II
Calendar No. 400
106TH CONGRESS
1ST SESSION
H. R. 1907
IN THE SENATE OF THE UNITED STATES
AUGUST 4, 1999
Received
OCTOBER 8, 1999
Read twice and referred to the Committee on the Judiciary
NOVEMBER 5, 1999
Reported by Mr. HATCH, with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
AN ACT
To amend title 35, United States Code, to provide enhanced
protection for inventors and innovators, protect patent
terms, reduce patent litigation, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘American Inventors
Protection Act of 1999’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents is as follows:
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Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—INVENTORS’ RIGHTS
Sec. 101. Short title.
Sec. 102. Invention promotion services.
Sec. 103. Effective date.
TITLE II—FIRST INVENTOR DEFENSE
Sec. 201. Short title.
Sec. 202. Defense to patent infringement based on earlier inventor.
Sec. 203. Effective date and applicability.
TITLE III—PATENT TERM GUARANTEE
Sec. 301. Short title.
Sec. 302. Patent term guarantee authority.
Sec. 303. Continued examination of patent applications.
Sec. 304. Technical clarification.
Sec. 305. Effective date.
TITLE IV—UNITED STATES PUBLICATION OF PATENT
APPLICATIONS PUBLISHED ABROAD
Sec. 401. Short title.
Sec. 402. Publication.
Sec. 403. Time for claiming benefit of earlier filing date.
Sec. 404. Provisional rights.
Sec. 405. Prior art effect of published applications.
Sec. 406. Cost recovery for publication.
Sec. 407. Conforming amendments.
Sec. 408. Effective date.
TITLE V—OPTIONAL INTER PARTES REEXAMINATION
PROCEDURE
Sec. 501. Short title.
Sec. 502. Ex parte reexamination of patents.
Sec. 503. Definitions.
Sec. 504. Optional inter partes reexamination procedures.
Sec. 505. Conforming amendments.
Sec. 506. Report to Congress.
Sec. 507. Estoppel effect of reexamination.
Sec. 508. Effective date.
TITLE VI—PATENT AND TRADEMARK OFFICE
Sec. 601. Short title.
Subtitle A—United States Patent and Trademark Office
Sec. 611. Establishment of Patent and Trademark Office.
Sec. 612. Powers and duties.
Sec. 613. Organization and management.
Sec. 614. Public Advisory Committees.
Sec. 615. Patent and Trademark Office funding.
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Sec. 616. Conforming amendments.
Sec. 617. Trademark Trial and Appeal Board.
Sec. 618. Board of Patent Appeals and Interferences.
Sec. 619. Annual report of Director.
Sec. 620. Suspension or exclusion from practice.
Sec. 621. Pay of Director and Deputy Director.
Sec. 622. Study on Alternative Fee Structures.
Subtitle B—Effective Date; Technical Amendments
Sec. 631. Effective date.
Sec. 632. Technical and conforming amendments.
Subtitle C—Miscellaneous Provisions
Sec. 641. References.
Sec. 642. Exercise of authorities.
Sec. 643. Savings provisions.
Sec. 644. Transfer of assets.
Sec. 645. Delegation and assignment.
Sec. 646. Authority of Director of the Office of Management and Budget with
respect to functions transferred.
Sec. 647. Certain vesting of functions considered transfers.
Sec. 648. Availability of existing funds.
Sec. 649. Definitions.
TITLE VII—MISCELLANEOUS PATENT PROVISIONS
Sec. 701. Provisional applications.
Sec. 702. International applications.
Sec. 703. Certain limitations on damages for patent infringement not applica-
ble.
Sec. 704. Electronic filing and publications.
Sec. 705. Study and report on biological deposits in support of biotechnology
patents.
Sec. 706. Prior invention.
Sec. 707. Prior art exclusion for certain commonly assigned patents.
TITLE I—INVENTORS’ RIGHTS
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Inventors’ Rights
Act’’.
SEC. 102. INVENTION PROMOTION SERVICES.
Part I of title 35, United States Code, is amended
by adding after chapter 4 the following chapter:
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‘‘CHAPTER 5—INVENTION PROMOTION
SERVICES
‘‘Sec.
‘‘51. Definitions.
‘‘52. Contracting requirements.
‘‘53. Standard provisions for cover notice.
‘‘54. Reports to customer required.
‘‘55. Mandatory contract terms.
‘‘56. Remedies.
‘‘57. Records of complaints.
‘‘58. Fraudulent representation by an invention promoter.
‘‘59. Rule of construction.
‘‘§ 51. Definitions
‘‘For purposes of this chapter—
‘‘(1) the term ‘contract for invention promotion
services’ means a contract by which an invention
promoter undertakes invention promotion services
for a customer;
‘‘(2) the term ‘customer’ means any person,
firm, partnership, corporation, or other entity who
enters into a financial relationship or a contract with
an invention promoter for invention promotion serv-
ices;
‘‘(3) the term ‘invention promoter’ means any
person, firm, partnership, corporation, or other enti-
ty who offers to perform or performs for, or on be-
half of, a customer any act described under para-
graph (4), but does not include—
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‘‘(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;
‘‘(C) any person duly registered with, and
in good standing before, the United States Pat-
ent and Trademark Office acting within the
scope of that person’s registration to practice
before the Patent and Trademark Office, except
when that person performs any act described in
subparagraph (B) or (C) of paragraph (4); or
‘‘(D) any person or entity involved in the
evaluation to determine commercial potential of,
or offering to license or sell, a utility patent or
a previously filed nonprovisional utility patent
application; 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
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property, other than evaluation by a person li-
censed by a State to practice law who is acting
solely within the scope of that person’s profes-
sional license;
‘‘(B) evaluating the invention to determine
its commercial potential by any person for pur-
poses other than providing venture capital; or
‘‘(C) marketing, brokering, offering to li-
cense or sell, or promoting the invention or a
product or service in which the invention is in-
corporated or used, except that the display only
of an invention at a trade show or exhibit shall
not be considered to be invention promotion
services.
‘‘§ 52. Contracting requirements
‘‘(a) IN GENERAL.—(1) Every contract for invention
promotion services shall be in writing and shall be subject
to the provisions of this chapter. A copy of the signed writ-
ten contract shall be given to the customer at the time
the customer enters into the contract.
‘‘(2) If a contract is entered into for the benefit of
a third party, the identity and address of such party shall
be disclosed by such party’s agent and such party shall
be considered a customer for purposes of this chapter.
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‘‘(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-
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tract for invention promotion services by sending a written
letter to the invention promoter stating the customer’s in-
tent to cancel the contract. The letter of termination must
be deposited with the United States Postal Service on or
before 5 business days after the date upon which the cus-
tomer or the invention promoter executes the contract,
whichever is later.
‘‘(2) Delivery of a promissory note, check, bill of ex-
change, or negotiable instrument of any kind to the inven-
tion promoter or to a third party for the benefit of the
invention promoter, without regard to the date or dates
appearing in such instrument, shall be deemed payment
received by the invention promoter on the date received
for purposes of this section.
‘‘§ 53. Standard provisions for cover notice
‘‘(a) CONTENTS.—Every contract for invention pro-
motion services shall have a conspicuous and legible cover
sheet attached with the following notice imprinted in bold-
face type of not less than 12-point size:
‘YOU HAVE THE RIGHT TO TERMINATE THIS
CONTRACT. TO TERMINATE THIS CONTRACT,
YOU MUST SEND A WRITTEN LETTER TO THE
COMPANY STATING YOUR INTENT TO CANCEL
THIS CONTRACT.
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‘THE LETTER OF TERMINATION MUST BE
DEPOSITED WITH THE UNITED STATES POSTAL
SERVICE ON OR BEFORE FIVE (5) BUSINESS
DAYS AFTER THE DATE ON WHICH YOU OR THE
COMPANY EXECUTE THE CONTRACT, WHICH-
EVER IS LATER.
‘THE
TOTAL
NUMBER
OF
INVENTIONS
EVALUATED BY THE INVENTION PROMOTER
FOR COMMERCIAL POTENTIAL IN THE PAST
FIVE (5) YEARS IS XXXXX. OF THAT NUMBER,
XXXXX RECEIVED POSITIVE EVALUATIONS AND
XXXXX RECEIVED NEGATIVE EVALUATIONS.
‘IF YOU ASSIGN EVEN A PARTIAL INTEREST
IN THE INVENTION TO THE INVENTION PRO-
MOTER, THE INVENTION PROMOTER MAY HAVE
THE RIGHT TO SELL OR DISPOSE OF THE IN-
VENTION WITHOUT YOUR CONSENT AND MAY
NOT HAVE TO SHARE THE PROFITS WITH YOU.
‘THE TOTAL NUMBER OF CUSTOMERS WHO
HAVE CONTRACTED WITH THE INVENTION PRO-
MOTER IN THE PAST FIVE (5) YEARS IS XXXXX.
THE TOTAL NUMBER OF CUSTOMERS KNOWN
BY THIS INVENTION PROMOTER TO HAVE RE-
CEIVED, BY VIRTUE OF THIS INVENTION PRO-
MOTER’S
PERFORMANCE,
AN
AMOUNT
OF
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MONEY IN EXCESS OF THE AMOUNT PAID BY
THE
CUSTOMER
TO
THIS
INVENTION
PRO-
MOTER IS XXXXXXX. AS A RESULT OF THE EF-
FORTS OF THIS INVENTION PROMOTER, XXXXX
NUMBER OF CUSTOMERS HAVE RECEIVED LI-
CENSE AGREEMENTS FOR THEIR INVENTIONS.
‘THE OFFICERS OF THIS INVENTION PRO-
MOTER HAVE COLLECTIVELY OR INDIVIDUALLY
BEEN AFFILIATED IN THE LAST TEN (10) YEARS
WITH THE FOLLOWING INVENTION PROMOTION
COMPANIES: (LIST THE NAMES AND ADDRESSES
OF
ALL
PREVIOUS
INVENTION
PROMOTION
COMPANIES WITH WHICH THE PRINCIPAL OFFI-
CERS HAVE BEEN AFFILIATED AS OWNERS,
AGENTS, OR EMPLOYEES). YOU ARE ENCOUR-
AGED TO CHECK WITH THE UNITED STATES
PATENT AND TRADEMARK OFFICE, THE FED-
ERAL TRADE COMMISSION, YOUR STATE ATTOR-
NEY GENERAL’S OFFICE, AND THE BETTER
BUSINESS
BUREAU
FOR
ANY
COMPLAINTS
FILED AGAINST ANY OF THESE COMPANIES
WHICH RESULTED IN REGULATORY SANCTIONS
OR OTHER CORRECTIVE ACTIONS.
‘YOU ARE ENCOURAGED TO CONSULT WITH
AN ATTORNEY OF YOUR OWN CHOOSING BE-
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FORE
SIGNING
THIS
CONTRACT.
BY
PRO-
CEEDING WITHOUT THE ADVICE OF AN ATTOR-
NEY REGISTERED TO PRACTICE BEFORE THE
UNITED STATES PATENT AND TRADEMARK OF-
FICE,
YOU
COULD
LOSE
ANY
RIGHTS
YOU
MIGHT HAVE IN YOUR IDEA OR INVENTION.’.
‘‘(b) OTHER REQUIREMENTS FOR COVER NOTICE.—
The cover notice shall contain the items required under
subsection (a) and the name, primary office address, and
local office address of the invention promoter, and may
contain no other matter.
