[House Report 112-98]
[From the U.S. Government Publishing Office]
112th Congress Rept. 112-98
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
AMERICA INVENTS ACT
_______
June 1, 2011.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Smith of Texas, from the Committee on the Judiciary,
submitted the following
R E P O R T
together with
DISSENTING VIEWS AND ADDITIONAL VIEWS
[To accompany H.R. 1249]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 1249) to amend title 35, United States Code, to
provide for patent reform, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
The Amendment.................................................... 1
Purpose and Summary.............................................. 38
Background and Need for the Legislation.......................... 40
Hearings......................................................... 57
Committee Consideration.......................................... 58
Committee Votes.................................................. 58
Committee Oversight Findings..................................... 63
New Budget Authority and Tax Expenditures........................ 63
Congressional Budget Office Cost Estimate........................ 63
Performance Goals and Objectives................................. 73
Advisory on Earmarks............................................. 73
Section-by-Section Analysis...................................... 73
Agency Views..................................................... 85
Changes in Existing Law Made by the Bill, as Reported............ 89
Dissenting Views................................................. 162
Additional Views................................................. 163
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``America Invents
Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. First inventor to file.
Sec. 4. Inventor's oath or declaration.
Sec. 5. Defense to infringement based on earlier inventor.
Sec. 6. Post-grant review proceedings.
Sec. 7. Patent Trial and Appeal Board.
Sec. 8. Preissuance submissions by third parties.
Sec. 9. Venue.
Sec. 10. Fee setting authority.
Sec. 11. Fees for patent services.
Sec. 12. Supplemental examination.
Sec. 13. Funding agreements.
Sec. 14. Tax strategies deemed within the prior art.
Sec. 15. Best mode requirement.
Sec. 16. Marking.
Sec. 17. Advice of counsel.
Sec. 18. Transitional program for covered business method patents.
Sec. 19. Jurisdiction and procedural matters.
Sec. 20. Technical amendments.
Sec. 21. Travel expenses and payment of administrative judges.
Sec. 22. Patent and Trademark Office funding.
Sec. 23. Satellite offices.
Sec. 24. Designation of Detroit satellite office.
Sec. 25. Patent Ombudsman Program for small business concerns.
Sec. 26. Priority examination for technologies important to American
competitiveness.
Sec. 27. Calculation of 60-day period for application of patent term
extension.
Sec. 28. Study on implementation.
Sec. 29. Pro bono program.
Sec. 30. Effective date.
Sec. 31. Budgetary effects.
SEC. 2. DEFINITIONS.
In this Act:
(1) Director.--The term ``Director'' means the Under
Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
(2) Office.--The term ``Office'' means the United States
Patent and Trademark Office.
(3) Patent public advisory committee.--The term ``Patent
Public Advisory Committee'' means the Patent Public Advisory
Committee established under section 5(a)(1) of title 35, United
States Code.
(4) Trademark act of 1946.--The term ``Trademark Act of
1946'' means the Act entitled ``An Act to provide for the
registration and protection of trademarks used in commerce, to
carry out the provisions of certain international conventions,
and for other purposes'', approved July 5, 1946 (15 U.S.C. 1051
et seq.) (commonly referred to as the ``Trademark Act of 1946''
or the ``Lanham Act'').
(5) Trademark public advisory committee.--The term
``Trademark Public Advisory Committee'' means the Trademark
Public Advisory Committee established under section 5(a)(1) of
title 35, United States Code.
SEC. 3. FIRST INVENTOR TO FILE.
(a) Definitions.--Section 100 of title 35, United States Code, is
amended--
(1) in subsection (e), by striking ``or inter partes
reexamination under section 311''; and
(2) by adding at the end the following:
``(f) The term `inventor' means the individual or, if a joint
invention, the individuals collectively who invented or discovered the
subject matter of the invention.
``(g) The terms `joint inventor' and `coinventor' mean any 1 of the
individuals who invented or discovered the subject matter of a joint
invention.
``(h) The term `joint research agreement' means a written contract,
grant, or cooperative agreement entered into by 2 or more persons or
entities for the performance of experimental, developmental, or
research work in the field of the claimed invention.
``(i)(1) The term `effective filing date' for a claimed invention
in a patent or application for patent means--
``(A) if subparagraph (B) does not apply, the actual filing
date of the patent or the application for the patent containing
a claim to the invention; or
``(B) the filing date of the earliest application for which
the patent or application is entitled, as to such invention, to
a right of priority under section 119, 365(a), or 365(b) or to
the benefit of an earlier filing date un
``(2) The effective filing date for a claimed invention in an
application for reissue or reissued patent shall be determined by
deeming the claim to the invention to have been contained in the patent
for which reissue was sought.
``(j) The term `claimed invention' means the subject matter defined
by a claim in a patent or an application for a patent.''.
(b) Conditions for Patentability.--
(1) In general.--Section 102 of title 35, United States
Code, is amended to read as follows:
``Sec. 102. Conditions for patentability; novelty
``(a) Novelty; Prior Art.--A person shall be entitled to a patent
unless--
``(1) the claimed invention was patented, described in a
printed publication, or in public use, on sale, or otherwise
available to the public before the effective filing date of the
claimed invention; or
``(2) the claimed invention was described in a patent
issued under section 151, or in an application for patent
published or deemed published under section 122(b), in which
the patent or application, as the case may be, names another
inventor and was effectively filed before the effective filing
date of the claimed invention.
``(b) Exceptions.--
``(1) Disclosures made 1 year or less before the effective
filing date of the claimed invention.--A disclosure made 1 year
or less before the effective filing date of a claimed invention
shall not be prior art to the claimed invention under
subsection (a)(1) if--
``(A) the disclosure was made by the inventor or
joint inventor or by another who obtained the subject
matter disclosed directly or indirectly from the
inventor or a joint inventor; or
``(B) the subject matter disclosed had, before such
disclosure, been publicly disclosed by the inventor or
a joint inventor or another who obtained the subject
matter disclosed directly or indirectly from the
inventor or a joint inventor.
``(2) Disclosures appearing in applications and patents.--A
disclosure shall not be prior art to a claimed invention under
subsection (a)(2) if--
``(A) the subject matter disclosed was obtained
directly or indirectly from the inventor or a joint
inventor;
``(B) the subject matter disclosed had, before such
subject matter was effectively filed under subsection
(a)(2), been publicly disclosed by the inventor or a
joint inventor or another who obtained the subject
matter disclosed directly or indirectly from the
inventor or a joint inventor; or
``(C) the subject matter disclosed and the claimed
invention, not later than the effective filing date of
the claimed invention, were owned by the same person or
subject to an obligation of assignment to the same
person.
``(c) Common Ownership Under Joint Research Agreements.--Subject
matter disclosed and a claimed invention shall be deemed to have been
owned by the same person or subject to an obligation of assignment to
the same person in applying the provisions of subsection (b)(2)(C) if--
``(1) the subject matter disclosed was developed and the
claimed invention was made by, or on behalf of, 1 or more
parties to a joint research agreement that was in effect on or
before the effective filing date of the claimed invention;
``(2) the claimed invention was made as a result of
activities undertaken within the scope of the joint research
agreement; and
``(3) the application for patent for the claimed invention
discloses or is amended to disclose the names of the parties to
the joint research agreement.
``(d) Patents and Published Applications Effective as Prior Art.--
For purposes of determining whether a patent or application for patent
is prior art to a claimed invention under subsection (a)(2), such
patent or application shall be considered to have been effectively
filed, with respect to any subject matter described in the patent or
application--
``(1) if paragraph (2) does not apply, as of the actual
filing date of the patent or the application for patent; or
``(2) if the patent or application for patent is entitled
to claim a right of priority under section 119, 365(a), or
365(b), or to claim the benefit of an earlier filing date under
section 120, 121, or 365(c), based upon 1 or more prior filed
applications for patent, as of the filing date of the earliest
such application that describes the subject matter.''.
(2) Continuity of intent under the create act.--The
enactment of section 102(c) of title 35, United States Code,
under paragraph (1) of this subsection is done with the same
intent to promote joint research activities that was expressed,
including in the legislative history, through the enactment of
the Cooperative Research and Technology Enhancement Act of 2004
(Public Law 108-453; the ``CREATE Act''), the amendments of
which are stricken by subsection (c) of this section. The
United States Patent and Trademark Office shall administer
section 102(c) of title 35, United States Code, in a manner
consistent with the legislative history of the CREATE Act that
was relevant to its administration by the United States Patent
and Trademark Office.
(3) Conforming amendment.--The item relating to section 102
in the table of sections for chapter 10 of title 35, United
States Code, is amended to read as follows:
``102. Conditions for patentability; novelty.''.
(c) Conditions for Patentability; Nonobvious Subject Matter.--
Section 103 of title 35, United States Code, is amended to read as
follows:
``Sec. 103. Conditions for patentability; non-obvious subject matter
``A patent for a claimed invention may not be obtained,
notwithstanding that the claimed invention is not identically disclosed
as set forth in section 102, if the differences between the claimed
invention and the prior art are such that the claimed invention as a
whole would have been obvious before the effective filing date of the
claimed invention to a person having ordinary skill in the art to which
the claimed invention pertains. Patentability shall not be negated by
the manner in which the invention was made.''.
(d) Repeal of Requirements for Inventions Made Abroad.--Section 104
of title 35, United States Code, and the item relating to that section
in the table of sections for chapter 10 of title 35, United States
Code, are repealed.
(e) Repeal of Statutory Invention Registration.--
(1) In general.--Section 157 of title 35, United States
Code, and the item relating to that section in the table of
sections for chapter 14 of title 35, United States Code, are
repealed.
(2) Removal of cross references.--Section 111(b)(8) of
title 35, United States Code, is amended by striking ``sections
115, 131, 135, and 157'' and inserting ``sections 131 and
135''.
(3) Effective date.--The amendments made by this subsection
shall take effect upon the expiration of the 18-month period
beginning on the date of the enactment of this Act, and shall
apply to any request for a statutory invention registration
filed on or after that effective date.
(f) Earlier Filing Date for Inventor and Joint Inventor.--Section
120 of title 35, United States Code, is amended by striking ``which is
filed by an inventor or inventors named'' and inserting ``which names
an inventor or joint inventor''.
(g) Conforming Amendments.--
(1) Right of priority.--Section 172 of title 35, United
States Code, is amended by striking ``and the time specified in
section 102(d)''.
(2) Limitation on remedies.--Section 287(c)(4) of title 35,
United States Code, is amended by striking ``the earliest
effective filing date of which is prior to'' and inserting
``which has an effective filing date before''.
(3) International application designating the united
states: effect.--Section 363 of title 35, United States Code,
is amended by striking ``except as otherwise provided in
section 102(e) of this title''.
(4) Publication of international application: effect.--
Section 374 of title 35, United States Code, is amended by
striking ``sections 102(e) and 154(d)'' and inserting ``section
154(d)''.
(5) Patent issued on international application: effect.--
The second sentence of section 375(a) of title 35, United
States Code, is amended by striking ``Subject to section 102(e)
of this title, such'' and inserting ``Such''.
(6) Limit on right of priority.--Section 119(a) of title
35, United States Code, is amended by striking ``; but no
patent shall be granted'' and all that follows through ``one
year prior to such filing''.
(7) Inventions made with federal assistance.--Section
202(c) of title 35, United States Code, is amended--
(A) in paragraph (2)--
(i) by striking ``publication, on sale, or
public use,'' and all that follows through
``obtained in the United States'' and inserting
``the 1-year period referred to in section
102(b) would end before the end of that 2-year
period''; and
(ii) by striking ``prior to the end of the
statutory'' and inserting ``before the end of
that 1-year''; and
(B) in paragraph (3), by striking ``any statutory
bar date that may occur under this title due to
publication, on sale, or public use'' and inserting
``the expiration of the 1-year period referred to in
section 102(b)''.
(h) Derived Patents.--
(1) In general.--Section 291 of title 35, United States
Code, is amended to read as follows:
``Sec. 291. Derived Patents
``(a) In General.--The owner of a patent may have relief by civil
action against the owner of another patent that claims the same
invention and has an earlier effective filing date, if the invention
claimed in such other patent was derived from the inventor of the
invention claimed in the patent owned by the person seeking relief
under this section.
``(b) Filing Limitation.--An action under this section may be filed
only before the end of the 1-year period beginning on the date of the
issuance of the first patent containing a claim to the allegedly
derived invention and naming an individual alleged to have derived such
invention as the inventor or joint inventor.''.
(2) Conforming amendment.--The item relating to section 291
in the table of sections for chapter 29 of title 35, United
States Code, is amended to read as follows:
``291. Derived patents.''.
(i) Derivation Proceedings.--Section 135 of title 35, United States
Code, is amended to read as follows:
``Sec. 135. Derivation proceedings
``(a) Institution of Proceeding.--An applicant for patent may file
a petition to institute a derivation proceeding in the Office. The
petition shall set forth with particularity the basis for finding that
an inventor named in an earlier application derived the claimed
invention from an inventor named in the petitioner's application and,
without authorization, the earlier application claiming such invention
was filed. Any such petition may be filed only within the 1-year period
beginning on the date of the first publication of a claim to an
invention that is the same or substantially the same as the earlier
application's claim to the invention, shall be made under oath, and
shall be supported by substantial evidence. Whenever the Director
determines that a petition filed under this subsection demonstrates
that the standards for instituting a derivation proceeding are met, the
Director may institute a derivation proceeding. The determination by
the Director whether to institute a derivation proceeding shall be
final and nonappealable.
``(b) Determination by Patent Trial and Appeal Board.--In a
derivation proceeding instituted under subsection (a), the Patent Trial
and Appeal Board shall determine whether an inventor named in the
earlier application derived the claimed invention from an inventor
named in the petitioner's application and, without authorization, the
earlier application claiming such invention was filed. The Director
shall prescribe regulations setting forth standards for the conduct of
derivation proceedings.
``(c) Deferral of Decision.--The Patent Trial and Appeal Board may
defer action on a petition for a derivation proceeding until the
expiration of the 3-month period beginning on the date on which the
Director issues a patent that includes the claimed invention that is
the subject of the petition. The Patent Trial and Appeal Board also may
defer action on a petition for a derivation proceeding, or stay the
proceeding after it has been instituted, until the termination of a
proceeding under chapter 30, 31, or 32 involving the patent of the
earlier applicant.
``(d) Effect of Final Decision.--The final decision of the Patent
Trial and Appeal Board, if adverse to claims in an application for
patent, shall constitute the final refusal by the Office on those
claims. The final decision of the Patent Trial and Appeal Board, if
adverse to claims in a patent, shall, if no appeal or other review of
the decision has been or can be taken or had, constitute cancellation
of those claims, and notice of such cancellation shall be endorsed on
copies of the patent distributed after such cancellation.
``(e) Settlement.--Parties to a proceeding instituted under
subsection (a) may terminate the proceeding by filing a written
statement reflecting the agreement of the parties as to the correct
inventors of the claimed invention in dispute. Unless the Patent Trial
and Appeal Board finds the agreement to be inconsistent with the
evidence of record, if any, it shall take action consistent with the
agreement. Any written settlement or understanding of the parties shall
be filed with the Director. At the request of a party to the
proceeding, the agreement or understanding shall be treated as business
confidential information, shall be kept separate from the file of the
involved patents or applications, and shall be made available only to
Government agencies on written request, or to any person on a showing
of good cause.
``(f) Arbitration.--Parties to a proceeding instituted under
subsection (a) may, within such time as may be specified by the
Director by regulation, determine such contest or any aspect thereof by
arbitration. Such arbitration shall be governed by the provisions of
title 9, to the extent such title is not inconsistent with this
section. The parties shall give notice of any arbitration award to the
Director, and such award shall, as between the parties to the
arbitration, be dispositive of the issues to which it relates. The
arbitration award shall be unenforceable until such notice is given.
Nothing in this subsection shall preclude the Director from determining
the patentability of the claimed inventions involved in the
proceeding.''.
(j) Elimination of References to Interferences.--(1) Sections 134,
145, 146, 154, and 305 of title 35, United States Code, are each
amended by striking ``Board of Patent Appeals and Interferences'' each
place it appears and inserting ``Patent Trial and Appeal Board''.
(2)(A) Section 146 of title 35, United States Code, is amended--
(i) by striking ``an interference'' and inserting
``a derivation proceeding''; and
(ii) by striking ``the interference'' and inserting
``the derivation proceeding''.
(B) The subparagraph heading for section 154(b)(1)(C) of
title 35, United States Code, is amended to read as follows:
``(C) Guarantee of adjustments for delays
due to derivation proceedings, secrecy orders,
and appeals.--''.
(3) The section heading for section 134 of title 35, United States
Code, is amended to read as follows:
``Sec. 134. Appeal to the Patent Trial and Appeal Board''.
(4) The section heading for section 146 of title 35, United States
Code, is amended to read as follows:
``Sec. 146. Civil action in case of derivation proceeding''.
(5) The items relating to sections 134 and 135 in the table of
sections for chapter 12 of title 35, United States Code, are amended to
read as follows:
``134. Appeal to the Patent Trial and Appeal Board.
``135. Derivation proceedings.''.
(6) The item relating to section 146 in the table of sections for
chapter 13 of title 35, United States Code, is amended to read as
follows:
``146. Civil action in case of derivation proceeding.''.
(k) Statute of Limitations.--
(1) In general.--Section 32 of title 35, United States
Code, is amended by inserting between the third and fourth
sentences the following: ``A proceeding under this section
shall be commenced not later than the earlier of either the
date that is 10 years after the date on which the misconduct
forming the basis for the proceeding occurred, or 1 year after
the date on which the misconduct forming the basis for the
proceeding is made known to an officer or employee of the
Office as prescribed in the regulations established under
section 2(b)(2)(D).''.
(2) Report to congress.--The Director shall provide on a
biennial basis to the Judiciary Committees of the Senate and
House of Representatives a report providing a short description
of incidents made known to an officer or employee of the Office
as prescribed in the regulations established under section
2(b)(2)(D) of title 35, United States Code, that reflect
substantial evidence of misconduct before the Office but for
which the Office was barred from commencing a proceeding under
section 32 of title 35, United States Code, by the time
limitation established by the fourth sentence of that section.
(3) Effective date.--The amendment made by paragraph (1)
shall apply in any case in which the time period for
instituting a proceeding under section 32 of title 35, United
States Code, had not lapsed before the date of the enactment of
this Act.
(l) Small Business Study.--
(1) Definitions.--In this subsection--
(A) the term ``Chief Counsel'' means the Chief
Counsel for Advocacy of the Small Business
Administration;
(B) the term ``General Counsel'' means the General
Counsel of the United States Patent and Trademark
Office; and
(C) the term ``small business concern'' has the
meaning given that term under section 3 of the Small
Business Act (15 U.S.C. 632).
(2) Study.--
(A) In general.--The Chief Counsel, in consultation
with the General Counsel, shall conduct a study of the
effects of eliminating the use of dates of invention in
determining whether an applicant is entitled to a
patent under title 35, United States Code.
(B) Areas of study.--The study conducted under
subparagraph (A) shall include examination of the
effects of eliminating the use of invention dates,
including examining--
(i) how the change would affect the ability
of small business concerns to obtain patents
and their costs of obtaining patents;
(ii) whether the change would create,
mitigate, or exacerbate any disadvantages for
applicants for patents that are small business
concerns relative to applicants for patents
that are not small business concerns, and
whether the change would create any advantages
for applicants for patents that are small
business concerns relative to applicants for
patents that are not small business concerns;
(iii) the cost savings and other potential
benefits to small business concerns of the
change; and
(iv) the feasibility and costs and benefits
to small business concerns of alternative means
of determining whether an applicant is entitled
to a patent under title 35, United States Code.
(3) Report.--Not later than the date that is 1 year after
the date of the enactment of this Act, the Chief Counsel shall
submit to the Committee on Small Business and Entrepreneurship
and the Committee on the Judiciary of the Senate and the
Committee on Small Business and the Committee on the Judiciary
of the House of Representatives a report on the results of the
study under paragraph (2).
(m) Report on Prior User Rights.--
(1) In general.--Not later than the end of the 4-month
period beginning on the date of the enactment of this Act, the
Director shall report, to the Committee on the Judiciary of the
Senate and the Committee on the Judiciary of the House of
Representatives, the findings and recommendations of the
Director on the operation of prior user rights in selected
countries in the industrialized world. The report shall include
the following:
(A) A comparison between patent laws of the United
States and the laws of other industrialized countries,
including members of the European Union and Japan,
Canada, and Australia.
(B) An analysis of the effect of prior user rights
on innovation rates in the selected countries.
(C) An analysis of the correlation, if any, between
prior user rights and start-up enterprises and the
ability to attract venture capital to start new
companies.
(D) An analysis of the effect of prior user rights,
if any, on small businesses, universities, and
individual inventors.
(E) An analysis of legal and constitutional issues,
if any, that arise from placing trade secret law in
patent law.
(F) An analysis of whether the change to a first-
to-file patent system creates a particular need for
prior user rights.
(2) Consultation with other agencies.--In preparing the
report required under paragraph (1), the Director shall consult
with the United States Trade Representative, the Secretary of
State, and the Attorney General.
(n) Effective Date.--
(1) In general.--Except as otherwise provided in this
section, the amendments made by this section shall take effect
upon the expiration of the 18-month period beginning on the
date of the enactment of this Act, and shall apply to any
application for patent, and to any patent issuing thereon, that
contains or contained at any time--
(A) a claim to a claimed invention that has an
effective filing date as defined in section 100(i) of
title 35, United States Code, that is on or after the
effective date described in this paragraph; or
(B) a specific reference under section 120, 121, or
365(c) of title 35, United States Code, to any patent
or application that contains or contained at any time
such a claim.
(2) Interfering patents.--The provisions of sections
102(g), 135, and 291 of title 35, United States Code, as in
effect on the day before the effective date set forth in
paragraph (1) of this subsection, shall apply to each claim of
an application for patent, and any patent issued thereon, for
which the amendments made by this section also apply, if such
application or patent contains or contained at any time--
(A) a claim to an invention having an effective
filing date as defined in section 100(i) of title 35,
United States Code, that occurs before the effective
date set forth in paragraph (1) of this subsection; or
(B) a specific reference under section 120, 121, or
365(c) of title 35, United States Code, to any patent
or application that contains or contained at any time
such a claim.
(o) Study of Patent Litigation.--
(1) GAO study.--The Comptroller General of the United
States shall conduct a study of the consequences of litigation
by non-practicing entities, or by patent assertion entities,
related to patent claims made under title 35, United States
Code, and regulations authorized by that title.
(2) Contents of study.--The study conducted under this
subsection shall include the following:
(A) The annual volume of litigation described in
paragraph (1) over the 20-year period ending on the
date of the enactment of this Act.
(B) The volume of cases comprising such litigation
that are found to be without merit after judicial
review.
(C) The impacts of such litigation on the time
required to resolve patent claims.
(D) The estimated costs, including the estimated
cost of defense, associated with such litigation for
patent holders, patent licensors, patent licensees, and
inventors, and for users of alternate or competing
innovations.
(E) The economic impact of such litigation on the
economy of the United States, including the impact on
inventors, job creation, employers, employees, and
consumers.
(F) The benefit to commerce, if any, supplied by
non-practicing entities or patent assertion entities
that prosecute such litigation.
(3) Report to congress.--The Comptroller General shall, not
later than the date that is 1 year after the date of the
enactment of this Act, submit to the Committee on the Judiciary
of the House of Representatives and the Committee on the
Judiciary of the Senate a report on the results of the study
required under this subsection, including recommendations for
any changes to laws and regulations that will minimize any
negative impact of patent litigation that was the subject of
such study.
(p) Sense of Congress.--It is the sense of the Congress that
converting the United States patent registration system from ``first
inventor to use'' to a system of ``first inventor to file'' will
promote the progress of science by securing for limited times to
inventors the exclusive rights to their discoveries and provide
inventors with greater certainty regarding the scope of protection
granted by the exclusive rights to their discoveries.
(q) Sense of Congress.--It is the sense of the Congress that
converting the United States patent registration system from ``first
inventor to use'' to a system of ``first inventor to file'' will
harmonize the United States patent registration system with the patent
registration systems commonly used in nearly all other countries
throughout the world with whom the United States conducts trade and
thereby promote a greater sense of international uniformity and
certainty in the procedures used for securing the exclusive rights of
inventors to their discoveries.
SEC. 4. INVENTOR'S OATH OR DECLARATION.
(a) Inventor's Oath or Declaration.--
(1) In general.--Section 115 of title 35, United States
Code, is amended to read as follows:
``Sec. 115. Inventor's oath or declaration
``(a) Naming the Inventor; Inventor's Oath or Declaration.--An
application for patent that is filed under section 111(a) or commences
the national stage under section 371 shall include, or be amended to
include, the name of the inventor for any invention claimed in the
application. Except as otherwise provided in this section, each
individual who is the inventor or a joint inventor of a claimed
invention in an application for patent shall execute an oath or
declaration in connection with the application.
``(b) Required Statements.--An oath or declaration under subsection
(a) shall contain statements that--
``(1) the application was made or was authorized to be made
by the affiant or declarant; and
``(2) such individual believes himself or herself to be the
original inventor or an original joint inventor of a claimed
invention in the application.
``(c) Additional Requirements.--The Director may specify additional
information relating to the inventor and the invention that is required
to be included in an oath or declaration under subsection (a).
``(d) Substitute Statement.--
``(1) In general.--In lieu of executing an oath or
declaration under subsection (a), the applicant for patent may
provide a substitute statement under the circumstances
described in paragraph (2) and such additional circumstances
that the Director may specify by regulation.
``(2) Permitted circumstances.--A substitute statement
under paragraph (1) is permitted with respect to any individual
who--
``(A) is unable to file the oath or declaration
under subsection (a) because the individual--
``(i) is deceased;
``(ii) is under legal incapacity; or
``(iii) cannot be found or reached after
diligent effort; or
``(B) is under an obligation to assign the
invention but has refused to make the oath or
declaration required under subsection (a).
``(3) Contents.--A substitute statement under this
subsection shall--
``(A) identify the individual with respect to whom
the statement applies;
``(B) set forth the circumstances representing the
permitted basis for the filing of the substitute
statement in lieu of the oath or declaration under
subsection (a); and
``(C) contain any additional information, including
any showing, required by the Director.
``(e) Making Required Statements in Assignment of Record.--An
individual who is under an obligation of assignment of an application
for patent may include the required statements under subsections (b)
and (c) in the assignment executed by the individual, in lieu of filing
such statements separately.
``(f) Time for Filing.--A notice of allowance under section 151 may
be provided to an applicant for patent only if the applicant for patent
has filed each required oath or declaration under subsection (a) or has
filed a substitute statement under subsection (d) or recorded an
assignment meeting the requirements of subsection (e).
``(g) Earlier-Filed Application Containing Required Statements or
Substitute Statement.--
``(1) Exception.--The requirements under this section shall
not apply to an individual with respect to an application for
patent in which the individual is named as the inventor or a
joint inventor and who claims the benefit under section 120,
121, or 365(c) of the filing of an earlier-filed application,
if--
``(A) an oath or declaration meeting the
requirements of subsection (a) was executed by the
individual and was filed in connection with the
earlier-filed application;
``(B) a substitute statement meeting the
requirements of subsection (d) was filed in connection
with the earlier filed application with respect to the
individual; or
``(C) an assignment meeting the requirements of
subsection (e) was executed with respect to the
earlier-filed application by the individual and was
recorded in connection with the earlier-filed
application.
``(2) Copies of oaths, declarations, statements, or
assignments.--Notwithstanding paragraph (1), the Director may
require that a copy of the executed oath or declaration, the
substitute statement, or the assignment filed in connection
with the earlier-filed application be included in the later-
filed application.
``(h) Supplemental and Corrected Statements; Filing Additional
Statements.--
``(1) In general.--Any person making a statement required
under this section may withdraw, replace, or otherwise correct
the statement at any time. If a change is made in the naming of
the inventor requiring the filing of 1 or more additional
statements under this section, the Director shall establish
regulations under which such additional statements may be
filed.
``(2) Supplemental statements not required.--If an
individual has executed an oath or declaration meeting the
requirements of subsection (a) or an assignment meeting the
requirements of subsection (e) with respect to an application
for patent, the Director may not thereafter require that
individual to make any additional oath, declaration, or other
statement equivalent to those required by this section in
connection with the application for patent or any patent
issuing thereon.
``(3) Savings clause.--A patent shall not be invalid or
unenforceable based upon the failure to comply with a
requirement under this section if the failure is remedied as
provided under paragraph (1).
``(i) Acknowledgment of Penalties.--Any declaration or statement
filed pursuant to this section shall contain an acknowledgment that any
willful false statement made in such declaration or statement is
punishable under section 1001 of title 18 by fine or imprisonment of
not more than 5 years, or both.''.
(2) Relationship to divisional applications.--Section 121
of title 35, United States Code, is amended by striking ``If a
divisional application'' and all that follows through
``inventor.''.
(3) Requirements for nonprovisional applications.--Section
111(a) of title 35, United States Code, is amended--
(A) in paragraph (2)(C), by striking ``by the
applicant'' and inserting ``or declaration'';
(B) in the heading for paragraph (3), by inserting
``or declaration'' after ``and oath''; and
(C) by inserting ``or declaration'' after ``and
oath'' each place it appears.
(4) Conforming amendment.--The item relating to section 115
in the table of sections for chapter 11 of title 35, United
States Code, is amended to read as follows:
``115. Inventor's oath or declaration.''.
(b) Filing by Other Than Inventor.--
(1) In general.--Section 118 of title 35, United States
Code, is amended to read as follows:
``Sec. 118. Filing by other than inventor
``A person to whom the inventor has assigned or is under an
obligation to assign the invention may make an application for patent.
A person who otherwise shows sufficient proprietary interest in the
matter may make an application for patent on behalf of and as agent for
the inventor on proof of the pertinent facts and a showing that such
action is appropriate to preserve the rights of the parties. If the
Director grants a patent on an application filed under this section by
a person other than the inventor, the patent shall be granted to the
real party in interest and upon such notice to the inventor as the
Director considers to be sufficient.''.
(2) Conforming amendment.--Section 251 of title 35, United
States Code, is amended in the third undesignated paragraph by
inserting ``or the application for the original patent was
filed by the assignee of the entire interest'' after ``claims
of the original patent''.
(c) Specification.--Section 112 of title 35, United States Code, is
amended--
(1) in the first undesignated paragraph--
(A) by striking ``The specification'' and inserting
``(a) In General.--The specification''; and
(B) by striking ``of carrying out his invention''
and inserting ``or joint inventor of carrying out the
invention'';
(2) in the second undesignated paragraph--
(A) by striking ``The specification'' and inserting
``(b) Conclusion.--The specification''; and
(B) by striking ``applicant regards as his
invention'' and inserting ``inventor or a joint
inventor regards as the invention'';
(3) in the third undesignated paragraph, by striking ``A
claim'' and inserting ``(c) Form.--A claim'';
(4) in the fourth undesignated paragraph, by striking
``Subject to the following paragraph,'' and inserting ``(d)
Reference in Dependent Forms.--Subject to subsection (e),'';
(5) in the fifth undesignated paragraph, by striking ``A
claim'' and inserting ``(e) Reference in Multiple Dependent
Form.--A claim''; and
(6) in the last undesignated paragraph, by striking ``An
element'' and inserting ``(f) Element in Claim for a
Combination.--An element''.
(d) Conforming Amendments.--
(1) Sections 111(b)(1)(A) of title 35, United States Code,
is amended by striking ``the first paragraph of section 112 of
this title'' and inserting ``section 112(a)''.
(2) Section 111(b)(2) of title 35, United States Code, is
amended by striking ``the second through fifth paragraphs of
section 112,'' and inserting ``subsections (b) through (e) of
section 112,''.
(e) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to any patent application
that is filed on or after that effective date.
SEC. 5. DEFENSE TO INFRINGEMENT BASED ON EARLIER INVENTOR.
Section 273 of title 35, United States Code, is amended as follows:
(1) Subsection (a) is amended--
(A) in paragraph (1)--
(i) by striking ``use of a method in'' and
inserting ``use of the subject matter of a
patent in''; and
(ii) by adding ``and'' after the semicolon;
(B) in paragraph (2), by striking the semicolon at
the end of subparagraph (B) and inserting a period; and
(C) by striking paragraphs (3) and (4).
(2) Subsection (b) is amended--
(A) in paragraph (1)--
(i) by striking ``for a method''; and
(ii) by striking ``at least 1 year'' and
all that follows through the end and inserting
``and commercially used the subject matter at
least 1 year before the effective filing date
of the claimed invention that is the subject
matter of the patent.'';
(B) in paragraph (2), by striking ``patented
method'' and inserting ``patented process'';
(C) in paragraph (3)--
(i) by striking subparagraph (A);
(ii) by striking subparagraph (B) and
inserting the following:
``(A) Derivation and prior disclosure to the
public.--A person may not assert the defense under this
section if--
``(i) the subject matter on which the
defense is based was derived from the patentee
or persons in privity with the patentee; or
``(ii) the claimed invention that is the
subject of the defense was disclosed to the
public in a manner that qualified for the
exception from the prior art under section
102(b) and the commercialization date relied
upon under paragraph (1) of this subsection for
establishing entitlement to the defense is less
than 1 year before the date of such disclosure
to the public;'';
(iii) by redesignating subparagraph (C) as
subparagraph (B); and
(iv) by adding at the end the following:
``(C) Funding.--
``(i) Defense not available in certain
cases.--A person may not assert the defense
under this section if the subject matter of the
patent on which the defense is based was
developed pursuant to a funding agreement under
chapter 18 or by a nonprofit institution of
higher education, or a technology transfer
organization affiliated with such an
institution, that did not receive funding from
a private business enterprise in support of
that development.
``(ii) Definitions.--In this subparagraph--
``(I) the term `institution of
higher education' has the meaning given
that term in section 101(a) of the
Higher Education Act of 1965 (20 U.S.C.
1001(a)); and
``(II) the term `technology
transfer organization' means an
organization the primary purpose of
which is to facilitate the
commercialization of technologies
developed by one or more institutions
of higher education.''; and
(D) by amending paragraph (6) to read as follows:
``(6) Personal defense.--
``(A) In general.--The defense under this section
may be asserted only by the person who performed or
caused the performance of the acts necessary to
establish the defense, as well as any other entity that
controls, is controlled by, or is under common control
with such person, 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 assignment or transfer for other reasons of
the entire enterprise or line of business to which the
defense relates.
``(B) Exception.--Notwithstanding subparagraph (A),
any person may, on the person's own behalf, assert a
defense based on the exhaustion of rights provided
under paragraph (2), including any necessary elements
thereof.''.
SEC. 6. POST-GRANT REVIEW PROCEEDINGS.
(a) Inter Partes Review.--Chapter 31 of title 35, United States
Code, is amended to read as follows:
``CHAPTER 31--INTER PARTES REVIEW
``Sec.
``311. Inter partes review.
``312. Petitions.
``313. Preliminary response to petition.
``314. Institution of inter partes review.
``315. Relation to other proceedings or actions.
``316. Conduct of inter partes review.
``317. Settlement.
``318. Decision of the Board.
``319. Appeal.
``Sec. 311. Inter partes review
``(a) In General.--Subject to the provisions of this chapter, a
person who is not the owner of a patent may file with the Office a
petition to institute an inter partes review of the patent. The
Director shall establish, by regulation, fees to be paid by the person
requesting the review, in such amounts as the Director determines to be
reasonable, considering the aggregate costs of the review.
``(b) Scope.--A petitioner in an inter partes review may request to
cancel as unpatentable 1 or more claims of a patent only on a ground
that could be raised under section 102 or 103 and only on the basis of
prior art consisting of patents or printed publications.
``(c) Filing Deadline.--A petition for inter partes review shall be
filed after the later of either--
``(1) the date that is 1 year after the grant of a patent
or issuance of a reissue of a patent; or
``(2) if a post-grant review is instituted under chapter
32, the date of the termination of such post-grant review.
``Sec. 312. Petitions
``(a) Requirements of Petition.--A petition filed under section 311
may be considered only if--
``(1) the petition is accompanied by payment of the fee
established by the Director under section 311;
``(2) the petition identifies all real parties in interest;
``(3) the petition identifies, in writing and with
particularity, each claim challenged, the grounds on which the
challenge to each claim is based, and the evidence that
supports the grounds for the challenge to each claim,
including--
``(A) copies of patents and printed publications
that the petitioner relies upon in support of the
petition; and
``(B) affidavits or declarations of supporting
evidence and opinions, if the petitioner relies on
expert opinions;
``(4) the petition provides such other information as the
Director may require by regulation; and
``(5) the petitioner provides copies of any of the
documents required under paragraphs (2), (3), and (4) to the
patent owner or, if applicable, the designated representative
of the patent owner.
``(b) Public Availability.--As soon as practicable after the
receipt of a petition under section 311, the Director shall make the
petition available to the public.
``Sec. 313. Preliminary response to petition
``If an inter partes review petition is filed under section 311,
the patent owner shall have the right to file a preliminary response to
the petition, within a time period set by the Director, that sets forth
reasons why no inter partes review should be instituted based upon the
failure of the petition to meet any requirement of this chapter.
``Sec. 314. Institution of inter partes review
``(a) Threshold.--The Director may not authorize an inter partes
review to commence unless the Director determines that the information
presented in the petition filed under section 311 and any response
filed under section 313 shows that there is a reasonable likelihood
that the petitioner would prevail with respect to at least 1 of the
claims challenged in the petition.
``(b) Timing.--The Director shall determine whether to institute an
inter partes review under this chapter pursuant to a petition filed
under section 311 within 3 months after--
``(1) receiving a preliminary response to the petition
under section 313; or
``(2) if no such preliminary response is filed, the last
date on which such response may be filed.
``(c) Notice.--The Director shall notify the petitioner and patent
owner, in writing, of the Director's determination under subsection
(a), and shall make such notice available to the public as soon as is
practicable. Such notice shall include the date on which the review
shall commence.
``(d) No Appeal.--The determination by the Director whether to
institute an inter partes review under this section shall be final and
nonappealable.
``Sec. 315. Relation to other proceedings or actions
``(a) Infringer's Civil Action.--
``(1) Inter partes review barred by civil action.--An inter
partes review may not be instituted if, before the date on
which the petition for such a review is filed, the petitioner,
real party in interest, or privy of the petitioner filed a
civil action challenging the validity of a claim of the patent.
``(2) Stay of civil action.--If the petitioner, real party
in interest, or privy of the petitioner files a civil action
challenging the validity of a claim of the patent on or after
the date on which the petitioner files a petition for inter
partes review of the patent, that civil action shall be
automatically stayed until either--
``(A) the patent owner moves the court to lift the
stay;
``(B) the patent owner files a civil action or
counterclaim alleging that the petitioner, real party
in interest, or privy of the petitioner has infringed
the patent; or
``(C) the petitioner, real party in interest, or
privy of the petitioner moves the court to dismiss the
civil action.
``(3) Treatment of counterclaim.--A counterclaim
challenging the validity of a claim of a patent does not
constitute a civil action challenging the validity of a claim
of a patent for purposes of this subsection.
``(b) Patent Owner's Action.--An inter partes review may not be
instituted if the petition requesting the proceeding is filed more than
1 year after the date on which the petitioner, real party in interest,
or privy of the petitioner is served with a complaint alleging
infringement of the patent. The time limitation set forth in the
preceding sentence shall not apply to a request for joinder under
subsection (c).
``(c) Joinder.--If the Director institutes an inter partes review,
the Director, in his or her discretion, may join as a party to that
inter partes review any person who properly files a petition under
section 311 that the Director, after receiving a preliminary response
under section 313 or the expiration of the time for filing such a
response, determines warrants the institution of an inter partes review
under section 314.
``(d) Multiple Proceedings.--Notwithstanding sections 135(a), 251,
and 252, and chapter 30, during the pendency of an inter partes review,
if another proceeding or matter involving the patent is before the
Office, the Director may determine the manner in which the inter partes
review or other proceeding or matter may proceed, including providing
for stay, transfer, consolidation, or termination of any such matter or
proceeding.
``(e) Estoppel.--
``(1) Proceedings before the office.--The petitioner in an
inter partes review of a claim in a patent under this chapter
that results in a final written decision under section 318(a),
or the real party in interest or privy of the petitioner, may
not request or maintain a proceeding before the Office with
respect to that claim on any ground that the petitioner raised
or reasonably could have raised during that inter partes
review.
``(2) Civil actions and other proceedings.--The petitioner
in an inter partes review of a claim in a patent under this
chapter that results in a final written decision under section
318(a), or the real party in interest or privy of the
petitioner, may not assert either in a civil action arising in
whole or in part under section 1338 of title 28 or in a
proceeding before the International Trade Commission under
section 337 of the Tariff Act of 1930 that the claim is invalid
on any ground that the petitioner raised or reasonably could
have raised during that inter partes review.
``Sec. 316. Conduct of inter partes review
``(a) Regulations.--The Director shall prescribe regulations--
``(1) providing that the file of any proceeding under this
chapter shall be made available to the public, except that any
petition or document filed with the intent that it be sealed
shall, if accompanied by a motion to seal, be treated as sealed
pending the outcome of the ruling on the motion;
``(2) setting forth the standards for the showing of
sufficient grounds to institute a review under section 314(a);
``(3) establishing procedures for the submission of
supplemental information after the petition is filed;
``(4) establishing and governing inter partes review under
this chapter and the relationship of such review to other
proceedings under this title;
``(5) setting forth standards and procedures for discovery
of relevant evidence, including that such discovery shall be
limited to--
``(A) the deposition of witnesses submitting
affidavits or declarations; and
``(B) what is otherwise necessary in the interest
of justice;
``(6) prescribing sanctions for abuse of discovery, abuse
of process, or any other improper use of the proceeding, such
as to harass or to cause unnecessary delay or an unnecessary
increase in the cost of the proceeding;
``(7) providing for protective orders governing the
exchange and submission of confidential information;
``(8) providing for the filing by the patent owner of a
response to the petition under section 313 after an inter
partes review has been instituted, and requiring that the
patent owner file with such response, through affidavits or
declarations, any additional factual evidence and expert
opinions on which the patent owner relies in support of the
response;
``(9) setting forth standards and procedures for allowing
the patent owner to move to amend the patent under subsection
(d) to cancel a challenged claim or propose a reasonable number
of substitute claims, and ensuring that any information
submitted by the patent owner in support of any amendment
entered under subsection (d) is made available to the public as
part of the prosecution history of the patent;
``(10) providing either party with the right to an oral
hearing as part of the proceeding;
``(11) requiring that the final determination in an inter
partes review be issued not later than 1 year after the date on
which the Director notices the institution of a review under
this chapter, except that the Director may, for good cause
shown, extend the 1-year period by not more than 6 months, and
may adjust the time periods in this paragraph in the case of
joinder under section 315(c);
``(12) setting a time period for requesting joinder under
section 315(c); and
``(13) providing the petitioner with at least 1 opportunity
to file written comments within a time period established by
the Director.
``(b) Considerations.--In prescribing regulations under this
section, the Director shall consider the effect of any such regulation
on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to timely
complete proceedings instituted under this chapter.
``(c) Patent Trial and Appeal Board.--The Patent Trial and Appeal
Board shall, in accordance with section 6, conduct each inter partes
review instituted under this chapter.
``(d) Amendment of the Patent.--
``(1) In general.--During an inter partes review instituted
under this chapter, the patent owner may file 1 motion to amend
the patent in 1 or more of the following ways:
``(A) Cancel any challenged patent claim.
``(B) For each challenged claim, propose a
reasonable number of substitute claims.
``(2) Additional motions.--Additional motions to amend may
be permitted upon the joint request of the petitioner and the
patent owner to materially advance the settlement of a
proceeding under section 317, or as permitted by regulations
prescribed by the Director.
``(3) Scope of claims.--An amendment under this subsection
may not enlarge the scope of the claims of the patent or
introduce new matter.
``(e) Evidentiary Standards.--In an inter partes review instituted
under this chapter, the petitioner shall have the burden of proving a
proposition of unpatentability by a preponderance of the evidence.
``Sec. 317. Settlement
``(a) In General.--An inter partes review instituted under this
chapter shall be terminated with respect to any petitioner upon the
joint request of the petitioner and the patent owner, unless the Office
has decided the merits of the proceeding before the request for
termination is filed. If the inter partes review is terminated with
respect to a petitioner under this section, no estoppel under section
315(e) shall attach to the petitioner, or to the real party in interest
or privy of the petitioner, on the basis of that petitioner's
institution of that inter partes review. If no petitioner remains in
the inter partes review, the Office may terminate the review or proceed
to a final written decision under section 318(a).
``(b) Agreements in Writing.--Any agreement or understanding
between the patent owner and a petitioner, including any collateral
agreements referred to in such agreement or understanding, made in
connection with, or in contemplation of, the termination of an inter
partes review under this section shall be in writing and a true copy of
such agreement or understanding shall be filed in the Office before the
termination of the inter partes review as between the parties. At the
request of a party to the proceeding, the agreement or understanding
shall be treated as business confidential information, shall be kept
separate from the file of the involved patents, and shall be made
available only to Federal Government agencies on written request, or to
any person on a showing of good cause.
``Sec. 318. Decision of the Board
``(a) Final Written Decision.--If an inter partes review is
instituted and not dismissed under this chapter, the Patent Trial and
Appeal Board shall issue a final written decision with respect to the
patentability of any patent claim challenged by the petitioner and any
new claim added under section 316(d).
``(b) Certificate.--If the Patent Trial and Appeal Board issues a
final written decision under subsection (a) and the time for appeal has
expired or any appeal 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 by
operation of the certificate any new or amended claim determined to be
patentable.
``(c) Amended or New Claim.--Any proposed amended or new claim
determined to be patentable and incorporated into a patent following an
inter partes review under this chapter shall have the same effect as
that specified in section 252 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 therefor,
before the issuance of a certificate under subsection (b).
``(d) Data on Length of Review.--The Office shall make available to
the public data describing the length of time between the institution
of, and the issuance of a final written decision under subsection (a)
for, each inter partes review.
``Sec. 319. Appeal
``A party dissatisfied with the final written decision of the
Patent Trial and Appeal Board under section 318(a) may appeal the
decision pursuant to sections 141 through 144. Any party to the inter
partes review shall have the right to be a party to the appeal.''.
(b) Conforming Amendment.--The table of chapters for part III of
title 35, United States Code, is amended by striking the item relating
to chapter 31 and inserting the following:
``31. Inter Partes Review................................... 311''.
(c) Regulations and Effective Date.--
(1) Regulations.--The Director shall, not later than the
date that is 1 year after the date of the enactment of this
Act, issue regulations to carry out chapter 31 of title 35,
United States Code, as amended by subsection (a) of this
section.
