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formation, or an analysis in the manner and within the 
time period prescribed by the Director. Any search report 
required by the Director may not substitute in any way 
for a search by an examiner of the prior art during exam-
ination. 
‘‘(b) EXCEPTION FOR MICRO ENTITIES.—Applica-
tions from micro-entities shall not be subject to the re-
quirements of regulations issued under subsection (a). 
‘‘§ 124. Micro entities 
‘‘(a) DEFINITION.—For purposes of this title, the 
term ‘micro entity’ means an applicant for patent who 
makes a certification under either subsection (b) or (c). 
‘‘(b) UNASSIGNED
APPLICATION.—A certification 
under this subsection is a certification by each inventor 
named in the application that the inventor— 
‘‘(1) qualifies as a small entity as defined in 
regulations issued by the Director; 
‘‘(2) has not been named on five or more pre-
viously filed patent applications; 
‘‘(3) has not assigned, granted, or conveyed, 
and is not under an obligation by contract or law to 
assign, grant, or convey, a license or any other own-
ership interest in the application; and 
‘‘(4) does not have a gross income, as defined 
in section 61(a) of the Internal Revenue Code of 
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1986, exceeding 2.5 times the median household in-
come, as reported by the Bureau of the Census, for 
the most recent calendar year preceding the calendar 
year in which the examination fee is being paid. 
‘‘(c) ASSIGNED APPLICATION.—A certification under 
this subsection is a certification by each inventor named 
in the application that the inventor— 
‘‘(1) qualifies as a small entity as defined in 
regulations issued by the Director and meets the re-
quirements of subsection (b)(4); 
‘‘(2) has not been named on five or more pre-
viously filed patent applications; and 
‘‘(3) has assigned, granted, conveyed, or is 
under an obligation by contract or law to assign, 
grant, or convey, a license or other ownership inter-
est in the application to an entity that has five or 
fewer employees and has a gross taxable income, as 
defined in section 61(a) of the Internal Revenue 
Code of 1986, that does not exceed 2.5 times the 
median household income, as reported by the Bu-
reau of the Census, for the most recent calendar 
year preceding the calendar year in which the exam-
ination fee is being paid.’’. 
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(2) CONFORMING AMENDMENT.—The table of 
sections for chapter 11 is amended by adding at the 
end the following new items: 
‘‘123. Additional information. 
‘‘124. Micro entities.’’. 
(b) INEQUITABLE CONDUCT AS DEFENSE TO IN-
FRINGEMENT.—Section 282 is amended— 
(1) in the first undesignated paragraph, by 
striking ‘‘A patent’’ and inserting ‘‘(a) IN GEN-
ERAL.—A patent’’; 
(2) in the second undesignated paragraph— 
(A) by striking ‘‘The following’’ and insert-
ing ‘‘(b) DEFENSES.—The following’’; and 
(B) by striking the comma at the end of 
each of paragraphs (1), (2), and (3) and insert-
ing a period; 
(3) in the third undesignated paragraph— 
(A) by striking ‘‘In actions’’ and inserting 
‘‘(d) NOTICE OF ACTIONS; PLEADING.—In ac-
tions’’; 
(B) by inserting after the second sentence 
the following: ‘‘In an action involving any alle-
gation of inequitable conduct under subsection 
(c), the party asserting this defense or claim 
shall comply with the pleading requirements set 
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forth in Rule 9(b) of the Federal Rules of Civil 
Procedure.’’; and 
(C) by striking ‘‘Invalidity’’ and inserting 
‘‘(e) EXTENSION
OF PATENT TERM.—Inva-
lidity’’; and 
(4) by inserting after subsection (b), as des-
ignated by paragraph (2) of this subsection, the fol-
lowing: 
‘‘(c) INEQUITABLE CONDUCT.— 
‘‘(1) DEFENSE.—One or more claims of a pat-
ent may be held to be unenforceable, or other rem-
edy imposed under paragraph (4), for inequitable 
conduct only if it is established, by clear and con-
vincing evidence, that a person with a duty of disclo-
sure to the Office, with the intent to mislead or de-
ceive the patent examiner, misrepresented or failed 
to disclose material information to the examiner dur-
ing examination of the patent. 
