‘‘(2) shall adopt and use a corporate seal, which
shall be judicially noticed and with which letters pat-
ent, certificates of trademark registrations, and pa-
pers issued by the Office shall be authenticated;
‘‘(3) may sue and be sued in its corporate name
and be represented by its own attorneys in all judi-
cial and administrative proceedings, subject to the
provisions of section 7;
‘‘(4) may indemnify the Director, and other of-
ficers, attorneys, agents, and employees (including
members of the Management Advisory Board estab-
lished in section 5) of the Office for liabilities and
expenses incurred within the scope of their employ-
ment;
‘‘(5) may establish regulations, not inconsistent
with law, which—
‘‘(A) shall govern the conduct of proceed-
ings 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; and
‘‘(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(h)(1) of this title;
‘‘(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 consist-
ent with the principles of impartiality and com-
petitiveness;
‘‘(6) 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;
‘‘(7)(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;
‘‘(8) 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;
‘‘(9) may obtain from the Administrator of
General Services such services as the Administrator
is authorized to provide to other agencies of the
United States, on the same basis as those services
are provided to other agencies of the United States;
‘‘(10) 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 person-
nel of any State or local government agency or in-
strumentality or foreign government or international
organization to perform functions on its behalf;
‘‘(11) may determine the character of and the
necessity for its obligations and expenditures and
the manner in which they shall be incurred, allowed,
and paid, subject to the provisions of this title and
the Act of July 5, 1946 (commonly referred to as
the ‘Trademark Act of 1946’);
‘‘(12) 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, including for
research and development and capital investment,
subject to the provisions of section 10101 of the
Omnibus Budget Reconciliation Act of 1990 (35
U.S.C. 41 note);
‘‘(13) shall have the priority of the United
States with respect to the payment of debts from
bankrupt, insolvent, and decedents’ estates;
‘‘(14) may execute, in accordance with its by-
laws, rules, and regulations, all instruments nec-
essary and appropriate in the exercise of any of its
powers; and
‘‘(15) may provide for liability insurance and
insurance against any loss in connection with its
property, other assets, or operations either by con-
tract or by self-insurance.
In exercising the Director’s powers under paragraphs (6)
and (7)(A), the Director shall consult with the Adminis-
trator of General Services when the Director determines
that it is practicable, efficient, and cost-effective to do so.
‘‘(c) 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. 113. ORGANIZATION AND MANAGEMENT.
Section 3 of title 35, United States Code, is amended
to read as follows:
‘‘§ 3. Officers and employees
‘‘(a) DIRECTOR.—
‘‘(1) IN
GENERAL.—The management of the
United States Patent and Trademark Office shall be
vested in a 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
MANAGE-
MENT
ADVISORY
BOARD.—The Director shall
consult with the Management Advisory Board
established in section 5 on a regular basis on
matters relating to the operation of the Office,
and shall consult with the Advisory Board be-
fore submitting budgetary proposals to the Of-
fice of Management and Budget or changing or
proposing to change patent or trademark user
fees or patent or trademark regulations.
‘‘(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) TERM.—The Director shall serve a term of
5 years, and may continue to serve after the expira-
tion of the Director’s term until a successor is ap-
pointed and assumes office. The Director may be re-
appointed to subsequent terms.
‘‘(4) OATH.—The Director shall, before taking
office, take an oath to discharge faithfully the duties
of the Office.
‘‘(5) COMPENSATION.—The Director shall be
paid an annual rate of basic pay not to exceed the
maximum rate of basic pay of the Senior Executive
Service established under section 5382 of title 5, in-
cluding any applicable locality-based comparability
payment that may be authorized under section
5304(h)(2)(C) of title 5. In addition, the Director
may receive a bonus in an amount up to, but not in
excess of, 50 percent of such annual rate of basic
pay, based upon an evaluation by the Secretary of
Commerce of the Director’s performance 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 de-
lineated in an annual performance plan agreed to by
the Director and the Secretary. 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 aggregate compensation in a cal-
endar year to equal or exceed the amount of the sal-
ary of the President under section 102 of title 3.
‘‘(6) 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.
‘‘(7) DESIGNEE OF DIRECTOR.—The Director
shall designate an officer of the Office who shall be
vested with the authority to act in the capacity of
the Director in the event of the absence or incapac-
ity of the Director.
‘‘(b) OFFICERS AND EMPLOYEES OF THE OFFICE.—
‘‘(1) COMMISSIONERS.—The Director shall ap-
point a Commissioner for Patents and a Commis-
sioner for Trademarks for terms that shall expire on
the date on which the Director’s term expires. The
Commissioner for Patents shall be a person with
demonstrated experience in patent law and the Com-
missioner for Trademarks shall be a person with
demonstrated experience in trademark law. The
Commissioner for Patents and the Commissioner for
Trademarks shall be the principal management ad-
visers to the Director on all aspects of the activities
of the Office that affect the administration of patent
and trademark operations, respectively.
‘‘(2) 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 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.
‘‘(3) 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 examin-
ers.
‘‘(c) CONTINUED APPLICABILITY OF TITLE 5.—Offi-
cers and employees of the Office shall be subject to the
provisions of title 5 relating to Federal employees. Section
2302 of title 5 applies to the Office, notwithstanding sub-
section (a)(2)(C) of such section.
‘‘(d) 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 Modernization Act,
with respect to such Office (as then in effect).
‘‘(e) CARRYOVER OF PERSONNEL.—
‘‘(1) FROM PTO.—Effective as of the effective
date of the Patent and Trademark Office Mod-
ernization Act, all officers and employees of the Pat-
ent and Trademark Office on the day before such ef-
fective date shall become officers and employees of
the Office, without a break in service.
‘‘(2) OTHER PERSONNEL.—Any individual who,
on the day before the effective date of the Patent
and Trademark Office Modernization Act, is an offi-
cer 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.
‘‘(f) TRANSITION PROVISIONS.—
‘‘(1) INTERIM APPOINTMENT OF DIRECTOR.—
On or after the effective date of the Patent and
Trademark Office Modernization Act, the President
shall appoint an individual to serve as the Director
until the date on which a Director qualifies under
subsection (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 Modernization Act may serve as the Commis-
sioner for Patents until the date on which a Com-
missioner 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
Modernization Act may serve as the Commissioner
for Trademarks until the date on which a Commis-
sioner for Trademarks is appointed under subsection
(b).’’.