(2) Applicability.--
(A) In general.--The amendments made by subsection
(a) shall take effect upon the expiration of the 1-year
period beginning on the date of the enactment of this
Act and shall apply to any patent issued before, on, or
after that effective date.
(B) Graduated implementation.--The Director may
impose a limit on the number of inter partes reviews
that may be instituted under chapter 31 of title 35,
United States Code, during each of the first 4 1-year
periods in which the amendments made by subsection (a)
are in effect, if such number in each year equals or
exceeds the number of inter partes reexaminations that
are ordered under chapter 31 of title 35, United States
Code, in the last fiscal year ending before the
effective date of the amendments made by subsection
(a).
(d) Post-Grant Review.--Part III of title 35, United States Code,
is amended by adding at the end the following:
``CHAPTER 32--POST-GRANT REVIEW
``Sec.
``321. Post-grant review.
``322. Petitions.
``323. Preliminary response to petition.
``324. Institution of post-grant review.
``325. Relation to other proceedings or actions.
``326. Conduct of post-grant review.
``327. Settlement.
``328. Decision of the Board.
``329. Appeal.
``Sec. 321. Post-grant review
``(a) In General.--Subject to the provisions of this chapter, a
person who is not the patent owner may file with the Office a petition
to institute a post-grant review of a patent. The Director shall
establish, by regulation, fees to be paid by the person requesting the
review, in such amounts as the Director determines to be reasonable,
considering the aggregate costs of the post-grant review.
``(b) Scope.--A petitioner in a post-grant review may request to
cancel as unpatentable 1 or more claims of a patent on any ground that
could be raised under paragraph (2) or (3) of section 282(b) (relating
to invalidity of the patent or any claim).
``(c) Filing Deadline.--A petition for a post-grant review may only
be filed not later than the date that is 1 year after the date of the
grant of the patent or of the issuance of a reissue patent (as the case
may be).
``Sec. 322. Petitions
``(a) Requirements of Petition.--A petition filed under section 321
may be considered only if--
``(1) the petition is accompanied by payment of the fee
established by the Director under section 321;
``(2) the petition identifies all real parties in interest;
``(3) the petition identifies, in writing and with
particularity, each claim challenged, the grounds on which the
challenge to each claim is based, and the evidence that
supports the grounds for the challenge to each claim,
including--
``(A) copies of patents and printed publications
that the petitioner relies upon in support of the
petition; and
``(B) affidavits or declarations of supporting
evidence and opinions, if the petitioner relies on
other factual evidence or on expert opinions;
``(4) the petition provides such other information as the
Director may require by regulation; and
``(5) the petitioner provides copies of any of the
documents required under paragraphs (2), (3), and (4) to the
patent owner or, if applicable, the designated representative
of the patent owner.
``(b) Public Availability.--As soon as practicable after the
receipt of a petition under section 321, the Director shall make the
petition available to the public.
``Sec. 323. Preliminary response to petition
``If a post-grant review petition is filed under section 321, the
patent owner shall have the right to file a preliminary response to the
petition, within a time period set by the Director, that sets forth
reasons why no post-grant review should be instituted based upon the
failure of the petition to meet any requirement of this chapter.
``Sec. 324. Institution of post-grant review
``(a) Threshold.--The Director may not authorize a post-grant
review to commence unless the Director determines that the information
presented in the petition filed under section 321, if such information
is not rebutted, would demonstrate that it is more likely than not that
at least 1 of the claims challenged in the petition is unpatentable.
``(b) Additional Grounds.--The determination required under
subsection (a) may also be satisfied by a showing that the petition
raises a novel or unsettled legal question that is important to other
patents or patent applications.
``(c) Timing.--The Director shall determine whether to institute a
post-grant review under this chapter pursuant to a petition filed under
section 321 within 3 months after--
``(1) receiving a preliminary response to the petition
under section 323; or
``(2) if no such preliminary response is filed, the last
date on which such response may be filed.
``(d) Notice.--The Director shall notify the petitioner and patent
owner, in writing, of the Director's determination under subsection (a)
or (b), and shall make such notice available to the public as soon as
is practicable. The Director shall make each notice of the institution
of a post-grant review available to the public. Such notice shall
include the date on which the review shall commence.
``(e) No Appeal.--The determination by the Director whether to
institute a post-grant review under this section shall be final and
nonappealable.
``Sec. 325. Relation to other proceedings or actions
``(a) Infringer's Civil Action.--
``(1) Post-grant review barred by civil action.--A post-
grant review may not be instituted under this chapter if,
before the date on which the petition for such a review is
filed, the petitioner, real party in interest, or privy of the
petitioner filed a civil action challenging the validity of a
claim of the patent.
``(2) Stay of civil action.--If the petitioner, real party
in interest, or privy of the petitioner files a civil action
challenging the validity of a claim of the patent on or after
the date on which the petitioner files a petition for post-
grant review of the patent, that civil action shall be
automatically stayed until either--
``(A) the patent owner moves the court to lift the
stay;
``(B) the patent owner files a civil action or
counterclaim alleging that the petitioner, real party
in interest, or privy of the petitioner has infringed
the patent; or
``(C) the petitioner, real party in interest, or
privy of the petitioner moves the court to dismiss the
civil action.
``(3) Treatment of counterclaim.--A counterclaim
challenging the validity of a claim of a patent does not
constitute a civil action challenging the validity of a claim
of a patent for purposes of this subsection.
``(b) Preliminary Injunctions.--If a civil action alleging
infringement of a patent is filed within 3 months after the date on
which the patent is granted, the court may not stay its consideration
of the patent owner's motion for a preliminary injunction against
infringement of the patent on the basis that a petition for post-grant
review has been filed under this chapter or that such a post-grant
review has been instituted under this chapter.
``(c) Joinder.--If more than 1 petition for a post-grant review
under this chapter is properly filed against the same patent and the
Director determines that more than 1 of these petitions warrants the
institution of a post-grant review under section 324, the Director may
consolidate such reviews into a single post-grant review.
``(d) Multiple Proceedings.--Notwithstanding sections 135(a), 251,
and 252, and chapter 30, during the pendency of any post-grant review
under this chapter, if another proceeding or matter involving the
patent is before the Office, the Director may determine the manner in
which the post-grant review or other proceeding or matter may proceed,
including providing for the stay, transfer, consolidation, or
termination of any such matter or proceeding. In determining whether to
institute or order a proceeding under this chapter, chapter 30, or
chapter 31, the Director may take into account whether, and reject the
petition or request because, the same or substantially the same prior
art or arguments previously were presented to the Office.
``(e) Estoppel.--
``(1) Proceedings before the office.--The petitioner in a
post-grant review of a claim in a patent under this chapter
that results in a final written decision under section 328(a),
or the real party in interest or privy of the petitioner, may
not request or maintain a proceeding before the Office with
respect to that claim on any ground that the petitioner raised
or reasonably could have raised during that post-grant review.
``(2) Civil actions and other proceedings.--The petitioner
in a post-grant review of a claim in a patent under this
chapter that results in a final written decision under section
328(a), or the real party in interest or privy of the
petitioner, may not assert either in a civil action arising in
whole or in part under section 1338 of title 28 or in a
proceeding before the International Trade Commission under
section 337 of the Tariff Act of 1930 that the claim is invalid
on any ground that the petitioner raised or reasonably could
have raised during that post-grant review.
``(f) Reissue Patents.--A post-grant review may not be instituted
under this chapter if the petition requests cancellation of a claim in
a reissue patent that is identical to or narrower than a claim in the
original patent from which the reissue patent was issued, and the time
limitations in section 321(c) would bar filing a petition for a post-
grant review for such original patent.
``Sec. 326. Conduct of post-grant review
``(a) Regulations.--The Director shall prescribe regulations--
``(1) providing that the file of any proceeding under this
chapter shall be made available to the public, except that any
petition or document filed with the intent that it be sealed
shall, if accompanied by a motion to seal, be treated as sealed
pending the outcome of the ruling on the motion;
``(2) setting forth the standards for the showing of
sufficient grounds to institute a review under subsections (a)
and (b) of section 324;
``(3) establishing procedures for the submission of
supplemental information after the petition is filed;
``(4) establishing and governing a post-grant review under
this chapter and the relationship of such review to other
proceedings under this title;
``(5) setting forth standards and procedures for discovery
of relevant evidence, including that such discovery shall be
limited to evidence directly related to factual assertions
advanced by either party in the proceeding;
``(6) prescribing sanctions for abuse of discovery, abuse
of process, or any other improper use of the proceeding, such
as to harass or to cause unnecessary delay or an unnecessary
increase in the cost of the proceeding;
``(7) providing for protective orders governing the
exchange and submission of confidential information;
``(8) providing for the filing by the patent owner of a
response to the petition under section 323 after a post-grant
review has been instituted, and requiring that the patent owner
file with such response, through affidavits or declarations,
any additional factual evidence and expert opinions on which
the patent owner relies in support of the response;
``(9) setting forth standards and procedures for allowing
the patent owner to move to amend the patent under subsection
(d) to cancel a challenged claim or propose a reasonable number
of substitute claims, and ensuring that any information
submitted by the patent owner in support of any amendment
entered under subsection (d) is made available to the public as
part of the prosecution history of the patent;
``(10) providing either party with the right to an oral
hearing as part of the proceeding; and
``(11) requiring that the final determination in any post-
grant review be issued not later than 1 year after the date on
which the Director notices the institution of a proceeding
under this chapter, except that the Director may, for good
cause shown, extend the 1-year period by not more than 6
months, and may adjust the time periods in this paragraph in
the case of joinder under section 325(c).
``(b) Considerations.--In prescribing regulations under this
section, the Director shall consider the effect of any such regulation
on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to timely
complete proceedings instituted under this chapter.
``(c) Patent Trial and Appeal Board.--The Patent Trial and Appeal
Board shall, in accordance with section 6, conduct each post-grant
review instituted under this chapter.
``(d) Amendment of the Patent.--
``(1) In general.--During a post-grant review instituted
under this chapter, the patent owner may file 1 motion to amend
the patent in 1 or more of the following ways:
``(A) Cancel any challenged patent claim.
``(B) For each challenged claim, propose a
reasonable number of substitute claims.
``(2) Additional motions.--Additional motions to amend may
be permitted upon the joint request of the petitioner and the
patent owner to materially advance the settlement of a
proceeding under section 327, or upon the request of the patent
owner for good cause shown.
``(3) Scope of claims.--An amendment under this subsection
may not enlarge the scope of the claims of the patent or
introduce new matter.
``(e) Evidentiary Standards.--In a post-grant review instituted
under this chapter, the petitioner shall have the burden of proving a
proposition of unpatentability by a preponderance of the evidence.
``Sec. 327. Settlement
``(a) In General.--A post-grant review instituted under this
chapter shall be terminated with respect to any petitioner upon the
joint request of the petitioner and the patent owner, unless the Office
has decided the merits of the proceeding before the request for
termination is filed. If the post-grant review is terminated with
respect to a petitioner under this section, no estoppel under section
325(e) shall attach to the petitioner, or to the real party in interest
or privy of the petitioner, on the basis of that petitioner's
institution of that post-grant review. If no petitioner remains in the
post-grant review, the Office may terminate the post-grant review or
proceed to a final written decision under section 328(a).
``(b) Agreements in Writing.--Any agreement or understanding
between the patent owner and a petitioner, including any collateral
agreements referred to in such agreement or understanding, made in
connection with, or in contemplation of, the termination of a post-
grant review under this section shall be in writing, and a true copy of
such agreement or understanding shall be filed in the Office before the
termination of the post-grant review as between the parties. At the
request of a party to the proceeding, the agreement or understanding
shall be treated as business confidential information, shall be kept
separate from the file of the involved patents, and shall be made
available only to Federal Government agencies on written request, or to
any person on a showing of good cause.
``Sec. 328. Decision of the Board
``(a) Final Written Decision.--If a post-grant review is instituted
and not dismissed under this chapter, the Patent Trial and Appeal Board
shall issue a final written decision with respect to the patentability
of any patent claim challenged by the petitioner and any new claim
added under section 326(d).
``(b) Certificate.--If the Patent Trial and Appeal Board issues a
final written decision under subsection (a) and the time for appeal has
expired or any appeal 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 by
operation of the certificate any new or amended claim determined to be
patentable.
``(c) Amended or New Claim.--Any proposed amended or new claim
determined to be patentable and incorporated into a patent following a
post-grant review under this chapter 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
therefor, before the issuance of a certificate under subsection (b).
``(d) Data on Length of Review.--The Office shall make available to
the public data describing the length of time between the institution
of, and the issuance of a final written decision under subsection (a)
for, each post-grant review.
``Sec. 329. Appeal
``A party dissatisfied with the final written decision of the
Patent Trial and Appeal Board under section 328(a) may appeal the
decision pursuant to sections 141 through 144. Any party to the post-
grant review shall have the right to be a party to the appeal.''.
(e) Conforming Amendment.--The table of chapters for part III of
title 35, United States Code, is amended by adding at the end the
following:
``32. Post-Grant Review..................................... 321''.
(f) Regulations and Effective Date.--
(1) Regulations.--The Director shall, not later than the
date that is 1 year after the date of the enactment of this
Act, issue regulations to carry out chapter 32 of title 35,
United States Code, as added by subsection (d) of this section.
(2) Applicability.--
(A) In general.--The amendments made by subsection
(d) shall take effect upon the expiration of the 1-year
period beginning on the date of the enactment of this
Act and, except as provided in section 18 and in
paragraph (3), shall apply to any patent that is
described in section 3(n)(1).
(B) Limitation.--The Director may impose a limit on
the number of post-grant reviews that may be instituted
under chapter 32 of title 35, United States Code,
during each of the first 4 1-year periods in which the
amendments made by subsection (d) are in effect.
(3) Pending interferences.--
(A) Procedures in general.--The Director shall
determine, and include in the regulations issued under
paragraph (1), the procedures under which an
interference commenced before the effective date set
forth in paragraph (2)(A) is to proceed, including
whether such interference--
(i) is to be dismissed without prejudice to
the filing of a petition for a post-grant
review under chapter 32 of title 35, United
States Code; or
(ii) is to proceed as if this Act had not
been enacted.
(B) Proceedings by patent trial and appeal board.--
For purposes of an interference that is commenced
before the effective date set forth in paragraph
(2)(A), the Director may deem the Patent Trial and
Appeal Board to be the Board of Patent Appeals and
Interferences, and may allow the Patent Trial and
Appeal Board to conduct any further proceedings in that
interference.
(C) Appeals.--The authorization to appeal or have
remedy from derivation proceedings in sections 141(d)
and 146 of title 35, United States Code, as amended by
this Act, and the jurisdiction to entertain appeals
from derivation proceedings in section 1295(a)(4)(A) of
title 28, United States Code, as amended by this Act,
shall be deemed to extend to any final decision in an
interference that is commenced before the effective
date set forth in paragraph (2)(A) of this subsection
and that is not dismissed pursuant to this paragraph.
(g) Citation of Prior Art and Written Statements.--
(1) In general.--Section 301 of title 35, United States
Code, is amended to read as follows:
``Sec. 301. Citation of prior art and written statements
``(a) In General.--Any person at any time may cite to the Office in
writing--
``(1) prior art consisting of patents or printed
publications which that person believes to have a bearing on
the patentability of any claim of a particular patent; or
``(2) statements of the patent owner filed in a proceeding
before a Federal court or the Office in which the patent owner
took a position on the scope of any claim of a particular
patent.
``(b) Official File.--If the person citing prior art or written
statements pursuant to subsection (a) explains in writing the
pertinence and manner of applying the prior art or written statements
to at least 1 claim of the patent, the citation of the prior art or
written statements and the explanation thereof shall become a part of
the official file of the patent.
``(c) Additional Information.--A party that submits a written
statement pursuant to subsection (a)(2) shall include any other
documents, pleadings, or evidence from the proceeding in which the
statement was filed that addresses the written statement.
``(d) Limitations.--A written statement submitted pursuant to
subsection (a)(2), and additional information submitted pursuant to
subsection (c), shall not be considered by the Office for any purpose
other than to determine the proper meaning of a patent claim in a
proceeding that is ordered or instituted pursuant to section 304, 314,
or 324. If any such written statement or additional information is
subject to an applicable protective order, such statement or
information shall be redacted to exclude information that is subject to
that order.
``(e) Confidentiality.--Upon the written request of the person
citing prior art or written statements pursuant to subsection (a), that
person's identity shall be excluded from the patent file and kept
confidential.''.
(2) Conforming amendment.--The item relating to section 301
in the table of sections for chapter 30 of title 35, United
States Code, is amended to read as follows:
``301. Citation of prior art and written statements.''.
(3) Effective date.--The amendments made by this subsection
shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall
apply to any patent issued before, on, or after that effective
date.
(h) Reexamination.--
(1) Determination by director.--
(A) In general.--Section 303(a) of title 35, United
States Code, is amended by striking ``section 301 of
this title'' and inserting ``section 301 or 302''.
(B) Effective date.--The amendment made by this
paragraph shall take effect upon the expiration of the
1-year period beginning on the date of the enactment of
this Act and shall apply to any patent issued before,
on, or after that effective date.
(2) Appeal.--
(A) In general.--Section 306 of title 35, United
States Code, is amended by striking ``145'' and
inserting ``144''.
(B) Effective date.--The amendment made by this
paragraph shall take effect on the date of the
enactment of this Act and shall apply to any appeal of
a reexamination before the Board of Patent Appeals and
Interferences or the Patent Trial and Appeal Board that
is pending on, or brought on or after, the date of the
enactment of this Act.
SEC. 7. PATENT TRIAL AND APPEAL BOARD.
(a) Composition and Duties.--
(1) In general.--Section 6 of title 35, United States Code,
is amended to read as follows:
``Sec. 6. Patent Trial and Appeal Board
``(a) In General.--There shall be in the Office a Patent Trial and
Appeal Board. The Director, the Deputy Director, the Commissioner for
Patents, the Commissioner for Trademarks, and the administrative patent
judges shall constitute the Patent Trial and Appeal Board. The
administrative patent judges shall be persons of competent legal
knowledge and scientific ability who are appointed by the Secretary, in
consultation with the Director. Any reference in any Federal law,
Executive order, rule, regulation, or delegation of authority, or any
document of or pertaining to the Board of Patent Appeals and
Interferences is deemed to refer to the Patent Trial and Appeal Board.
``(b) Duties.--The Patent Trial and Appeal Board shall--
``(1) on written appeal of an applicant, review adverse
decisions of examiners upon applications for patents pursuant
to section 134(a);
``(2) review appeals of reexaminations pursuant to section
134(b);
``(3) conduct derivation proceedings pursuant to section
135; and
``(4) conduct inter partes reviews and post-grant reviews
pursuant to chapters 31 and 32.
``(c) 3-Member Panels.--Each appeal, derivation proceeding, post-
grant review, and inter partes review shall be heard by at least 3
members of the Patent Trial and Appeal Board, who shall be designated
by the Director. Only the Patent Trial and Appeal Board may grant
rehearings.
``(d) Treatment of Prior Appointments.--The Secretary of Commerce
may, in the Secretary's discretion, deem the appointment of an
administrative patent judge who, before the date of the enactment of
this subsection, held office pursuant to an appointment by the Director
to take effect on the date on which the Director initially appointed
the administrative patent judge. It shall be a defense to a challenge
to the appointment of an administrative patent judge on the basis of
the judge's having been originally appointed by the Director that the
administrative patent judge so appointed was acting as a de facto
officer.''.
(2) Conforming amendment.--The item relating to section 6
in the table of sections for chapter 1 of title 35, United
States Code, is amended to read as follows:
``6. Patent Trial and Appeal Board.''.
(b) Administrative Appeals.--Section 134 of title 35, United States
Code, is amended--
(1) in subsection (b), by striking ``any reexamination
proceeding'' and inserting ``a reexamination''; and
(2) by striking subsection (c).
(c) Circuit Appeals.--
(1) In general.--Section 141 of title 35, United States
Code, is amended to read as follows:
``Sec. 141. Appeal to Court of Appeals for the Federal Circuit
``(a) Examinations.--An applicant who is dissatisfied with the
final decision in an appeal to the Patent Trial and Appeal Board under
section 134(a) may appeal the Board's decision to the United States
Court of Appeals for the Federal Circuit. By filing such an appeal, the
applicant waives his or her right to proceed under section 145.
``(b) Reexaminations.--A patent owner who is dissatisfied with the
final decision in an appeal of a reexamination to the Patent Trial and
Appeal Board under section 134(b) may appeal the Board's decision only
to the United States Court of Appeals for the Federal Circuit.
``(c) Post-Grant and Inter Partes Reviews.--A party to an inter
partes review or a post-grant review who is dissatisfied with the final
written decision of the Patent Trial and Appeal Board under section
318(a) or 328(a) (as the case may be) may appeal the Board's decision
only to the United States Court of Appeals for the Federal Circuit.
``(d) Derivation Proceedings.--A party to a derivation proceeding
who is dissatisfied with the final decision of the Patent Trial and
Appeal Board in the proceeding may appeal the decision to the United
States Court of Appeals for the Federal Circuit, but such appeal shall
be dismissed if any adverse party to such derivation proceeding, within
20 days after the appellant has filed notice of appeal in accordance
with section 142, files notice with the Director that the party elects
to have all further proceedings conducted as provided in section 146.
If the appellant does not, within 30 days after the filing of such
notice by the adverse party, file a civil action under section 146, the
Board's decision shall govern the further proceedings in the case.''.
(2) Jurisdiction.--Section 1295(a)(4)(A) of title 28,
United States Code, is amended to read as follows:
``(A) the Patent Trial and Appeal Board of the
United States Patent and Trademark Office with respect
to a patent application, derivation proceeding,
reexamination, post-grant review, or inter partes
review under title 35, at the instance of a party who
exercised that party's right to participate in the
applicable proceeding before or appeal to the Board,
except that an applicant or a party to a derivation
proceeding may also have remedy by civil action
pursuant to section 145 or 146 of title 35; an appeal
under this subparagraph of a decision of the Board with
respect to an application or derivation proceeding
shall waive the right of such applicant or party to
proceed under section 145 or 146 of title 35;''.
(3) Proceedings on appeal.--Section 143 of title 35, United
States Code, is amended--
(A) by striking the third sentence and inserting
the following: ``In an ex parte case, the Director
shall submit to the court in writing the grounds for
the decision of the Patent and Trademark Office,
addressing all of the issues raised in the appeal. The
Director shall have the right to intervene in an appeal
from a decision entered by the Patent Trial and Appeal
Board in a derivation proceeding under section 135 or
in an inter partes or post-grant review under chapter
31 or 32.''; and
(B) by striking the last sentence.
(d) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to proceedings commenced
on or after that effective date, except that--
(1) the extension of jurisdiction to the United States
Court of Appeals for the Federal Circuit to entertain appeals
of decisions of the Patent Trial and Appeal Board in
reexaminations under the amendment made by subsection (c)(2)
shall be deemed to take effect on the date of the enactment of
this Act and shall extend to any decision of the Board of
Patent Appeals and Interferences with respect to a
reexamination that is entered before, on, or after the date of
the enactment of this Act;
(2) the provisions of sections 6, 134, and 141 of title 35,
United States Code, as in effect on the day before the
effective date of the amendments made by this section shall
continue to apply to inter partes reexaminations that are
requested under section 311 of such title before such effective
date;
(3) the Patent Trial and Appeal Board may be deemed to be
the Board of Patent Appeals and Interferences for purposes of
appeals of inter partes reexaminations that are requested under
section 311 of title 35, United States Code, before the
effective date of the amendments made by this section; and
(4) the Director's right under the fourth sentence of
section 143 of title 35, United States Code, as amended by
subsection (c)(3) of this section, to intervene in an appeal
from a decision entered by the Patent Trial and Appeal Board
shall be deemed to extend to inter partes reexaminations that
are requested under section 311 of such title before the
effective date of the amendments made by this section.
SEC. 8. PREISSUANCE SUBMISSIONS BY THIRD PARTIES.
(a) In General.--Section 122 of title 35, United States Code, is
amended by adding at the end the following:
``(e) Preissuance Submissions by Third Parties.--
``(1) In general.--Any third party may submit for
consideration and inclusion in the record of a patent
application, any patent, published patent application, or other
printed publication of potential relevance to the examination
of the application, if such submission is made in writing
before the earlier of--
``(A) the date a notice of allowance under section
151 is given or mailed in the application for patent;
or
``(B) the later of--
``(i) 6 months after the date on which the
application for patent is first published under
section 122 by the Office, or
``(ii) the date of the first rejection
under section 132 of any claim by the examiner
during the examination of the application for
patent.
``(2) Other requirements.--Any submission under paragraph
(1) shall--
``(A) set forth a concise description of the
asserted relevance of each submitted document;
``(B) be accompanied by such fee as the Director
may prescribe; and
``(C) include a statement by the person making such
submission affirming that the submission was made in
compliance with this section.''.
(b) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to any patent application
filed before, on, or after that effective date.
SEC. 9. VENUE.
(a) Technical Amendments Relating to Venue.--Sections 32, 145, 146,
154(b)(4)(A), and 293 of title 35, United States Code, and section
21(b)(4) of the Trademark Act of 1946 (15 U.S.C. 1071(b)(4)), are each
amended by striking ``United States District Court for the District of
Columbia'' each place that term appears and inserting ``United States
District Court for the Eastern District of Virginia''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act and shall apply to any
civil action commenced on or after that date.
SEC. 10. FEE SETTING AUTHORITY.
(a) Fee Setting.--
(1) In general.--The Director may set or adjust by rule any
fee established, authorized, or charged under title 35, United
States Code, or the Trademark Act of 1946 (15 U.S.C. 1051 et
seq.), for any services performed by or materials furnished by,
the Office, subject to paragraph (2).
(2) Fees to recover costs.--Fees may be set or adjusted
under paragraph (1) only to recover the aggregate estimated
costs to the Office for processing, activities, services, and
materials relating to patents (in the case of patent fees) and
trademarks (in the case of trademark fees), including
administrative costs of the Office with respect to such patent
or trademark fees (as the case may be).
(b) Small and Micro Entities.--The fees set or adjusted under
subsection (a) for filing, searching, examining, issuing, appealing,
and maintaining patent applications and patents shall be reduced by 50
percent with respect to the application of such fees to any small
entity that qualifies for reduced fees under section 41(h)(1) of title
35, United States Code, and shall be reduced by 75 percent with respect
to the application of such fees to any micro entity as defined in
section 123 of that title (as added by subsection (g) of this section).
(c) Reduction of Fees in Certain Fiscal Years.--In each fiscal
year, the Director--
(1) shall consult with the Patent Public Advisory Committee
and the Trademark Public Advisory Committee on the advisability
of reducing any fees described in subsection (a); and
(2) after the consultation required under paragraph (1),
may reduce such fees.
(d) Role of the Public Advisory Committee.--The Director shall--
(1) not less than 45 days before publishing any proposed
fee under subsection (a) in the Federal Register, submit the
proposed fee to the Patent Public Advisory Committee or the
Trademark Public Advisory Committee, or both, as appropriate;
(2)(A) provide the relevant advisory committee described in
paragraph (1) a 30-day period following the submission of any
proposed fee, in which to deliberate, consider, and comment on
such proposal;
(B) require that, during that 30-day period, the relevant
advisory committee hold a public hearing relating to such
proposal; and
(C) assist the relevant advisory committee in carrying out
that public hearing, including by offering the use of the
resources of the Office to notify and promote the hearing to
the public and interested stakeholders;
(3) require the relevant advisory committee to make
available to the public a written report setting forth in
detail the comments, advice, and recommendations of the
committee regarding the proposed fee; and
(4) consider and analyze any comments, advice, or
recommendations received from the relevant advisory committee
before setting or adjusting (as the case may be) the fee.
(e) Publication in the Federal Register.--
(1) Publication and rationale.--The Director shall--
(A) publish any proposed fee change under this
section in the Federal Register;
(B) include, in such publication, the specific
rationale and purpose for the proposal, including the
possible expectations or benefits resulting from the
proposed change; and
(C) notify, through the Chair and Ranking Member of
the Committees on the Judiciary of the Senate and the
House of Representatives, the Congress of the proposed
change not later than the date on which the proposed
change is published under subparagraph (A).
(2) Public comment period.--The Director shall, in the
publication under paragraph (1), provide the public a period of
not less than 45 days in which to submit comments on the
proposed change in fees.
(3) Publication of final rule.--The final rule setting or
adjusting a fee under this section shall be published in the
Federal Register and in the Official Gazette of the Patent and
Trademark Office.
(4) Congressional comment period.--A fee set or adjusted
under subsection (a) may not become effective--
(A) before the end of the 45-day period beginning
on the day after the date on which the Director
publishes the final rule adjusting or setting the fee
under paragraph (3); or
(B) if a law is enacted disapproving such fee.
(5) Rule of construction.--Rules prescribed under this
section shall not diminish--
(A) the rights of an applicant for a patent under
title 35, United States Code, or for a mark under the
Trademark Act of 1946; or
(B) any rights under a ratified treaty.
(f) Retention of Authority.--The Director retains the authority
under subsection (a) to set or adjust fees only during such period as
the Patent and Trademark Office remains an agency within the Department
of Commerce.
(g) Micro Entity Defined.--
(1) In general.--Chapter 11 of title 35, United States
Code, is amended by adding at the end the following new
section:
``Sec. 123. Micro entity defined
``(a) In General.--For purposes of this title, the term `micro
entity' means an applicant who makes a certification that the
applicant--
``(1) qualifies as a small entity, as defined in
regulations issued by the Director;
``(2) has not been named as an inventor on more than 4
previously filed patent applications, other than applications
filed in another country, provisional applications under
section 111(b), or international applications filed under the
treaty defined in section 351(a) for which the basic national
fee under section 41(a) was not paid;
``(3) did not, in the calendar year preceding the calendar
year in which the examination fee for the application is being
paid, have a gross income, as defined in section 61(a) of the
Internal Revenue Code of 1986, exceeding 3 times the median
household income for that preceding calendar year, as reported
by the Bureau of the Census; and
``(4) has not assigned, granted, or conveyed, and is not
under an obligation by contract or law to assign, grant, or
convey, a license or other ownership interest in the
application concerned to an entity that, in the calendar year
preceding the calendar year in which the examination fee for
the application is being paid, had a gross income, as defined
in section 61(a) of the Internal Revenue Code of 1986,
exceeding 3 times the median household income for that
preceding calendar year, as reported by the Bureau of the
Census.
``(b) Applications Resulting From Prior Employment.--An applicant
is not considered to be named on a previously filed application for
purposes of subsection (a)(2) if the applicant has assigned, or is
under an obligation by contract or law to assign, all ownership rights
in the application as the result of the applicant's previous
employment.
``(c) Foreign Currency Exchange Rate.--If an applicant's or
entity's gross income in the preceding calendar year is not in United
States dollars, the average currency exchange rate, as reported by the
Internal Revenue Service, during that calendar year shall be used to
determine whether the applicant's or entity's gross income exceeds the
threshold specified in paragraphs (3) or (4) of subsection (a).
``(d) Public Institutions of Higher Education.--
``(1) In general.--For purposes of this section, a micro
entity shall include an applicant who certifies that--
``(A) the applicant's employer, from which the
applicant obtains the majority of the applicant's
income, is an institution of higher education, as
defined in section 101 of the Higher Education Act of
1965 (20 U.S.C. 1001), that is a public institution; or
``(B) the applicant has assigned, granted,
conveyed, or is under an obligation by contract or law
to assign, grant, or convey, a license or other
ownership interest in the particular application to
such public institution.
``(2) Director's authority.--The Director may, in the
Director's discretion, impose income limits, annual filing
limits, or other limits on who may qualify as a micro entity
pursuant to this subsection if the Director determines that
such additional limits are reasonably necessary to avoid an
undue impact on other patent applicants or owners or are
otherwise reasonably necessary and appropriate. At least 3
months before any limits proposed to be imposed pursuant to
this paragraph take effect, the Director shall inform the
Committee on the Judiciary of the House of Representatives and
the Committee on the Judiciary of the Senate of any such
proposed limits.''.
(2) Conforming amendment.--Chapter 11 of title 35, United
States Code, is amended by adding at the end the following new
item:
``123. Micro entity defined.''.
(h) Electronic Filing Incentive.--
(1) In general.--Notwithstanding any other provision of
this section, a fee of $400 shall be established for each
application for an original patent, except for a design, plant,
or provisional application, that is not filed by electronic
means as prescribed by the Director. The fee established by
this subsection shall be reduced by 50 percent for small
entities that qualify for reduced fees under section 41(h)(1)
of title 35, United States Code. All fees paid under this
subsection shall be deposited in the Treasury as an offsetting
receipt that shall not be available for obligation or
expenditure.
(2) Effective date.--This subsection shall take effect upon
the expiration of the 60-day period beginning on the date of
the enactment of this Act.
(i) Effective Date; Sunset.--
(1) Effective date.--This section and the amendments made
by this section shall take effect on the date of the enactment
of this Act.
(2) Sunset.--The authority of the Director to set or adjust
any fee under subsection (a) shall terminate upon the
expiration of the 6-year period beginning on the date of the
enactment of this Act.
SEC. 11. FEES FOR PATENT SERVICES.
(a) General Patent Services.--Subsections (a) and (b) of section 41
of title 35, United States Code, are amended to read as follows:
``(a) General Fees.--The Director shall charge the following fees:
``(1) Filing and basic national fees.--
``(A) On filing each application for an original
patent, except for design, plant, or provisional
applications, $330.
``(B) On filing each application for an original
design patent, $220.
``(C) On filing each application for an original
plant patent, $220.
``(D) On filing each provisional application for an
original patent, $220.
``(E) On filing each application for the reissue of
a patent, $330.
``(F) The basic national fee for each international
application filed under the treaty defined in section
351(a) entering the national stage under section 371,
$330.
``(G) In addition, excluding any sequence listing
or computer program listing filed in an electronic
medium as prescribed by the Director, for any
application the specification and drawings of which
exceed 100 sheets of paper (or equivalent as prescribed
by the Director if filed in an electronic medium), $270
for each additional 50 sheets of paper (or equivalent
as prescribed by the Director if filed in an electronic
medium) or fraction thereof.
``(2) Excess claims fees.--
``(A) In general.--In addition to the fee specified
in paragraph (1)--
``(i) on filing or on presentation at any
other time, $220 for each claim in independent
form in excess of 3;
``(ii) on filing or on presentation at any
other time, $52 for each claim (whether
dependent or independent) in excess of 20; and
``(iii) for each application containing a
multiple dependent claim, $390.
``(B) Multiple dependent claims.--For the purpose
of computing fees under subparagraph (A), a multiple
dependent claim referred to in section 112 or any claim
depending therefrom shall be considered as separate
dependent claims in accordance with the number of
claims to which reference is made.
``(C) Refunds; errors in payment.--The Director may
by regulation provide for a refund of any part of the
fee specified in subparagraph (A) for any claim that is
canceled before an examination on the merits, as
prescribed by the Director, has been made of the
application under section 131. Errors in payment of the
additional fees under this paragraph may be rectified
in accordance with regulations prescribed by the
Director.
``(3) Examination fees.--
``(A) In general.--
``(i) For examination of each application
for an original patent, except for design,
plant, provisional, or international
applications, $220.
``(ii) For examination of each application
for an original design patent, $140.
``(iii) For examination of each application
for an original plant patent, $170.
``(iv) For examination of the national
stage of each international application, $220.
``(v) For examination of each application
for the reissue of a patent, $650.
``(B) Applicability of other fee provisions.--The
provisions of paragraphs (3) and (4) of section 111(a)
relating to the payment of the fee for filing the
application shall apply to the payment of the fee
specified in subparagraph (A) with respect to an
application filed under section 111(a). The provisions
of section 371(d) relating to the payment of the
national fee shall apply to the payment of the fee
specified in subparagraph (A) with respect to an
international application.
``(4) Issue fees.--
``(A) For issuing each original patent, except for
design or plant patents, $1,510.
``(B) For issuing each original design patent,
$860.
``(C) For issuing each original plant patent,
$1,190.
``(D) For issuing each reissue patent, $1,510.
``(5) Disclaimer fee.--On filing each disclaimer, $140.
``(6) Appeal fees.--
``(A) On filing an appeal from the examiner to the
Patent Trial and Appeal Board, $540.
``(B) In addition, on filing a brief in support of
the appeal, $540, and on requesting an oral hearing in
the appeal before the Patent Trial and Appeal Board,
$1,080.
``(7) Revival fees.--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 delayed response
by the patent owner in any reexamination proceeding, $1,620,
unless the petition is filed under section 133 or 151, in which
case the fee shall be $540.
``(8) Extension fees.--For petitions for 1-month extensions
of time to take actions required by the Director in an
application--
``(A) on filing a first petition, $130;
``(B) on filing a second petition, $360; and
``(C) on filing a third or subsequent petition,
$620.
``(b) Maintenance Fees.--
``(1) In general.--The Director shall charge the following
fees for maintaining in force all patents based on applications
filed on or after December 12, 1980:
``(A) Three years and 6 months after grant, $980.
``(B) Seven years and 6 months after grant, $2,480.
``(C) Eleven years and 6 months after grant,
$4,110.
``(2) Grace period; surcharge.--Unless payment of the
applicable maintenance fee under paragraph (1) is received in
the Office on or before the date the fee is due or within a
grace period of 6 months thereafter, the patent shall expire as
of the end of such grace period. The Director may require the
payment of a surcharge as a condition of accepting within such
6-month grace period the payment of an applicable maintenance
fee.
``(3) No maintenance fee for design or plant patent.--No
fee may be established for maintaining a design or plant patent
in force.''.
(b) Delays in Payment.--Subsection (c) of section 41 of title 35,
United States Code, is amended--
(1) by striking ``(c)(1) The Director'' and inserting:
``(c) Delays in Payment of Maintenance Fees.--
``(1) Acceptance.--The Director''; and
(2) by striking ``(2) A patent'' and inserting:
``(2) Effect on rights of others.--A patent''.
(c) Patent Search Fees.--Subsection (d) of section 41 of title 35,
United States Code, is amended to read as follows:
``(d) Patent Search and Other Fees.--
``(1) Patent search fees.--
``(A) In general.--The Director shall charge the
fees specified under subparagraph (B) for the search of
each application for a patent, except for provisional
applications. The Director shall adjust the fees
charged under this paragraph to ensure that the fees
recover an amount not to exceed the estimated average
cost to the Office of searching applications for patent
either by acquiring a search report from a qualified
search authority, or by causing a search by Office
personnel to be made, of each application for patent.
``(B) Specific fees.--The fees referred to in
subparagraph (A) are--
``(i) $540 for each application for an
original patent, except for design, plant,
provisional, or international applications;
``(ii) $100 for each application for an
original design patent;
``(iii) $330 for each application for an
original plant patent;
``(iv) $540 for the national stage of each
international application; and
``(v) $540 for each application for the
reissue of a patent.
``(C) Applicability of other provisions.--The
provisions of paragraphs (3) and (4) of section 111(a)
relating to the payment of the fee for filing the
application shall apply to the payment of the fee
specified in this paragraph with respect to an
application filed under section 111(a). The provisions
of section 371(d) relating to the payment of the
national fee shall apply to the payment of the fee
specified in this paragraph with respect to an
international application.
``(D) Refunds.--The Director may by regulation
provide for a refund of any part of the fee specified
in this paragraph for any applicant who files a written
declaration of express abandonment as prescribed by the
Director before an examination has been made of the
application under section 131.
``(E) Applications subject to secrecy order.--A
search of an application that is the subject of a
secrecy order under section 181 or otherwise involves
classified information may be conducted only by Office
personnel.
``(F) Conflicts of interest.--A qualified search
authority that is a commercial entity may not conduct a
search of a patent application if the entity has any
direct or indirect financial interest in any patent or
in any pending or imminent application for patent filed
or to be filed in the Office.
``(2) Other fees.--
``(A) In general.--The Director shall establish
fees for all other processing, services, or materials
relating to patents not specified in this section to
recover the estimated average cost to the Office of
such processing, services, or materials, except that
the Director shall charge the following fees for the
following services:
``(i) For recording a document affecting
title, $40 per property.
``(ii) For each photocopy, $.25 per page.
``(iii) For each black and white copy of a
patent, $3.
``(B) Copies for libraries.--The yearly fee for
providing a library specified in section 12 with
uncertified printed copies of the specifications and
drawings for all patents in that year shall be $50.''.
(d) Fees for Small Entities.--Subsection (h) of section 41 of title
35, United States Code, is amended to read as follows:
``(h) Fees for Small Entities.--
``(1) Reductions in fees.--Subject to paragraph (3), fees
charged under subsections (a), (b), and (d)(1) shall be reduced
by 50 percent with respect to their application to any small
business concern as defined under section 3 of the Small
Business Act, and to any independent inventor or nonprofit
organization as defined in regulations issued by the Director.
``(2) Surcharges and other fees.--With respect to its
application to any entity described in paragraph (1), any
surcharge or fee charged under subsection (c) or (d) shall not
be higher than the surcharge or fee required of any other
entity under the same or substantially similar circumstances.
``(3) Reduction for electronic filing.--The fee charged
under subsection (a)(1)(A) shall be reduced by 75 percent with
respect to its application to any entity to which paragraph (1)
applies, if the application is filed by electronic means as
prescribed by the Director.''.
(e) Technical Amendments.--Section 41 of title 35, United States
Code, is amended--
(1) in subsection (e), in the first sentence, by striking
``The Director'' and inserting ``Waiver of Fees; Copies
Regarding Notice.--The Director'';
(2) in subsection (f), by striking ``The fees'' and
inserting ``Adjustment of Fees.--The fees'';
(3) by repealing subsection (g); and
(4) in subsection (i)--
(A) by striking ``(i)(1) The Director'' and
inserting the following:
``(i) Electronic Patent and Trademark Data.--
``(1) Maintenance of collections.--The Director'';
(B) by striking ``(2) The Director'' and inserting
the following:
``(2) Availability of automated search systems.--The
Director'';
(C) by striking ``(3) The Director'' and inserting
the following:
``(3) Access fees.--The Director''; and
(D) by striking ``(4) The Director'' and inserting
the following:
``(4) Annual report to congress.--The Director''.
(f) Adjustment of Trademark Fees.--Section 802(a) of division B of
the Consolidated Appropriations Act, 2005 (Public Law 108-447) is
amended--
(1) in the first sentence, by striking ``During fiscal
years 2005, 2006, and 2007,'', and inserting ``Until such time
as the Director sets or adjusts the fees otherwise,''; and
(2) in the second sentence, by striking ``During fiscal
years 2005, 2006, and 2007, the'' and inserting ``The''.
(g) Effective Date, Applicability, and Transition Provisions.--
Section 803(a) of division B of the Consolidated Appropriations Act,
2005 (Public Law 108-447) is amended by striking ``and shall apply only
with respect to the remaining portion of fiscal year 2005 and fiscal
year 2006''.
(h) Reduction in Fees for Small Entity Patents.--The Director shall
reduce fees for providing prioritized examination of utility and plant
patent applications by 50 percent for small entities that qualify for
reduced fees under section 41(h)(1) of title 35, United States Code, so
long as the fees of the prioritized examination program are set to
recover the estimated cost of the program.
(i) Effective Date.--Except as provided in subsection (h), this
section and the amendments made by this section shall take effect on
the date of the enactment of this Act.
SEC. 12. SUPPLEMENTAL EXAMINATION.
(a) In General.--Chapter 25 of title 35, United States Code, is
amended by adding at the end the following:
``Sec. 257. Supplemental examinations to consider, reconsider, or
correct information
``(a) Request for Supplemental Examination.--A patent owner may
request supplemental examination of a patent in the Office to consider,
reconsider, or correct information believed to be relevant to the
patent, in accordance with such requirements as the Director may
establish. Within 3 months after the date a request for supplemental
examination meeting the requirements of this section is received, the
Director shall conduct the supplemental examination and shall conclude
such examination by issuing a certificate indicating whether the
information presented in the request raises a substantial new question
of patentability.
``(b) Reexamination Ordered.--If the certificate issued under
subsection (a) indicates that a substantial new question of
patentability is raised by 1 or more items of information in the
request, the Director shall order reexamination of the patent. The
reexamination shall be conducted according to procedures established by
chapter 30, except that the patent owner shall not have the right to
file a statement pursuant to section 304. During the reexamination, the
Director shall address each substantial new question of patentability
identified during the supplemental examination, notwithstanding the
limitations in chapter 30 relating to patents and printed publication
or any other provision of such chapter.
``(c) Effect.--
``(1) In general.--A patent shall not be held unenforceable
on the basis of conduct relating to information that had not
been considered, was inadequately considered, or was incorrect
in a prior examination of the patent if the information was
considered, reconsidered, or corrected during a supplemental
examination of the patent. The making of a request under
subsection (a), or the absence thereof, shall not be relevant
to enforceability of the patent under section 282.
``(2) Exceptions.--
``(A) Prior allegations.--Paragraph (1) shall not
apply to an allegation pled with particularity in a
civil action, or set forth with particularity in a
notice received by the patent owner under section
505(j)(2)(B)(iv)(II) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(2)(B)(iv)(II)), before
the date of a supplemental examination request under
subsection (a) to consider, reconsider, or correct
information forming the basis for the allegation.
``(B) Patent enforcement actions.--In an action
brought under section 337(a) of the Tariff Act of 1930
(19 U.S.C. 1337(a)), or section 281 of this title,
paragraph (1) shall not apply to any defense raised in
the action that is based upon information that was
considered, reconsidered, or corrected pursuant to a
supplemental examination request under subsection (a),
unless the supplemental examination, and any
reexamination ordered pursuant to the request, are
concluded before the date on which the action is
brought.
``(C) Fraud.--No supplemental examination may be
commenced by the Director on, and any pending
supplemental examination shall be immediately
terminated regarding, an application or patent in
connection with which fraud on the Office was practiced
or attempted. If the Director determines that such a
fraud on the Office was practiced or attempted, the
Director shall also refer the matter to the Attorney
General for such action as the Attorney General may
deem appropriate.
``(d) Fees and Regulations.--
``(1) Fees.--The Director shall, by regulation, establish
fees for the submission of a request for supplemental
examination of a patent, and to consider each item of
information submitted in the request. If reexamination is
ordered under subsection (b), fees established and applicable
to ex parte reexamination proceedings under chapter 30 shall be
paid, in addition to fees applicable to supplemental
examination.
``(2) Regulations.--The Director shall issue regulations
governing the form, content, and other requirements of requests
for supplemental examination, and establishing procedures for
reviewing information submitted in such requests.