‘‘(2) MATERIALITY.— 
‘‘(A) IN GENERAL.—Information is mate-
rial under this section if— 
‘‘(i) a reasonable examiner would have 
made 
a 
prima 
facie 
finding 
of 
unpatentability, or maintained a finding of 
unpatentability, of one or more of the pat-
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ent claims based on the information, and 
the information is not cumulative to infor-
mation already of record or previously con-
sidered by the Office; or 
‘‘(ii) information that is otherwise ma-
terial refutes or is inconsistent with a posi-
tion the applicant takes in opposing a re-
jection of the claim or in asserting an ar-
gument of patentability. 
‘‘(B) PRIMA
FACIE
FINDING.—A prima 
facie finding of unpatentability under this sec-
tion is shown if a reasonable examiner, based 
on a preponderance of the evidence, would con-
clude that the claim is unpatentable based on 
the information misrepresented or not disclosed, 
when that information is considered alone or in 
conjunction with other information or record. In 
determining whether there is a prima facie find-
ing of unpatentability, each term in the claim 
shall be given its broadest reasonable construc-
tion consistent with the specification, and re-
buttal evidence shall not be considered. 
‘‘(3) INTENT.—To prove a person with a duty 
of disclosure to the Office intended to mislead or de-
ceive the examiner under paragraph (1), specific 
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facts beyond materiality of the information misrepre-
sented or not disclosed must be proven that establish 
the intent of the person to mislead or deceive the ex-
aminer by the actions of the person. Facts support 
an intent to mislead or deceive if they show cir-
cumstances that indicate conscious or deliberate be-
havior on the part of the person to not disclose ma-
terial information or to submit false material infor-
mation in order to mislead or deceive the examiner. 
Circumstantial evidence may be used to prove that 
a person had the intent to mislead or deceive the ex-
aminer under paragraph (1). 
‘‘(4) REMEDY.—Upon a finding of inequitable 
conduct, the court shall balance the equities to de-
termine which of the following remedies to impose: 
‘‘(A) Denying equitable relief to the patent 
holder and limiting the remedy for infringement 
to reasonable royalties. 
‘‘(B) Holding the claims-in-suit, or the 
claims in which inequitable conduct occurred, 
unenforceable. 
‘‘(C) Holding the patent unenforceable. 
‘‘(D) Holding the claims of a related pat-
ent unenforceable. 
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‘‘(5) ATTORNEY MISCONDUCT.—Upon a finding 
of inequitable conduct, if there is evidence that the 
conduct is attributable to a person or persons au-
thorized to practice before the Office, the court shall 
refer the matter to the Office for appropriate dis-
ciplinary action under section 32, and shall order the 
parties to preserve and make available to the Office 
any materials that may be relevant to the determina-
tion under section 32.’’. 
(c) EFFECTIVE DATE.— 
(1) SUBSECTION (a).—The amendments made 
by subsection (a)— 
(A) shall take effect at the end of the 1- 
year period beginning on the date of the enact-
ment of this Act; and 
(B) shall apply to any application for pat-
ent filed on or after the effective date under 
subparagraph (A). 
(2) SUBSECTION (b).—The amendments made 
by subsection (b) shall apply to any civil action com-
menced on or after the date of the enactment of this 
Act. 
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SEC. 13. BEST MODE REQUIREMENT. 
Section 282(b) (as designated by section 12(b) of this 
Act) is amended by striking paragraph (3) and inserting 
the following: 
‘‘(3) Invalidity of the patent or any claim in 
suit for failure to comply with— 
‘‘(A) any requirement of section 112 of 
this title, other than the requirement that the 
specification shall set forth the best mode con-
templated by the inventor of carrying out his 
invention; or 
‘‘(B) any requirement of section 251 of 
this title.’’. 
SEC. 14. REGULATORY AUTHORITY. 