‘‘(c) DISCLOSURE OF CERTAIN CUSTOMERS NOT RE-
QUIRED.—The requirement in the notice set forth in sub-
section (a) to include the ‘TOTAL NUMBER OF CUS-
TOMERS WHO HAVE CONTRACTED WITH THE
INVENTION PROMOTER IN THE PAST FIVE (5)
YEARS’ need not include information with respect to cus-
tomers who have purchased trade show services, research,
advertising, or other nonmarketing services from the in-
vention promoter, nor with respect to customers who have
defaulted in their payment to the invention promoter.
‘‘§ 54. Reports to customer required
‘‘With respect to every contract for invention pro-
motion services, the invention promoter shall deliver to the
customer at the address specified in the contract, at least
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once every 3 months throughout the term of the contract,
a written report that identifies the contract and includes—
‘‘(1) a full, clear, and concise description of the
services performed to the date of the report and of
the services yet to be performed and names of all
persons who it is known will perform the services;
and
‘‘(2) the name and address of each person,
firm, corporation, or other entity to whom the sub-
ject matter of the contract has been disclosed, the
reason for each such disclosure, the nature of the
disclosure, and complete and accurate summaries of
all responses received as a result of those disclo-
sures.
‘‘§ 55. Mandatory contract terms
‘‘(a) MANDATORY TERMS.—Each contract for inven-
tion promotion services shall include in boldface type of
not less than 12-point size—
‘‘(1) the terms and conditions of payment and
contract termination rights required under section
52;
‘‘(2) a statement that the customer may avoid
entering into the contract by not making the initial
payment to the invention promoter;
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‘‘(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
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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.
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‘‘(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-
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cover in a civil action against the invention promoter (or
the officers, directors, or partners of such invention pro-
moter) in addition to reasonable costs and attorneys’ fees,
the greater of—
‘‘(A) $5,000; or
‘‘(B) the amount of actual damages sustained
by the customer.
‘‘(2) Notwithstanding paragraph (1), the court may
increase damages to not more than 3 times the amount
awarded, taking into account past complaints made
against the invention promoter that resulted in regulatory
sanctions or other corrective actions based on those
records compiled by the Director under section 57.
‘‘(c) REBUTTABLE PRESUMPTION OF INJURY.—For
purposes of this section, substantial violation of any provi-
sion of this chapter by an invention promoter or execution
by the customer of a contract for invention promotion
services in reliance on any material false or fraudulent
statements or representations or omissions of material
fact shall establish a rebuttable presumption of injury.
‘‘§ 57. Records of complaints
‘‘(a) RELEASE OF COMPLAINTS.—The Director shall
make all complaints received by the United States Patent
and Trademark Office involving invention promoters pub-
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licly available, together with any response of the invention
promoters.
‘‘(b) REQUEST
FOR COMPLAINTS.—The Director
may request complaints relating to invention promotion
services from any Federal or State agency and include
such complaints in the records maintained under sub-
section (a), together with any response of the invention
promoters.
‘‘§ 58. Fraudulent representation by an invention pro-
moter
‘‘Whoever, in providing invention promotion services,
knowingly provides any false or misleading statement, rep-
resentation, or omission of material fact to a customer or
fails to make all the disclosures required under this chap-
ter, shall be guilty of a misdemeanor and fined not more
than $10,000 for each offense.
‘‘§ 59. Rule of construction
‘‘Except as expressly provided in this chapter, no pro-
vision of this chapter shall be construed to affect any obli-
gation, right, or remedy provided under any other Federal
or State law.’’.
SEC. 103. EFFECTIVE DATE.
This title and the amendments made by this title
shall take effect 60 days after the date of the enactment
of this Act.
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TITLE II—FIRST INVENTOR
DEFENSE
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘First Inventor Defense
Act’’.
SEC. 202. DEFENSE TO PATENT INFRINGEMENT BASED ON
EARLIER INVENTOR.
(a) DEFENSE.—Chapter 28 of title 35, United States
Code, is amended by adding at the end the following new
section:
‘‘§ 273. Defense to infringement based on earlier in-
ventor
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) the terms ‘commercially used’ and ‘com-
mercial use’ mean use of a method in the United
States, so long as such use is in connection with an
internal commercial use or an actual arm’s-length
sale or other arm’s-length commercial transfer of a
useful end result, whether or not the subject matter
at issue is accessible to or otherwise known to the
public, except that the subject matter for which com-
mercial marketing or use is subject to a premar-
keting regulatory review period during which the
safety or efficacy of the subject matter is estab-
lished, including any period specified in section
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156(g), shall be deemed ‘commercially used’ and in
‘commercial use’ during such regulatory review pe-
riod;
‘‘(2) in the case of activities performed by a
nonprofit research laboratory, or nonprofit entity
such as a university, research center, or hospital, a
use for which the public is the intended beneficiary
shall be considered to be a use described in para-
graph (1), except that the use—
‘‘(A) may be asserted as a defense under
this section only for continued use by and in
the laboratory or nonprofit entity; and
‘‘(B) may not be asserted as a defense
with respect to any subsequent commercializa-
tion or use outside such laboratory or nonprofit
entity;
‘‘(3) the term ‘method’ means a method of
doing or conducting business; 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.—.
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‘‘(1) IN GENERAL.—It shall be a defense to an
action for infringement under section 271 of this
title with respect to any subject matter that would
otherwise infringe one or more claims for a method
in the patent being asserted against a person, if
such person had, acting in good faith, actually re-
duced the subject matter to practice at least one
year before the effective filing date of such patent,
and commercially used the subject matter before the
effective filing date of such patent.
‘‘(2) EXHAUSTION
OF
RIGHT.—The sale or
other disposition, of a useful end result produced by
a patented method, by a person entitled to assert a
defense under this section with respect to that useful
end result shall exhaust the patent owner’s rights
under the patent to the extent such rights would
have been exhausted had such sale or other disposi-
tion been made by the patent owner.
‘‘(3) LIMITATIONS AND QUALIFICATIONS OF DE-
FENSE.—The defense to infringement under this
section is subject to the following:
‘‘(A) PATENT.—A person may not assert
the defense under this section unless the inven-
tion for which the defense is asserted is for a
method.
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‘‘(B) DERIVATION.—A person may not as-
sert the defense under this section if the subject
matter on which the defense is based was de-
rived from the patentee or persons in privity
with the patentee.
‘‘(C) NOT A GENERAL LICENSE.—The de-
fense asserted by a person under this section is
not a general license under all claims of the
patent at issue, but extends only to the specific
subject matter claimed in the patent with re-
spect to which the person can assert a defense
under this chapter, except that the defense shall
also extend to variations in the quantity or vol-
ume of use of the claimed subject matter, and
to improvements in the claimed subject matter
that
do
not
infringe
additional
specifically
claimed subject matter of the patent.
‘‘(4) BURDEN OF PROOF.—A person asserting
the defense under this section shall have the burden
of establishing the defense by clear and convincing
evidence.
‘‘(5) ABANDONMENT OF USE.—A person who
has abandoned commercial use of subject matter
may not rely on activities performed before the date
of such abandonment in establishing a defense under
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this section with respect to actions taken after the
date of such abandonment.
‘‘(6) PERSONAL DEFENSE.—The defense under
this section may be asserted only by the person who
performed the acts necessary to establish the defense
and, except for any transfer to the patent owner, the
right to assert the defense shall not be licensed or
assigned or transferred to another person except as
an ancillary and subordinate part of a good faith as-
signment or transfer for other reasons of the entire
enterprise or line of business to which the defense
relates.
‘‘(7) LIMITATION ON SITES.—A defense under
this section, when acquired as part of a good faith
assignment or transfer of an entire enterprise or line
of business to which the defense relates, may only be
asserted for uses at sites where the subject matter
that would otherwise infringe one or more of the
claims is in use before the later of the effective filing
date of the patent or the date of the assignment or
transfer of such enterprise or line of business.
‘‘(8)
UNSUCCESSFUL
ASSERTION
OF
DE-
FENSE.—If the defense under this section is pleaded
by a person who is found to infringe the patent and
who subsequently fails to demonstrate a reasonable
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basis for asserting the defense, the court shall find
the case exceptional for the purpose of awarding at-
torney’s fees under section 285 of this title.
‘‘(9)
INVALIDITY.—A
patent
shall
not
be
deemed to be invalid under section 102 or 103 of
this title solely because a defense is raised or estab-
lished under this section.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions at the beginning of chapter 28 of title 35, United
States Code, is amended by adding at the end the fol-
lowing new item:
‘‘273. Defense to infringement based on earlier inventor.’’.
SEC. 203. EFFECTIVE DATE AND APPLICABILITY.
This title and the amendments made by this title
shall take effect on the date of the enactment of this Act,
but shall not apply to any action for infringement that
is pending on such date of the enactment or with respect
to any subject matter for which an adjudication of in-
fringement, including a consent judgment, has been made
before such date of the enactment.
TITLE III—PATENT TERM
GUARANTEE
SEC. 301. SHORT TITLE.
This title may be cited as the ‘‘Patent Term Guar-
antee Act’’.
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SEC. 302. PATENT TERM GUARANTEE AUTHORITY.
(a)
ADJUSTMENT
OF
PATENT
TERM.—Section
154(b) of title 35, United States Code, is amended to read
as follows:
‘‘(b) ADJUSTMENT OF PATENT TERM.—
‘‘(1) PATENT TERM GUARANTEES.—
‘‘(A)
GUARANTEE
OF
PROMPT
PATENT
AND TRADEMARK OFFICE RESPONSES.—Subject
to the limitations under paragraph (2), if the
issue of an original patent is delayed due to the
failure of the Patent and Trademark Office
to—
‘‘(i) make a notification of the rejec-
tion of any claim for a patent or any objec-
tion or argument under section 132, or
give or mail a written notice of allowance
under section 151, within 14 months after
the date on which the application was filed;
‘‘(ii) respond to a reply under section
132, or to an appeal taken under section
134, within 4 months after the date on
which the reply was filed or the appeal was
taken;
‘‘(iii) act on an application within 4
months after the date of a decision by the
Board of Patent Appeals and Interferences
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under section 134 or 135 or a decision by
a Federal court under section 141, 145, or
146 in a case in which allowable claims re-
main in the application; or
‘‘(iv) issue a patent within 4 months
after the date on which the issue fee was
paid under section 151 and all outstanding
requirements were satisfied,
the term of the patent shall be extended one
day for each day after the end of the period
specified in clause (i), (ii), (iii), or (iv), as the
case may be, until the action described in such
clause is taken.
‘‘(B) GUARANTEE OF NO MORE THAN 3-
YEAR APPLICATION PENDENCY.—Subject to the
limitations under paragraph (2), if the issue of
an original patent is delayed due to the failure
of the Patent and Trademark Office to issue a
patent within 3 years after the actual filing
date of the application in the United States, not
including—
‘‘(i) any time consumed by continued
examination of the application requested
by the applicant under section 132(b);
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‘‘(ii) any time consumed by a pro-
ceeding under section 135(a), any time
consumed by the imposition of an order
pursuant to section 181, or any time con-
sumed by appellate review by the Board of
Patent Appeals and Interferences or by a
Federal court; or
‘‘(iii) any delay in the processing of
the application by the Patent and Trade-
mark Office requested by the applicant ex-
cept as permitted by paragraph (3)(C),
the term of the patent shall be extended 1 day
for each day after the end of that 3-year period
until the patent is issued.
‘‘(C) GUARANTEE OR ADJUSTMENTS FOR
DELAYS DUE TO INTERFERENCES, SECRECY OR-
DERS,
AND
APPEALS.—Subject to the limita-
tions under paragraph (2), if the issue of an
original patent is delayed due to—
‘‘(i)
a
proceeding
under
section
135(a);
‘‘(ii) the imposition of an order pursu-
ant to section 181; or
‘‘(iii) appellate review by the Board of
Patent Appeals and Interferences or by a
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Federal court in a case in which the patent
was issued pursuant to a decision in the
review reversing an adverse determination
of patentability,
the term of the patent shall be extended one
day for each day of the pendency of the pro-
ceeding, order, or review, as the case may be.