``(e) Rule of Construction.--Nothing in this section shall be
construed--
``(1) to preclude the imposition of sanctions based upon
criminal or antitrust laws (including section 1001(a) of title
18, the first section of the Clayton Act, and section 5 of the
Federal Trade Commission Act to the extent that section relates
to unfair methods of competition);
``(2) to limit the authority of the Director to investigate
issues of possible misconduct and impose sanctions for
misconduct in connection with matters or proceedings before the
Office; or
``(3) to limit the authority of the Director to issue
regulations under chapter 3 relating to sanctions for
misconduct by representatives practicing before the Office.''.
(b) Conforming Amendment.--The table of sections for chapter 25 of
title 35, United States Code, is amended by adding at the end the
following new item:
``257. Supplemental examinations to consider, reconsider, or correct
information.''.
(c) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to any patent issued
before, on, or after that effective date.
SEC. 13. FUNDING AGREEMENTS.
(a) In General.--Section 202(c)(7)(E)(i) of title 35, United States
Code, is amended--
(1) by striking ``75 percent'' and inserting ``15
percent'';
(2) by striking ``25 percent'' and inserting ``85
percent''; and
(3) by striking ``as described above in this clause (D);''
and inserting ``described above in this clause;''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act and shall apply to any
patent issued before, on, or after that date.
SEC. 14. TAX STRATEGIES DEEMED WITHIN THE PRIOR ART.
(a) In General.--For purposes of evaluating an invention under
section 102 or 103 of title 35, United States Code, any strategy for
reducing, avoiding, or deferring tax liability, whether known or
unknown at the time of the invention or application for patent, shall
be deemed insufficient to differentiate a claimed invention from the
prior art.
(b) Definition.--For purposes of this section, the term ``tax
liability'' refers to any liability for a tax under any Federal, State,
or local law, or the law of any foreign jurisdiction, including any
statute, rule, regulation, or ordinance that levies, imposes, or
assesses such tax liability.
(c) Exclusions.--This section does not apply to that part of an
invention that--
(1) is a method, apparatus, technology, computer program
product, or system, that is used solely for preparing a tax or
information return or other tax filing, including one that
records, transmits, transfers, or organizes data related to
such filing; or
(2) is a method, apparatus, technology, computer program
product, or system used solely for financial management, to the
extent that it is severable from any tax strategy or does not
limit the use of any tax strategy by any taxpayer or tax
advisor.
(d) Rule of Construction.--Nothing in this section shall be
construed to imply that other business methods are patentable or that
other business method patents are valid.
(e) Effective Date; Applicability.--This section shall take effect
on the date of the enactment of this Act and shall apply to any patent
application that is pending on, or filed on or after, that date, and to
any patent that is issued on or after that date.
SEC. 15. BEST MODE REQUIREMENT.
(a) In General.--Section 282 of title 35, United States Code, is
amended in the second undesignated paragraph by striking paragraph (3)
and inserting the following:
``(3) Invalidity of the patent or any claim in suit for
failure to comply with--
``(A) any requirement of section 112, except that
the failure to disclose the best mode shall not be a
basis on which any claim of a patent may be canceled or
held invalid or otherwise unenforceable; or
``(B) any requirement of section 251.''.
(b) Conforming Amendment.--Sections 119(e)(1) and 120 of title 35,
United States Code, are each amended by striking ``the first paragraph
of section 112 of this title'' and inserting ``section 112(a) (other
than the requirement to disclose the best mode)''.
(c) Effective Date.--The amendments made by this section shall take
effect upon the date of the enactment of this Act and shall apply to
proceedings commenced on or after that date.
SEC. 16. MARKING.
(a) Virtual Marking.--
(1) In general.--Section 287(a) of title 35, United States
Code, is amended by striking ``or when,'' and inserting ``or by
fixing thereon the word `patent' or the abbreviation `pat.'
together with an address of a posting on the Internet,
accessible to the public without charge for accessing the
address, that associates the patented article with the number
of the patent, or when,''.
(2) Effective date.--The amendment made by this subsection
shall apply to any case that is pending on, or commenced on or
after, the date of the enactment of this Act.
(3) Report.--Not later than the date that is 3 years after
the date of the enactment of this Act, the Director shall
submit a report to Congress that provides--
(A) an analysis of the effectiveness of ``virtual
marking'', as provided in the amendment made by
paragraph (1) of this subsection, as an alternative to
the physical marking of articles;
(B) an analysis of whether such virtual marking has
limited or improved the ability of the general public
to access information about patents;
(C) an analysis of the legal issues, if any, that
arise from such virtual marking; and
(D) an analysis of the deficiencies, if any, of
such virtual marking.
(b) False Marking.--
(1) Civil penalty.--Section 292(a) of title 35, United
States, Code, is amended by adding at the end the following:
``Only the United States may sue for the penalty authorized by
this subsection.''.
(2) Civil action for damages.--Subsection (b) of section
292 of title 35, United States Code, is amended to read as
follows:
``(b) A person who has suffered a competitive injury as a result of
a violation of this section may file a civil action in a district court
of the United States for recovery of damages adequate to compensate for
the injury.''.
(3) Expired patents.--Section 292 of title 35, United
States Code, is amended by adding at the end the following:
``(c) Whoever engages in an activity under subsection (a) for which
liability would otherwise be imposed shall not be liable for such
activity--
``(1) that is engaged in during the 3-year period beginning
on the date on which the patent at issue expires; or
``(2) that is engaged in after the end of that 3-year
period if the word `expired' is placed before the word
`patent', `patented', the abbreviation `pat', or the patent
number, either on the article or through a posting on the
Internet, as provided in section 287(a).''.
(4) Effective date.--The amendments made by this subsection
shall apply to any case that is pending on, or commenced on or
after, the date of the enactment of this Act.
SEC. 17. ADVICE OF COUNSEL.
(a) In General.--Chapter 29 of title 35, United States Code, is
amended by adding at the end the following:
``Sec. 298. Advice of counsel
``The failure of an infringer to obtain the advice of counsel with
respect to any allegedly infringed patent, or the failure of the
infringer to present such advice to the court or jury, may not be used
to prove that the accused infringer willfully infringed the patent or
that the infringer intended to induce infringement of the patent.''.
(b) Conforming Amendment.--The table of sections for chapter 29 of
title 35, United States Code, is amended by adding at the end the
following:
``298. Advice of counsel.''.
SEC. 18. TRANSITIONAL PROGRAM FOR COVERED BUSINESS METHOD PATENTS.
(a) Transitional Program.--
(1) Establishment.--Not later than the date that is 1 year
after the date of the enactment of this Act, the Director shall
issue regulations establishing and implementing a transitional
post-grant review proceeding for review of the validity of
covered business method patents. The transitional proceeding
implemented pursuant to this subsection shall be regarded as,
and shall employ the standards and procedures of, a post-grant
review under chapter 32 of title 35, United States Code,
subject to the following:
(A) Section 321(c) of title 35, United States Code,
and subsections (b), (e)(2), and (f) of section 325 of
such title shall not apply to a transitional
proceeding.
(B) A person may not file a petition for a
transitional proceeding with respect to a covered
business method patent unless the person or the
person's real party in interest has been sued for
infringement of the patent or has been charged with
infringement under that patent.
(C) A petitioner in a transitional proceeding who
challenges the validity of 1 or more claims in a
covered business method patent on a ground raised under
section 102 or 103 of title 35, United States Code, as
in effect on the day before the effective date set
forth in section 3(n)(1), may support such ground only
on the basis of--
(i) prior art that is described by section
102(a) of such title of such title (as in
effect on the day before such effective date);
or
(ii) prior art that--
(I) discloses the invention more
than 1 year before the date of the
application for patent in the United
States; and
(II) would be described by section
102(a) of such title (as in effect on
the day before the effective date set
forth in section 3(n)(1)) if the
disclosure had been made by another
before the invention thereof by the
applicant for patent.
(D) The petitioner in a transitional proceeding, or
the petitioner's real party in interest, may not
assert, either in a civil action arising in whole or in
part under section 1338 of title 28, United States
Code, or in a proceeding before the International Trade
Commission under section 337 of the Tariff Act of 1930
(19 U.S.C. 1337), that a claim in a patent is invalid
on any ground that the petitioner raised during a
transitional proceeding that resulted in a final
written decision.
(E) The Director may institute a transitional
proceeding only for a patent that is a covered business
method patent.
(2) Effective date.--The regulations issued under paragraph
(1) shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall
apply to any covered business method patent issued before, on,
or after that effective date, except that the regulations shall
not apply to a patent described in section 6(f)(2)(A) of this
Act during the period in which a petition for post-grant review
of that patent would satisfy the requirements of section 321(c)
of title 35, United States Code.
(3) Sunset.--
(A) In general.--This subsection, and the
regulations issued under this subsection, are repealed
effective upon the expiration of the 10-year period
beginning on the date that the regulations issued under
to paragraph (1) take effect.
(B) Applicability.--Notwithstanding subparagraph
(A), this subsection and the regulations issued under
this subsection shall continue to apply, after the date
of the repeal under subparagraph (A), to any petition
for a transitional proceeding that is filed before the
date of such repeal.
(b) Request for Stay.--
(1) In general.--If a party seeks a stay of a civil action
alleging infringement of a patent under section 281 of title
35, United States Code, relating to a transitional proceeding
for that patent, the court shall decide whether to enter a stay
based on--
(A) whether a stay, or the denial thereof, will
simplify the issues in question and streamline the
trial;
(B) whether discovery is complete and whether a
trial date has been set;
(C) whether a stay, or the denial thereof, would
unduly prejudice the nonmoving party or present a clear
tactical advantage for the moving party; and
(D) whether a stay, or the denial thereof, will
reduce the burden of litigation on the parties and on
the court.
(2) Review.--A party may take an immediate interlocutory
appeal from a district court's decision under paragraph (1).
The United States Court of Appeals for the Federal Circuit
shall review the district court's decision to ensure consistent
application of established precedent, and such review may be de
novo.
(c) ATM Exemption for Venue Purposes.--In an action for
infringement under section 281 of title 35, United States Code, of a
covered business method patent, an automated teller machine shall not
be deemed to be a regular and established place of business for
purposes of section 1400(b) of title 28, United States Code.
(d) Definition.--
(1) In general.--For purposes of this section, the term
``covered business method patent'' means a patent that claims a
method or corresponding apparatus for performing data
processing or other operations used in the practice,
administration, or management of a financial product or
service, except that the term does not include patents for
technological inventions.
(2) Regulations.--To assist in implementing the
transitional proceeding authorized by this subsection, the
Director shall issue regulations for determining whether a
patent is for a technological invention.
(e) Rule of Construction.--Nothing in this section shall be
construed as amending or interpreting categories of patent-eligible
subject matter set forth under section 101 of title 35, United States
Code.
SEC. 19. JURISDICTION AND PROCEDURAL MATTERS.
(a) State Court Jurisdiction.--Section 1338(a) of title 28, United
States Code, is amended by striking the second sentence and inserting
the following: ``No State court shall have jurisdiction over any claim
for relief arising under any Act of Congress relating to patents, plant
variety protection, or copyrights. For purposes of this subsection, the
term `State' includes any State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the United States Virgin
Islands, American Samoa, Guam, and the Northern Mariana Islands.''.
(b) Court of Appeals for the Federal Circuit.--Section 1295(a)(1)
of title 28, United States Code, is amended to read as follows:
``(1) of an appeal from a final decision of a district
court of the United States, the District Court of Guam, the
District Court of the Virgin Islands, or the District Court of
the Northern Mariana Islands, in any civil action arising
under, or in any civil action in which a party has asserted a
compulsory counterclaim arising under, any Act of Congress
relating to patents or plant variety protection;''.
(c) Removal.--
(1) In general.--Chapter 89 of title 28, United States
Code, is amended by adding at the end the following new
section:
``Sec. 1454. Patent, plant variety protection, and copyright cases
``(a) In General.--A civil action in which any party asserts a
claim for relief arising under any Act of Congress relating to patents,
plant variety protection, or copyrights may be removed to the district
court of the United States for the district and division embracing the
place where the action is pending.
``(b) Special Rules.--The removal of an action under this section
shall be made in accordance with section 1446, except that if the
removal is based solely on this section--
``(1) the action may be removed by any party; and
``(2) the time limitations contained in section 1446(b) may
be extended at any time for cause shown.
``(c) Clarification of Jurisdiction in Certain Cases.--The court to
which a civil action is removed under this section is not precluded
from hearing and determining any claim in the civil action because the
State court from which the civil action is removed did not have
jurisdiction over that claim.
``(d) Remand.--If a civil action is removed solely under this
section, the district court--
``(1) shall remand all claims that are neither a basis for
removal under subsection (a) nor within the original or
supplemental jurisdiction of the district court under any Act
of Congress; and
``(2) may, under the circumstances specified in section
1367(c), remand any claims within the supplemental jurisdiction
of the district court under section 1367.''.
(2) Conforming amendment.--The table of sections for
chapter 89 of title 28, United States Code, is amended by
adding at the end the following new item:
``1454. Patent, plant variety protection, and copyright cases.''.
(d) Transfer by Court of Appeals for the Federal Circuit.--
(1) In general.--Chapter 99 of title 28, United States
Code, is amended by adding at the end the following new
section:
``Sec. 1632. Transfer by the Court of Appeals for the Federal Circuit
``When a case is appealed to the Court of Appeals for the Federal
Circuit under section 1295(a)(1), and no claim for relief arising under
any Act of Congress relating to patents or plant variety protection is
the subject of the appeal by any party, the Court of Appeals for the
Federal Circuit shall transfer the appeal to the court of appeals for
the regional circuit embracing the district from which the appeal has
been taken.''.
(2) Conforming amendment.--The table of sections for
chapter 99 of title 28, United States Code, is amended by
adding at the end the following new item:
``1632. Transfer by the Court of Appeals for the Federal Circuit.''.
(e) Procedural Matters in Patent Cases.--
(1) Joinder of parties and stay of actions.--Chapter 29 of
title 35, United States Code, as amended by this Act, is
further amended by adding at the end the following new section:
``Sec. 299. Joinder of parties
``(a) Joinder of Accused Infringers.--In any civil action arising
under any Act of Congress relating to patents, other than an action or
trial in which an act of infringement under section 271(e)(2) has been
pled, parties that are accused infringers may be joined in one action
as defendants or counterclaim defendants only if--
``(1) any right to relief is asserted against the parties
jointly, severally, or in the alternative with respect to or
arising out of the same transaction, occurrence, or series of
transactions or occurrences relating to the making, using,
importing into the United States, offering for sale, or selling
of the same accused product or process; and
``(2) questions of fact common to all defendants or
counterclaim defendants will arise in the action.
``(b) Allegations Insufficient for Joinder.--For purposes of this
subsection, accused infringers may not be joined in one action or trial
as defendants or counterclaim defendants based solely on allegations
that they each have infringed the patent or patents in suit.''.
(2) Conforming amendment.--The table of sections for
chapter 29 of title 35, United States Code, as amended by this
Act, is further amended by adding at the end the following new
item:
``299. Joinder of parties.''.
(e) Effective Date.--The amendments made by this section shall
apply to any civil action commenced on or after the date of the
enactment of this Act.
SEC. 20. TECHNICAL AMENDMENTS.
(a) Joint Inventions.--Section 116 of title 35, United States Code,
is amended--
(1) in the first undesignated paragraph, by
striking ``When'' and inserting ``(a) Joint
Inventions.--When'';
(2) in the second undesignated paragraph, by
striking ``If a joint inventor'' and inserting ``(b)
Omitted Inventor.--If a joint inventor''; and
(3) in the third undesignated paragraph--
(A) by striking ``Whenever'' and inserting
``(c) Correction of Errors in Application.--
Whenever''; and
(B) by striking ``and such error arose
without any deceptive intention on his part,''.
(b) Filing of Application in Foreign Country.--Section 184 of title
35, United States Code, is amended--
(1) in the first undesignated paragraph--
(A) by striking ``Except when'' and inserting ``(a)
Filing in Foreign Country.--Except when''; and
(B) by striking ``and without deceptive intent'';
(2) in the second undesignated paragraph, by striking ``The
term'' and inserting ``(b) Application.--The term''; and
(3) in the third undesignated paragraph, by striking ``The
scope'' and inserting ``(c) Subsequent Modifications,
Amendments, and Supplements.--The scope''.
(c) Filing Without a License.--Section 185 of title 35, United
States Code, is amended by striking ``and without deceptive intent''.
(d) Reissue of Defective Patents.--Section 251 of title 35, United
States Code, is amended--
(1) in the first undesignated paragraph--
(A) by striking ``Whenever'' and inserting ``(a) In
General.--Whenever''; and
(B) by striking ``without any deceptive
intention'';
(2) in the second undesignated paragraph, by striking ``The
Director'' and inserting ``(b) Multiple Reissued Patents.--The
Director'';
(3) in the third undesignated paragraph, by striking ``The
provisions'' and inserting ``(c) Applicability of This Title.--
The provisions''; and
(4) in the last undesignated paragraph, by striking ``No
reissued patent'' and inserting ``(d) Reissue Patent Enlarging
Scope of Claims.--No reissued patent''.
(e) Effect of Reissue.--Section 253 of title 35, United States
Code, is amended--
(1) in the first undesignated paragraph, by striking
``Whenever, without any deceptive intention,'' and inserting
``(a) In General.--Whenever''; and
(2) in the second undesignated paragraph, by striking ``In
like manner'' and inserting ``(b) Additional Disclaimer or
Dedication.--In the manner set forth in subsection (a),''.
(f) Correction of Named Inventor.--Section 256 of title 35, United
States Code, is amended--
(1) in the first undesignated paragraph--
(A) by striking ``Whenever'' and inserting ``(a)
Correction.--Whenever''; and
(B) by striking ``and such error arose without any
deceptive intention on his part''; and
(2) in the second undesignated paragraph, by striking ``The
error'' and inserting ``(b) Patent Valid if Error Corrected.--
The error''.
(g) Presumption of Validity.--Section 282 of title 35, United
States Code, is amended--
(1) in the first undesignated paragraph--
(A) by striking ``A patent'' and inserting ``(a) In
General.--A patent''; and
(B) by striking the third sentence;
(2) in the second undesignated paragraph--
(A) by striking ``The following'' and inserting
``(b) Defenses.--The following'';
(B) in paragraph (1), by striking
``uneforceability,'' and inserting
``unenforceability.''; and
(C) in paragraph (2), by striking
``patentability,'' and inserting ``patentability.'' ;
and
(3) in the third undesignated paragraph--
(A) by striking ``In actions involving the validity
or infringement of a patent'' and inserting ``(c)
Notice of Actions; Actions During Extension of Patent
Term.--In an action involving the validity or
infringement of patent, the party asserting
infringement shall identify, in the pleadings or
otherwise in writing to the adverse party, all of its
real parties in interest, and''; and
(B) by striking ``Claims Court'' and inserting
``Court of Federal Claims''.
(h) Action for Infringement.--Section 288 of title 35, United
States Code, is amended by striking ``, without deceptive intention,''.
(i) Reviser's Notes.--
(1) Section 3(e)(2) of title 35, United States Code, is
amended by striking ``this Act,'' and inserting ``that Act,''.
(2) Section 202 of title 35, United States Code, is
amended--
(A) in subsection (b)(3), by striking ``the section
203(b)'' and inserting ``section 203(b)''; and
(B) in subsection (c)(7)(D), by striking ``except
where it proves'' and all that follows through ``small
business firms; and'' and inserting: ``except where it
is determined to be infeasible following a reasonable
inquiry, a preference in the licensing of subject
inventions shall be given to small business firms;
and''.
(3) Section 209(d)(1) of title 35, United States Code, is
amended by striking ``nontransferrable'' and inserting
``nontransferable''.
(4) Section 287(c)(2)(G) of title 35, United States Code,
is amended by striking ``any state'' and inserting ``any
State''.
(5) Section 371(b) of title 35, United States Code, is
amended by striking ``of the treaty'' and inserting ``of the
treaty.''.
(j) Unnecessary References.--
(1) In general.--Title 35, United States Code, is amended
by striking ``of this title'' each place that term appears.
(2) Exception.--The amendment made by paragraph (1) shall
not apply to the use of such term in the following sections of
title 35, United States Code:
(A) Section 1(c).
(B) Section 101.
(C) Subsections (a) and (b) of section 105.
(D) The first instance of the use of such term in
section 111(b)(8).
(E) Section 161.
(F) Section 164.
(G) Section 171.
(H) Section 251(c), as so designated by this
section.
(I) Section 261.
(J) Subsections (g) and (h) of section 271.
(K) Section 287(b)(1).
(L) Section 289.
(M) The first instance of the use of such term in
section 375(a).
(k) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to proceedings commenced
on or after that effective date.
SEC. 21. TRAVEL EXPENSES AND PAYMENT OF ADMINISTRATIVE JUDGES.
(a) Authority To Cover Certain Travel Related Expenses.--Section
2(b)(11) of title 35, United States Code, is amended by inserting ``,
and the Office is authorized to expend funds to cover the subsistence
expenses and travel-related expenses, including per diem, lodging
costs, and transportation costs, of persons attending such programs who
are not Federal employees'' after ``world''.
(b) Payment of Administrative Judges.--Section 3(b) of title 35,
United States Code, is amended by adding at the end the following:
``(6) Administrative patent judges and administrative
trademark judges.--The Director may fix the rate of basic pay
for the administrative patent judges appointed pursuant to
section 6 and the administrative trademark judges appointed
pursuant to section 17 of the Trademark Act of 1946 (15 U.S.C.
1067) at not greater than the rate of basic pay payable for
level III of the Executive Schedule under section 5314 of title
5. The payment of a rate of basic pay under this paragraph
shall not be subject to the pay limitation under section
5306(e) or 5373 of title 5.''.
SEC. 22. PATENT AND TRADEMARK OFFICE FUNDING.
(a) Definition.--In this section, the term ``Fund'' means the
United States Patent and Trademark Office Public Enterprise Fund
established under subsection (c).
(b) Funding.--
(1) In general.--Section 42 of title 35, United States
Code, is amended--
(A) in subsection (b), by striking ``Patent and
Trademark Office Appropriation Account'' and inserting
``United States Patent and Trademark Office Public
Enterprise Fund''; and
(B) in subsection (c), in the first sentence--
(i) by striking ``To the extent'' and all
that follows through ``fees'' and inserting
``Fees''; and
(ii) by striking ``shall be collected by
and shall be available to the Director'' and
inserting ``shall be collected by the Director
and shall be available until expended''.
(2) Effective date.--The amendments made by paragraph (1)
shall take effect on the later of--
(A) October 1, 2011; or
(B) the first day of the first fiscal year that
begins after the date of the enactment of this Act.
(c) USPTO Revolving Fund.--
(1) Establishment.--There is established in the Treasury of
the United States a revolving fund to be known as the ``United
States Patent and Trademark Office Public Enterprise Fund''.
Any amounts in the Fund shall be available for use by the
Director without fiscal year limitation.
(2) Derivation of resources.--There shall be deposited into
the Fund and recorded as offsetting receipts, on and after the
effective date set forth in subsection (b)(2)--
(A) any fees collected under sections 41, 42, and
376 of title 35, United States Code, except that--
(i) notwithstanding any other provision of
law, if such fees are collected by, and payable
to, the Director, the Director shall transfer
such amounts to the Fund; and
(ii) no funds collected pursuant to section
10(h) of this Act or section 1(a)(2) of Public
Law 111-45 shall be deposited in the Fund; and
(B) any fees collected under section 31 of the
Trademark Act of 1946 (15 U.S.C. 1113).
(3) Expenses.--Amounts deposited into the Fund under
paragraph (2) shall be available, without fiscal year
limitation, to cover--
(A) all expenses to the extent consistent with the
limitation on the use of fees set forth in section
42(c) of title 35, United States Code, including all
administrative and operating expenses, determined in
the discretion of the Director to be ordinary and
reasonable, incurred by the Director for the continued
operation of all services, programs, activities, and
duties of the Office relating to patents and
trademarks, as such services, programs, activities, and
duties are described under--
(i) title 35, United States Code; and
(ii) the Trademark Act of 1946; and
(B) all expenses incurred pursuant to any
obligation, representation, or other commitment of the
Office.
(d) Annual Report.--Not later than 60 days after the end of each
fiscal year, the Director shall submit a report to Congress which
shall--
(1) summarize the operations of the Office for the
preceding fiscal year, including financial details and staff
levels broken down by each major activity of the Office;
(2) detail the operating plan of the Office, including
specific expense and staff needs for the upcoming fiscal year;
(3) describe the long-term modernization plans of the
Office;
(4) set forth details of any progress towards such
modernization plans made in the previous fiscal year; and
(5) include the results of the most recent audit carried
out under subsection (f).
(e) Annual Spending Plan.--
(1) In general.--Not later than 30 days after the beginning
of each fiscal year, the Director shall notify the Committees
on Appropriations of both Houses of Congress of the plan for
the obligation and expenditure of the total amount of the funds
for that fiscal year in accordance with section 605 of the
Science, State, Justice, Commerce, and Related Agencies
Appropriations Act, 2006 (Public Law 109-108; 119 Stat. 2334).
(2) Contents.--Each plan under paragraph (1) shall--
(A) summarize the operations of the Office for the
current fiscal year, including financial details and
staff levels with respect to major activities; and
(B) detail the operating plan of the Office,
including specific expense and staff needs, for the
current fiscal year.
(f) Audit.--The Director shall, on an annual basis, provide for an
independent audit of the financial statements of the Office. Such audit
shall be conducted in accordance with generally acceptable accounting
procedures.
(g) Budget.--The Director shall prepare and submit each year to the
President a business-type budget for the Fund in a manner, and before a
date, as the President prescribes by regulation for the Federal budget.
SEC. 23. SATELLITE OFFICES.
(a) Establishment.--Subject to available resources, the Director
shall, by not later than the date that is 3 years after the date of the
enactment of this Act, establish 3 or more satellite offices in the
United States to carry out the responsibilities of the Office.
(b) Purposes.--The purposes of the satellite offices established
under subsection (a) are to--
(1) increase outreach activities to better connect patent
filers and innovators with the Office;
(2) enhance patent examiner retention;
(3) improve recruitment of patent examiners;
(4) decrease the number of patent applications waiting for
examination; and
(5) improve the quality of patent examination.
(c) Required Considerations.--
(1) In general.--In selecting the location of each
satellite office to be established under subsection (a), the
Director--
(A) shall ensure geographic diversity among the
offices, including by ensuring that such offices are
established in different States and regions throughout
the Nation;
(B) may rely upon any previous evaluations by the
Office of potential locales for satellite offices,
including any evaluations prepared as part of the
Office's Nationwide Workforce Program that resulted in
the 2010 selection of Detroit, Michigan, as the first
satellite office of the Office.
(2) Open selection process.--Nothing in paragraph (1) shall
constrain the Office to only consider its evaluations in
selecting the Detroit, Michigan, satellite office.
(d) Report to Congress.--Not later than the end of the third fiscal
year that begins after the date of the enactment of this Act, the
Director shall submit a report to Congress on--
(1) the rationale of the Director in selecting the location
of any satellite office required under subsection (a);
(2) the progress of the Director in establishing all such
satellite offices; and
(3) whether the operation of existing satellite offices is
achieving the purposes under subsection (b).
SEC. 24. DESIGNATION OF DETROIT SATELLITE OFFICE.
(a) Designation.--The satellite office of the United States Patent
and Trademark Office to be located in Detroit, Michigan, shall be known
and designated as the ``Elijah J. McCoy United States Patent and
Trademark Office''.
(b) References.--Any reference in a law, map, regulation, document,
paper, or other record of the United States to the satellite office of
the United States Patent and Trademark Office to be located in Detroit,
Michigan, referred to in subsection (a) shall be deemed to be a
reference to the ``Elijah J. McCoy United States Patent and Trademark
Office''.
SEC. 25. PATENT OMBUDSMAN PROGRAM FOR SMALL BUSINESS CONCERNS.
Using available resources, the Director shall establish and
maintain in the Office a Patent Ombudsman Program. The duties of the
Program's staff shall include providing support and services relating
to patent filings to small business concerns.
SEC. 26. PRIORITY EXAMINATION FOR TECHNOLOGIES IMPORTANT TO AMERICAN
COMPETITIVENESS.
Section 2(b)(2) of title 35, United States Code, is amended--
(1) in subparagraph (E), by striking ``and'' after the
semicolon;
(2) in subparagraph (F), by inserting ``and'' after the
semicolon; and
(3) by adding at the end the following:
``(G) may, subject to any conditions prescribed by
the Director and at the request of the patent
applicant, provide for prioritization of examination of
applications for products, processes, or technologies
that are important to the national economy or national
competitiveness without recovering the aggregate extra
cost of providing such prioritization, notwithstanding
section 41 or any other provision of law;''.
SEC. 27. CALCULATION OF 60-DAY PERIOD FOR APPLICATION OF PATENT TERM
EXTENSION.
(a) In General.--Section 156(d)(1) of title 35, United States Code,
is amended by adding at the end the following flush sentence:
``For purposes of determining the date on which a product receives
permission under the second sentence of this paragraph, if such
permission is transmitted after 4:30 P.M., Eastern Time, on a business
day, or is transmitted on a day that is not a business day, the product
shall be deemed to receive such permission on the next business day.
For purposes of the preceding sentence, the term `business day' means
any Monday, Tuesday, Wednesday, Thursday, or Friday, excluding any
legal holiday under section 6103 of title 5.''.
(b) Applicability.--The amendment made by subsection (a) shall
apply to any application for extension of a patent term under section
156 of title 35, United States Code, that is pending on, that is filed
after, or as to which a decision regarding the application is subject
to judicial review on, the date of the enactment of this Act.
SEC. 28. STUDY ON IMPLEMENTATION.
(a) PTO Study.--The Director shall conduct a study on the manner in
which this Act and the amendments made by this Act are being
implemented by the Office, and on such other aspects of the patent
policies and practices of the Federal Government with respect to patent
rights, innovation in the United States, competitiveness of United
States markets, access by small businesses to capital for investment,
and such other issues, as the Director considers appropriate.
(b) Report to Congress.--The Director shall, not later than the
date that is 4 years after the date of the enactment of this Act,
submit to the Committees on the Judiciary of the House of
Representatives and the Senate a report on the results of the study
conducted under subsection (a), including recommendations for any
changes to laws and regulations that the Director considers
appropriate.
SEC. 29. PRO BONO PROGRAM.
(a) In General.--The Director shall work with and support
intellectual property law associations across the country in the
establishment of pro bono programs designed to assist financially
under-resourced independent inventors and small businesses.
(b) Effective Date.--This section shall take effect on the date of
the enactment of this Act.
SEC. 30. EFFECTIVE DATE.
Except as otherwise provided in this Act, the provisions of this
Act shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall apply to
any patent issued on or after that effective date.
SEC. 31. BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by
reference to the latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, submitted for printing in the Congressional
Record by the Chairman of the House Budget Committee, provided that
such statement has been submitted prior to the vote on passage.
Purpose and Summary
The Constitution explicitly 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 respective . . . discoveries.''\1\ Congress has responded
by authorizing patents to issue to inventors of new and useful
inventions or improvements on inventions.\2\ The patent law
thus accomplishes two objectives, consistent with the
authorization granted by the Constitution: first, it encourages
inventors by granting them limited, but exclusive rights to
their inventions; second, in exchange for the grant of those
exclusive rights, the patent law requires disclosure of the
invention and terminates the monopoly after a period of
years.\3\ This disclosure and limited time benefits both
society and future inventors by making the details of the
invention available to the public immediately, and the right to
make use of that invention after the expiration of 20 years
from the date the patent application was filed.
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\1\U.S. Const. Art. 1, Sec. 8.
\2\See 35 U.S.C. Sec. 101.
\3\See Perspectives on Patents: Post-Grant Review Procedures and
Other Litigation Reforms: Hearing before the Subcomm. on Intellectual
Prop. of the Senate Comm. on the Judiciary, 109th Cong. (2006)
(statement of Nathan P. Myhrvold, Chief Executive Officer, Intellectual
Ventures); Perspectives on Patents: Hearing before the Subcomm. on
Intellectual Prop. of the Senate Comm. on the Judiciary, 109th Cong.
(2005) (statement of Dean Kamen, President, DEKA Research and
Development Corp.).
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Congress has not enacted comprehensive patent law reform in
nearly 60 years.\4\ The object of the patent law today must
remain true to the constitutional command, but its form needs
to change, both to correct flaws in the system that have become
unbearable, and to accommodate changes in the economy and the
litigation practices in the patent realm. The need to update
our patent laws has been meticulously documented in 15 hearings
before the Committee or its Subcommittee on Courts, the
Internet, and Intellectual Property, as well as eight hearings
before the United States Senate Committee on the Judiciary. In
addition, these legislative findings are augmented by the
Federal Trade Commission and the National Academy of
Sciences,\5\ both of which published authoritative reports on
patent reform, and a plethora of academic commentary.\6\
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\4\The last major revision of the patent laws was the Patent Act of
1952, P.L. 82-593.
\5\The National Academy of Sciences (NAS), and the Federal Trade
Commission (FTC) conducted multi-year studies on the patent system and
its need for reform. See National Research Council of the National
Academies, A Patent System for the 21st Century (2004) (hereinafter
``NAS Report''); and Federal Trade Comm'n, To Promote Innovation: The
Proper Balance of Competition and Patent Law and Policy (2003)
(hereinafter ``FTC Report'').
\6\See, e.g., Mark A. Lemley and Carl Shapiro, Patent Holdup and
Royalty Stacking, 85 Tex. L. Rev. 1991 (2007); Donald S. Chisum,
Reforming Patent Law Reform, 4 J. Marshall Rev. Intell. Prop. L. 336
(2005); Gerald J. Mossinghoff, The First-to-Invent Rule in the U.S.
Patent System has Provided no Advantage to Small Entities, 87 JPTOS 514
(2005); Joseph Farrell & Robert P. Merges, Incentives to Challenge and
Defend Patents: Why Litigation Won't Reliably Fix Patent Office Errors
and Why Administrative Patent Review Might Help, 19 Berkeley Tech. L.J.
943, 958 (2004); see also Adam B. Jaffe & Josh Lerner, Innovation and
Its Discontents: How Our Broken Patent System is Endangering Innovation
and Progress, and What to Do About It (2004); Kevin G. Rivette & David
Kline, Rembrandts in the Attic, Unlocking the Hidden Value of Patents
(2000).
---------------------------------------------------------------------------
While Congress has considered patent reform legislation
over the last four Congresses, the need to modernize our patent
laws has found expression in the courts, as well. The Supreme
Court has reversed the Federal Circuit in six of the patent-
related cases that it has heard since the beginning of the
109th Congress.\7\ The Court's decisions have moved in the
direction of improving patent quality and making the
determination of patent validity more efficient. The decisions
reflect a growing sense that questionable patents are too
easily obtained and are too difficult to challenge.\8\ Recent
decisions by the Federal Circuit reflect a similar trend in
response to these concerns.\9\ But the courts are constrained
in their decisions by the text of the statutes at issue. It is
time for Congress to act.
---------------------------------------------------------------------------
\7\See Bilski v. Kappos,___ U.S. __, 130 S.Ct. 3218 (2010)
(reversing the Federal Circuit and holding that the machine-or-
transformation test is not the sole test for determining the patent
eligibility of a process); Quanta Computer, Inc. v. LG Elecs. Inc., 553
U.S. 617 (2008) (reversing the Federal Circuit and holding that patent
exhaustion applies to method patents when the essential or inventive
feature of the invention is embodied in the product); Microsoft Corp.
v. AT&T Corp., 550 U.S. 437 (2007) (reversing the Federal Circuit and
limiting the extraterritorial reach of section 271(f), which imposes
liability on a party which supplies from the U.S. components of a
patented invention for combination outside the U.S.); KSR Int'l Co. v.
Teleflex Inc., 550 U.S. 398 (2007) (reversing the Federal Circuit and
strengthening the standard for determining when an invention is obvious
under section 103); MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118
(2007) (reversing the Federal Circuit and holding that the threat of a
private enforcement action is sufficient to confirm standing under the
Constitution); eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006)
(reversing the Federal Circuit and holding that the generally
applicable four-factor test for injunctive relief applies to disputes
in patent cases).
\8\See generally Patent Reform in the 111th Congress: Legislation
and Recent Court Decisions, Senate Judiciary Committee, 111th Cong.
(2009) (statement of Professor Mark A. Lemley, Stanford Law School).
\9\See, e.g., In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir.
2007) (holding that willful infringement requires at least a
demonstration of objectively reckless behavior and removing any
affirmative obligation to obtain an opinion of counsel letter to combat
an allegation of willful infringement).
---------------------------------------------------------------------------
The voices heard during the debate over changes to the
patent law have been diverse and their proposals have been far
from uniform. They have focused the Committee's attention on
the value of harmonizing our system for granting patents with
the best parts of other major patent systems throughout the
industrialized world for the benefit of U.S. patent holders;
improving patent quality and providing a more efficient system
for challenging patents that should not have issued; and
reducing unwarranted litigation costs and inconsistent damage
awards.
The purpose of the ``America Invents Act,'' as reported by
the Committee on the Judiciary, is to ensure that the patent
system in the 21st century reflects the constitutional
imperative. Congress must promote innovation by granting
inventors temporally limited monopolies on their inventions in
a manner that ultimately benefits the public through the
disclosure of the invention to the public. The legislation is
designed to establish a more efficient and streamlined patent
system that will improve patent quality and limit unnecessary
and counterproductive litigation costs.
If the United States is to maintain its competitive edge in
the global economy, it needs a system that will support and
reward all innovators with high quality patents. The Committee
has taken testimony from and its members have held meetings
with interested parties that have different and often
conflicting perspectives on the patent system. The Committee
has taken all of those views into consideration, and drafted
and then amended the ``America Invents Act'' to balance the
competing interests. The legislation ordered reported by the
Committee on a vote of 32-3 is a consensus approach that will
modernize the United States patent system in significant
respects.
Background and Need for the Legislation
First Inventor to File
The ``America Invents Act'' creates a new ``first-inventor-
to-file'' system. Every industrialized nation other than the
United States uses a patent priority system commonly referred
to as ``first-to-file.'' In a first-to-file system, when more
than one application claiming the same invention is filed, the
priority of a right to a patent is based on the earlier-filed
application. The United States, by contrast, currently uses a
``first-to-invent'' system, in which priority is established
through a proceeding to determine which applicant actually
invented the claimed invention first. Differences between the
two systems arise in large part from the date that is most
relevant to each respective system. In a first-to-file system,
the filing date of the application is most relevant;\10\ the
filing date of an application is an objective date, simple to
determine, for it is listed on the face of the patent. In
contrast, in a first-to-invent system, the date the invention
claimed in the application was actually invented is the
determinative date. Unlike the objective date of filing, the
date someone invents something is often uncertain, and, when
disputed, typically requires corroborating evidence as part of
an adjudication.
---------------------------------------------------------------------------
\10\When the term ``filing date'' is used herein, it is also meant
to include, when appropriate, the effective filing date, i.e., the
earliest date the claim in an application-claims priority.
---------------------------------------------------------------------------
There are significant, practical differences between the
two systems. Among them is the ease of determining the right to
a claimed invention in the instance in which two different
people file patent applications for the same invention. In a
first-to-file system, the application with the earlier filing
date prevails and will be awarded the patent, if one issues. In
the first-to-invent system, a lengthy, complex and costly
administrative proceeding (called an ``interference
proceeding'') must be conducted at the United States Patent and
Trademark Office (``USPTO'') to determine who actually invented
first.\11\ Interference proceedings can take years to complete
(even if there is no appeal to the United States Court of
Appeals for the Federal Circuit), cost hundreds of thousands of
dollars, and require extensive discovery.\12\ In addition,
because it is always possible that an applicant could be
involved in an interference proceeding, companies must maintain
extensive recording and document retention systems in case they
are later required to prove the date they invented the claimed
invention.
---------------------------------------------------------------------------
\11\See 35 U.S.C. Sec. 135.
\12\See, e.g., Robert W. Pritchard, The Future is Now--The Case for
Patent Harmonization, 20 N.C. J. Int'l L. & Com. Reg. 291, 313 (1995).
---------------------------------------------------------------------------
Another important difference between the two systems is
that in some first-to-file systems, prior art can include the
inventor's own disclosure of his invention prior to the filing
date of his application. Such systems do not provide the
inventor any grace period during which time he is allowed to
publish his invention without fear of its later being used
against him as prior art. The Committee heard from universities
and small inventors, in particular, about the importance of
maintaining that grace period in our system.\13\ They argued
that the grace period affords the necessary time to prepare and
file applications, and in some instances, to obtain the
necessary funding that enables the inventor to prepare
adequately the application. In addition, the grace period
benefits the public by encouraging early disclosure of new
inventions, regardless of whether an application may later be
filed for a patent on it.
---------------------------------------------------------------------------
\13\See, e.g., Perspectives on Patents: Harmonization and Other
Matters: Hearing Before the Subcomm. on Intellectual Prop. of the
Senate Comm. on the Judiciary, 109th Cong. (2005) (statement of Charles
E. Phelps, Provost, University of Rochester, on behalf of the
Association of American Universities); Patent Law Reform: Injunctions
and Damages: Hearing Before the Subcomm. on Intellectual Prop. of the
Senate Comm. on the Judiciary, 109th Cong. (2005) (statement of Carl
Gulbrandsen, Managing Director, Wisconsin Alumni Research Foundation
(WARF)); Perspective on Patents: Hearing Before the Subcomm. on
Intellectual Prop. of the Senate Comm. on the Judiciary, 109th Cong.
(2005) (statement of William Parker, Diffraction, Ltd.).
---------------------------------------------------------------------------
Numerous organizations, institutions, and companies have
advocated that the U.S. adopt a first-to-file system similar to
those used in the rest of the world.\14\ The National Academy
of Sciences made a similar recommendation after an extensive
study of the patent system.\15\ When the United States patent
system was first adopted, inventors did not typically file in
other countries. It is now common for inventors and companies
to file for protection in several countries at the same
time.\16\ Thus, United States applicants, who also want to file
abroad, are forced to follow and comply with two different
filing systems. Maintaining a filing system so different from
the rest of the world disadvantages United States applicants
who, in most instances, also file in other countries.\17\ A
change is long overdue.\18\
---------------------------------------------------------------------------
\14\See, e.g., Perspectives on Patents: Harmonization and Other
Matters: Hearing Before the Subcomm. on Intellectual Prop. of the
Senate Comm. on the Judiciary, 109th Cong. (2005) (statement of Gerald
J. Mossinghoff, Former Assistant Secretary of Commerce and Commissioner
of Patents and Trademarks); Perspectives on Patents: Harmonization and
Other Matters: Hearing Before the Subcomm. on Intellectual Prop. of the
Senate Comm. on the Judiciary, 109th Cong. (2005) (statement of Q. Todd
Dickinson, Former Under Secretary of Commerce for Intellectual Property
and Director of the United States Patent and Trademark Office); Patent
Law Reform: Injunctions and Damages: Hearing Before the Subcomm. on
Intellectual Prop. of the Senate Comm. on the Judiciary, 109th Cong.
(2005) (statement of Jeffrey P. Kushan, Partner, Sidley Austin Brown &
Wood, LLP); Patent Law Reform: Injunctions and Damages: Hearing Before
the Subcomm. on Intellectual Prop. of the Senate Comm. on the
Judiciary, 109th Cong. (2005) (statement of Mark A. Lemley, Professor,
Stanford Law School); Perspectives on Patents: Hearing Before the
Subcomm. on Intellectual Prop. of the Senate Comm. on the Judiciary,
109th Cong. (2005) (statement of Robert A. Armitage, Senior Vice
President and General Patent Counsel, Eli Lilly and Company);
Perspectives on Patents: Hearing Before the Subcomm. on Intellectual
Prop. of the Senate Comm. on the Judiciary, 109th Cong. (2005)
(statement of Michael K. Kirk, Executive Director, American
Intellectual Property Law Association).
\15\See NAS Report at 124; see also Perspectives on Patents:
Hearing Before the Subcomm. on Intellectual Prop. of the Senate Comm.
on the Judiciary, 109th Cong. (2005) (statement of Richard C. Levin,
Yale University).
\16\See Perspectives on Patents: Harmonization and Other Matters:
Hearing Before the Subcomm. on Intellectual Prop. of the Senate Comm.
on the Judiciary, 109th Cong. (2005) (statement of Gerald J.
Mossinghoff, Former Assistant Secretary of Commerce and Commissioner of
Patents and Trademarks) .
\17\See Perspectives on Patents: Hearing Before the Subcomm. on
Intellectual Prop. of the Senate Comm. on the Judiciary, 109th Cong.
(2005) (statement of Richard C. Levin, President, Yale University, and
Mark B. Meyers, Visiting Executive Professor, Management Department at
the Wharton Business School, University of Pennsylvania), estimating
that it costs as much as $750,000 to $1 million to obtain worldwide
patent protection on an important invention, and the lack of
harmonization regarding filing systems adds unnecessary cost and delay.
\18\The NAS recommended changing the U.S. to a first-to-file
system, while maintaining a grace period. See NAS Report at 124-27. See
also Patent Reform in the 111th Congress: Legislation and Recent Court
Decisions: Hearing Before the Senate Comm. on the Judiciary, 111th
Cong. (2009) (statement of Steven Appleton, Chairman and Chief
Executive Officer, Micron Technologies, Inc.); Patent Reform in the
111th Congress: Legislation and Recent Court Decisions: Hearing Before
the Senate Comm. on the Judiciary, 111th Cong. (2009) (statement of
Philip S. Johnson, Chief Patent Counsel, Johnson & Johnson); Patent
Reform in the 111th Congress: Legislation and Recent Court Decisions:
Hearing Before the Senate Comm. on the Judiciary, 111th Cong. (2009)
(statement of Herbert C. Wamsley, Executive Director, Intellectual
Property Owners Association); Patent Reform in the 111th Congress:
Legislation and Recent Court Decisions: Hearing Before the Senate Comm.
on the Judiciary, 111th Cong. (2009) (statement of Mark A. Lemley,
Professor, Stanford Law School).
---------------------------------------------------------------------------
Drawing on the best aspects of the two existing systems,
the America Invents Act creates a new ``first-inventor-to-
file'' system. This new system provides patent applicants in
the United States the efficiency benefits of the first-to-file
systems used in the rest of the world by moving the U.S. system
much closer to a first-to-file system and making the filing
date that which is most relevant in determining whether an
application is patentable. The new system continues, however,
to provide inventors the benefit of the 1-year grace period. As
part of the transition to a simpler, more efficient first-
inventor-to-file system, this provision eliminates costly,
complex interference proceedings, because priority will be
based on the first application. A new administrative
proceeding--called a ``derivation'' proceeding--is created to
ensure that the first person to file the application is
actually a true inventor. This new proceeding will ensure that
a person will not be able to obtain a patent for the invention
that he did not actually invent. If a dispute arises as to
which of two applicants is a true inventor (as opposed to who
invented it first), it will be resolved through an
administrative proceeding by the Patent Board. The Act also
simplifies how prior art is determined, provides more
certainty, and reduces the cost associated with filing and
litigating patents.