SEC. 114. MANAGEMENT ADVISORY BOARD.
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 Management Advi-
sory Board
‘‘(a) ESTABLISHMENT OF MANAGEMENT ADVISORY
BOARD.—
‘‘(1) APPOINTMENT.—The United States Pat-
ent and Trademark Office shall have a Management
Advisory Board (hereafter in this title referred to as
the ‘Advisory Board’) of 12 members, 4 of whom
shall be appointed by the President, 4 of whom shall
be appointed by the Speaker of the House of Rep-
resentatives, and 4 of whom shall be appointed by
the majority leader of the Senate. Not more than 3
of the 4 members appointed by each appointing au-
thority shall be members of the same political party.
‘‘(2) TERMS.—Members of the Advisory Board
shall be appointed for a term of 4 years each, except
that of the members first appointed by each appoint-
ing authority, 1 shall be for a term of 1 year, 1 shall
be for a term of 2 years, and 1 shall be for a term
of 3 years. No member may serve more than 1 term.
‘‘(3) CHAIR.—The President shall designate the
chair of the Advisory Board, whose term as chair
shall be for 3 years.
‘‘(4) TIMING
OF
APPOINTMENTS.—Initial ap-
pointments to the Advisory Board shall be made
within 3 months after the effective date of the Pat-
ent and Trademark Office Modernization Act, and
vacancies shall be filled within 3 months after they
occur.
‘‘(5) VACANCIES.—Vacancies shall be filled in
the manner in which the original appointment was
made under this subsection. Members appointed to
fill a vacancy occurring before the expiration of the
term for which the member’s predecessor was ap-
pointed shall be appointed only for the remainder of
that term. A member may serve after the expiration
of that member’s term until a successor is ap-
pointed.
‘‘(6) COMMITTEES.—The Chair shall designate
members of the Advisory Board to serve on a com-
mittee on patent operations and on a committee on
trademark operations to perform the duties set forth
in subsection (e) as they relate specifically to the Of-
fice’s patent operations, and the Office’s trademark
operations, respectively.
‘‘(b) BASIS FOR APPOINTMENTS.—Members of the
Advisory Board shall be citizens of the United States who
shall be chosen so as to represent the interests of diverse
users of the United States Patent and Trademark Office,
including inventors, and shall include individuals with sub-
stantial background and achievement in corporate finance
and management.
‘‘(c) APPLICABILITY OF CERTAIN ETHICS LAWS.—
Members of the Advisory Board shall be special Govern-
ment employees within the meaning of section 202 of title
18.
‘‘(d) MEETINGS.—The Advisory Board shall meet at
the call of the chair, not less than every 6 months, to con-
sider an agenda set by the chair.
‘‘(e) DUTIES.—The Advisory Board shall—
‘‘(1) review the policies, goals, performance,
budget, and user fees of the United States Patent
and Trademark Office, and advise the Director on
these matters; and
‘‘(2) within 60 days after the end of each fiscal
year, prepare an annual report on the matters re-
ferred to in paragraph (1), transmit the report to
the President and the Committees on the Judiciary
of the Senate and the House of Representatives, and
publish the report in the Patent and Trademark Of-
fice Official Gazette.
‘‘(f) COMPENSATION.—Members of the Advisory
Board shall be compensated for each day (including travel
time) during which they are attending meetings or con-
ferences of the Advisory Board or otherwise engaged in
the business of the Advisory Board, at the rate which is
the daily equivalent of the annual rate of basic pay in ef-
fect for level III of the Executive Schedule under section
5314 of title 5, and while away from their homes or regu-
lar places of business they may be allowed travel expenses,
including per diem in lieu of subsistence, as authorized
by section 5703 of title 5.
‘‘(g) ACCESS TO INFORMATION.—Members of the Ad-
visory Board shall be provided access to records and infor-
mation in the United States Patent and Trademark Of-
fice, except for personnel or other privileged information
and information concerning patent applications required
to be kept in confidence by section 122.’’.
SEC. 115. 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. 116. 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. 117. BOARD OF PATENT APPEALS AND INTER-
FERENCES.
Chapter 1 of title 35, United States Code, is amended
by striking section 7 and inserting after section 5 the fol-
lowing:
‘‘§ 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. 118. SUITS BY AND AGAINST THE OFFICE.
Chapter 1 of part I of title 35, United States Code,
is amended by inserting after section 6 the following new
section:
‘‘§ 7. Suits by and against the Office
‘‘(a) ACTIONS UNDER UNITED STATES LAW.—Any
civil action or proceeding to which the United States Pat-
ent and Trademark Office is a party is deemed to arise
under the laws of the United States. The Federal courts
shall have exclusive jurisdiction over all civil actions by
or against the Office.
‘‘(b) REPRESENTATION BY THE DEPARTMENT OF
JUSTICE.—The United States Patent and Trademark Of-
fice shall be deemed an agency of the United States for
purposes of section 516 of title 28.
‘‘(c) PROHIBITION ON ATTACHMENT, LIENS, ETC.—
No attachment, garnishment, lien, or similar process, in-
termediate or final, in law or equity, may be issued against
property of the Office.’’.
SEC. 119. ANNUAL REPORT OF DIRECTOR.
Section 14 of title 35, United States Code, is amend-
ed to read as follows:
‘‘§ 14. 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, and other information relating to
the Office. The report under this section shall also meet
the requirements of section 9106 of title 31, to the extent
that such requirements are not inconsistent with the pre-
ceding sentence. The report required under this section
shall not be deemed to be the report of the United States
Patent and Trademark Office under section 9106 of title
31, and the Director shall file a separate report under
such section.’’.
SEC. 120. 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. 121. FUNDING.
Section 42 of title 35, United States Code, is amend-
ed to read as follows:
‘‘§ 42. Patent and Trademark Office funding
‘‘(a) FEES PAYABLE TO THE OFFICE.—All fees for
services performed by or materials furnished by the Unit-
ed States Patent and Trademark Office shall be payable
to the Office.
