ``Requirements for Authorization by Director.--
            ``(1) Threshold.--The Director''; and
            (2) by adding at the end the following:
            ``(2) Patents that are subjects of other proceedings.--The 
        Director may not institute an inter partes review of a patent 
        while the patent is the subject of a--
                    ``(A) reissue proceeding under chapter 25; or
                    ``(B) reexamination proceeding under chapter 30.''.

SEC. 103. POST-GRANT REVIEW.

    (a) Claim Construction.--Section 326(a) of title 35, United States 
Code, is amended--
            (1) in paragraph (11), by striking ``; and'' and inserting 
        a semicolon;
            (2) in paragraph (12), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(13) providing that for all purposes under this chapter--
                    ``(A) each claim of a patent shall be construed as 
                the claim would be construed under section 282(b) in an 
                action to invalidate a patent, including by construing 
                each claim of the patent in accordance with--
                            ``(i) the ordinary and customary meaning of 
                        the claim as understood by a person having 
                        ordinary skill in the art to which the claimed 
                        invention pertains; and
                            ``(ii) the prosecution history pertaining 
                        to the patent; and
                    ``(B) if a court has previously construed a claim 
                of a patent or a claim term in a civil action to which 
                the patent owner was a party, the Office shall consider 
                that claim construction.''.
    (b) Amendment of Claims.--Section 326(d) of title 35, United States 
Code, is amended to read as follows:
    ``(d) Amendment of the Patent.--
            ``(1) In general.--During a post-grant review instituted 
        under this chapter, the patent owner may move to amend the 
        patent in 1 or more of the following ways:
                    ``(A) Cancel any challenged patent claim.
                    ``(B) For each challenged claim, propose a 
                reasonable number of substitute claims.
            ``(2) Initial amendment.--If the patent owner has not 
        amended the patent under this subsection, a motion to amend 
        filed by the patent owner shall be granted if the proposed 
        number of substitute claims is reasonable.
            ``(3) Additional amendments.--
                    ``(A) Permission to file motions.--If the patent 
                owner has amended the patent under this subsection, 
                additional motions to amend may be permitted upon--
                            ``(i) the joint request of the petitioner 
                        and the patent owner to materially advance the 
                        settlement of a proceeding under section 327; 
                        or
                            ``(ii) the request of the patent owner for 
                        good cause shown.
                    ``(B) Discretion to grant motions.--The Patent 
                Trial and Appeal Board shall determine, in its 
                discretion, whether to grant or deny a motion filed 
                under this paragraph.
            ``(4) Scope of claims.--An amendment to a patent under this 
        subsection may not enlarge the scope of the claims of the 
        patent or introduce new matter.''.
    (c) Burden of Proof.--Section 326(e) of title 35, United States 
Code, is amended to read as follows:
    ``(e) Evidentiary Standards.--
            ``(1) Presumption of validity.--The presumption of validity 
        under section 282(a) shall apply to a previously issued claim 
        that is challenged during a proceeding under this chapter.
            ``(2) Burdens of proof.--In a post-grant review instituted 
        under this chapter, the petitioner shall have the burden of 
        proving--
                    ``(A) a proposition of unpatentability of a 
                previously issue claim by clear and convincing 
                evidence; and
                    ``(B) a proposition of unpatentability of a 
                proposed amended claim by a preponderance of the 
                evidence.''.
    (d) Standing.--Section 321 of title 35, United States Code, is 
amended by adding at the end the following:
    ``(d) Persons That May Petition.--
            ``(1) Definition.--In this subsection, the term `charged 
        with infringement' means a real and substantial controversy 
        regarding infringement of a patent exists such that the 
        petitioner would have standing to bring a declaratory judgment 
        action in Federal court.
            ``(2) Necessary conditions.--A person may not file with the 
        Office a petition to institute a post-grant review of the 
        patent unless the person, or a real party in interest or privy 
        of the person, demonstrates--
                    ``(A) a reasonable possibility of being--
                            ``(i) sued for infringement of the patent; 
                        or
                            ``(ii) charged with infringement under the 
                        patent; or
                    ``(B) a competitive harm related to the validity of 
                the patent.''.
    (e) Discovery of Real Party in Interest.--Section 326(a)(5) of 
title 35, United States Code, is amended to read as follows:
            ``(5) setting forth standards and procedures for discovery 
        of relevant evidence, including that such discovery shall be 
        limited to--
                    ``(A) the deposition of witnesses submitting 
                affidavits or declarations; and
                    ``(B) evidence identifying the petitioner's real 
                parties in interest.''.
    (f) Evidence Supporting Preliminary Response.--Section 323 of title 
35, United States Code, is amended--
            (1) by striking ``If a'' and inserting the following:
    ``(a) In General.--If a''; and
            (2) by adding at the end the following:
    ``(b) Supporting Evidence.--In filing a preliminary response under 
subsection (a), the patent owner may present any supporting evidence 
that the petitioner is authorized to present under section 322(a)(3).
    ``(c) Reply and Surreply.--If the Patent Trial and Appeal Board 
permits the petitioner to submit a reply to a preliminary response 
filed under subsection (a) and the petitioner presents additional 
evidence in that reply, the patent owner may submit a brief surreply, 
which shall be limited to addressing that evidence, including with 
appropriate rebuttal evidence.''.
    (g) Coordination of Proceedings.--Section 324(a) of title 35, 
United States Code, is amended--
            (1) by striking ``Threshold.--The Director'' and inserting 
        the following: ``Requirements for Authorization by the 
        Director.--
            ``(1) Threshold.--The Director''; and
            (2) by adding at the end the following:
            ``(2) Patents that are subjects of other proceedings.--The 
        Director may not institute a post-grant review of a patent 
        while the patent is the subject of a--
                    ``(A) reissue proceeding under chapter 25; or
                    ``(B) reexamination proceeding under chapter 30.''.

