To amend title 35, United States Code, to provide for improvements in the quality of patents on certain inventions.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Patent Improvement Act of 2001''.

SEC. 2. OPPOSITION PROCEDURES.

    (a) In General.--Title 35, United States Code, is amended by 
inserting after chapter 31 the following new chapter:

                  ``CHAPTER 32--OPPOSITION PROCEDURES

``Sec.
``321. Opposition procedures.
``322. Effect on other proceedings.
``Sec. 321. Opposition procedures
    ``(a) Administrative Opposition Panel.--
            ``(1) Establishment.--The Director shall, not later than 1 
        year after the date of enactment of the Patent Improvement Act 
        of 2001, establish an Administrative Opposition Panel. The 
        Administrative Opposition Panel shall be comprised of not less 
        than 18 administrative opposition judges, each of whom shall be 
        an individual of competent legal knowledge and scientific 
        ability. Upon establishment of the Administrative Opposition 
        Panel, the Director shall publish notice of the establishment 
        of the Panel in the Federal Register.
            ``(2) Assignment of patent examiners to panel.--Patent 
        examiners may be assigned on detail to assist the 
        Administrative Opposition Panel in carrying out opposition 
        proceedings under this section, except that a patent examiner 
        may not be assigned to assist in review of a patent application 
        examined by that patent examiner. The Director shall establish 
        procedures by which an opposition is heard under subsection 
        (b).
    ``(b) Opposition Procedures.--
            ``(1) Request for opposition.--(A) Any person may file a 
        request for an opposition to a patent on the basis of section 
        101, 102, 103, or 112 of this title. Such a request is valid 
        only if the request--
                    ``(i) is made not later than 9 months after the 
                date of issuance of the patent;
                    ``(ii) is in writing;
                    ``(iii) is accompanied by payment of the opposition 
                fee set forth in section 41(a) of this title; and
                    ``(iv) sets forth in detail the basis on which the 
                opposition is requested.
            ``(B) Not later than 60 days after receiving a valid 
        request under subparagraph (A), the Director shall issue an 
        order for an opposition proceeding to be held on the record 
        after opportunity for a hearing, and shall promptly send a copy 
        of the request to the owner of record of the patent. The patent 
        owner shall be provided a reasonable period, but in no case 
        less than 60 days after the date on which a copy of the request 
        is given or mailed to the patent owner, within which the owner 
        may file a statement in reply to the grounds for the request 
        for opposition, including any amendment to the patent and new 
        claim or claims, for consideration in the opposition 
        proceeding. If the patent owner files such a statement, the 
        patent owner shall promptly serve a copy of the statement on 
        the third-party requester. Not later than 2 months after the 
        date of such service, the third-party requester may file and 
        have considered in the opposition proceeding a reply to the 
        statement filed by the patent owner.
            ``(2) Conduct of opposition proceedings.--Each opposition 
        shall be heard by one administrative opposition judge, and no 
        party shall be permitted ex parte communication with the 
        administrative opposition judge. In addition to the statements 
        and replies set forth in paragraph (1), the administrative 
        opposition judge may consider evidence that the judge considers 
        relevant, including evidence that is presented in any oral 
        testimony (including exhibits and expert testimony) in direct 
        or cross examination, or in any deposition, affidavit, or other 
        documentary form, whether voluntary or compelled. In any 
        opposition proceeding, the Federal Rules of Evidence shall 
        apply.
            ``(3) Amendments to patent claims.--A patent applicant may 
        propose to amend a patent claim or propose a new claim at any 
        time during the  opposition proceeding, except that no proposed 
amended or new claim enlarging the scope of a claim of the patent may 
be permitted at any time during an opposition proceeding under this 
section.
            ``(4) Determination.--Not later than 18 months after the 
        filing of a request for an opposition under this section, the 
        administrative opposition judge in the opposition proceeding 
        shall determine the patentability of the subject matter of the 
        patent, a record of the administrative opposition judge's 
        determination under this section shall be placed in the 
        official file of the patent, and a copy shall promptly be given 
        or mailed to the owner of record of the patent and to the 
        third-party requester.
            ``(5) Appeals.--Any party to the opposition may appeal a 
        decision of the Administrative Opposition Panel under the 
        provisions of section 134 of this title, and may seek court 
        review under the provisions of sections 141 through 145 of this 
        title, with respect to any decision in regard to the 
        patentability of any original or proposed amended or new claim 
        of the patent. A patent owner may be a party to an appeal taken 
        by a third-party requester. Any third-party requester may be a 
        party to an appeal taken by a patent owner.
            ``(6) Certification of patentability.--In an opposition 
