I
107TH CONGRESS
1ST SESSION
H. R. 1332
To amend title 35, United States Code, to provide for improvements in
the quality of patents on certain inventions.
IN THE HOUSE OF REPRESENTATIVES
APRIL 3, 2001
Mr. BERMAN (for himself and Mr. BOUCHER) introduced the following bill;
which was referred to the Committee on the Judiciary
A BILL
To amend title 35, United States Code, to provide for
improvements in the quality of patents on certain inventions.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Business Method Pat-
ent Improvement Act of 2001’’.
SEC. 2. DEFINITIONS.
Section 100 of title 35, United States Code, is
amended by adding at the end the following:
‘‘(f) The term ‘business method’ means—
‘‘(1) a method—
‘‘(A) of—
‘‘(i) processing data; or
‘‘(ii) 
performing 
calculation 
oper-
ations; and
‘‘(B) which is uniquely designed for or uti-
lized in the practice, administration, or manage-
ment of an enterprise;
‘‘(2) any technique used in athletics, instruc-
tion, or personal skills; and
‘‘(3) any computer-assisted implementation of a
method described in paragraph (1) or a technique
described in paragraph (2).
‘‘(g) The term ‘business method invention’ means—
‘‘(1) any invention which is a business method
(including any software or other apparatus); and
‘‘(2) any invention which is comprised of any
claim that is a business method.’’.
SEC. 3. PATENTS ON BUSINESS METHOD INVENTIONS.
(a) IN GENERAL.—Title 35, United States Code, is
amended by inserting after chapter 31 the following new
chapter:
‘‘CHAPTER 32—PATENTS ON BUSINESS
METHOD INVENTIONS
‘‘Sec.
‘‘321. Business method invention determinations.
‘‘322. Opposition procedures.
‘‘323. Effect on other proceedings.
‘‘324. Burden of proof.
‘‘§ 321. Business method invention determinations
‘‘(a) CONFIDENTIALITY.—Except as provided in sub-
section (b), an application for a patent on a business
method invention shall be kept in confidence by the Patent
and Trademark Office and no information concerning the
application may be given without authority of the appli-
cant or owner unless necessary 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 subpara-
graph (E) and paragraph (2), each application for a
patent on a business method invention shall be pub-
lished, in accordance with procedures determined by
the Director, promptly after the expiration of a pe-
riod of 18 months after the earliest filing date for
which a benefit is sought under this title. At the re-
quest of the applicant, an application may be pub-
lished earlier than the end of that 18-month period.
‘‘(B) Within 12 months after the first filing
date of an application in the United States for a
patent under this title, the Director shall make a de-
termination of whether any invention claimed in the
application is a business method invention.
‘‘(C) After making a determination under sub-
paragraph (B) that an invention is a business meth-
od invention, the Director shall notify the applicant
of the determination and shall provide the applicant
with a period of 60 days within which to respond to
the determination by amending the application, with-
drawing the application, or otherwise.
‘‘(D) No information concerning patent applica-
tions published under this subsection shall be made
available to the public, except as the Director deter-
mines.
‘‘(E)(i) The Director shall establish procedures
for making determinations under subparagraph (B),
and for addressing amendments to any application
that may affect the Director’s determination of
whether the invention claimed in the application is
a business method invention.
‘‘(ii) In no case shall an application that would
be subject to section 122 but for this section be pub-
lished later than the date that would otherwise apply
to the application under section 122.
‘‘(2) EXCEPTIONS.—(A) An application shall
not be published under paragraph (1) if that appli-
cation is—
‘‘(i) no longer pending;
‘‘(ii) subject to a secrecy order under sec-
tion 181 of this title;
‘‘(iii) a provisional application filed under
section 111(b) of this title; or
‘‘(iv) an application for a design patent
filed under chapter 16 of this title.
‘‘(B) No application for a patent shall be pub-
lished under paragraph (1) if the publication or dis-
closure of such invention would be detrimental to the
national security. The Director shall establish appro-
priate procedures to ensure that such applications
are promptly identified and the secrecy of such in-
ventions is maintained in accordance with chapter
17 of this title.
