I
106TH CONGRESS
1ST SESSION
H. R. 1907
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. ROHR-
ABACHER, Mr. CAMPBELL, Mr. GOODLATTE, Mr. LOFGREN, Mr.
DELAHUNT, Mr. PEASE, Mr. WEXLER, and Mr. GALLEGLY) introduced
the following bill; which was referred to the Committee on the Judiciary
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 Representa-
tives 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. 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 applica-
ble.
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.
‘‘§ 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 serv-
ices;
‘‘(3) the term ‘invention promoter’ means any
person, firm, partnership, corporation, or other enti-
ty who offers to perform or performs for, or on be-
half of, a customer any act described under para-
graph (4), but does not include—
‘‘(A) any department or agency of the Fed-
eral Government or of a State or local govern-
ment;
‘‘(B) any nonprofit, charitable, scientific,
or educational organization, qualified under ap-
plicable 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 Pat-
ent 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 li-
censed by a State to practice law who is acting
solely within the scope of that person’s profes-
sional license;
‘‘(B) evaluating the invention to determine
its commercial potential by any person for pur-
poses other than providing venture capital; or
‘‘(C) marketing, brokering, offering to li-
cense or sell, or promoting the invention or a
product or service in which the invention is in-
corporated 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.
‘‘§ 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 writ-
ten 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 for invention pro-
motion services, whether the usual business practice
of the invention promoter is to—
‘‘(A) seek more than 1 contract in connec-
tion 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 writ-
ten document together with a written summary of
the usual business practices of the invention pro-
moter, 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 pro-
vided by the invention promoter.
‘‘(c) RIGHT OF CUSTOMER TO CANCEL CONTRACT.—
(1) Notwithstanding any contractual provision to the con-
trary, a customer shall have the right to terminate a con-
tract for invention promotion services by sending a written
letter to the invention promoter stating the customer’s in-
tent 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 cus-
tomer or the invention promoter executes the contract,
whichever is later.
‘‘(2) Delivery of a promissory note, check, bill of ex-
change, or negotiable instrument of any kind to the inven-
tion 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.
‘‘§ 53. Standard provisions for cover notice
‘‘(a) CONTENTS.—Every contract for invention pro-
motion services shall have a conspicuous and legible cover
sheet attached with the following notice imprinted in bold-
face 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, WHICH-
EVER 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 PRO-
MOTER, THE INVENTION PROMOTER MAY HAVE
THE RIGHT TO SELL OR DISPOSE OF THE IN-
VENTION WITHOUT YOUR CONSENT AND MAY
NOT HAVE TO SHARE THE PROFITS WITH YOU.
‘THE TOTAL NUMBER OF CUSTOMERS WHO
HAVE CONTRACTED WITH THE INVENTION PRO-
MOTER IN THE PAST FIVE (5) YEARS IS XXXXX.
THE TOTAL NUMBER OF CUSTOMERS KNOWN
BY THIS INVENTION PROMOTER TO HAVE RE-
CEIVED, BY VIRTUE OF THIS INVENTION PRO-
MOTER’S 
PERFORMANCE, 
AN 
AMOUNT 
OF
MONEY IN EXCESS OF THE AMOUNT PAID BY
THE CUSTOMER TO THIS INVENTION PRO-
MOTER IS XXXXXXX. AS A RESULT OF THE EF-
FORTS OF THIS INVENTION PROMOTER, XXXXX
NUMBER OF CUSTOMERS HAVE RECEIVED LI-
CENSE AGREEMENTS FOR THEIR INVENTIONS.
‘THE OFFICERS OF THIS INVENTION PRO-
MOTER 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 OFFI-
CERS HAVE BEEN AFFILIATED AS OWNERS,
AGENTS, OR EMPLOYEES). YOU ARE ENCOUR-
AGED TO CHECK WITH THE UNITED STATES
PATENT AND TRADEMARK OFFICE, THE FED-
ERAL TRADE COMMISSION, YOUR STATE ATTOR-
NEY 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 BE-
FORE SIGNING THIS CONTRACT. BY PRO-
CEEDING WITHOUT THE ADVICE OF AN ATTOR-
NEY REGISTERED TO PRACTICE BEFORE THE
UNITED STATES PATENT AND TRADEMARK OF-
FICE, 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 RE-
QUIRED.—The requirement in the notice set forth in sub-
section (a) to include the ‘TOTAL NUMBER OF CUS-
TOMERS WHO HAVE CONTRACTED WITH THE
INVENTION PROMOTER IN THE PAST FIVE (5)
YEARS’ need not include information with respect to cus-
tomers who have purchased trade show services, research,
advertising, or other nonmarketing services from the in-
vention promoter, nor with respect to customers who have
defaulted in their payment to the invention promoter.
‘‘§ 54. Reports to customer required
‘‘With respect to every contract for invention pro-
motion 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 sub-
ject 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 disclo-
sures.
‘‘§ 55. Mandatory contract terms
‘‘(a) MANDATORY TERMS.—Each contract for inven-
tion 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 embody-
ing the invention of the customer;
‘‘(5) the full name and principal place of busi-
ness 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 es-
timated or projected customer earnings is given by
the invention promoter (or any agent, employee, offi-
cer, director, partner, or independent contractor of
such invention promoter), a statement of that esti-
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 record
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 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, ex-
cept that the subject matter for which commercial
marketing or use is subject to a premarketing regu-
latory review period during which the safety or effi-
cacy 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, the exclusive 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 (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 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 Commissioner 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 exam-
ination 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’’.
without authority of the applicant or owner unless nec-
essary 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 APPLICA-
TIONS PUBLISHED ABROAD.—
‘‘(1) IN GENERAL.—(A) Subject to paragraph
(2), each application for patent, except applications
for design patents filed under chapter 16 and provi-
sional applications filed under section 111(b), shall
be published, in accordance with procedures deter-
mined 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 pub-
lished earlier than the end of such 18-month period.
