Union Calendar No. 172
106TH CONGRESS
1ST SESSION
H. R. 1907
[Report No. 106–287, Part I]
A BILL
To amend title 35, United States Code, to provide
enhanced protection for inventors and innovators,
protect patent terms, reduce patent litigation,
and for other purposes.
AUGUST 3, 1999
Reported with an amendment and referred to the Com-
mittee on Government Reform for a period ending not
later than August 3, 1999, for consideration of such
provisions of the bill and amendment as fall within the
jurisdiction of that committee pursuant to clause 1(h),
rule X
AUGUST 3, 1999
Committee on Government Reform discharged; com-
mitted to the Committee of the Whole House on the
State of the Union and ordered to be printed
IB
Union Calendar No. 172
106TH CONGRESS
1ST SESSION
H. R. 1907
[Report No. 106–287, Part I]
To amend title 35, United States Code, to provide enhanced protection for
inventors and innovators, protect patent terms, reduce patent litigation,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 24, 1999
Mr. COBLE (for himself, Mr. BERMAN, Mr. HYDE, Mr. CONYERS, Mr. ROHR-
ABACHER, Mr. CAMPBELL, Mr. GOODLATTE, Ms. LOFGREN, Mr.
DELAHUNT, Mr. PEASE, Mr. WEXLER, and Mr. GALLEGLY) introduced
the following bill; which was referred to the Committee on the Judiciary
AUGUST 3, 1999
Reported with an amendment and referred to the Committee on Government
Reform for a period ending not later than August 3, 1999, for consider-
ation of such provisions of the bill and amendment as fall within the ju-
risdiction of that committee pursuant to clause 1(h), rule X
[Strike out all after the enacting clause and insert the part printed in italic]
AUGUST 3, 1999
Additional sponsors: Mr. CANNON, Mrs. MORELLA, Mrs. KELLY, Mr. SMITH
of Washington, Mrs. TAUSCHER, Ms. ESHOO, Mr. LARGENT, Mr. BART-
LETT of Maryland, Mr. FRANKS of New Jersey, Mr. FRANK of Massachu-
setts, Mr. BILBRAY, Mr. FROST, Mr. LANTOS, Mr. SWEENEY, Mr. SHER-
MAN, Mr. DOOLEY of California, Mr. MCDERMOTT, Mr. BOUCHER, Mr.
PORTMAN, Mr. DAVIS of Florida, Mrs. NAPOLITANO, Mrs. MEEK of Flor-
ida, Mr. PETRI, Mr. NORWOOD, Mr. BALLENGER, Mrs. JOHNSON of Con-
necticut, Mr. BRYANT, Mr. ROTHMAN, Mr. EHRLICH, Mr. MALONEY of
Connecticut, Mr. DICKS, Mr. WATT of North Carolina, Mr. DREIER, Mr.
MCCOLLUM, Mr. VENTO, Mr. CALVERT, Mr. PRICE of North Carolina,
Mr. LEWIS of Georgia, Mr. CLEMENT, Mr. FORD, Mr. MORAN of Vir-
ginia, Mr. ETHERIDGE, Ms. MCCARTHY of Missouri, Mr. HILL of Mon-
tana, Mr. CASTLE, Mr. MASCARA, Mr. SHADEGG, AND Mr. WOLF
AUGUST 3, 1999
Committee on Government Reform discharged; committed to the Committee
of the Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on May 24, 1999]
A BILL
To amend title 35, United States Code, to provide enhanced
protection for inventors and innovators, protect patent
terms, reduce patent litigation, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘American Inventors Pro-
tection Act of 1999’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—INVENTORS’ RIGHTS
Sec. 101. Short title.
Sec. 102. Invention promotion services.
Sec. 103. Effective date.
TITLE II—FIRST INVENTOR DEFENSE
Sec. 201. Short title.
Sec. 202. Defense to patent infringement based on earlier inventor.
Sec. 203. Effective date and applicability.
TITLE III—PATENT TERM GUARANTEE
Sec. 301. Short title.