‘‘(b) USE OF MONEYS.—Moneys from fees shall be
available to the United States Patent and Trademark Of-
fice to carry out, to the extent provided in appropriations
Acts, the functions of the Office. Moneys of the Office not
otherwise used to carry out the functions of the Office
shall be kept in cash on hand or on deposit, or invested
in obligations of the United States or guaranteed by the
United States, or in obligations or other instruments
which are lawful investments for fiduciary, trust, or public
funds. Fees available to the Office under this title shall
be used for the processing of patent applications and for
other services and materials relating to patents. Fees
available to the Office under section 31 of the Act of July
5, 1946 (commonly referred to as the ‘Trademark Act of
1946’; 15 U.S.C. 1113), shall be used only for the process-
ing of trademark registrations and for other services and
materials relating to trademarks.’’.
SEC. 122. EXTENSION OF SURCHARGES ON PATENT FEES.
(a) IN GENERAL.—Section 10101 of the Omnibus
Budget Reconciliation Act of 1990 (35 U.S.C. 41 note)
is amended to read as follows:
‘‘SEC. 10101. PATENT 
AND 
TRADEMARK 
OFFICE 
USER
FEES.
‘‘(a) SURCHARGES.—There shall be a surcharge on
all fees authorized by subsections (a) and (b) of section
41 of title 35, United States Code, in order to ensure that
the amounts specified in subsection (c) are collected.
‘‘(b) USE OF SURCHARGES.—Notwithstanding sec-
tion 3302 of title 31, United States Code, all surcharges
collected by the Patent and Trademark Office—
‘‘(1) shall be credited to a separate account es-
tablished in the Treasury and ascribed to the activi-
ties of the United States Patent and Trademark Of-
fice as offsetting collections,
‘‘(2) shall be collected by and available to the
United States Patent and Trademark Office for all
authorized activities and operations of the Office, in-
cluding all direct and indirect costs of services pro-
vided by the office, and
‘‘(3) shall remain available until expended.
‘‘(c) ESTABLISHMENT OF SURCHARGES.—The Direc-
tor of the United States Patent and Trademark Office
shall establish surcharges under subsection (a), subject to
the provisions of section 553 of title 5, United States
Code, in order to ensure that $119,000,000, but not more
than $119,000,000, are collected in fiscal year 1999 and
each fiscal year thereafter.
‘‘(d) APPROPRIATIONS ACT REQUIRED.—Notwith-
standing subsections (a) through (c), no fee established
by subsection (a) shall be collected nor shall be available
for spending without prior authorization in appropriations
Acts.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on October 1, 1998.
SEC. 123. TRANSFERS.
(a) TRANSFER OF FUNCTIONS.—Except to the extent
that such functions, powers, and duties relate to the direc-
tion of patent or trademark policy, there are transferred
to, and vested in, the United States Patent and Trade-
mark Office all functions, powers, and duties vested by
law in the Secretary of Commerce or the Department of
Commerce or in the officers or components in the Depart-
ment of Commerce with respect to the authority to grant
patents and register trademarks, and in the Patent and
Trademark Office, as in effect on the day before the effec-
tive date of this title, and in the officers and components
of such Office.
(b) TRANSFER
OF FUNDS
AND PROPERTY.—The
Secretary of Commerce shall transfer to the United States
Patent and Trademark Office, on the effective date of this
title, so much of the assets, liabilities, contracts, property,
records, and unexpended and unobligated balances of ap-
propriations, authorizations, allocations, and other funds
employed, held, used, arising from, available to, or to be
made available to the Department of Commerce, including
funds set aside for accounts receivable, which are related
to functions, powers, and duties which are vested in the
Patent and Trademark Office by this title.
SEC. 124. GAO STUDY AND REPORT.
The Comptroller General shall conduct a study of
and, not later than the date that is 2 years after the effec-
tive date of this title, submit to the Committee on the Ju-
diciary of the House of Representatives and the Commit-
tee on the Judiciary of the Senate a report on—
(1) the operations of the Patent and Trademark
Office as a Government corporation; and
(2) the feasibility and desirability of making the
trademark operations of the Patent and Trademark
Office a separate Government corporation or agency.
Subtitle B—Effective Date;
Technical Amendments
SEC. 131. 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. 132. 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
follows:
‘‘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 Management Advisory Board.
‘‘6.
Board of Patent Appeals and Interferences.
‘‘7.
Suits by and against the Office.
‘‘8.
Library.
‘‘9.
Classification of patents.
‘‘10. Certified copies of records.
‘‘11. Publications.
‘‘12. Exchange of copies of patents with foreign countries.
‘‘13. Copies of patents for public libraries.
‘‘14. Annual report to Congress.’’.
(5) Section 41(h) of title 35, United States Code, is
amended by striking ‘‘Commissioner of Patents 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 by striking ‘‘iv)’’ and inserting
‘‘(iv)’’.
(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 9101(3) of title 31, United States
Code, is amended by adding at the end the follow-
ing:
‘‘(R) the United States Patent and Trade-
mark Office.’’.
(3) Section 500(e) of title 5, United States
Code, is amended by striking ‘‘Patent Office’’ and
inserting ‘‘United States Patent and Trademark Of-
fice’’.
(4) 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;’’.
(5) Section 5316 of title 5, United States Code
(5 U.S.C. 5316) is amended by striking ‘‘Commis-
sioner of Patents, Department of Commerce.’’,
‘‘Deputy Commissioner of Patents and Trade-
marks.’’, ‘‘Assistant Commissioner for Patents.’’,
and ‘‘Assistant Commissioner for Trademarks.’’.
(6) 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’’.
(7) 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 sub-
sections (a) through (g) as paragraphs (1) through
(6), respectively.
(8) 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 Unit-
ed 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’’.
(9) 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’’.
(10) Section 302(b)(2)(D) of the Trade Act of
1974 (19 U.S.C. 2412(b)(2)(D)) is amended by
striking ‘‘Commissioner of Patents and Trade-
marks’’ and inserting ‘‘Director of the United States
Patent and Trademark Office’’.
(11) 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’’.
(12) 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’’.
(13) 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’’.
(14) 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’’.
(15) Section 1295(a)(4) of title 28, United
States Code, is amended—
(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’’.