The Act maintains a 1-year grace period for U.S.
applicants. Applicants' own publication or disclosure that
occurs within 1 year prior to filing will not act as prior art
against their applications. Similarly, disclosure by others
during that time based on information obtained (directly or
indirectly) from the inventor will not constitute prior art.
This 1-year grace period should continue to give U.S.
applicants the time they need to prepare and file their
applications.
This provision also, and necessarily, modifies the prior-
art sections of the patent law. Prior art will be measured from
the filing date of the application and will typically include
all art that publicly exists prior to the filing date, other
than disclosures by the inventor within 1 year of filing. Prior
art also will no longer have any geographic limitations. Thus,
in section 102 the ``in this country'' limitation as applied to
``public use'' and ``on sale'' is removed, and the phrase
``available to the public'' is added to clarify the broad scope
of relevant prior art, as well as to emphasize the fact that it
must be publicly accessible. Prior art based on earlier-filed
United States applications is maintained,\19\ as is current
law's grace period, which will apply to all actions by the
patent owner during the year prior to filing that would
otherwise create Sec. 102(a) prior art.\20\ Sections (and
subsections) of the existing statute are renumbered, modified,
or deleted consistent with converting to a first-inventor-to-
file system.\21\ Finally, the intent behind the CREATE Act to
promote joint research activities is preserved by including a
prior art exception for subject matter invented by parties to a
joint research agreement. The Act also provides that its
enactment of new section 102(c) of title 35 is done with the
same intent to promote joint research activities that was
expressed in the Cooperative Research and Technology
Enhancement Act of 2004 (Public Law 108-453), and that section
102(c) shall be administered in a manner consistent with such
intent.
---------------------------------------------------------------------------
\19\Compare current Sec. 102(e) with new Sec. 102(a)(2).
\20\See generally 157 Cong. Rec. S.1496-97 (daily ed. March 9,
2011), S. 1370-71 (daily ed. March 8, 2011).
\21\The Committee does not intend a substantive change by replacing
the word ``negatived'' in section 103 of title 35 with ``negated.''
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Inventor's oath or declaration
The U.S. patent system, when first adopted in 1790,
contemplated that individual inventors would file their own
patent applications, or would have a patent practitioner do so
on their behalf. It has become increasingly common for patent
applications to be assigned to corporate entities, most
commonly the employer of the inventor.\22\ In fact, many
employment contracts require employees to assign their
inventions to their employer.\23\
---------------------------------------------------------------------------
\22\See John R. Allison & Mark A. Lemley, The Growing Complexity of
the United States Patent System, 82 B.U. L. Rev. 77, 97 (2002) (study
showing that approximately 85% of the patents issued between 1996-98
were assigned by inventors to corporations; an increase from 79% during
the period between 1976-78).
\23\See Jerry C. Liu, Overview of Patent Ownership Considerations
in Joint Technology Development, 2005 Syracuse Sci. & Tech. L. Rep. 1
(2005).
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Current law still reflects the antiquated notion that it is
the inventor who files the application, not the company-
assignee. For example, every inventor must sign an oath as part
of the patent application stating that the inventor believes he
or she is the true inventor of the invention claimed in the
application.\24\ By the time an application is eventually
filed, however, the applicant filing as an assignee may have
difficulty locating and obtaining every inventor's signature
for the statutorily required oath. Although the USPTO has
adopted certain regulations to allow filing of an application
when the inventor's signature is unobtainable,\25\ many have
advocated that the statute be modernized to facilitate the
filing of applications by assignees.\26\
---------------------------------------------------------------------------
\24\35 U.S.C. Sec. 115.
\25\See 37 C.F.R. Sec. 1.47, which permits an applicant to petition
the Director of the USPTO to have the application accepted without
every inventor's signature in limited circumstances, e.g., when the
inventor cannot be found or refuses to participate in the application.
\26\See Perspectives on Patents: Harmonization and Other Matters:
Hearing Before the Subcomm. on Intellectual Prop. of the Senate Comm.
on the Judiciary, 109th Cong. (2005) (statement of David Beier, Senior
Vice President of Global Government Affairs, Amgen).
---------------------------------------------------------------------------
The Act updates the patent system by facilitating the
process by which an assignee may file and prosecute patent
applications. It provides similar flexibility for a person to
whom the inventor is obligated to assign, but has not assigned,
rights to the invention (the ``obligated assignee'').
Section 115 of title 35 is amended to allow a substitute
statement to be submitted in lieu of an inventor's oath when
either the inventor (i) is unable to submit an oath, or (ii) is
both unwilling to do so and under an obligation to assign the
invention. If an error is discovered, the statement may later
be corrected. A savings clause is included to prevent an
invalidity or unenforceability challenge to the patent based on
failure to comply with these requirements, provided that any
error has been remedied. Willful false statements remain
punishable, however, under Federal criminal laws.\27\
---------------------------------------------------------------------------
\27\See 18 U.S.C. Sec. 1001.
---------------------------------------------------------------------------
Section 118 of title 35 is also amended to make it easier
for an assignee to file a patent application. The amendment now
allows obligated assignees--entities to which the inventor is
obligated to assign the application--to file applications, as
well. It also allows a person who has a sufficient proprietary
interest in the invention to file an application to preserve
that person's rights and those of the inventor.
Defense to infringement based on earlier inventor
Under current law, ``prior user rights'' may offer a
defense to patent infringement when the patent in question is a
``business method patent''\28\ and its inventor uses the
invention, but never files a patent application for it.\29\ If
the same invention is later patented by another party, the
prior user may not be liable for infringement to the new patent
holder, although all others may be.
---------------------------------------------------------------------------
\28\35 U.S.C. Sec. 273(a)(3) states: ``The term `method' means a
method of doing or conducting business.''
\29\See 35 U.S.C. Sec. 273.
---------------------------------------------------------------------------
Many counties include a more expansive prior-user rights
regime within their first-to-file system. In the United States,
this is particularly important to high-tech businesses that
prefer not to patent every process or method that is part of
their commercial operations. The Act responds to this point by
revising US law as follows: First, the prior-use defense may be
asserted against any patent (not just method patents), provided
the person asserting the defense reduced the subject matter of
the patent to practice and commercially used the subject matter
at least 1 year before the effective filing date of the patent.
Second, the defense cannot be asserted if the subject matter
was derived from the patent holder or persons in privity with
the patent holder. And third, the defense cannot be asserted
unless the prior user both reduced the subject matter of the
patent to practice and commercially used it at least 1 year
before the effective filing date of the patent or the date that
the patentee publicly disclosed the invention and invoked the
Sec. 102(b) grace period, whichever is earlier.
This narrow expansion of prior-user rights balances the
interests of patent holders, including universities, against
the legitimate concerns of businesses that want to avoid
infringement suits relating to processes that they developed
and used prior to another party acquiring related patents.
Post-grant review proceedings
The Act amends ex parte and inter partes reexamination and
establishes a new post-grant review procedure. Under current
law, there are two ways to challenge the validity and
enforceability of a patent that has issued. The patent may be
challenged in district court litigation or in a reexamination
at the USPTO.
Nearly 30 years ago, Congress created the administrative
``reexamination'' process, through which the USPTO could review
the validity of already-issued patents on the request of either
the patent holder or a third party,\30\ in the expectation that
it would serve as an effective and efficient alternative to
often costly and protracted district court litigation.\31\
Reexamination requires the USPTO to review the patent in light
of a substantial new question of patentability not presented
during the original examination.\32\ The initial reexamination
statute had several limitations that later proved to make it a
less viable alternative to litigation for evaluating patent
validity than Congress intended. First, a reexamination request
could only be based on prior art, and could not be based on
prior public use or prior sales. Moreover, the requestor could
not raise any challenge based on Sec. 101 (utility,
eligibility) or Sec. 112 (indefiniteness, enablement, written
description, best mode). A third party alleging a patent is
invalid, therefore, had fewer challenges it could raise in the
proceeding and, therefore, may instead opt to risk infringement
and litigate the validity of the patent in court. Second, in
the original reexamination system, the third-party challenger
had no role once the proceeding was initiated, while the patent
holder had significant input throughout the entire process.
Third, a challenger that lost at the USPTO under reexamination
had no right to appeal an examiner's, or the Patent Board's,
decision either administratively or in court. Restrictions such
as these made reexamination a much less favored avenue to
challenge questionable patents than litigation. Reexamination
proceedings are also often costly, taking several years to
complete,\33\ and are first conducted by examiners and, if the
patent is rejected, then by Patent Board judges. Thus, many
patents must go through two rounds of administrative review
(one by the examiner, and a second by the Patent Board) adding
to the length of the proceeding.\34\
---------------------------------------------------------------------------
\30\See 35 U.S.C. Sec. Sec. 301-307. A patent holder will typically
request reexamination to bolster the patent in view of new prior art. A
third party may request reexamination to challenge, and ultimately
invalidate, the patent.
\31\``Reexamination will permit efficient resolution of questions
about the validity of issued patents without recourse to expensive and
lengthy infringement litigation. . . . The reexamination of issued
patents could be conducted with a fraction of the time and cost of
formal legal proceedings and would help restore confidence in the
effectiveness of our patent system. . . . It is anticipated that these
measures provide a useful and necessary alternative for challengers and
for patent owners to test the validity of united states patents in an
efficient and relatively inexpensive manner.'' See H.R. Rep. No. 96-
1307(I) at 3 (1980), reprinted in 1980 U.S.C.C.A.N. 6460, 6462-63.
\32\See 35 U.S.C. Sec. 303.
\33\See Perspectives on Patents: Hearing Before the Subcomm. on
Intellectual Prop. of the Senate Comm. on the Judiciary, 109th Cong.
(2005) (statement of Jon W. Dudas, Undersecretary of Commerce for
Intellectual Property, Director of the U.S. Patent and Trademark
Office), explaining that ``a large number of reexamination proceedings
have been pending before the USPTO for more than 4 years,'' and
questioning whether this amount of time is consistent with the
statutory requirement that ``[a]ll reexamination proceedings . . . will
be conducted with special dispatch within the Office.'' See also 35
U.S.C. Sec. 305.
\34\For several years, the standard practice at the USPTO was to
assign the reexamination to the patent examiner who had originally
examined that patent. In addition, the same third-party requester could
file multiple, serial reexaminations based on the same ``substantial
new question of patentability,'' so long as the initial reexamination
was not complete. More recently, the USPTO ended some of these
procedures, and now reexaminations are handled by a Central
Reexamination Unit (CRU), and subsequent serial reexamination, based on
the same ``substantial new question of patentability,'' is no longer
permitted. See, e.g., Manual of Patent Examining Procedure (MPEP)
Sec. Sec. 2236 and 2240 (August 2006).
---------------------------------------------------------------------------
Congress has responded several times to criticisms of the
reexamination system by making amendments to the process.\35\
In 1999, Congress created a second reexamination procedure--
called inter partes reexamination--that gave third-party
challengers greater input throughout the proceeding by
permitting them to respond to every pleading submitted by the
patent holder.\36\ Congress also eventually gave third-party
challengers the right to appeal adverse decisions.\37\
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\35\See e.g., 21st Century Dep't of Justice Appropriations
Authorization Act, Pub. L. No. 107-273, Sec. Sec. 13105-06, 13202, 116
Stat. 1758, 1761 (2002) (effective Nov. 2, 2002); American Inventors
Protection Act, Pub.L. 106-113, 113 Stat. 1536, Sec. 1501A et seq.
(1999) (creating inter partes reexamination) (hereafter referred to as
the ``AIPA'').
\36\See 35 U.S.C. Sec. Sec. 311-318.
\37\See 35 U.S.C. Sec. 315(b).
---------------------------------------------------------------------------
As part of the 1999 improvements to reexamination, Congress
directed the USPTO to submit a report to Congress evaluating
the inter partes reexamination process and making any
recommendations for changes.\38\ Initially, the USPTO projected
that in the first year after the creation of inter partes
reexamination, it would receive 400 such requests and it
projected that by 2004 it would receive nearly 600.\39\ No
inter partes reexamination requests were actually filed in 2000
and only 27 such requests had been filed by 2004.\40\ Over the
5-year period studied by the USPTO, it issued 900,000 patents
and received only 53 requests for inter partes
reexamination.\41\
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\38\AIPA, Pub. L. 106-113, Sec. 4606.
\39\See United States Patent and Trademark Office, Report to
Congress on Inter Partes Reexamination (2004) (hereinafter referred to
as ``Report on Inter Partes Reexamination''), at 4.
\40\Id. at 5.
\41\Id.
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The Act expands the category of documents that may be cited
in a reexamination proceeding to include written statements of
the patent owner that have been filed in a proceeding before a
Federal court or the USPTO regarding the scope of claims. This
addition will counteract the ability of patent owners to offer
differing interpretations of prior art in different
proceedings. These written statements, which include documents,
pleadings or evidence from proceedings that address the patent
owner's statements, shall not be considered for any purpose
other than to determine the proper meaning of the claims that
are the subject of the request in a proceeding. Specifically,
the Committee does not intend these statements to be a basis
for the institution of a reexamination proceeding.
Reexaminations will continue to be available only on the basis
of ``patents or printed publications.''\42\
---------------------------------------------------------------------------
\42\The scope of ``patent and printed publication'' prior art in
the amended section 301 is intended to be coextensive with these terms
in current section 102 of the title 35. Further, amendments made by
Section 2 of the Act, which expand and contract the definition of
certain other forms of prior art, are not intended to change the
particular ``patent or printed publication'' prior art, which will
continue to be the sole basis for initiating reexamination proceedings.
---------------------------------------------------------------------------
The Act also amends the ex parte reexamination procedure to
allow the Director to institute a reexamination on the
Director's own initiative if a substantial new question of
patentability is raised by patents or publications.
The Act converts inter partes reexamination from an
examinational to an adjudicative proceeding, and renames the
proceeding ``inter partes review.'' The Act also makes the
following improvements to this proceeding:
L``Reasonable likelihood of success'' for
instituting inter partes review. The threshold for
initiating an inter partes review is elevated from
``significant new question of patentability''--a
standard that currently allows 95% of all requests to
be granted--to a standard requiring petitioners to
present information showing that their challenge has a
reasonable likelihood of success. Satisfaction of the
new threshold will be assessed based on the information
presented both in the petition for the proceeding and
in the patent owner's response to the petition.
L``Reasonably could have raised'' estoppel
applied to subsequent administrative proceedings. A
party that uses inter partes review is estopped from
raising in a subsequent PTO proceeding (such as an ex
parte reexam or inter partes review) any issue that it
raised or reasonably could have raised in the inter
partes review.
LRepeal of the 1999 limit. The limit on
challenging patents issued before 1999 in inter partes
reexamination is eliminated; all patents can be
challenged in inter partes review.
LPreponderance burden. Petitioners bear the
burden of proving that a patent is invalid by a
preponderance of the evidence in inter partes review.
LTime limits during litigation. Parties who
want to use inter partes review during litigation are
required to seek a proceeding within 12 months of being
served with a complaint alleging infringement of the
patent, and are barred from seeking or maintaining an
inter partes review if they file an action for a
declaratory judgment that the patent is invalid.
LDiscovery. Parties may depose witnesses
submitting affidavits or declarations and seek such
discovery as the Patent Office determines is otherwise
necessary in the interest of justice.
L12- to 18-month deadline. Inter partes review
must be completed within 1 year of when the proceeding
is instituted, except that the Office can extend this
deadline by 6 months for good cause.
LOral hearing. Each party has the right to
request an oral hearing as part of an inter partes
review.
LThree-judge panels. Inter partes reviews will
be conducted before a panel of three APJs. Decisions
will be appealed directly to the Federal Circuit.
The Act also creates a new post-grant opposition procedure
that can be utilized during the first 12 months after the grant
of a patent or issue of a reissue patent. Unlike reexamination
proceedings, which provide only a limited basis on which to
consider whether a patent should have issued, the post-grant
review proceeding permits a challenge on any ground related to
invalidity under section 282. The intent of the post-grant
review process is to enable early challenges to patents, while
still protecting the rights of inventors and patent owners
against new patent challenges unbounded in time and scope. The
Committee believes that this new, early-stage process for
challenging patent validity and its clear procedures for
submission of art will make the patent system more efficient
and improve the quality of patents and the patent system. This
new, but time-limited, post-grant review procedure will provide
a meaningful opportunity to improve patent quality and restore
confidence in the presumption of validity that comes with
issued patents in court.
In utilizing the post-grant review process, petitioners,
real parties in interest, and their privies are precluded from
improperly mounting multiple challenges to a patent or
initiating challenges after filing a civil action challenging
the validity a claim in the patent. Further, a final decision
in a post-grant review process will prevent the petitioner, a
real party in interest, or its privy from challenging any
patent claim on a ground that was raised in the post-grant
review process. The post-grant review procedure is not
intended, however, to inhibit patent owners from pursuing the
various avenues of enforcement of their rights under a patent,
and the amendment makes clear that the filing or institution of
a post-grant review proceeding does not limit a patent owner
from commencing such actions.
The Committee recognizes the importance of quiet title to
patent owners to ensure continued investment resources. While
this amendment is intended to remove current disincentives to
current administrative processes, the changes made by it are
not to be used as tools for harassment or a means to prevent
market entry through repeated litigation and administrative
attacks on the validity of a patent. Doing so would frustrate
the purpose of the section as providing quick and cost
effective alternatives to litigation. Further, such activity
would divert resources from the research and development of
inventions. As such, the Committee intends for the USPTO to
address potential abuses and current inefficiencies under its
expanded procedural authority.
Patent Trial and Appeal Board.
The Act renames the Patent Board the ``Patent Trial and
Appeal Board'' and sets forth its duties, which are expanded to
include jurisdiction over the new post-grant review and
derivation proceedings. This section strikes references to
proceedings eliminated by the Act, including interference
proceedings, and updates the various appeals statutes.
Preissuance submissions by third parties
After an application is published, members of the public--
most likely, a competitor or someone else familiar with the
patented invention's field--may realize they have information
relevant to a pending application. The relevant information may
include prior art that would prohibit the pending application
from issuing as a patent. Current USPTO rules permit the
submission of such prior art by third parties only if it is in
the form of a patent or publication,\43\ but the submitter is
precluded from explaining why the prior art was submitted or
what its relevancy to the application might be.\44\ Such
restrictions decrease the value of the information to the
examiner and may, as a result, deter such submissions.\45\
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\43\See 35 C.F.R. Sec. 1.99.
\44\See 35 C.F.R. Sec. 1.99(d) (``A submission under this section
shall not include any explanation of the patents or publications, or
any other information.'').
\45\See Perspectives on Patents: Hearing Before the Subcomm. on
Intellectual Prop. of the Senate Comm. on the Judiciary, 109th Cong.
(2005) (statement of David Simon, Chief Patent Counsel, Intel
Corporation).
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The Act improves the process by which third parties submit
relevant information to the UPSTO by permitting those third
parties to make statements concerning the relevance of the
patents, patent applications, and other printed publications
that they bring to the USPTO's attention.
Venue
In 1999, as part of the American Inventors Protection Act
(AIPA), Congress established that as a general matter the venue
of the USPTO is the district where it resides.\46\ The USPTO
currently resides in the Eastern District of Virginia. However,
Congress inadvertently failed to make this change uniformly
throughout the entire patent statute. As a result, certain
sections of the patent statute (and one section of the
trademark statute) continue to allow challenges to USPTO
decisions to be brought in the District of Columbia, a place
where the USPTO has not resided in decades.
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\46\See 35 U.S.C. Sec. 1(b).
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Because the USPTO no longer resides in the District of
Columbia, the sections that authorize venue for litigation
against the USPTO are consistently changed to reflect the venue
where the USPTO currently resides.
Fee-setting authority
a) Agency fee setting authority
Although the USPTO has had the ability to set certain fees
by regulation, most fees (e.g., filing fee, issuance fee,
maintenance fees) are set by Congress.\47\ History has shown
that such a scheme does not allow the USPTO to respond promptly
to the challenges that confront it. The USPTO has argued for
years that it must have fee-setting authority to administer
properly the agency and its growing workload.
---------------------------------------------------------------------------
\47\See, e.g., 35 U.S.C. Sec. 41.
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The Act allows the USPTO to set or adjust all of its fees,
including those related to patents and trademarks, so long as
they do no more than reasonably compensate the USPTO for the
services performed. Prior to setting such fees, the Director
must give notice to, and receive input from, the Patent or
Trademark Public Advisory Committee (PPAC or TPAC). The
Director may also reduce fees for any given fiscal year, but
only after consultation with the PPAC or TPAC. The Act details
the procedures for how the Director shall consult with the PPAC
and TPAC, including providing for public hearings and the
dissemination to the public of any recommendations made by
either Committee. Fees shall be prescribed by rule. Any
proposed fee change shall be published in the Federal Register
and include the specific rationale and purpose for the proposed
change. The Director must seek public comments for no less than
45 days. The Director must also notify Congress of any final
decision regarding proposed fees. Congress shall have no more
than 45 days to consider and comment on any proposed fee, but
no proposed fee shall be effective prior to the expiration of
this 45-day period.
b) ``Micro entity'' defined
As part of the ongoing effort to nurture U.S. innovation,
Congress has long recognized that certain groups, including
independent inventors, small business concerns, and non-profit
organizations (collectively referred to as ``small business
entities'') should not bear the same financial burden for
filing patent applications as larger corporate interests. The
current statute provides for a significant reduction in certain
fees for small business entities.\48\ The Committee was made
aware, however, that there is likely a benefit to describing--
and then accommodating--a group of inventors who are even
smaller, in order to ensure that the USPTO can tailor its
requirements, and its assistance, to the people with very
little capital, and just a few inventions, as they are starting
out.
---------------------------------------------------------------------------
\48\See 35 U.S.C. Sec. 41(h).
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This section of the Act defines this even smaller group--
the micro-entity--that includes only truly independent
inventors. The Committee expects that the USPTO will make
accommodations under its authority in recognition of the
special status of micro-entities.
Supplemental examination
Patents are unenforceable and invalid if they are obtained
through fraud. This concept is addressed in the ``inequitable
conduct'' defense, which allows a defendant in an infringement
suit to plead that the plaintiff patent-holder would not have
received a patent but for misrepresentations made to the USPTO.
Inequitable conduct requires proof of materiality as well as
intent to deceive. These standards require courts and litigants
to invest time and resources in determining the patent-holder's
state of mind or intent when developing the invention and
submitting the application. Critics of the inequitable conduct
defense, including the National Academies and the Federal Trade
Commission, argue that our patent system is hampered by
provisions that require courts to divine the difficult-to-prove
subjective intent of individuals in patent disputes. And most
defendants reflexively plead inequitable conduct as a defense
to infringement, prompting the Federal Circuit to label the
practice a ``plague'' on the patent system.
The Act addresses the inequitable conduct doctrine by
authorizing supplemental examination of a patent to correct
errors or omissions in proceedings before the Office. Under
this new procedure, information that was not considered or was
inadequately considered or was incorrect can be presented to
the Office. If the Office determines that the information does
not present a substantial new question of patentability or that
the patent is still valid, that information cannot later be
used to hold the patent unenforceable or invalid on the basis
for an inequitable-conduct attack in civil litigation.
Funding agreements
The Patent and Trademark Amendments Act of 1980 (commonly
referred to as the Bayh-Dole Act)\49\ granted universities,
other non-profit organizations, and small businesses the right
to title to inventions developed using Federal funds. In 1984,
Congress amended the law to ensure that universities and small
businesses operating at Government facilities (GOCOs) reaped
the benefits of Bayh-Dole by giving them the right to elect
title to a subject invention.\50\ The 1984 Act permitted GOCOs
to retain the balance of any royalties or income earned from
licensing inventions, up to 5 percent of the annual budget of
the facility, for further research, development, and related
activities. If the balance exceeds 5 percent of the facility's
annual budget, however, 75 percent of the excess is recouped by
the Government, with the remaining 25 percent of the excess
also retained by the GOCO for further research, development,
and related activities.\51\
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\49\P.L. 96-517.
\50\P.L. 98-620, Sec. 501.
\51\35 U.S.C. Sec. 202(c)(7).
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The Senate Judiciary Committee considered testimony that
the requirement to repay the government 75 percent of the
excess on royalty payments may be causing a disincentive for
universities and small business operating under the GOCO
provisions to commercialize products.\52\ Based on these
concerns, the Act maintains the essence of the agreement GOCOs
made with the taxpayers when they received funding that they
would reimburse the taxpayer if they are sufficiently
successful in commercializing a product invented with taxpayer
dollars, but which reduces the burden on universities and small
businesses, thereby encouraging commercialization. Pursuant to
the Act, instead of reimbursing 75% of the excess to the
Government, the GOCO will retain 85 percent for further
research, development, and related activities and reimburse the
Government 15 percent.
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\52\See The Role of Federally-Funded University Research in the
Patent System: Hearing Before the Senate Comm. on the Judiciary, 110th
Cong. (2008) (statement of Dr. Elizabeth Hoffman, Executive Vice
President and Provost, Iowa State University).
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Tax strategies deemed within the prior art
In recent years, the numbers of patents on tax-strategies
have increased. Critics assert that it is not fair to permit
patents on techniques used to satisfy a government mandate,
such as compliance with the Internal Revenue Code.
Tax preparers, lawyers, and planners have a long history of
sharing their knowledge regarding how to file returns, plan
estates, and advise clients. The ability to interpret the tax
law and implement such interpretations should remain in the
public domain, available to all taxpayers and their advisors.
The Act mandates that tax strategies are deemed
``insufficient to differentiate a claimed invention from the
prior art.'' In other words, any future tax strategy will be
considered indistinguishable from all other publicly available
information that is relevant to a patent's claim of
originality. Under the Act, however, protection (an exclusion)
is made available for software that enables individuals to file
their income tax returns or that assists them with managing
their finances. The exclusion does not apply to that part of
the software related to a tax strategy.
Best mode requirement
The Act amends Sec. 282(b) to eliminate as a defense to
patent infringement the patentee's failure to comply with the
best mode requirement of Sec. 112. An applicant for a patent
must disclose: (1) a written description of the invention; (2)
a written description of the manner of making and using the
invention, sufficient to enable one skilled in the art to make
and use it (known as the ``enablement requirement''); and (3)
the best mode contemplated by the inventor of carrying out the
invention.\53\ The disclosures required of an applicant are
part of the important tradeoff that underlies the patent laws:
the grant of a limited-term monopoly in exchange for disclosure
of the invention.
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\53\35 U.S.C. Sec. 112. Section 112 also requires an applicant to
disclose a written description of the invention and a written
description of the manner of making and using the invention, sufficient
to enable one skilled in the art to make and use it.
---------------------------------------------------------------------------
Under current law, the defense of patent invalidity is
available for failure to comply with any requirement of
Sec. 112 (specification) or Sec. 251 (reissued patents).
Further, a defendant in patent litigation may also allege an
intentional nondisclosure of the best mode, with intent to
deceive the Office, as a basis for an unenforceability defense.
Many have argued in recent years that the best mode
requirement, which is unique to American patent law, is
counterproductive.\54\ They argue that challenges to patents
based on best mode are inherently subjective and not relevant
by the time the patent is in litigation, because the best mode
contemplated at the time of the invention may not be the best
mode for practicing or using the invention years later.
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\54\Among those who have so argued are the National Academy of
Sciences, the Biotechnology Industry Organization, the American
Intellectual Property Law Association, the Intellectual Property Owners
Association, and Pharmaceutical Research and Manufacturers of America.
---------------------------------------------------------------------------
In response to these concerns, the Act includes a provision
that eliminates best mode as a basis for both invalidity and
unenforceability defenses under Sec. 282; other defenses are
unaffected.
Marking
a) Virtual Marking
In general, for patented ``articles,'' a patent holder must
give an alleged infringer notice of the claimed infringement,
and the infringer must continue to infringe, before the patent
holder may succeed in a suit for damages.\55\ Actual notice
requires the affirmative communication of infringement to the
defendant, which may include the filing of a lawsuit.
Constructive notice is possible by ``marking'' any patented
article that the patent holder (or its licensee) makes, uses,
sells or imports.\56\ Failure to appropriately mark an article
can preclude the recovery of damages until notice is effective.
---------------------------------------------------------------------------
\55\See 35 U.S.C. Sec. 287.
\56\See id.
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The Act permits patent holders to ``virtually mark'' a
product by providing the address of a publicly available
website that associates the patented article with the number of
the patent. The burden will remain on the patent holder to
demonstrate that the marking was effective. This amendment will
save costs for producers of products that include technology on
which a patent issues after the product is on the market, and
will facilitate effective marking on smaller products.
b) False marking
The Federal Circuit's recent decision in Forest Group, Inc.
v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009), which held
that section 292's $500 fine is assessed for each product that
is falsely marked, has created a surge in false-marking qui tam
litigation. Though one might assume that section 292 actions
are targeted at parties that assert fictitious patents in order
to deter competitors, such a scenario is almost wholly unknown
to false-marking litigation. False-marking suits are almost
always based on allegations that a valid patent that did cover
the product has expired, but the manufacturer continued to sell
products stamped with the patent; or that an existing patent
used to mark products is invalid or unenforceable; or that an
existing and valid patent's claims should not be construed to
cover the product in question.
Indeed, a recent survey of such suits found that a large
majority involved valid patents that covered the products in
question but had simply expired. For many products, it is
difficult and expensive to change a mold or other means by
which a product is marked as patented, and marked products
continue to circulate in commerce for some period after the
patent expires. It is doubtful that the Congress that
originally enacted this section anticipated that it would force
manufacturers to immediately remove marked products from
commerce once the patent expired, given that the expense to
manufacturers of doing so will generally greatly outweigh any
conceivable harm of allowing such products to continue to
circulate in commerce.
To address the recent surge in litigation, the bill
replaces the qui tam remedy for false marking with a new action
that allows a party that has suffered a competitive injury as a
result of such marking to seek compensatory damages. The United
States would be allowed to seek the $500-per-article fine, and
competitors may recover in relation to actual injuries that
they have suffered as a result of false marking, but the bill
would eliminate litigation brought by unrelated, private third
parties.
Advice of Counsel
The Act includes a new provision that bars courts and
juries from drawing an adverse inference from an accused
infringer's failure to obtain opinion of counsel as to
infringement or his failure to waive privilege and disclose
such an opinion. Section 298 of title 35 is designed to protect
attorney-client privilege and to reduce pressure on accused
infringers to obtain opinions of counsel for litigation
purposes. It reflects a policy choice that the probative value
of this type of evidence is outweighed by the harm that
coercing a waiver of attorney-client privilege inflicts on the
attorney-client relationship. Section 298 applies to findings
of both willfulness and intent to induce infringement--and thus
legislatively abrogates the Federal Circuit's decision in
Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 699 (Fed. Cir.
2008).
Transitional program for covered business method patents
A number of patent observers believe the issuance of poor
business-method patents during the late 1990's through the
early 2000's led to the patent ``troll'' lawsuits that
compelled the Committee to launch the patent reform project 6
years ago. At the time, the USPTO lacked a sufficient number of
examiners with expertise in the relevant art area. Compounding
this problem, there was a dearth of available prior art to
assist examiners as they reviewed business method applications.
Critics also note that most countries do not grant patents for
business methods.
The Act responds to the problem by creating a transitional
program 1 year after enactment of the bill to implement a
provisional post-grant proceeding for review of the validity of
any business method patent. In contrast to the era of the late
1990's-early 2000's, examiners will review the best prior art
available. A petition to initiate a review will not be granted
unless the petitioner is first sued for infringement or is
accused of infringement. The program otherwise generally
functions on the same terms as other post-grant proceedings
initiated pursuant to the bill. Any party may request a stay of
a civil action if a related post-grant proceeding is granted.
The program sunsets after 10 years, which ensures that patent
holders cannot delay filing a lawsuit over a shorter time
period to avoid reevaluation under the transitional program.
Jurisdictional and procedural matters
a) LState court jurisdiction and the US Court of Appeals for the
Federal Circuit
The US district courts area given original jurisdiction to
hear patent cases,\57\ while the US Court of Appeals for the
Federal Circuit adjudicates all patent appeals.\58\ The Supreme
Court ruled in 2002,\59\ however, that patent counterclaims do
not give the Federal Circuit appellate jurisdiction over a
case.
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\57\28 USC Sec. 1338.
\58\28 USC Sec. 1295.
\59\Holmes Group, Inc., v. Vornado Air Circulation Systems, Inc.
535 U.S. 826 (2002).
---------------------------------------------------------------------------
The Act clarifies the jurisdiction of the US district
courts and stipulates that the US Court of Appeals for the
Federal Circuit has jurisdiction over appeals involving
compulsory patent counterclaims. The legislative history of
this provision, which we reaffirm and adopt as our own, appears
in the Committee Report accompanying H.R. 2955 from the 109th
Congress,\60\ which the Committee reported favorably to the
House on April 5, 2006.
---------------------------------------------------------------------------
\60\H. Rep. 109-405.
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b) Joinder
The Act also addresses problems occasioned by the joinder
of defendants (sometimes numbering in the dozens) who have
tenuous connections to the underlying disputes in patent
infringement suits.
The Act amends chapter 29 of the Patent Act by creating a
new Sec. 299 that addresses joinder under Rule 20 and
consolidation of trials under Rule 42. Pursuant to the
provision, parties who are accused infringers in most patent
suits may be joined as defendants or counterclaim defendants
only if: (1) relief is asserted against the parties, jointly,
severally, or in the alternative, arising out of the same
transaction regarding the manufacture, use, or importation of
the accused product or process; and (2) questions of fact
common to all of the defendants will arise in the action. New
Sec. 299 also clarifies that joinder will not be available if
it based solely on allegations that a defendant has infringed
the patent(s) in question.\61\
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\61\Section 299 legislatively abrogates the construction of Rule
20(a) adopted in MyMail, Ltd. v. America Online, Inc., 223 F.R.D. 455
(E.D. Tex. 2004); Sprint Communications Co. v. Theglobe.com, Inc., 233
F.R.D. 615 (D. Kan. 2006); Adrain v. Genetec Inc., 2009 WL3063414 (E.D.
Tex. September 22, 2009); Better Educ. Inc. v. Einstruction Corp., 2010
WL 918307 (E.D. Tex. March 10, 2010); Mannatech, Inc. v. Country Life,
LLC, 2010 WL 2944574 (N.D. Tex. July 26, 2010); Alford Safety Services,
Inc., v. Hot-Hed, Inc., 2010 WL 3418233 (E.D. La. August 24, 2010); and
Eolas Technologies, Inc. v. Adobe Systems, Inc., 2010 WL 3835762 (E.D.
Tex. September 28, 2010)--effectively conforming these courts'
jurisprudence to that followed by a majority of jurisdictions. See
generally Rudd v. Lux Products Corp., 2011 WL 148052 (N.D. Ill. January
12, 2011).
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Technical amendments
The Act contains technical amendments to improve the
organization of the patent statute.
Travel expenses and payment of administrative judges
The USPTO Director is authorized to conduct programs or
exchanges pertaining to intellectual property law and
protection ``domestically and throughout the world.'' The House
bill clarifies that this authority includes expending funds to
cover the subsistence and travel expenses of non-Federal
employees who attend these programs.
The House bill also clarifies that the Director may fix the
pay for administrative patent judges and administrative
trademark judges under the new Patent Trial and Appeal Board
set forth in Section 6 of the bill.
Patent and Trademark Office funding
The USPTO is a fee-funded agency. The revenue it collects
from fees imposed on inventors and trademark filers is
deposited in a special USPTO appropriations account in the
Treasury. To obtain funding for its operations, the agency must
request the revenue back from congressional appropriators.
Since the early 1990's, however, more than $800 million has
been diverted from the agency and spent on non-USPTO
initiatives.
The Committee believes the USPTO could operate more
efficiently and productively if the agency had full access to
all of its fee-generated revenue. The House bill therefore
creates a USPTO revolving fund within the Treasury that allows
the agency to keep all of the funds it raises until expended.
The provision also requires the Director to submit an
annual spending plan as well as an annual year-end report to
the House and Senate Appropriations and Judiciary Committees.
Satellite offices
The USPTO is conducting a pilot to create and operate a new
satellite office located in Detroit. The bill requires the
Director to establish three other satellite offices within a 3-
year window, subject to available resources. The legislation
includes criteria that must be invoked when selecting the new
sites.
Designation of Detroit satellite office
The House and Senate bills contain a provision that
designates the PTO satellite office in Detroit as the ``Elijah
J. McCoy United States Patent and Trademark Office.'' Elijah
McCoy was an African-Canadian inventor who spent much of his
life in Michigan and earned 57 US patents. His work on an
automatic lubricator to oil railroad steam engines gave rise to
the expression, ``the real McCoy.''
Patent Ombudsman Program for small business concerns
The Act requires the USPTO Director to establish a Patent
Ombudsman Program to provide support and services regarding
patent filings to small business concerns. The authorization is
subject to available resources.
Priority examination for technologies important to American
competitiveness
The Act stipulates that the USPTO may promulgate
regulations, not inconsistent with law, that prioritize
examination of applications for products, processes, or
technologies that are important to the national economy or
national competitiveness. This may be done without recovering
the aggregate extra cost of providing the prioritization.
Calculation of 60-day period for application of patent term extension
The USPTO has inconsistently applied ``counting'' rules
that are imposed on patent holders who must submit documents to
the agency within statutory time periods for consideration of
additional patent term under Sec. 156 of the Patent Act. The
Act clarifies that the agency should impose a ``business-day''
construction for application to Sec. 156, consistent with
recent case law on the matter\62\.
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\62\The Medicines Co. v. Kappos, et. al., 10-CV-286 (E.D. Va.
August 3, 2010).
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Study on implementation
The Act requires the USPTO Director to conduct a study
regarding the implementation of the legislation and on such
other aspects of Federal patent policies and practices with
respect to patent rights, innovation in the United States,
competitiveness of US markets, access by small business to
capital and investment, and such other issues as the Director
deems appropriate. The study must be completed within 4 years
and the results submitted to the House and Senate Committees on
the Judiciary.
Pro bono program
The Committee acknowledges the importance of individuals
and small businesses to the patent system and our national
culture of innovation. Consistent with this sentiment, the Act
requires the USPTO Director to support intellectual property
law associations across the United States to establish pro bono
programs to assist under-resourced independent inventors and
businesses.
Effective date
Except as otherwise provided, the provisions of the bill
take effect 1 year following the date of enactment and shall
apply to any patent issued on or after that date.
Budgetary effects
The House bill retains a Senate provision that references a
CBO PAYGO score in The Congressional Record.
Hearings
The Committee's Subcommittee on Intellectual Property,
Competition, and the Internet held 1 day of hearings on H.R.
1249. The hearing took place on March 30, 2011. Testimony was
received from the Honorable David Kappos, Under Secretary of
Commerce for Intellectual Property and Director of the United
States Patent and Trademark Office; Steve Bartlett, President
and CEO of The Financial Services Roundtable; Steven Miller,
President and General Counsel (Intellectual Property) for
Procter & Gamble; Mark Chandler, Senior Vice President, General
Counsel, and Secretary for Cisco; and John Vaughn, Executive
Vice President of the Association of American Universities.
The Subcommittee also conducted three separate but related
hearings on January 25, 2011 (``How an Improved US Patent and
Trademark Office Can Create Jobs,'' Serial No. 112-6), February
11, 2011 (``Crossing the Finish Line on Patent Reform--What Can
and Should be Done,'' Serial No. 112-8), and March 10, 2011
(``Review of Recent Judicial Decisions on Patent Law,'' Serial
No. 112-20).
Given that the bill is a 6-year work in progress, the
legislative record should also reflect that the Subcommittee
conducted related hearings on patent reform in the 109th
through 111th Congresses. These hearings include the following:
``H.R. 2795, the `Patent Reform Act of 2005''' (June 19, 2005);
``Committee Print Regarding Patent Quality Improvement (Part
I)'' (April 20, 2005, Serial No. 109-11); ``Committee Print
Regarding Patent Quality Improvement (Part II)'' (April 28,
2005, Serial No. 109-11); ``Review of US Patent and Trademark
Office Operations'' (September 8, 2005, Serial No. 109-48);
``Patent Quality Enhancement in the Information-Based Economy''
(April 5, 2006, Serial No. 109-99); ``Patent Harmonization''
(April 26, 2006, Serial No. 109-100); ``Patent Trolls: Fact or
Fiction?'' (June 15, 2006, Serial No. 109-104); ``Oversight
Hearing on the US Patent and Trademark Office'' (February 27,
2008, Serial No. 110-115); ``The `Patent Reform Act of 2007'''
(April 26, 2007, Serial No. 110-65); ``H.R. 1260, The `Patent
Reform Act of 2009''' (April 30, 2009, Serial No. 111-92); and
``The US Patent and Trademark Office'' (May 5, 2010, Serial No.
111-135).
Finally, the United States Senate Committee on the
Judiciary devoted substantial process to patent reform over the
same time period. Beginning in 2005, the Senate Judiciary
Committee conducted eight hearings on the subject and reported
separate bills in the 110th (S. 1145), 111th (S. 515), and
112th (S. 23) Congresses. The full Senate passed S. 23 on March
8, 2011, by a vote of 95-5. H.R. 1249 is substantially similar
to S. 23.
Committee Consideration
On April 14, 2011, the Committee met in open session and
ordered the bill H.R. 1249 favorably reported with an
amendment, by a rollcall vote of 32 to 3, a quorum being
present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following rollcall votes occurred during the Committee's
consideration of H.R. 1249.
1. Amendment #7 to the Manager's Amendment, offered by Ms.
Lofgren. The amendment ties the commencement of an inter partes
proceeding to a claims-construction order following a
``Markman'' hearing. Failed by a rollcall of 14-17.
ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble.......................................................
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams.......................................................
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 14 17
----------------------------------------------------------------------------------------------------------------
2. Amendment #11 to the Manager's amendment, offered by Ms.
Chu. The amendment strikes the inter partes review threshold
and retains the lower threshold of a ``substantial new
questions of patentability.'' Failed by a rollcall of 7-21.
ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Griffin.....................................................
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott.......................................................
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee.................................................
Ms. Waters...................................................... X
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 7 21
----------------------------------------------------------------------------------------------------------------
3. Manager's amendment as amended to H.R. 1249. The
manager's amendment revises the inter partes review proceeding,
clarifies the application of the prior-user defense, and makes
other improvements to H.R. 1249. Adopted by a rollcall of 29-2.
ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Griffin.....................................................
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott.......................................................
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee.................................................
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 29 2
----------------------------------------------------------------------------------------------------------------
4. Amendment #8 to H.R. 1249, offered by Mr. Goodlatte. The
amendment precludes the use of supplemental examination by any
patent holder who attempts to practice or practices fraud on
the USPTO. The amendment passed by a rollcall of 21-9, with one
vote recorded as ``present'' and one vote recorded as ``pass.''
ROLLCALL NO. 4
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... Pass
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 21 9
----------------------------------------------------------------------------------------------------------------
5. Amendment #15 to H.R. 1249, offered by Ms. Lofgren. The
amendment strikes the supplemental examination provision from
the bill. Failed by a rollcall of 8-21.
ROLLCALL NO. 5
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes......................................................
Mr. King........................................................
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 8 21
----------------------------------------------------------------------------------------------------------------
6. Amendment #1 to H.R. 1249, offered by Mr. Conyers. The
amendment limits the application of the business method patent
program. Failed by a rollcall of 11-24.
ROLLCALL NO. 6
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen....................................................... X
Mr. Johnson.....................................................
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 11 24
----------------------------------------------------------------------------------------------------------------
7. Reporting H.R. 1249 as amended. The bill bolsters
funding for the USPTO, switches the United States to a first-
to-file patent system, and makes further improvements to the
Patent Act. Reported by a rollcall of 32-3.
ROLLCALL NO. 7
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen....................................................... X
Mr. Johnson.....................................................
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 32 3
----------------------------------------------------------------------------------------------------------------
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 1249, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 26, 2011.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1249, the
``America Invents Act.''
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure.
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 1249--America Invents Act.
SUMMARY
H.R. 1249 would amend the law that governs how the Patent
and Trademark Office (PTO) awards patents. Among other things,
the bill would alter the rule that prioritizes the award of a
patent from the ``first to invent'' to the ``first inventor to
file.'' As a result, PTO would change certain procedures it
follows in awarding patents. The bill also would establish new
review procedures that would allow individuals to challenge the
validity of a patent and would modify PTO's authority to
collect and spend fees.
CBO estimates that enacting the bill would reduce net
direct spending by $725 million and revenues by $8 million over
the 2011-2021 period. Most of the change in direct spending
would result from providing PTO with permanent authority to
collect and spend certain fees. In total, the changes would
decrease budget deficits by $717 million over the 2011-2021
period. Because enacting the legislation would affect direct
spending and revenues, pay-as-you-go procedures apply. CBO
estimates that implementing H.R. 1249 would have a
discretionary cost of $446 million over the 2011-2016 period,
assuming appropriation of the necessary amounts.
H.R. 1249 would impose both intergovernmental and private-
sector mandates, as defined in the Unfunded Mandates Reform Act
(UMRA), on certain patent applicants and other entities. The
bill also would preempt the authority of state courts to hear
certain patent cases. Based on information from PTO, CBO
estimates that the costs of complying with those mandates would
exceed the annual threshold for private-sector mandates
established in UMRA ($142 million in 2011, adjusted annually
for inflation) in each of the first 5 years the mandate is in
effect. CBO estimates that the cost to state, local, and tribal
governments would fall below the annual threshold established
in UMRA ($71 million in 2011, adjusted annually for inflation).
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 1249 is shown in the
following table. The costs of this legislation fall within
budget function 370 (commerce and housing credit).