SEC. 104. COMPOSITION OF POST-GRANT REVIEW AND INTER PARTES REVIEW 
              PANELS.

    Section 6(c) of title 35, United States Code, is amended to read as 
follows:
    ``(c) 3-Member Panels.--
            ``(1) In general.--Each appeal, derivation proceeding, 
        post-grant review, and inter partes review shall be heard by at 
        least 3 members of the Patent Trial and Appeal Board, who shall 
        be designated by the Director.
            ``(2) Ineligibility to hear review.--A member of the Patent 
        Trial and Appeal Board who participates in the decision to 
        institute a post-grant review or an inter partes review of a 
        patent shall be ineligible to hear the review.
            ``(3) Rehearings.--Only the Patent Trial and Appeal Board 
        may grant rehearings.''.

SEC. 105. REEXAMINATION OF PATENTS.

    (a) Request for Reexamination.--Section 302 of title 35, United 
States Code, is amended to read as follows:
``Sec. 302. Request for reexamination
    ``Any person at any time may file a request for reexamination by 
the Office of any claim of a patent on the basis of any prior art cited 
under the provisions of section 301. The request must be in writing and 
must be accompanied by payment of a reexamination fee established by 
the Director pursuant to the provisions of section 41. The request must 
identify all real parties in interest and certify that reexamination is 
not barred under section 303(d). The request must set forth the 
pertinency and manner of applying cited prior art to every claim for 
which reexamination is requested. Unless the requesting person is the 
owner of the patent, the Director promptly will send a copy of the 
request to the owner of record of the patent.''.
    (b) Reexamination Barred by Civil Action.--Section 303 of title 35, 
United States Code, is amended by adding at the end the following:
    ``(d) An ex parte reexamination may not be instituted if the 
request for reexamination is filed more than 1 year after the date on 
which the requester or a real party in interest or privy of the 
requester is served with a complaint alleging infringement of the 
patent.''.

SEC. 106. ELIMINATION OF FORM 18.