        proceeding under this chapter, when the time for appeal has 
        expired or any appeal 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 patentable, and 
        incorporating in the patent any proposed amended or new claim 
        determined to be patentable.
            ``(7) Effect of determination.--Any proposed, amended, or 
        new claim determined to be patentable and incorporated into a 
        patent following an opposition proceeding shall have the same 
        effect as that specified in section 252 of this title for 
        reissued patents on the right of any person who made, 
        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 preparations therefor, 
        prior to issuance of a certificate under paragraph (6) of this 
        subsection.
``Sec. 322. Effect on other proceedings
    ``(a) Right to Litigation.--Subject to subsections (b) and (c), 
proceedings under section 321 shall not alter or prejudice any party's 
right to pursue remedies under provisions of law other than this 
section. In the case of court proceedings, other than an appeal of a 
decision in an opposition proceeding under section 321, the court may 
consider any matter independently of any opposition proceeding under 
this section.
    ``(b) Effect of Final Decision.--
            ``(1) In future opposition proceedings.--If a final 
        decision has been entered against a party in a civil action 
        arising in whole or in part under section 1338 of title 28, 
        establishing that the party has not sustained its burden of 
        proving the invalidity of any patent claim, or if a final 
        decision in an inter partes reexamination proceeding instituted 
        by a third-party requester is favorable to the patentability of 
        any original or proposed amended or new claim of the patent--
                    ``(A) neither that party to the civil action, the 
                third-party requester, nor the privies of that party or 
                third-party requester may thereafter request an 
                opposition to such patent claim on the basis of issues 
                which that party, third-party requester, or the privies 
                of that party or third-party requester raised in such 
                civil action or inter partes reexamination proceeding 
                (as the case may be); and
                    ``(B) an opposition requested by that party, third-
                party requester, or the privies of that party or third-
                party requester on the basis of such issues may not 
                thereafter be maintained by the Office.
            ``(2) Effect of final decision in opposition.--If a final 
        decision in an opposition proceeding instituted by a third-
        party requester is favorable to the patentability of any 
        original or proposed amended or new claim of the patent--
                    ``(A) neither the third-party requester, nor the 
                privies of that third-party requester, may thereafter 
                bring a civil action under section 1338 of title 28, or 
                request an inter partes reexamination of, or an 
                opposition to, such patent claim on the basis of issues 
                which that third-party requester, or the privies of 
                that third-party requester, raised in such opposition 
                proceeding; and
                    ``(B) an inter partes reexamination or opposition 
                requested by that third-party requester, or the privies 
                of that third-party requester, on the basis of such 
                issues may not thereafter be maintained by the Office.
            ``(3) New evidence.--Paragraphs (1) and (2) do not prevent 
        the assertion by a party to a civil action or a third-party 
        requester of invalidity based on newly discovered prior art, or 
        other evidence, unavailable to that party or third-party 
        requester, as the case may be, and the Patent and Trademark 
        Office, at the time of the civil action, inter partes 
        reexamination, or opposition proceeding (as the case may be).
    ``(c) Stay of Litigation.--Once an order for an opposition 
proceeding with respect to a patent has been issued under section 
321(b)(1)(B), any party to the proceeding may obtain a stay of any 
pending court proceeding (other than an appeal to the Court of Appeals 
for the Federal Circuit) which involves an issue of patentability of 
any claims of the patent which are the subject of the opposition 
proceeding, unless the court before which such litigation is pending 
determines that a stay would not serve the interests of justice.''.
    (b) Fees.--Section 41(a) of title 35, United States Code, is 
amended--
            (1) by redesignating paragraphs (7) through (15) as 
        paragraphs (9) through (17), respectively; and
            (2) by inserting after paragraph (6) the following:
            ``(7)(A) On filing an opposition under chapter 32 to a 
        patent based on prior art citations or obviousness, a fee of 
        $200.
            ``(B) On filing an opposition under chapter 32 to a patent 
        on any other basis, a fee of $5,000.
            ``(C) The Director may waive the payment by an individual 
        of fees under this paragraph if such waiver is in the public 
        interest.
            ``(8) On filing a request for a proceeding to determine 
        whether an invention claimed in an application was known or 
        used, or has been in public use or on sale, under section 102, 
        a fee of $35.''.
    (b) Clerical Amendment.--The table of chapters for part III of 
title 35, United States Code, is amended by adding at the end the 
following:

``32. Opposition Procedures.................................    321.''.