(16) 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’’.
(17) Section 1745 of title 28, United States
Code, is amended by striking ‘‘United States Patent
Office’’ and inserting ‘‘United States Patent and
Trademark Office’’.
(18) Section 1928 of title 28, United States
Code, is amended by striking ‘‘Patent Office’’ and
inserting ‘‘United States Patent and Trademark Of-
fice’’.
(19) 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’’.
(20) 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’’.
(21) Section 305 of the National Aeronautics
and Space Act of 1958 (42 U.S.C. 2457) is amend-
ed—
(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’’.
(22) Section 12(a) of the Solar Heating and
Cooling Demonstration Act of 1974 (42 U.S.C.
5510(a)) is amended by striking ‘‘Commissioner of
the Patent Office’’ and inserting ‘‘Director of the
United States Patent and Trademark Office’’.
(23) Section 1111 of title 44, United States
Code, is amended by striking ‘‘the Commissioner of
Patents,’’.
(24) Section 1114 of title 44, United States
Code, is amended by striking ‘‘the Commissioner of
Patents,’’.
(25) Section 1123 of title 44, United States
Code, is amended by striking ‘‘the Patent Office,’’.
(26) 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.
(27) 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’’.
(28) Section 11 of the Inspector General Act of
1978 (5 U.S.C. App.) is amended—
(A) in paragraph (1)—
(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 Veter-
ans’ 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. 141. 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-
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. 142. 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-
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. 143. 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 author-
ized official, a court of competent jurisdiction, or operation
of law.
(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 proceed-
ings, 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 proceeding
shall continue in effect until modified, terminated, super-
seded, 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 dis-
continuance or modification of any such proceeding under
the same terms and conditions and to the same extent 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
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. 144. 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
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. 145. 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. 146. 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.
(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. 147. 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. 148. 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
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 1997.
SEC. 149. 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.
Subtitle 
D—Under 
Secretary 
of
Commerce for Intellectual Prop-
erty Policy
SEC. 151. UNDER SECRETARY OF COMMERCE FOR INTEL-
LECTUAL PROPERTY POLICY.
(a) APPOINTMENT.—There shall be within the De-
partment of Commerce an Under Secretary of Commerce
for Intellectual Property Policy, who shall be appointed
by the President, by and with the advice and consent of
the Senate. On or after the effective date of this title, the
President may appoint an individual to serve as the Under
Secretary until the date on which an Under Secretary
qualifies under this subsection. The President shall not
make more than 1 appointment under the preceding sen-
tence.
(b) DUTIES.—The Under Secretary of Commerce for
Intellectual Property Policy, under the direction of the
Secretary of Commerce, shall perform the following func-
tions with respect to intellectual property policy:
(1) In coordination with the Under Secretary of
Commerce for International Trade, promote exports
of goods and services of the United States industries
that rely on intellectual property.
(2) Advise the President, through the Secretary
of Commerce, on national and international intellec-
tual property policy issues.
(3) Advise Federal departments and agencies
on matters of intellectual property protection in
other countries.
(4) Provide guidance, as appropriate, with re-
spect to proposals by agencies to assist foreign gov-
ernments and international intergovernmental orga-
nizations on matters of intellectual property protec-
tion.
(5) Conduct programs and studies related to
the effectiveness of intellectual property protection
throughout the world.
(6) Advise the Secretary of Commerce on pro-
grams and studies relating to intellectual property
policy that are conducted, or authorized to be con-
ducted, cooperatively with foreign patent and trade-
mark offices and international intergovernmental or-
ganizations.
(7) In coordination with the Department of
State, conduct programs and studies cooperatively
with foreign intellectual property offices and inter-
national intergovernmental organizations.
(c) DEPUTY UNDER SECRETARIES.—To assist the
Under Secretary of Commerce for Intellectual Property
Policy, the Secretary of Commerce shall appoint a Deputy
Under Secretary for Patent Policy and a Deputy Under
Secretary for Trademark Policy as members of the Senior
Executive Service in accordance with the provisions of title
5, United States Code. The Deputy Under Secretaries
shall perform such duties and functions as the Under Sec-
retary for Intellectual Property Policy shall prescribe.
(d) COMPENSATION.—Section 5314 of title 5, United
States Code, is amended by adding at the end the follow-
ing:
‘‘Under Secretary of Commerce for Intellectual
Property Policy.’’.
(e) FUNDING.—Funds available to the United States
Patent and Trademark Office shall be made available for
all expenses of the office of the Under Secretary for Intel-
lectual Property Policy, subject to prior approval in appro-
priations Acts. Amounts made available under this sub-
section shall not exceed 2 percent of the projected annual
revenues of the Patent and Trademark Office from fees
for services and goods of that Office. The Secretary of
Commerce shall determine the budget requirements of the
office of the Under Secretary for Intellectual Property Pol-
icy.
SEC. 152. RELATIONSHIP WITH EXISTING AUTHORITIES.
Nothing in section 151 shall derogate 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).
TITLE 
II—EXAMINING 
PROCE-
DURE IMPROVEMENTS: PUB-
LICATION WITH PROVISIONAL
ROYALTIES; 
TERM 
EXTEN-
SIONS; 
FURTHER 
EXAMINA-
TION
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Examining Procedure
Improvements Act’’.
SEC. 202. PUBLICATION.
Section 122 of title 35, United States Code, is
amended to read as follows:
‘‘§ 122. Confidential status of applications; publica-
tion of patent applications
‘‘(a) CONFIDENTIALITY.—Except as provided in sub-
section (b), applications for patents shall be kept in con-
fidence by the Patent and Trademark Office and no infor-
mation concerning applications for patents shall be given
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) PUBLICATION.—
‘‘(1) IN GENERAL.—(A) Subject to paragraph
(2), each application for patent, except applications
for design patents filed under chapter 16 of this title
and provisional applications filed under section
111(b) of this title, shall be published, in accordance
with procedures determined by the Director, prompt-
ly after the expiration of a period of 18 months from
the earliest filing date for which a benefit is sought
under this title. At the request of the applicant, an
application may be published 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) Notwithstanding any other provision of
law, a determination by the Director to release or
not to release information concerning 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 in the process of
being reviewed by the Atomic Energy Commission,
the Department of Defense, or a defense agency
pursuant to section 181 of this title shall not be
published until the Director has been notified by the
Atomic Energy Commission, the Secretary of De-
fense, or the chief officer of the defense agency, as
the case may be, that in the opinion of the Atomic
Energy Commission, the Secretary of Defense, or
such chief officer, as the case may be, publication or
disclosure of the invention by the granting of a pat-
ent would not be detrimental to the national security
of the United States.