    Effective 1 year after the date of enactment of this Act, the 
Supreme Court, using existing resources, shall eliminate Form 18 in the 
Appendix to the Federal Rules of Civil Procedure (relating to Complaint 
for Patent Infringement), if Form 18 remains in existence at that time.

SEC. 107. ELIMINATION OF USPTO FEE DIVERSION.

    (a) Funding.--Section 42 of title 35, United States Code, is 
amended--
            (1) in subsection (b), by striking ``Patent and Trademark 
        Office Appropriation Account'' and inserting ``United States 
        Patent and Trademark Office Innovation Promotion Fund'';
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``To the extent'' and all 
                        that follows through ``fees'' and inserting 
                        ``Fees''; and
                            (ii) by striking ``shall be collected by 
                        and shall, subject to paragraph (2), be 
                        available to the Director'' and inserting 
                        ``shall be collected by the Director and shall 
                        be available to the Director until expended'';
                    (B) by striking paragraph (2); and
                    (C) by redesignating paragraph (3) as paragraph 
                (2);
            (3) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively;
            (4) by inserting after subsection (c) the following:
    ``(d) Revolving Fund.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `Fund' means the United States 
                Patent and Trademark Office Innovation Promotion Fund 
                established under paragraph (2); and
                    ``(B) the term `Trademark Act of 1946' means the 
                Act entitled `An Act to provide for the registration 
                and protection of trademarks used in commerce, to carry 
                out the provisions of certain international 
                conventions, and for other purposes', approved July 5, 
                1946 (15 U.S.C. 1051 et seq.) (commonly referred to as 
                the `Trademark Act of 1946' or the `Lanham Act').
            ``(2) Establishment.--There is established in the Treasury 
        a revolving fund to be known as the `United States Patent and 
        Trademark Office Innovation Promotion Fund'.
            ``(3) Derivation of resources.--There shall be deposited 
        into the Fund any fees collected under--
                    ``(A) this title; or
                    ``(B) the Trademark Act of 1946.
            ``(4) Expenses.--Amounts deposited into the Fund under 
        paragraph (3) shall be available, without fiscal year 
        limitation, to cover--
                    ``(A) all expenses to the extent consistent with 
                the limitation on the use of fees set forth in 
                subsection (c), including all administrative and 
                operating expenses, determined in the discretion of the 
                Director to be ordinary and reasonable, incurred by the 
                Director for the continued operation of all services, 
                programs, activities, and duties of the Office relating 
                to patents and trademarks, as such services, programs, 
                activities, and duties are described under--
                            ``(i) this title; and
                            ``(ii) the Trademark Act of 1946; and
                    ``(B) all expenses incurred pursuant to any 
                obligation, representation, or other commitment of the 
                Office.'';
            (5) in subsection (e), as redesignated, by striking ``The 
        Director'' and inserting ``Refunds.--The Director''; and
            (6) in subsection (f), as redesignated, by striking ``The 
        Secretary'' and inserting ``Report.--The Secretary''.
    (b) Effective Date; Transfer From and Termination of Obsolete 
Funds.--
            (1) Effective date.--The amendments made by subsection (a) 
        shall take effect on the first day of the first fiscal year 
        that begins on or after the date of enactment of this Act.
            (2) Remaining balances.--There shall be deposited in the 
        Fund, on the effective date described in paragraph (1), any 
        available unobligated balances remaining in the Patent and 
        Trademark Office Appropriation Account, and in the Patent and 
        Trademark Fee Reserve Fund established under section 42(c)(2) 
        of title 35, United States Code, as in effect on the date 
        before the effective date.
            (3) Termination of reserve fund.--Upon the payment of all 
        obligated amounts in the Patent and Trademark Fee Reserve Fund 
        under paragraph (2), the Patent and Trademark Fee Reserve Fund 
        shall be terminated.

SEC. 108. WILLFUL INFRINGEMENT.