SEC. 3. NONOBVIOUSNESS.

    Section 103 of title 35, United States Code, is amended by adding 
at the end the following:
    ``(d)(1) An invention shall be presumed obvious under this section 
if the only significant difference between the combined teachings of 
the prior art and the claimed invention is that the claimed invention 
is appropriate for use with a computer technology, unless--
            ``(A) the application of the computer technology is novel; 
        or
            ``(B) the computer technology is novel and not the subject 
        of another patent or patent application.
    ``(2)(A) An applicant or patentee may rebut the presumption under 
paragraph (1) upon a showing by a preponderance of the evidence that 
the invention is not obvious to persons of ordinary skill in all 
relevant arts.
    ``(B) Those areas of art which are relevant for purposes of 
subparagraph (A) include the field of the computer implementation.''.

SEC. 4. REQUIREMENT TO DISCLOSE SEARCH.

    The Director of the Patent and Trademark Office shall, within 30 
days after the date of enactment of this Act, publish notice of 
rulemaking proceedings to amend the rules of the Patent and Trademark 
Office to require an applicant for a patent to disclose in the 
application the extent to which the applicant searched for prior art to 
meet the requirements of title 35, United States Code. Such amendment 
shall include appropriate penalties for failure to comply with such 
requirement. The Director shall ensure that the amendment is 
implemented as promptly as possible.

SEC. 5. CONFORMING AMENDMENTS.

    (a) Definitions.--Section 100(e) of title 35, United States Code, 
is amended by striking ``or inter partes reexamination under section 
311'' and inserting ``, inter partes reexamination under section 311, 
or an opposition under section 321,''.
    (b) Board of Patent Appeals and Interferences.--Section 134 of 
title 35, United States Code, is amended--
            (1) in subsection (b)--
                    (A) by inserting ``or opposition'' after 
                ``reexamination''; and
                    (B) by inserting ``or the Administrative Opposition 
                Panel (as the case may be)'' after ``administrative 
                patent judge''; and
            (2) in subsection (c)--
                    (A) by striking ``proceeding'' and inserting 
                ``reexamination proceeding or an opposition 
                proceeding'';
                    (B) by inserting ``or the Administrative Opposition 
                Panel (as the case may be)'' after ``administrative 
                patent judge''; and
                    (C) in the last sentence, by inserting ``in an 
                inter partes reexamination proceeding'' after 
                ``requester''.
    (c) Appeal to Court of Appeals.--(1) Section 141 of title 35, 
United States Code, is amended in the second sentence by inserting 
after ``reexamination proceeding'' the following: ``, and any party in 
an opposition proceeding, who is''.
    (2) Section 143 of title 35, United States Code, is amended by 
inserting after the third sentence the following: ``In any opposition 
proceeding, the Administrative Opposition Panel shall submit to the 
court in writing the grounds for the decision of the Panel, addressing 
all the issues involved in the appeal.''.

SEC. 6. EFFECTIVE DATE.

    (a) In General.--Subject to subsections (b), (c), and (d), this Act 
and the amendments made by this Act apply to--
            (1) any application for patent that is pending on, or that 
        is filed on or after, the date of enactment of this Act; and
            (2) any patent issued on or after the date of enactment of 
        this Act.
    (b) Patents Issued Before Establishment of Administrative 
Opposition Panel.--In the case of a patent issued after the enactment 
of this Act but before the date on which notice of the establishment of 
the Administrative Opposition Panel is published under section 
321(a)(1) of title 35, United States Code (as added by this Act), a 
request for an opposition to the patent may be filed under section 
321(b)(1)(A) of title 35, United States Code (as added by this Act), 
notwithstanding the 9-month requirement set forth in clause (i) of that 
section, if the request is filed not later than 9 months after the date 
on which such notice is so published.

Summary: Patent Improvement Act of 2001 - Amends Federal law to require the Director of the Patent and Trademark Office to establish an Administrative Opposition Panel to conduct proceedings, under specified conditions, to hear opposition to patent claims and cancel, confirm, or modify them.