‘‘(C) An application that is subject to a secrecy
order pursuant to section 181 of this title shall not
be published.
‘‘(D) An application filed by a small business
concern entitled to reduced fees under section
41(h)(1) of this title, by an individual who is an
independent inventor entitled to reduced fees under
such section, or by an institution of higher education
(as defined in section 1202 of the Higher Education
Act of 1965) entitled to reduced fees under such sec-
tion 41(h)(1) shall not be published until a patent
is issued thereon, except upon the request of the ap-
plicant, or in any of the following circumstances:
‘‘(i) In the case of an application under
section 111(a) for a patent for an invention for
which the applicant intends to file or has filed
an application for a patent in a foreign country,
the Commissioner may publish, at the discre-
tion of the Commissioner and by means deter-
mined suitable for the purpose, no more than
that data from such application under section
111(a) which will be made or has been made
public in such foreign country. Such a publica-
tion shall be made only after the date of the
publication in such foreign country and shall be
made only if the data is not available, or cannot
be made readily available, in the English lan-
guage through commercial services.
‘‘(ii) If the Commissioner determines that
a patent application which is filed after the date
of the enactment of this paragraph—
‘‘(I) has been pending more than 5
years from the effective filing date of the
application,
‘‘(II) has not been previously pub-
lished by the Patent and Trademark Of-
fice,
‘‘(III) is not under any appellate re-
view by the Board of Patent Appeals and
Interferences,
‘‘(IV) is not under interference pro-
ceedings in accordance with section 135(a),
‘‘(V) is not under any secrecy order
pursuant to section 181,
‘‘(VI) is not being diligently pursued
by the applicant in accordance with this
title, and
‘‘(VII) is not in abandonment,
the Commissioner shall notify the applicant of
such determination.
‘‘(iii) An applicant which received notice of
a determination described in clause (ii) may,
within 30 days of receiving such notice, petition
the Commissioner to review the determination
to verify that subclauses (I) through (VII) are
all applicable to the applicant’s application. If
the applicant makes such a petition, the Com-
missioner shall not publish the applicant’s ap-
plication before the Commissioner’s review of
the petition is completed. If the applicant does
not submit a petition, the Commissioner may
publish the applicant’s application no earlier
than 90 days after giving such a notice.
‘‘(iv) If after the date of the enactment of
this paragraph a continuing application has
been filed more than 6 months after the date of
the initial filing of an application, the Commis-
sioner shall notify the applicant under such ap-
plication. The Commissioner shall establish a
procedure for an applicant which receives such
a notice to demonstrate that the purpose of the
continuing application was for reasons other
than to achieve a delay in the time of publica-
tion of the application. If the Commissioner
agrees with such a demonstration by the appli-
cant, the Commissioner shall not publish the
applicant’s application. If the Commissioner
does not agree with such a demonstration by
the applicant or if the applicant does not make
an attempt at such a demonstration within a
reasonable period of time as determined by the
Commissioner, the Commissioner shall publish
the applicant’s application.
‘‘(E)(i) Upon the request at the time of filing
by an applicant that is a small business concern or
an independent inventor entitled to reduced fees
under section 41(h)(1) of this title, the application
shall not be published in accordance with paragraph
(1) until 3 months after the Director makes a sec-
ond notification to such applicant on the merits of
the application under section 132 of this title. The
Director may require applicants that no longer have
the status of a small business concern or an inde-
pendent inventor to so notify the Director not later
than 15 months after the earliest filing date for
which a benefit is sought under this title.
‘‘(ii) Applications filed pursuant to section 363
of this title, applications asserting priority under
section 119 or 365(a) of this title, and applications
asserting the benefit of an earlier application under
section 120 or 365(c) of this title shall not be eligi-
ble for a request pursuant to this subparagraph.
‘‘(iii) Applications asserting the benefit of an
earlier application under section 121 shall not be eli-
gible for a request pursuant to this subparagraph
unless filed within 2 months after the date on which
the Director required the earlier application to be re-
stricted to 1 of 2 or more inventions in the earlier
application.
‘‘(iv) In a request under this subparagraph, the
applicant shall certify that the invention disclosed in
the application was not and will not be the subject
of an application filed in a foreign country.
‘‘(v) The Director may establish appropriate
procedures and nominal fees for making a request
under this subparagraph.
‘‘(F)(i) In a case in which an applicant, after
making a request under subparagraph (E)(i), deter-
mines to file an application in a foreign country, the
applicant shall notify the Director promptly. The ap-
plication shall then be published in accordance with
the provisions of paragraph (1).
‘‘(ii) The Director may establish appropriate
fees to cover the costs of processing notifications
under clause (i), including the costs of any special
handling of applications resulting from the initial re-
quest under subparagraph (E)(i).
‘‘(F) No fee established under this section shall
be collected nor shall be available for spending with-
out prior authorization in appropriations Acts.
‘‘(c) PRE-ISSUANCE OPPOSITION.—The provisions of
this section shall not operate to create any new oppor-
tunity for pre-issuance opposition. The Director may es-
tablish appropriate procedures to ensure that this section
does not create any new opportunity for pre-issuance op-
position.’’.
SEC. 203. 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 is filed in the Patent
and Trademark Office, at such time during the pendency
of the application as is required by the Director, that iden-
tifies the foreign application by specifying its application
number, the country in or for which the application was
filed, and the date of its filing.
‘‘(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, and may require the payment of a sur-
charge as a condition of accepting an untimely claim dur-
ing the pendency of the application.