‘‘(B) No information concerning published pat-
ent 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 con-
cerning 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 re-
quest 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 coun-
try, 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 for-
eign country or under a multilateral international
agreement specified in clause (i), an application di-
rected to the invention disclosed in the application
filed in the Patent and Trademark Office, shall no-
tify 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 for-
eign filed applications corresponding to an applica-
tion filed in the Patent and Trademark Office or the
description of the invention in such foreign filed ap-
plications 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 applica-
tion that is not also contained in any of the cor-
responding applications filed in a foreign country.
The Director may only publish the redacted copy of
the application unless the redacted copy of the appli-
cation 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 applica-
tion 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 en-
sure that no protest or other form of pre-issuance opposi-
tion 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 appli-
cants 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 appli-
cants 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 FIL-
ING 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 ap-
plicant 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 unin-
tentionally 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 con-
siders necessary. Any such certification shall be made by
the foreign intellectual property authority in which the for-
eign application was filed and show the date of the appli-
cation and of the filing of the specification and other pa-
pers.’’.
(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 pe-
riod during the pendency of the application within which
an amendment containing the specific reference to the ear-
lier filed application is submitted. The Director may con-
sider 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 pay-
ment of a surcharge, to accept unintentionally late submis-
sions 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 ‘‘; pro-
visional rights’’ after ‘‘patent’’; and
(2) by adding at the end the following new sub-
section:
‘‘(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 pub-
lication 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 pub-
lished patent application is a process, uses, of-
fers for sale, or sells in the United States or
imports into the United States products made
by that process as claimed in the published pat-
ent 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 lan-
guage other than English, a translation of the
international application into the English lan-
guage.
‘‘(2) RIGHT BASED ON SUBSTANTIALLY IDEN-
TICAL 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 inven-
tion as claimed in the published patent application.
‘‘(3) TIME LIMITATION ON OBTAINING A REA-
SONABLE 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 AP-
PLICATIONS.—
‘‘(A) EFFECTIVE DATE.—The right under
paragraph (1) to obtain a reasonable royalty
based upon the publication under the treaty de-
fined in section 351(a) of an international ap-
plication designating the United States shall
commence on the date on which the Patent and
Trademark Office receives a copy of the publi-
cation under the treaty of the international ap-
plication, 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 trans-
lation of the international application in the
English language.
‘‘(B) COPIES.—The Director may require
the applicant to provide a copy of the inter-
national application and a translation thereof.
‘‘(5) ISSUANCE
OF
PATENTS
ON
INDIVIDUAL
CLAIMS.—If the Director in a notification to the ap-
plicant under section 132 indicates that one or more
claims of a published application are allowable, the
applicant may request the issuance of a patent in-
corporating those claims. The applicant may con-
tinue prosecution of the remaining claims as pro-
vided 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 APPLICA-
TIONS.
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 Trade-
mark Office shall recover the cost of early publication re-
quired by the amendment made by section 402 by charg-
ing 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 applica-
tions 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 applica-
tions for patents’’ after ‘‘patents’’.
(3) Section 13 is amended—
(4) The items relating to sections 12 and 13 in
the table of sections for chapter 1 are each amended
by inserting ‘‘and applications’’ after ‘‘patents’’.
(5) The item relating to section 122 in the table
of sections for chapter 11 is amended by inserting
‘‘; publication of patent applications’’ after ‘‘applica-
tions’’.
(6) The item relating to section 154 in the table
of sections for chapter 14 is amended by inserting
‘‘; provisional rights’’ after ‘‘patent’’.
(7) 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 applica-
tion 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) ‘‘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.
(8) Section 252 is amended in the first undesig-
nated paragraph by inserting ‘‘substantially’’ before
‘‘identical’’ each place it appears.
(9) Section 284 is amended by adding at the
end of the second undesignated paragraph the fol-
lowing: ‘Increased damages under this paragraph
shall not apply to provisional rights under section
154(d) of this title.’’.
(10) Section 374 is amended to read as follows:
‘‘§ 374. Publication of international application: effect
‘‘The publication under the treaty defined in section
351(a) of this title of an international application desig-
nating 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 pro-
vided 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 applica-
tions 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 re-
sulted from international applications filed on or after that
date. 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 Re-
duction Act’’.
SEC. 502. DEFINITIONS.
Section 100 of title 35, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(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:
‘‘§ 301. Citation of prior art
‘‘Any person at any time may cite to the Office in
writing prior art consisting of patents or printed publica-
tions 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 fol-
lows:
‘‘§ 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 pay-
ment of a reexamination fee established by the Di-
rector under section 41; and
‘‘(2) set forth the pertinency and manner of ap-
plying cited prior art to every claim for which reex-
amination 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.—Sec-
tion 303 of title 35, United States Code, is amended to
read as follows:
‘‘§ 303. Determination of issue by Director
‘‘(a) REEXAMINATION.—Not later than 3 months
after the filing of a request for reexamination under sec-
tion 302, the Director shall determine whether a substan-
tial new question of patentability affecting any claim of
the patent concerned is raised by the request, with or with-
out 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 pat-
entability is raised by patents and publications.
‘‘(b) RECORD.—A record of the Director’s determina-
tion 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 Di-
rector pursuant to subsection (a) shall be final and non-
appealable. 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:
‘‘§ 304. Reexamination order by Director
‘‘If, in a determination made under section 303(a),
the Director finds that a substantial new question of pat-
entability affecting a claim of a patent is raised, the deter-
mination 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 Trade-
mark 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:
‘‘§ 305. Conduct of reexamination proceedings
‘‘(a) IN GENERAL.—Subject to subsection (b), reex-
amination 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 chap-
ter, the patent owner shall be permitted to propose any
amendment to the patent and a new claim or claims, ex-
cept 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 reex-
amination is based upon a request by a third-party re-
quester.