By Fiscal Year, in Millions of Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011-2016 2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Reclassification of PTO
Spending
Estimated Budget Authority 0 2,266 2,573 2,784 2,907 3,017 3,143 3,262 3,375 3,472 3,593 13,547 30,392
Estimated Outlays 0 1,869 2,486 2,743 2,883 2,995 3,119 3,238 3,353 3,453 3,571 12,976 29,710
New and Amended PTO Processes
Estimated Budget Authority 0 43 92 99 113 123 129 134 141 149 157 470 1,180
Estimated Outlays 0 35 83 97 110 121 127 134 140 147 155 446 1,149
PTO Administrative Costs
Estimated Budget Authority 0 8 7 3 0 0 0 0 0 0 0 18 18
Estimated Outlays 0 8 7 3 0 0 0 0 0 0 0 18 18
Reclassification of PTO
Collections
Estimated Budget Authority 0 -2,318 -2,672 -2,886 -3,019 -3,140 -3,272 -3,396 -3,516 -3,620 -3,750 -14,035 -31,589
Estimated Outlays 0 -2,318 -2,672 -2,886 -3,019 -3,140 -3,272 -3,396 -3,516 -3,620 -3,750 -14,035 -31,589
Electronic Filing Incentive
Estimated Budget Authority 0 -3 3 -2 -2 -2 -1 -1 -1 -1 -1 -12 -17
Estimated Outlays 0 -3 -3 -2 -2 -2 -1 -1 -1 -1 -1 -12 -17
Funding Agreements
Estimated Budget Authority * 1 1 * * * * * * ....... * 2 4
Estimated Outlays * 1 1 * * * * * * * * 2 4
Total Changes in Direct
Spending
Estimated Budget Authority * -3 -2 -2 -1 -2 -1 -1 -1 0 0 -10 -12
Estimated Outlays * -408 -98 -45 -28 -26 -27 -25 -24 -21 -25 -605 -725
CHANGES IN REVENUES
Estimated Revenues -1 -3 -2 -1 * * * * * * * -7 -8
NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND RECEIPTS
Impact on Deficit 1 -405 -96 -44 -28 -26 -27 -25 -24 -21 -25 -598 -717
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level 0 -76 -37 5 44 76 n.a. n.a. n.a. n.a. n.a. 13 n.a.
Estimated Outlays 0 294 -8 16 55 88 n.a. n.a. n.a. n.a. n.a. 446 n.a.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
Components may not sum to totals because of rounding.
Negative numbers denote reductions in spending, revenues, and the deficit.
PTO = Patent and Trademark Office; * = between -$500,000 and $500,000; n.a. = not applicable.
BASIS OF ESTIMATE
For this estimate, CBO assumes that the bill will be
enacted near the end of fiscal year 2011, the necessary amounts
will be appropriated each year, and spending will follow
historical patterns for the PTO. Further, CBO assumes that most
of the bill's provisions would be effective 1 year after the
date of enactment.
H.R. 1249 would change the basis that PTO uses to award
patents. Under current law, where two or more persons
independently develop identical or similar inventions at
approximately the same time, the patent is awarded to the
inventor PTO established to be first through PTO's examination
process. H.R. 1249 would direct PTO, under the same
circumstances, to award the patent to the inventor whose
application to PTO had the earliest filing date.
H.R. 1249 also would provide PTO with permanent authority
to collect and spend certain fees, shifting collections and
spending out of the PTO appropriation account and into a
revolving fund. Further, H.R. 1249 would direct PTO's
collections to be recorded in the budget as offsetting
receipts, that is, offsets to direct spending. Under current
law, PTO is authorized to collect fees from the public for
specific activities related to processing applications for
patents and trademarks. The agency assesses and collects fees
for a number of different activities, and the rate for each is
set in law. Currently, authority to collect and spend those
fees is provided in annual appropriation acts, and the fees are
classified as offsets to the agency's discretionary spending
levels. For 2011, PTO received a gross appropriation of $2,016
million, and CBO estimates the agency will collect fees of
$2,198 million that year to more than offset that
appropriation.
Direct Spending
Based on information from PTO and other agencies, CBO
estimates that enacting H.R. 1249 would reduce net direct
spending by about $0.7 billion over the 2012-2021 period.
Provisions of the bill that would reclassify PTO spending and
broaden the agency's workload would increase spending by $30.9
billion over the 2012-2021 period. Other provisions of the bill
would decrease direct spending (by changing the amount of
collections classified as offsets to direct spending) by $31.6
billion over the same period.
Reclassification of PTO Spending. Because PTO's spending
would no longer be controlled by the availability of
appropriated funds, H.R. 1249 would make all of the agency's
fee collections permanently available for spending. Based on
historical growth in the number of applications filed for
patents and trademarks and historical spending patterns, we
estimate that enacting those provisions of H.R. 1249 would
increase gross direct spending by about $29.7 billion over the
2012-2021 period.
New and Amended PTO Processes. H.R. 1249 would establish
two new procedures to review or update patents and amend one
process already available under current law to review existing
patents. PTO would be authorized to collect fees to offset much
of the costs associated with those activities. Based on
information from PTO, CBO estimates that those new and amended
processes, taken together, would increase direct spending by
$1.1 billion over the 2012-2021 period.
Specifically, the bill would:
LEstablish a new procedure, known as post-
grant review, to review the validity of a patent. This
option generally would be available within 12 months of
the date the patent was issued and would take place in
a court-like proceeding in which both the challenger
and the owner of the patent present information
regarding the validity of a patent. CBO estimates that
implementing this new process would increase direct
spending by $140 million over the 2012-2021 period.
LEstablish a new procedure that would allow
patent holders to request that PTO review an existing
patent to consider, reconsider, or correct information
believed to be relevant to the patent. Should this
supplemental review raise a new question of
patentability, PTO would then reexamine the patent. CBO
estimates that the supplemental reviews and the
additional reexaminations that would result under the
bill would increase direct spending by $758 million
over the 2012-2021 period.
LAmend a process already existing under
current law, inter partes reexamination, to expand the
universe of patents that could be challenged through
this proceeding but also limit the time period during
which such a challenge could be raised. CBO estimates
that implementing the changes to inter partes
reexamination procedures would increase direct spending
by $251 million over the 2012-2021 period.
PTO Administrative Costs. As a result of the switch to a
``first-to-file'' principle for granting patents, PTO would
incur additional administrative costs, including updating its
information technology systems, training staff, and preparing
several reports for the Congress. Further, the bill would
require PTO to establish at least three additional satellite
offices in different regions throughout the country. CBO
estimates that those changes would cost $18 million over the
2012-2021 period.
Reclassification of PTO Fees. As noted above, the bill
would permanently authorize PTO to set and collect fees and
would direct those collections to be recorded in the budget as
offsetting receipts (credits against direct spending). Further,
the bill would amend current law to permanently increase fee
rates that have been temporarily authorized in annual
appropriation acts since 2005 and authorize PTO, after
specified public notice and comment periods, to set fee rates
at levels sufficient to cover the agency's operating costs.
Based on information from PTO and historical patterns of
collections, CBO estimates that enacting H.R. 1249 would result
in collections of $31.6 billion over the 2012-2021 period. Most
of that amount, about $30.5 billion, would stem from the
reclassification of the fees from offsets to discretionary
spending to offsetting receipts and from PTO's new authority to
set fees to recover costs; the balance, about $1.1 billion,
would result from increases in fee collections related to the
increases in the agency's workload.
Electronic Filing Incentive. In addition to fees PTO
collects under current law, H.R. 1249 would establish a new fee
that would be charged to patent applicants that do not use
electronic means to file an application. Based on information
from PTO, CBO estimates that about 5,000 paper applications, on
average, would be filed per year, generating collections of
about $17 million over the 2012-2021 period. The bill would
direct those collections to be recorded as offsets to direct
spending and would make them unavailable for spending by PTO.
Funding Agreements. H.R. 1249 would change the amount of
royalties or income earned by certain contractors that is
required to be remitted to the federal government. Under
current law, funding agreements between the federal government
and contractors operating government-owned, contractor-operated
(GOCO) laboratories allow contractors to retain, up to a
certain threshold, all royalty and other income earned from
patents received as a result of work performed under the
contract. Beyond that, 75 percent of royalties or income earned
above the threshold must be returned to the U.S. Treasury. The
royalties returned to the Treasury are recorded as offsetting
receipts. H.R. 1249 would reduce the amount deposited into the
Treasury to 15 percent.
Currently, only one entity operating a GOCO laboratory
returns royalties and license fees to the federal government.
Over the past several years, the Ames Laboratory, operated by
Iowa State University, has returned to the Treasury
approximately $1 million a year in license fees earned from
patents awarded under its contract with the federal government.
CBO estimates that reducing the percentage of income that is
returned to the Treasury would reduce offsetting receipts (and
thus increase direct spending) by about $4 million over the
2011-2021 period.
REVENUES
H.R. 1249 would change how certain patent cases, known as
false marking cases, are handled by the court system. False
marking cases are brought when a defendant is accused of
incorrectly claiming a product's right to certain patent
protection. Under current law, such cases can be brought by any
person on behalf of the government; the government receives
half of the value of any fines or amount paid as part of a
court-mediated settlement, with the person bringing the case
receiving the other. H.R. 1249 would permit competitors to
recover damages for the competitive harm caused by a
defendant's false marking but would eliminate the option for
individuals to seek fines on behalf of the government by
stating that only the United States can sue for a civil
penalty. H.R. 1249 would further specify that a defendant would
not be liable for a false marking suit if the patent involved
either expired within 3 years of the alleged false marking or
if the word 'expired' were added to the claim of patent
protection.
Information from the Department of Justice (DOJ) indicates
that in 2010, the government collected fines (recorded as
revenues) of about $3 million from false marking cases. Under
current law, CBO expects that a diminishing number of new cases
will be filed through 2011 and beyond, as courts define
stricter standards for proving 'intent to deceive' on the part
of the defendant, and as companies rectify their patent marking
procedures in response to the risk of litigation. Based on
information from DOJ, CBO estimates that about a third of
currently pending cases will eventually be settled in court; we
expect the rest to be dismissed with no monetary settlement.
Thus, CBO estimates that under current law, by 2014, federal
revenues from those cases will drop to less than $500,000 a
year.
By changing both who can litigate and their incentives for
doing so, H.R. 1249 would significantly reduce both the pending
caseload and the number of future cases filed. Therefore, CBO
estimates that enacting the bill would reduce federal revenues
by $7 million over the 2011-2016 period and by $8 million over
the 2011-2021 period.
Spending Subject to Appropriation
H.R. 1249 would provide PTO with permanent authority to
collect fees and spend those collections thus changing the
budgetary classification of those fees and spending. Under that
permanent authority, PTO fees would be recorded as offsetting
receipts rather than as offsets to discretionary spending. As a
result of the reclassification, CBO estimates that this
provision would decrease discretionary spending by $10.4
billion and offsetting collections by about $10.8 billion over
the 2012-2016 period. On net, CBO estimates that implementing
this provision would increase net discretionary spending by
$445 million over the 5-year period, assuming that
appropriation actions consistent with H.R. 1249 are enacted.
H.R. 1249 also would require the Small Business
Administration to prepare a study of the effects on small
businesses of eliminating the use of dates of invention for
determining entitlement to a patent. The results of the study
would be included in a report to the Congress due 1 year after
enactment of the bill. In addition, H.R. 1249 would require the
Government Accountability Office to conduct a study on the
implementation of the bill's provisions by PTO; a report on the
results of the study would be due 4 years after enactment of
the bill. Based on information from the affected agencies, CBO
estimates that those reporting requirements would cost $1
million over the 2012-2016 period, assuming availability of
appropriated funds.
PAY-AS-YOU-GO CONSIDERATIONS
The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting
direct spending or revenues. The net changes in outlays and
revenues that are subject to those pay-as-you-go procedures are
shown in the following table.
CBO Estimate of Pay-As-You-Go Effects for H.R. 1249 as ordered reported
by the House Committee on the Judiciary on April 14, 2011
By Fiscal Year, in Millions of Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011-2016 2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact 1 -405 -96 -44 -28 -26 -27 -25 -24 -21 -25 -598 -717
Memorandum:
Changes in
Outlays 0 -408 -98 -45 -28 -26 -27 -25 -24 -21 -25 -605 -725
Changes in
Revenues -1 -3 -2 -1 0 0 0 0 0 0 0 -7 -8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
H.R. 1249 would impose both intergovernmental and private-
sector mandates, as defined in UMRA, on certain patent
applicants and other entities. The bill also would preempt the
authority of state courts to hear certain patent cases. Based
on information from PTO, CBO estimates that the costs of
complying with those mandates would exceed the annual threshold
for private-sector mandates established in UMRA ($142 million
in 2011, adjusted annually for inflation) in each of the first
5 years the mandate is in effect. CBO estimates that the costs
to state, local, and tribal governments would fall below the
annual threshold established in UMRA ($71 million in 2011,
adjusted annually for inflation).
Mandates That Apply to Both Public and Private Entities
PTO fees. H.R. 1249 would impose a mandate on both public
and private entities by allowing PTO to set or adjust certain
fees and by permanently extending other fee increases that are
set to expire at the end of fiscal year 2011. The requirement
to pay those fees is a mandate because the federal government
controls the patent and trademark systems, and no reasonable
alternatives to the systems exist.
Based on information from PTO, CBO estimates that the total
cost to comply with the mandate would range from about $220
million in 2013 to about $350 million in 2017, with less than
$1 million of those costs accruing to public entities and the
rest accruing to private entities.
Restricting Prior-Use Defense. H.R. 1249 would prohibit
public and private entities from using the prior-use defense to
patent infringement claims for business processes brought by a
university or technology-transfer organization. Consequently,
public and private entities that have been using business
processes which are later patented by a university or
technology-transfer organization would no longer be eligible to
use those processes without permission from the patent holder.
That restriction would be an intergovernmental and private-
sector mandate. The cost of the mandate would be the cost to
purchase a license from the patent holder, or the amount of net
income the entity would lose as a result of no longer being
able to use that patent commercially. Based on the small number
of public entities that use business methods, CBO estimates
that the cost to comply with the mandate would be small for
public entities. According to information from industry
experts, the prior-use defense has never been asserted in a
recorded case and therefore it is likely that the use of such a
defense would be uncommon. Consequently, CBO estimates that the
cost to comply with the mandate for private entities would
probably be small.
Mandate That Applies to Public Entities Only
H.R. 1249 would preempt the authority of state courts to
hear certain patent cases. That provision would be an
intergovernmental mandate as defined in UMRA. While it would
limit the authority of state courts, CBO estimates that it
would impose no duty on states that would result in additional
spending.
Mandate That Applies to Private Entities Only
The bill also would impose a mandate on patent applicants
by prohibiting certain tax strategies from being patented. The
prohibition would apply to any application pending on the date
of enactment and any application submitted for such a patent
after that date. CBO has no basis for estimating the net income
that would be forgone by a patent applicant for not receiving
such a patent. Therefore, the cost to private entities to
comply with this mandate is uncertain.
PREVIOUS CBO ESTIMATE
On March 8, 2011, CBO transmitted a pay-as-you-go estimate
for S. 23, the America Invents Act, reflecting a number of
amendments adopted prior to Senate passage of the bill. One
amendment would provide permanent authority to PTO to collect
and spend fees. CBO estimated that enacting S. 23 would reduce
budget deficits by $750 million over the 2011-2021 period.
On March 1, 2011, CBO transmitted a cost estimate for S.
23, the Patent Reform Act of 2011, as ordered reported by the
Senate Committee on the Judiciary on February 3, 2011. That
version of the legislation would not provide permanent
authority to PTO to collect and spend fees. CBO's estimates of
the House and Senate bills reflect those differences. The
mandates contained in both the House and Senate bills are the
same, except for the mandate regarding prior-use defense, which
is only in H.R. 1249.
ESTIMATE PREPARED BY:
Federal Spending: Susan Willie
Federal Revenue: Kalyani Parthasarathy
Impact on State, Local, and Tribal Governments: Elizabeth Cove
Delisle
Impact on the Private Sector: Paige Piper/Bach
ESTIMATE APPROVED BY:
Theresa Gullo
Deputy Assistant Director for Budget Analysis
Frank Sammartino
Assistant Director for Tax Analysis
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
1249 modernizes US patent law to improve the operations of the
US Patent and Trademark Office, inhibit frivolous patent
lawsuits, protect the rights of all inventors, and spur
innovation as a means to create American jobs and raise
standards of living.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 1249 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.
Section-by-Section
Section 1. Short title; table of contents.
This Act may be cited as the ``America Invents Act.''
Section 2. Definitions.
Section 2 defines the following terms: ``Director,''
``Office,'' ``Patent Public Advisory Committee,'' ``Trademark
Act of 1946,'' and ``Trademark Public Advisory Committee''.
Section 3. First inventor to file.
Subsection (a)--Sec. 100 is amended to include definitions
for additional terms, including ``effective filing date.''
Subsection (b)--Sec. 102 is amended to make an invention's
priority date its effective filing date. This change moves the
United States to the first-to-file system. New section 102(b)
preserves the grace period, ensuring that during the year prior
to filing, an invention will not be rendered unpatentable based
on any of the inventor's own disclosures, or any disclosure
made by any party after the inventor has disclosed his
invention to the public. Section 102(c) recodifies the CREATE
Act, and section 102(d) defines the effective filing date of a
patent or application that is cited as prior art to a claimed
invention.
Subsection (c)--Sec. 103 is amended consistent with moving
to a first-to-file system. Existing subsection (a) is amended
slightly; subsection (b) is deleted because it is no longer
needed; subsection (c), which is the CREATE Act, has been moved
to Sec. 102.
Subsection (d)--Repeals Sec. 104 (Inventions Made Abroad).
Subsection (e)--Repeals Sec. 157 (Statutory Invention
Registration).
Subsection (f)--Amends Sec. 120 related to filing dates to
conform with the CREATE Act.
Subsection (g)--Makes various conforming amendments.
Subsections (h), (i) & (j)--Repeals interference proceeding
and makes conforming changes to Sec. 291. Amends Sec. 135(a)
and provides for a ``derivation proceeding,'' designed to
determine the inventor with the right to file an application on
a claimed invention. An applicant requesting a derivation
proceeding must set forth the basis for finding that an earlier
applicant derived the claimed invention and without
authorization filed an application claiming such invention. The
request must be filed within 1 year of the date of first
publication of an application for a claim that is substantially
the same as the claimed invention. The Patent Trial and Appeal
Board (the ``Board'') shall determine the right to patent and
issue a final decision thereon. Decisions of the Board may be
appealed to the Federal Circuit, or to district court pursuant
to Sec. 146.
Subsection (k)--Paragraph (1) amends Sec. 32 of the Patent
Act (``suspension or exclusion from practice'') by placing time
limitations on the commencement of a proceeding. Paragraph (2)
imposes a reporting requirement on the Director regarding
instances of misconduct before the agency and how they were
addressed.
Subsection (l)--Contains a provision for a study regarding
first-to-file to be conducted by the Small Business
Administration and the USPTO.
Subsection (m)--Requires a study of prior user rights.
Subsection (n)--Contains an effective date provision.
Subsection (o)--Contains a study of patent litigation and
its effect on the patent system.
Subsection (p)--Sets forth the sense of Congress that the
first-to-file system promotes the purposes of Article I,
section 8, clause 8, of the US Constitution.
Subsection (q)--Sets forth the sense of Congress that the
first-to-file system promotes harmonization of the US and other
patent systems.
Section 4. Inventor's oath or declaration.
The section streamlines the requirement that the inventor
submit an oath as part of a patent application, and makes it
easier for patent owners to file applications.
Subsection (a)--Section 115 is amended to permit an
applicant to submit a substitute statement in lieu of the
inventor's oath or declaration in certain circumstances,
including if the inventor is (i) unable to do so, or (ii)
unwilling to do so and is under an obligation to assign the
invention. A savings clause provides that failure to comply
with the requirements of this section will not be a basis for
invalidity or unenforceability of the patent if the failure is
remedied by a supplemental and corrected statement. False
substitute statements are subject to the same penalties as
false oaths and declarations.
Subsection (b)--Section 118 is amended to allow the person
to whom the inventor has assigned (or is under an obligation to
assign) the invention to file a patent application. A person
who otherwise shows sufficient proprietary interest in the
invention may file a patent application as an agent of the
inventor to preserve the rights of the parties.
Section 5. Defense to infringement based on earlier inventor.
Section 5 amends Sec. 273 of the Patent Act, which
addresses prior-user rights, as follows:
The prior-use defense may be asserted against any patent
(not just methods), provided the person asserting the defense
reduced the subject matter of the patent to practice and
commercially used the subject matter at least 1 year before the
effective filing date of the patent. However, the defense
cannot be asserted if the subject matter was derived from the
patent holder or persons in privity with the patent holder. Nor
can the defense be asserted unless the prior user both reduced
the subject matter of the patent to practice and commercially
used it at least 1 year before the effective filing date of the
patent or the date that the patentee publicly disclosed the
invention and invoked the Sec. 102(b) grace period, whichever
is earlier.
Section 5 also clarifies that a person may not assert the
defense if the subject matter of the patent on which the
defense is based was developed pursuant to a funding agreement
under Chapter 18 of the Patent Act (patent rights in inventions
made with Federal assistance) or by a university or a
technology transfer organization affiliated with a university
that did not receive private business funding in support of the
patent's development.
Finally, Section 5 states that the defense may only be
asserted by the person who performed or caused the performance
of the acts necessary to establish the defense, as well as any
other entity that controls, is controlled by, or is under
common control with such person; and except for any transfer to
the patent owner, the right to assert the defense cannot be
licensed or assigned or transferred to another person except as
an ancillary and subordinate part of a good faith assignment or
transfer for other reasons of the entire enterprise or line of
bsiness to which the defense relates.
Section 6. Post-grant review proceedings.
Subsections (a) and (d) enact new chapters 31 and 32, which
create adjudicative systems of post-grant and inter partes
review. The parallel sections of these new chapters are as
follows:
Sec. Sec. 311 and 321. Inter partes review may be
sought on the basis of patents and printed publications
any time after a post-grant review is concluded or, if
no such review is instituted, after the time for
seeking such review has expired. Post-grant review may
be sought on any invalidity ground during the first 12
months after a patent is issue or reissued.
Sec. Sec. 312 and 322. Petitions for review shall
explain the basis for seeking review, shall identify
the petitioner's real parties in interest and privies,
and shall be made publicly available as soon as is
practicable.
Sec. Sec. 313 and 323. Patent owners may file a
response to a petition for reviewing explaining why a
review should not be instituted.
Sec. Sec. 314 and 324. Inter partes review shall not be
instituted unless the information in the petition and
response shows that there is a reasonable likelihood
that a claim would be found invalid. Post-grant review
shall not be instituted unless the information
presented in the petition, if not rebutted, shows that
it is more likely than not that a claim would be found
invalid, or the petition raises a novel or unsettled
legal question that is important to other patents or
applications.
Sec. Sec. 315 and 325. (a) Review may not be instituted
if the petitioner has previously filed a civil action
challenging the validity of the patent. The petitioner
may, however, file a declaratory-judgment action
challenging the validity of one or more claims in the
patent on or after the day that he files the review
petition, but such action is automatically stayed until
the patent owner countersues for infringement.
(b) Inter partes review must be sought by a party
within 12 months of the date when the party is served
with a complaint for infringement. If a patent owner
sues for infringement within 3 months of the patent's
issue, a pending petition for post-grant review or the
institution of such a proceeding may not serve as a
basis for staying the court's consideration of the
patent owner's motion for a preliminary injunction.
(c) The Director may allow other petitioners to join an
inter partes or post-grant review.
(d) The Director may consolidate multiple proceedings
or matters concerning the same patent and decline
requests for repeated proceedings on the same question.
(e) Inter partes and post-grant petitioners are
estopped from raising in a subsequent Office proceeding
any issue that they raised or reasonably could have
raised in the inter partes or post grant review, and
inter partes petitioners are also estopped from raising
in civil litigation or an ITC proceeding any issue that
they raised or could have raised in the inter partes
review. Post-grant petitioners are only estopped from
raising in civil litigation or ITC proceedings those
issues that they actually raised in the post-grant
review.
(f) Post-grant review may not be used to challenge
claims in a reissue patent that are the same as or
narrower than claims in the original patent if the time
for seeking review of the original patent has lapsed.
Sec. Sec. 316 and 326. (a) The Director shall prescribe
regulations that make the file in proceedings public;
define standards for instituting reviews; allow
submission of additional information; establish and
govern review and its relationship to other
proceedings; set a time limit for requesting joinder in
inter partes review; set standards for discovery;
prescribe sanctions for abuse of the proceedings;
provide for protective orders for confidential
information; allow the patent owner to file a response
after an inter partes review has been instituted; allow
the patent owner to amend the patent; provide either
party with the right to an oral hearing; and set a 1-
year time limit for completion of the proceeding, with
a 6-month extension for good cause; and provide the
petitioner with at least one opportunity to file
written comments after the proceeding is instituted.
(b) In prescribing regulations, the Director shall
consider the integrity of the patent system and the
efficient operation of the Office.
(c) The Patent Trial and Appeal Board shall conduct
review proceedings.
(d) The patent owner may submit one amendment with a
reasonable number of substitute claims, and additional
amendments either as agreed to by the parties for
settlement, for good cause shown in post-grant review,
or as prescribed in regulations by the Director in
inter partes review.
(e) The challenger shall have the burden of providing
unpatentability by a preponderance of the evidence.
Sec. Sec. 317 and 327. Parties may agree to settle review
proceedings, in which case estoppel shall not apply and a copy
of the settlement agreement shall be filed in the Office.
Sec. Sec. 318 and 328. The Patent Trial and Appeal Board
shall issue a final written decision and a certificate
cancelling, confirming, or incorporating claims.
Sec. Sec. 319 and 329. A party dissatisfied with a final
written decision may appeal to the U.S. Court of Appeals for
the Federal Circuit.
Subsections (b) and (e) of section 5 make technical and
conforming amendments.
Subsections (c) and (f) require the Director to issue
regulations implementing the new reviews within 1 year, and
create transition provisions for proceedings pending between
the enactment of the Act and the full implementation of the new
reviews.
Subsection (g) amends Sec. 301 to include written
statements of the patent owner filed in a proceedings before a
Federal court or the Office as citable prior art. The section
is further amended to provide rules for submitting such
statements and the limitations on their use.
Subsection (h) amends Sec. 303 to provide that the Director
may determine whether to initiate reexamination on the
Director's own initiative based on citations by any person
other than the owner of the patent under section 301 or 302.
Also, Sec. 306 is amended to conform to the changes made by
Sec. 4605 of the American Inventors Protection Act of 1999,
Public Law 106-113, to Sec. Sec. 134 and 141 of title 35.
Section 7. Patent Trial and Appeal Board.
The Board of Patent Appeals and Interferences is replaced
with the new Patent Trial and Appeal Board (``Board''). The
Board is charged with (i) reviewing adverse decisions of
examiners on applications and reexamination proceedings, (ii)
conducting derivation proceedings, and (iii) conducting the
post-grant review proceedings. This section also updates the
various appeals statutes.
Section 8. Preissuance submissions by third parties.
This section amends Sec. 122 to create a mechanism for
third parties to submit timely pre-issuance information
relevant to the examination of the application, including a
concise statement of the relevance of the submission.
Section 9. Venue.
The venue for certain district court challenges of USPTO
decisions is changed from the District of Columbia to the
Eastern District of Virginia, the district where the USPTO
resides.
Section 10. Fee-setting authority.
This section gives the Director rulemaking authority to set
or adjust any fee under Sec. Sec. 41 and 376, and section 1113
of title 15, provided that such fee amounts are set to
reasonably compensate the USPTO for the services performed. The
Director may also reduce such fees. The Director shall consult
with the patent and trademark advisory committees as provided
for in this section. Any proposal for a change in fees
(including the rationale, purpose, and possible expectations or
benefits that will result) shall be published in the Federal
Register and shall seek public comment for a period of not less
than 45 days. The Director shall notify Congress of any final
proposed fee change and Congress shall have up to 45 days to
consider and comment before any proposed fee change becomes
effective.
Rules of construction are provided.
Section 11. Fees for patent services.
The Act includes the current patent fee schedule in the
text. This schedule represents a reference point for any future
adjustments to the fee schedule by the Director.
Section 12. Supplemental examination.
This section authorizes a new Sec. 257 of the Patent Act
that addresses the ``supplemental examination'' of a patent to
correct errors or omissions in proceedings before the Office.
Information that was not considered or was inadequately
considered or was incorrect can be presented to the Office.
Under new subsection (a) of Sec. 257, the Director must
initially determine whether a petitioner's request for
supplemental examination of one or more items in the request
raises a new question of patentability. The Director must make
this determination within 3 months of receiving a request for
supplemental examination.
Under new subsection (b), if the Director issues a
certificate affirming that this threshold is met, a
reexamination shall be ordered and will be conducted according
to the procedures under Chapter 30 of the Patent Act (ex parte
reexamination).
New Subsection (c) of Sec. 257 stipulates that a patent
cannot be held unenforceable on the basis of conduct relating
to information that had not been considered, was inadequately
considered, or was incorrect in a prior examination if the
information was considered, reconsidered, or corrected during
the supplemental examination. Challengers may still argue in
court that the Office's conclusion in supplemental examination
was erroneous and that the information renders the patent
invalid, but the information cannot be used to render the
patent invalid or unenforceable on the basis of inequitable
conduct.
New subsection (c) also enumerates three exceptions to
these terms: (1) prior allegations involving certain new drug
applications (21 USC Sec. 355(j)); (2) patent enforcement
actions before the International Trade Commission or a US
district court, unless the supplemental examination was
concluded before the date on which the action is brought; and
(3) instances in which fraud on the USPTO was practiced or
attempted.
New subsection (d) of Sec. 257 authorizes the Director to
establish fees, by regulation, to help defray the cost of a
supplemental examination, in addition to those charged pursuant
to Chapter 30.
Finally, new subsection (e) clarifies that nothing in
Section 12 limits the application of criminal or antitrust laws
or the ability of the USPTO Director to investigate and
sanction persons or their representatives for misconduct before
the Office.
Section 13. Funding agreements.
Clause (i) of Sec. 202(c)(7)(E) is amended to permit a
nonprofit organization that has a funding agreement for the
operation of a Government-owned-contractor-operated facility to
retain 85%, rather than 25% under current law, of licensing
royalties in excess of the amount equal to 5% of the annual
budget of the facility.
Section 14. Tax strategies deemed within the prior art.
This section provides that strategies for reducing,
avoiding, or deferring tax liability shall be deemed
insufficient to differentiate an invention from the prior art.
In other words, applicants will no longer be able to rely on
the novelty or non-obviousness of a tax strategy embodied in
their claims in order to distinguish their claims from the
prior art under the statutory novelty and non-obviousness
requirements of those provisions.
Under the provision, the term ``tax liability'' refers to
any liability for a tax under any Federal, State, or local law,
or law of any foreign jurisdiction, including any statute,
rule, regulation, or ordinance that levies, imposes, or
assesses such tax liability.
The provision is directed to tax strategies, which are a
subset of business methods, and is not intended to deny patent
protection for an invention that consists of tax preparation
software or other tools used solely to enter data on tax or
information returns or any other filing required by a tax
authority. Thus, a software program that is novel and non-
obvious as software would not be affected by this section even
though the software is used for a tax purpose. A prior-art
software program, however, could not overcome the section 102
and 103 hurdles by implementing a novel and non-obvious
strategy for reducing, avoiding, or deferring taxes.
There may be situations in which some aspects of an
invention are separable from the tax strategy. In this case,
any claim that encompasses a tax strategy will be subject to
the provision and the novelty or non-obviousness of the tax
strategy will be deemed insufficient to differentiate that
claim from the prior art. However, any claim that does not
involve a tax strategy would not be within the scope of the
provision. In such a case, if the invention includes claims
that are separable from the tax strategy, such claims could, if
otherwise enforceable, be enforced.
Inventions that fall within the scope of the provision
include those especially suitable for use with tax-favored
structures that must meet certain requirements, such as
employee benefit plans, tax-exempt organizations, or any other
entities that must be structured or operated in a particular
manner to obtain certain tax consequences. Thus, the provision
applies if the effect of an invention is to aid in satisfying
the qualification requirements for the desired tax-favored
entity status, to take advantage of the specific tax benefits
offered in a tax-favored structure, or to allow for tax
reduction, avoidance, or deferral not otherwise automatically
available in such entity or structure.
In general, the USPTO may seek advice and assistance from
Treasury and the IRS to better recognize tax strategies. Such
consultations should help ensure that patents do not infringe
on the ability of others to interpret the tax law and that
implementing such interpretations remains in the public domain,
available to all taxpayers and their advisors.
Section 15. Best Mode Requirement.
This section amends Sec. 282(b) by removing the failure to
disclose the best mode under section 112 as a basis for
canceling or holding either invalid or unenforceable a patent
claim.
Section 16. Marking.
Subsection (a) addresses virtual marking. The provision
allows a patent holder to satisfy the requirements of Sec. 287
of the Patent Act by affixing to a patented article the word
``patent'' or the abbreviation ``pat.'' together with an
Internet address that the public can access free of charge to
determine the status of the patent. The USPTO is also
instructed to submit a report to Congress on the effectiveness
of virtual marking that is due no later than 3 years after the
date of enactment.
Subsection (b) addresses false marking in the following
ways: (1) Only the United States may sue for the qui tam
penalty under the subsection. (2) A person who has suffered a
competitive injury as a result of a violation may still bring a
civil action in US district court for compensatory damages. (3)
Persons or companies otherwise liable under Sec. 292 (the false
marking statute) are protected during a 3-year window beginning
on the date the patent at issue expires. Beyond the 3-year
window, persons or companies are also protected if they place
the word ``patent'' or ``patented'', the abbreviation ``pat.'',
or the patent number either on the article or through an
Internet posting, consistent with the amendments in subsection
(a).
Section 17. Advice of Counsel.
Section 17 creates a new Sec. 298 of the Patent Act that
states that the failure of an infringer to obtain the advice of
counsel regarding any allegedly infringed patent, or the
failure of the infringer to present such advice to the court or
jury, may not be used to prove that the accused infringer
willfully infringed the patent or that the infringer intended
to induce infringement of the patent.
Section 18. Transitional program for covered business method patents.
Section 18 creates a transitional program to allow post-
grant review of the validity of business method patents.
Under subsection (a), the Director is authorized to
establish regulations governing the use of the new proceeding,
which will be modeled after post-grant review as set forth in
Section 6 (new Chapter 32 of the Patent Act). The proceeding is
limited in certain respects. A petition cannot be accepted
unless the petitioner or his real party in interest has been
sued for infringement of the patent or has been charged with
infringement. Nor can the petitioner or his real party in
interest later assert invalidity before the ITC or a Federal
court on a ground that was considered and resulted in a written
decision by the agency in the course of a transitional
proceeding.
The program takes effect 1 year following the date of
enactment and applies to any covered business method patent
issued before, on, or after the effective date, with the
exception of a patent that satisfies the requirements of
Sec. 321(c) of the Patent Act as set forth in Section 6 of the
bill. The program sunsets after 10 years.
Subsection (b) addresses requests for a stay of a civil
action alleging infringement under Sec. 281 of the Patent Act.
A US district court shall decide to grant a stay based on
prescribed criteria: (A) whether a stay (or denial thereof)
will simplify the issues in question and streamline the trial;
(B) whether discovery is complete and whether a trial date has
been set; (C) whether a stay (or a denial thereof) would unduly
prejudice the non-moving party or present a clear tactical
advantage for the moving party; and (D) whether a stay (or the
denial thereof) will reduce the burden of litigation on the
parties and on the court. A party may seek an interlocutory
appeal of the US district court's decision, which the Federal
Circuit shall review to ensure consistent application of
established precedent, and such review may be de novo.
Subsection (c) deems that in an action for infringement
under Sec. 281 of a covered business method patent, an
automated teller machine (``ATM'') shall not be considered a
regular and established place of business for purposes of the
patent venue statute.\63\
---------------------------------------------------------------------------
\63\28 USC Sec. 1400(b).
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Subsection (d) defines ``covered business method patent''
as one that claims a method or corresponding apparatus for
performing data processing or other operations used in the
practice, administration, or management of a financial product
or service, except that it does not include patents for
technological inventions.
Finally, subsection (e) clarifies that nothing in Section
18 shall be construed as amending or interpreting categories of
patent-eligible subject matter under Sec. 101 of the Patent
Act.
Section 19. Jurisdiction and procedural matters.
Subsection (a) through (d) enact the so-called Holmes Group
fix (H.R. 2955, 109th Congress), which the House Judiciary
Committee reported favorably in 2006. The Committee Report
accompanying H.R. 2955 (House Rep. 109-407), which we reaffirm,
explains the bill's reasons for abrogating Holmes Group, Inc.
v. Vornado Air Circulation Systems, Inc., 535 U.S. 826 (2002),
and more fully precluding state court jurisdiction over patent
legal claims.
Subsection (e) creates a new Sec. 299 of the Patent Act
that addresses joinder of accused infringers in patent actions
or trials not involving certain drugs and biologics. Parties
accused as defendants may be joined in one action as defendants
or counterclaim defendants only if: (1) any right to relief is
asserted against the parties jointly, severally, or in the
alternative with respect to or arising out of the same
transaction, occurrence, or series of transactions or
occurrences relating to the making, using, importing into the
United States, offering for sale, or selling of the same
accused product or process; and (2) questions of fact common to
all defendants or counterclaim defendants will arise in the
action.
For purposes of subsection (e), accused infringers may not
be joined based solely on allegations that they each have
infringed the patent or patents in suit.
The changes set forth in Section 19 shall apply to any
civil action commenced on or after the date of enactment of the
Act.
Section 20. Technical amendments.
This section sets forth technical amendments consistent
with this Act.
Section 21. Travel expenses and payment of administrative judges.
Subsection (a) authorizes the USPTO to expend funds to
cover the subsistence and travel-related expenses of non-
Federal employees attending intellectual property programs
hosted by the agency.
Subsection (b) authorizes the Director to fix the rate of
basic pay for administrative patent and trademark judges at a
rate not greater than that payable for level III of the
Executive Pay Schedule under 5 USC Sec. 5314.
Section 22. Patent and Trademark Office funding.
Subsections (a) defines the ``United State Patent and
Trademark Office Public Enterprise Fund'' (``the Fund'') that
replaces the existing ``Patent and Trademark Office
Appropriation Account.''
Subsection (b) clarifies the USPTO Director's authority
under the new Fund to collect all patent and trademark user fee
revenue, which shall be available to the agency until expended.
This change shall take effect on the later of October 1, 2011,
or the first day of the first fiscal year that begins after the
date of the enactment of the Act.
Subsection (c) establishes the Fund as a revolving fund in
the US Treasury. Any amounts in the Fund shall be available for
use by the Director without fiscal year limitation. Patent and
trademark fees deposited in the Fund shall be recorded as
offsetting receipts. Amounts deposited in the Fund shall be
available, without fiscal year limitation, to cover all
expenses determined in the discretion of the Director to be
ordinary and reasonable.
Subsection (d) requires the Director, not later than 60
days after the end of each fiscal year, to submit a report to
Congress that summarizes the USPTO operations for the preceding
fiscal year, details the operating plan of the agency,
describes its long-term modernization plans as well as any
progress made toward modernization efforts in the previous
fiscal year, and includes the results of the most recent audit
as carried out by subsection (f).
Not later than 30 days after the beginning of each fiscal
year, subsection (e) instructs the Director to notify the
Committees on Appropriations of both houses of Congress of the
plan for the obligation and expenditure of the total amount of
the funds for that fiscal year under Public Law 109-108.
Subsection (f) mandates that the Director annually shall
provide for an independent audit of the financial statement of
the USPTO.
Subsection (g) requires the Director to prepare and submit
to the President an annual ``business-type'' budget for the
Fund as the President prescribes by regulation for the Federal
Budget.
Section 23. Satellite offices.
Pursuant to subsection (a), and subject to available
resources, the Director shall establish three or more satellite
offices in the United States to carry out the responsibilities
of the USPTO. The Director has 3 years after the date of
enactment of the Act to complete the task.
Subject (b) enumerates the purposes of the satellite
offices, including efforts to increase outreach activities,
enhance patent examiner retention, and improve the quality of
patent examination.
Subsection (c) details the required considerations the
Director must invoke in selecting each location. Among the
criteria are geographic diversity among the offices and
reliance upon previous evaluations.
Not later than three fiscal years after the date of
enactment of the Act, Subsection (d) requires the Director to
submit a report to Congress on the rationale of the Director in
selecting the location of any satellite office, the progress in
establishing any satellite offices so selected, and whether the
operation of any existing satellite office is achieving the
purposes set forth in subsection (b).
Section 24. Designation of the Detroit satellite office.
Section 24 designates the USPTO satellite office to be
located in Detroit, Michigan, as the ``Elijah J. McCoy United
States Patent and Trademark Office.''
Section 25. Patent Ombudsman Program for small business concerns.
Section 25 states that, using available resources, the
Director shall establish and maintain in the USPTO a Patent
Ombudsman Program, whose staff shall provide support and
services relating to patent filings to small business concerns.
Section 26. Priority examination for technologies important to American
competitiveness.
Section 26 amends Sec. 2(b)(2) of the Patent Act by
permitting the USPTO to prioritize the examination of
applications for products, processes, or technologies that are
important to the national economy or national competitiveness
without recovering the aggregate extra cost of providing such
prioritization.
Section 27. Calculation of 60-day period for application of patent term
extension.
Subsection (a) clarifies USPTO ``counting'' rules that are
used to determine whether an applicant has submitted an
application to the agency in a timely manner under
Sec. 156(d)(1) of the Patent Act. If the application is
transmitted after 4:30 pm, EST, on a business day, or is
transmitted on a day that is not a business day, the product
addressed by the application shall be deemed to receive
``permission'' on the next business day. ``Business day'' means
any Monday, Tuesday, Wednesday, Thursday, or Friday, excluding
any legal holiday under 5 USC Sec. 6103.
Subsection (b) states that subsection (a) shall apply to
any application for extension of term under Sec. 156 of the
Patent Act that is pending on, filed after, or as to which a
decision regarding the application is subject judicial review
on, the date of enactment of the Act.
Section 28. Study on implementation.
Subsection (a) requires the Director to conduct a study on
the manner in which the Act is being implemented by the USPTO,
along with a review of patent policies and practices of the
Federal Government with respect to patent rights, US
innovation, access by small business to capital, and other
issues as the Director deems appropriate.
Subsection (b) stipulates that the Director shall submit
the results of the study along with his recommendations for any
changes to the Senate and House Judiciary Committees not later
than 4 years after the date of enactment of the Act.
Section 29. Pro bono program.
Section 29 requires the Director to work with and support
intellectual law associations across the country to establish
pro bono programs to assist financially under-resourced
independent inventors and small businesses.
Section 30. Effective date.
Except as otherwise provided, this Act takes effect 12
months after the date of enactment and applies to any patent
issued on or after that effective date.
Section 31. Budgetary effects.
Section 31 references text from S. 23 regarding the
budgetary effects of the Act as it pertains to PAYGO
compliance.
Agency Views
__________
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
TITLE 35, UNITED STATES CODE
PART I--UNITED STATES PATENT AND TRADEMARK OFFICE
CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS
Sec.
1. Establishment.
* * * * * * *
[6. Board of Patent Appeals and Interferences.]
6. Patent Trial and Appeal Board.
* * * * * * *
Sec. 2. Powers and duties
(a) * * *
(b) Specific Powers.--The Office--
(1) * * *
(2) may establish regulations, not inconsistent
with law, which--
(A) * * *
* * * * * * *
(E) shall recognize the public interest in
continuing to safeguard broad access to the
United States patent system through the reduced
fee structure for small entities under section
41(h)(1) [of this title; and];
(F) provide for the development of a
performance-based process that includes
quantitative and qualitative measures and
standards for evaluating cost-effectiveness and
is consistent with the principles of
impartiality and competitiveness; and
(G) may, subject to any conditions
prescribed by the Director and at the request
of the patent applicant, provide for
prioritization of examination of applications
for products, processes, or technologies that
are important to the national economy or
national competitiveness without recovering the
aggregate extra cost of providing such
prioritization, notwithstanding section 41 or
any other provision of law;
* * * * * * *
(11) may conduct programs, studies, or exchanges of
items or services regarding domestic and international
intellectual property law and the effectiveness of
intellectual property protection domestically and
throughout the world, and the Office is authorized to
expend funds to cover the subsistence expenses and
travel-related expenses, including per diem, lodging
costs, and transportation costs, of persons attending
such programs who are not Federal employees;
* * * * * * *
Sec. 3. Officers and employees
(a) * * *
(b) Officers and Employees of the Office.--
(1) * * *
* * * * * * *
(6) Administrative patent judges and administrative
trademark judges.--The Director may fix the rate of
basic pay for the administrative patent judges
appointed pursuant to section 6 and the administrative
trademark judges appointed pursuant to section 17 of
the Trademark Act of 1946 (15 U.S.C. 1067) at not
greater than the rate of basic pay payable for level
III of the Executive Schedule under section 5314 of
title 5. The payment of a rate of basic pay under this
paragraph shall not be subject to the pay limitation
under section 5306(e) or 5373 of title 5.
* * * * * * *
(e) Carryover of Personnel.--
(1) * * *
(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)) shall be
transferred to the Office, as necessary to carry out
the purposes of [this Act,] that Act, if--
(A) * * *
* * * * * * *
[Sec. 6. Board of Patent Appeals and Interferences
[(a) Establishment and Composition.--There shall be in the
United States Patent and Trademark Office a Board of Patent
Appeals and Interferences. The Director, 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
Secretary of Commerce, in consultation with the Director.
[(b) Duties.--The Board of Patent Appeals and Interferences
shall, on written appeal of an applicant, review 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 three members of the
Board, who shall be designated by the Director. Only the Board
of Patent Appeals and Interferences may grant rehearings.
[(c) Authority of the Secretary.--The Secretary of Commerce
may, in his or her discretion, deem the appointment of an
administrative patent judge who, before the date of the
enactment of this subsection, held office pursuant to an
appointment by the Director to take effect on the date on which
the Director initially appointed the administrative patent
judge.
[(d) Defense to Challenge of Appointment.--It shall be a
defense to a challenge to the appointment of an administrative
patent judge on the basis of the judge's having been originally
appointed by the Director that the administrative patent judge
so appointed was acting as a de facto officer.]
Sec. 6. Patent Trial and Appeal Board
(a) In General.--There shall be in the Office a Patent
Trial and Appeal Board. The Director, the Deputy Director, the
Commissioner for Patents, the Commissioner for Trademarks, and
the administrative patent judges shall constitute the Patent
Trial and Appeal Board. The administrative patent judges shall
be persons of competent legal knowledge and scientific ability
who are appointed by the Secretary, in consultation with the
Director. Any reference in any Federal law, Executive order,
rule, regulation, or delegation of authority, or any document
of or pertaining to the Board of Patent Appeals and
Interferences is deemed to refer to the Patent Trial and Appeal
Board.
(b) Duties.--The Patent Trial and Appeal Board shall--
(1) on written appeal of an applicant, review
adverse decisions of examiners upon applications for
patents pursuant to section 134(a);
(2) review appeals of reexaminations pursuant to
section 134(b);
(3) conduct derivation proceedings pursuant to
section 135; and
(4) conduct inter partes reviews and post-grant
reviews pursuant to chapters 31 and 32.