    Section 284 of title 35, United States Code, is amended to read as 
follows:
``Sec. 284. Damages
    ``(a) Upon finding for the claimant the court shall award the 
claimant damages adequate to compensate for the infringement, but in no 
event less than a reasonable royalty for the use made of the invention 
by the infringer, together with interest and costs as fixed by the 
court. When the damages are not found by a jury, the court shall assess 
them.
    ``(b) In either event the court may exercise its discretion to 
increase the damages up to 3 times the amount found or assessed upon 
determining, by a preponderance of the evidence, that the infringement 
was willful or in bad faith.
    ``(c) Increased damages under this section shall not apply to 
provisional rights under section 154(d).''.

SEC. 109. DIVIDED INFRINGEMENT.

    Section 271 of title 35, United States Code, is amended by adding 
at the end the following:
    ``(j) For a finding of liability for actively inducing infringement 
of a process patent under subsection (b), or for contributory 
infringement of a process patent under subsection (c), it shall not be 
a requirement that the steps of the patented process be practiced by a 
single entity.''.

SEC. 110. INSTITUTIONS OF HIGHER EDUCATION.

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

SEC. 111. ASSISTING SMALL BUSINESSES IN THE U.S. PATENT SYSTEM.

    (a) Definition.--In this section, the term ``small business 
concern'' has the meaning given the term in section 3 of the Small 
Business Act (15 U.S.C. 632).
    (b) Small Business Administration Report.--Not later than 1 year 
after the date of enactment of this Act, the Small Business 
Administration, using existing resources, shall submit to the Committee 
on Small Business and Entrepreneurship of the Senate and the Committee 
on Small Business of the House of Representatives a report analyzing 
the impact of--
            (1) patent ownership by small business concerns; and
            (2) civil actions against small business concerns arising 
        under title 35, United States Code, relating to patent 
        infringement.
    (c) Expansion of Patent Pilot Program in Certain District Courts.--
            (1) In general.--Not later than 6 months after the date of 
        enactment of this Act, the Director of the Administrative 
        Office of the United States Courts shall designate not fewer 
        than 6 of the district courts of the United States that are 
        participating in the patent cases pilot program established 
        under section 1 of Public Law 111-349 (28 U.S.C. 137 note) for 
        the purpose of expanding that program to address special issues 
        raised in patent infringement suits against individuals or 
        small business concerns.
            (2) Procedures for small businesses.--Not later than 2 
        years after the date of enactment of this Act, each district 
        court designated under paragraph (1) shall develop procedures 
        for expediting cases in which an individual or small business 
        concern is accused of patent infringement.
            (3) Participating judges.--
                    (A) In general.--In each district court designated 
                under paragraph (1), each district court judge 
                participating in the patent cases pilot program 
                established under section 1 of Public Law 111-349 may 
                appoint 1 additional law clerk or secretary in excess 
                of any other limitation on the number of such 
                employees.
                    (B) Education and training.--The Federal Judicial 
                Center, using existing resources, shall prepare 
                educational and training materials to assist district 
                court judges described in subparagraph (A) in 
                developing expertise in patent and plant variety 
                protection cases.
            (4) Funds.--There are authorized to be appropriated such 
        sums as may be necessary to carry out paragraph (3)(A).
    (d) Free Online Availability of Public Search Facility Materials.--
Section 41(i) of title 35, United States Code, is amended by adding at 
the end the following:
            ``(5) Free online availability of public search facility 
        materials.--The Director shall make available online and at no 
        charge all patent and trademark information that is available 
        at the Public Search Facility of the Office located in 
        Alexandria, Virginia, including--
                    ``(A) search tools and databases;
                    ``(B) informational materials; and
                    ``(C) training classes and materials.''.

              TITLE II--TARGETING ROGUE AND OPAQUE LETTERS

SEC. 201. DEFINITIONS.