‘‘(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 oppor-
tunity 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 Of-
fice 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 pro-
ceedings under this section, including any appeal to the
Board of Patent Appeals and Interferences, shall be con-
ducted with special dispatch within the Office.’’.
(f) APPEAL.—Section 306 of title 35, United States
Code, is amended to read as follows:
‘‘§ 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 sec-
tions 141 through 144, with respect to any decision
adverse to the patentability of any original or pro-
posed 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 re-
quester 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 fa-
vorable to the patentability of any original or pro-
posed amended or new claim of the patent; or
‘‘(2) be a party to any appeal taken by the pat-
ent owner, subject to subsection (c).
‘‘(c) CIVIL ACTION.—A third-party requester whose
request for a reexamination results in an order under sec-
tion 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 re-
examination 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 LITIGA-
TION.—
(1) IN
GENERAL.—Chapter 30 of title 35,
United States Code, is amended by adding at the
end the following new section:
‘‘§ 308. Reexamination prohibited
‘‘(a) 
ORDER
FOR
REEXAMINATION.—Notwith-
standing 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 re-
quester, if any, nor privies of either, may file a subsequent
request for reexamination of the patent until a reexamina-
tion 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 reex-
amination 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 reexamina-
tion 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 chap-
ter. This subsection does not prevent the assertion of inva-
lidity 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.
‘‘§ 309. Stay of litigation
‘‘Once an order for reexamination of a patent has
been issued under section 304, the patent owner may ob-
tain 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
AMEND-
MENT.—The table of sections for chapter 30 of title
35, United States Code, is amended to read as fol-
lows:
‘‘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.—Sec-
tion 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 de-
layed response by the patent owner in a reexamina-
tion 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:
‘‘§ 134. Appeal to the Board of Patent Appeals and
Interferences
‘‘(a) PATENT APPLICANT.—An applicant for a pat-
ent, any of whose claims has been twice rejected, may ap-
peal 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 reexam-
ination 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 FED-
ERAL 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 deci-
sion 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 Trade-
mark Office shall submit to the Congress a report evalu-
ating 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. 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 reexam-
ination 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 Trade-
mark 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:
‘‘§ 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 shall retain responsi-
bility for decisions regarding the management and admin-
istration of its operations and shall exercise independent
control of its budget allocations and expenditures, per-
sonnel decisions and processes, procurements, and other
administrative and management functions in accordance
with this title and applicable provisions of law.
‘‘(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 ac-
tions, to be a resident of the district in which its principal
office is located, except where jurisdiction is otherwise pro-
vided 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 appro-
priate 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:
‘‘§ 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 trade-
marks; 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 let-
ters patent, certificates of trademark registrations,
and papers issued by the Office shall be authenti-
cated;
‘‘(2) may establish regulations, not inconsistent
with law, which—
‘‘(A) shall govern the conduct of pro-
ceedings in the Office;
‘‘(B) shall be made after notice and oppor-
tunity for full participation by interested public
and private parties;
‘‘(C) shall facilitate and expedite the proc-
essing of patent applications, particularly those
which can be filed, stored, processed, searched,
and retrieved electronically, subject to the provi-
sions of section 122 relating to the confidential
status of applications;
‘‘(D) may govern the recognition and con-
duct of agents, attorneys, or other persons rep-
resenting applicants or other parties before the
Office, and may require them, before being rec-
ognized as representatives of applicants or
other persons, to show that they are of good
moral character and reputation and are pos-
sessed 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 busi-
ness before the Office;
‘‘(E) shall recognize the public interest in
continuing to safeguard broad access to the
United States patent system through the re-
duced fee structure for small entities under sec-
tion 41(b)(1) of this title; and
‘‘(F) provide for the development of a per-
formance-based process that includes quan-
titative and qualitative measures and standards
for evaluating cost-effectiveness and is con-
sistent 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 pur-
chases 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 re-
gard 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 depart-
ments, agencies, and instrumentalities of the Fed-
eral Government, on a reimbursable basis, and co-
operate 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 per-
sonnel of any State or local government agency or
instrumentality or foreign government or inter-
national organization to perform functions on its be-
half;
‘‘(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 protec-
tion in other countries;
‘‘(11) shall provide guidance, as appropriate,
with respect to proposals by agencies to assist for-
eign governments and international intergovern-
mental organizations on matters of intellectual prop-
erty protection;
‘‘(12) may conduct programs, studies, or ex-
changes of items or services regarding domestic and
international intellectual property law and the effec-
tiveness of intellectual property protection domesti-
cally and throughout the world;
‘‘(13)(A) shall advise the Secretary of Com-
merce on programs and studies relating to intellec-
tual property policy that are conducted, or author-
ized to be conducted, cooperatively with foreign in-
tellectual property offices and international intergov-
ernmental organizations; and
‘‘(B) may conduct programs and studies de-
scribed in subparagraph (A); and
‘‘(14)(A) in coordination with the Department
of State, may conduct programs and studies coop-
eratively 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 inter-
national intergovernmental organizations for studies
and programs for advancing international coopera-
tion concerning patents, trademarks, and other mat-
ters.
‘‘(c) CLARIFICATION OF SPECIFIC POWERS.—(1) The
special payments under paragraph (14)(B) shall be in ad-
dition to any other payments or contributions to inter-
national 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 para-
graphs (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 pend-
ing request-for-proposal let or contract issued by the Gen-
eral Services Administration for the specific purpose of re-
locating 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:
‘‘§ 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
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, by reason of
professional background and experience in patent or
trademark law, is especially qualified to manage the
Office.