‘‘(3) PUBLIC PARTICIPATION.—Any party shall
have the opportunity to submit to the Director for
the record prior art (including, but not limited to,
evidence of knowledge or use, or public use or sale,
under section 102), file a protest, or petition the Di-
rector to conduct a proceeding to determine whether
the invention was known or used, or was in public
use, or on sale, under section 102 or is obvious
under section 103. The Director shall conduct such
a proceeding if the petition—
‘‘(i) is in writing;
‘‘(ii) is accompanied by payment of the fee
set forth in section 41(a) of this title; and
‘‘(iii) sets forth in detail the basis on which
the proceeding is requested.
‘‘(4) AVAILABILITY
OF
INFORMATION.—Infor-
mation submitted pursuant to paragraph (3) shall be
considered during the examination of the patent ap-
plication.
‘‘(5) PROVISIONAL RIGHTS.—During the period
of pendency of an application after publication, an
applicant shall have provisional rights pursuant to
section 154 of this title.
‘‘§ 322. Opposition procedures
‘‘(a) ADMINISTRATIVE OPPOSITION PANEL.—
‘‘(1) ESTABLISHMENT.—The Director shall, not
later than 1 year after the date of enactment of the
Business Method Patent Improvement Act of 2001,
establish an Administrative Opposition Panel. The
Administrative Opposition Panel shall be comprised
of not less than 18 administrative opposition judges,
each of whom shall be an individual of competent
legal knowledge and scientific ability. Upon estab-
lishment of the Administrative Opposition Panel, the
Director shall publish notice of the establishment of
the Panel in the Federal Register.
‘‘(2) ASSIGNMENT OF PATENT EXAMINERS TO
PANEL.—Patent examiners may be assigned on de-
tail to assist the Administrative Opposition Panel in
carrying out opposition proceedings under this sec-
tion, except that a patent examiner may not be as-
signed to assist in review of a patent application ex-
amined by that patent examiner. The Director shall
establish procedures by which an opposition is heard
under subsection (b).
‘‘(b) OPPOSITION PROCEDURES.—
‘‘(1) REQUEST FOR OPPOSITION.—(A) Any per-
son may file a request for an opposition to a patent
on a business method invention on the basis of sec-
tion 101, 102, 103, or 112 of this title. Such a re-
quest is valid only if the request—
‘‘(i) is made not later than 9 months after
the date of issuance of the patent;
‘‘(ii) is in writing;
‘‘(iii) is accompanied by payment of the
opposition fee set forth in section 41(a) of this
title; and
‘‘(iv) sets forth in detail the basis on which
the opposition is requested.
‘‘(B) Not later than 60 days after receiving a
valid request under subparagraph (A), the Director
shall issue an order for an opposition proceeding to
be held on the record after opportunity for a hear-
ing, and shall promptly send a copy of the request
to the owner of record of the patent. The patent
owner shall be provided a reasonable period, but in
no case less than 60 days after the date on which
a copy of the request is given or mailed to the pat-
ent owner, within which the owner may file a state-
ment in reply to the grounds for the request for op-
position, including any amendment to the patent and
new claim or claims, for consideration in the opposi-
tion proceeding. If the patent owner files such a
statement, the patent owner shall promptly serve a
copy of the statement on the third-party requester.
Not later than 2 months after the date of such serv-
ice, the third-party requester may file and have con-
sidered in the opposition proceeding a reply to the
statement filed by the patent owner.
‘‘(2) 
CONDUCT
OF
OPPOSITION
PRO-
CEEDINGS.—Each opposition shall be heard by one
administrative opposition judge, and no party shall
be permitted ex parte communication with the ad-
ministrative opposition judge. In addition to the
statements and replies set forth in paragraph (1),
the administrative opposition judge may consider
evidence that the judge considers relevant, including
evidence that is presented in any oral testimony (in-
cluding exhibits and expert testimony) in direct or
cross examination, or in any deposition, affidavit, or
other documentary form, whether voluntary or com-
pelled. In any opposition proceeding, the Federal
Rules of Evidence shall apply.