‘‘(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 intellectual property authority in the foreign country
in which the foreign application was filed and show the
date of the application 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: ‘‘No application shall be entitled to the bene-
fit of an earlier filed application under this section unless
an amendment containing the specific reference to the ear-
lier filed application is submitted at such time during the
pendency of the application as is required by the Commis-
sioner. 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 estab-
lish procedures, including the payment of a surcharge, to
accept unavoidably late submissions of amendments under
this section.’’.
SEC. 204. 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) of this title, or in the case of an
international application filed under the treaty de-
fined in section 351(a) of this title 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, where the right arising
under this paragraph is based upon an inter-
national application designating the United
States that is published in a language other
than English, a translation of the international
application 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 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.—The right under paragraph (1) to ob-
tain a reasonable royalty based upon the publication
under the treaty defined in section 351(a) of this
title of an international application designating the
United States shall commence from the date that
the Patent and Trademark Office receives a copy of
the publication under such treaty of the inter-
national application, or, if the publication under the
treaty of the international application is in a lan-
guage other than English, from the date that the
Patent and Trademark Office receives a translation
of the international application in the English lan-
guage. The Director may require the applicant to
provide a copy of the international publication of the
international application and a translation thereof.’’.
SEC. 205. 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) an application for patent, published pursu-
ant to section 122(b) of this title, by another filed
in the United States before the invention by the ap-
plicant for patent, except that an international appli-
cation filed under the treaty defined in section
351(a) of this title shall have the effect under this
subsection of a national application published under
section 122(b) of this title only if the international
application designating the United States was pub-
lished under Article 21(2)(a) of such treaty in the
English language, or
‘‘(2) a patent granted on an application for pat-
ent by another filed in the United States before the
invention by the applicant for patent, or’’.
SEC. 206. 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 202 by adjust-
ing the filing, issue, and maintenance fees under title 35,
United States Code, by charging a separate publication
fee, or by any combination of these methods.
SEC. 207. CONFORMING CHANGES.
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 items relating to sections 12 and 13 in
the table of sections for chapter 1, as amended by
section 132(a)(4) of this Act, 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 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 paragraph by inserting
‘‘by the publication of an application or’’ after
‘‘disclosure of an invention’’;
(C) in the third 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 paragraph by inserting
‘‘the publication of an application or’’ after
‘‘and’’ in the first sentence.
(8) Section 252 is amended in the first para-
graph by inserting ‘‘substantially’’ before ‘‘identical’’
each place it appears.
(9) Section 284 is amended by adding at the
end of the second paragraph the following: ‘‘In-
creased 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: Ef-
fect
‘‘The publication under the treaty defined in section
351(a) of this title of an international application des-
ignating the United States shall confer the same rights
and shall have the same effect under this title as an appli-
cation for patent published under section 122(b), except
as provided in sections 102(e) and 154(d) of this title.’’.
(11) Section 135(b) of title 35, United States
Code, is amended to read as follows:
‘‘(b)(1) A claim which is the same as, or for the same
or substantially the same subject matter as, a claim of
an issued patent may only be made in an application if—
‘‘(A) such a claim is made prior to 1 year after
the date on which the patent was granted; and
‘‘(B) the applicant files evidence which dem-
onstrates that the applicant is prima facie entitled to
a judgment relative to the patent.
‘‘(2)(A) A claim which is the same as, or for the same
or substantially the same subject matter as, a claim of
a published application may only be made in an applica-
tion filed after the date of publication of the published
application if, except in a case to which subparagraph (B)
applies—
‘‘(i) such a claim is made prior to 1 year after
the date of publication of the published application;
and
‘‘(ii) the applicant of the application filed after
the date of publication of the published application
files evidence that demonstrates that the applicant is
prima facie entitled to a judgment relative to the
published application.
‘‘(B) If the applicant of the application filed after the
date of publication of the published application alleges
that the invention claimed in the published application was
derived from that applicant, such a claim may only be
made if that applicant files evidence which demonstrates
that the applicant is prima facie entitled to a judgment
relative to the published application.’’.
SEC. 208. PATENT TERM EXTENSION AUTHORITY.
Section 154(b) of title 35, United States Code, is
amended to read as follows:
‘‘(b) TERM EXTENSION.—
‘‘(1) BASIS FOR PATENT TERM EXTENSION.—
‘‘(A) DELAY.—Subject to the limitations
set forth in paragraph (2), if the issue of an
original patent is delayed due to—
‘‘(i) a proceeding under section 135(a)
of this title, including any appeal under
section 141, or any civil action under sec-
tion 146, of this title,
‘‘(ii) the imposition of an order pursu-
ant to section 181 of this title,
‘‘(iii) review by the Board of Patent
Appeals and Interferences or by a Federal
court in a case in which the patent was is-
sued pursuant to a decision in the review
reversing an adverse determination of pat-
entability, or
‘‘(iv) an unusual administrative delay
by the Patent and Trademark Office in is-
suing the patent,
the term of the patent shall be extended for the
period of delay.
‘‘(B) ADMINISTRATIVE DELAY.—For pur-
poses of subparagraph (A)(iv), an unusual ad-
ministrative delay by the Patent and Trade-
mark Office is the failure to—
‘‘(i) make a notification of the rejec-
tion of any claim for a patent or any objec-
tion or argument under section 132 of this
title or give or mail a written notice of al-
lowance under section 151 of this title not
later than 14 months after the date on
which the application was filed;
‘‘(ii) respond to a reply under section
132 of this title or to an appeal taken
under section 134 of this title not later
than 4 months after the date on which the
reply was filed or the appeal was taken;
‘‘(iii) act on an application not later
than 4 months after the date of a decision
by the Board of Patent Appeals and Inter-
ferences under section 134 or 135 of this
title or a decision by a Federal court under
section 141, 145, or 146 of this title in a
case in which allowable claims remain in
an application;
‘‘(iv) issue a patent not later than 4
months after the date on which the issue
fee was paid under section 151 of this title
and all outstanding requirements were sat-
isfied; or
‘‘(v) issue a patent within 3 years
after the filing date of the application in
the United States, if the applicant—
‘‘(I) has not obtained further lim-
ited examination of the application
under section 209 of the Examining
Procedure Improvements Act;
‘‘(II) has not benefitted from an
extension of patent term under clause
(i), (ii), or (iii) of paragraph (1)(A);
‘‘(III) has not sought or obtained
appellate review by the Board of Pat-
ent Appeals and Interferences or by a
Federal Court other than in a case in
which the patent was issued pursuant
to a decision in the review reversing
an adverse determination of patent-
ability; and
‘‘(IV) has not requested any
delay in the processing of the applica-
tion by the Patent and Trademark Of-
fice.