Sec. 302. Patent term guarantee authority.
Sec. 303. Continued examination of patent applications.
Sec. 304. Technical clarification.
Sec. 305. Effective date.
TITLE IV—UNITED STATES PUBLICATION OF PATENT
APPLICATIONS PUBLISHED ABROAD
Sec. 401. Short title.
Sec. 402. Publication.
Sec. 403. Time for claiming benefit of earlier filing date.
Sec. 404. Provisional rights.
Sec. 405. Prior art effect of published applications.
Sec. 406. Cost recovery for publication.
Sec. 407. Conforming amendments.
Sec. 408. Effective date.
TITLE V—PATENT LITIGATION REDUCTION ACT
Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Reexamination procedures.
Sec. 504. Conforming amendments.
Sec. 505. Report to Congress.
Sec. 506. Estoppel effect of reexamination.
Sec. 507. Effective date.
TITLE VI—PATENT AND TRADEMARK OFFICE
Sec. 601. Short title.
Subtitle A—United States Patent and Trademark Office
Sec. 611. Establishment of Patent and Trademark Office.
Sec. 612. Powers and duties.
Sec. 613. Organization and management.
Sec. 614. Personnel flexibility.
Sec. 615. Public Advisory Committees.
Sec. 616. Patent and Trademark Office funding.
Sec. 617. Conforming amendments.
Sec. 618. Trademark Trial and Appeal Board.
Sec. 619. Board of Patent Appeals and Interferences.
Sec. 620. Annual report of Director.
Sec. 621. Suspension or exclusion from practice.
Sec. 622. Pay of Director.
Subtitle B—Effective Date; Technical Amendments
Sec. 631. Effective date.
Sec. 632. Technical and conforming amendments.
Subtitle C—Miscellaneous Provisions
Sec. 641. References.
Sec. 642. Exercise of authorities.
Sec. 643. Savings provisions.
Sec. 644. Transfer of assets.
Sec. 645. Delegation and assignment.
Sec. 646. Authority of Director of the Office of Management and Budget with re-
spect to functions transferred.
Sec. 647. Certain vesting of functions considered transfers.
Sec. 648. Availability of existing funds.
Sec. 649. Definitions.
TITLE VII—MISCELLANEOUS PATENT PROVISIONS
Sec. 701. Provisional applications.
Sec. 702. International applications.
Sec. 703. Certain limitations on damages for patent infringement not applicable.
Sec. 704. Electronic filing.
Sec. 705. Study and report on biological deposits in support of biotechnology pat-
ents.
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 pro-
moter undertakes invention promotion services for a
customer;
‘‘(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 serv-
ices.
‘‘§ 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 forinvention 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 written
document together with a written summary of the
usual business practices of the invention promoter,
including—
‘‘(A) the usual business terms of contracts;
and
‘‘(B) the approximate amount of the usual
fees or other consideration that may be required
from the customer for each of the services 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 in-
vention promoter, without regard to the date or dates ap-
pearing in such instrument, shall be deemed payment re-
ceived 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 COM-
PANY STATING YOUR INTENT TO CANCEL THIS
CONTRACT.
‘THE LETTER OF TERMINATION MUST BE DE-
POSITED WITH THE UNITED STATES POSTAL
SERVICE ON OR BEFORE FIVE (5) BUSINESS DAYS
AFTER THE DATE ON WHICH YOU OR THE COM-
PANY EXECUTE THE CONTRACT, WHICHEVER IS
LATER.
‘THE TOTAL NUMBER OF INVENTIONS EVALU-
ATED BY THE INVENTION PROMOTER FOR COM-
MERCIAL POTENTIAL IN THE PAST FIVE (5)
YEARS IS XXXXX. OF THAT NUMBER, XXXXX RE-
CEIVED POSITIVE EVALUATIONS AND XXXXX RE-
CEIVED 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 INVEN-
TION 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 RECEIVED,
BY VIRTUE OF THIS INVENTION PROMOTER’S
PERFORMANCE, AN AMOUNT OF MONEY IN EX-
CESS OF THE AMOUNT PAID BY THE CUSTOMER
TO THIS INVENTION PROMOTER IS XXXXXXX. AS
A RESULT OF THE EFFORTS OF THIS INVENTION
PROMOTER, XXXXX NUMBER OF CUSTOMERS
HAVE RECEIVED LICENSE AGREEMENTS FOR
THEIR INVENTIONS.