‘‘(2) LIMITATIONS.—
‘‘(A) IN GENERAL.—To the extent that pe-
riods of delay attributable to grounds specified
in paragraph (1) overlap, the period of any ad-
justment granted under this subsection shall
not exceed the actual number of days the
issuance of the patent was delayed.
‘‘(B) DISCLAIMED TERM.—No patent the
term of which has been disclaimed beyond a
specified date may be adjusted under this sec-
tion beyond the expiration date specified in the
disclaimer.
‘‘(C) REDUCTION OF PERIOD OF ADJUST-
MENT.—
‘‘(i) The period of adjustment of the
term of a patent under paragraph (1) shall
be reduced by a period equal to the period
of time during which the applicant failed
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to engage in reasonable efforts to conclude
prosecution of the application.
‘‘(ii) With respect to adjustments to
patent term made under the authority of
paragraph (1)(B), an applicant shall be
deemed to have failed to engage in reason-
able efforts to conclude processing or ex-
amination of an application for the cumu-
lative total of any periods of time in excess
of 3 months that are taken to respond to
a notice from the Office making any rejec-
tion, objection, argument, or other request,
measuring such 3-month period from the
date the notice was given or mailed to the
applicant.
‘‘(iii) The Director shall prescribe reg-
ulations
establishing
the
circumstances
that constitute a failure of an applicant to
engage in reasonable efforts to conclude
processing or examination of an applica-
tion.
‘‘(3) PROCEDURES FOR PATENT TERM ADJUST-
MENT DETERMINATION.—
‘‘(A) The Director shall prescribe regula-
tions establishing procedures for the application
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for and determination of patent term adjust-
ments under this subsection.
‘‘(B)
Under
the
procedures
established
under subparagraph (A), the Director shall—
‘‘(i) make a determination of the pe-
riod of any patent term adjustment under
this subsection, and shall transmit a notice
of that determination with the written no-
tice of allowance of the application under
section 151; and
‘‘(ii) provide the applicant one oppor-
tunity to request reconsideration of any
patent
term
adjustment
determination
made by the Director.
‘‘(C) The Director shall reinstate all or
part of the cumulative period of time of an ad-
justment under paragraph (2)(C) if the appli-
cant, prior to the issuance of the patent, makes
a showing that, in spite of all due care, the ap-
plicant was unable to respond within the 3-
month period, but in no case shall more than 3
additional months for each such response be-
yond the original 3-month period be reinstated.
‘‘(D) The Director shall proceed to grant
the patent after completion of the Director’s de-
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termination of a patent term adjustment under
the
procedures
established
under
this
sub-
section, notwithstanding any appeal taken by
the applicant of such determination.
‘‘(4) APPEAL OF PATENT TERM ADJUSTMENT
DETERMINATION.—
‘‘(A) An applicant dissatisfied with a de-
termination made by the Director under para-
graph (3) shall have remedy by a civil action
against the Director filed in the United States
District Court for the District of Columbia
within 180 days after the grant of the patent.
Chapter 7 of title 5 shall apply to such action.
Any final judgment resulting in a change to the
period of adjustment of the patent term shall be
served on the Director, and the Director shall
thereafter alter the term of the patent to reflect
such change.
‘‘(B) The determination of a patent term
adjustment under this subsection shall not be
subject to appeal or challenge by a third party
prior to the grant of the patent.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 282 of title 35, United States Code,
is amended in the fourth paragraph by striking ‘‘156
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of this title’’ and inserting ‘‘154(b) or 156 of this
title’’.
(2) Section 1295(a)(4)(C) of title 28, United
States Code, is amended by striking ‘‘145 or 146’’
and inserting ‘‘145, 146, or 154(b)’’.
SEC. 303. CONTINUED EXAMINATION OF PATENT APPLICA-
TIONS.
Section 132 of title 35, United States Code, is
amended—
(1) in the first sentence by striking ‘‘Whenever’’
and inserting ‘‘(a) Whenever’’; and
(2) by adding at the end the following:
‘‘(b) The Director shall prescribe regulations to pro-
vide for the continued examination of applications for pat-
ent at the request of the applicant. The Director may es-
tablish appropriate fees for such continued examination
and shall provide a 50 percent reduction in such fees for
small entities that qualify for reduced fees under section
41(h)(1) of this title.’’.
SEC. 304. TECHNICAL CLARIFICATION.
Section 156(a) of title 35, United States Code, is
amended in the matter preceding paragraph (1) by insert-
ing ‘‘, which shall include any patent term adjustment
granted under section 154(b),’’ after ‘‘the original expira-
tion date of the patent’’.
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SEC. 305. EFFECTIVE DATE.
(a) SECTIONS 302 AND 304.—The amendments made
by sections 302 and 304 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
the date of the enactment of this Act.
(b) SECTION 303.—The amendments made by sec-
tion 303 shall take effect 6 months after the date of the
enactment of this Act.
TITLE IV—UNITED STATES PUB-
LICATION OF PATENT APPLI-
CATIONS
PUBLISHED
ABROAD
SEC. 401. SHORT TITLE.
This title may be referred to as the ‘‘Publication of
Foreign Filed Applications Act’’.
SEC. 402. PUBLICATION.
(a) 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 any such application shall be given
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without authority of the applicant or owner unless nec-
essary to carry out the provisions of an Act of Congress
or in such special circumstances as may be determined by
the Director.
‘‘(b) UNITED STATES PUBLICATION
OF APPLICA-
TIONS PUBLISHED ABROAD.—
‘‘(1) IN GENERAL.—(A) Subject to paragraph
(2), each application for patent, except applications
for design patents filed under chapter 16 and provi-
sional applications filed under section 111(b), shall
be published, in accordance with procedures deter-
mined by the Director, promptly upon the expiration
of a period of 18 months after the earliest filing date
for which a benefit is sought under this title. At the
request of the applicant, an application may be pub-
lished earlier than the end of such 18-month period.
‘‘(B) No information concerning published pat-
ent applications shall be made available to the public
except as the Director determines.
‘‘(C) Pursuant to this title and notwithstanding
any other provision of law, a determination by the
Director to release or not to release information con-
cerning a published patent application shall be final
and nonreviewable.
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‘‘(2) EXCEPTIONS.—(A) An application that is
no longer pending shall not be published.
‘‘(B) An application that is subject to a secrecy
order under section 181 shall not be published.
‘‘(C)(i) If an applicant, upon filing, makes a re-
quest that an application not be published pursuant
to paragraph (1), and states in such request that the
invention disclosed in the application has not been
the subject of an application filed in another coun-
try, or under a multilateral international agreement,
that requires publication of applications 18 months
after filing, the application shall not be published as
provided in paragraph (1).
‘‘(ii) An applicant may rescind a request made
under clause (i) at any time.
‘‘(iii) An applicant who has made a request
under clause (i) but who subsequently files, in a for-
eign country or under a multilateral international
agreement specified in clause (i), an application di-
rected to the invention disclosed in the application
filed in the Patent and Trademark Office, shall no-
tify the Director of such filing not later than 45
days after the date of the filing of such foreign or
international application. A failure of the applicant
to provide such notice within the prescribed period
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shall result in the application being regarded as
abandoned, unless it is shown to the satisfaction of
the Director that the delay in submitting the notice
was unintentional.
‘‘(iv) If a notice is made pursuant to clause
(iii), or the applicant rescinds a request pursuant to
clause (ii), the Director shall publish the application
on or as soon as is practical after the date that is
specified in clause (i).
‘‘(v) If an applicant has filed applications in
one or more foreign countries, directly or through a
multilateral international agreement, and such for-
eign filed applications corresponding to an applica-
tion filed in the Patent and Trademark Office or the
description of the invention in such foreign filed ap-
plications is less extensive than the application or
description of the invention in the application filed
in the Patent and Trademark Office, the applicant
may submit a redacted copy of the application filed
in the Patent and Trademark Office eliminating any
part or description of the invention in such applica-
tion that is not also contained in any of the cor-
responding applications filed in a foreign country.
The Director may only publish the redacted copy of
the application unless the redacted copy of the appli-
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cation is not received within 16 months after the
earliest effective filing date for which a benefit is
sought under this title. The provisions of section
154(d) shall not apply to a claim if the description
of the invention published in the redacted applica-
tion filed under this clause with respect to the claim
does not enable a person skilled in the art to make
and use the subject matter of the claim.
‘‘(c) PROTEST AND PRE-ISSUANCE OPPOSITION.—
The Director shall establish appropriate procedures to en-
sure that no protest or other form of pre-issuance opposi-
tion to the grant of a patent on an application may be
initiated after publication of the application without the
express written consent of the applicant.’’.
(b) STUDY BY GAO.—
(1) IN GENERAL.—The Comptroller General of
the United States shall conduct a study of appli-
cants for patents who file only in the United States
during the 3-year period beginning on the effective
date of this title.
(2) CONTENTS.—The study conducted under
paragraph (1) shall—
(A) consider the number of such applicants
for patent in relation to the number of appli-
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cants who file in the United States and outside
the United States;
(B) examine how many domestic-only filers
request at the time of filing not to be published;
(C) examine how many such filers rescind
that request or later choose to file abroad; and
(D) examine the manner of entity seeking
an application and any correlation that may
exist between such manner and publication of
patent applications.
(3) REPORT TO JUDICIARY COMMITTEES.—The
Comptroller General shall submit to the Committees
on the Judiciary of the House of Representatives
and the Senate the results of the study conducted
under this subsection.
SEC. 403. TIME FOR CLAIMING BENEFIT OF EARLIER FIL-
ING DATE.
(a) IN A FOREIGN COUNTRY.—Section 119(b) of title
35, United States Code, is amended to read as follows:
‘‘(b)(1) No application for patent shall be entitled to
this right of priority unless a claim, identifying the foreign
application by specifying its application number, country,
and the day, month, and year of its filing, is filed in the
Patent and Trademark Office at such time during the
pendency of the application as required by the Director.
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‘‘(2) The Director may consider the failure of the ap-
plicant to file a timely claim for priority as a waiver of
any such claim. The Director may establish procedures,
including the payment of a surcharge, to accept an unin-
tentionally delayed claim under this section.
‘‘(3) The Director may require a certified copy of the
original foreign application, specification, and drawings
upon which it is based, a translation if not in the English
language, and such other information as the Director con-
siders necessary. Any such certification shall be made by
the foreign intellectual property authority in which the for-
eign application was filed and show the date of the appli-
cation and of the filing of the specification and other pa-
pers.’’.
(b) IN THE UNITED STATES.—Section 120 of title
35, United States Code, is amended by adding at the end
the following: ‘‘The Director may determine the time pe-
riod during the pendency of the application within which
an amendment containing the specific reference to the ear-
lier filed application is submitted. The Director may con-
sider the failure to submit such an amendment within that
time period as a waiver of any benefit under this section.
The Director may establish procedures, including the pay-
ment of a surcharge, to accept unintentionally late submis-
sions of amendments under this section.’’.
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SEC. 404. PROVISIONAL RIGHTS.