‘‘(2) DUTIES.—
‘‘(A) IN GENERAL.—The Director shall be
responsible for the management 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 AD-
VISORY COMMITTEES.—The Director shall con-
sult 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 trade-
mark 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 Direc-
tor, in consultation with the Director of the Of-
fice of Personnel Management, shall maintain a
program for identifying national security posi-
tions 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 Di-
rector’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 perform-
ance 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 aggre-
gate compensation in a calendar year to equal or ex-
ceed 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 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.
‘‘(2) COMMISSIONERS.—The Director shall ap-
point a Commissioner for Patents and a Commis-
sioner for Trademarks. The Commissioner for Pat-
ents shall be a citizen of the United States with
demonstrated experience in patent law and the Com-
missioner for Trademarks shall be a citizen of the
United States with demonstrated experience in
trademark law. The Commissioner for Patents and
the Commissioner for Trademarks shall be the prin-
cipal management advisers to the Director on all as-
pects of the activities of the Office that affect the
administration of patent and trademark operations,
respectively.
‘‘(3) OTHER OFFICERS AND EMPLOYEES.—The
Director shall—
‘‘(A) appoint such officers, employees (in-
cluding 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 administra-
tively 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 trade-
mark examiners of the primary examiner grade or
higher who are eligible for retirement, for the sole
purpose of training patent and trademark exam-
iners.
‘‘(c) ADOPTION
OF
EXISTING
LABOR
AGREE-
MENTS.—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).
‘‘(d) 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 Of-
fice, 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 if—
‘‘(A) such individual serves in a position
for which a major function is the performance
of work reimbursed by the Patent and Trade-
mark 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 para-
graph (1), and shall be made without a break in
service.
‘‘(3) ACCUMULATED
LEAVE.—The amount of
sick and annual leave and compensatory time accu-
mulated under title 5 before the effective date de-
scribed in paragraph (1), by those becoming officers
or employees of the Office pursuant to this sub-
section, are obligations of the Office.
‘‘(e) 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 sub-
section (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 As-
sistant Commissioner for Patents on the day before
the effective date of the Patent and Trademark Of-
fice 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. PERSONNEL FLEXIBILITY.
(a) IN GENERAL.—Chapter 1 of part I of title 35,
United States Code, is amended by inserting after section
3 the following:
‘‘§ 3a. Personnel flexibility
‘‘(a) ADMINISTRATIVE FLEXIBILITY.—
‘‘(1) RELATIONSHIP TO TITLE 5.—Any authori-
ties provided by this section shall be exercised—
‘‘(A) in a manner consistent with—
‘‘(i) chapter 23 of title 5 (relating to
merit system principles and prohibited per-
sonnel practices);
‘‘(ii) provisions of title 5 relating to
preference eligibles;
‘‘(iii) except as otherwise specifically
provided, section 5307 of title 5 (relating
to the aggregate limitation on pay); and
‘‘(iv) except as otherwise specifically
provided, chapter 71 of title 5 (relating to
labor-management relations); and
‘‘(E) subject to subsections (b) and (c) of
section 1104 of title 5 as though such authori-
ties were delegated to the Office under section
1104(a)(2) of such title.
‘‘(2) INFORMING OPM.—The Director shall pro-
vide the Office of Personnel Management with any
information the Office of Personnel Management re-
quires in carrying out its responsibilities under this
section.
‘‘(b) WRITTEN AGREEMENTS WITH LABOR ORGANI-
ZATIONS REQUIRED.—Employees within a unit to which
a labor organization is accorded exclusive recognition
under chapter 71 of title 5 shall not be subject to the au-
thorities provided in this section unless the exclusive rep-
resentative and the Office have entered into a written
agreement which specifically provides for the exercise of
those authorities. Such written agreement may not be im-
posed by the Federal Services Impasses Panel under sec-
tion 7119 of title 5.
‘‘(c) SENIOR MANAGEMENT OF THE OFFICE.—
‘‘(1) APPOINTMENT.—(A) The Director may
appoint such senior managers as the Director deter-
mines are necessary without regard to the provisions
of title 5 governing appointments in the competitive
service.
‘‘(B) The senior managers described in sub-
paragraph (A) may be paid without regard to the
provisions of chapter 51 and subchapter III of chap-
ter 53 of title 5 relating to classification and Gen-
eral Schedule pay rates.
‘‘(2) PERFORMANCE AGREEMENT.—Each year
the Director and each senior manager appointed
under this subsection shall enter into an annual per-
formance agreement that sets forth measurable or-
ganization and individual goals. The agreement shall
be subject to review and renegotiation at the end of
each term.
‘‘(3) COMPENSATION.—
‘‘(A) IN GENERAL.—A senior manager ap-
pointed under this subsection may be paid at an
annual rate of basic pay of not more than the
maximum rate of basic pay for the Senior Exec-
utive Service under section 5382 of title 5, in-
cluding any applicable locality-based com-
parability payment that may be authorized
under section 5304(h)(2)(C) of title 5. The
compensation of a senior manager shall be con-
sidered, for purposes of section 207(c)(2)(A) of
title 18, to be the equivalent of that described
under clause (ii) of section 207(c)(2)(A) of title
18.
‘‘(B) BONUS.—In addition to the com-
pensation paid under subparagraph (A), a sen-
ior manager may receive a bonus in an amount
such that the manager’s total compensation
does not exceed 125 percent of the maximum
rate of basic pay for the Senior Executive Serv-
ice, including any applicable locality-based com-
parability payment, based upon the Director’s
evaluation of the manager’s performance in re-
lation to the goals set forth in the performance
agreement described in paragraph (2).
‘‘(4) REMOVAL.—A senior manager shall be re-
movable by the Director, or by the Secretary if the
position of Director is vacant.