‘THE OFFICERS OF THIS INVENTION 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 COM-
PANIES WITH WHICH THE PRINCIPAL OFFICERS
HAVE BEEN AFFILIATED AS OWNERS, AGENTS, OR
EMPLOYEES). YOU ARE ENCOURAGED TO CHECK
WITH THE UNITED STATES PATENT AND TRADE-
MARK OFFICE, THE FEDERAL TRADE COMMIS-
SION, YOUR STATE ATTORNEY GENERAL’S OF-
FICE, AND THE BETTER BUSINESS BUREAU FOR
ANY COMPLAINTS FILED AGAINST ANY OF THESE
COMPANIES WHICH RESULTED IN REGULATORY
SANCTIONS OR OTHER CORRECTIVE ACTIONS.
‘YOU ARE ENCOURAGED TO CONSULT WITH
AN ATTORNEY OF YOUR OWN CHOOSING BEFORE
SIGNING THIS CONTRACT. BY PROCEEDING WITH-
OUT THE ADVICE OF AN ATTORNEY REGISTERED
TO PRACTICE BEFORE THE UNITED STATES PAT-
ENT AND TRADEMARK OFFICE, YOU COULD LOSE
ANY RIGHTS YOU MIGHT HAVE IN YOUR IDEA OR
INVENTION.’.
‘‘(b) OTHER REQUIREMENTS FOR COVER NOTICE.—
The cover notice shall contain the items required under sub-
section (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 IN-
VENTION 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 inven-
tion promoter, nor with respect to customers who have de-
faulted 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 subject mat-
ter 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 re-
ceived as a result of those disclosures.
‘‘§ 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 pro-
moter undertakes to construct, sell, or distribute one
or more prototypes, models, or devices embodying the
invention of the customer;
‘‘(5) the full name and principal place of 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 un-
dertakes to perform for the customer;
‘‘(6) if any oral or written representation of esti-
mated or projected customer earnings is given by the
invention promoter (or any agent, employee, officer,
director, partner, or independent contractor of such
invention promoter), a statement of that estimation
or projection and a description of the data upon
which such representation is based;
‘‘(7) the name and address of the custodian of all
records and correspondence relating to the contracted
for invention promotion services, and a statement
that the invention promoter is required to maintain
all records and correspondence relating to perform-
ance of the invention promotion services for such cus-
tomer for a period of not less than 2 years after expi-
ration of the term of such contract; and
‘‘(8) a statement setting forth a time schedule for
performance of the invention promotion services, in-
cluding an estimated date in which such performance
is expected to be completed.
‘‘(b) INVENTION PROMOTER AS FIDUCIARY.—To the
extent that the description of the specific acts or services
affords discretion to the invention promoter with respect to
what specific acts or services shall be performed, the inven-
tion 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 applicable
provisions of this chapter shall be voidable at the option
of the customer.
‘‘(2) Any contract for invention promotion services en-
tered into in reliance upon any material false, fraudulent,
or misleading information, representation, notice, or adver-
tisement of the invention promoter (or any agent, employee,
officer, director, partner, or independent contractor of such
invention promoter) shall be voidable at the option of the
customer.
‘‘(3) Any waiver by the customer of any provision of
this chapter shall be deemed contrary to public policy and
shall be void and unenforceable.
‘‘(4) Any contract for invention promotion services
which provides for filing for and obtaining utility, design,
or plant patent protection shall be voidable at the option
of the customer unless the invention promoter offers to per-
form or performs such act through aperson duly registered
to practice before, and in good standing with, the Patent
and Trademark Office.