Section 154 of title 35, United States Code, is
amended—
(1) in the section caption by inserting ‘‘; pro-
visional rights’’ after ‘‘patent’’; and
(2) by adding at the end the following new sub-
section:
‘‘(d) PROVISIONAL RIGHTS.—
‘‘(1) IN GENERAL.—In addition to other rights
provided by this section, a patent shall include the
right to obtain a reasonable royalty from any person
who, during the period beginning on the date of pub-
lication of the application for such patent pursuant
to section 122(b), or in the case of an international
application filed under the treaty defined in section
351(a) designating the United States under Article
21(2)(a) of such treaty, the date of publication of
the application, and ending on the date the patent
is issued—
‘‘(A)(i) makes, uses, offers for sale, or sells
in the United States the invention as claimed in
the published patent application or imports
such an invention into the United States; or
‘‘(ii) if the invention as claimed in the pub-
lished patent application is a process, uses, of-
fers for sale, or sells in the United States or
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imports into the United States products made
by that process as claimed in the published pat-
ent application; and
‘‘(B) had actual notice of the published
patent application, and in a case in which the
right arising under this paragraph is based
upon an international application designating
the United States that is published in a lan-
guage other than English, a translation of the
international application into the English lan-
guage.
‘‘(2) RIGHT BASED ON SUBSTANTIALLY IDEN-
TICAL INVENTIONS.—The right under paragraph (1)
to obtain a reasonable royalty shall not be available
under this subsection unless the invention as claimed
in the patent is substantially identical to the inven-
tion as claimed in the published patent application.
‘‘(3) TIME LIMITATION ON OBTAINING A REA-
SONABLE ROYALTY.—The right under paragraph (1)
to obtain a reasonable royalty shall be available only
in an action brought not later than 6 years after the
patent is issued. The right under paragraph (1) to
obtain a reasonable royalty shall not be affected by
the duration of the period described in paragraph
(1).
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‘‘(4) REQUIREMENTS FOR INTERNATIONAL AP-
PLICATIONS.—
‘‘(A) EFFECTIVE DATE.—The right under
paragraph (1) to obtain a reasonable royalty
based upon the publication under the treaty de-
fined in section 351(a) of an international ap-
plication designating the United States shall
commence on the date on which the Patent and
Trademark Office receives a copy of the publi-
cation under the treaty of the international ap-
plication, or, if the publication under the treaty
of the international application is in a language
other than English, on the date on which the
Patent and Trademark Office receives a trans-
lation of the international application in the
English language.
‘‘(B) COPIES.—The Director may require
the applicant to provide a copy of the inter-
national application and a translation thereof.’’.
SEC. 405. PRIOR ART EFFECT OF PUBLISHED APPLICA-
TIONS.
Section 102(e) of title 35, United States Code, is
amended to read as follows:
‘‘(e) the invention was described in—
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SEC. 407. CONFORMING AMENDMENTS.
The following provisions of title 35, United States
Code, are amended:
(1) Section 11 is amended in paragraph 1 of
subsection (a) by inserting ‘‘and published applica-
tions for patents’’ after ‘‘Patents’’.
(2) Section 12 is amended—
(A) in the section caption by inserting
‘‘and applications’’ after ‘‘patents’’; and
(B) by inserting ‘‘and published applica-
tions for patents’’ after ‘‘patents’’.
(3) Section 13 is amended—
(A) in the section caption by inserting
‘‘and applications’’ after ‘‘patents’’; and
(B) by inserting ‘‘and published applica-
tions for patents’’ after ‘‘patents’’.
(4) The item relating to section 122 in the table
of sections for chapter 11 is amended by inserting
‘‘; publication of patent applications’’ after ‘‘applica-
tions’’.
(5) The item relating to section 154 in the table
of sections for chapter 14 is amended by inserting
‘‘; provisional rights’’ after ‘‘patent’’.
(6) Section 181 is amended—
(A) in the first undesignated paragraph—
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(i) by inserting ‘‘by the publication of
an application or’’ after ‘‘disclosure’’; and
(ii) by inserting ‘‘the publication of
the application or’’ after ‘‘withhold’’;
(B) in the second undesignated paragraph
by inserting ‘‘by the publication of an applica-
tion or’’ after ‘‘disclosure of an invention’’;
(C) in the third undesignated paragraph—
(i) by inserting ‘‘by the publication of
the application or’’ after ‘‘disclosure of the
invention’’; and
(ii) by inserting ‘‘the publication of
the application or’’ after ‘‘withhold’’; and
(D) in the fourth undesignated paragraph
by inserting ‘‘the publication of an application
or’’ after ‘‘and’’ in the first sentence.
(7) Section 252 is amended in the first undesig-
nated paragraph by inserting ‘‘substantially’’ before
‘‘identical’’ each place it appears.
(8) Section 284 is amended by adding at the
end of the second undesignated paragraph the fol-
lowing: ‘‘Increased damages under this paragraph
shall not apply to provisional rights under section
154(d) of this title.’’.
(9) Section 374 is amended to read as follows:
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‘‘§ 374. Publication of international application: effect
‘‘The publication under the treaty defined in section
351(a) of this title of an international application desig-
nating the United States shall confer the same rights and
shall have the same effect under this title as an application
for patent published under section 122(b), except as pro-
vided in sections 102(e) and 154(d).’’.
SEC. 408. EFFECTIVE DATE.
This title and the amendments made by this title,
shall take effect on the date that is 1 year after the date
of the enactment of this Act and shall apply to all applica-
tions filed under section 111 of title 35, United States
Code, on or after that date, and all applications complying
with section 371 of title 35, United States Code, that re-
sulted from international applications filed on or after that
date. The amendments made by sections 404 and 405
shall apply to any such application voluntarily published
by the applicant under procedures established under this
title that is pending on the date that is 1 year after the
date of the enactment of this Act. The amendment made
by section 404 shall also apply to international applica-
tions designating the United States that are filed on or
after the date that is 1 year after the date of the enact-
ment of this Act.
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TITLE
V—OPTIONAL
INTER
PARTES
REEXAMINATION
PROCEDURE
SEC. 501. SHORT TITLE.
This title may be cited as the ‘‘Optional Inter Partes
Reexamination Procedure Act’’.
SEC. 502. EX PARTE REEXAMINATION OF PATENTS.
Chapter 30 of title 35, United States Code, is amend-
ed in the title by inserting ‘‘EX PARTE’’ before ‘‘RE-
EXAMINATION OF PATENTS’’.
SEC. 503. DEFINITIONS.
Section 100 of title 35, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(e) The term ‘third-party requester’ means a person
requesting ex parte reexamination under section 302 or
inter partes reexamination under section 311 who is not
the patent owner.’’.
SEC. 504. OPTIONAL INTER PARTES REEXAMINATION PRO-
CEDURES.
(a) IN GENERAL.—Part 3 of title 35, United Stats
Code, is amended by adding after chapter 30 the following
new chapter:
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‘‘CHAPTER 31—OPTIONAL INTER PARTES
REEXAMINATION PROCEDURES
‘‘Sec.
‘‘311. Request for inter partes reexamination.
‘‘312. Determination of issue by Director.
‘‘313. Inter partes reexamination order by Director.
‘‘314. Conduct of inter partes reexamination proceedings.
‘‘315. Appeal.
‘‘316. Certificate of patentability, unpatentability, and claim cancellation.
‘‘317. Inter partes reexamination prohibited.
‘‘318. Stay of litigation.
‘‘§ 311. Request for inter partes reexamination
‘‘(a) IN GENERAL.—Any person at any time may file
a request for inter partes reexamination by the Office of
a patent on the basis of any prior art cited under the pro-
visions of section 301.
‘‘(b) REQUIREMENTS.—The request shall—
‘‘(1) be in writing, include the identity of the
real party in interest, and be accompanied by pay-
ment of an inter partes reexamination fee estab-
lished by the Director under section 41; and
‘‘(2) set forth the pertinency and manner of ap-
plying cited prior art to every claim for which reex-
amination is requested.
‘‘(c) COPY.—Unless the requesting person is the
owner of the patent, the Director promptly shall send a
copy of the request to the owner of record of the patent.
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‘‘§ 312. Determination of issue by Director
‘‘(a) REEXAMINATION.—Not later than 3 months
after the filing of a request for inter partes reexamination
under section 311, the Director shall determine whether
a substantial new question of patentability affecting any
claim of the patent concerned is raised by the request,
with or without consideration of other patents or printed
publications. On the Director’s initiative, and at any time,
the Director may determine whether a substantial new
question of patentability is raised by patents and publica-
tions.
‘‘(b) RECORD.—A record of the Director’s determina-
tion under subsection (a) shall be placed in the official
file of the patent, and a copy shall be promptly given or
mailed to the owner of record of the patent and to the
third-party requester, if any.
‘‘(c) FINAL DECISION.—A determination by the Di-
rector pursuant to subsection (a) shall be final and non-
appealable. Upon a determination that no substantial new
question of patentability has been raised, the Director may
refund a portion of the inter partes reexamination fee re-
quired under section 311.
‘‘§ 313. Inter partes reexamination order by Director
‘‘If, in a determination made under section 312(a),
the Director finds that a substantial new question of pat-
entability affecting a claim of a patent is raised, the deter-
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mination shall include an order for inter partes reexamina-
tion of the patent for resolution of the question. The order
may be accompanied by the initial action of the Patent
and Trademark Office on the merits of the inter partes
reexamination conducted in accordance with section 314.
‘‘§ 314. Conduct of inter partes reexamination pro-
ceedings
‘‘(a) IN GENERAL.—Subject to subsection (b), reex-
amination shall be conducted according to the procedures
established for initial examination under the provisions of
sections 132 and 133, except as provided for under this
section. In any inter partes reexamination proceeding
under this chapter, the patent owner shall be permitted
to propose any amendment to the patent and a new claim
or claims, except that no proposed amended or new claim
enlarging the scope of the claims of the patent shall be
permitted.
‘‘(b) RESPONSE.—(1) This subsection shall apply to
any inter partes reexamination proceeding in which the
order for inter partes reexamination is based upon a re-
quest by a third-party requester.
‘‘(2) With the exception of the inter partes reexam-
ination request, any document filed by either the patent
owner or the third-party requester shall be served on the
other party. In addition, the third-party requester shall
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receive a copy of any communication sent by the Office
to the patent owner concerning the patent subject to the
inter partes reexamination proceeding.
‘‘(3) Each time that the patent owner files a response
to an action on the merits from the Patent and Trademark
Office, the third-party requester shall have one oppor-
tunity to file written comments addressing issues raised
by the action of the Office or the patent owner’s response
thereto, if those written comments are received by the Of-
fice within 30 days after the date of service of the patent
owner’s response.
‘‘(c) SPECIAL DISPATCH.—Unless otherwise provided
by the Director for good cause, all inter partes reexamina-
tion proceedings under this section, including any appeal
to the Board of Patent Appeals and Interferences, shall
be conducted with special dispatch within the Office.
‘‘§ 315. Appeal
‘‘(a) PATENT OWNER.—The patent owner involved in
an inter partes reexamination proceeding under this
chapter—
‘‘(1) may appeal under the provisions of section
134, and may appeal under the provisions of sec-
tions 141 through 144, with respect to any decision
adverse to the patentability of any original or pro-
posed amended or new claim of the patent; and
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‘‘(2) may be a party to any appeal taken by a
third-party requester under subsection (b).
‘‘(b) THIRD-PARTY REQUESTER.—A third-party re-
quester may—
‘‘(1) appeal under the provisions of section 134
with respect to any final decision favorable to the
patentability of any original or proposed amended or
new claim of the patent; or
‘‘(2) be a party to any appeal taken by the pat-
ent owner under the provisions of section 134, sub-
ject to subsection (c).
‘‘(c) CIVIL ACTION.—A third-party requester whose
request for an inter partes reexamination results in an
order under section 313 is estopped from asserting at a
later time, in any civil action arising in whole or in part
under section 1338 of title 28, the invalidity of any claim
finally determined to be valid and patentable on any
ground which the third-party requester raised or could
have raised during the inter partes reexamination pro-
ceedings. This subsection does not prevent the assertion
of invalidity based on newly discovered prior art unavail-
able to the third-party requester and the Patent and
Trademark Office at the time of the inter partes reexam-
ination proceedings.