    In this title:
            (1) Bad faith.--The term ``bad faith'' means, with respect 
        to section 202(a), that the sender--
                    (A) made knowingly false or knowingly misleading 
                statements, representations, or omissions;
                    (B) made statements, representations, or omissions 
                with reckless indifference as to the false or 
                misleading nature of such statements, representations, 
                or omissions; or
                    (C) made statements, representations, or omissions 
                with awareness of the high probability of the 
                statements, representations, or omissions to deceive 
                and the sender intentionally avoided the truth.
            (2) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (3) Final determination.--The term ``final determination'' 
        means, with respect to the invalidity or unenforceability of a 
        patent, that the invalidity or unenforceability has been 
        determined by a court of the United States or the United States 
        Patent and Trademark Office in a final decision that is 
        unappealable or for which any opportunity for appeal is no 
        longer available.

SEC. 202. UNFAIR OR DECEPTIVE ACTS OR PRACTICES IN CONNECTION WITH THE 
              ASSERTION OF A UNITED STATES PATENT.

    (a) In General.--It shall be an unfair or deceptive act or practice 
within the meaning of section 5(a)(1) of the Federal Trade Commission 
Act (15 U.S.C. 45(a)(1)) for a person, in connection with the assertion 
of a United States patent, to engage in a pattern or practice of 
sending written communications that state or represent that the 
recipients are or may be infringing, or have or may have infringed, the 
patent and bear liability or owe compensation to another, if--
            (1) the sender of the communications, in bad faith, states 
        or represents in the communications that--
                    (A) the sender is a person with the right to 
                license or enforce the patent at the time the 
                communications are sent, and the sender is not a person 
                with such a right;
                    (B) a civil action asserting a claim of 
                infringement of the patent has been filed against the 
                recipient;
                    (C) a civil action asserting a claim of 
                infringement of the patent has been filed against other 
                persons;
                    (D) legal action for infringement of the patent 
                will be taken against the recipient;
                    (E) the sender is the exclusive licensee of the 
                patent asserted in the communications;
                    (F) persons other than the recipient purchased a 
                license for the patent asserted in the communications;
                    (G) persons other than the recipient purchased a 
                license, and the sender does not disclose that such 
                license is unrelated to the alleged infringement or the 
                patent asserted in the communications;
                    (H) an investigation of the recipient's alleged 
                infringement occurred; or
                    (I) the sender or an affiliate of the sender 
                previously filed a civil action asserting a claim of 
                infringement of the patent based on the activity that 
                is the subject of the written communication when the 
                sender knew such activity was held, in a final 
                determination, not to infringe the patent;
            (2) the sender of the communications, in bad faith, seeks 
        compensation for--
                    (A) a patent claim that has been held to be 
                unenforceable due to inequitable conduct, invalid, or 
                otherwise unenforceable against the recipient, in a 
                final determination;
                    (B) activities undertaken by the recipient after 
                expiration of the patent asserted in the 
                communications; or
                    (C) activity of the recipient that the sender knew 
                was authorized, with respect to the patent claim or 
                claims that are the subject of the communications, by a 
                person with the right to license the patent; or
            (3) the sender of the communications, in bad faith, fails 
        to include--
                    (A) the identity of the person asserting a right to 
                license the patent to, or enforce the patent against, 
                the recipient, including the identity of any parent 
                entity and the ultimate parent entity of such person, 
                unless such person is a public company and the name of 
                the public company is identified;
                    (B) an identification of at least one patent issued 
                by the United States Patent and Trademark Office 
                alleged to have been infringed;
                    (C) an identification, to the extent reasonable 
                under the circumstances, of at least one product, 
                service, or other activity of the recipient that is 
                alleged to infringe the identified patent;
                    (D) a description, to the extent reasonable under 
                the circumstances, of how the product, service, or 
                other activity of the recipient infringes an identified 
                patent and patent claim; or
                    (E) a name and contact information for a person the 
                recipient may contact about the assertions or claims 
                relating to the patent contained in the communications.
    (b) Affirmative Defense.--With respect to subsection (a), there 
shall be an affirmative defense that statements, representations, or 
omissions were not made in bad faith (as defined in subparagraphs (B) 
and (C) of section 201(1)) if the sender can demonstrate that such 
statements, representations, or omissions were mistakes made in good 
faith. Evidence that the sender in the usual course of business sends 
written communications that do not violate the provisions of this title 
shall be sufficient to demonstrate good faith. Good faith may also be 
demonstrated by other evidence.
    (c) Rule of Construction.--For purposes of sections 203 and 204, 
the commission of an act or practice that is declared under this 
section to be an unfair or deceptive act or practice within the meaning 
of section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 
45(a)(1)) shall be considered to be a violation of this section.