‘‘(b) CIVIL ACTION.—(1) Any customer who is injured
by a violation of this chapter by an invention promoter or
by any material false or fraudulent statement or representa-
tion, or any omission of material fact, by an invention pro-
moter (or any agent, employee, director, officer, partner, or
independent contractor of such invention promoter) or by
failure of an invention promoter to make all the disclosures
required under this chapter, may recover in a civil action
against the invention promoter (or the officers, directors,
or partners of such invention promoter) in addition to rea-
sonable 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 serv-
ices in reliance on any material false or fraudulent state-
ments 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 com-
plaints in the records maintained under subsection (a), to-
gether 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 chapter,
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 obliga-
tion, 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 ‘commer-
cial 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 connec-
tion with an actual arm’s-length sale or other arm’s-
length commercial transfer of a product or service,
whether or not the subject matter at issue is accessible
to or otherwise known to the public, except that the
subject matter for which commercial marketing or use
is subject to a premarketing regulatory review period
during which the safety or efficacy of the subject mat-
ter is established, including any period specified in
section 156(g), shall be deemed ‘commercially used’
and in ‘commercial use’ during such regulatory re-
view period;
‘‘(2) in the case of activities performed by a non-
profit research laboratory, or nonprofit entity such as
a university, research center, or hospital, a use for
which the public is the intended beneficiary shall be
considered to be a use described in paragraph (1), ex-
cept that the use—
‘‘(A) may be asserted as a defense under
this section only for continued use by and in the
laboratory or nonprofit entity; and
‘‘(B) may not be asserted as a defense with
respect to any subsequent commercialization or
use outside such laboratory or nonprofit entity;
‘‘(3) the term ‘process or method’ means ‘process’
as defined in section 100(b), and includes any inven-
tion that produces a useful end product or service
which has been or could have been claimed in a pat-
ent 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 other-
wise infringe one or more claims asserting a process
or method in the patent being asserted against a per-
son, if such person had, acting in good faith, actually
reduced the subject matter to practice at least one
year before the effective filing date of such patent, and
commercially used the subject matter before the effec-
tive filing date of such patent.
‘‘(2) EXHAUSTION OF RIGHT.—The sale or other
disposition, of a product or service produced by a
patented process or method, by a person entitled to
assert a defense under this section with respect to that
product or service shall exhaust the patent owner’s
rights under the patent to the extent such rights
would have been exhausted had such sale or other dis-
position been made by the patent owner.
‘‘(3) LIMITATIONS AND QUALIFICATIONS OF DE-
FENSE.—The defense to infringement under this sec-
tion is subject to the following:
‘‘(A) PATENT.—A person may not assert the
defense under this section unless the invention
for which the defense is asserted is for a process
or method, the exclusive purpose of which is to
produce a useful end product or service.
‘‘(B) DERIVATION.—A person may not as-
sert the defense under this section if the subject
matter on which the defense is based was derived
from the patentee or persons in privity with the
patentee.
‘‘(C) NOT A GENERAL LICENSE.—The de-
fense asserted by a person under this section is
not a general license under all claims of the pat-
ent at issue, but extends only to the specific sub-
ject matter claimed in the patent with respect to
which the person can assert a defense under this
chapter, except that the defense shall also extend
to variations in the quantity or volume of use of
the claimed subject matter, and to improvements
in the claimed subject matter that do not in-
fringe 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 es-
tablishing the defense by clear and convincing evi-
dence.
‘‘(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 sec-
tion 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 as-
signed or transferred to another person except as an
ancillary and subordinate part of a good faith assign-
ment or transfer for other reasons of the entire enter-
prise 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 as-
signment or transfer of an entire enterprise or line of
business to which the defense relates, may only be as-
serted for uses at sites where the subject matter that
would otherwise infringe one or more of the claims is
in use before the later of the effective filing date of the
patent or the date of the assignment or transfer of
such enterprise or line of business.