‘‘(d) GENERAL WORKFORCE PERFORMANCE MAN-
AGEMENT SYSTEM.—
‘‘(1) ESTABLISHMENT.—In lieu of a perform-
ance appraisal system established under section
5302 of title 5, the Director shall, within 1 year
after the date of the enactment of the Patent and
Trademark Office Efficiency Act, establish for the
Office a performance management system that—
‘‘(A) maintains individual accountability
by—
‘‘(i) establishing 1 or more retention
standards for each employee related to the
work of the employee and expressed in
terms of individual performance, and com-
municating such retention standards to
employees;
‘‘(ii) making periodic determinations
of whether each employee meets or does
not meet the employee’s established reten-
tion standards; and
‘‘(iii) taking actions, in accordance
with applicable laws and regulations, with
respect to any employee whose perform-
ance does not meet established retention
standards, including denying any increases
in basic pay, promotions, and credit for
performance under section 3502 of title 5,
and—
‘‘(I) reassignment;
‘‘(II) an action under chapter 43
or chapter 75 of title 5;
‘‘(III) any other appropriate ac-
tion to resolve the performance prob-
lem; or
‘‘(IV) any combination of actions
under subclauses (I) through (III);
and
‘‘(B) strengthens the system’s effectiveness
by—
‘‘(i) establishing goals or objectives for
individual, group, or organizational per-
formance (or any combination thereof),
consistent with the Office’s performance
planning procedures, including those estab-
lished under the Government Performance
and Results Act of 1993, and commu-
nicating such goals or objectives to employ-
ees;
‘‘(ii) using such goals and objectives
to make performance distinctions among
employees or groups of employees; and
‘‘(iii) using performance assessments
as a basis for granting employee awards,
adjusting an employee’s rate of basic pay,
and other appropriate personnel actions, in
accordance with applicable laws and regu-
lations.
‘‘(2) DEFINITIONS.—For purposes of this
subsection—
‘‘(A) the term ‘performance assessment’
means a determination of whether or not reten-
tion standards established under paragraph
(1)(A)(i) are met, and any additional perform-
ance determination made on the basis of per-
formance goals and objectives established under
paragraph (1)(B)(i); and
‘‘(B) the term ‘unacceptable performance’,
with respect to an employee of the Office cov-
ered by a performance management system es-
tablished under this subsection, means perform-
ance of the employee which fails to meet a re-
tention standard established under this section.
‘‘(3) AWARDS PROGRAM.—(A) The Office may
establish an awards program designed to provide in-
centives for and recognition of organizational, group,
and individual achievements by providing for grant-
ing awards to employees who, as individuals or mem-
bers of a group, contribute to meeting the perform-
ance goals and objectives established under this sec-
tion by such means as a superior individual or group
accomplishment, a documented productivity gain, or
sustained superior performance.
‘‘(B) A cash award under subchapter I of chap-
ter 45 of title 5 may be granted to an employee of
the Office without the need for any approval under
section 4502(b) of title 5. The Office may approve
cash awards in excess of $10,000, but not in excess
of $25,000, to an employee for exceptional and un-
usually outstanding contributions or accomplish-
ments.
‘‘(4) APPLICATION
OF
PROCEDURES.—(A) In
applying sections 4303(b)(1)(A) and 7513(b) of title
5 to employees of the Office, ‘30 days’ may be
deemed to be ‘15 days’.
‘‘(B) Notwithstanding the second sentence of
section 5335(c) of title 5, an employee of the Office
shall not have a right to appeal the denial of a peri-
odic step increase under section 5335 to the Merit
Systems Protection Board.
‘‘(e) CLASSIFICATION AND PAY FLEXIBILITIES.—
‘‘(1) DEFINITION.—For purposes of this sub-
section, the term ‘broad-banded system’ means a
system for grouping positions for pay, job evalua-
tion, and other purposes that is different from the
system established under chapter 51 and subchapter
III of chapter 53 of title 5 as a result of combining
grades and related ranges of rates of pay in 1 or
more occupational series.
‘‘(2) ESTABLISHMENT OF BROAD-BANDED SYS-
TEMS.—(A)(i) The Director may, subject to criteria
to be prescribed by the Office of Personnel Manage-
ment, establish 1 or more broad-banded systems cov-
ering all or any portion of the Office workforce.
‘‘(ii) With the approval of the Office of Per-
sonnel Management, a broad-banded system estab-
lished under this subsection may either include or
consist of positions that otherwise would be subject
to subchapter IV of chapter 53 or section 5376 of
title 5.
‘‘(B) The Office of Personnel Management may
require the Director to submit to the Office of Per-
sonnel Management information relating to broad-
banded systems at the Office.
‘‘(C) Except as otherwise provided under this
section, employees under a broad-banded system
shall continue to be subject to the laws and regula-
tions covering employees under the pay system that
otherwise would apply to such employees.
‘‘(D) The criteria to be prescribed by the Office
of Personnel Management shall, at a minimum—
‘‘(i) ensure that the structure of any
broad-banded system maintains the principle of
equal pay for substantially equal work;
‘‘(ii) establish the minimum and maximum
number of grades that may be combined into
pay bands;
‘‘(iii) establish requirements for setting
minimum and maximum rates of pay in a pay
band;
‘‘(iv) establish requirements for adjusting
the pay of an employee within a pay band;
‘‘(v) establish requirements for setting the
pay of a supervisory employee whose position is
in a pay band or who supervises employees
whose positions are in pay bands; and
‘‘(vi) establish requirements and meth-
odologies for setting the pay of an employee
upon conversion to a broad-banded system, ini-
tial appointment, change of position or type of
appointment (including promotion, demotion,
transfer, reassignment, reinstatement, or place-
ment in another pay band, or movement to a
different geographic location), and movement
between a broad-banded system and another
pay system.
‘‘(E) With the approval of the Office of Per-
sonnel Management and in accordance with a plan
for implementation submitted by the Director, the
Director may, with respect to the Office employees
who are covered by a broad-banded system estab-
lished under this section, provide for variations from
the provisions of subchapter VI of chapter 53 of title
5.