(c) 3-Member Panels.--Each appeal, derivation proceeding,
post-grant review, and inter partes review shall be heard by at
least 3 members of the Patent Trial and Appeal Board, who shall
be designated by the Director. Only the Patent Trial and Appeal
Board may grant rehearings.
(d) Treatment of Prior Appointments.--The Secretary of
Commerce may, in the Secretary's discretion, deem the
appointment of an administrative patent judge who, before the
date of the enactment of this subsection, held office pursuant
to an appointment by the Director to take effect on the date on
which the Director initially appointed the administrative
patent judge. It shall be a defense to a challenge to the
appointment of an administrative patent judge on the basis of
the judge's having been originally appointed by the Director
that the administrative patent judge so appointed was acting as
a de facto officer.
* * * * * * *
Sec. 12. Copies of patents and applications for public libraries
The Director may supply copies of specifications and
drawings of patents in printed or electronic form and published
applications for patents to public libraries in the United
States which shall maintain such copies for the use of the
public, at the rate for each year's issue established for this
purpose in section 41(d) [of this title].
* * * * * * *
CHAPTER 3--PRACTICE BEFORE PATENT AND TRADEMARK OFFICE
Sec. 32. Suspension or exclusion from practice
The Director may, after notice and opportunity for a
hearing, suspend or exclude, either generally or in any
particular case, from further practice before the Patent and
Trademark Office, any person, agent, or attorney shown to be
incompetent or disreputable, or guilty of gross misconduct, or
who does not comply with the regulations established under
section 2(b)(2)(D) [of this title], or who shall, by word,
circular, letter, or advertising, with intent to defraud in any
manner, deceive, mislead, or threaten any applicant or
prospective applicant, or other person having immediate or
prospective business before the Office. The reasons for any
such suspension or exclusion shall be duly recorded. The
Director shall have the discretion to designate any attorney
who is an officer or employee of the United States Patent and
Trademark Office to conduct the hearing required by this
section. A proceeding under this section shall be commenced not
later than the earlier of either the date that is 10 years
after the date on which the misconduct forming the basis for
the proceeding occurred, or 1 year after the date on which the
misconduct forming the basis for the proceeding is made known
to an officer or employee of the Office as prescribed in the
regulations established under section 2(b)(2)(D). The [United
States District Court for the District of Columbia] United
States District Court for the Eastern District of Virginia,
under such conditions and upon such proceedings as it by its
rules determines, may review the action of the Director upon
the petition of the person so refused recognition or so
suspended or excluded.
* * * * * * *
CHAPTER 4--PATENT FEES; FUNDING; SEARCH SYSTEMS
Sec. 41. Patent fees; patent and trademark search systems
[(a) The Director shall charge the following fees:
[(1)(A) On filing each application for an original
patent, except in design or plant cases, $690.
[(B) In addition, on filing or on presentation at
any other time, $78 for each claim in independent form
which is in excess of 3, $18 for each claim (whether
independent or dependent) which is in excess of 20, and
$260 for each application containing a multiple
dependent claim.
[(C) On filing each provisional application for an
original patent, $150.
[(2) For issuing each original or reissue patent,
except in design or plant cases, $1,210.
[(3) In design and plant cases--
[(A) on filing each design application,
$310;
[(B) on filing each plant application,
$480;
[(C) on issuing each design patent, $430;
and
[(D) on issuing each plant patent, $580.
[(4)(A) On filing each application for the reissue
of a patent, $690.
[(B) In addition, on filing or on presentation at
any other time, $78 for each claim in independent form
which is in excess of the number of independent claims
of the original patent, and $18 for each claim (whether
independent or dependent) which is in excess of 20 and
also in excess of the number of claims of the original
patent.
[(5) On filing each disclaimer, $110.
[(6)(A) On filing an appeal from the examiner to
the Board of Patent Appeals and Interferences, $300.
[(B) In addition, on filing a brief in support of
the appeal, $300, and on requesting an oral hearing in
the appeal before the Board of Patent Appeals and
Interferences, $260.
[(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 delayed
response by the patent owner in any reexamination
proceeding, $1,210, unless the petition is filed under
section 133 or 151 of this title, in which case the fee
shall be $110.
[(8) For petitions for 1-month extensions of time
to take actions required by the Director in an
application--
[(A) on filing a first petition, $110;
[(B) on filing a second petition, $270; and
[(C) on filing a third petition or
subsequent petition, $490.
[(9) Basic national fee for an international
application where the Patent and Trademark Office was
the International Preliminary Examining Authority and
the International Searching Authority, $670.
[(10) Basic national fee for an international
application where the Patent and Trademark Office was
the International Searching Authority but not the
International Preliminary Examining Authority, $690.
[(11) Basic national fee for an international
application where the Patent and Trademark Office was
neither the International Searching Authority nor the
International Preliminary Examining Authority, $970.
[(12) Basic national fee for an international
application where the international preliminary
examination fee has been paid to the Patent and
Trademark Office, and the international preliminary
examination report states that the provisions of
Article 33(2), (3), and (4) of the Patent Cooperation
Treaty have been satisfied for all claims in the
application entering the national stage, $96.
[(13) For filing or later presentation of each
independent claim in the national stage of an
international application in excess of 3, $78.
[(14) For filing or later presentation of each
claim (whether independent or dependent) in a national
stage of an international application in excess of 20,
$18.
[(15) For each national stage of an international
application containing a multiple dependent claim,
$260.
For the purpose of computing fees, a multiple dependent claim
referred to in section 112 of this title or any claim depending
therefrom shall be considered as separate dependent claims in
accordance with the number of claims to which reference is
made. Errors in payment of the additional fees may be rectified
in accordance with regulations of the Director.
[(b) The Director shall charge the following fees for
maintaining in force all patents based on applications filed on
or after December 12, 1980:
[(1) 3 years and 6 months after grant, $830.
[(2) 7 years and 6 months after grant, $1,900.
[(3) 11 years and 6 months after grant, $2,910.
Unless payment of the applicable maintenance fee is received in
the Patent and Trademark Office on or before the date the fee
is due or within a grace period of 6 months thereafter, the
patent will expire as of the end of such grace period. The
Director may require the payment of a surcharge as a condition
of accepting within such 6-month grace period the payment of an
applicable maintenance fee. No fee may be established for
maintaining a design or plant patent in force.]
(a) General Fees.--The Director shall charge the following
fees:
(1) Filing and basic national fees.--
(A) On filing each application for an
original patent, except for design, plant, or
provisional applications, $330.
(B) On filing each application for an
original design patent, $220.
(C) On filing each application for an
original plant patent, $220.
(D) On filing each provisional application
for an original patent, $220.
(E) On filing each application for the
reissue of a patent, $330.
(F) The basic national fee for each
international application filed under the
treaty defined in section 351(a) entering the
national stage under section 371, $330.
(G) In addition, excluding any sequence
listing or computer program listing filed in an
electronic medium as prescribed by the
Director, for any application the specification
and drawings of which exceed 100 sheets of
paper (or equivalent as prescribed by the
Director if filed in an electronic medium),
$270 for each additional 50 sheets of paper (or
equivalent as prescribed by the Director if
filed in an electronic medium) or fraction
thereof.
(2) Excess claims fees.--
(A) In general.--In addition to the fee
specified in paragraph (1)--
(i) on filing or on presentation at
any other time, $220 for each claim in
independent form in excess of 3;
(ii) on filing or on presentation
at any other time, $52 for each claim
(whether dependent or independent) in
excess of 20; and
(iii) for each application
containing a multiple dependent claim,
$390.
(B) Multiple dependent claims.--For the
purpose of computing fees under subparagraph
(A), a multiple dependent claim referred to in
section 112 or any claim depending therefrom
shall be considered as separate dependent
claims in accordance with the number of claims
to which reference is made.
(C) Refunds; errors in payment.--The
Director may by regulation provide for a refund
of any part of the fee specified in
subparagraph (A) for any claim that is canceled
before an examination on the merits, as
prescribed by the Director, has been made of
the application under section 131. Errors in
payment of the additional fees under this
paragraph may be rectified in accordance with
regulations prescribed by the Director.
(3) Examination fees.--
(A) In general.--
(i) For examination of each
application for an original patent,
except for design, plant, provisional,
or international applications, $220.
(ii) For examination of each
application for an original design
patent, $140.
(iii) For examination of each
application for an original plant
patent, $170.
(iv) For examination of the
national stage of each international
application, $220.
(v) For examination of each
application for the reissue of a
patent, $650.
(B) Applicability of other fee
provisions.--The provisions of paragraphs (3)
and (4) of section 111(a) relating to the
payment of the fee for filing the application
shall apply to the payment of the fee specified
in subparagraph (A) with respect to an
application filed under section 111(a). The
provisions of section 371(d) relating to the
payment of the national fee shall apply to the
payment of the fee specified in subparagraph
(A) with respect to an international
application.
(4) Issue fees.--
(A) For issuing each original patent,
except for design or plant patents, $1,510.
(B) For issuing each original design
patent, $860.
(C) For issuing each original plant patent,
$1,190.
(D) For issuing each reissue patent,
$1,510.
(5) Disclaimer fee.--On filing each disclaimer,
$140.
(6) Appeal fees.--
(A) On filing an appeal from the examiner
to the Patent Trial and Appeal Board, $540.
(B) In addition, on filing a brief in
support of the appeal, $540, and on requesting
an oral hearing in the appeal before the Patent
Trial and Appeal Board, $1,080.
(7) Revival fees.--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 delayed response by the patent owner in
any reexamination proceeding, $1,620, unless the
petition is filed under section 133 or 151, in which
case the fee shall be $540.
(8) Extension fees.--For petitions for 1-month
extensions of time to take actions required by the
Director in an application--
(A) on filing a first petition, $130;
(B) on filing a second petition, $360; and
(C) on filing a third or subsequent
petition, $620.
(b) Maintenance Fees.--
(1) In general.--The Director shall charge the
following fees for maintaining in force all patents
based on applications filed on or after December 12,
1980:
(A) Three years and 6 months after grant,
$980.
(B) Seven years and 6 months after grant,
$2,480.
(C) Eleven years and 6 months after grant,
$4,110.
(2) Grace period; surcharge.--Unless payment of the
applicable maintenance fee under paragraph (1) is
received in the Office on or before the date the fee is
due or within a grace period of 6 months thereafter,
the patent shall expire as of the end of such grace
period. The Director may require the payment of a
surcharge as a condition of accepting within such 6-
month grace period the payment of an applicable
maintenance fee.
(3) No maintenance fee for design or plant
patent.--No fee may be established for maintaining a
design or plant patent in force.
[(c)(1) The Director]
(c) Delays in Payment of Maintenance Fees.--
(1) Acceptance.--The Director may accept the
payment of any maintenance fee required by subsection
(b) of this section which is made within twenty-four
months after the six-month grace period if the delay is
shown to the satisfaction of the Director to have been
unintentional, or at any time after the six-month grace
period if the delay is shown to the satisfaction of the
Director to have been unavoidable. The Director may
require the payment of a surcharge as a condition of
accepting payment of any maintenance fee after the six-
month grace period. If the Director accepts payment of
a maintenance fee after the six-month grace period, the
patent shall be considered as not having expired at the
end of the grace period.
[(2) A patent]
(2) Effect on rights of others.--A patent, the term
of which has been maintained as a result of the
acceptance of a payment of a maintenance fee under this
subsection, shall not abridge or affect the right of
any person or that person's successors in business who
made, purchased, offered to sell, or used anything
protected by the patent within the United States, or
imported anything protected by the patent into the
United States after the 6-month grace period but prior
to the acceptance of a maintenance fee under this
subsection, to continue the use of, to offer for sale,
or to sell to others to be used, offered for sale, or
sold, the specific thing so made, purchased, offered
for sale, used, or imported. The court before which
such matter is in question may provide for the
continued manufacture, use, offer for sale, or sale of
the thing made, purchased, offered for sale, or used
within the United States, or imported into the United
States, as specified, or for the manufacture, use,
offer for sale, or sale in the United States of which
substantial preparation was made after the 6-month
grace period but before the acceptance of a maintenance
fee under this subsection, and the court may also
provide for the continued practice of any process that
is practiced, or for the practice of which substantial
preparation was made, after the 6-month grace period
but before the acceptance of a maintenance fee under
this subsection, to the extent and under such terms as
the court deems equitable for the protection of
investments made or business commenced after the 6-
month grace period but before the acceptance of a
maintenance fee under this subsection.
[(d) The Director shall establish fees for all other
processing, services, or materials relating to patents not
specified in this section to recover the estimated average cost
to the Office of such processing, services, or materials,
except that the Director shall charge the following fees for
the following services:
[(1) For recording a document affecting title, $40
per property.
[(2) For each photocopy, $.25 per page.
[(3) For each black and white copy of a patent, $3.
The yearly fee for providing a library specified in section 13
of this title with uncertified printed copies of the
specifications and drawings for all patents in that year shall
be $50.]
(d) Patent Search and Other Fees.--
(1) Patent search fees.--
(A) In general.--The Director shall charge
the fees specified under subparagraph (B) for
the search of each application for a patent,
except for provisional applications. The
Director shall adjust the fees charged under
this paragraph to ensure that the fees recover
an amount not to exceed the estimated average
cost to the Office of searching applications
for patent either by acquiring a search report
from a qualified search authority, or by
causing a search by Office personnel to be
made, of each application for patent.
(B) Specific fees.--The fees referred to in
subparagraph (A) are--
(i) $540 for each application for
an original patent, except for design,
plant, provisional, or international
applications;
(ii) $100 for each application for
an original design patent;
(iii) $330 for each application for
an original plant patent;
(iv) $540 for the national stage of
each international application; and
(v) $540 for each application for
the reissue of a patent.
(C) Applicability of other provisions.--The
provisions of paragraphs (3) and (4) of section
111(a) relating to the payment of the fee for
filing the application shall apply to the
payment of the fee specified in this paragraph
with respect to an application filed under
section 111(a). The provisions of section
371(d) relating to the payment of the national
fee shall apply to the payment of the fee
specified in this paragraph with respect to an
international application.
(D) Refunds.--The Director may by
regulation provide for a refund of any part of
the fee specified in this paragraph for any
applicant who files a written declaration of
express abandonment as prescribed by the
Director before an examination has been made of
the application under section 131.
(E) Applications subject to secrecy
order.--A search of an application that is the
subject of a secrecy order under section 181 or
otherwise involves classified information may
be conducted only by Office personnel.
(F) Conflicts of interest.--A qualified
search authority that is a commercial entity
may not conduct a search of a patent
application if the entity has any direct or
indirect financial interest in any patent or in
any pending or imminent application for patent
filed or to be filed in the Office.
(2) Other fees.--
(A) In general.--The Director shall
establish fees for all other processing,
services, or materials relating to patents not
specified in this section to recover the
estimated average cost to the Office of such
processing, services, or materials, except that
the Director shall charge the following fees
for the following services:
(i) For recording a document
affecting title, $40 per property.
(ii) For each photocopy, $.25 per
page.
(iii) For each black and white copy
of a patent, $3.
(B) Copies for libraries.--The yearly fee
for providing a library specified in section 12
with uncertified printed copies of the
specifications and drawings for all patents in
that year shall be $50.
(e) [The Director] Waiver of Fees; Copies Regarding
Notice._The Director may waive the payment of any fee for any
service or material related to patents in connection with an
occasional or incidental request made by a department or agency
of the Government, or any officer thereof. The Director may
provide any applicant issued a notice under section 132 [of
this title] with a copy of the specifications and drawings for
all patents referred to in that notice without charge.
(f) [The fees] Adjustment of Fees._The fees established in
subsections (a) and (b) of this section may be adjusted by the
Director on October 1, 1992, and every year thereafter, to
reflect any fluctuations occurring during the previous 12
months in the Consumer Price Index, as determined by the
Secretary of Labor. Changes of less than 1 per centum may be
ignored.
[(g) No fee established by the Director under this section
shall take effect until at least 30 days after notice of the
fee has been published in the Federal Register and in the
Official Gazette of the Patent and Trademark Office.
[(h)(1) Fees charged under subsection (a) or (b) shall be
reduced by 50 percent with respect to their application to any
small business concern as defined under section 3 of the Small
Business Act, and to any independent inventor or nonprofit
organization as defined in regulations issued by the Director.
[(2) With respect to its application to any entity
described in paragraph (1), any surcharge or fee charged under
subsection (c) or (d) shall not be higher than the surcharge or
fee required of any other entity under the same or
substantially similar circumstances.]
(h) Fees for Small Entities.--
(1) Reductions in fees.--Subject to paragraph (3),
fees charged under subsections (a), (b), and (d)(1)
shall be reduced by 50 percent with respect to their
application to any small business concern as defined
under section 3 of the Small Business Act, and to any
independent inventor or nonprofit organization as
defined in regulations issued by the Director.
(2) Surcharges and other fees.--With respect to its
application to any entity described in paragraph (1),
any surcharge or fee charged under subsection (c) or
(d) shall not be higher than the surcharge or fee
required of any other entity under the same or
substantially similar circumstances.
(3) Reduction for electronic filing.--The fee
charged under subsection (a)(1)(A) shall be reduced by
75 percent with respect to its application to any
entity to which paragraph (1) applies, if the
application is filed by electronic means as prescribed
by the Director.
[(i)(1) The Director]
(i) Electronic Patent and Trademark Data.--
(1) Maintenance of collections.--The Director shall
maintain, for use by the public, paper, microform, or
electronic collections of United States patents,
foreign patent documents, and United States trademark
registrations arranged to permit search for and
retrieval of information. The Director may not impose
fees directly for the use of such collections, or for
the use of the public patent or trademark search rooms
or libraries.
[(2) The Director]
(2) Availability of automated search systems.--The
Director shall provide for the full deployment of the
automated search systems of the Patent and Trademark
Office so that such systems are available for use by
the public, and shall assure full access by the public
to, and dissemination of, patent and trademark
information, using a variety of automated methods,
including electronic bulletin boards and remote access
by users to mass storage and retrieval systems.
[(3) The Director]
(3) Access fees.--The Director may establish
reasonable fees for access by the public to the
automated search systems of the Patent and Trademark
Office. If such fees are established, a limited amount
of free access shall be made available to users of the
systems for purposes of education and training. The
Director may waive the payment by an individual of fees
authorized by this subsection upon a showing of need or
hardship, and if such a waiver is in the public
interest.
[(4) The Director]
(4) Annual report to congress.--The Director shall
submit to the Congress an annual report on the
automated search systems of the Patent and Trademark
Office and the access by the public to such systems.
The Director shall also publish such report in the
Federal Register. The Director shall provide an
opportunity for the submission of comments by
interested persons on each such report.
Sec. 42. Patent and Trademark Office funding
(a) * * *
(b) All fees paid to the Director and all appropriations
for defraying the costs of the activities of the Patent and
Trademark Office will be credited to the [Patent and Trademark
Office Appropriation Account] United States Patent and
Trademark Office Public Enterprise Fund in the Treasury of the
United States.
(c) [To the extent and in the amounts provided in advance
in appropriations Acts, fees] Fees authorized in this title or
any other Act to be charged or established by the Director
[shall be collected by and shall be available to the Director]
shall be collected by the Director and shall be available until
expended to carry out the activities of the Patent and
Trademark Office. All fees available to the Director under
section 31 of the Trademark Act of 1946 shall be used only for
the processing of trademark registrations and for other
activities, services, and materials relating to trademarks and
to cover a proportionate share of the administrative costs of
the Patent and Trademark Office.
* * * * * * *
CHAPTER 10--PATENTABILITY OF INVENTIONS
Sec.
100. Definitions.
* * * * * * *
[102. Conditions for patentability; novelty and loss of right to
patent.]
102. Conditions for patentability; novelty.
* * * * * * *
[104. Invention made abroad.]
* * * * * * *
Sec. 100. Definitions
When used in this title unless the context otherwise
indicates--
(a) * * *
* * * * * * *
(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.
(f) The term ``inventor'' means the individual or, if a
joint invention, the individuals collectively who invented or
discovered the subject matter of the invention.
(g) The terms ``joint inventor'' and ``coinventor'' mean
any 1 of the individuals who invented or discovered the subject
matter of a joint invention.
(h) The term ``joint research agreement'' means a written
contract, grant, or cooperative agreement entered into by 2 or
more persons or entities for the performance of experimental,
developmental, or research work in the field of the claimed
invention.
(i)(1) The term ``effective filing date'' for a claimed
invention in a patent or application for patent means--
(A) if subparagraph (B) does not apply, the actual
filing date of the patent or the application for the
patent containing a claim to the invention; or
(B) the filing date of the earliest application for
which the patent or application is entitled, as to such
invention, to a right of priority under section 119,
365(a), or 365(b) or to the benefit of an earlier
filing date under section 120, 121, or 365(c).
(2) The effective filing date for a claimed invention in an
application for reissue or reissued patent shall be determined
by deeming the claim to the invention to have been contained in
the patent for which reissue was sought.
(j) The term ``claimed invention'' means the subject matter
defined by a claim in a patent or an application for a patent.
* * * * * * *
[Sec. 102. Conditions for patentability; novelty and loss of right to
patent
[A person shall be entitled to a patent unless--
[(a) the invention was known or used by others in this
country, or patented or described in a printed publication in
this or a foreign country, before the invention thereof by the
applicant for patent, or
[(b) the invention was patented or described in a printed
publication in this or a foreign country or in public use or on
sale in this country, more than one year prior to the date of
the application for patent in the United States, or
[(c) he has abandoned the invention, or
[(d) the invention was first patented or caused to be
patented, or was the subject of an inventor's certificate, by
the applicant or his legal representatives or assigns in a
foreign country prior to the date of the application for patent
in this country on an application for patent or inventor's
certificate filed more than twelve months before the filing of
the application in the United States, or
[(e) the invention was described in (1) an application for
patent, published under section 122(b), by another filed in the
United States before the invention by the applicant for patent
or (2) a patent granted on an application for patent by another
filed in the United States before the invention by the
applicant for patent, except that an international application
filed under the treaty defined in section 351(a) shall have the
effects for the purposes of this subsection of an application
filed in the United States only if the international
application designated the United States and was published
under Article 21(2) of such treaty in the English language; or
[(f) he did not himself invent the subject matter sought to
be patented, or
[(g)(1) during the course of an interference conducted
under section 135 or section 291, another inventor involved
therein establishes, to the extent permitted in section 104,
that before such person's invention thereof the invention was
made by such other inventor and not abandoned, suppressed, or
concealed, or (2) before such person's invention thereof, the
invention was made in this country by another inventor who had
not abandoned, suppressed, or concealed it. In determining
priority of invention under this subsection, there shall be
considered not only the respective dates of conception and
reduction to practice of the invention, but also the reasonable
diligence of one who was first to conceive and last to reduce
to practice, from a time prior to conception by the other.
[Sec. 103. Conditions for patentability; non-obvious subject matter
[(a) A patent may not be obtained though the invention is
not identically disclosed or described as set forth in section
102 of this title, if the differences between the subject
matter sought to be patented and the prior art are such that
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. Patentability
shall not be negatived by the manner in which the invention was
made.
[(b)(1) Notwithstanding subsection (a), and upon timely
election by the applicant for patent to proceed under this
subsection, a biotechnological process using or resulting in a
composition of matter that is novel under section 102 and
nonobvious under subsection (a) of this section shall be
considered nonobvious if--
[(A) claims to the process and the composition of
matter are contained in either the same application for
patent or in separate applications having the same
effective filing date; and
[(B) the composition of matter, and the process at
the time it was invented, were owned by the same person
or subject to an obligation of assignment to the same
person.
[(2) A patent issued on a process under paragraph (1)--
[(A) shall also contain the claims to the
composition of matter used in or made by that process,
or
[(B) shall, if such composition of matter is
claimed in another patent, be set to expire on the same
date as such other patent, notwithstanding section 154.
[(3) For purposes of paragraph (1), the term
``biotechnological process'' means--
[(A) a process of genetically altering or otherwise
inducing a single- or multi-celled organism to--
[(i) express an exogenous nucleotide
sequence,
[(ii) inhibit, eliminate, augment, or alter
expression of an endogenous nucleotide
sequence, or
[(iii) express a specific physiological
characteristic not naturally associated with
said organism;
[(B) cell fusion procedures yielding a cell line
that expresses a specific protein, such as a monoclonal
antibody; and
[(C) a method of using a product produced by a
process defined by subparagraph (A) or (B), or a
combination of subparagraphs (A) and (B).
[(c)(1) Subject matter developed by another person, which
qualifies as prior art only under one or more of subsections
(e), (f), and (g) of section 102 of this title, shall not
preclude patentability under this section where the subject
matter and the claimed invention were, at the time the claimed
invention was made, owned by the same person or subject to an
obligation of assignment to the same person.
[(2) For purposes of this subsection, subject matter
developed by another person and a claimed invention shall be
deemed to have been owned by the same person or subject to an
obligation of assignment to the same person if--
[(A) the claimed invention was made by or on behalf
of parties to a joint research agreement that was in
effect on or before the date the claimed invention was
made;
[(B) the claimed invention was made as a result of
activities undertaken within the scope of the joint
research agreement; and
[(C) the application for patent for the claimed
invention discloses or is amended to disclose the names
of the parties to the joint research agreement.
[(3) For purposes of paragraph (2), the term ``joint
research agreement'' means a written contract, grant, or
cooperative agreement entered into by two or more persons or
entities for the performance of experimental, developmental, or
research work in the field of the claimed invention.
[Sec. 104. Invention made abroad
[(a) In General.--
[(1) Proceedings.--In proceedings in the Patent and
Trademark Office, in the courts, and before any other
competent authority, an applicant for a patent, or a
patentee, may not establish a date of invention by
reference to knowledge or use thereof, or other
activity with respect thereto, in a foreign country
other than a NAFTA country or a WTO member country,
except as provided in sections 119 and 365 of this
title.
[(2) Rights.--If an invention was made by a person,
civil or military--
[(A) while domiciled in the United States,
and serving in any other country in connection
with operations by or on behalf of the United
States,
[(B) while domiciled in a NAFTA country and
serving in another country in connection with
operations by or on behalf of that NAFTA
country, or
[(C) while domiciled in a WTO member
country and serving in another country in
connection with operations by or on behalf of
that WTO member country,
that person shall be entitled to the same rights of
priority in the United States with respect to such
invention as if such invention had been made in the
United States, that NAFTA country, or that WTO member
country, as the case may be.
[(3) Use of information.--To the extent that any
information in a NAFTA country or a WTO member country
concerning knowledge, use, or other activity relevant
to proving or disproving a date of invention has not
been made available for use in a proceeding in the
Patent and Trademark Office, a court, or any other
competent authority to the same extent as such
information could be made available in the United
States, the Director, court, or such other authority
shall draw appropriate inferences, or take other action
permitted by statute, rule, or regulation, in favor of
the party that requested the information in the
proceeding.
[(b) Definitions.--As used in this section--
[(1) the term ``NAFTA country'' has the meaning
given that term in section 2(4) of the North American
Free Trade Agreement Implementation Act; and
[(2) the term ``WTO member country'' has the
meaning given that term in section 2(10) of the Uruguay
Round Agreements Act.]
Sec. 102. Conditions for patentability; novelty
(a) Novelty; Prior Art.--A person shall be entitled to a
patent unless--
(1) the claimed invention was patented, described
in a printed publication, or in public use, on sale, or
otherwise available to the public before the effective
filing date of the claimed invention; or
(2) the claimed invention was described in a patent
issued under section 151, or in an application for
patent published or deemed published under section
122(b), in which the patent or application, as the case
may be, names another inventor and was effectively
filed before the effective filing date of the claimed
invention.
(b) Exceptions.--
(1) Disclosures made 1 year or less before the
effective filing date of the claimed invention.--A
disclosure made 1 year or less before the effective
filing date of a claimed invention shall not be prior
art to the claimed invention under subsection (a)(1)
if--
(A) the disclosure was made by the inventor
or joint inventor or by another who obtained
the subject matter disclosed directly or
indirectly from the inventor or a joint
inventor; or
(B) the subject matter disclosed had,
before such disclosure, been publicly disclosed
by the inventor or a joint inventor or another
who obtained the subject matter disclosed
directly or indirectly from the inventor or a
joint inventor.
(2) Disclosures appearing in applications and
patents.--A disclosure shall not be prior art to a
claimed invention under subsection (a)(2) if--
(A) the subject matter disclosed was
obtained directly or indirectly from the
inventor or a joint inventor;
(B) the subject matter disclosed had,
before such subject matter was effectively
filed under subsection (a)(2), been publicly
disclosed by the inventor or a joint inventor
or another who obtained the subject matter
disclosed directly or indirectly from the
inventor or a joint inventor; or
(C) the subject matter disclosed and the
claimed invention, not later than the effective
filing date of the claimed invention, were
owned by the same person or subject to an
obligation of assignment to the same person.
(c) Common Ownership Under Joint Research Agreements.--
Subject matter disclosed and a claimed invention shall be
deemed to have been owned by the same person or subject to an
obligation of assignment to the same person in applying the
provisions of subsection (b)(2)(C) if--
(1) the subject matter disclosed was developed and
the claimed invention was made by, or on behalf of, 1
or more parties to a joint research agreement that was
in effect on or before the effective filing date of the
claimed invention;
(2) the claimed invention was made as a result of
activities undertaken within the scope of the joint
research agreement; and
(3) the application for patent for the claimed
invention discloses or is amended to disclose the names
of the parties to the joint research agreement.
(d) Patents and Published Applications Effective as Prior
Art.--For purposes of determining whether a patent or
application for patent is prior art to a claimed invention
under subsection (a)(2), such patent or application shall be
considered to have been effectively filed, with respect to any
subject matter described in the patent or application--
(1) if paragraph (2) does not apply, as of the
actual filing date of the patent or the application for
patent; or
(2) if the patent or application for patent is
entitled to claim a right of priority under section
119, 365(a), or 365(b), or to claim the benefit of an
earlier filing date under section 120, 121, or 365(c),
based upon 1 or more prior filed applications for
patent, as of the filing date of the earliest such
application that describes the subject matter.
Sec. 103. Conditions for patentability; non-obvious subject matter
A patent for a claimed invention may not be obtained,
notwithstanding that the claimed invention is not identically
disclosed as set forth in section 102, if the differences
between the claimed invention and the prior art are such that
the claimed invention as a whole would have been obvious before
the effective filing date of the claimed invention to a person
having ordinary skill in the art to which the claimed invention
pertains. Patentability shall not be negated by the manner in
which the invention was made.
CHAPTER 11--APPLICATION FOR PATENT
Sec.
111. Application.
* * * * * * *
[115. Oath of applicant.]
115. Inventor's oath or declaration.
* * * * * * *
123. Micro entity defined.
Sec. 111. Application
(a) In General.--
(1) * * *
(2) Contents.--Such application shall include--
(A) a specification as prescribed by
section 112 [of this title];
(B) a drawing as prescribed by section 113
[of this title]; and
(C) an oath [by the applicant] or
declaration as prescribed by section 115 [of
this title].
(3) Fee and oath or declaration.--The application
must be accompanied by the fee required by law. The fee
and oath or declaration may be submitted after the
specification and any required drawing are submitted,
within such period and under such conditions, including
the payment of a surcharge, as may be prescribed by the
Director.
(4) Failure to submit.--Upon failure to submit the
fee and oath or declaration within such prescribed
period, the application shall be regarded as abandoned,
unless it is shown to the satisfaction of the Director
that the delay in submitting the fee and oath or
declaration was unavoidable or unintentional. The
filing date of an application shall be the date on
which the specification and any required drawing are
received in the Patent and Trademark Office.
(b) Provisional Application.--
(1) Authorization.--A provisional application for
patent shall be made or authorized to be made by the
inventor, except as otherwise provided in this title,
in writing to the Director. Such application shall
include--
(A) a specification as prescribed by [the
first paragraph of section 112 of this title]
section 112(a); and
(B) a drawing as prescribed by section 113
[of this title].
(2) Claim.--A claim, as required by [the second
through fifth paragraphs of section 112,] subsections
(b) through (e) of section 112, shall not be required
in a provisional application.
* * * * * * *
(5) Abandonment.--Notwithstanding the absence of a
claim, upon timely request and as prescribed by the
Director, a provisional application may be treated as
an application filed under subsection (a). Subject to
section 119(e)(3) [of this title], if no such request
is made, the provisional application shall be regarded
as abandoned 12 months after the filing date of such
application and shall not be subject to revival after
such 12-month period.
(6) Other basis for provisional application.--
Subject to all the conditions in this subsection and
section 119(e) [of this title], and as prescribed by
the Director, an application for patent filed under
subsection (a) may be treated as a provisional
application for patent.
(7) No right of priority or benefit of earliest
filing date.--A provisional application shall not be
entitled to the right of priority of any other
application under section 119 or 365(a) [of this title]
or to the benefit of an earlier filing date in the
United States under section 120, 121, or 365(c) [of
this title].
(8) Applicable provisions.--The provisions of this
title relating to applications for patent shall apply
to provisional applications for patent, except as
otherwise provided, and except that provisional
applications for patent shall not be subject to
[sections 115, 131, 135, and 157 of this title]
sections 131 and 135.
Sec. 112. Specification
(a) In General.--The specification shall contain a written
description of the invention, and of the manner and process of
making and using it, in such full, clear, concise, and exact
terms as to enable any person skilled in the art to which it
pertains, or with which it is most nearly connected, to make
and use the same, and shall set forth the best mode
contemplated by the inventor [of carrying out his invention] or
joint inventor of carrying out the invention.
(b) Conclusion.--The specification shall conclude with one
or more claims particularly pointing out and distinctly
claiming the subject matter which the [applicant regards as his
invention] inventor or a joint inventor regards as the
invention.
(c) Form.--A claim may be written in independent or, if the
nature of the case admits, in dependent or multiple dependent
form.
[Subject to the following paragraph,] (d) Reference in
Dependent Forms.--Subject to subsection (e), a claim in
dependent form shall contain a reference to a claim previously
set forth and then specify a further limitation of the subject
matter claimed. A claim in dependent form shall be construed to
incorporate by reference all the limitations of the claim to
which it refers.
(e) Reference in Multiple Dependent Form.--A claim in
multiple dependent form shall contain a reference, in the
alternative only, to more than one claim previously set forth
and then specify a further limitation of the subject matter
claimed. A multiple dependent claim shall not serve as a basis
for any other multiple dependent claim. A multiple dependent
claim shall be construed to incorporate by reference all the
limitations of the particular claim in relation to which it is
being considered.
(f) Element in Claim for a Combination.--An element in a
claim for a combination may be expressed as a means or step for
performing a specified function without the recital of
structure, material, or acts in support thereof, and such claim
shall be construed to cover the corresponding structure,
material, or acts described in the specification and
equivalents thereof.
* * * * * * *
[Sec. 115. Oath of applicant
[The applicant shall make oath that he believes himself to
be the original and first inventor of the process, machine,
manufacture, or composition of matter, or improvement thereof,
for which he solicits a patent; and shall state of what country
he is a citizen. Such oath may be made before any person within
the United States authorized by law to administer oaths, or,
when, made in a foreign country, before any diplomatic or
consular officer of the United States authorized to administer
oaths, or before any officer having an official seal and
authorized to administer oaths in the foreign country in which
the applicant may be, whose authority is proved by certificate
of a diplomatic or consular officer of the United States, or
apostille of an official designated by a foreign country which,
by treaty or convention, accords like effect to apostilles of
designated officials in the United States, and such oath shall
be valid if it complies with the laws of the state or country
where made. When the application is made as provided in this
title by a person other than the inventor, the oath may be so
varied in form that it can be made by him. For purposes of this
section, a consular officer shall include any United States
citizen serving overseas, authorized to perform notarial
functions pursuant to section 1750 of the Revised Statutes, as
amended (22 U.S.C. 4221).]
Sec. 115. Inventor's oath or declaration
(a) Naming the Inventor; Inventor's Oath or Declaration.--
An application for patent that is filed under section 111(a) or
commences the national stage under section 371 shall include,
or be amended to include, the name of the inventor for any
invention claimed in the application. Except as otherwise
provided in this section, each individual who is the inventor
or a joint inventor of a claimed invention in an application
for patent shall execute an oath or declaration in connection
with the application.
(b) Required Statements.--An oath or declaration under
subsection (a) shall contain statements that--
(1) the application was made or was authorized to
be made by the affiant or declarant; and
(2) such individual believes himself or herself to
be the original inventor or an original joint inventor
of a claimed invention in the application.
(c) Additional Requirements.--The Director may specify
additional information relating to the inventor and the
invention that is required to be included in an oath or
declaration under subsection (a).
(d) Substitute Statement.--
(1) In general.--In lieu of executing an oath or
declaration under subsection (a), the applicant for
patent may provide a substitute statement under the
circumstances described in paragraph (2) and such
additional circumstances that the Director may specify
by regulation.
(2) Permitted circumstances.--A substitute
statement under paragraph (1) is permitted with respect
to any individual who--
(A) is unable to file the oath or
declaration under subsection (a) because the
individual--
(i) is deceased;
(ii) is under legal incapacity; or
(iii) cannot be found or reached
after diligent effort; or
(B) is under an obligation to assign the
invention but has refused to make the oath or
declaration required under subsection (a).
(3) Contents.--A substitute statement under this
subsection shall--
(A) identify the individual with respect to
whom the statement applies;
(B) set forth the circumstances
representing the permitted basis for the filing
of the substitute statement in lieu of the oath
or declaration under subsection (a); and
(C) contain any additional information,
including any showing, required by the
Director.
(e) Making Required Statements in Assignment of Record.--An
individual who is under an obligation of assignment of an
application for patent may include the required statements
under subsections (b) and (c) in the assignment executed by the
individual, in lieu of filing such statements separately.
(f) Time for Filing.--A notice of allowance under section
151 may be provided to an applicant for patent only if the
applicant for patent has filed each required oath or
declaration under subsection (a) or has filed a substitute
statement under subsection (d) or recorded an assignment
meeting the requirements of subsection (e).
(g) Earlier-Filed Application Containing Required
Statements or Substitute Statement.--
(1) Exception.--The requirements under this section
shall not apply to an individual with respect to an
application for patent in which the individual is named
as the inventor or a joint inventor and who claims the
benefit under section 120, 121, or 365(c) of the filing
of an earlier-filed application, if--
(A) an oath or declaration meeting the
requirements of subsection (a) was executed by
the individual and was filed in connection with
the earlier-filed application;
(B) a substitute statement meeting the
requirements of subsection (d) was filed in
connection with the earlier filed application
with respect to the individual; or
(C) an assignment meeting the requirements
of subsection (e) was executed with respect to
the earlier-filed application by the individual
and was recorded in connection with the
earlier-filed application.
(2) Copies of oaths, declarations, statements, or
assignments.--Notwithstanding paragraph (1), the
Director may require that a copy of the executed oath
or declaration, the substitute statement, or the
assignment filed in connection with the earlier-filed
application be included in the later-filed application.
(h) Supplemental and Corrected Statements; Filing
Additional Statements.--
(1) In general.--Any person making a statement
required under this section may withdraw, replace, or
otherwise correct the statement at any time. If a
change is made in the naming of the inventor requiring
the filing of 1 or more additional statements under
this section, the Director shall establish regulations
under which such additional statements may be filed.
(2) Supplemental statements not required.--If an
individual has executed an oath or declaration meeting
the requirements of subsection (a) or an assignment
meeting the requirements of subsection (e) with respect
to an application for patent, the Director may not
thereafter require that individual to make any
additional oath, declaration, or other statement
equivalent to those required by this section in
connection with the application for patent or any
patent issuing thereon.
(3) Savings clause.--A patent shall not be invalid
or unenforceable based upon the failure to comply with
a requirement under this section if the failure is
remedied as provided under paragraph (1).
(i) Acknowledgment of Penalties.--Any declaration or
statement filed pursuant to this section shall contain an
acknowledgment that any willful false statement made in such
declaration or statement is punishable under section 1001 of
title 18 by fine or imprisonment of not more than 5 years, or
both.
Sec. 116. Inventors
(a) Joint Inventions.--When an invention is made by two or
more persons jointly, they shall apply for patent jointly and
each make the required oath, except as otherwise provided in
this title. Inventors may apply for a patent jointly even
though (1) they did not physically work together or at the same
time, (2) each did not make the same type or amount of
contribution, or (3) each did not make a contribution to the
subject matter of every claim of the patent.
(b) Omitted Inventor.--If a joint inventor refuses to join
in an application for patent or cannot be found or reached
after diligent effort, the application may be made by the other
inventor on behalf of himself and the omitted inventor. The
Director, on proof of the pertinent facts and after such notice
to the omitted inventor as he prescribes, may grant a patent to
the inventor making the application, subject to the same rights
which the omitted inventor would have had if he had been
joined. The omitted inventor may subsequently join in the
application.
(c) Correction of Errors in Application.--Whenever through
error a person is named in an application for patent as the
inventor, or through error an inventor is not named in an
application, [and such error arose without any deceptive
intention on his part,] the Director may permit the application
to be amended accordingly, under such terms as he prescribes.
* * * * * * *
[Sec. 118. Filing by other than inventor
[Whenever an inventor refuses to execute an application for
patent, or cannot be found or reached after diligent effort, a
person to whom the inventor has assigned or agreed in writing
to assign the invention or who otherwise shows sufficient
proprietary interest in the matter justifying such action, may
make application for patent on behalf of and as agent for the
inventor on proof of the pertinent facts and a showing that
such action is necessary to preserve the rights of the parties
or to prevent irreparable damage; and the Director may grant a
patent to such inventor upon such notice to him as the Director
deems sufficient, and on compliance with such regulations as he
prescribes.]
Sec. 118. Filing by other than inventor
A person to whom the inventor has assigned or is under an
obligation to assign the invention may make an application for
patent. A person who otherwise shows sufficient proprietary
interest in the matter may make an application for patent on
behalf of and as agent for the inventor on proof of the
pertinent facts and a showing that such action is appropriate
to preserve the rights of the parties. If the Director grants a
patent on an application filed under this section by a person
other than the inventor, the patent shall be granted to the
real party in interest and upon such notice to the inventor as
the Director considers to be sufficient.
Sec. 119. Benefit of earlier filing date; right of priority
(a) An application for patent for an invention filed in
this country by any person who has, or whose legal
representatives or assigns have, previously regularly filed an
application for a patent for the same invention in a foreign
country which affords similar privileges in the case of
applications filed in the United States or to citizens of the
United States, or in a WTO member country, shall have the same
effect as the same application would have if filed in this
country on the date on which the application for patent for the
same invention was first filed in such foreign country, if the
application in this country is filed within twelve months from
the earliest date on which such foreign application was filed[;
but no patent shall be granted on any application for patent
for an invention which had been patented or described in a
printed publication in any country more than one year before
the date of the actual filing of the application in this
country, or which had been in public use or on sale in this
country more than one year prior to such filing].
* * * * * * *
(e)(1) An application for patent filed under section 111(a)
or section 363 [of this title] for an invention disclosed in
the manner provided by [the first paragraph of section 112 of
this title] section 112(a) (other than the requirement to
disclose the best mode) in a provisional application filed
under section 111(b) [of this title], by an inventor or
inventors named in the provisional application, shall have the
same effect, as to such invention, as though filed on the date
of the provisional application filed under section 111(b) [of
this title], if the application for patent filed under section
111(a) or section 363 [of this title] is filed not later than
12 months after the date on which the provisional application
was filed and if it contains or is amended to contain a
specific reference to the provisional application. No
application shall be entitled to the benefit of an earlier
filed provisional application under this subsection unless an
amendment containing the specific reference to the earlier
filed provisional application is submitted at such time during
the pendency of the application as required by the Director.
The Director may consider the failure to submit such an
amendment within that time period as a waiver of any benefit
under this subsection. The Director may establish procedures,
including the payment of a surcharge, to accept an
unintentionally delayed submission of an amendment under this
subsection during the pendency of the application.
(2) A provisional application filed under section 111(b)
[of this title] may not be relied upon in any proceeding in
the Patent and Trademark Office unless the fee set forth in
subparagraph (A) or (C) of section 41(a)(1) [of this title] has
been paid.
* * * * * * *
(g) As used in this section--
(1) the term ``WTO member country'' has the same
meaning as the term is defined in section 104(b)(2)
[of this title]; and
* * * * * * *
Sec. 120. Benefit of earlier filing date in the United States
An application for patent for an invention disclosed in the
manner provided by [the first paragraph of section 112 of this
title] section 112(a) (other than the requirement to disclose
the best mode) in an application previously filed in the United
States, or as provided by section 363 [of this title], [which
is filed by an inventor or inventors named] which names an
inventor or joint inventor in the previously filed application
shall have the same effect, as to such invention, as though
filed on the date of the prior application, if filed before the
patenting or abandonment of or termination of proceedings on
the first application or on an application similarly entitled
to the benefit of the filing date of the first application and
if it contains or is amended to contain a specific reference to
the earlier filed application. No application shall be entitled
to the benefit of an earlier filed application under this
section unless an amendment containing the specific reference
to the earlier filed application is submitted at such time
during the pendency of the application as required by the
Director. The Director may consider 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 payment of a surcharge, to accept an
unintentionally delayed submission of an amendment under this
section.
Sec. 121. Divisional applications
If two or more independent and distinct inventions are
claimed in one application, the Director may require the
application to be restricted to one of the inventions. If the
other invention is made the subject of a divisional application
which complies with the requirements of section 120 [of this
title] it shall be entitled to the benefit of the filing date
of the original application. A patent issuing on an application
with respect to which a requirement for restriction under this
section has been made, or on an application filed as a result
of such a requirement, shall not be used as a reference either
in the Patent and Trademark Office or in the courts against a
divisional application or against the original application or
any patent issued on either of them, if the divisional
application is filed before the issuance of the patent on the
other application. [If a divisional application is directed
solely to subject matter described and claimed in the original
application as filed, the Director may dispense with signing
and execution by the inventor.] The validity of a patent shall
not be questioned for failure of the Director to require the
application to be restricted to one invention.
Sec. 122. Confidential status of applications; publication of patent
applications
(a) * * *
(b) Publication.--
(1) * * *
(2) Exceptions.--(A) An application shall not be
published if that application is--
(i) * * *
(ii) subject to a secrecy order under
section 181 [of this title];
(iii) a provisional application filed under
section 111(b) [of this title]; or
(iv) an application for a design patent
filed under chapter 16 [of this title].
* * * * * * *
(d) National Security.--No application for patent shall be
published under subsection (b)(1) if the publication or
disclosure of such invention would be detrimental to the
national security. The Director shall establish appropriate
procedures to ensure that such applications are promptly
identified and the secrecy of such inventions is maintained in
accordance with chapter 17 [of this title].