(a) REGULATORY
AUTHORITY.—Section 2(c) is 
amended by adding at the end the following: 
‘‘(6) The powers granted under paragraph (2) of sub-
section (b) include the authority to promulgate regulations 
to ensure the quality and timeliness of applications and 
their examination, including specifying circumstances 
under which an application for patent may claim the ben-
efit under sections 120, 121 and 365(c) of the filing date 
of a prior filed application for patent.’’. 
(b) CLARIFICATION.—The amendment made by sub-
section (a) clarifies the scope of power granted to the 
United States Patent and Trademark Office by paragraph 
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(2) of section 2(b) of title 35, United States Code, as in 
effect since the enactment of Public Law 106–113. 
(c) EFFECTIVE DATE OF REGULATIONS.— 
(1) REVIEW BY CONGRESS.—A regulation pro-
mulgated by the United States Patent and Trade-
mark Office under section 2(b)(2) of title 35, United 
States Code, with respect to any matter described in 
section 2(c)(6) of such title, as added by subsection 
(a) of this section, may not take effect before the 
end of a period of 60 days beginning on the date on 
which the Under Secretary of Commerce for Intellec-
tual Property and Director of the United States Pat-
ent and Trademark Office submits to each House of 
Congress a copy of the regulation, together with a 
report containing the reasons for its adoption. The 
regulation and report so submitted shall be referred 
to the Committee on the Judiciary of the House of 
Representatives and the Committee on the Judiciary 
of the Senate. 
(2) JOINT RESOLUTION OF DISAPPROVAL.—If a 
joint resolution of disapproval with respect to the 
regulation is enacted into law, the regulation shall 
not become effective or continue in effect. 
(3) JOINT
RESOLUTION
DEFINED.—For pur-
poses of this subsection, the term a ‘‘joint resolution 
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of disapproval’’ means a joint resolution, the matter 
after the resolving clause of which is as follows: 
‘‘That Congress disapproves the regulation sub-
mitted by the Under Secretary of Commerce for In-
tellectual Property and Director of the United States 
Patent and Trademark Office on lll relating to 
lll, and such regulation shall have no force or 
effect.’’, with the first space being filled with the ap-
propriate date, and the second space being filled 
with a description of the regulation at issue. 
(4) REFERRAL.—A joint resolution of dis-
approval shall be referred in the House of Rep-
resentatives to the Committee on the Judiciary and 
in the Senate to the Committee on the Judiciary. 
(5) FLOOR CONSIDERATION.—A vote on final 
passage of a joint resolution of disapproval shall be 
taken in each House on or before the close of the 
15th day after the bill or resolution is reported by 
the committee of that House to which it was re-
ferred or after such committee has been discharged 
from further consideration of the joint resolution of 
disapproval. 
(6) NO INFERENCES.—If the Congress does not 
enact a joint resolution of disapproval, no court or 
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agency may infer therefrom any intent of the Con-
gress with regard to such regulation or action. 
(7) CALCULATION OF DAYS.—The 60-day pe-
riod referred to in paragraph (1) and the 15-day pe-
riod referred to in paragraph (5) shall be computed 
by excluding— 
(A) the days on which either House of 
Congress is not in session because of an ad-
journment of the Congress sine die; and 
(B) any Saturday and Sunday, not ex-
cluded under subparagraph (A), when either 
House is not in session. 
(8) RULEMAKING AUTHORITY.—This subsection 
is enacted by the Congress as an exercise of the 
rulemaking power of the Senate and House of Rep-
resentatives respectively, and as such it is deemed a 
part of the rules of each House, respectively. 
SEC. 15. TECHNICAL AMENDMENTS. 
(a) JOINT INVENTIONS.—Section 116 is amended— 
(1) in the first paragraph, by striking 
‘‘When’’ and inserting ‘‘(a) JOINT
INVEN-
TIONS.—When’’; 
(2) in the second paragraph, by striking 
‘‘If a joint inventor’’ and inserting ‘‘(b) OMIT-
TED INVENTOR.—If a joint inventor’’; and 
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(3) in the third paragraph, by striking 
‘‘Whenever’’ and inserting ‘‘(c) CORRECTION OF 
ERRORS IN APPLICATION.—Whenever’’. 