‘‘(8) UNSUCCESSFUL ASSERTION OF DEFENSE.—
If the defense under this section is pleaded by a per-
son who is found to infringe the patent and who sub-
sequently fails to demonstrate a reasonable basis for
asserting the defense, the court shall find the case ex-
ceptional for the purpose of awarding attorney’s fees
under section 285 of this title.
‘‘(9) INVALIDITY.—A patent shall not be deemed
to be invalid under section 102 or 103 of this title
solely because a defense is raised or established under
this section.’’.
(b) CONFORMING AMENDMENT.—The table of sections
at the beginning of chapter 28 of title 35, United States
Code, is amended by adding at the end the following new
item:
‘‘273. Defense to infringement based on earlier inventor.’’.
SEC. 203. EFFECTIVE DATE AND APPLICABILITY.
This title and the amendments made by this title shall
take effect on the date of the enactment of this Act, but shall
not apply to any action for infringement that is pending
on such date of enactment or with respect to any subject
matter for which an adjudication of infringement, includ-
ing a consent judgment, has been made before such date of
enactment.
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 con-
sumed by the imposition of an order pursu-
ant to section 181, or any time consumed
by appellate review by the Board of Patent
Appeals and Interferences or by a Federal
court; or
‘‘(iii) any delay in the processing of
the application by the Patent and 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 limitations
under paragraph (2), if the issue of an original
patent is delayed due to—
‘‘(i) a proceeding under section 135(a);
‘‘(ii) the imposition of an order 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 re-
view reversing an adverse determination of
patentability,
the term of the patent shall be extended one day
for each day of the pendency of the proceeding,
order, or review, as the case may be.
‘‘(2) LIMITATIONS.—
‘‘(A) IN GENERAL.—To the extent that peri-
ods of delay attributable to grounds specified in
paragraph (1) overlap, the period of any adjust-
ment granted under this subsection shall not ex-
ceed the actual number of days the issuance of
the patent was delayed.
‘‘(B) DISCLAIMED
TERM.—No patent the
term of which has been disclaimed beyond a
specified date may be adjusted under this section
beyond the expiration date specified in the dis-
claimer.
‘‘(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 exam-
ination of an application for the cumulative
total of any periods of time in excess of 3
months that are taken to respond to a notice
from the Office making any rejection, objec-
tion, argument, or other request, measuring
such 3-month period from the date the no-
tice 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 en-
gage in reasonable efforts to conclude proc-
essing or examination of an application.
‘‘(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 adjust-
ment under paragraph (2)(C) if the applicant,
prior to the issuance of the patent, makes a
showing that, in spite of all due care, the appli-
cant was unable to respond within the 3-month
period, but in no case shall more than 3 addi-
tional months for each such response beyond the
original 3-month period be reinstated.
‘‘(D) The Director shall proceed to grant the
patent after completion of the Director’s deter-
mination of a patent term adjustment under the
procedures established under this subsection, not-
withstanding any appeal taken by the applicant
of such determination.
‘‘(4) APPEAL OF PATENT TERM ADJUSTMENT DE-
TERMINATION.—
‘‘(A) An applicant dissatisfied with a deter-
mination made by the Director under paragraph
(3) shall have remedy by a civil action against
the Director filed in the United States District
Court for the District of Columbia within 180
days after the grant of the patent. Chapter 7 of
title 5 shall apply to such action. Any final
judgment resulting in a change to the period of
adjustment of the patent term shall be served on
the Director, and the Director shall thereafter
alter the term of the patent to reflect such
change.
‘‘(B) The determination of a patent term
adjustment under this subsection shall not be
subject to appeal or challenge by a third party
prior to the grant of the patent.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 282 of title 35, United States Code,
is amended in the fourth paragraph by striking ‘‘156
of this title’’ and inserting ‘‘154(b) or 156 of this
title’’.
(2) Section 1295(a)(4)(C) of title 28, United
States Code, is amended by striking ‘‘145 or 146’’
and inserting ‘‘145, 146, or 154(b)’’.