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‘‘§ 316. Certificate of patentability, unpatentability,
and claim cancellation
‘‘(a) IN GENERAL.—In an inter partes reexamination
proceeding under this chapter, when the time for appeal
has expired or any appeal proceeding has terminated, the
Director shall issue and publish a certificate canceling any
claim of the patent finally determined to be unpatentable,
confirming any claim of the patent determined to be pat-
entable, and incorporating in the patent any proposed
amended or new claim determined to be patentable.
‘‘(b) AMENDED
OR NEW CLAIM.—Any proposed
amended or new claim determined to be patentable and
incorporated into a patent following an inter partes reex-
amination 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, purchased, or used
within the United States, or imported into the United
States, anything patented by such proposed amended or
new claim, or who made substantial preparation for the
same, prior to issuance of a certificate under the provi-
sions of subsection (a) of this section.
‘‘§ 317. Inter partes reexamination prohibited
‘‘(a)
ORDER
FOR
REEXAMINATION.—Notwith-
standing any provision of this chapter, once an order for
inter partes reexamination of a patent has been issued
under section 313, neither the patent owner nor the third-
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party requester, if any, nor privies of either, may file a
subsequent request for inter partes reexamination of the
patent until an inter partes reexamination certificate is
issued and published under section 316, unless authorized
by the Director.
‘‘(b) FINAL DECISION.—Once a final decision has
been entered against a party in a civil action arising in
whole or in part under section 1338 of title 28 that the
party has not sustained its burden of proving the invalidity
of any patent claim in suit or if a final decision in 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 pat-
ent then neither that party nor its privies may thereafter
request inter partes reexamination of any such patent
claim on the basis of issues which that party or its privies
raised or could have raised in such civil action or inter
partes reexamination proceeding, and an inter partes reex-
amination requested by that party or its privies on the
basis of such issues may not thereafter be maintained by
the Office, notwithstanding any other provision of this
chapter. This subsection does not prevent the assertion of
invalidity based on newly discovered prior art unavailable
to the third-party requester and the Patent and Trade-
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mark Office at the time of the inter partes reexamination
proceedings.
‘‘§ 318. Stay of litigation
‘‘Once an order for inter partes reexamination of a
patent has been issued under section 313, the patent
owner may obtain a stay of any pending litigation which
involves an issue of patentability of any claims of the pat-
ent which are the subject of the inter partes reexamination
order, unless the court before which such litigation is
pending determines that a stay would not serve the inter-
ests of justice.’’.
(b) CONFORMING AMENDMENTS.—The table of chap-
ters for part III of title 35, United States Code, is amend-
ed by striking the item relating to chapter 30 and insert-
ing the following:
‘‘30. Prior Art Citations to Office and Ex Parte Reexam-
ination of Patents ..................................................
301
‘‘31. Optional Inter Partes Reexamination of Patents ........
311’’.
SEC. 505. CONFORMING AMENDMENTS.
(a) PATENT FEES; PATENT SEARCH SYSTEMS.—Sec-
tion 41(a)(7) of title 35, United States Code, is amended
to read as follows:
‘‘(7) On filing each petition for the revival of an
unintentionally abandoned application for a patent,
for the unintentionally delayed payment of the fee
for issuing each patent, or for an unintentionally de-
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layed response by the patent owner in any reexam-
ination proceeding, $1,210, unless the petition is
filed under section 133 or 151 of this title, in which
case the fee shall be $110.’’.
(b) APPEAL TO THE BOARD OF PATENT APPEALS
AND INTERFERENCES.—Section 134 of title 35, United
States Code, is amended to read as follows:
‘‘§ 134. Appeal to the Board of Patent Appeals and
Interferences
‘‘(a) PATENT APPLICANT.—An applicant for a pat-
ent, any of whose claims has been twice rejected, may ap-
peal from the decision of the primary examiner to the
Board of Patent Appeals and Interferences, having once
paid the fee for such appeal.
‘‘(b) PATENT OWNER.—A patent owner in any reex-
amination proceeding may appeal from the final rejection
of any claim by the primary examiner to the Board of Pat-
ent Appeals and Interferences, having once paid the fee
for such appeal.
‘‘(c) THIRD-PARTY.—A third-party requester in an
inter partes proceeding may appeal to the Board of Patent
Appeals and Interferences from the final decision of the
primary examiner favorable to the patentability of any
original or proposed amended or new claim of a patent,
having once paid the fee for such appeal. The third-party
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requester may not appeal the decision of the Board of Pat-
ent Appeals and Interferences.’’.
(c) APPEAL TO COURT OF APPEALS FOR THE FED-
ERAL CIRCUIT.—Section 141 of title 35, United States
Code, is amended by adding the following after the second
sentence: ‘‘A patent owner in any reexamination pro-
ceeding dissatisfied with the final decision in an appeal
to the Board of Patent Appeals and Interferences under
section 134 may appeal the decision only to the United
States Court of Appeals for the Federal Circuit.’’.
(d) PROCEEDINGS ON APPEAL.—Section 143 of title
35, United States Code, is amended by amending the third
sentence to read as follows: ‘‘In any reexamination cases,
the Director shall submit to the court in writing the
grounds for the decision of the Patent and Trademark Of-
fice, addressing all the issues involved in the appeal.’’.
(e) CIVIL ACTION TO OBTAIN PATENT.—Section 145
of title 35, United States Code, is amended in the first
sentence by inserting ‘‘(a)’’ after ‘‘section 134’’.
SEC. 506. REPORT TO CONGRESS.
Not later than 5 years after the effective date of this
title, the Director of the United States Patent and Trade-
mark Office shall submit to the Congress a report evalu-
ating whether the inter partes reexamination proceedings
established under the amendments made by this title are
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inequitable to any of the parties in interest and, if so, the
report shall contain recommendations for changes to the
amendments made by this title to remove such inequity.
SEC. 507. ESTOPPEL EFFECT OF REEXAMINATION.
Any party who requests an inter partes reexamina-
tion under section 311 of title 35, United States Code,
is estopped from challenging at a later time, in any civil
action, any fact determined during the process of such re-
examination, except with respect to a fact determination
later proved to be erroneous based on information unavail-
able at the time of the inter partes reexamination decision.
If this section is held to be unenforceable, the enforce-
ability of the rest of this title or of this Act shall not be
denied as a result.
SEC. 508. EFFECTIVE DATE.
This title and the amendments made by this title
shall take effect on the date that is 1 year after the date
of the enactment of this Act and shall apply to inter partes
reexamination requests filed on or after such date.
TITLE VI—PATENT AND
TRADEMARK OFFICE
SEC. 601. SHORT TITLE.
This title may be cited as the ‘‘Patent and Trade-
mark Office Efficiency Act’’.
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Subtitle A—United States Patent
and Trademark Office
SEC. 611. ESTABLISHMENT OF PATENT AND TRADEMARK
OFFICE.
Section 1 of title 35, United States Code, is amended
to read as follows:
‘‘§ 1. Establishment
‘‘(a) ESTABLISHMENT.—The United States Patent
and Trademark Office is established as an agency of the
United States, within the Department of Commerce. In
carrying out its functions, the United States Patent and
Trademark Office shall be subject to the policy direction
of the Secretary of Commerce, but otherwise shall retain
responsibility for decisions regarding the management and
administration of its operations and shall exercise inde-
pendent control of its budget allocations and expenditures,
personnel decisions and processes, procurements, and
other administrative and management functions in accord-
ance with this title and applicable provisions of law. Those
operations designed to grant and issue patents and those
operations which are designed to facilitate the registration
of trademarks shall be treated as separate operating units
within the Office.
‘‘(b)
OFFICES.—The
United
States
Patent
and
Trademark Office shall maintain its principal office in the
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metropolitan Washington, DC, area, for the service of
process and papers and for the purpose of carrying out
its functions. The United States Patent and Trademark
Office shall be deemed, for purposes of venue in civil ac-
tions, to be a resident of the district in which its principal
office is located, except where jurisdiction is otherwise pro-
vided by law. The United States Patent and Trademark
Office may establish satellite offices in such other places
in the United States as it considers necessary and appro-
priate in the conduct of its business.
‘‘(c) REFERENCE.—For purposes of this title, the
United States Patent and Trademark Office shall also be
referred to as the ‘Office’ and the ‘Patent and Trademark
Office’.’’.
SEC. 612. POWERS AND DUTIES.
Section 2 of title 35, United States Code, is amended
to read as follows:
‘‘§ 2. Powers and duties
‘‘(a) IN GENERAL.—The United States Patent and
Trademark Office, subject to the policy direction of the
Secretary of Commerce—
‘‘(1) shall be responsible for the granting and
issuing of patents and the registration of trade-
marks; and
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‘‘(2) shall be responsible for disseminating to
the public information with respect to patents and
trademarks.
‘‘(b) SPECIFIC POWERS.—The Office—
‘‘(1) shall adopt and use a seal of the Office,
which shall be judicially noticed and with which let-
ters patent, certificates of trademark registrations,
and papers issued by the Office shall be authenti-
cated;
‘‘(2) may establish regulations, not inconsistent
with law, which—
‘‘(A) shall govern the conduct of pro-
ceedings in the Office;
‘‘(B) shall be made in accordance with sec-
tion 553 of title 5;
‘‘(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-
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ognized
as
representatives
of
applicants
or
other persons, to show that they are of good
moral character and reputation and are pos-
sessed of the necessary qualifications to render
to applicants or other persons valuable service,
advice, and assistance in the presentation or
prosecution of their applications or other busi-
ness before the Office;
‘‘(E) shall recognize the public interest in
continuing to safeguard broad access to the
United States patent system through the re-
duced fee structure for small entities under sec-
tion 41(h)(1) of this title; and
‘‘(F) provide for the development of a per-
formance-based
process
that
includes
quan-
titative and qualitative measures and standards
for evaluating cost-effectiveness and is con-
sistent with the principles of impartiality and
competitiveness;
‘‘(3) may acquire, construct, purchase, lease,
hold, manage, operate, improve, alter, and renovate
any real, personal, or mixed property, or any interest
therein, as it considers necessary to carry out its
functions;
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‘‘(4)(A) may make such purchases, contracts
for the construction, maintenance, or management
and operation of facilities, and contracts for supplies
or services, without regard to the provisions of the
Federal Property and Administrative Services Act of
1949 (40 U.S.C. 471 et seq.), the Public Buildings
Act (40 U.S.C. 601 et seq.), and the Stewart B.
McKinney
Homeless
Assistance
Act
(42
U.S.C.
11301 et seq.); 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, United States Code;
‘‘(5) may use, with their consent, services,
equipment, personnel, and facilities of other depart-
ments, agencies, and instrumentalities of the Fed-
eral Government, on a reimbursable basis, and co-
operate with such other departments, agencies, and
instrumentalities in the establishment and use of
services, equipment, and facilities of the Office;
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‘‘(6) may, when the Director determines that it
is practicable, efficient, and cost-effective to do so,
use, with the consent of the United States and the
agency, instrumentality, patent and trademark of-
fice, or international organization concerned, the
services, records, facilities, or personnel of any State
or local government agency or instrumentality or
foreign patent and trademark office or international
organization to perform functions on its behalf;
‘‘(7) may retain and use all of its revenues and
receipts, including revenues from the sale, lease, or
disposal of any real, personal, or mixed property, or
any interest therein, of the Office;
‘‘(8) shall advise the President, through the
Secretary of Commerce, on national and certain
international intellectual property policy issues;
‘‘(9)
shall
advise
Federal
departments
and
agencies on matters of intellectual property policy in
the United States and intellectual property protec-
tion in other countries;
‘‘(10) shall provide guidance, as appropriate,
with respect to proposals by agencies to assist for-
eign
governments
and
international
intergovern-
mental organizations on matters of intellectual prop-
erty protection;
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tion concerning patents, trademarks, and other mat-
ters.