‘‘(f) GENERAL WORKFORCE STAFFING.—
‘‘(1) EVALUATING APPLICANTS.—(A) Notwith-
standing subchapter I of chapter 33 of title 5, the
Office may establish category rating systems for
evaluating applicants for Office positions in the com-
petitive service under which qualified candidates are
divided into 2 or more quality categories on the
basis of relative degrees of merit, rather than as-
signed individual numerical ratings.
‘‘(B) Each applicant who meets the minimum
qualification requirements for the position to be
filled shall be assigned to an appropriate category
based on an evaluation of the applicant’s knowledge,
skills, and abilities relative to those needed for suc-
cessful performance in the position to be filled.
‘‘(C) Within each quality category established
under subparagraph (A), preference eligibles shall be
listed ahead of individuals who are not preference
eligibles. For other than scientific and professional
positions at or higher than GS–9 (or equivalent),
preference eligibles who have a compensable service-
connected disability of 10 percent or more, and who
meet the minimum qualification standards, shall be
listed in the highest quality category.
‘‘(D) An appointing authority may select any
applicant from the highest quality category or, if
fewer than 3 candidates have been assigned to the
highest quality category, from a merged category
consisting of the highest and second highest cat-
egories.
‘‘(E) Notwithstanding subparagraph (D), the
appointing authority may not pass over a preference
eligible in the same or higher category from which
selection is made unless the requirements of section
3317(b) or 3318(b) of title 5, United States Code,
as applicable, are satisfied.
‘‘(2) DETAILING OF EMPLOYEES.—The Direc-
tor may detail employees among the offices of the
Office without regard to the 120-day limitation in
section 3341(b) of title 5.
‘‘(3) 
PROBATIONARY
PERIODS.—Notwith-
standing any other provision of law, the Office may
establish a probationary period under section 3321
of title 5 of up to 3 years for Office positions if the
Director determines that the nature of the work is
such that a shorter period is insufficient to dem-
onstrate complete proficiency in the position.
‘‘(4) PRECEDENCE
OF
PRESIDENTIAL
AND
COURT ORDERS.—Nothing in this section exempts
the Office from—
‘‘(A) any employment priority established
under direction of the President for the place-
ment of surplus or displaced employees; or
‘‘(B) any obligation under a court order or
decree relating to the employment practices of
the Office or the Department of Commerce.
‘‘(g) STREAMLINED DEMONSTRATION PROJECT AU-
THORITY.—
‘‘(1) DEMONSTRATION PROJECT AUTHORITY.—
The exercise of any of the authorities under this sec-
tion shall not affect the authority of the Office to
implement a demonstration project subject to chap-
ter 47 of title 5, as provided in paragraph (2).
‘‘(2) APPLICABILITY OF TITLE 5.—In applying
section 4703 of title 5 to a demonstration project
described in section 4701(a)(4) of title 5 which in-
volves the Office—
‘‘(A) section 4703(b)(1) shall be deemed to
read
‘(1) develop a plan for such project which de-
scribes its purpose, the employees to be covered, the
project itself, its anticipated outcomes, and the
method of evaluating the project;’;
‘‘(B) section 4703(b)(3) shall not apply;
‘‘(C) the 180-day notification period in sec-
tion 4703(b)(4) shall be deemed to be a notifi-
cation period of 30 days;
‘‘(D) section 4703(b)(6) shall be deemed to
read
‘(6) provide each House of Congress with the
final version of the plan.’;
‘‘(E) section 4703(c)(1) shall be deemed to
read
‘(1) subchapter V of chapter 63 or subpart G
of part III of this title;’;
‘‘(F) the requirements of paragraphs
(1)(A) and (2) of section 4703(d) shall not
apply; and
‘‘(G) 
notwithstanding 
section
4703(d)(1)(B), based on an evaluation as pro-
vided in section 4703(h), the Office of Per-
sonnel Management and the Director, except as
otherwise provided by this subsection, may
waive the termination date of a demonstration
project under section 4703(d).
‘‘(3) NOTICE
OF
INTENT
TO
WAIVE
TERMI-
NATION DATE.—At least 90 days before waiving the
termination date under paragraph (2)(G), the Office
of Personnel Management shall publish in the Fed-
eral Register a notice of its intention to waive the
termination date and shall inform in writing both
Houses of Congress of its intention.’’.
SEC. 615. PUBLIC ADVISORY COMMITTEES.
Chapter 1 of part I of title 35, United States Code,
is amended by inserting after section 4 the following:
‘‘§ 5. Patent and Trademark Office Public Advisory
Committees
‘‘(a) ESTABLISHMENT OF PUBLIC ADVISORY COM-
MITTEES.—
‘‘(1) APPOINTMENT.—The United States Pat-
ent and Trademark Office shall have a Patent Pub-
lic Advisory Committee and a Trademark Public Ad-
visory 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 appoint-
ments to each Committee, the Secretary of Com-
merce shall consider the risk of loss of competitive
advantage in international commerce or other harm
to United States companies as a result of such ap-
pointments.
‘‘(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 ap-
pointments to each Advisory Committee shall be
made within 3 months after the effective date of the
Patent and Trademark Office Efficiency Act. Vacan-
cies 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 di-
verse users of the Patent and Trademark Office with
respect to patents, in the case of the Patent Public
Advisory Committee, and with respect to trade-
marks, in the case of the Trademark Public Advi-
sory 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, includ-
ing small business concerns, independent inventors,
and nonprofit organizations, constitute less than 25
percent of the members of the Patent Public Advi-
sory Committee; and
‘‘(3) shall include individuals with substantial
background and achievement in finance, manage-
ment, labor relations, science, technology, and office
automation.