‘‘(2) LIMITATIONS.—(A) The total duration of
any extensions granted pursuant to either clause (iii)
or (iv) of paragraph (1)(A) or both such clauses
shall not exceed 10 years. To the extent that periods
of delay attributable to grounds specified in para-
graph (1) overlap, the period of any extension grant-
ed under this subsection shall not exceed the actual
number of days the issuance of the patent was de-
layed.
‘‘(B) The period of extension of the term of a
patent under clause (iv) of paragraph (1)(A), which
is based on the failure of the Patent and Trademark
Office to meet the criteria set forth in clause (v) of
paragraph (1)(B), shall be reduced by the cumu-
lative total of any periods of time that an applicant
takes to respond in excess of 3 months after the
date on which the Patent and Trademark Office
makes any rejection, objection, argument, or other
request.
‘‘(C) The period of extension of the term of a
patent under this subsection shall be reduced by a
period equal to the time in which the applicant failed
to engage in reasonable efforts to conclude prosecu-
tion of the application. The Director shall prescribe
regulations establishing the circumstances that con-
stitute a failure of an applicant to engage in reason-
able efforts to conclude processing or examination of
an application in order to ensure that applicants are
appropriately compensated for any delays by the
Patent and Trademark Office in excess of the time
periods specified in paragraph (1)(B).
‘‘(D) No patent the term of which has been dis-
claimed beyond a specified date may be extended
under this section beyond the expiration date speci-
fied in the disclaimer.
‘‘(3) PROCEDURES.—The Director shall pre-
scribe regulations establishing procedures for the no-
tification of patent term extensions under this sub-
section and procedures for contesting patent term
extensions under this subsection.’’.
SEC. 209. FURTHER EXAMINATION OF PATENT APPLICA-
TIONS.
Section 132 of title 35, United States Code, is
amended—
(1) in the first sentence by striking ‘‘Whenever’’
and inserting ‘‘(a) Whenever’’; and
(2) by adding at the end the following:
‘‘(b) The Director shall prescribe regulations to pro-
vide for the further limited examination of applications for
patent at the request of the applicant. The Director may
establish appropriate fees for such further limited exam-
ination and shall be authorized to 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. 210. LAST DAY OF PENDENCY OF PROVISIONAL APPLI-
CATION.
Section 119(e) of title 35, United States Code, is
amended by adding at the end the following:
‘‘(3) If the day that is 12 months after the filing date
of a provisional application falls on a Saturday, Sunday,
or Federal holiday within the District of Columbia, the
period of pendency of the provisional application shall be
extended to the next succeeding secular or business day.’’.
SEC. 211. REPORTING REQUIREMENT.
The Director of the United States Patent and Trade-
mark Office shall report to the Congress not later than
April 1, 2001, and not later than April 1 of each year
thereafter, regarding the impact of publication on the pat-
ent applications filed by applicants who are independent
inventors entitled to reduced fees under section 41(h)(1)
of title 35, United States Code. The report shall include
information concerning the frequency and number of ini-
tial and continuing patent applications, pendency, inter-
ferences, reexaminations, rejection, abandonment rates,
fees, other expenses, and other relevant information relat-
ed to the prosecution of patent applications.
SEC. 212. EFFECTIVE DATE.
(a) SECTIONS 202 THROUGH 207.—Sections 202
through 207, and the amendments made by such sections,
shall take effect on April 1, 1998, and shall apply to all
applications filed under section 111 of title 35, United
States Code, on or after that date, and all international
applications designating the United States that are filed
on or after that date.
(b) SECTIONS 208 THROUGH 210.—The amend-
ments made by sections 208 through 210 shall take effect
on the date of the enactment of this Act and, except for
a design patent application filed under chapter 16 of title
35, United States Code, shall apply to any application
filed on or after June 8, 1995.
TITLE 
III—PROTECTION 
FOR
PRIOR DOMESTIC USERS OF
PATENTED TECHNOLOGIES
SEC. 301. SHORT TITLE.
This title may be cited as the ‘‘Protection for Prior
Domestic Commercial and Research Users of Patented
Technologies Act’’.
SEC. 302. DEFENSE TO PATENT INFRINGEMENT BASED ON
PRIOR 
DOMESTIC 
COMMERCIAL 
OR 
RE-
SEARCH USE.
(a) DEFENSE.—Chapter 28 of title 35, United States
Code, is amended by adding at the end the following new
section:
‘‘§ 273. Prior domestic commercial or research use;
defense to infringement
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) the terms ‘commercially used’, ‘commer-
cially use’, and ‘commercial use’ mean the use in the
United States in commerce or the use in the design,
testing, or production in the United States of a
product or service which is used in commerce,
whether or not the subject matter at issue is acces-
sible to or otherwise known to the public;
‘‘(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) if the use is limited to activity that oc-
curred within the laboratory or nonprofit entity or
by persons in privity with that laboratory or non-
profit entity before the effective filing date of the ap-
plication for patent at issue, except that the use—
‘‘(A) may be asserted as a defense under
this section only by the laboratory or nonprofit
entity; and
‘‘(B) may not be asserted as a defense
with respect to any subsequent use by any en-
tity other than such laboratory, nonprofit en-
tity, or persons in privity;
‘‘(3) the terms ‘used in commerce’, and ‘use in
commerce’ mean that there has been an actual sale
or other arm’s-length commercial transfer of the
subject matter at issue or that there has been an ac-
tual sale or other arm’s-length commercial transfer
of a product or service resulting from the use of the
subject matter at issue; 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) A person
shall not be liable as an infringer under section 271 of
this title with respect to any subject matter that would
otherwise infringe one or more claims in the patent being
asserted against such person, if such person had, acting
in good faith, commercially used the subject matter before
the effective filing date of such patent.
‘‘(2) The sale or other disposition of the subject mat-
ter of a patent by a person entitled to assert a defense
under this section with respect to that subject matter 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.