‘‘(c) CLARIFICATION OF SPECIFIC POWERS.—(1) The
special payments under subsection (b)(13)(B) shall be in
addition to any other payments or contributions to inter-
national organizations described in subsection (b)(13)(B)
and shall not be subject to any limitations imposed by law
on the amounts of such other payments or contributions
by the United States Government.
‘‘(2) Nothing in subsection (b) shall derogate from
the duties of the Secretary of State or from the duties
of the United States Trade Representative as set forth in
section 141 of the Trade Act of 1974 (19 U.S.C. 2171).
‘‘(3) Nothing in subsection (b) shall derogate from
the duties and functions of the Register of Copyrights or
otherwise alter current authorities relating to copyright
matters.
‘‘(4) In exercising the Director’s powers under para-
graphs (3) and (4)(A) of subsection (b), the Director shall
consult with the Administrator of General Services.
‘‘(d) CONSTRUCTION.—Nothing in this section shall
be construed to nullify, void, cancel, or interrupt any pend-
ing request-for-proposal let or contract issued by the Gen-
eral Services Administration for the specific purpose of re-
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locating or leasing space to the United States Patent and
Trademark Office.’’.
SEC. 613. ORGANIZATION AND MANAGEMENT.
Section 3 of title 35, United States Code, is amended
to read as follows:
‘‘§ 3. Officers and employees
‘‘(a) UNDER SECRETARY AND DIRECTOR.—
‘‘(1) IN GENERAL.—The powers and duties of
the United States Patent and Trademark Office
shall be vested in an Under Secretary of Commerce
for Intellectual Property and Director of the United
States Patent and Trademark Office (in this title re-
ferred 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 has a
professional background and experience in patent or
trademark law.
‘‘(2) DUTIES.—
‘‘(A) IN GENERAL.—The Director shall be
responsible for providing policy direction and
management supervision for the Office and for
the issuance of patents and the registration of
trademarks. The Director shall perform these
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duties in a fair, impartial, and equitable man-
ner.
‘‘(B) CONSULTING WITH THE PUBLIC AD-
VISORY COMMITTEES.—The Director shall con-
sult with the Patent Public Advisory Committee
established in section 5 on a regular basis on
matters relating to the patent operations of the
Office, shall consult with the Trademark Public
Advisory Committee established in section 5 on
a regular basis on matters relating to the trade-
mark operations of the Office, and shall consult
with the respective Public Advisory Committee
before submitting budgetary proposals to the
Office of Management and Budget or changing
or proposing to change patent or trademark
user fees or patent or trademark regulations
which are subject to the requirement to provide
notice and opportunity for public comment pur-
suant to section 553 of title 5, as the case may
be.
‘‘(3) OATH.—The Director shall, before taking
office, take an oath to discharge faithfully the duties
of the Office.
‘‘(4) REMOVAL.—The Director may be removed
from office by the President. The President shall
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provide notification of any such removal to both
Houses of Congress.
‘‘(b) OFFICERS AND EMPLOYEES OF THE OFFICE.—
‘‘(1) DEPUTY UNDER SECRETARY AND DEPUTY
DIRECTOR.—The Secretary of Commerce, upon nom-
ination by the Director, shall appoint a Deputy
Under Secretary of Commerce for Intellectual Prop-
erty and Deputy Director of the United States Pat-
ent and Trademark Office who shall be vested with
the authority to act in the capacity of the Director
in the event of the absence or incapacity of the Di-
rector. The Deputy Director shall be a citizen of the
United States who has a professional background
and experience in patent or trademark law.
‘‘(2) COMMISSIONERS.—
‘‘(A)
APPOINTMENT
AND
DUTIES.—The
Secretary of Commerce shall appoint a Commis-
sioner for Patents and a Commissioner for
Trademarks, without regard to chapter 33, 51,
or 53 of title 5. The Commissioner for Patents
shall be a citizen of the United States with
demonstrated management ability and profes-
sional background and experience in patent law
and serve for a term of 5 years. The Commis-
sioner for Trademarks shall be a citizen of the
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United States with demonstrated management
ability and professional background and experi-
ence in trademark law and serve for a term of
5 years. The Commissioner for Patents and the
Commissioner for Trademarks shall serve as
the chief operating officers for the operations of
the Office relating to patents and trademarks,
respectively, and shall be responsible for the
management and direction of all aspects of the
activities of the Office that affect the adminis-
tration of patent and trademark operations, re-
spectively. The Secretary may reappoint a Com-
missioner to subsequent terms of 5 years as
long as the performance of the Commissioner as
set forth in the performance agreement in sub-
paragraph (B) is satisfactory.
‘‘(B) SALARY AND PERFORMANCE AGREE-
MENT.—The Commissioners shall be paid an
annual rate of basic pay not to exceed the max-
imum rate of basic pay for the Senior Executive
Service established under section 5382 of title
5, including any applicable locality-based com-
parability payment that may be authorized
under section 5304(h)(2)(C) of title 5. The
compensation of the Commissioners shall be
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considered, for purposes of section 207(c)(2)(A)
of title 18, to be the equivalent of that de-
scribed under clause (ii) of section 207(c)(2)(A)
of title 18. In addition, the Commissioners may
receive a bonus in an amount of up to, but not
in excess of, 50 percent of the Commissioner’s
annual rate of basic pay, based upon an evalua-
tion by the Secretary of Commerce, acting
through the Director, of the Commissioners’
performance as defined in an annual perform-
ance agreement between the Commissioners and
the Secretary. The annual performance agree-
ments shall incorporate measurable organiza-
tion and individual goals in key operational
areas as delineated in an annual performance
plan agreed to by the Commissioners and the
Secretary. Payment of a bonus under this sub-
paragraph may be made to the Commissioners
only to the extent that such payment does not
cause the Commissioners’ total aggregate com-
pensation in a calendar year to equal or exceed
the amount of the salary of the Vice President
under section 104 of title 3, United States
Code.
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‘‘(C) REMOVAL.—The Commissioners may
be removed from office by the Secretary for
misconduct
or
nonsatisfactory
performance
under the performance agreement described in
subparagraph (B), without regard to the provi-
sions of title 5. The Secretary shall provide no-
tification of any such removal to both Houses
of Congress.
‘‘(3) OTHER OFFICERS AND EMPLOYEES.—The
Director shall—
‘‘(A) appoint such officers, employees (in-
cluding attorneys), and agents of the Office as
the Director considers necessary to carry out
the functions of the Office; and
‘‘(B) define the title, authority, and duties
of such officers and employees and delegate to
them such of the powers vested in the Office as
the Director may determine.
The Office shall not be subject to any administra-
tively or statutorily imposed limitation on positions
or personnel, and no positions or personnel of the
Office shall be taken into account for purposes of
applying any such limitation.
‘‘(4) TRAINING
OF
EXAMINERS.—The Office
shall submit to the Congress a proposal to provide
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an incentive program to retain as employees patent
and trademark examiners of the primary examiner
grade or higher who are eligible for retirement, for
the sole purpose of training patent and trademark
examiners.
‘‘(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.
‘‘(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 Efficiency 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 Efficiency
Act, all officers and employees of the Patent and
Trademark Office on the day before such effective
date shall become officers and employees of the Of-
fice, without a break in service.
‘‘(2) OTHER PERSONNEL.—Any individual who,
on the day before the effective date of the Patent
and Trademark Office Efficiency Act, is an officer
or employee of the Department of Commerce (other
than an officer or employee under paragraph (1))
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shall be transferred to the Office, as necessary to
carry out the purposes of this Act, 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.
‘‘(f) TRANSITION PROVISIONS.—
‘‘(1) INTERIM APPOINTMENT OF DIRECTOR.—
On or after the effective date of the Patent and
Trademark Office Efficiency Act, the President shall
appoint an individual to serve as the Director until
the date on which a Director qualifies under sub-
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section (a). The President shall not make more than
one such appointment under this subsection.
‘‘(2) CONTINUATION
IN
OFFICE
OF
CERTAIN
OFFICERS.—(A) The individual serving as the As-
sistant Commissioner for Patents on the day before
the effective date of the Patent and Trademark Of-
fice Efficiency Act may serve as the Commissioner
for Patents until the date on which a Commissioner
for Patents is appointed under subsection (b).
‘‘(B) The individual serving as the Assistant
Commissioner for Trademarks on the day before the
effective date of the Patent and Trademark Office
Efficiency Act may serve as the Commissioner for
Trademarks until the date on which a Commissioner
for Trademarks is appointed under subsection (b).’’.
SEC. 614. PUBLIC ADVISORY COMMITTEES.
Chapter 1 of part I of title 35, United States Code,
is amended by inserting after section 4 the following:
‘‘§ 5. Patent and Trademark Office Public Advisory
Committees
‘‘(a) ESTABLISHMENT OF PUBLIC ADVISORY COM-
MITTEES.—
‘‘(1) APPOINTMENT.—The United States Pat-
ent and Trademark Office shall have a Patent Pub-
lic Advisory Committee and a Trademark Public Ad-
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visory Committee, each of which shall have nine vot-
ing members who shall be appointed by the Sec-
retary of Commerce and serve at the pleasure of the
Secretary of Commerce. Members of each Public Ad-
visory Committee shall be appointed for a term of 3
years, except that of the members first appointed,
three shall be appointed for a term of 1 year, and
three shall be appointed for a term of 2 years. In
making appointments to each Committee, the Sec-
retary of Commerce shall consider the risk of loss of
competitive advantage in international commerce or
other harm to United States companies as a result
of such appointments.
‘‘(2) CHAIR.—The Secretary shall designate a
chair of each Advisory Committee, whose term as
chair shall be for 3 years.
‘‘(3) TIMING
OF
APPOINTMENTS.—Initial ap-
pointments to each Advisory Committee shall be
made within 3 months after the effective date of the
Patent and Trademark Office Efficiency Act. Vacan-
cies shall be filled within 3 months after they occur.
‘‘(b) BASIS FOR APPOINTMENTS.—Members of each
Advisory Committee—
‘‘(1) shall be citizens of the United States who
shall be chosen so as to represent the interests of di-
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verse users of the United States Patent and Trade-
mark Office with respect to patents, in the case of
the Patent Public Advisory Committee, and with re-
spect to trademarks, in the case of the Trademark
Public Advisory Committee;
‘‘(2) shall include members who represent small
and large entity applicants located in the United
States in proportion to the number of applications
filed by such applicants, but in no case shall mem-
bers who represent small entity patent applicants,
including small business concerns, independent in-
ventors, and nonprofit organizations, constitute less
than 25 percent of the members of the Patent Pub-
lic Advisory Committee, and such members shall in-
clude at least one independent inventor; and
‘‘(3) shall include individuals with substantial
background and achievement in finance, manage-
ment, labor relations, science, technology, and office
automation.
In addition to the voting members, each Advisory Com-
mittee shall include a representative of each labor organi-
zation recognized by the United States Patent and Trade-
mark Office. Such representatives shall be nonvoting
members of the Advisory Committee to which they are ap-
pointed.
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‘‘(c) MEETINGS.—Each Advisory Committee shall
meet at the call of the chair to consider an agenda set
by the chair.