SEC. 303. CONTINUED EXAMINATION OF PATENT APPLICA-
TIONS.
Section 132 of title 35, United States Code, is
amended—
(1) in the first sentence by striking ‘‘Whenever’’
and inserting ‘‘(a) Whenever’’; and
(2) by adding at the end the following:
‘‘(b) The Director shall prescribe regulations to provide
for the continued examination of applications for patent
at the request of the applicant. The Commissioner may es-
tablish appropriate fees for such continued examination
and shall provide a 50 percent reduction on such fees for
small entities that qualify for reduced fees under section
41(h)(1) of this title.’’.
SEC. 304. TECHNICAL CLARIFICATION.
Section 156(a) of title 35, United States Code, is
amended in the matter preceding paragraph (1) by insert-
ing ‘‘, which shall include any patent term adjustment
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 country,
or under a multilateral international agreement, that
requires publication of applications 18 months after
filing, the application shall not be published as pro-
vided 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 notify
the Director of such filing not later than 45 days
after the date of the filing of such foreign or inter-
national application. A failure of the applicant to
provide such notice within the prescribed period shall
result in the application being regarded as aban-
doned, unless it is shown to the satisfaction of the Di-
rector that the delay in submitting the notice was un-
intentional.
‘‘(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 de-
scription of the invention in the application filed in
the Patent and Trademark Office, the applicant may
submit a redacted copy of the application filed in the
Patent and Trademark Office eliminating any part
or description of the invention in such application
that is not also contained in any of the corresponding
applications filed in a foreign country. The Director
may only publish the redacted copy of the application
unless the redacted copy of the application is not re-
ceived within 16 months after the earliest effective fil-
ing date for which a benefit is sought under this title.
The provisions of section 154(d) shall not apply to a
claim if the description of the invention published in
the redacted application filed under this clause with
respect to the claim does not enable a person skilled
in the art to make and use the subject matter of the
claim.
‘‘(c) PROTEST AND PRE-ISSUANCE OPPOSITION.—The
Director shall establish appropriate procedures to ensure
that no protest or other form of pre-issuance opposition to
the grant of a patent on an application may be initiated
after publication of the application without the express
written consent of the applicant.’’.
(b) STUDY BY GAO.—
(1) IN GENERAL.—The Comptroller General of
the United States shall conduct a study of applicants
for patents who file only in the United States during
the 3-year period beginning on the effective date of
this title.
(2) CONTENTS.—The study conducted under
paragraph (1) shall—
(A) consider the number of such applicants
for patent in relation to the number of 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 FILING
DATE.
(a) IN A FOREIGN COUNTRY.—Section 119(b) of title
35, United States Code, is amended to read as follows:
‘‘(b)(1) No application for patent shall be entitled to
this right of priority unless a claim, identifying the foreign
application by specifying its application number, country,
and the day, month, and year of its filing, is filed in the
Patent and Trademark Office at such time during the pend-
ency 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, in-
cluding the payment of a surcharge, to accept an uninten-
tionally 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 applica-
tion and of the filing of the specification and other papers.’’.
(b) IN THE UNITED STATES.—Section 120 of title 35,
United States Code, is amended by adding at the end the
following: ‘‘The Director may determine the time period
during the pendency of the application within which an
amendment containing the specific reference to the earlier
filed application is submitted. The Director may consider
the failure to submit such an amendment within that time
period as a waiver of any benefit under this section. The
Director may establish procedures, including the payment
of a surcharge, to accept unintentionally late submissions
of amendments under this section.’’.
SEC. 404. PROVISIONAL RIGHTS.
Section 154 of title 35, United States Code, is
amended—
(1) in the section caption by inserting ‘‘; provi-
sional 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, offers
for sale, or sells in the United States or imports
into the United States products made by that
process as claimed in the published patent appli-
cation; and
‘‘(B) had actual notice of the published pat-
ent application, and in a case in which the right
arising under this paragraph is based upon an
international application designating the United
States that is published in a language other than
English, a translation of the international appli-
cation into the English language.