‘‘(c) LIMITATIONS
AND QUALIFICATIONS
OF DE-
FENSE.—The defense to infringement under this section
is subject to the following:
‘‘(1) DERIVATION.—A person may not assert
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.
‘‘(2) NOT A GENERAL LICENSE.—The defense
asserted by a person under this section is not a gen-
eral license under all claims of the patent at issue,
but extends only to the subject 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 vol-
ume of use of the claimed subject matter, and to im-
provements in the claimed subject matter that do
not infringe additional specifically claimed subject
matter of the patent.
‘‘(3) EFFECTIVE
AND
SERIOUS
PREPARA-
TION.—With respect to subject matter that cannot
be commercialized without a significant investment
of time, money, and effort, a person shall be deemed
to have commercially used the subject matter if—
‘‘(A) before the effective filing date of the
patent, the person actually reduced the subject
matter to practice in the United States, com-
pleted a significant portion of the total invest-
ment necessary to commercially use the subject
matter, and made an arm’s-length commercial
transaction in the United States in connection
with the preparation to use the subject matter;
and
‘‘(B) thereafter the person diligently com-
pleted the remainder of the activities and in-
vestments necessary to commercially use the
subject matter, and promptly began commercial
use of the subject matter, even if such activities
were conducted after the effective filing date of
the patent.
‘‘(4) BURDEN OF PROOF.—A person asserting
the defense under this section shall have the burden
of establishing the defense.
‘‘(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
subsection (b) with respect to actions taken after the
date of such abandonment.
‘‘(6) PERSONAL DEFENSE.—The defense under
this section may only be asserted 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 in
connection with the good faith assignment or trans-
fer of the entire enterprise or line of business to
which the defense relates.
‘‘(7) ONE-YEAR
LIMITATION.—A person may
not assert a defense under this section unless the
subject matter on which the defense is based had
been commercially used or actually reduced to prac-
tice more than one year prior to the effective filing
date of the patent by the person asserting the de-
fense or someone in privity with that person.
‘‘(d) UNSUCCESSFUL ASSERTION OF DEFENSE.—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 de-
fense, the court shall find the case exceptional for the pur-
pose of awarding attorney’s fees under section 285 of this
title.
‘‘(e) INVALIDITY.—A patent shall not be deemed to
be invalid under section 102 or 103 of this title solely be-
cause a defense is established 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 follow-
ing new item:
‘‘273. Prior domestic commercial or research use; defense to infringement.’’.
SEC. 303. 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 IV—ENHANCED PROTEC-
TION OF INVENTORS’ RIGHTS
SEC. 401. SHORT TITLE.
This title may be cited as the ‘‘Enhanced Protection
of Inventors’ Rights Act’’.
SEC. 402. INVENTION PROMOTION SERVICES.
Part I of title 35, United States Code, is amended
by adding after chapter 4 the following new 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 en-
tity 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; 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, licensing, sell-
ing, or promoting the invention or a product or
service in which the invention is incorporated or
used, except that the display only of an inven-
tion at a trade show or exhibit shall not be con-
sidered 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, 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 TERMI-
NATE THIS CONTRACT. TO TERMINATE
THIS CONTRACT, YOU MUST SEND A WRIT-
TEN 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, WHICHEVER IS LATER.
‘‘ ‘THE TOTAL NUMBER OF INVENTIONS
EVALUATED 
BY 
THE 
INVENTION 
PRO-
MOTER FOR COMMERCIAL POTENTIAL IN
THE PAST FIVE (5) YEARS IS lllll. OF
THAT NUMBER, lllll RECEIVED POSI-
TIVE EVALUATIONS AND lllll RE-
CEIVED NEGATIVE EVALUATIONS.
‘‘ ‘IF YOU ASSIGN EVEN A PARTIAL IN-
TEREST IN THE INVENTION TO THE IN-
VENTION PROMOTER, THE INVENTION PRO-
MOTER MAY HAVE THE RIGHT TO SELL OR
DISPOSE OF THE INVENTION WITHOUT
YOUR CONSENT AND MAY NOT HAVE TO
SHARE THE PROFITS WITH YOU.
‘‘ ‘THE TOTAL NUMBER OF CUSTOMERS
WHO HAVE CONTRACTED WITH THE IN-
VENTION PROMOTER IN THE PAST FIVE (5)
YEARS IS lllll. THE TOTAL NUMBER
OF CUSTOMERS KNOWN BY THIS INVEN-
TION PROMOTER TO HAVE RECEIVED, BY
VIRTUE OF THIS INVENTION PROMOTER’S
PERFORMANCE, AN AMOUNT OF MONEY IN
EXCESS OF THE AMOUNT PAID BY THE
CUSTOMER TO THIS INVENTION PROMOTER
IS lllllll.
‘‘ ‘THE OFFICERS OF THIS INVENTION
PROMOTER HAVE COLLECTIVELY OR INDI-
VIDUALLY BEEN AFFILIATED IN THE LAST
TEN (10) YEARS WITH THE FOLLOWING IN-
VENTION PROMOTION COMPANIES: (LIST
THE NAMES AND ADDRESSES OF ALL PRE-
VIOUS INVENTION PROMOTION COMPANIES
WITH WHICH THE PRINCIPAL OFFICERS
HAVE 
BEEN 
AFFILIATED 
AS 
OWNERS,
AGENTS, OR EMPLOYEES). YOU ARE EN-
COURAGED TO CHECK WITH THE UNITED
STATES PATENT AND TRADEMARK OFFICE,
THE FEDERAL TRADE COMMISSION, YOUR
STATE ATTORNEY GENERAL’S OFFICE, AND
THE BETTER BUSINESS BUREAU FOR ANY
COMPLAINTS 
FILED 
AGAINST 
ANY 
OF
THESE COMPANIES.
‘‘ ‘YOU ARE ENCOURAGED TO CONSULT
WITH AN ATTORNEY OF YOUR OWN CHOOS-
ING BEFORE SIGNING THIS CONTRACT. BY
PROCEEDING WITHOUT THE ADVICE OF AN
ATTORNEY REGISTERED TO PRACTICE BE-
FORE THE UNITED STATES PATENT 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
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 payments 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 a 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-