mation 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 con-
tracted for invention promotion services, and a state-
ment 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 perform-
ance 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.
‘‘§ 56. Remedies
‘‘(a) IN GENERAL.—(1) Any contract for invention
promotion services that does not comply with the applica-
ble provisions of this chapter shall be voidable at the op-
tion of the customer.
‘‘(2) Any contract for invention promotion services
entered into in reliance upon any material false, fraudu-
lent, or misleading information, representation, notice, or
advertisement of the invention promoter (or any agent,
employee, officer, director, partner, or independent con-
tractor 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 a person duly reg-
istered to practice before, and in good standing with, the
Patent and Trademark Office.
‘‘(b) CIVIL ACTION.—(1) Any customer who is in-
jured by a violation of this chapter by an invention pro-
moter 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, offi-
cer, 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 re-
cover in a civil action against the invention promoter (or
the officers, directors, or partners of such invention pro-
moter) 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
records compiled by the Director under section 57.
‘‘(c) REBUTTABLE PRESUMPTION OF INJURY.—For
purposes of this section, substantial violation of any provi-
sion 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.
‘‘§ 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 pub-
licly 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 sub-
section (a), together with any response of the invention
promoters.
‘‘§ 58. Fraudulent representation by an invention pro-
moter
‘‘Whoever, in providing invention promotion services,
knowingly provides any false or misleading statement, rep-
resentation, or omission of material fact to a customer or
fails to make all the disclosures required under this chap-
ter, shall be guilty of a misdemeanor and fined not more
than $10,000 for each offense.
‘‘§ 59. Rule of construction
‘‘Except as expressly provided in this chapter, no pro-
vision of this chapter shall be construed to affect any obli-
gation, 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:
‘‘§ 273. Defense to infringement based on earlier in-
ventor
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) the terms ‘commercially used’ and ‘com-
mercial 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 internal commercial use or
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 sub-
ject 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 para-
graph (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 commercializa-
tion or use outside such laboratory or nonprofit
entity;
‘‘(3) the term ‘process or method’ means ‘proc-
ess’ 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 mat-
ter 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 enti-
tled to assert a defense under this section with re-
spect 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 DE-
FENSE.—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 inven-
tion for which the defense is asserted is for a
process or method, including a process the ex-
clusive purpose of which is to produce a useful
end product or service.
‘‘(B) DERIVATION.—A person may not as-
sert the defense under this section if the subject
matter on which the defense is based was de-
rived from the patentee or persons in privity
with the patentee.
‘‘(C) NOT A GENERAL LICENSE.—The de-
fense 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 re-
spect to which the person can assert a defense
under this chapter, except that the defense shall
also extend to variations in the quantity or vol-
ume 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 as-
signment 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
DE-
FENSE.—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 at-
torney’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 estab-
lished under this section.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions at the beginning of chapter 28 of title 35, United
States Code, is amended by adding at the end the fol-
lowing 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 infringe-
ment, 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 Guar-
antee 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 rejec-
tion of any claim for a patent or any objec-
tion 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 re-
main 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 pro-
ceeding under section 135(a), any time
consumed by the imposition of an order
pursuant to section 181, or any time con-
sumed 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 Trade-
mark Office requested by the applicant ex-
cept as permitted by paragraph (3)(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 OR-
DERS, AND
APPEALS.—Subject to the limita-
tions 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 pursu-
ant 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 pro-
ceeding, order, or review, as the case may be.
‘‘(2) LIMITATIONS.—
‘‘(A) IN GENERAL.—To the extent that pe-
riods of delay attributable to grounds specified
in paragraph (1) overlap, the period of any ad-
justment 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 sec-
tion beyond the expiration date specified in the
disclaimer.
‘‘(C) REDUCTION OF PERIOD OF ADJUST-
MENT.—
‘‘(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 reason-
able efforts to conclude processing or ex-
amination of an application for the cumu-
lative total of any periods of time in excess
of 3 months that are taken to respond to
a notice from the Office making any rejec-
tion, 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 reg-
ulations establishing the circumstances
that constitute a failure of an applicant to
engage in reasonable efforts to conclude
processing or examination of an applica-
tion.
‘‘(3) PROCEDURES FOR PATENT TERM ADJUST-
MENT DETERMINATION.—
‘‘(A) The Director shall prescribe regula-
tions establishing procedures for the application
for and determination of patent term adjust-
ments under this subsection.
‘‘(B) Under the procedures established
under subparagraph (A), the Director shall—
‘‘(i) make a determination of the pe-
riod of any patent term adjustment under
this subsection, and shall transmit a notice
of that determination with the written no-
tice of allowance of the application under
section 151; and
‘‘(ii) provide the applicant one oppor-
tunity 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 ad-
justment under paragraph (2)(C) if the appli-
cant, prior to the issuance of the patent, makes
a showing that, in spite of all due care, the ap-
plicant was unable to respond within the 3-
month period, but in no case shall more than 3
additional months for each such response be-
yond the original 3-month period be reinstated.
‘‘(D) The Director shall proceed to grant
the patent after completion of the Director’s de-
termination of a patent term adjustment under
the procedures established under this sub-
section, notwithstanding any appeal taken by
the applicant of such determination.
‘‘(4) APPEAL OF PATENT TERM ADJUSTMENT
DETERMINATION.—
‘‘(A) An applicant dissatisfied with a de-
termination made by the Director under para-
graph (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 APPLICA-
TIONS.
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 pro-
vide for the continued examination of applications for pat-
ent 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 insert-
ing ‘‘, which shall include any patent term adjustment
granted under section 154(b),’’ after ‘‘the original expira-
tion 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 sec-
tion 303 shall take effect 6 months after the date of the
enactment of this Act.