(b) FILING
OF APPLICATION
IN FOREIGN COUN-
TRY.—Section 184 is amended— 
(1) in the first paragraph, by striking ‘‘Except 
when’’ and inserting ‘‘(a) FILING
IN
FOREIGN 
COUNTRY.—Except when’’; 
(2) in the second paragraph, by striking ‘‘The 
term’’ 
and 
inserting 
‘‘(b) 
APPLICATION.—The 
term’’; and 
(3) in the third paragraph, by striking ‘‘The 
scope’’ and inserting ‘‘(c) SUBSEQUENT MODIFICA-
TIONS, AMENDMENTS, AND
SUPPLEMENTS.—The 
scope’’. 
(c) REISSUE OF DEFECTIVE PATENTS.—Section 251 
is amended— 
(1) in the first paragraph, by striking ‘‘When-
ever’’ and inserting ‘‘(a) IN GENERAL.—Whenever’’; 
(2) in the second paragraph, by striking ‘‘The 
Director’’ and inserting ‘‘(b) MULTIPLE REISSUED 
PATENTS.—The Director’’; 
(3) in the third paragraph, by striking ‘‘The 
provisions’’ and inserting ‘‘(c) APPLICABILITY
OF 
THIS TITLE.—The provisions’’; and 
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(4) in the last paragraph, by striking ‘‘No re-
issued patent’’ and inserting ‘‘(d) REISSUE PATENT 
ENLARGING SCOPE OF CLAIMS.—No reissued pat-
ent’’. 
(d) EFFECT OF REISSUE.—Section 253 is amend-
ed— 
(1) in the first paragraph, by striking ‘‘When-
ever’’ and inserting ‘‘(a) IN GENERAL.—Whenever’’; 
and 
(2) in the second paragraph, by striking ‘‘In 
like manner’’ and inserting ‘‘(b) ADDITIONAL DIS-
CLAIMER OR DEDICATION.—In the manner set forth 
in subsection (a),’’. 
(e) CORRECTION
OF NAMED INVENTOR.—Section 
256 is amended— 
(1) in the first paragraph, by striking ‘‘When-
ever’’ and inserting ‘‘(a) CORRECTION.—Whenever’’; 
and 
(2) in the second paragraph, by striking ‘‘The 
error’’ and inserting ‘‘(b) PATENT VALID IF ERROR 
CORRECTED.—The error’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
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SEC. 16. STUDY OF SPECIAL MASTERS IN PATENT CASES. 
(a) IN GENERAL.—Not later than 1 year after the 
date of the enactment of this Act, the Director of the Ad-
ministrative Office of the United States Courts shall con-
duct a study of, and submit to the Committee on the Judi-
ciary of the House of Representatives and the Committee 
on the Judiciary of the Senate a report on, the use of 
special masters in patent litigation who are appointed in 
accordance with Rule 53 of the Federal Rules of Civil Pro-
cedure. 
(b) OBJECTIVE.—In conducting the study under sub-
section (a), the Director shall consider whether the use 
of special masters has been beneficial in patent litigation 
and what, if any, program should be undertaken to facili-
tate the use by the judiciary of special masters in patent 
litigation. 
(c) FACTORS TO CONSIDER.—In conducting the 
study under subsection (a), the Director, in consultation 
with the Federal Judicial Center, shall consider— 
(1) the basis upon which courts appoint special 
masters under Rule 53(b) of the Federal Rules of 
Civil Procedure; 
(2) the frequency with which special masters 
have been used by the courts; 
(3) the role and powers special masters are 
given by the courts; 
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(4) the subject matter at issue in cases that use 
special masters; 
(5) the impact on court time and costs in cases 
where a special master is used as compared to cases 
where no special master is used; 
(6) the legal and technical training and experi-
ence of special masters; 
(7) whether the use of special masters has an 
impact on the reversal rate of district court decisions 
at the Court of Appeals for the Federal Circuit; and 
(8) any other factors that the Director believes 
would assist in gauging the effectiveness of special 
masters in patent litigation. 
SEC. 17. STUDY ON WORKPLACE CONDITIONS. 