‘‘(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 REASON-
ABLE 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 ob-
applicant may request the issuance of a patent incor-
porating those claims. The applicant may continue
prosecution of the remaining claims as provided in
chapter 12 of this title. Any subsequently allowed
claims may be incorporated into the patent or issued
in a separate patent, in accordance with regulations
adopted by the Director. The Director may establish
appropriate fees to cover the costs of incorporating
any additional claims into the patent or issuing a
separate patent.’’.
SEC. 405. PRIOR ART EFFECT OF PUBLISHED 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 ap-
plication 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 pat-
ent 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 charging
a separate publication fee after notice of allowance is given
pursuant to section 151 of title 35, United States Code.
SEC. 407. CONFORMING AMENDMENTS.
The following provisions of title 35, United States
Code, are amended:
(1) Section 11 is amended in paragraph 1 of
subsection (a) by inserting ‘‘and published 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—
(A) in the section caption by inserting
‘‘and applications’’ after ‘‘patents’’; and
(B) by inserting ‘‘and published applica-
tions for patents’’ after ‘‘patents’’.
(4) The item relating to section 122 in the table
of sections for chapter 11 is amended by inserting ‘‘;
publication of patent applications’’ after ‘‘applica-
tions’’.
(5) The item relating to section 154 in the table
of sections for chapter 14 is amended by inserting ‘‘;
provisional rights’’ after ‘‘patent’’.
(6) Section 181 is amended—
(A) in the first undesignated paragraph—
(i) by inserting ‘‘by the publication of
an application or’’ after ‘‘disclosure’’; and
(ii) by inserting ‘‘the publication of the
application or’’ after ‘‘withhold’’;
(B) in the second undesignated paragraph
by inserting ‘‘by the publication of an 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) by inserting ‘‘the publication of the
application or’’ after ‘‘withhold’’; and
(D) in the fourth undesignated paragraph
by inserting ‘‘the publication of an application
or’’ after ‘‘and’’ in the first sentence.
(7) Section 252 is amended in the first undesig-
nated paragraph by inserting ‘‘substantially’’ before
‘‘identical’’ each place it appears.
(8) Section 284 is amended by adding at the end
of the second undesignated paragraph the following:
‘‘Increased damages under this paragraph shall not
apply to provisional rights under section 154(d) of
this title.’’.
(9) Section 374 is amended to read as follows:
‘‘§ 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 applications
filed under section 111 of title 35, United States Code, on
or after that date, and all applications complying with sec-
tion 371 of title 35, United States Code, that resulted from
international applications filed on or after that date. The
amendments made by sections 404 and 405 shall apply to
any such application voluntarily published by the appli-
cant under procedures established under this title that is
pending on the date that is 1 year after the date of enact-
ment of this Act. The amendment made by section 404 shall
also apply to international applications designating the
United States that are filed on or after the date that is
1 year after the date of the enactment of this Act.
TITLE V—PATENT LITIGATION
REDUCTION ACT
SEC. 501. SHORT TITLE.
This title may be cited as the ‘‘Patent Litigation Re-
duction Act’’.
SEC. 502. DEFINITIONS.
Section 100 of title 35, United States Code, is amended
by adding at the end the following new subsection:
‘‘(e) The term ‘third-party requester’ means a person
requesting reexamination under section 302 of this title who
is not the patent owner.’’.
SEC. 503. REEXAMINATION PROCEDURES.
(a) CITATION OF PRIOR ART.—Section 301 of title 35,
United States Code, is amended to read as follows:
‘‘§ 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 follows:
‘‘§ 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 sec-
tion 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 Direc-
tor 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 section 302,
the Director shall determine whether a substantial new
question of patentability affecting any claim of the patent
concerned is raised by the request, with or without consider-
ation of other patents or printed publications. On the Direc-
tor’s initiative, and any time, the Director may determine
whether a substantial new question of patentability is
raised by patents and publications.
‘‘(b) RECORD.—A record of the Director’s 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.