‘‘(3) AMENDMENTS
TO
PATENT
CLAIMS.—A
patent applicant may propose to amend a patent
claim or propose a new claim at any time during the
opposition proceeding, except that no proposed
amended or new claim enlarging the scope of a claim
of the patent may be permitted at any time during
an opposition proceeding under this section.
‘‘(4) DETERMINATION.—Not later than 18
months after the filing of a request for an opposition
under this section, the administrative opposition
judge in the opposition proceeding shall determine
the patentability of the subject matter of the patent,
a record of the administrative opposition judge’s de-
termination under this section shall be placed in the
official file of the patent, and a copy shall promptly
be given or mailed to the owner of record of the pat-
ent and to the third-party requester.
‘‘(5) APPEALS.—Any party to the opposition
may appeal a decision of the Administrative Opposi-
tion Panel under the provisions of section 134 of
this title, and may seek court review under the pro-
visions of sections 141 through 145 of this title, with
respect to any decision in regard to the patentability
of any original or proposed amended or new claim
of the patent. A patent owner may be a party to an
appeal taken by a third-party requester. Any third-
party requester may be a party to an appeal taken
by a patent owner.
‘‘(6) CERTIFICATION
OF
PATENTABILITY.—In
an opposition proceeding under this chapter, when
the time for appeal has expired or any appeal pro-
ceeding has terminated, the Director shall issue and
publish a certificate canceling any claim of the pat-
ent finally determined to be unpatentable, con-
firming any claim of the patent determined to be
patentable, and incorporating in the patent any pro-
posed amended or new claim determined to be pat-
entable.
‘‘(7) EFFECT OF DETERMINATION.—Any pro-
posed, amended, or new claim determined to be pat-
entable and incorporated into a patent following an
opposition proceeding shall have the same effect as
that specified in section 252 of this title for reissued
patents on the right of any person who made, pur-
chased, or used within the United States, or im-
ported into the United States, anything patented by
such proposed amended or new claim, or who made
substantial preparations therefor, prior to issuance
of a certificate under paragraph (6) of this sub-
section.
‘‘§ 323. Effect on other proceedings
‘‘(a) RIGHT TO LITIGATION.—Subject to subsections
(b) and (c), proceedings under section 322 shall not alter
or prejudice any party’s right to pursue remedies under
provisions of law other than this section. In the case of
court proceedings, other than an appeal of a decision in
an opposition proceeding under this section, the court may
consider any matter independently of any opposition pro-
ceeding under this section.
‘‘(b) EFFECT OF FINAL DECISIONS.—
‘‘(1) IN FUTURE OPPOSITION PROCEEDINGS.—
If a final decision has been entered against a party
in a civil action arising in whole or in part under
section 1338 of title 28, establishing that the party
has not sustained its burden of proving the invalidity
of any patent claim, or if a final decision in an inter
partes reexamination proceeding instituted by a
third-party requester is favorable to the patentability
of any original or proposed amended or new claim
of the patent—
‘‘(A) neither that party to the civil action,
the third-party requester, nor the privies of that
party or third-party requester may thereafter
request an opposition to such patent claim on
the basis of issues which that party, third-party
requester, or the privies of that party or third-
party requester raised in such civil action or
inter partes reexamination proceeding (as the
case may be); and
‘‘(B) an opposition requested by that
party, third-party requester, or the privies of
that party or third-party requester on the basis
of such issues may not thereafter be maintained
by the Office.
‘‘(2) EFFECT OF FINAL DECISION IN OPPOSI-
TION.—If a final decision in an opposition pro-
ceeding instituted by a third-party requester is fa-
vorable to the patentability of any original or pro-
posed amended or new claim of the patent—
‘‘(A) neither the third-party requester, nor
the privies of that third-party requester, may
thereafter bring a civil action under section
1338 of title 28, or request an inter partes re-
examination of, or an opposition to, such patent
claim on the basis of issues which that third-
party requester, or the privies of that third-
party requester, raised in such opposition pro-
ceeding; and
‘‘(B) an inter partes reexamination or op-
position requested by that third-party requester,
or the privies of that third-party requester, on
the basis of such issues may not thereafter be
maintained by the Office.