(e) Preissuance Submissions by Third Parties.--
(1) In general.--Any third party may submit for
consideration and inclusion in the record of a patent
application, any patent, published patent application,
or other printed publication of potential relevance to
the examination of the application, if such submission
is made in writing before the earlier of--
(A) the date a notice of allowance under
section 151 is given or mailed in the
application for patent; or
(B) the later of--
(i) 6 months after the date on
which the application for patent is
first published under section 122 by
the Office, or
(ii) the date of the first
rejection under section 132 of any
claim by the examiner during the
examination of the application for
patent.
(2) Other requirements.--Any submission under
paragraph (1) shall--
(A) set forth a concise description of the
asserted relevance of each submitted document;
(B) be accompanied by such fee as the
Director may prescribe; and
(C) include a statement by the person
making such submission affirming that the
submission was made in compliance with this
section.
Sec. 123. Micro entity defined
(a) In General.--For purposes of this title, the term
``micro entity'' means an applicant who makes a certification
that the applicant--
(1) qualifies as a small entity, as defined in
regulations issued by the Director;
(2) has not been named as an inventor on more than
4 previously filed patent applications, other than
applications filed in another country, provisional
applications under section 111(b), or international
applications filed under the treaty defined in section
351(a) for which the basic national fee under section
41(a) was not paid;
(3) did not, in the calendar year preceding the
calendar year in which the examination fee for the
application is being paid, have a gross income, as
defined in section 61(a) of the Internal Revenue Code
of 1986, exceeding 3 times the median household income
for that preceding calendar year, as reported by the
Bureau of the Census; and
(4) has not assigned, granted, or conveyed, and is
not under an obligation by contract or law to assign,
grant, or convey, a license or other ownership interest
in the application concerned to an entity that, in the
calendar year preceding the calendar year in which the
examination fee for the application is being paid, had
a gross income, as defined in section 61(a) of the
Internal Revenue Code of 1986, exceeding 3 times the
median household income for that preceding calendar
year, as reported by the Bureau of the Census.
(b) Applications Resulting From Prior Employment.--An
applicant is not considered to be named on a previously filed
application for purposes of subsection (a)(2) if the applicant
has assigned, or is under an obligation by contract or law to
assign, all ownership rights in the application as the result
of the applicant's previous employment.
(c) Foreign Currency Exchange Rate.--If an applicant's or
entity's gross income in the preceding calendar year is not in
United States dollars, the average currency exchange rate, as
reported by the Internal Revenue Service, during that calendar
year shall be used to determine whether the applicant's or
entity's gross income exceeds the threshold specified in
paragraphs (3) or (4) of subsection (a).
(d) Public Institutions of Higher Education.--
(1) In general.--For purposes of this section, a
micro entity shall include an applicant who certifies
that--
(A) the applicant's employer, from which
the applicant obtains the majority of the
applicant's income, is an institution of higher
education, as defined in section 101 of the
Higher Education Act of 1965 (20 U.S.C. 1001),
that is a public institution; or
(B) the applicant has assigned, granted,
conveyed, or is under an obligation by contract
or law to assign, grant, or convey, a license
or other ownership interest in the particular
application to such public institution.
(2) Director's authority.--The Director may, in the
Director's discretion, impose income limits, annual
filing limits, or other limits on who may qualify as a
micro entity pursuant to this subsection if the
Director determines that such additional limits are
reasonably necessary to avoid an undue impact on other
patent applicants or owners or are otherwise reasonably
necessary and appropriate. At least 3 months before any
limits proposed to be imposed pursuant to this
paragraph take effect, the Director shall inform the
Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of
the Senate of any such proposed limits.
CHAPTER 12--EXAMINATION OF APPLICATION
Sec.
131. Examination of application.
* * * * * * *
[134. Appeal to the Board of Patent Appeals and Interferences.
[135. Interferences.]
134. Appeal to the Patent Trial and Appeal Board.
135. Derivation proceedings.
* * * * * * *
Sec. 132. Notice of rejection; reexamination
(a) * * *
(b) The Director shall prescribe regulations to provide for
the continued examination of applications for patent at the
request of the applicant. The Director may establish
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. 134. Appeal to the Board of Patent Appeals and Interferences]
Sec. 134. Appeal to the Patent Trial and Appeal Board
(a) Patent Applicant.--An applicant for a patent, any of
whose claims has been twice rejected, may appeal from the
decision of the primary examiner to the [Board of Patent
Appeals and Interferences] Patent Trial and Appeal Board,
having once paid the fee for such appeal.
(b) Patent Owner.--A patent owner in [any reexamination
proceeding] a reexamination may appeal from the final rejection
of any claim by the a primary examiner to the [Board of Patent
Appeals and Interferences] Patent Trial and Appeal Board,
having once paid the fee for such appeal.
[(c) Third-Party.--A third-party requester in an inter
partes proceeding may appeal to the Patent Trial and Appeal
Board 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.]
[Sec. 135. Interferences
[(a) Whenever an application is made for a patent which, in
the opinion of the Director, would interfere with any pending
application, or with any unexpired patent, an interference may
be declared and the Director shall give notice of such
declaration to the applicants, or applicant and patentee, as
the case may be. The Board of Patent Appeals and Interferences
shall determine questions of priority of the inventions and may
determine questions of patentability. Any final decision, if
adverse to the claim of an applicant, shall constitute the
final refusal by the Patent and Trademark Office of the claims
involved, and the Director may issue a patent to the applicant
who is adjudged the prior inventor. A final judgment adverse to
a patentee from which no appeal or other review has been or can
be taken or had shall constitute cancellation of the claims
involved in the patent, and notice of such cancellation shall
be endorsed on copies of the patent distributed after such
cancellation by the Patent and Trademark Office.
[(b)(1) A claim which is the same as, or for the same or
substantially the same subject matter as, a claim of an issued
patent may not be made in any application unless such a claim
is made prior to one year from the date on which the patent was
granted.
[(2) A claim which is the same as, or for the same or
substantially the same subject matter as, a claim of an
application published under section 122(b) of this title may be
made in an application filed after the application is published
only if the claim is made before 1 year after the date on which
the application is published.
[(c) Any agreement or understanding between parties to an
interference, including any collateral agreements referred to
therein, made in connection with or in contemplation of the
termination of the interference, shall be in writing and a true
copy thereof filed in the Patent and Trademark Office before
the termination of the interference as between the said parties
to the agreement or understanding. If any party filing the same
so requests, the copy shall be kept separate from the file of
the interference, and made available only to Government
agencies on written request, or to any person on a showing of
good cause. Failure to file the copy of such agreement or
understanding shall render permanently unenforceable such
agreement or understanding and any patent of such parties
involved in the interference or any patent subsequently issued
on any application of such parties so involved. The Director
may, however, on a showing of good cause for failure to file
within the time prescribed, permit the filing of the agreement
or understanding during the six-month period subsequent to the
termination of the interference as between the parties to the
agreement or understanding.The Director shall give notice to
the parties or their attorneys of record, a reasonable time
prior to said termination, of the filing requirement of this
section. If the Director gives such notice at a later time,
irrespective of the right to file such agreement or
understanding within the six-month period on a showing of good
cause, the parties may file such agreement or understanding
within sixty days of the receipt of such notice.Any
discretionary action of the Director under this subsection
shall be reviewable under section 10 of the Administrative
Procedure Act.
[(d) Parties to a patent interference, within such time as
may be specified by the Director by regulation, may determine
such contest or any aspect thereof by arbitration. Such
arbitration shall be governed by the provisions of title 9 to
the extent such title is not inconsistent with this section.
The parties shall give notice of any arbitration award to the
Director, and such award shall, as between the parties to the
arbitration, be dispositive of the issues to which it relates.
The arbitration award shall be unenforceable until such notice
is given. Nothing in this subsection shall preclude the
Director from determining patentability of the invention
involved in the interference.]
Sec. 135. Derivation proceedings
(a) Institution of Proceeding.--An applicant for patent may
file a petition to institute a derivation proceeding in the
Office. The petition shall set forth with particularity the
basis for finding that an inventor named in an earlier
application derived the claimed invention from an inventor
named in the petitioner's application and, without
authorization, the earlier application claiming such invention
was filed. Any such petition may be filed only within the 1-
year period beginning on the date of the first publication of a
claim to an invention that is the same or substantially the
same as the earlier application's claim to the invention, shall
be made under oath, and shall be supported by substantial
evidence. Whenever the Director determines that a petition
filed under this subsection demonstrates that the standards for
instituting a derivation proceeding are met, the Director may
institute a derivation proceeding. The determination by the
Director whether to institute a derivation proceeding shall be
final and nonappealable.
(b) Determination by Patent Trial and Appeal Board.--In a
derivation proceeding instituted under subsection (a), the
Patent Trial and Appeal Board shall determine whether an
inventor named in the earlier application derived the claimed
invention from an inventor named in the petitioner's
application and, without authorization, the earlier application
claiming such invention was filed. The Director shall prescribe
regulations setting forth standards for the conduct of
derivation proceedings.
(c) Deferral of Decision.--The Patent Trial and Appeal
Board may defer action on a petition for a derivation
proceeding until the expiration of the 3-month period beginning
on the date on which the Director issues a patent that includes
the claimed invention that is the subject of the petition. The
Patent Trial and Appeal Board also may defer action on a
petition for a derivation proceeding, or stay the proceeding
after it has been instituted, until the termination of a
proceeding under chapter 30, 31, or 32 involving the patent of
the earlier applicant.
(d) Effect of Final Decision.--The final decision of the
Patent Trial and Appeal Board, if adverse to claims in an
application for patent, shall constitute the final refusal by
the Office on those claims. The final decision of the Patent
Trial and Appeal Board, if adverse to claims in a patent,
shall, if no appeal or other review of the decision has been or
can be taken or had, constitute cancellation of those claims,
and notice of such cancellation shall be endorsed on copies of
the patent distributed after such cancellation.
(e) Settlement.--Parties to a proceeding instituted under
subsection (a) may terminate the proceeding by filing a written
statement reflecting the agreement of the parties as to the
correct inventors of the claimed invention in dispute. Unless
the Patent Trial and Appeal Board finds the agreement to be
inconsistent with the evidence of record, if any, it shall take
action consistent with the agreement. Any written settlement or
understanding of the parties shall be filed with the Director.
At the request of a party to the proceeding, the agreement or
understanding shall be treated as business confidential
information, shall be kept separate from the file of the
involved patents or applications, and shall be made available
only to Government agencies on written request, or to any
person on a showing of good cause.
(f) Arbitration.--Parties to a proceeding instituted under
subsection (a) may, within such time as may be specified by the
Director by regulation, determine such contest or any aspect
thereof by arbitration. Such arbitration shall be governed by
the provisions of title 9, to the extent such title is not
inconsistent with this section. The parties shall give notice
of any arbitration award to the Director, and such award shall,
as between the parties to the arbitration, be dispositive of
the issues to which it relates. The arbitration award shall be
unenforceable until such notice is given. Nothing in this
subsection shall preclude the Director from determining the
patentability of the claimed inventions involved in the
proceeding.
* * * * * * *
CHAPTER 13--REVIEW OF PATENT AND TRADEMARK OFFICE DECISIONS
Sec.
141. Appeal to Court of Appeals for the Federal Circuit.
* * * * * * *
[146. Civil action in case of interference.]
146. Civil action in case of derivation proceeding.
[Sec. 141. Appeal to Court of Appeals for the Federal Circuit
[An applicant dissatisfied with the decision in an appeal
to the Board of Patent Appeals and Interferences under section
134 of this title may appeal the decision to the United States
Court of Appeals for the Federal Circuit. By filing such an
appeal the applicant waives his or her right to proceed under
section 145 of this title. A patent owner, or a third-party
requester in an inter partes reexamination proceeding, who is
in any reexamination proceeding 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. A
party to an interference dissatisfied with the decision of the
Board of Patent Appeals and Interferences on the interference
may appeal the decision to the United States Court of Appeals
for the Federal Circuit, but such appeal shall be dismissed if
any adverse party to such interference, within twenty days
after the appellant has filed notice of appeal in accordance
with section 142 of this title, files notice with the Director
that the party elects to have all further proceedings conducted
as provided in section 146 of this title. If the appellant does
not, within thirty days after the filing of such notice by the
adverse party, file a civil action under section 146, the
decision appealed from shall govern the further proceedings in
the case.]
Sec. 141. Appeal to Court of Appeals for the Federal Circuit
(a) Examinations.--An applicant who is dissatisfied with
the final decision in an appeal to the Patent Trial and Appeal
Board under section 134(a) may appeal the Board's decision to
the United States Court of Appeals for the Federal Circuit. By
filing such an appeal, the applicant waives his or her right to
proceed under section 145.
(b) Reexaminations.--A patent owner who is dissatisfied
with the final decision in an appeal of a reexamination to the
Patent Trial and Appeal Board under section 134(b) may appeal
the Board's decision only to the United States Court of Appeals
for the Federal Circuit.
(c) Post-Grant and Inter Partes Reviews.--A party to an
inter partes review or a post-grant review who is dissatisfied
with the final written decision of the Patent Trial and Appeal
Board under section 318(a) or 328(a) (as the case may be) may
appeal the Board's decision only to the United States Court of
Appeals for the Federal Circuit.
(d) Derivation Proceedings.--A party to a derivation
proceeding who is dissatisfied with the final decision of the
Patent Trial and Appeal Board in the proceeding may appeal the
decision to the United States Court of Appeals for the Federal
Circuit, but such appeal shall be dismissed if any adverse
party to such derivation proceeding, within 20 days after the
appellant has filed notice of appeal in accordance with section
142, files notice with the Director that the party elects to
have all further proceedings conducted as provided in section
146. If the appellant does not, within 30 days after the filing
of such notice by the adverse party, file a civil action under
section 146, the Board's decision shall govern the further
proceedings in the case.
* * * * * * *
Sec. 143. Proceedings on appeal
With respect to an appeal described in section 142 [of this
title], the Director shall transmit to the United States Court
of Appeals for the Federal Circuit a certified list of the
documents comprising the record in the Patent and Trademark
Office. The court may request that the Director forward the
original or certified copies of such documents during pendency
of the appeal. In an ex parte case or any reexamination case,
the Director shall submit to the court in writing the grounds
for the decision of the Patent and Trademark Office, addressing
all the issues involved in the appeal. [The court shall, before
hearing an appeal, give notice of the time and place of the
hearing to the Director and the parties in the appeal. The
court shall, before hearing an appeal, give notice of the time
and place of the hearing to the Director and the parties in the
appeal] In an ex parte case, the Director shall submit to the
court in writing the grounds for the decision of the Patent and
Trademark Office, addressing all of the issues raised in the
appeal. The Director shall have the right to intervene in an
appeal from a decision entered by the Patent Trial and Appeal
Board in a derivation proceeding under section 135 or in an
inter partes or post-grant review under chapter 31 or 32.
* * * * * * *
Sec. 145. Civil action to obtain patent
An applicant dissatisfied with the decision of the [Board
of Patent Appeals and Interferences] Patent Trial and Appeal
Board in an appeal under section 134(a) [of this title] may,
unless appeal has been taken to the United States Court of
Appeals for the Federal Circuit, have remedy by civil action
against the Director in the [United States District Court for
the District of Columbia] United States District Court for the
Eastern District of Virginia if commenced within such time
after such decision, not less than sixty days, as the Director
appoints. The court may adjudge that such applicant is entitled
to receive a patent for his invention, as specified in any of
his claims involved in the decision of the [Board of Patent
Appeals and Interferences] Patent Trial and Appeal Board, as
the facts in the case may appear and such adjudication shall
authorize the Director to issue such patent on compliance with
the requirements of law. All the expenses of the proceedings
shall be paid by the applicant.
[Sec. 146. Civil action in case of interference]
Sec. 146. Civil action in case of derivation proceeding
Any party to [an interference] a derivation proceeding
dissatisfied with the decision of the [Board of Patent Appeals
and Interferences] Patent Trial and Appeal Board on [the
interference] the derivation proceeding, may have remedy by
civil action, if commenced within such time after such
decision, not less than sixty days, as the Director appoints or
as provided in section 141 [of this title], unless he has
appealed to the United States Court of Appeals for the Federal
Circuit, and such appeal is pending or has been decided. In
such suits the record in the Patent and Trademark Office shall
be admitted on motion of either party upon the terms and
conditions as to costs, expenses, and the further cross-
examination of the witnesses as the court imposes, without
prejudice to the right of the parties to take further
testimony. The testimony and exhibits of the record in the
Patent and Trademark Office when admitted shall have the same
effect as if originally taken and produced in the suit.
Such suit may be instituted against the party in interest
as shown by the records of the Patent and Trademark Office at
the time of the decision complained of, but any party in
interest may become a party to the action. If there be adverse
parties residing in a plurality of districts not embraced
within the same state, or an adverse party residing in a
foreign country, the [United States District Court for the
District of Columbia] United States District Court for the
Eastern District of Virginia shall have jurisdiction and may
issue summons against the adverse parties directed to the
marshal of any district in which any adverse party resides.
Summons against adverse parties residing in foreign countries
may be served by publication or otherwise as the court directs.
The Director shall not be a necessary party but he shall be
notified of the filing of the suit by the clerk of the court in
which it is filed and shall have the right to intervene.
Judgment of the court in favor of the right of an applicant to
a patent shall authorize the Director to issue such patent on
the filing in the Patent and Trademark Office of a certified
copy of the judgment and on compliance with the requirements of
law.
* * * * * * *
CHAPTER 14--ISSUE OF PATENT
Sec.
151. Issue of patent.
* * * * * * *
[157. Statutory invention registration.]
* * * * * * *
Sec. 154. Contents and term of patent; provisional rights
(a) In General.--
(1) * * *
(2) Term.--Subject to the payment of fees under
this title, such grant shall be for a term beginning on
the date on which the patent issues and ending 20 years
from the date on which the application for the patent
was filed in the United States or, if the application
contains a specific reference to an earlier filed
application or applications under section 120, 121, or
365(c) [of this title], from the date on which the
earliest such application was filed.
(3) Priority.--Priority under section 119, 365(a),
or 365(b) [of this title] shall not be taken into
account in determining the term of a patent.
* * * * * * *
(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) provide at least one of the
notifications under section 132 [of
this title] or a notice of allowance
under section 151 [of this title] not
later than 14 months after--
(I) the date on which an
application was filed under
section 111(a) [of this title];
or
(II) the date on which an
international application
fulfilled the requirements of
section 371 [of this title];
* * * * * * *
(iii) act on an application within
4 months after the date of a decision
by the [Board of Patent Appeals and
Interferences] Patent Trial and Appeal
Board 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 remain in the
application; or
* * * * * * *
the term of the patent shall be extended 1 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 United States 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) * * *
(ii) any time consumed by a
proceeding under section 135(a), any
time consumed by the imposition of an
order under section 181, or any time
consumed by appellate review by the
[Board of Patent Appeals and
Interferences] Patent Trial and Appeal
Board or by a Federal court; or
* * * * * * *
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 orders, and
appeals.--]
(C) Guarantee of adjustments for delays due
to derivation proceedings, secrecy orders, and
appeals.--Subject to the limitations under
paragraph (2), if the issue of an original
patent is delayed due to--
(i) * * *
* * * * * * *
(iii) appellate review by the
[Board of Patent Appeals and
Interferences] Patent Trial and Appeal
Board or by a Federal court in a case
in which the patent was issued under a
decision in the review reversing an
adverse determination of patentability,
the term of the patent shall be extended 1 day
for each day of the pendency of the proceeding,
order, or review, as the case may be.
* * * * * * *
(4) Appeal of patent term adjustment
determination.--
(A) An applicant dissatisfied with a
determination made by the Director under
paragraph (3) shall have remedy by a civil
action against the Director filed in the
[United States District Court for the District
of Columbia] United States District Court for
the Eastern District of Virginia 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.
* * * * * * *
(c) Continuation.--
(1) * * *
(2) Remedies.--The remedies of sections 283, 284,
and 285 [of this title] shall not apply to acts which--
(A) * * *
* * * * * * *
(3) Remuneration.--The acts referred to in
paragraph (2) may be continued only upon the payment of
an equitable remuneration to the patentee that is
determined in an action brought under chapter 28 and
chapter 29 (other than those provisions excluded by
paragraph (2)) [of this title].
* * * * * * *
Sec. 155A. Patent term restoration
(a) Notwithstanding section 154 [of this title], the term
of each of the following patents shall be extended in
accordance with this section:
(1) * * *
* * * * * * *
Sec. 156. Extension of patent term
(a) * * *
* * * * * * *
(d)(1) To obtain an extension of the term of a patent under
this section, the owner of record of the patent or its agent
shall submit an application to the Director. Except as provided
in paragraph (5), such an application may only be submitted
within the sixty-day period beginning on the date the product
received permission under the provision of law under which the
applicable regulatory review period occurred for commercial
marketing or use. The application shall contain--
(A) * * *
* * * * * * *
For purposes of determining the date on which a product
receives permission under the second sentence of this
paragraph, if such permission is transmitted after 4:30 P.M.,
Eastern Time, on a business day, or is transmitted on a day
that is not a business day, the product shall be deemed to
receive such permission on the next business day. For purposes
of the preceding sentence, the term ``business day'' means any
Monday, Tuesday, Wednesday, Thursday, or Friday, excluding any
legal holiday under section 6103 of title 5.
* * * * * * *
[Sec. 157. Statutory invention registration
[(a) Notwithstanding any other provision of this title, the
Director is authorized to publish a statutory invention
registration containing the specification and drawings of a
regularly filed application for a patent without examination if
the applicant--
[(1) meets the requirements of section 112 of this
title;
[(2) has complied with the requirements for
printing, as set forth in regulations of the Director;
[(3) waives the right to receive a patent on the
invention within such period as may be prescribed by
the Director; and
[(4) pays application, publication, and other
processing fees established by the Director.
If an interference is declared with respect to such an
application, a statutory invention registration may not be
published unless the issue of priority of invention is finally
determined in favor of the applicant.
[(b) The waiver under subsection (a)(3) of this section by
an applicant shall take effect upon publication of the
statutory invention registration.
[(c) A statutory invention registration published pursuant
to this section shall have all of the attributes specified for
patents in this title except those specified in section 183 and
sections 271 through 289 of this title. A statutory invention
registration shall not have any of the attributes specified for
patents in any other provision of law other than this title. A
statutory invention registration published pursuant to this
section shall give appropriate notice to the public, pursuant
to regulations which the Director shall issue, of the preceding
provisions of this subsection. The invention with respect to
which a statutory invention certificate is published is not a
patented invention for purposes of section 292 of this title.
[(d) The Director shall report to the Congress annually on
the use of statutory invention registrations. Such report shall
include an assessment of the degree to which agencies of the
Federal Government are making use of the statutory invention
registration system, the degree to which it aids the management
of federally developed technology, and an assessment of the
cost savings to the Federal Government of the use of such
procedures.]
* * * * * * *
CHAPTER 15--PLANT PATENTS
* * * * * * *
Sec. 162. Description, claim
No plant patent shall be declared invalid for noncompliance
with section 112 [of this title] if the description is as
complete as is reasonably possible.
The claim in the specification shall be in formal terms to
the plant shown and described.
* * * * * * *
CHAPTER 16--DESIGNS
* * * * * * *
Sec. 172. Right of priority
The right of priority provided for by subsections (a)
through (d) of section 119 [of this title and the time
specified in section 102(d)] shall be six months in the case
of designs. The right of priority provided for by section
119(e) [of this title] shall not apply to designs.
* * * * * * *
CHAPTER 17--SECRECY OF CERTAIN INVENTIONS AND FILING APPLICATIONS IN
FOREIGN COUNTRY
* * * * * * *
Sec. 182. Abandonment of invention for unauthorized disclosure
The invention disclosed in an application for patent
subject to an order made pursuant to section 181 [of this
title] may be held abandoned upon its being established by the
Commissioner of Patents that in violation of said order the
invention has been published or disclosed or that an
application for a patent therefor has been filed in a foreign
country by the inventor, his successors, assigns, or legal
representatives, or anyone in privity with him or them, without
the consent of the Commissioner of Patents. The abandonment
shall be held to have occurred as of the time of violation. The
consent of the Commissioner of Patents shall not be given
without the concurrence of the heads of the departments and the
chief officers of the agencies who caused the order to be
issued. A holding of abandonment shall constitute forfeiture by
the applicant, his successors, assigns, or legal
representatives, or anyone in privity with him or them, of all
claims against the United States based upon such invention.
Sec. 183. Right to compensation
An applicant, his successors, assigns, or legal
representatives, whose patent is withheld as herein provided,
shall have the right, beginning at the date the applicant is
notified that, except for such order, his application is
otherwise in condition for allowance, or February 1, 1952,
whichever is later, and ending six years after a patent is
issued thereon, to apply to the head of any department or
agency who caused the order to be issued for compensation for
the damage caused by the order of secrecy and/or for the use of
the invention by the Government, resulting from his disclosure.
The right to compensation for use shall begin on the date of
the first use of the invention by the Government. The head of
the department or agency is authorized, upon the presentation
of a claim, to enter into an agreement with the applicant, his
successors, assigns, or legal representatives, in full
settlement for the damage and/or use. This settlement agreement
shall be conclusive for all purposes notwithstanding any other
provision of law to the contrary. If full settlement of the
claim cannot be effected, the head of the department or agency
may award and pay to such applicant, his successors, assigns,
or legal representatives, a sum not exceeding 75 per centum of
the sum which the head of the department or agency considers
just compensation for the damage and/or use. A claimant may
bring suit against the United States in the United States Court
of Federal Claims or in the District Court of the United States
for the district in which such claimant is a resident for an
amount which when added to the award shall constitute just
compensation for the damage and/or use of the invention by the
Government. The owner of any patent issued upon an application
that was subject to a secrecy order issued pursuant to section
181 [of this title], who did not apply for compensation as
above provided, shall have the right, after the date of
issuance of such patent, to bring suit in the United States
Court of Federal Claims for just compensation for the damage
caused by reason of the order of secrecy and/or use by the
Government of the invention resulting from his disclosure. The
right to compensation for use shall begin on the date of the
first use of the invention by the Government. In a suit under
the provisions of this section the United States may avail
itself of all defenses it may plead in an action under section
1498 of title 28. This section shall not confer a right of
action on anyone or his successors, assigns, or legal
representatives who, while in the full-time employment or
service of the United States, discovered, invented, or
developed the invention on which the claim is based.
Sec. 184. Filing of application in foreign country
(a) Filing in Foreign Country.--Except when authorized by a
license obtained from the Commissioner of Patents a person
shall not file or cause or authorize to be filed in any foreign
country prior to six months after filing in the United States
an application for patent or for the registration of a utility
model, industrial design, or model in respect of an invention
made in this country. A license shall not be granted with
respect to an invention subject to an order issued by the
Commissioner of Patents pursuant to section 181 [of this title]
without the concurrence of the head of the departments and
the chief officers of the agencies who caused the order to be
issued. The license may be granted retroactively where an
application has been filed abroad through error [and without
deceptive intent] and the application does not disclose an
invention within the scope of section 181 [of this title].
(b) Application.--The term ``application'' when used in
this chapter includes applications and any modifications,
amendments, or supplements thereto, or divisions thereof.
(c) Subsequent modifications, amendments, and
supplements.--The scope of a license shall permit subsequent
modifications, amendments, and supplements containing
additional subject matter if the application upon which the
request for the license is based is not, or was not, required
to be made available for inspection under section 181 [of this
title] and if such modifications, amendments, and supplements
do not change the general nature of the invention in a manner
which would require such application to be made available for
inspection under such section 181. In any case in which a
license is not, or was not, required in order to file an
application in any foreign country, such subsequent
modifications, amendments, and supplements may be made, without
a license, to the application filed in the foreign country if
the United States application was not required to be made
available for inspection under section 181 and if such
modifications, amendments, and supplements do not, or did not,
change the general nature of the invention in a manner which
would require the United States application to have been made
available for inspection under such section 181.
Sec. 185. Patent barred for filing without license
Notwithstanding any other provisions of law any person, and
his successors, assigns, or legal representatives, shall not
receive a United States patent for an invention if that person,
or his successors, assigns, or legal representatives shall,
without procuring the license prescribed in section 184 [of
this title], have made, or consented to or assisted another's
making, application in a foreign country for a patent or for
the registration of a utility model, industrial design, or
model in respect of the invention. A United States patent
issued to such person, his successors, assigns, or legal
representatives shall be invalid, unless the failure to procure
such license was through error [and without deceptive intent],
and the patent does not disclose subject matter within the
scope of section 181 [of this title].
Sec. 186. Penalty
Whoever, during the period or periods of time an invention
has been ordered to be kept secret and the grant of a patent
thereon withheld pursuant to section 181 [of this title],
shall, with knowledge of such order and without due
authorization, willfully publish or disclose or authorize or
cause to be published or disclosed the invention, or material
information with respect thereto, or whoever willfully, in
violation of the provisions of section 184 [of this title],
shall file or cause or authorize to be filed in any foreign
country an application for patent or for the registration of a
utility model, industrial design, or model in respect of any
invention made in the United States, shall, upon conviction, be
fined not more than $10,000 or imprisoned for not more than two
years, or both.
* * * * * * *
CHAPTER 18--PATENT RIGHTS IN INVENTIONS MADE WITH FEDERAL ASSISTANCE
* * * * * * *
Sec. 202. Disposition of rights
(a) * * *
(b)(1) * * *
* * * * * * *
(3) If the contractor believes that a determination is
contrary to the policies and objectives of this chapter or
constitutes an abuse of discretion by the agency, the
determination shall be subject to [the section 203(b)] section
203(b).
(c) Each funding agreement with a small business firm or
nonprofit organization shall contain appropriate provisions to
effectuate the following:
(1) * * *
(2) That the contractor make a written election
within two years after disclosure to the Federal agency
(or such additional time as may be approved by the
Federal agency) whether the contractor will retain
title to a subject invention: Provided, That in any
case where [publication, on sale, or public use, has
initiated the one year statutory period in which valid
patent protection can still be obtained in the United
States] the 1-year period referred to in section 102(b)
would end before the end of that 2-year period, the
period for election may be shortened by the Federal
agency to a date that is not more than sixty days
[prior to the end of the statutory] before the end of
that 1-year period: And provided further, That the
Federal Government may receive title to any subject
invention in which the contractor does not elect to
retain rights or fails to elect rights within such
times.
(3) That a contractor electing rights in a subject
invention agrees to file a patent application prior to
[any statutory bar date that may occur under this title
due to publication, on sale, or public use] the
expiration of the 1-year period referred to in section
102(b), and shall thereafter file corresponding patent
applications in other countries in which it wishes to
retain title within reasonable times, and that the
Federal Government may receive title to any subject
inventions in the United States or other countries in
which the contractor has not filed patent applications
on the subject invention within such times.
* * * * * * *
(7) In the case of a nonprofit organization, (A) a
prohibition upon the assignment of rights to a subject
invention in the United States without the approval of
the Federal agency, except where such assignment is
made to an organization which has as one of its primary
functions the management of inventions (provided that
such assignee shall be subject to the same provisions
as the contractor); (B) a requirement that the
contractor share royalties with the inventor; (C)
except with respect to a funding agreement for the
operation of a Government-owned-contractor-operated
facility, a requirement that the balance of any
royalties or income earned by the contractor with
respect to subject inventions, after payment of
expenses (including payments to inventors) incidental
to the administration of subject inventions, be
utilized for the support of scientific research or
education; (D) a requirement that, [except where it
proves infeasible after a reasonable inquiry, in the
licensing of subject inventions shall be given to small
business firms; and] except where it is determined to
be infeasible following a reasonable inquiry, a
preference in the licensing of subject inventions shall
be given to small business firms; and (E) with respect
to a funding agreement for the operation of a
Government-owned-contractor-operated facility,
requirements (i) that after payment of patenting costs,
licensing costs, payments to inventors, and other
expenses incidental to the administration of subject
inventions, 100 percent of the balance of any royalties
or income earned and retained by the contractor during
any fiscal year up to an amount equal to 5 percent of
the annual budget of the facility, shall be used by the
contractor for scientific research, development, and
education consistent with the research and development
mission and objectives of the facility, including
activities that increase the licensing potential of
other inventions of the facility; provided that if said
balance exceeds 5 percent of the annual budget of the
facility, that [75] 15 percent of such excess shall be
paid to the Treasury of the United States and the
remaining [25] 85 percent shall be used for the same
purposes [as described above in this clause (D);]
described above in this clause; and (ii) that, to the
extent it provides the most effective technology
transfer, the licensing of subject inventions shall be
administered by contractor employees on location at the
facility.
* * * * * * *
Sec. 207. Domestic and foreign protection of federally owned inventions
(a) Each Federal agency is authorized to--
(1) * * *
(2) grant nonexclusive, exclusive, or partially
exclusive licenses under federally owned inventions,
royalty-free or for royalties or other consideration,
and on such terms and conditions, including the grant
to the licensee of the right of enforcement pursuant to
the provisions of chapter 29 [of this title] as
determined appropriate in the public interest;
* * * * * * *
Sec. 209. Licensing federally owned inventions
(a) * * *
* * * * * * *
(d) Terms and Conditions.--Any licenses granted under
section 207(a)(2) shall contain such terms and conditions as
the granting agency considers appropriate, and shall include
provisions--
(1) retaining a [nontransferrable] nontransferable,
irrevocable, paid-up license for any Federal agency to
practice the invention or have the invention practiced
throughout the world by or on behalf of the Government
of the United States;
* * * * * * *
Sec. 210. Precedence of chapter
(a) * * *
* * * * * * *
(c) Nothing in this chapter is intended to limit the
authority of agencies to agree to the disposition of rights in
inventions made in the performance of work under funding
agreements with persons other than nonprofit organizations or
small business firms in accordance with the Statement of
Government Patent Policy issued on February 18, 1983, agency
regulations, or other applicable regulations or to otherwise
limit the authority of agencies to allow such persons to retain
ownership of inventions except that all funding agreements,
including those with other than small business firms and
nonprofit organizations, shall include the requirements
established in section 202(c)(4) and section 203 [of this
title]. Any disposition of rights in inventions made in
accordance with the Statement or implementing regulations,
including any disposition occurring before enactment of this
section, are hereby authorized.
* * * * * * *
* * * * * * *
PART III--PATENTS AND PROTECTION OF PATENT RIGHTS
Chap. Sec.
Optional Inter Partes Reexamination of Patents................311]
Inter Partes Review............................................311
Post-Grant Review..............................................321
* * * * * * *
CHAPTER 25--AMENDMENT AND CORRECTION OF PATENTS
Sec.
251. Reissue of defective patents.
* * * * * * *
257. Supplemental examinations to consider, reconsider, or correct
information.
Sec. 251. Reissue of defective patents
(a) In General.--Whenever any patent is, through error
[without any deceptive intention], deemed wholly or partly
inoperative or invalid, by reason of a defective specification
or drawing, or by reason of the patentee claiming more or less
than he had a right to claim in the patent, the Director shall,
on the surrender of such patent and the payment of the fee
required by law, reissue the patent for the invention disclosed
in the original patent, and in accordance with a new and
amended application, for the unexpired part of the term of the
original patent. No new matter shall be introduced into the
application for reissue.
(b) Multiple Reissued Patents.--The Director may issue
several reissued patents for distinct and separate parts of the
thing patented, upon demand of the applicant, and upon payment
of the required fee for a reissue for each of such reissued
patents.
(c) Applicability of This Title.--The provisions of this
title relating to applications for patent shall be applicable
to applications for reissue of a patent, except that
application for reissue may be made and sworn to by the
assignee of the entire interest if the application does not
seek to enlarge the scope of the claims of the original patent
or the application for the original patent was filed by the
assignee of the entire interest.
(d) Reissue Patent Enlarging Scope of Claims.--No reissued
patent shall be granted enlarging the scope of the claims of
the original patent unless applied for within two years from
the grant of the original patent.
* * * * * * *
Sec. 253. Disclaimer
[Whenever, without any deceptive intention,] (a) In
General.--Whenever a claim of a patent is invalid the remaining
claims shall not thereby be rendered invalid. A patentee,
whether of the whole or any sectional interest therein, may, on
payment of the fee required by law, make disclaimer of any
complete claim, stating therein the extent of his interest in
such patent. Such disclaimer shall be in writing, and recorded
in the Patent and Trademark Office; and it shall thereafter be
considered as part of the original patent to the extent of the
interest possessed by the disclaimant and by those claiming
under him.
[In like manner] (b) Additional Disclaimer or
Dedication._In the manner set forth in subsection (a), any
patentee or applicant may disclaim or dedicate to the public
the entire term, or any terminal part of the term, of the
patent granted or to be granted.
* * * * * * *
Sec. 256. Correction of named inventor
(a) Correction.--Whenever through error a person is named
in an issued patent as the inventor, or through error an
inventor is not named in an issued patent [and such error arose
without any deceptive intention on his part], the Director may,
on application of all the parties and assignees, with proof of
the facts and such other requirements as may be imposed, issued
a certificate correcting such error.
(b) Patent valid if error corrected.--The error of omitting
inventors or naming persons who are not inventors shall not
invalidate the patent in which such error occurred if it can be
corrected as provided in this section. The court before which
such matter is called in question may order correction of the
patent on notice and hearing of all parties concerned and the
Director shall issue a certificate accordingly.
Sec. 257. Supplemental examinations to consider, reconsider, or correct
information
(a) Request for Supplemental Examination.--A patent owner
may request supplemental examination of a patent in the Office
to consider, reconsider, or correct information believed to be
relevant to the patent, in accordance with such requirements as
the Director may establish. Within 3 months after the date a
request for supplemental examination meeting the requirements
of this section is received, the Director shall conduct the
supplemental examination and shall conclude such examination by
issuing a certificate indicating whether the information
presented in the request raises a substantial new question of
patentability.
(b) Reexamination Ordered.--If the certificate issued under
subsection (a) indicates that a substantial new question of
patentability is raised by 1 or more items of information in
the request, the Director shall order reexamination of the
patent. The reexamination shall be conducted according to
procedures established by chapter 30, except that the patent
owner shall not have the right to file a statement pursuant to
section 304. During the reexamination, the Director shall
address each substantial new question of patentability
identified during the supplemental examination, notwithstanding
the limitations in chapter 30 relating to patents and printed
publication or any other provision of such chapter.
(c) Effect.--
(1) In general.--A patent shall not be held
unenforceable on the basis of conduct relating to
information that had not been considered, was
inadequately considered, or was incorrect in a prior
examination of the patent if the information was
considered, reconsidered, or corrected during a
supplemental examination of the patent. The making of a
request under subsection (a), or the absence thereof,
shall not be relevant to enforceability of the patent
under section 282.
(2) Exceptions.--
(A) Prior allegations.--Paragraph (1) shall
not apply to an allegation pled with
particularity in a civil action, or set forth
with particularity in a notice received by the
patent owner under section 505(j)(2)(B)(iv)(II)
of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355(j)(2)(B)(iv)(II)), before the date
of a supplemental examination request under
subsection (a) to consider, reconsider, or
correct information forming the basis for the
allegation.
(B) Patent enforcement actions.--In an
action brought under section 337(a) of the
Tariff Act of 1930 (19 U.S.C. 1337(a)), or
section 281 of this title, paragraph (1) shall
not apply to any defense raised in the action
that is based upon information that was
considered, reconsidered, or corrected pursuant
to a supplemental examination request under
subsection (a), unless the supplemental
examination, and any reexamination ordered
pursuant to the request, are concluded before
the date on which the action is brought.
(C) Fraud.--No supplemental examination may
be commenced by the Director on, and any
pending supplemental examination shall be
immediately terminated regarding, an
application or patent in connection with which
fraud on the Office was practiced or attempted.
If the Director determines that such a fraud on
the Office was practiced or attempted, the
Director shall also refer the matter to the
Attorney General for such action as the
Attorney General may deem appropriate.
(d) Fees and Regulations.--
(1) Fees.--The Director shall, by regulation,
establish fees for the submission of a request for
supplemental examination of a patent, and to consider
each item of information submitted in the request. If
reexamination is ordered under subsection (b), fees
established and applicable to ex parte reexamination
proceedings under chapter 30 shall be paid, in addition
to fees applicable to supplemental examination.
(2) Regulations.--The Director shall issue
regulations governing the form, content, and other
requirements of requests for supplemental examination,
and establishing procedures for reviewing information
submitted in such requests.
(e) Rule of Construction.--Nothing in this section shall be
construed--
(1) to preclude the imposition of sanctions based
upon criminal or antitrust laws (including section
1001(a) of title 18, the first section of the Clayton
Act, and section 5 of the Federal Trade Commission Act
to the extent that section relates to unfair methods of
competition);
(2) to limit the authority of the Director to
investigate issues of possible misconduct and impose
sanctions for misconduct in connection with matters or
proceedings before the Office; or
(3) to limit the authority of the Director to issue
regulations under chapter 3 relating to sanctions for
misconduct by representatives practicing before the
Office.
* * * * * * *
CHAPTER 27--GOVERNMENT INTERESTS IN PATENTS
Sec. 267. Time for taking action in Government applications
Notwithstanding the provisions of sections 133 and 151 [of
this title], the Director may extend the time for taking any
action to three years, when an application has become the
property of the United States and the head of the appropriate
department or agency of the Government has certified to the
Director that the invention disclosed therein is important to
the armament or defense of the United States.
CHAPTER 28--INFRINGEMENT OF PATENTS
* * * * * * *
Sec. 273. Defense to infringement based on earlier inventor
(a) Definitions.--For purposes of this section--
(1) the terms ``commercially used'' and
``commercial use'' mean [use of a method in] use of the
subject matter of a patent 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 commercial marketing
or use is subject to a premarketing regulatory review
period during which the safety or efficacy of the
subject matter is established, including any period
specified in section 156(g), shall be deemed
``commercially used'' and in ``commercial use'' during
such regulatory review period; and
(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 paragraph (1),
except that the use--
(A) * * *
(B) may not be asserted as a defense with
respect to any subsequent commercialization 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.--
(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 reduced the subject
matter to practice [at least 1 year before the
effective filing date of such patent, and commercially
used the subject matter before the effective filing
date of such patent.] and commercially used the subject
matter at least 1 year before the effective filing date
of the claimed invention that is the subject matter of
the patent.
(2) Exhaustion of right.--The sale or other
disposition of a useful end product produced by a
[patented method] patented process, 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 disposition been made by the patent owner.
(3) Limitations and qualifications of defense.--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 invention
for which the defense is asserted is for a
method.
[(B) Derivation.--A person may not assert
the defense under this section if the subject
matter on which the defense is based was
derived from the patentee or persons in privity
with the patentee.]
(A) Derivation and prior disclosure to the
public.--A person may not assert the defense
under this section if--
(i) the subject matter on which the
defense is based was derived from the
patentee or persons in privity with the
patentee; or
(ii) the claimed invention that is
the subject of the defense was
disclosed to the public in a manner
that qualified for the exception from
the prior art under section 102(b) and
the commercialization date relied upon
under paragraph (1) of this subsection
for establishing entitlement to the
defense is less than 1 year before the
date of such disclosure to the public;
[(C)] (B) Not a general license.--The
defense 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 respect to which the person can assert a
defense under this chapter, except that the
defense shall also extend to variations in the
quantity or volume 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.
(C) Funding.--
(i) Defense not available in
certain cases.--A person may not assert
the defense under this section if the
subject matter of the patent on which
the defense is based was developed
pursuant to a funding agreement under
chapter 18 or by a nonprofit
institution of higher education, or a
technology transfer organization
affiliated with such an institution,
that did not receive funding from a
private business enterprise in support
of that development.
(ii) Definitions.--In this
subparagraph--
(I) the term ``institution
of higher education'' has the
meaning given that term in
section 101(a) of the Higher
Education Act of 1965 (20
U.S.C. 1001(a)); and
(II) the term ``technology
transfer organization'' means
an organization the primary
purpose of which is to
facilitate the
commercialization of
technologies developed by one
or more institutions of higher
education.
* * * * * * *
[(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
assignment or transfer for other reasons of the entire
enterprise or line of business to which the defense
relates.]
(6) Personal defense.--
(A) In general.--The defense under this
section may be asserted only by the person who
performed or caused the performance of the acts
necessary to establish the defense, as well as
any other entity that controls, is controlled
by, or is under common control with such
person, 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
assignment or transfer for other reasons of the
entire enterprise or line of business to which
the defense relates.
(B) Exception.--Notwithstanding
subparagraph (A), any person may, on the
person's own behalf, assert a defense based on
the exhaustion of rights provided under
paragraph (2), including any necessary elements
thereof.
* * * * * * *
(8) Unsuccessful assertion of defense.--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 basis for asserting
the defense, the court shall find the case exceptional
for the purpose of awarding attorney 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 established under this
section.
CHAPTER 29--REMEDIES FOR INFRINGEMENT OF PATENT, AND OTHER ACTIONS
Sec.
281. Remedy for infringement of patent.
* * * * * * *
[291. Interfering patents.]
291. Derived patents.
* * * * * * *
298. Advice of counsel.
299. Joinder of parties.
* * * * * * *
Sec. 282. Presumption of validity; defenses
(a) In General.--A patent shall be presumed valid. Each
claim of a patent (whether in independent, dependent, or
multiple dependent form) shall be presumed valid independently
of the validity of other claims; dependent or multiple
dependent claims shall be presumed valid even though dependent
upon an invalid claim. [Notwithstanding the preceding sentence,
if a claim to a composition of matter is held invalid and that
claim was the basis of a determination of nonobviousness under
section 103(b)(1), the process shall no longer be considered
nonobvious solely on the basis of section 103(b)(1).] The
burden of establishing invalidity of a patent or any claim
thereof shall rest on the party asserting such invalidity.
(b) Defenses.--The following shall be defenses in any
action involving the validity or infringement of a patent and
shall be pleaded:
(1) Noninfringement, absence of liability for
infringement or [unenforceability,] unenforceability.
(2) Invalidity of the patent or any claim in suit
on any ground specified in part II [of this title] as a
condition for [patentability,] patentability.
[(3) Invalidity of the patent or any claim in suit
for failure to comply with any requirement of sections
112 or 251 of this title,]
(3) Invalidity of the patent or any claim in suit
for failure to comply with--
(A) any requirement of section 112, except
that the failure to disclose the best mode
shall not be a basis on which any claim of a
patent may be canceled or held invalid or
otherwise unenforceable; or
(B) any requirement of section 251.
(4) Any other fact or act made a defense by this
title.