‘‘(d) DUTIES.—Each Advisory Committee shall—
‘‘(1) review the policies, goals, performance,
budget, and user fees of the United States Patent
and Trademark Office with respect to patents, in the
case of the Patent Public Advisory Committee, and
with respect to Trademarks, in the case of the
Trademark Public Advisory Committee, and advise
the Director on these matters;
‘‘(2) within 60 days after the end of each fiscal
year—
‘‘(A) prepare an annual report on the mat-
ters referred to in paragraph (1);
‘‘(B) transmit the report to the Secretary
of Commerce, the President, and the Commit-
tees on the Judiciary of the Senate and the
House of Representatives; and
‘‘(C) publish the report in the Official Ga-
zette of the United States Patent and Trade-
mark Office.
‘‘(e) COMPENSATION.—Each member of each Advi-
sory Committee shall be compensated for each day (includ-
ing travel time) during which such member is attending
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meetings or conferences of that Advisory Committee or
otherwise engaged in the business of that Advisory Com-
mittee, at the rate which is the daily equivalent of the an-
nual rate of basic pay in effect for level III of the Execu-
tive Schedule under section 5314 of title 5. While away
from such member’s home or regular place of business
such member shall be allowed travel expenses, including
per diem in lieu of subsistence, as authorized by section
5703 of title 5, United States Code.
‘‘(f) ACCESS TO INFORMATION.—Members of each
Advisory Committee shall be provided access to records
and information in the United States Patent and Trade-
mark Office, except for personnel or other privileged infor-
mation and information concerning patent applications re-
quired to be kept in confidence by section 122.
‘‘(g) APPLICABILITY OF CERTAIN ETHICS LAWS.—
Members of each Advisory Committee shall be special Gov-
ernment employees within the meaning of section 202 of
title 18, United States Code.
‘‘(h) INAPPLICABILITY OF FEDERAL ADVISORY COM-
MITTEE ACT.—The Federal Advisory Committee Act (5
U.S.C. App.) shall not apply to each Advisory Committee.
‘‘(i) OPEN MEETINGS.—The meetings of each Advi-
sory Committee shall be open to the public, except that
each Advisory Committee may by majority vote meet in
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executive session when considering personnel or other con-
fidential information.’’.
SEC. 615. PATENT AND TRADEMARK OFFICE FUNDING.
Section 42(c) of title 35, United States Code, is
amended in the second sentence—
(1) by striking ‘‘Fees available’’ and inserting
‘‘All fees available’’; and
(2) by striking ‘‘may’’ and inserting ‘‘shall’’.
SEC. 616. 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.
(c) SUSPENSION OR EXCLUSION FROM PRACTICE.—
Section 32 of title 35, United States Code, is amended
by striking ‘‘31’’ and inserting ‘‘2(b)(2)(D)’’.
SEC. 617. 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
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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.
618.
BOARD
OF
PATENT
APPEALS
AND
INTER-
FERENCES.
Chapter 1 of title 35, United States Code, is
amended—
(1) by striking section 7 and redesignating sec-
tions 8 through 14 as sections 7 through 13, respec-
tively; and
(2) by inserting after section 5 the following:
‘‘§ 6. Board of Patent Appeals and Interferences
‘‘(a) ESTABLISHMENT
AND COMPOSITION.—There
shall be in the United States Patent and Trademark Of-
fice a Board of Patent Appeals and Interferences. The Di-
rector, the Commissioner for Patents, the Commissioner
for Trademarks, and the administrative patent judges
shall constitute the Board. The administrative patent
judges shall be persons of competent legal knowledge and
scientific ability who are appointed by the Director.
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‘‘(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. 619. ANNUAL REPORT OF DIRECTOR.
Section 13 of title 35, United States Code, as redesig-
nated by section 618 of this Act, is amended to read as
follows:
‘‘§ 13. Annual report to Congress
‘‘The Director shall report to the Congress, not later
than 180 days after the end of each fiscal year, the mon-
eys received and expended by the Office, the purposes for
which the moneys were spent, the quality and quantity of
the work of the Office, the nature of training provided to
examiners, the evaluation of the Commissioner of Patents
and the Commissioner of Trademarks by the Secretary of
Commerce, the compensation of the Commissioners, and
other information relating to the Office.’’.
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SEC. 620. 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. 621. PAY OF DIRECTOR AND DEPUTY DIRECTOR.
(a) PAY OF DIRECTOR.—Section 5314 of title 5,
United States Code, is amended by striking:
‘‘Assistant Secretary of Commerce and Com-
missioner of Patents and Trademarks.’’.
and inserting:
‘‘Under Secretary of Commerce for Intellectual
Property and Director of the United States Patent
and Trademark Office.’’.
(b) PAY OF DEPUTY DIRECTOR.—Section 5315 of
title 5, United States Code, is amended by adding at the
end the following:
‘‘Deputy Under Secretary of Commerce for In-
tellectual Property and Deputy Director of the
United States Patent and Trademark Office.’’.
SEC. 622. STUDY ON ALTERNATIVE FEE STRUCTURES.
The Under Secretary of Commerce for Intellectual
Property and Director of the United States Patent and
Trademark Office shall conduct a study of alternative fee
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structures that could be adopted by the United States Pat-
ent and Trademark Office to encourage maximum partici-
pation by the inventor community in the United States.
The Director shall submit to the Committees on the Judi-
ciary of the House of Representatives and the Senate a
report on the study not later than 1 year after the date
of the enactment of this Act.
Subtitle B—Effective Date;
Technical Amendments
SEC. 631. EFFECTIVE DATE.
This title and the amendments made by this title
shall take effect 4 months after the date of the enactment
of this Act.
SEC. 632. TECHNICAL AND CONFORMING AMENDMENTS.
(a) AMENDMENTS TO TITLE 35.—
(1) The item relating to part I in the table of
parts for chapter 35, United States Code, is amend-
ed to read as follows:
‘‘I. United States Patent and Trademark Office ....................
1’’.
(2) The heading for part I of title 35, United
States Code, is amended to read as follows:
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‘‘PART I—UNITED STATES PATENT AND
TRADEMARK OFFICE’’.
(3) The table of chapters for part I of title 35,
United States Code, is amended by amending the
item relating to chapter 1 to read as follows:
‘‘1. Establishment, Officers and Employees, Functions ......
1’’.
(4) The table of sections for chapter 1 of title
35, United States Code, is amended to read as fol-
lows:
‘‘CHAPTER 1—ESTABLISHMENT, OFFICERS
AND EMPLOYEES, FUNCTIONS
‘‘Sec.
‘‘ 1. Establishment.
‘‘ 2. Powers and duties.
‘‘ 3. Officers and employees.
‘‘ 4. Restrictions on officers and employees as to interest in patent s.
‘‘ 5. Patent and Trademark Office Public Advisory Committees.
‘‘ 6. Board of Patent Appeals and Interferences.
‘‘ 7. Library.
‘‘ 8. Classification of patents.
‘‘ 9. Certified copies of records.
‘‘10. Publications.
‘‘11. Exchange of copies of patents and applications with foreign countries.
‘‘12. Copies of patents and applications for public libraries.
‘‘13. Annual report to Congress.’’.
(5) Section 41(h) of title 35, United States
Code, is amended by striking ‘‘Commissioner of Pat-
ents and Trademarks’’ and inserting ‘‘Director’’.
(6) Section 155 of title 35, United States Code,
is amended by striking ‘‘Commissioner of Patents
and Trademarks’’ and inserting ‘‘Director’’.
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(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 157(d) of title 35, United States
Code, is amended by striking ‘‘Secretary of Com-
merce’’ and inserting ‘‘Director’’.
(12) Section 202(a) of title 35, United States
Code, is amended—
(A) by striking ‘‘iv)’’ and inserting ‘‘(iv)’’;
and
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(B) by striking the second period after
‘‘Department of Energy’’ at the end of the first
sentence.
(b) OTHER PROVISIONS OF LAW.—
(1)(A) Section 45 of the Act of July 5, 1946
(commonly referred to as the ‘‘Trademark Act of
1946’’; 15 U.S.C. 1127), is amended by striking
‘‘The term ‘Commissioner’’ means the Commissioner
of Patents and Trademarks.’ and inserting ‘‘The
term ‘Director’ means the Director of the United
States Patent and Trademark Office.’’.
(B) The Act of July 5, 1946 (commonly re-
ferred to as the ‘‘Trademark Act of 1946’’; 15
U.S.C. 1051 and following), except for section 17, as
amended by section 617 of this Act, is amended by
striking ‘‘Commissioner’’ each place it appears and
inserting ‘‘Director’’.
(2) Section 500(e) of title 5, United States
Code, is amended by striking ‘‘Patent Office’’ and
inserting ‘‘United States Patent and Trademark Of-
fice’’.
(3)
Section
5102(c)(23)
of
title
5,
United
States Code, is amended to read as follows:
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‘‘(23) administrative patent judges and des-
ignated administrative patent judges in the United
States Patent and Trademark Office;’’.
(4) Section 5316 of title 5, United States Code
(5 U.S.C. 5316) is amended by striking ‘‘Commis-
sioner
of
Patents,
Department
of
Commerce.’’,
‘‘Deputy
Commissioner
of
Patents
and
Trade-
marks.’’, ‘‘Assistant Commissioner for Patents.’’,
and ‘‘Assistant Commissioner for Trademarks.’’.
(5) Section 9(p)(1)(B) of the Small Business
Act (15 U.S.C. 638(p)(1)(B)) is amended to read as
follows:
‘‘(B) the Director of the United States
Patent and Trademark Office; and’’.
(6) Section 12 of the Act of February 14, 1903
(15 U.S.C. 1511) is amended—
(A) by striking ‘‘(d) Patent and Trade-
mark Office;’’ and inserting:
‘‘(4) United States Patent and Trademark Of-
fice’’; and
(B) by redesignating subsections (a), (b),
(c), (e), (f), and (g) as paragraphs (1), (2), (3),
(5), (6), and (7), respectively and indenting the
paragraphs as so redesignated 2 ems to the
right.
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(7) Section 19 of the Tennessee Valley Author-
ity Act of 1933 (16 U.S.C. 831r) is amended—
(A) by striking ‘‘Patent Office of the
United States’’ and inserting ‘‘United States
Patent and Trademark Office’’; and
(B) by striking ‘‘Commissioner of Patents’’
and inserting ‘‘Director of the United States
Patent and Trademark Office’’.
(8) Section 182(b)(2)(A) of the Trade Act of
1974 (19 U.S.C. 2242(b)(2)(A)) is amended by
striking
‘‘Commissioner
of
Patents
and
Trade-
marks’’ and inserting ‘‘Director of the United States
Patent and Trademark Office’’.
(9) Section 302(b)(2)(D) of the Trade Act of
1974 (19 U.S.C. 2412(b)(2)(D)) is amended by
striking
‘‘Commissioner
of
Patents
and
Trade-
marks’’ and inserting ‘‘Director of the United States
Patent and Trademark Office’’.
(10) The Act of April 12, 1892 (27 Stat. 395;
20 U.S.C. 91) is amended by striking ‘‘Patent Of-
fice’’ and inserting ‘‘United States Patent and
Trademark Office’’.
(11) Sections 505(m) and 512(o) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(m)
and 360b(o)) are each amended by striking ‘‘Patent
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and Trademark Office of the Department of Com-
merce’’ and inserting ‘‘United States Patent and
Trademark Office’’.
(12) Section 702(d) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 372(d)) is amended by
striking ‘‘Commissioner of Patents’’ and inserting
‘‘Director of the United States Patent and Trade-
mark Office’’ and by striking ‘‘Commissioner’’ and
inserting ‘‘Director’’.