‘‘(3) NEW EVIDENCE.—Paragraphs (1) and (2)
do not prevent the assertion by a party to a civil ac-
tion or a third-party requester of invalidity based on
newly discovered prior art, or other evidence, un-
available to that party or third-party requester, as
the case may be, and the Patent and Trademark Of-
fice, at the time of the civil action, inter partes reex-
amination, or opposition proceeding (as the case
may be).
‘‘(c) STAY OF LITIGATION.—Once an order for an op-
position proceeding with respect to a patent has been
issued under section 322(b)(1)(B), any party to the pro-
ceeding may obtain a stay of any pending court proceeding
(other than an appeal to the Court of Appeals for the Fed-
eral Circuit) which involves an issue of patentability of any
claims of the patent which are the subject of the opposi-
tion proceeding, unless the court before which such litiga-
tion is pending determines that a stay would not serve the
interests of justice.
‘‘§ 324. Burden of proof
‘‘(a) BURDEN OF PROOF.—In the case of reexamina-
tion, interference, opposition, or other legal challenge (in-
cluding a civil action brought in whole or in part under
section 1338 of title 28) to a patent (or an application
for a patent) on a business method invention, the party
producing evidence of invalidity or ineligibility shall have
the burden of showing by a preponderance of the evidence
the invalidity of the patent or ineligibility of the subject
matter of the application.’’.
(b) FEES.—Section 41(a) of title 35, United States
Code, is amended—
(1) by redesignating paragraphs (7) through
(15) as paragraphs (9) through (17), respectively;
and
(2) by inserting after paragraph (6) the fol-
lowing:
‘‘(7)(A) On filing an opposition under chapter
32 to a patent on a business method invention based
on prior art citations or obviousness, a fee of $200.
‘‘(B) On filing an opposition under chapter 32
to a patent on a business method invention on any
other basis, a fee of $5,000.
‘‘(C) The Director may waive the payment by
an individual of fees under this paragraph if such
waiver is in the public interest.
‘‘(8) On filing a request for a proceeding to de-
termine whether an invention claimed in an applica-
tion was known or used, or has been in public use
or on sale, under section 102, a fee of $35.’’.
(c) CLERICAL AMENDMENT.—The table of chapters
for part III of title 35, United States Code, is amended
by adding at the end the following:
‘‘32. Patents on Business Method Inventions .........................
321.’’.
SEC. 4. NONOBVIOUSNESS.
Section 103 of title 35, United States Code, is
amended by adding at the end the following:
‘‘(d)(1) A business method invention shall be pre-
sumed obvious under this section if the only significant
difference between the combined teachings of the prior art
and the claimed invention is that the claimed invention
is appropriate for use with a computer technology,
unless—
‘‘(A) the application of the computer technology
is novel; or
‘‘(B) the computer technology is novel and not
the subject of another patent or patent application.
‘‘(2)(A) An applicant or patentee may rebut the pre-
sumption under paragraph (1) upon a showing by a pre-
ponderance of the evidence that the invention is not obvi-
ous to persons of ordinary skill in all relevant arts.
‘‘(B) Those areas of art which are relevant for pur-
poses of subparagraph (A) include the field of the business
method and the field of the computer implementation.’’.
SEC. 5. REQUIREMENT TO DISCLOSE SEARCH.
The Director of the Patent and Trademark Office
shall, within 30 days after the date of enactment of this
Act, publish notice of rulemaking proceedings to amend
the rules of the Patent and Trademark Office to require
an applicant for a patent for a business method invention
to disclose in the application the extent to which the appli-
cant searched for prior art to meet the requirements of
title 35, United States Code. Such amendment shall in-
clude appropriate penalties for failure to comply with such
requirement. The Director shall ensure that the amend-
ment is implemented as promptly as possible.
SEC. 6. CONFORMING AMENDMENTS.