SEC. 203. ENFORCEMENT BY FEDERAL TRADE COMMISSION.

    (a) Violation of Rule.--A violation of section 202 shall be treated 
as a violation of a rule defining an unfair or deceptive act or 
practice prescribed under section 18(a)(1)(B) of the Federal Trade 
Commission Act (15 U.S.C. 57a(a)(1)(B)).
    (b) Powers of Commission.--The Commission shall enforce this title 
in the same manner, by the same means, and with the same jurisdiction, 
powers, and duties as though all applicable terms and provisions of the 
Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated 
into and made a part of this title. Any person who violates section 202 
shall be subject to the penalties and entitled to the privileges and 
immunities provided in the Federal Trade Commission Act.
    (c) Effect on Other Laws.--Nothing in this title shall be construed 
in any way to limit or affect the authority of the Commission under any 
other provision of law.

SEC. 204. PREEMPTION OF STATE LAWS ON PATENT DEMAND LETTERS AND 
              ENFORCEMENT BY STATE ATTORNEYS GENERAL.

    (a) Preemption.--
            (1) In general.--This title preempts any law, rule, 
        regulation, requirement, standard, or other provision having 
        the force and effect of law of any State, or political 
        subdivision of a State, expressly relating to the transmission 
        or contents of communications relating to the assertion of 
        patent rights.
            (2) Effect on other state laws.--Except as provided in 
        paragraph (1), this title shall not be construed to preempt or 
        limit any provision of any State law, including any State 
        consumer protection law, any State law relating to acts of 
        fraud or deception, and any State trespass, contract, or tort 
        law.
    (b) Enforcement by State Attorneys General.--
            (1) In general.--In any case in which the attorney general 
        of a State has reason to believe that an interest of the 
        residents of that State has been adversely affected by any 
        person who violates section 202, the attorney general of the 
        State, may bring a civil action on behalf of such residents of 
        the State in a district court of the United States of 
        appropriate jurisdiction--
                    (A) to enjoin further such violation by the 
                defendant; or
                    (B) to obtain civil penalties on behalf of 
                recipients who suffered actual damages as a result of 
                such violation.
            (2) Maximum civil penalty.--Notwithstanding the number of 
        actions which may be brought against a person under this 
        subsection, a person may not be liable for a total of more than 
        $5,000,000 for a series of related violations of section 202.
            (3) Intervention by the ftc.--
                    (A) Notice and intervention.--The attorney general 
                of a State shall provide prior written notice of any 
                action under paragraph (1) to the Commission and 
                provide the Commission with a copy of the complaint in 
                the action, except in any case in which such prior 
                notice is not feasible, in which case the attorney 
                general shall serve such notice immediately upon 
                instituting such action. The Commission shall have the 
                right--
                            (i) to intervene in the action;
                            (ii) upon so intervening, to be heard on 
                        all matters arising therein; and
                            (iii) to file petitions for appeal.
                    (B) Limitation on state action while federal action 
                is pending.--If the Commission has instituted a civil 
                action for violation of section 202, no State attorney 
                general may bring an action under this subsection 
                during the pendency of that action against any 
                defendant named in the complaint of the Commission for 
                any violation of such section alleged in the complaint.
            (4) Construction.--For purposes of bringing any civil 
        action under paragraph (1), nothing in this title shall be 
        construed to prevent the attorney general of a State from 
        exercising the powers conferred on the attorney general by the 
        laws of that State to--
                    (A) conduct investigations;
                    (B) administer oaths or affirmations; or
                    (C) compel the attendance of witnesses or the 
                production of documentary and other evidence.
                                 <all>
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