The Comptroller General shall, not later than 2 years 
after the date of the enactment of this Act— 
(1) conduct a study of workplace conditions for 
the examiner corps of the United States Patent and 
Trademark Office, including the effect, if any, of 
this Act and the amendments made by this Act on— 
(A) recruitment, retention, and promotion 
of employees; and 
(B) workload, quality assurance, and em-
ployee grievances; and 
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(2) submit to the Committees on the Judiciary 
of the House of Representatives and the Senate a 
report on the results of the study, including any sug-
gestions for improving workplace conditions, to-
gether with any other recommendations that the 
Comptroller General has with respect to patent reex-
amination proceedings. 
SEC. 18. RULE OF CONSTRUCTION. 
The enactment of section 102(b)(3) of title 35, 
United States Code, under section (3)(b) of this Act is 
done with the same intent to promote joint research activi-
ties that was expressed, including in the legislative history, 
through the enactment of the Cooperative Research and 
Technology Enhancement Act of 2004 (Public Law 108– 
453; the ‘‘CREATE Act’’), the amendments of which are 
stricken by section 3(c) of this Act. The United States 
Patent and Trademark Office shall administer section 
102(b)(3) of title 35, United States Code, in a manner 
consistent with the legislative history of the CREATE Act 
that was relevant to its administration by the Patent and 
Trademark Office. 
SEC. 19. STUDY ON PATENT DAMAGES. 
(a) IN GENERAL.—The Under Secretary of Com-
merce for Intellectual Property and Director of the United 
States Patent and Trademark Office (in this section re-
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ferred to as the ‘‘Director’’) shall conduct a study of pat-
ent damage awards in cases where such awards have been 
based on a reasonable royalty under section 284 of title 
35, United States Code. The study should, at a minimum, 
consider cases from 1990 to the present. 
(b) CONDUCT.—In conducting the study under sub-
section (a), the Director shall investigate, at a minimum, 
the following: 
(1) Whether the mean or median dollar amount 
of reasonable-royalty-based patent damages awarded 
by courts or juries, as the case may be, has signifi-
cantly increased on a per case basis during the pe-
riod covered by the study, taking into consideration 
adjustments for inflation and other relevant eco-
nomic factors. 
(2) Whether there has been a pattern of exces-
sive and inequitable reasonable-royalty-based dam-
ages during the period covered by the study and, if 
so, any contributing factors, including, for example, 
evidence that Federal courts have routinely and in-
appropriately broadened the scope of the ‘‘entire 
market value rule’’, or that juries have routinely 
misapplied the entire market value rule to the facts 
at issue. 
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(3) To the extent that a pattern of excessive 
and inequitable damage awards exists, measures 
that could guard against such inappropriate awards 
without unduly prejudicing the rights and remedies 
of patent holders or significantly increasing litigation 
costs, including legislative reforms or improved 
model jury instructions. 
(4) To the extent that a pattern of excessive 
and inequitable damage awards exists, whether legis-
lative proposals that would mandate, or create a pre-
sumption in favor of, apportionment of reasonable- 
royalty-based patent damages would effectively 
guard against such inappropriate awards without 
unduly prejudicing the rights and remedies of patent 
holders or significantly increasing litigation costs. 
(c) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the Director shall submit 
to the Congress a report on the study conducted under 
this section. 
SEC. 20. SEVERABILITY. 
If any provision of this Act or of any amendment or 
repeals made by this Act, or the application of such a pro-
vision to any person or circumstance, is held to be invalid 
or unenforceable, the remainder of this Act and the 
amendments and repeals made by this Act, and the appli-
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cation of this Act and such amendments and repeals to 
any other person or circumstance, shall not be affected 
by such holding. 
Passed the House of Representatives September 7, 
2007. 
Attest: 
LORRAINE C. MILLER, 
Clerk. 
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Calendar No. 348 
110TH CONGRESS 
1ST SESSION 
H. R. 1908 
AN ACT 
To amend title 35, United States Code, to provide 
for patent reform. 
SEPTEMBER 11, 2007 
Read the second time and placed on the calendar 
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