Increased congressional interest in the patent system has reflected growing recognition of the role patents play in promoting innovation and economic growth. In recent years, a number of bills have proposed changes to the patent system designed to address perceived deficiencies. Several of these bills would have altered the current system of "patent revocation proceedings" administered by the U.S. Patent and Trademark Office (USPTO). These proposals built upon several earlier laws, including the American Inventors Protection Act of 1999, that provided interested parties with a mechanism for challenging a patent outside of the federal court system. The term "patent revocation proceeding" commonly refers to a legal procedure through which members of the public may challenge the validity of an issued patent. Patent revocation proceedings are administrative in nature and are conducted before the USPTO. Current law provides for two types of patent revocation proceedings: an ex parte reexamination and inter partes reexamination. The chief distinction between these two sorts of proceedings is the level of participation by the individual who requested the reexamination. Once the USPTO decides to pursue an ex parte  reexamination, the requestor no longer participates in the proceedings. In contrast, the requestor participates in an inter partes  reexamination throughout the duration of the proceedings. Reexamination proceedings were intended to serve several goals, including allowing firms to resolve patent disputes in a more timely and less costly manner than litigation in the federal courts, harnessing the technological and legal expertise of the USPTO, and improving public confidence in the patent system. Some observers believe that these proceedings are underutilized due to shortcomings in their design. Among the expressed concerns over reexamination proceedings is that they are too slow, too susceptible to abuse by patent opponents, and not truly an effective substitute for litigation in the federal courts. Legislative proposals in the 111 th Congress would address existing patent revocation proceedings and also establish a new, more expansive "post-grant review proceeding." Proponents of reform assert that these changes would better fulfill the original purposes of reexamination, ultimately allowing more efficient resolution of patent disputes and improving patent quality. On the other hand, concerned observers note that patent revocation proceedings may hold disdavantages. In their view, these procedures may increase uncertainty about patent rights in the marketplace, be used strategically to harass patent proprietors, and strain USPTO administrative capabilities. Proponents maintain that the design features of the different patent revocation proceedings endeavor to realize their potential advantages while minimizing their possible drawbacks. This report introduces issues with respect to the design and implementation of patent revocation proceedings. It begins by providing an overview of the basic workings and policy aspirations of the patent system. The report then provides a more detailed review of ex parte and inter partes reexamination proceedings currently administered by the USPTO. Next, the report reviews changes to patent revocation proceedings that were proposed in pending legislation. The report closes by identifying a number of congressional issues and options with respect to patent revocation proceedings. The U.S. Constitution grants Congress the power "To promote the Progress of Science and useful Arts, by securing for limited Times to ... Inventors the exclusive Right to their ... Discoveries...." The Patent Act of 1952 allows inventors to request the grant of a patent by preparing and submitting an application to the USPTO. USPTO officials known as examiners then determine whether the invention disclosed in the application merits the award of a patent. In deciding whether to approve a patent application, a USPTO examiner will consider whether the submitted application fully discloses and distinctly claims the invention. In particular, the application must enable persons skilled in the art to make and use the invention without undue experimentation. In addition, the application must disclose the "best mode," or preferred way, that the applicant knows to practice the invention. The examiner will also determine whether the invention itself fulfills certain substantive standards set by the patent statute. To be patentable, an invention must meet four primary requirements. First, the invention must fall within at least one category of patentable subject matter. An invention that qualifies as a "process, machine, manufacture, or composition of matter" is eligible for patenting. Second, the invention must be useful, a requirement that is satisfied if the invention is operable and provides a tangible benefit. Third, the invention must be new, or different, from subject matter disclosed by an earlier patent, publication, or other state-of-the-art knowledge. Finally, an invention is not patentable if "the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." This requirement of "nonobviousness" prevents the issuance of patents claiming subject matter that a skilled artisan would have been able to implement in view of the knowledge of the state of the art. If the USPTO allows the patent to issue, its owner obtains the right to exclude others from