(a) DEFINITIONS.—Section 100(e) of title 35, United
States Code, is amended by striking ‘‘or inter partes reex-
amination under section 311’’ and inserting ‘‘, inter partes
reexamination under section 311, or an opposition under
section 322,’’.
(b) BOARD
OF
PATENT
APPEALS
AND
INTER-
FERENCES.—Section 134 of title 35, United States Code,
is amended—
(1) in subsection (b)—
(A) by inserting ‘‘or opposition’’ after ‘‘re-
examination’’; and
(B) by inserting ‘‘or the Administrative
Opposition Panel (as the case may be)’’ after
‘‘administrative patent judge’’; and
(2) in subsection (c)—
(A) by striking ‘‘proceeding’’ and inserting
‘‘reexamination proceeding or an opposition
proceeding’’;
(B) by inserting ‘‘or the Administrative
Opposition Panel (as the case may be)’’ after
‘‘administrative patent judge’’; and
(C) in the last sentence, by inserting ‘‘in
an inter partes reexamination proceeding’’ after
‘‘requester’’.
(c) APPEAL TO COURT OF APPEALS.—(1) Section
141 of title 35, United States Code, is amended in the
second sentence by inserting after ‘‘reexamination pro-
ceeding’’ the following: ‘‘, and any party in an opposition
proceeding, who is’’.
(2) Section 143 of title 35, United States Code, is
amended by inserting after the third sentence the fol-
lowing: ‘‘In any opposition proceeding, the Administrative
Opposition Panel shall submit to the court in writing the
grounds for the decision of the Panel, addressing all the
issues involved in the appeal.’’.
(d) DEFENSE TO INFRINGEMENT.—Section 273 of
title 35, United States Code, is amended—
(1) in subsection (a)—
(A) by striking paragraph (3) and redesig-
nating paragraph (4) as paragraph (3); and
(B) in paragraphs (1) and (2) by striking
‘‘method’’ and inserting ‘‘business method’’;
and
(2) in subsection (b), by striking ‘‘method’’
each place it appears and inserting ‘‘business meth-
od’’.
(e) OTHER PUBLICATION
OF PATENT APPLICA-
TIONS.—Section 122 of title 35, United States Code, is
amended by adding at the end the following:
‘‘(e) BUSINESS METHOD INVENTIONS.—In the case
of applications for business method inventions, section 321
of this title applies in lieu of this section.’’.
SEC. 7. EFFECTIVE DATE.
(a) IN GENERAL.—Subject to subsections (b), (c),
and (d), this Act and the amendments made by this Act
apply to—
(1) any application for patent that is pending
on, or that is filed on or after, the date of enactment
of this Act; and
(2) any patent issued on or after the date of en-
actment of this Act.
(b) PENDING APPLICATIONS.—In applying section
321 of title 35, United States Code, as added by section
3 of this Act, to an application for patent that is pending
on the date of enactment of this Act—
(1) the Director of the Patent and Trademark
Office shall make the determination required by sub-
section (b)(1)(B) of such section 321 within 12
months after the date of enactment of this Act, or
on the date specified in such section 321, whichever
occurs later;
(2) subject to paragraph (3), such an applica-
tion shall be published—
(A) on the date specified in section 321 of
title 35, United States Code, or
(B) the date on which the determination is
made pursuant to paragraph (1),
whichever occurs later; and
(3) in no case shall an application that would
be published under section 122 of title 35, United
States Code, but for the enactment of this Act, be
published later than the date specified in such sec-
tion 122, regardless of when the Director makes the
determination under paragraph (1).
(c) PATENTS ISSUED BEFORE ESTABLISHMENT OF
ADMINISTRATIVE OPPOSITION PANEL.—In the case of a
patent issued after the enactment of this Act but before
the date on which notice of the establishment of the Ad-
ministrative Opposition Panel is published under section
322(a)(1) of title 35, United States Code (as added by
this Act), a request for an opposition to the patent may
be filed under section 322(b)(1)(A) of title 35, United
States Code (as added by this Act), notwithstanding the
9-month requirement set forth in clause (i) of that section,
if the request is filed not later than 9 months after the
date on which such notice is so published.
Æ