To amend title 35, United States Code, with respect to patents on certain processes.

TITLE I--BIOTECHNOLOGICAL PROCESS PATENTS

SEC. 101. CONDITIONS FOR PATENTABILITY; NONOBVIOUS SUBJECT MATTER.

    Section 103 of title 35, United States Code, is amended--
            (1) in the first unnumbered paragraph by inserting ``(a)'' 
        before ``A patent'';
            (2) in the second unnumbered paragraph by inserting ``(b)'' 
        before ``Subject matter''; and
            (3) by adding at the end thereof the following new 
        subsections:
    ``(c) Notwithstanding any other provision of this section, a 
claimed process of making or using a machine, manufacture, or 
composition of matter is not obvious under this section if--
            ``(1) the machine, manufacture, or composition of matter is 
        novel under section 102 of this title and nonobvious under this 
        section;
            ``(2) the claimed process is a biotechnological process as 
        defined in subsection (d); and
            ``(3)(A) the machine, manufacture, or composition of 
        matter, and the claimed process invention at the time it was 
        made, were owned by the same person or subject to an obligation 
        of assignment to the same person; and
            ``(B) claims to the process and to the machine, 
        manufacture, or composition of matter--
                    ``(i) are entitled to the same effective filing 
                date; and
                    ``(ii) appear in the same patent application, 
                different patent applications, or patent which is owned 
                by the same person and which expires or is set to 
                expire on the same date.
    ``(d) For purposes of this section, the term `biotechnological 
process' means any method of making or using living organisms, or parts 
thereof, for the purpose of making or modifying products. Such term 
includes recombinant DNA, recombinant RNA, cell fusion including 
hybridoma techniques, and other processes involving site specific 
manipulation of genetic material.''.

SEC. 102. NO PRESUMPTION OF INVALIDITY.

    The first unnumbered paragraph of section 282 of title 35, United 
States Code, is amended by inserting after the second sentence ``A 
claim issued under the provisions of section 103(c) of this title on a 
process of making or using a machine, manufacture, or composition of 
matter shall not be held invalid under section 103 of this title solely 
because the machine, manufacture, or composition of matter is 
determined to lack novelty under section 102 of this title or to be 
obvious under section 103 of this title.''.

SEC. 103. EFFECTIVE DATE.

    The amendments made by this title shall apply to all United States 
patents granted on or after the date of the enactment of this Act and 
to all applications for United States patents pending on or filed after 
such date of enactment, including any application for the reissuance of 
a patent.

              TITLE II--BIOTECHNOLOGICAL MATERIAL PATENTS

SEC. 201. INFRINGEMENT BY IMPORTATION, SALE OR USE.

    (a) Infringement.--Section 271 of title 35, United States Code, is 
amended by adding at the end the following new subsection:
    ``(h) Whoever without authority imports into the United States or 
sells or uses within the United States a product which is made by using 
a biotechnological material (as defined under section 154(b)) which is 
patented in the United States shall be liable as an infringer if the 
importation, sale, or use of the product occurs during the term of such 
patent.''.
    (b) Contents and Term Patent.--Section 154 of title 35, United 
States Code, is amended--
            (1) by inserting ``(a)'' before ``Every'';
            (2) by striking out ``in this title,'' and inserting in 
        lieu thereof ``in this title (1)'';
            (3) by striking out ``and, if the invention'' and inserting 
        ``(2) if the invention'';
            (4) by inserting after ``products made by that process,'' 
        the following: ``and (3) if the invention is a biotechnological 
        material used in making a product, of the right to exclude 
        others from using or selling throughout the United States, or 
        importing into the United States the product made or using such 
        biotechnological material,''; and
            (5) by adding at the end thereof the following:
    ``(b) For purposes of this section, the term `biotechnological 
material' is defined as any material (including a host cell, DNA 
sequence, or vector) that is used in a biotechnological process as 
defined under section 103(d).''.
    (c) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        take effect six months after the date of enactment of this Act 
        and, subject to paragraph (2), shall apply only with respect to 
        products made or imported after the effective date of the 
        amendments made by this section.
            (2) Exceptions.--The amendments made by this section shall 
        not abridge or affect the right of any person, or any successor 
        to the business of such person--
                    (A) to continue to use, sell, or import products in 
                substantial and continuous sale or use by such person 
                in the United States on the date of enactment of this 
                Act; or
                    (B) to continue to use, sell, or import products 
                for which substantial preparation by such person for 
                such sale or use was made before such date, to the 
                extent equitable for the protection of commercial 
                investment made or business commenced in the United 
                States before such date.

Summary: TABLE OF CONTENTS: 
     Title I:  Biotechnological Process Patents 
     Title II:  Biotechnological Material Patents 
Title I:  Biotechnological Process Patents
 - Amends Federal patent law to cite conditions under which a claimed process of making or using a machine, manufacture, or composition of matter is not obvious (thereby enhancing the patentability prospects of certain biotechnology processes). 
Establishes a presumption of validity with respect to a process claim even through a related product claim is invalidated (thus allowing a patentee to prove that the process claim is independently patentable from the product claim). 
Title II:  Biotechnological Material Patents
 - Makes any unauthorized person who imports or sells a product made by using a biotechnological material that is patented in the United States liable for patent infringement. 
Includes within the terms of such patents the right to exclude others from using, selling, or importing such products throughout or into the United States. 
Establishes exceptions to such requirements to the extent suitable to protect commercial investment made or business commenced before the effective date of such amendments.