In addition to the voting members, each Advisory Com-
mittee shall include a representative of each labor organi-
zation 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 mat-
ters referred to in paragraph (1);
‘‘(B) transmit the report to the Secretary
of Commerce, the President, and the Commit-
tees on the Judiciary of the Senate and the
House of Representatives; and
‘‘(C) publish the report in the Official Ga-
zette of the Patent and Trademark Office.
‘‘(e) COMPENSATION.—Each member of each Advi-
sory Committee shall be compensated for each day (includ-
ing travel time) during which such member is attending
meetings or conferences of that Advisory Committee or
otherwise engaged in the business of that Advisory Com-
mittee, at the rate which is the daily equivalent of the an-
nual rate of basic pay in effect for level III of the Execu-
tive 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, ex-
cept for personnel or other privileged information and in-
formation 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 Gov-
ernment employees within the meaning of section 202 of
title 18.
‘‘(h) INAPPLICABILITY OF FEDERAL ADVISORY COM-
MITTEE 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 Advi-
sory 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 con-
fidential information.’’.
SEC. 616. 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. 617. 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. 618. TRADEMARK TRIAL AND APPEAL BOARD.
Section 17 of the Act of July 5, 1946 (commonly re-
ferred 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 concur-
rent 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 trade-
mark judges who are appointed by the Director.’’.
SEC. 619. BOARD OF PATENT APPEALS AND INTER-
FERENCES.
Chapter 1 of title 35, United States Code, is
amended—
(1) by striking section 7 and redesignating sec-
tions 8 through 14 as sections 7 through 13, respec-
tively; and
(2) by inserting after section 5 the following:
‘‘§ 6. Board of Patent Appeals and Interferences
‘‘(a) ESTABLISHMENT
AND COMPOSITION.—There
shall be in the United States Patent and Trademark Of-
fice a Board of Patent Appeals and Interferences. The Di-
rector, 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, re-
view 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 Inter-
ferences may grant rehearings.’’.
SEC. 620. ANNUAL REPORT OF DIRECTOR.
Section 13 of title 35, United States Code, as redesig-
nated by section 617 of this Act, is amended to read as
follows:
‘‘§ 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 mon-
eys 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 by the Secretary
of Commerce, the Director’s compensation, and other in-
formation relating to the Office.’’.
SEC. 621. SUSPENSION OR EXCLUSION FROM PRACTICE.
Section 32 of title 35, United States Code, is amend-
ed by inserting before the last sentence the following: ‘‘The
Director shall have the discretion to designate any attor-
ney who is an officer or employee of the United States
Patent and Trademark Office to conduct the hearing re-
quired by this section.’’.
SEC. 622. PAY OF DIRECTOR.
Section 5314 of title 5, United States Code, is
amended by striking
‘‘Assistant Secretary of Commerce and Com-
missioner of Patents and Trademarks.’’
and inserting
‘‘Under Secretary of Commerce 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 amend-
ed 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 fol-
lows:
‘‘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 with foreign countries.
‘‘12. Copies of patents for public libraries.
‘‘13. Annual report to Congress.’’.
(5) Section 41(h) of title 35, United States
Code, is amended by striking ‘Commissioner of Pat-
ents 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 Pat-
ents and Trademarks’’ and inserting ‘‘Director’’.
(8) Section 302 of title 35, United States Code,
is amended by striking ‘‘Commissioner of Patents’’
and inserting ‘‘Director’’.
(9) Section 303(b) of title 35, United States
Code, is amended by striking ‘‘Commissioner’s’’ and
inserting ‘‘Director’s’’.
(10)(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’’.
(11) Section 41(a)(8)(A) of title 35, United
States Code, is amended by striking ‘‘On’’ and in-
serting ‘‘on’’.
(12) Section 157(d) of title 35, United States
Code, is amended by striking ‘‘Secretary of Com-
merce’’ and inserting ‘‘Director’’.
(13) 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’’.
(14) Section 188 of title 35, United States
Code, is amended by striking ‘‘Secretary of Com-
merce’’ and inserting ‘‘Patent and Trademark Of-
fice’’.
(15) 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 re-
ferred to as the ‘‘Trademark Act of 1946’’; 15
U.S.C. 1051 and following), except for section 17, as
amended by section 116 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 Of-
fice’’.
(3) Section 5102(c)(23) of title 5, United
States Code, is amended to read as follows:
‘‘(23) administrative patent judges and des-
ignated 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 ‘‘Commis-
sioner of Patents, Department of Commerce.’’, ‘Dep-
uty Commissioner of Patents and Trademarks.’’,
‘‘Assistant Commissioner for Patents.’’, and ‘Assist-
ant 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) PAT-
ENT AND TRADEMARK OFFICE;’’ and redesignating
subsections (a) through (g) as paragraphs (1)
through (6), respectively.
(7) Section 19 of the Tennessee Valley Author-
ity 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 Trade-
marks’’ 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
100
striking ‘‘Commissioner of Patents and Trade-
marks’’ 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 Of-
fice’’ 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 Com-
merce’’ 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 Trade-
mark Office’’.
(13) Section 105(e) of the Federal Alcohol Ad-
ministration 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—
101
(A) in subparagraph (A) by inserting
‘‘United States’’ before ‘‘Patent and Trade-
mark’’; and
(B) in subparagraph (B) by striking
‘‘Commissioner of Patents and Trademarks’’
and inserting ‘‘Director of the United States
Patent and Trademark Office’’.
(15) Section 1744 of title 28, United States
Code is amended—
(A) by striking ‘‘Patent Office’’ each place
it appears in the text and section heading and
inserting ‘‘United States Patent and Trade-
mark Office’’;
(B) by striking ‘‘Commissioner of Patents’’
and inserting ‘‘Director of the United States
Patent and Trademark Office’’; and
(C) by striking ‘‘Commissioner’’ and in-
serting ‘‘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
102
inserting ‘‘United States Patent and Trademark Of-
fice’’.