making, using, selling, offering to sell, or importing into the United States the patented invention. Those who engage in those acts without the permission of the patentee during the term of the patent can be held liable for infringement. The maximum term of patent protection is ordinarily set at 20 years from the date the application is filed. At the end of that period, others may employ that invention without regard to the expired patent. Patent proprietors who wish to compel others to respect their rights must commence enforcement proceedings, which most commonly consist of litigation in the federal courts. Adjudicated infringers may be enjoined from further infringing acts. The patent statute also provides for an award of damages "adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer." Although issued patents are presumed to be valid, accused infringers may assert that a patent is invalid or unenforceable on a number of grounds. If the court agrees that the patented invention would have been obvious in view of the state of the art, for example, then it will declare the patent invalid. Several empirical studies have attempted to track the percentage of litigated patents that the courts conclude the USPTO improvidently granted. One study conducted by John R. Allison, a member of the University of Texas business school faculty, and Mark A. Lemley, a member of the Stanford Law School faculty, concluded that courts hold 46% of patents litigated to a final judgment to be invalid. Other studies have reported results broadly consistent with the Allison & Lemley research. The Court of Appeals for the Federal Circuit (Federal Circuit) possesses nationwide jurisdiction over most patent appeals from the district courts. The Supreme Court enjoys discretionary authority to review cases decided by the Federal Circuit. The patent system is intended to promote innovation, which in turn leads to industry advancement and economic growth. The patent system in particular attempts to address "public goods problems" that may discourage individuals from innovating. Innovation commonly results in information that may be deemed a "public good," in that it is both non-rivalrous and non-excludable. Stated differently, consumption of a public good by one individual does not limit the amount of the good available for use by others, and no one can be prevented from using that good. The lack of excludability in particular is believed to result in an environment where too little innovation would occur. Absent a patent system, "free riders" could easily duplicate and exploit the inventions of others. Further, because they incurred no cost to develop and perfect the technology involved, copyists could undersell the original inventor. Aware that they would be unable to capitalize upon their inventions, individuals might be discouraged from innovating in the first instance. The patent system corrects this market failure problem by providing innovators with an exclusive interest in their inventions for a period of time, thereby allowing them to capture their marketplace value. The patent system potentially serves other goals as well. The patent law may promote the disclosure of new products and processes, as each issued patent must include a description sufficient to enable skilled artisans to practice the patented invention. At the close of the patent's 20-year term, others may employ the claimed invention without regard to the expired patent. In this manner the patent system ultimately contributes to the growth of information in the public domain. Issued patents may encourage others to "invent around" the patentee's proprietary interest. A patent proprietor may point the way to new products, markets, economies of production, and even entire industries. Others can build upon the disclosure of a patent instrument to produce their own technologies that fall outside the exclusive rights associated with the patent. The patent system also has been identified as a facilitator of markets. If inventors lack patent rights, they may have scant assets to sell or license. In addition, an inventor might otherwise be unable to police the conduct of a contracting party. Any technology or know-how that has been disclosed to a prospective licensee might be appropriated without compensation to the inventor. The availability of patent protection decreases the ability of contracting parties to engage in opportunistic behavior. By lowering such transaction costs, the patent system may make transactions concerning information goods more feasible. Through these mechanisms, the patent system may act in a more socially desirable way than its chief legal alternative, trade secret protection. Trade secrecy guards against the improper appropriation of valuable, commercially useful, and secret information. In contrast to patenting, trade secret protection does not result in the disclosure of publicly available information. That is because an enterprise must take reasonable measures to keep secret the information for which trade secret protection is sought. Taking the steps necessary to maintain secrecy, such as implementing physical security measures, also imposes costs that may ultimately be unproductive for society. The patent system has long been subject to criticism, however. Some observers have asserted that the patent system is unnecessary due to market forces that already suffice to create an optimal level of innovation.