(13) Section 105(e) of the Federal Alcohol Ad-
ministration Act (27 U.S.C. 205(e)) is amended by
striking ‘‘United States Patent Office’’ and inserting
‘‘United States Patent and Trademark Office’’.
(14) Section 1295(a)(4) of title 28, United
States Code, is amended—
(A)
in
subparagraph
(A)
by
inserting
‘‘United States’’ before ‘‘Patent and Trade-
mark’’; and
(B)
in
subparagraph
(B)
by
striking
‘‘Commissioner of Patents and Trademarks’’
and inserting ‘‘Director of the United States
Patent and Trademark Office’’.
(15) Chapter 115 of title 28, United States
Code, is amended—
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(A) in the item relating to section 1744 in
the table of sections by striking ‘‘Patent Office’’
and
inserting
‘‘United
States
Patent
and
Trademark Office’’;
(B) in section 1744—
(i) by striking ‘‘Patent Office’’ each
place it appears in the text and section
heading and inserting ‘‘United States Pat-
ent and Trademark Office’’; and
(ii) by striking ‘‘Commissioner of Pat-
ents’’
and
inserting
‘‘Director
of
the
United States Patent and Trademark Of-
fice’’; and
(C) by striking ‘‘Commissioner’’ and in-
serting ‘‘Director’’.
(16) Section 1745 of title 28, United States
Code, is amended by striking ‘‘United States Patent
Office’’ and inserting ‘‘United States Patent and
Trademark Office’’.
(17) Section 1928 of title 28, United States
Code, is amended by striking ‘‘Patent Office’’ and
inserting ‘‘United States Patent and Trademark Of-
fice’’.
(18) Section 151 of the Atomic Energy Act of
1954 (42 U.S.C. 2181) is amended in subsections c.
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and d. by striking ‘‘Commissioner of Patents’’ and
inserting ‘‘Director of the United States Patent and
Trademark Office’’.
(19) Section 152 of the Atomic Energy Act of
1954 (42 U.S.C. 2182) is amended by striking
‘‘Commissioner of Patents’’ each place it appears
and inserting ‘‘Director of the United States Patent
and Trademark Office’’.
(20) Section 305 of the National Aeronautics
and
Space
Act
of
1958
(42
U.S.C.
2457)
is
amended—
(A) in subsection (c) by striking ‘‘Commis-
sioner of Patents’’ and inserting ‘‘Director of
the United States Patent and Trademark Office
(hereafter in this section referred to as the ‘Di-
rector’)’’; and
(B) by striking ‘‘Commissioner’’ each sub-
sequent place it appears and inserting ‘‘Direc-
tor’’.
(21) Section 12(a) of the Solar Heating and
Cooling Demonstration Act of 1974 (42 U.S.C.
5510(a)) is amended by striking ‘‘Commissioner of
the Patent Office’’ and inserting ‘‘Director of the
United States Patent and Trademark Office’’.
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(22) Section 1111 of title 44, United States
Code, is amended by striking ‘‘the Commissioner of
Patents,’’.
(23) Section 1114 of title 44, United States
Code, is amended by striking ‘‘the Commissioner of
Patents,’’.
(24) Section 1123 of title 44, United States
Code, is amended by striking ‘‘the Patent Office,’’.
(25) Sections 1337 and 1338 of title 44, United
States Code, and the items relating to those sections
in the table of contents for chapter 13 of such title,
are repealed.
(26) Section 10(i) of the Trading with the
enemy Act (50 U.S.C. App. 10(i)) is amended by
striking ‘‘Commissioner of Patents’’ and inserting
‘‘Director of the United States Patent and Trade-
mark Office’’.
Subtitle C—Miscellaneous
Provisions
SEC. 641. REFERENCES.
(a) IN GENERAL.—Any reference in any other Fed-
eral law, Executive order, rule, regulation, or delegation
of authority, or any document of or pertaining to a depart-
ment or office from which a function is transferred by this
title—
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(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 Under Secretary of
Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office;
(2) to the Assistant Commissioner for Patents
is deemed to refer to the Commissioner for Patents;
or
(3) to the Assistant Commissioner for Trade-
marks is deemed to refer to the Commissioner for
Trademarks.
SEC. 642. EXERCISE OF AUTHORITIES.
Except as otherwise provided by law, a Federal offi-
cial to whom a function is transferred by this title may,
for purposes of performing the function, exercise all au-
thorities under any other provision of law that were avail-
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able with respect to the performance of that function to
the official responsible for the performance of the function
immediately before the effective date of the transfer of the
function under this title.
SEC. 643. SAVINGS PROVISIONS.
(a) LEGAL DOCUMENTS.—All orders, determinations,
rules, regulations, permits, grants, loans, contracts, agree-
ments, certificates, licenses, and privileges—
(1) that have been issued, made, granted, or al-
lowed to become effective by the President, the Sec-
retary of Commerce, any officer or employee of any
office transferred by this title, or any other Govern-
ment official, or by a court of competent jurisdic-
tion, in the performance of any function that is
transferred by this title; and
(2) that are in effect on the effective date of
such transfer (or become effective after such date
pursuant to their terms as in effect on such effective
date), shall continue in effect according to their
terms until modified, terminated, superseded, set
aside, or revoked in accordance with law by the
President, any other authorized official, a court of
competent jurisdiction, or operation of law.
(b) PROCEEDINGS.—This title shall not affect any
proceedings or any application for any benefits, service,
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license, permit, certificate, or financial assistance pending
on the effective date of this title before an office trans-
ferred by this title, but such proceedings and applications
shall be continued. Orders shall be issued in such pro-
ceedings, appeals shall be taken therefrom, and payments
shall be made pursuant to such orders, as if this title had
not been enacted, and orders issued in any such pro-
ceeding shall continue in effect until modified, terminated,
superseded, or revoked by a duly authorized official, by
a court of competent jurisdiction, or by operation of law.
Nothing in this subsection shall be considered to prohibit
the discontinuance or modification of any such proceeding
under the same terms and conditions and to the same ex-
tent that such proceeding could have been discontinued
or modified if this title had not been enacted.
(c) SUITS.—This title shall not affect suits com-
menced before the effective date of this title, and in all
such suits, proceedings shall be had, appeals taken, and
judgments rendered in the same manner and with the
same effect as if this title had not been enacted.
(d) NONABATEMENT OF ACTIONS.—No suit, action,
or other proceeding commenced by or against the Depart-
ment of Commerce or the Secretary of Commerce, or by
or against any individual in the official capacity of such
individual as an officer or employee of an office trans-
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ferred by this title, shall abate by reason of the enactment
of this title.
(e) CONTINUANCE OF SUITS.—If any Government of-
ficer in the official capacity of such officer is party to a
suit with respect to a function of the officer, and under
this title such function is transferred to any other officer
or office, then such suit shall be continued with the other
officer or the head of such other office, as applicable, sub-
stituted or added as a party.
(f) ADMINISTRATIVE PROCEDURE AND JUDICIAL RE-
VIEW.—Except as otherwise provided by this title, any
statutory requirements relating to notice, hearings, action
upon the record, or administrative or judicial review that
apply to any function transferred by this title shall apply
to the exercise of such function by the head of the Federal
agency, and other officers of the agency, to which such
function is transferred by this title.
SEC. 644. TRANSFER OF ASSETS.
Except as otherwise provided in this title, so much
of the personnel, property, records, and unexpended bal-
ances of appropriations, allocations, and other funds em-
ployed, used, held, available, or to be made available in
connection with a function transferred to an official or
agency by this title shall be available to the official or the
head of that agency, respectively, at such time or times
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as the Director of the Office of Management and Budget
directs for use in connection with the functions trans-
ferred.
SEC. 645. DELEGATION AND ASSIGNMENT.
Except as otherwise expressly prohibited by law or
otherwise provided in this title, an official to whom func-
tions are transferred under this title (including the head
of any office to which functions are transferred under this
title) may delegate any of the functions so transferred to
such officers and employees of the office of the official as
the official may designate, and may authorize successive
redelegations of such functions as may be necessary or ap-
propriate. No delegation of functions under this section
or under any other provision of this title shall relieve the
official to whom a function is transferred under this title
of responsibility for the administration of the function.
SEC. 646. AUTHORITY OF DIRECTOR OF THE OFFICE OF
MANAGEMENT AND BUDGET WITH RESPECT
TO FUNCTIONS TRANSFERRED.
(a) DETERMINATIONS.—If necessary, the Director of
the Office of Management and Budget shall make any de-
termination of the functions that are transferred under
this title.
(b) INCIDENTAL TRANSFERS.—The Director of the
Office of Management and Budget, at such time or times
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as the Director shall provide, may make such determina-
tions as may be necessary with regard to the functions
transferred by this title, and to make such additional inci-
dental dispositions of personnel, assets, liabilities, grants,
contracts, property, records, and unexpended balances of
appropriations,
authorizations,
allocations,
and
other
funds held, used, arising from, available to, or to be made
available in connection with such functions, as may be nec-
essary to carry out the provisions of this title. The Direc-
tor shall provide for the termination of the affairs of all
entities terminated by this title and for such further meas-
ures and dispositions as may be necessary to effectuate
the purposes of this title.
SEC. 647. CERTAIN VESTING OF FUNCTIONS CONSIDERED
TRANSFERS.
For purposes of this title, the vesting of a function
in a department or office pursuant to reestablishment of
an office shall be considered to be the transfer of the func-
tion.
SEC. 648. AVAILABILITY OF EXISTING FUNDS.
Existing appropriations and funds available for the
performance of functions, programs, and activities termi-
nated pursuant to this title shall remain available, for the
duration of their period of availability, for necessary ex-
penses in connection with the termination and resolution
118
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tion with respect to actions taken after the date of
such abandonment.
‘‘(6) PERSONAL
DEFENSE.—The defense under
this section may be asserted only by the person who
performed the acts necessary to establish the defense
and, except for any transfer to the patent owner, the
right to assert the defense shall not be licensed or as-
signed or transferred to another person except as an
ancillary and subordinate part of a good faith assign-
ment or transfer for other reasons of the entire enter-
prise or line of business to which the defense relates.
‘‘(7) LIMITATION
ON
SITES.—A defense under
this section, when acquired as part of a good faith as-
signment or transfer of an entire enterprise or line of
business to which the defense relates, may only be as-
serted for uses at sites where the subject matter that
would otherwise infringe one or more of the claims is
in use before the later of the effective filing date of the
patent or the date of the assignment or transfer of
such enterprise or line of business.
‘‘(8) UNSUCCESSFUL ASSERTION OF DEFENSE.—
If the defense under this section is pleaded by a per-
son who is found to infringe the patent and who sub-
sequently fails to demonstrate a reasonable basis for
asserting the defense, the court shall find the case ex-
125
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the term of the patent shall be extended one day
for each day of the pendency of the proceeding,
order, or review, as the case may be.
‘‘(2) LIMITATIONS.—
‘‘(A) IN GENERAL.—To the extent that peri-
ods of delay attributable to grounds specified in
paragraph (1) overlap, the period of any adjust-
ment granted under this subsection shall not ex-
ceed the actual number of days the issuance of
the patent was delayed.
‘‘(B) DISCLAIMED
TERM.—No patent the
term of which has been disclaimed beyond a
specified date may be adjusted under this section
beyond the expiration date specified in the dis-
claimer.
‘‘(C) REDUCTION OF PERIOD OF ADJUST-
MENT.—
‘‘(i) The period of adjustment of the
term of a patent under paragraph (1) shall
be reduced by a period equal to the period
of time during which the applicant failed to
engage in reasonable efforts to conclude
prosecution of the application.
‘‘(ii) With respect to adjustments to
patent term made under the authority of