(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 ‘‘Commis-
sioner of Patents’’ and inserting ‘‘Director of
the United States Patent and Trademark Office
(hereafter in this section referred to as the ‘Di-
rector’)’’; and
(B) by striking ‘‘Commissioner’’ each sub-
sequent place it appears and inserting ‘‘Direc-
tor’’.
(21) Section 12(a) of the Solar Heating and
Cooling Demonstration Act of 1974 (42 U.S.C.
103
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 Trade-
mark Office’’.
(27) Section 11 of the Inspector General Act of
1978 (5 U.S.C. App.) is amended—
(A) in paragraph (1)—
104
(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 Insur-
ance Corporation;’’;
(iii) by striking ‘‘or’’ before ‘‘the Com-
missioner of Social Security,’’; and
(iv) by inserting ‘‘or the Director of
the United States Patent and Trademark
Office;’’ after ‘‘Social Security Administra-
tion;’’; and
(B) in paragraph (2)—
(i) by striking ‘‘or’’ before ‘‘the Vet-
erans’ 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 Fed-
eral law, Executive order, rule, regulation, or delegation
of authority, or any document of or pertaining to a depart-
105
ment 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 of-
fice 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 func-
tion 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 Trade-
marks 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 Trade-
marks is deemed to refer to the Commissioner for
Trademarks.
SEC. 642. EXERCISE OF AUTHORITIES.
Except as otherwise provided by law, a Federal offi-
cial to whom a function is transferred by this title may,
for purposes of performing the function, exercise all au-
106
thorities under any other provision of law that were avail-
able 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, agree-
ments, certificates, licenses, and privileges—
(1) that have been issued, made, granted, or al-
lowed to become effective by the President, the Sec-
retary of Commerce, any officer or employee of any
office transferred by this title, or any other Govern-
ment official, or by a court of competent jurisdic-
tion, 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.
107
(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 trans-
ferred by this title, but such proceedings and applications
shall be continued. Orders shall be issued in such pro-
ceedings, 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 pro-
ceeding 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 ex-
tent that such proceeding could have been discontinued
or modified if this title had not been enacted.
(c) SUITS.—This title shall not affect suits com-
menced 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 Depart-
ment of Commerce or the Secretary of Commerce, or by
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or against any individual in the official capacity of such
individual as an officer or employee of an office trans-
ferred by this title, shall abate by reason of the enactment
of this title.
(e) CONTINUANCE OF SUITS.—If any Government of-
ficer 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, sub-
stituted or added as a party.
(f) ADMINISTRATIVE PROCEDURE AND JUDICIAL RE-
VIEW.—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 bal-
ances of appropriations, allocations, and other funds em-
ployed, used, held, available, or to be made available in
connection with a function transferred to an official or
109
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 trans-
ferred.
SEC. 645. DELEGATION AND ASSIGNMENT.
Except as otherwise expressly prohibited by law or
otherwise provided in this title, an official to whom func-
tions 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 ap-
propriate. 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 de-
termination of the functions that are transferred under
this title.
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(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 determina-
tions as may be necessary with regard to the functions
transferred by this title, and to make such additional inci-
dental 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 nec-
essary to carry out the provisions of this title. The Direc-
tor shall provide for the termination of the affairs of all
entities terminated by this title and for such further meas-
ures 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 func-
tion.
SEC. 648. AVAILABILITY OF EXISTING FUNDS.
Existing appropriations and funds available for the
performance of functions, programs, and activities termi-
nated pursuant to this title shall remain available, for the
111
duration of their period of availability, for necessary ex-
penses 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 proce-
dures set forth in section 605 of the Departments of Com-
merce, 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, obli-
gation, power, authority, responsibility, right, privi-
lege, activity, or program; and
(2) the term ‘‘office’’ includes any office, ad-
ministration, 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 ab-
sence of a claim, upon timely request and as pre-
scribed by the Commissioner, a provisional applica-
112
tion 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 ap-
plication 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 WEEK-
ENDS AND HOLIDAYS.—Section 119(e) of title 35, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘(3) If the day that is 12 months after the fil-
ing date of a provisional application falls on a Satur-
day, Sunday, or Federal holiday within the District
of Columbia, the period of pendency of the provi-
sional application shall be extended to the next suc-
ceeding secular or business day.’’.
(c) 
ELIMINATION
OF
COPENDENCY
REQUIRE-
MENT.—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 amend-
113
ments 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 coun-
try 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 mem-
ber 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 Con-
tracting 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—
114
‘‘(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 PAT-
ENT 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 amend-
ed 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 in-
115
dustry relating to biological deposits in support of bio-
technology patents.
(b) CONTENTS.—The study conducted under this sec-
tion shall include—
(1) an examination of the risk of export and the
risk of transfers to third parties of biological depos-
its, and the risks posed by the change to 18-month
publication requirements made by this Act;
(2) an analysis of comparative legal and regu-
latory regimes; and
(3) any related recommendations.
(c) CONSIDERATION OF REPORT.—In drafting regu-
lations affecting biological deposits (including any modi-
fication of title 37, Code of Federal Regulations, section
1.801 et seq.), the Patent and Trademark Office shall con-
sider 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 con-
ducted under section 135 or section 291, another inventor
involved therein establishes, to the extent permitted in sec-
tion 104, that before such person’s invention thereof the
invention was made by such other inventor and not aban-
116
doned, suppressed, or concealed, or (2) before such per-
son’s invention thereof, the invention was made in this
country by another inventor who had not abandoned, sup-
pressed, or concealed it. In determining priority of inven-
tion 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 prac-
tice, 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 ‘‘sub-
section (f) or (g)’’ and inserting ‘‘one or more of sub-
sections (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.
Æ