[In actions involving the validity or infringement of a
patent] (c) Notice of Actions; Actions During Extension of
Patent Term._In an action involving the validity or
infringement of patent, the party asserting infringement shall
identify, in the pleadings or otherwise in writing to the
adverse party, all of its real parties in interest, and the
party asserting invalidity or noninfringement shall give notice
in the pleadings or otherwise in writing to the adverse party
at least thirty days before the trial, of the country, number,
date, and name of the patentee of any patent, the title, date,
and page numbers of any publication to be relied upon as
anticipation of the patent in suit or, except in actions in the
United States [Claims Court] Court of Federal Claims, as
showing the state of the art, and the name and address of any
person who may be relied upon as the prior inventor or as
having prior knowledge of or as having previously used or
offered for sale the invention of the patent in suit. In the
absence of such notice proof of the said matters may not be
made at the trial except on such terms as the court requires.
Invalidity of the extension of a patent term or any portion
thereof under section 154(b) or 156 [of this title] because of
the material failure--
(1) * * *
* * * * * * *
Sec. 284. Damages
Upon finding for the claimant the court shall award the
claimant 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, together with interest and
costs as fixed by the court.
When the damages are not found by a jury, the court shall
assess them. In either event the court may increase the damages
up to three times the amount found or assessed. Increased
damages under this paragraph shall not apply to provisional
rights under section 154(d) [of this title].
The court may receive expert testimony as an aid to the
determination of damages or of what royalty would be reasonable
under the circumstances.
* * * * * * *
Sec. 287. Limitation on damages and other remedies; marking and notice
(a) Patentees, and persons making, offering for sale, or
selling within the United States any patented article for or
under them, or importing any patented article into the United
States, may give notice to the public that the same is
patented, either by fixing thereon the word ``patent'' or the
abbreviation ``pat.'', together with the number of the patent,
[or when,] or by fixing thereon the word ``patent'' or the
abbreviation ``pat.'' together with an address of a posting on
the Internet, accessible to the public without charge for
accessing the address, that associates the patented article
with the number of the patent, or when, from the character of
the article, this can not be done, by fixing to it, or to the
package wherein one or more of them is contained, a label
containing a like notice. In the event of failure so to mark,
no damages shall be recovered by the patentee in any action for
infringement, except on proof that the infringer was notified
of the infringement and continued to infringe thereafter, in
which event damages may be recovered only for infringement
occurring after such notice. Filing of an action for
infringement shall constitute such notice.
(b)(1) * * *
(2) No remedies for infringement under section 271(g) [of
this title] shall be available with respect to any product in
the possession of, or in transit to, the person subject to
liability under such section before that person had notice of
infringement with respect to that product. The person subject
to liability shall bear the burden of proving any such
possession or transit.
* * * * * * *
(c)(1) With respect to a medical practitioner's performance
of a medical activity that constitutes an infringement under
section 271 (a) or (b) [of this title], the provisions of
sections 281, 283, 284, and 285 [of this title] shall not apply
against the medical practitioner or against a related health
care entity with respect to such medical activity.
(2) For the purposes of this subsection:
(A) * * *
* * * * * * *
(G) the term ``State'' shall mean [any state] any
State or territory of the United States, the District
of Columbia, and the Commonwealth of Puerto Rico.
* * * * * * *
(4) This subsection shall not apply to any patent issued
based on an application [the earliest effective filing date of
which is prior to] which has an effective filing date before
September 30, 1996.
Sec. 288. Action for infringement of a patent containing an invalid
claim
Whenever[, without deceptive intention,] a claim of a
patent is invalid, an action may be maintained for the
infringement of a claim of the patent which may be valid. The
patentee shall recover no costs unless a disclaimer of the
invalid claim has been entered at the Patent and Trademark
Office before the commencement of the suit.
* * * * * * *
[Sec. 291. Interfering patents
[The owner of an interfering patent may have relief against
the owner of another by civil action, and the court may adjudge
the question of the validity of any of the interfering patents,
in whole or in part. The provisions of the second paragraph of
section 146 of this title shall apply to actions brought under
this section.]
Sec. 291. Derived Patents
(a) In General.--The owner of a patent may have relief by
civil action against the owner of another patent that claims
the same invention and has an earlier effective filing date, if
the invention claimed in such other patent was derived from the
inventor of the invention claimed in the patent owned by the
person seeking relief under this section.
(b) Filing Limitation.--An action under this section may be
filed only before the end of the 1-year period beginning on the
date of the issuance of the first patent containing a claim to
the allegedly derived invention and naming an individual
alleged to have derived such invention as the inventor or joint
inventor.
Sec. 292. False marking
(a) Whoever, without the consent of the patentee, marks
upon, or affixes to, or uses in advertising in connection with
anything made, used, offered for sale, or sold by such person
within the United States, or imported by the person into the
United States, the name or any imitation of the name of the
patentee, the patent number, or the words ``patent,''
``patentee,'' or the like, with the intent of counterfeiting or
imitating the mark of the patentee, or of deceiving the public
and inducing them to believe that the thing was made, offered
for sale, sold, or imported into the United States by or with
the consent of the patentee; or
Whoever marks upon, or affixes to, or uses in advertising
in connection with any unpatented article, the word ``patent''
or any word or number importing that the same is patented for
the purpose of deceiving the public; or
Whoever marks upon, or affixes to, or uses in advertising
in connection with any article, the words ``patent applied
for,'' ``patent pending,'' or any word importing that an
application for patent has been made, when no application for
patent has been made, or if made, is not pending, for the
purpose of deceiving the public--
Shall be fined not more than $500 for every such offense.
Only the United States may sue for the penalty authorized by
this subsection.
[(b) Any person may sue for the penalty, in which event
one-half shall go to the person suing and the other to the use
of the United States.]
(b) A person who has suffered a competitive injury as a
result of a violation of this section may file a civil action
in a district court of the United States for recovery of
damages adequate to compensate for the injury.
(c) Whoever engages in an activity under subsection (a) for
which liability would otherwise be imposed shall not be liable
for such activity--
(1) that is engaged in during the 3-year period
beginning on the date on which the patent at issue
expires; or
(2) that is engaged in after the end of that 3-year
period if the word ``expired'' is placed before the
word ``patent'', ``patented'', the abbreviation
``pat'', or the patent number, either on the article or
through a posting on the Internet, as provided in
section 287(a).
Sec. 293. Nonresident patentee; service and notice
Every patentee not residing in the United States may file
in the Patent and Trademark Office a written designation
stating the name and address of a person residing within the
United States on whom may be served process or notice of
proceedings affecting the patent or rights thereunder. If the
person designated cannot be found at the address given in the
last designation, or if no person has been designated, the
[United States District Court for the District of Columbia]
United States District Court for the Eastern District of
Virginia shall have jurisdiction and summons shall be served by
publication or otherwise as the court directs. The court shall
have the same jurisdiction to take any action respecting the
patent or rights thereunder that it would have if the patentee
were personally within the jurisdiction of the court.
Sec. 294. Voluntary arbitration
(a) * * *
(b) Arbitration of such disputes, awards by arbitrators and
confirmation of awards shall be governed by title 9, to the
extent such title is not inconsistent with this section. In any
such arbitration proceeding, the defenses provided for under
section 282 [of this title] shall be considered by the
arbitrator if raised by any party to the proceeding.
* * * * * * *
Sec. 298. Advice of counsel
The failure of an infringer to obtain the advice of counsel
with respect to any allegedly infringed patent, or the failure
of the infringer to present such advice to the court or jury,
may not be used to prove that the accused infringer willfully
infringed the patent or that the infringer intended to induce
infringement of the patent.
Sec. 299. Joinder of parties
(a) Joinder of accused infringers.--In any civil action
arising under any Act of Congress relating to patents, other
than an action or trial in which an act of infringement under
section 271(e)(2) has been pled, parties that are accused
infringers may be joined in one action as defendants or
counterclaim defendants only if--
(1) any right to relief is asserted against the
parties jointly, severally, or in the alternative with
respect to or arising out of the same transaction,
occurrence, or series of transactions or occurrences
relating to the making, using, importing into the
United States, offering for sale, or selling of the
same accused product or process; and
(2) questions of fact common to all defendants or
counterclaim defendants will arise in the action.
(b) Allegations insufficient for joinder.--For purposes of
this subsection, accused infringers may not be joined in one
action or trial as defendants or counterclaim defendants based
solely on allegations that they each have infringed the patent
or patents in suit.
CHAPTER 30--PRIOR ART CITATIONS TO OFFICE AND EX PARTE REEXAMINATION OF
PATENTS
Sec.
[301. Citation of prior art.]
301. Citation of prior art and written statements.
* * * * * * *
[Sec. 301. Citation of prior art
[Any person at any time may cite to the Office in writing
prior art consisting of patents or printed publications which
that person believes to have a bearing on the patentability of
any claim of a particular patent. If the person explains in
writing the pertinency and manner of applying such prior art to
at least one claim of the patent, the citation of such prior
art and the explanation thereof will become a part of the
official file of the patent. At the written request of the
person citing the prior art, his or her identity will be
excluded from the patent file and kept confidential.]
Sec. 301. Citation of prior art and written statements
(a) In General.--Any person at any time may cite to the
Office in writing--
(1) prior art consisting of patents or printed
publications which that person believes to have a
bearing on the patentability of any claim of a
particular patent; or
(2) statements of the patent owner filed in a
proceeding before a Federal court or the Office in
which the patent owner took a position on the scope of
any claim of a particular patent.
(b) Official File.--If the person citing prior art or
written statements pursuant to subsection (a) explains in
writing the pertinence and manner of applying the prior art or
written statements to at least 1 claim of the patent, the
citation of the prior art or written statements and the
explanation thereof shall become a part of the official file of
the patent.
(c) Additional Information.--A party that submits a written
statement pursuant to subsection (a)(2) shall include any other
documents, pleadings, or evidence from the proceeding in which
the statement was filed that addresses the written statement.
(d) Limitations.--A written statement submitted pursuant to
subsection (a)(2), and additional information submitted
pursuant to subsection (c), shall not be considered by the
Office for any purpose other than to determine the proper
meaning of a patent claim in a proceeding that is ordered or
instituted pursuant to section 304, 314, or 324. If any such
written statement or additional information is subject to an
applicable protective order, such statement or information
shall be redacted to exclude information that is subject to
that order.
(e) Confidentiality.--Upon the written request of the
person citing prior art or written statements pursuant to
subsection (a), that person's identity shall be excluded from
the patent file and kept confidential.
Sec. 302. Request for reexamination
Any person at any time may file a request for reexamination
by the Office of any claim of a patent on the basis of any
prior art cited under the provisions of section 301 [of this
title]. The request must be in writing and must be accompanied
by payment of a reexamination fee established by the Director
pursuant to the provisions of section 41 [of this title]. The
request must set forth the pertinency and manner of applying
cited prior art to every claim for which reexamination is
requested. Unless the requesting person is the owner of the
patent, the Director promptly will send a copy of the request
to the owner of record of the patent.
Sec. 303. Determination of issue by Director
(a) Within three months following the filing of a request
for reexamination under the provisions of section 302 [of this
title], the Director will 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 his
own initiative, and any time, the Director may determine
whether a substantial new question of patentability is raised
by patents and publications discovered by him or cited under
the provisions of [section 301 of this title] section 301 or
302. The existence of a substantial new question of
patentability is not precluded by the fact that a patent or
printed publication was previously cited by or to the Office or
considered by the Office.
* * * * * * *
(c) A determination by the Director pursuant to subsection
(a) of this section that no substantial new question of
patentability has been raised will be final and nonappealable.
Upon such a determination, the Director may refund a portion of
the reexamination fee required under section 302 [of this
title].
Sec. 304. Reexamination order by Director
If, in a determination made under the provisions of
subsection 303(a) [of this title], the Director finds that a
substantial new question of patentability affecting any claim
of a patent is raised, the determination will include an order
for reexamination of the patent for resolution of the question.
The patent owner will be given a reasonable period, not less
than two months from the date a copy of the determination is
given or mailed to him, within which he may file a statement on
such question, including any amendment to his patent and new
claim or claims he may wish to propose, for consideration in
the reexamination. If the patent owner files such a statement,
he promptly will serve a copy of it on the person who has
requested reexamination under the provisions of section 302 [of
this title]. Within a period of two months from the date of
service, that person may file and have considered in the
reexamination a reply to any statement filed by the patent
owner. That person promptly will serve on the patent owner a
copy of any reply filed.
Sec. 305. Conduct of reexamination proceedings
After the times for filing the statement and reply provided
for by section 304 [of this title] have expired,
reexamination will be conducted according to the procedures
established for initial examination under the provisions of
sections 132 and 133 [of this title]. In any reexamination
proceeding under this chapter, the patent owner will be
permitted to propose any amendment to his patent and a new
claim or claims thereto, in order to distinguish the invention
as claimed from the prior art cited under the provisions of
section 301 [of this title], or in response to a decision
adverse to the patentability of a claim of a patent. No
proposed amended or new claim enlarging the scope of a claim of
the patent will be permitted in a reexamination proceeding
under this chapter. All reexamination proceedings under this
section, including any appeal to the [Board of Patent Appeals
and Interferences] Patent Trial and Appeal Board, will be
conducted with special dispatch within the Office.
Sec. 306. Appeal
The patent owner involved in a reexamination proceeding
under this chapter may appeal under the provisions of section
134 [of this title], and may seek court review under the
provisions of sections 141 to [145 of this title] 144, with
respect to any decision adverse to the patentability of any
original or proposed amended or new claim of the patent.
Sec. 307. Certificate of patentability, unpatentability, and claim
cancellation
(a) * * *
(b) Any proposed amended or new claim determined to be
patentable and incorporated into a patent following a
reexamination proceeding will 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 provisions of subsection (a) of this
section.
[CHAPTER 31--OPTIONAL INTER PARTES REEXAMINATION PROCEDURES
[Sec. 311. Request for inter partes reexamination
[(a) In General.--Any third-party requester 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
provisions 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 payment
of an inter partes reexamination fee established by the
Director under section 41; and
[(2) set forth the pertinency and manner of
applying cited prior art to every claim for which
reexamination is requested.
[(c) Copy.--The Director promptly shall send a copy
of the request to the owner of record of the patent.
[Sec. 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. The
existence of a substantial new question of patentability is not
precluded by the fact that a patent or printed publication was
previously cited by or to the Office or considered by the
Office.
[(b) Record.--A record of the Director's determination
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.
[(c) Final Decision.--A determination by the Director under
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 required under section 311.
[Sec. 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 patentability
affecting a claim of a patent is raised, the determination
shall include an order for inter partes reexamination 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.
[Sec. 314. Conduct of inter partes reexamination proceedings
[(a) In General.--Except as otherwise provided in this
section, reexamination shall be conducted according to the
procedures established for initial examination under the
provisions of sections 132 and 133. 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) With the exception of the inter partes
reexamination request, any document filed by either the patent
owner or the third-party requester shall be served on the other
party. In addition, the Office shall send to the third-party
requester a copy of any communication sent by the Office to the
patent owner concerning the patent subject to the inter partes
reexamination proceeding.
[(2) 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 opportunity 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 Office 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 reexamination
proceedings under this section, including any appeal to the
Board of Patent Appeals and Interferences, shall be conducted
with special dispatch within the Office.
[Sec. 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 sections 141
through 144, with respect to any decision adverse to
the patentability of any original or proposed amended
or new claim of the patent; and
[(2) may be a party to any appeal taken by a third-
party requester under subsection (b).
[(b) Third-Party Requester.--A third-party requester--
[(1) may appeal under the provisions of section
134, and may appeal under the provisions of sections
141 through 144, with respect to any final decision
favorable to the patentability of any original or
proposed amended or new claim of the patent; and
[(2) may, subject to subsection (c), be a party to
any appeal taken by the patent owner under the
provisions of section 134 or sections 141 through 144.
[(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 proceedings. 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
Trademark Office at the time of the inter partes reexamination
proceedings.
[Sec. 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 patentable, 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 reexamination 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 therefor,
prior to issuance of a certificate under the provisions of
subsection (a) of this section.
[Sec. 317. Inter partes reexamination prohibited
[(a) Order for Reexamination.--Notwithstanding any
provision of this chapter, once an order for inter partes
reexamination of a patent has been issued under section 313,
neither the third-party requester nor its privies, 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 patent, then neither that party nor
its privies may thereafter request an 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 reexamination 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 Trademark
Office at the time of the inter partes reexamination
proceedings.
[Sec. 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 patent 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 interests of justice.]
CHAPTER 31--INTER PARTES REVIEW
Sec.
311. Inter partes review.
312. Petitions.
313. Preliminary response to petition.
314. Institution of inter partes review.
315. Relation to other proceedings or actions.
316. Conduct of inter partes review.
317. Settlement.
318. Decision of the Board.
319. Appeal.
Sec. 311. Inter partes review
(a) In General.--Subject to the provisions of this chapter,
a person who is not the owner of a patent may file with the
Office a petition to institute an inter partes review of the
patent. The Director shall establish, by regulation, fees to be
paid by the person requesting the review, in such amounts as
the Director determines to be reasonable, considering the
aggregate costs of the review.
(b) Scope.--A petitioner in an inter partes review may
request to cancel as unpatentable 1 or more claims of a patent
only on a ground that could be raised under section 102 or 103
and only on the basis of prior art consisting of patents or
printed publications.
(c) Filing Deadline.--A petition for inter partes review
shall be filed after the later of either--
(1) the date that is 1 year after the grant of a
patent or issuance of a reissue of a patent; or
(2) if a post-grant review is instituted under
chapter 32, the date of the termination of such post-
grant review.
Sec. 312. Petitions
(a) Requirements of Petition.--A petition filed under
section 311 may be considered only if--
(1) the petition is accompanied by payment of the
fee established by the Director under section 311;
(2) the petition identifies all real parties in
interest;
(3) the petition identifies, in writing and with
particularity, each claim challenged, the grounds on
which the challenge to each claim is based, and the
evidence that supports the grounds for the challenge to
each claim, including--
(A) copies of patents and printed
publications that the petitioner relies upon in
support of the petition; and
(B) affidavits or declarations of
supporting evidence and opinions, if the
petitioner relies on expert opinions;
(4) the petition provides such other information as
the Director may require by regulation; and
(5) the petitioner provides copies of any of the
documents required under paragraphs (2), (3), and (4)
to the patent owner or, if applicable, the designated
representative of the patent owner.
(b) Public Availability.--As soon as practicable after the
receipt of a petition under section 311, the Director shall
make the petition available to the public.
Sec. 313. Preliminary response to petition
If an inter partes review petition is filed under section
311, the patent owner shall have the right to file a
preliminary response to the petition, within a time period set
by the Director, that sets forth reasons why no inter partes
review should be instituted based upon the failure of the
petition to meet any requirement of this chapter.
Sec. 314. Institution of inter partes review
(a) Threshold.--The Director may not authorize an inter
partes review to commence unless the Director determines that
the information presented in the petition filed under section
311 and any response filed under section 313 shows that there
is a reasonable likelihood that the petitioner would prevail
with respect to at least 1 of the claims challenged in the
petition.
(b) Timing.--The Director shall determine whether to
institute an inter partes review under this chapter pursuant to
a petition filed under section 311 within 3 months after--
(1) receiving a preliminary response to the
petition under section 313; or
(2) if no such preliminary response is filed, the
last date on which such response may be filed.
(c) Notice.--The Director shall notify the petitioner and
patent owner, in writing, of the Director's determination under
subsection (a), and shall make such notice available to the
public as soon as is practicable. Such notice shall include the
date on which the review shall commence.
(d) No Appeal.--The determination by the Director whether
to institute an inter partes review under this section shall be
final and nonappealable.
Sec. 315. Relation to other proceedings or actions
(a) Infringer's Civil Action.--
(1) Inter partes review barred by civil action.--An
inter partes review may not be instituted if, before
the date on which the petition for such a review is
filed, the petitioner, real party in interest, or privy
of the petitioner filed a civil action challenging the
validity of a claim of the patent.
(2) Stay of civil action.--If the petitioner, real
party in interest, or privy of the petitioner files a
civil action challenging the validity of a claim of the
patent on or after the date on which the petitioner
files a petition for inter partes review of the patent,
that civil action shall be automatically stayed until
either--
(A) the patent owner moves the court to
lift the stay;
(B) the patent owner files a civil action
or counterclaim alleging that the petitioner,
real party in interest, or privy of the
petitioner has infringed the patent; or
(C) the petitioner, real party in interest,
or privy of the petitioner moves the court to
dismiss the civil action.
(3) Treatment of counterclaim.--A counterclaim
challenging the validity of a claim of a patent does
not constitute a civil action challenging the validity
of a claim of a patent for purposes of this subsection.
(b) Patent Owner's Action.--An inter partes review may not
be instituted if the petition requesting the proceeding is
filed more than 1 year after the date on which the petitioner,
real party in interest, or privy of the petitioner is served
with a complaint alleging infringement of the patent. The time
limitation set forth in the preceding sentence shall not apply
to a request for joinder under subsection (c).
(c) Joinder.--If the Director institutes an inter partes
review, the Director, in his or her discretion, may join as a
party to that inter partes review any person who properly files
a petition under section 311 that the Director, after receiving
a preliminary response under section 313 or the expiration of
the time for filing such a response, determines warrants the
institution of an inter partes review under section 314.
(d) Multiple Proceedings.--Notwithstanding sections 135(a),
251, and 252, and chapter 30, during the pendency of an inter
partes review, if another proceeding or matter involving the
patent is before the Office, the Director may determine the
manner in which the inter partes review or other proceeding or
matter may proceed, including providing for stay, transfer,
consolidation, or termination of any such matter or proceeding.
(e) Estoppel.--
(1) Proceedings before the office.--The petitioner
in an inter partes review of a claim in a patent under
this chapter that results in a final written decision
under section 318(a), or the real party in interest or
privy of the petitioner, may not request or maintain a
proceeding before the Office with respect to that claim
on any ground that the petitioner raised or reasonably
could have raised during that inter partes review.
(2) Civil actions and other proceedings.--The
petitioner in an inter partes review of a claim in a
patent under this chapter that results in a final
written decision under section 318(a), or the real
party in interest or privy of the petitioner, may not
assert either in a civil action arising in whole or in
part under section 1338 of title 28 or in a proceeding
before the International Trade Commission under section
337 of the Tariff Act of 1930 that the claim is invalid
on any ground that the petitioner raised or reasonably
could have raised during that inter partes review.
Sec. 316. Conduct of inter partes review
(a) Regulations.--The Director shall prescribe
regulations--
(1) providing that the file of any proceeding under
this chapter shall be made available to the public,
except that any petition or document filed with the
intent that it be sealed shall, if accompanied by a
motion to seal, be treated as sealed pending the
outcome of the ruling on the motion;
(2) setting forth the standards for the showing of
sufficient grounds to institute a review under section
314(a);
(3) establishing procedures for the submission of
supplemental information after the petition is filed;
(4) establishing and governing inter partes review
under this chapter and the relationship of such review
to other proceedings under this title;
(5) setting forth standards and procedures for
discovery of relevant evidence, including that such
discovery shall be limited to--
(A) the deposition of witnesses submitting
affidavits or declarations; and
(B) what is otherwise necessary in the
interest of justice;
(6) prescribing sanctions for abuse of discovery,
abuse of process, or any other improper use of the
proceeding, such as to harass or to cause unnecessary
delay or an unnecessary increase in the cost of the
proceeding;
(7) providing for protective orders governing the
exchange and submission of confidential information;
(8) providing for the filing by the patent owner of
a response to the petition under section 313 after an
inter partes review has been instituted, and requiring
that the patent owner file with such response, through
affidavits or declarations, any additional factual
evidence and expert opinions on which the patent owner
relies in support of the response;
(9) setting forth standards and procedures for
allowing the patent owner to move to amend the patent
under subsection (d) to cancel a challenged claim or
propose a reasonable number of substitute claims, and
ensuring that any information submitted by the patent
owner in support of any amendment entered under
subsection (d) is made available to the public as part
of the prosecution history of the patent;
(10) providing either party with the right to an
oral hearing as part of the proceeding;
(11) requiring that the final determination in an
inter partes review be issued not later than 1 year
after the date on which the Director notices the
institution of a review under this chapter, except that
the Director may, for good cause shown, extend the 1-
year period by not more than 6 months, and may adjust
the time periods in this paragraph in the case of
joinder under section 315(c);
(12) setting a time period for requesting joinder
under section 315(c); and
(13) providing the petitioner with at least 1
opportunity to file written comments within a time
period established by the Director.
(b) Considerations.--In prescribing regulations under this
section, the Director shall consider the effect of any such
regulation on the economy, the integrity of the patent system,
the efficient administration of the Office, and the ability of
the Office to timely complete proceedings instituted under this
chapter.
(c) Patent Trial and Appeal Board.--The Patent Trial and
Appeal Board shall, in accordance with section 6, conduct each
inter partes review instituted under this chapter.
(d) Amendment of the Patent.--
(1) In general.--During an inter partes review
instituted under this chapter, the patent owner may
file 1 motion to amend the patent in 1 or more of the
following ways:
(A) Cancel any challenged patent claim.
(B) For each challenged claim, propose a
reasonable number of substitute claims.
(2) Additional motions.--Additional motions to
amend may be permitted upon the joint request of the
petitioner and the patent owner to materially advance
the settlement of a proceeding under section 317, or as
permitted by regulations prescribed by the Director.
(3) Scope of claims.--An amendment under this
subsection may not enlarge the scope of the claims of
the patent or introduce new matter.
(e) Evidentiary Standards.--In an inter partes review
instituted under this chapter, the petitioner shall have the
burden of proving a proposition of unpatentability by a
preponderance of the evidence.
Sec. 317. Settlement
(a) In General.--An inter partes review instituted under
this chapter shall be terminated with respect to any petitioner
upon the joint request of the petitioner and the patent owner,
unless the Office has decided the merits of the proceeding
before the request for termination is filed. If the inter
partes review is terminated with respect to a petitioner under
this section, no estoppel under section 315(e) shall attach to
the petitioner, or to the real party in interest or privy of
the petitioner, on the basis of that petitioner's institution
of that inter partes review. If no petitioner remains in the
inter partes review, the Office may terminate the review or
proceed to a final written decision under section 318(a).
(b) Agreements in Writing.--Any agreement or understanding
between the patent owner and a petitioner, including any
collateral agreements referred to in such agreement or
understanding, made in connection with, or in contemplation of,
the termination of an inter partes review under this section
shall be in writing and a true copy of such agreement or
understanding shall be filed in the Office before the
termination of the inter partes review as between the parties.
At the request of a party to the proceeding, the agreement or
understanding shall be treated as business confidential
information, shall be kept separate from the file of the
involved patents, and shall be made available only to Federal
Government agencies on written request, or to any person on a
showing of good cause.
Sec. 318. Decision of the Board
(a) Final Written Decision.--If an inter partes review is
instituted and not dismissed under this chapter, the Patent
Trial and Appeal Board shall issue a final written decision
with respect to the patentability of any patent claim
challenged by the petitioner and any new claim added under
section 316(d).
(b) Certificate.--If the Patent Trial and Appeal Board
issues a final written decision under subsection (a) and the
time for appeal has expired or any appeal 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 by operation of the certificate
any new or amended claim determined to be patentable.
(c) Amended or New Claim.--Any proposed amended or new
claim determined to be patentable and incorporated into a
patent following an inter partes review under this chapter
shall have the same effect as that specified in section 252 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 therefor,
before the issuance of a certificate under subsection (b).
(d) Data on Length of Review.--The Office shall make
available to the public data describing the length of time
between the institution of, and the issuance of a final written
decision under subsection (a) for, each inter partes review.
Sec. 319. Appeal
A party dissatisfied with the final written decision of the
Patent Trial and Appeal Board under section 318(a) may appeal
the decision pursuant to sections 141 through 144. Any party to
the inter partes review shall have the right to be a party to
the appeal.
CHAPTER 32--POST-GRANT REVIEW
Sec.
321. Post-grant review.
322. Petitions.
323. Preliminary response to petition.
324. Institution of post-grant review.
325. Relation to other proceedings or actions.
326. Conduct of post-grant review.
327. Settlement.
328. Decision of the Board.
329. Appeal.
Sec. 321. Post-grant review
(a) In General.--Subject to the provisions of this chapter,
a person who is not the patent owner may file with the Office a
petition to institute a post-grant review of a patent. The
Director shall establish, by regulation, fees to be paid by the
person requesting the review, in such amounts as the Director
determines to be reasonable, considering the aggregate costs of
the post-grant review.
(b) Scope.--A petitioner in a post-grant review may request
to cancel as unpatentable 1 or more claims of a patent on any
ground that could be raised under paragraph (2) or (3) of
section 282(b) (relating to invalidity of the patent or any
claim).
(c) Filing Deadline.--A petition for a post-grant review
may only be filed not later than the date that is 1 year after
the date of the grant of the patent or of the issuance of a
reissue patent (as the case may be).
Sec. 322. Petitions
(a) Requirements of Petition.--A petition filed under
section 321 may be considered only if--
(1) the petition is accompanied by payment of the
fee established by the Director under section 321;
(2) the petition identifies all real parties in
interest;
(3) the petition identifies, in writing and with
particularity, each claim challenged, the grounds on
which the challenge to each claim is based, and the
evidence that supports the grounds for the challenge to
each claim, including--
(A) copies of patents and printed
publications that the petitioner relies upon in
support of the petition; and
(B) affidavits or declarations of
supporting evidence and opinions, if the
petitioner relies on other factual evidence or
on expert opinions;
(4) the petition provides such other information as
the Director may require by regulation; and
(5) the petitioner provides copies of any of the
documents required under paragraphs (2), (3), and (4)
to the patent owner or, if applicable, the designated
representative of the patent owner.
(b) Public Availability.--As soon as practicable after the
receipt of a petition under section 321, the Director shall
make the petition available to the public.
Sec. 323. Preliminary response to petition
If a post-grant review petition is filed under section 321,
the patent owner shall have the right to file a preliminary
response to the petition, within a time period set by the
Director, that sets forth reasons why no post-grant review
should be instituted based upon the failure of the petition to
meet any requirement of this chapter.
Sec. 324. Institution of post-grant review
(a) Threshold.--The Director may not authorize a post-grant
review to commence unless the Director determines that the
information presented in the petition filed under section 321,
if such information is not rebutted, would demonstrate that it
is more likely than not that at least 1 of the claims
challenged in the petition is unpatentable.
(b) Additional Grounds.--The determination required under
subsection (a) may also be satisfied by a showing that the
petition raises a novel or unsettled legal question that is
important to other patents or patent applications.
(c) Timing.--The Director shall determine whether to
institute a post-grant review under this chapter pursuant to a
petition filed under section 321 within 3 months after--
(1) receiving a preliminary response to the
petition under section 323; or
(2) if no such preliminary response is filed, the
last date on which such response may be filed.
(d) Notice.--The Director shall notify the petitioner and
patent owner, in writing, of the Director's determination under
subsection (a) or (b), and shall make such notice available to
the public as soon as is practicable. The Director shall make
each notice of the institution of a post-grant review available
to the public. Such notice shall include the date on which the
review shall commence.
(e) No Appeal.--The determination by the Director whether
to institute a post-grant review under this section shall be
final and nonappealable.
Sec. 325. Relation to other proceedings or actions
(a) Infringer's Civil Action.--
(1) Post-grant review barred by civil action.--A
post-grant review may not be instituted under this
chapter if, before the date on which the petition for
such a review is filed, the petitioner, real party in
interest, or privy of the petitioner filed a civil
action challenging the validity of a claim of the
patent.
(2) Stay of civil action.--If the petitioner, real
party in interest, or privy of the petitioner files a
civil action challenging the validity of a claim of the
patent on or after the date on which the petitioner
files a petition for post-grant review of the patent,
that civil action shall be automatically stayed until
either--
(A) the patent owner moves the court to
lift the stay;
(B) the patent owner files a civil action
or counterclaim alleging that the petitioner,
real party in interest, or privy of the
petitioner has infringed the patent; or
(C) the petitioner, real party in interest,
or privy of the petitioner moves the court to
dismiss the civil action.
(3) Treatment of counterclaim.--A counterclaim
challenging the validity of a claim of a patent does
not constitute a civil action challenging the validity
of a claim of a patent for purposes of this subsection.
(b) Preliminary Injunctions.--If a civil action alleging
infringement of a patent is filed within 3 months after the
date on which the patent is granted, the court may not stay its
consideration of the patent owner's motion for a preliminary
injunction against infringement of the patent on the basis that
a petition for post-grant review has been filed under this
chapter or that such a post-grant review has been instituted
under this chapter.
(c) Joinder.--If more than 1 petition for a post-grant
review under this chapter is properly filed against the same
patent and the Director determines that more than 1 of these
petitions warrants the institution of a post-grant review under
section 324, the Director may consolidate such reviews into a
single post-grant review.
(d) Multiple Proceedings.--Notwithstanding sections 135(a),
251, and 252, and chapter 30, during the pendency of any post-
grant review under this chapter, if another proceeding or
matter involving the patent is before the Office, the Director
may determine the manner in which the post-grant review or
other proceeding or matter may proceed, including providing for
the stay, transfer, consolidation, or termination of any such
matter or proceeding. In determining whether to institute or
order a proceeding under this chapter, chapter 30, or chapter
31, the Director may take into account whether, and reject the
petition or request because, the same or substantially the same
prior art or arguments previously were presented to the Office.
(e) Estoppel.--
(1) Proceedings before the office.--The petitioner
in a post-grant review of a claim in a patent under
this chapter that results in a final written decision
under section 328(a), or the real party in interest or
privy of the petitioner, may not request or maintain a
proceeding before the Office with respect to that claim
on any ground that the petitioner raised or reasonably
could have raised during that post-grant review.
(2) Civil actions and other proceedings.--The
petitioner in a post-grant review of a claim in a
patent under this chapter that results in a final
written decision under section 328(a), or the real
party in interest or privy of the petitioner, may not
assert either in a civil action arising in whole or in
part under section 1338 of title 28 or in a proceeding
before the International Trade Commission under section
337 of the Tariff Act of 1930 that the claim is invalid
on any ground that the petitioner raised or reasonably
could have raised during that post-grant review.
(f) Reissue Patents.--A post-grant review may not be
instituted under this chapter if the petition requests
cancellation of a claim in a reissue patent that is identical
to or narrower than a claim in the original patent from which
the reissue patent was issued, and the time limitations in
section 321(c) would bar filing a petition for a post-grant
review for such original patent.
Sec. 326. Conduct of post-grant review
(a) Regulations.--The Director shall prescribe
regulations--
(1) providing that the file of any proceeding under
this chapter shall be made available to the public,
except that any petition or document filed with the
intent that it be sealed shall, if accompanied by a
motion to seal, be treated as sealed pending the
outcome of the ruling on the motion;
(2) setting forth the standards for the showing of
sufficient grounds to institute a review under
subsections (a) and (b) of section 324;
(3) establishing procedures for the submission of
supplemental information after the petition is filed;
(4) establishing and governing a post-grant review
under this chapter and the relationship of such review
to other proceedings under this title;
(5) setting forth standards and procedures for
discovery of relevant evidence, including that such
discovery shall be limited to evidence directly related
to factual assertions advanced by either party in the
proceeding;
(6) prescribing sanctions for abuse of discovery,
abuse of process, or any other improper use of the
proceeding, such as to harass or to cause unnecessary
delay or an unnecessary increase in the cost of the
proceeding;
(7) providing for protective orders governing the
exchange and submission of confidential information;
(8) providing for the filing by the patent owner of
a response to the petition under section 323 after a
post-grant review has been instituted, and requiring
that the patent owner file with such response, through
affidavits or declarations, any additional factual
evidence and expert opinions on which the patent owner
relies in support of the response;
(9) setting forth standards and procedures for
allowing the patent owner to move to amend the patent
under subsection (d) to cancel a challenged claim or
propose a reasonable number of substitute claims, and
ensuring that any information submitted by the patent
owner in support of any amendment entered under
subsection (d) is made available to the public as part
of the prosecution history of the patent;
(10) providing either party with the right to an
oral hearing as part of the proceeding; and
(11) requiring that the final determination in any
post-grant review be issued not later than 1 year after
the date on which the Director notices the institution
of a proceeding under this chapter, except that the
Director may, for good cause shown, extend the 1-year
period by not more than 6 months, and may adjust the
time periods in this paragraph in the case of joinder
under section 325(c).
(b) Considerations.--In prescribing regulations under this
section, the Director shall consider the effect of any such
regulation on the economy, the integrity of the patent system,
the efficient administration of the Office, and the ability of
the Office to timely complete proceedings instituted under this
chapter.
(c) Patent Trial and Appeal Board.--The Patent Trial and
Appeal Board shall, in accordance with section 6, conduct each
post-grant review instituted under this chapter.
(d) Amendment of the Patent.--
(1) In general.--During a post-grant review
instituted under this chapter, the patent owner may
file 1 motion to amend the patent in 1 or more of the
following ways:
(A) Cancel any challenged patent claim.
(B) For each challenged claim, propose a
reasonable number of substitute claims.
(2) Additional motions.--Additional motions to
amend may be permitted upon the joint request of the
petitioner and the patent owner to materially advance
the settlement of a proceeding under section 327, or
upon the request of the patent owner for good cause
shown.
(3) Scope of claims.--An amendment under this
subsection may not enlarge the scope of the claims of
the patent or introduce new matter.
(e) Evidentiary Standards.--In a post-grant review
instituted under this chapter, the petitioner shall have the
burden of proving a proposition of unpatentability by a
preponderance of the evidence.
Sec. 327. Settlement
(a) In General.--A post-grant review instituted under this
chapter shall be terminated with respect to any petitioner upon
the joint request of the petitioner and the patent owner,
unless the Office has decided the merits of the proceeding
before the request for termination is filed. If the post-grant
review is terminated with respect to a petitioner under this
section, no estoppel under section 325(e) shall attach to the
petitioner, or to the real party in interest or privy of the
petitioner, on the basis of that petitioner's institution of
that post-grant review. If no petitioner remains in the post-
grant review, the Office may terminate the post-grant review or
proceed to a final written decision under section 328(a).
(b) Agreements in Writing.--Any agreement or understanding
between the patent owner and a petitioner, including any
collateral agreements referred to in such agreement or
understanding, made in connection with, or in contemplation of,
the termination of a post-grant review under this section shall
be in writing, and a true copy of such agreement or
understanding shall be filed in the Office before the
termination of the post-grant review as between the parties. At
the request of a party to the proceeding, the agreement or
understanding shall be treated as business confidential
information, shall be kept separate from the file of the
involved patents, and shall be made available only to Federal
Government agencies on written request, or to any person on a
showing of good cause.
Sec. 328. Decision of the Board
(a) Final Written Decision.--If a post-grant review is
instituted and not dismissed under this chapter, the Patent
Trial and Appeal Board shall issue a final written decision
with respect to the patentability of any patent claim
challenged by the petitioner and any new claim added under
section 326(d).
(b) Certificate.--If the Patent Trial and Appeal Board
issues a final written decision under subsection (a) and the
time for appeal has expired or any appeal 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 by operation of the certificate
any new or amended claim determined to be patentable.
(c) Amended or New Claim.--Any proposed amended or new
claim determined to be patentable and incorporated into a
patent following a post-grant review under this chapter 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 therefor,
before the issuance of a certificate under subsection (b).
(d) Data on Length of Review.--The Office shall make
available to the public data describing the length of time
between the institution of, and the issuance of a final written
decision under subsection (a) for, each post-grant review.
Sec. 329. Appeal
A party dissatisfied with the final written decision of the
Patent Trial and Appeal Board under section 328(a) may appeal
the decision pursuant to sections 141 through 144. Any party to
the post-grant review shall have the right to be a party to the
appeal.
PART IV--PATENT COOPERATION TREATY
* * * * * * *
CHAPTER 36--INTERNATIONAL STAGE
Sec. 363. International application designating the United States:
Effect
An international application designating the United States
shall have the effect, from its international filing date under
article 11 of the treaty, of a national application for patent
regularly filed in the Patent and Trademark Office [except as
otherwise provided in section 102(e) of this title].
Sec. 365. Right of priority; benefit of the filing date of a prior
application
(a) In accordance with the conditions and requirements of
subsections (a) through (d) of section 119 [of this title], a
national application shall be entitled to the right of priority
based on a prior filed international application which
designated at least one country other than the United States.
(b) In accordance with the conditions and requirement of
section 119(a) [of this title] and the treaty and the
Regulations, an international application designating the
United States shall be entitled to the right of priority based
on a prior foreign application, or a prior international
application designating at least one country other than the
United States.
(c) In accordance with the conditions and requirements of
section 120 [of this title], an international application
designating the United States shall be entitled to the benefit
of the filing date of a prior national application or a prior
international application designating the United States, and a
national application shall be entitled to the benefit of the
filing date of a prior international application designating
the United States. If any claim for the benefit of an earlier
filing date is based on a prior international application which
designated but did not originate in the United States, the
Director may require the filing in the Patent and Trademark
Office of a certified copy of such application together with a
translation thereof into the English language, if it was filed
in another language.
* * * * * * *
Sec. 368. Secrecy of certain inventions; filing international
applications in foreign countries
(a) International applications filed in the Patent and
Trademark Office shall be subject to the provisions of chapter
17 [of this title].
(b) In accordance with article 27(8) of the treaty, the
filing of an international application in a country other than
the United States on the invention made in this country shall
be considered to constitute the filing of an application in a
foreign country within the meaning of chapter 17 [of this
title], whether or not the United States is designated in that
international application.
* * * * * * *
CHAPTER 37--NATIONAL STAGE
Sec. 371. National stage: Commencement
(a) * * *
(b) Subject to subsection (f) of this section, the national
stage shall commence with the expiration of the applicable time
limit under article 22(1) or (2), or under article 39(1)(a) [of
the treaty] of the treaty.
(c) The applicant shall file in the Patent and Trademark
Office--
(1) the national fee provided in section 41(a) [of
this title];
* * * * * * *
(4) an oath or declaration of the inventor (or
other person authorized under chapter 11 [of this
title]) complying with the requirements of section 115
[of this title] and with regulations prescribed for
oaths or declarations of applicants;
* * * * * * *
Sec. 372. National stage: Requirements and procedure
(a) * * *
(b) In case of international applications designating but
not originating in, the United States--
(1) * * *
(2) the Director may cause the question of unity of
invention to be reexamined under section 121 [of this
title], within the scope of the requirements of the
treaty and the Regulations; and
* * * * * * *
Sec. 373. Improper applicant
An international application designating the United States,
shall not be accepted by the Patent and Trademark Office for
the national stage if it was filed by anyone not qualified
under chapter 11 [of this title] to be an applicant for the
purpose of filing a national application in the United States.
Such international applications shall not serve as the basis
for the benefit of an earlier filing date under section 120 [of
this title] in a subsequently filed application, but may
serve as the basis for a claim of the right of priority under
subsections (a) through (d) of section 119 [of this title], if
the United States was not the sole country designated in such
international application.
Sec. 374. Publication of international application
The publication under the treaty defined in section 351(a)
[of this title], of an international application designating
the United States shall be deemed a publication under section
122(b), except as provided in [sections 102(e) and 154(d) of
this title] section 154(d).
The publication under the treaty of an international
application shall confer no rights and shall have no effect
under this title other than that of a printed publication.
Sec. 375. Patent issued on international application: Effect
(a) A patent may be issued by the Director based on an
international application designating the United States, in
accordance with the provisions of this title. [Subject to
section 102(e) of this title, such] Such patent shall have the
force and effect of a patent issued on a national application
filed under the provisions of chapter 11 [of this title].
* * * * * * *
----------
TITLE 28, UNITED STATES CODE
* * * * * * *
PART IV--JURISDICTION AND VENUE
* * * * * * *
CHAPTER 83--COURTS OF APPEALS
* * * * * * *
Sec. 1295. Jurisdiction of the united states court of appeals for the
federal circuit
(a) The United States Court of Appeals for the Federal
Circuit shall have exclusive jurisdiction-
[(1) of an appeal from a final decision of a
district court of the United States, the United States
District Court for the District of the Canal Zone, the
District Court of Guam, the District Court of the
Virgin Islands, or the District Court for the Northern
Mariana Islands, if the jurisdiction of that court was
based, in whole or in part, on section 1338 of this
title, except that a case involving a claim arising
under any Act of Congress relating to copyrights,
exclusive rights in mask works, or trademarks and no
other claims under section 1338(a) shall be governed by
sections 1291, 1292, and 1294 of this title;]
(1) of an appeal from a final decision of a
district court of the United States, the District Court
of Guam, the District Court of the Virgin Islands, or
the District Court of the Northern Mariana Islands, in
any civil action arising under, or in any civil action
in which a party has asserted a compulsory counterclaim
arising under, any Act of Congress relating to patents
or plant variety protection;
* * * * * * *
(4) of an appeal from a decision of-
[(A) the Board of Patent Appeals and
Interferences of the United States Patent and
Trademark Office with respect to patent
applications and interferences, at the instance
of an applicant for a patent or any party to a
patent interference, and any such appeal shall
waive the right of such applicant or party to
proceed under section 145 or 146 of title 35;]
(A) the Patent Trial and Appeal Board of
the United States Patent and Trademark Office
with respect to a patent application,
derivation proceeding, reexamination, post-
grant review, or inter partes review under
title 35, at the instance of a party who
exercised that party's right to participate in
the applicable proceeding before or appeal to
the Board, except that an applicant or a party
to a derivation proceeding may also have remedy
by civil action pursuant to section 145 or 146
of title 35; an appeal under this subparagraph
of a decision of the Board with respect to an
application or derivation proceeding shall
waive the right of such applicant or party to
proceed under section 145 or 146 of title 35;
* * * * * * *
CHAPTER 85--COURTS OF APPEALS
* * * * * * *
Sec. 1338. Patents, plant variety protection, copyrights, mask works,
designs, trademarks, and unfair competition
(a) The district courts shall have original jurisdiction of
any civil action arising under any Act of Congress relating to
patents, plant variety protection, copyrights and trademarks.
[Such jurisdiction shall be exclusive of the courts of the
states in patent, plant variety protection and copyright
cases.] No State court shall have jurisdiction over any claim
for relief arising under any Act of Congress relating to
patents, plant variety protection, or copyrights. For purposes
of this subsection, the term ``State'' includes any State of
the United States, the District of Columbia, the Commonwealth
of Puerto Rico, the United States Virgin Islands, American
Samoa, Guam, and the Northern Mariana Islands.
* * * * * * *
CHAPTER 89--DISTRICT COURTS; REMOVAL OF CASES FROM STATE COURTS
Sec.
1441. Actions removable generally.
* * * * * * *
1454. Patent, plant variety protection, and copyright cases.
* * * * * * *
Sec. 1454. Patent, plant variety protection, and copyright cases
(a) In General.--A civil action in which any party asserts
a claim for relief arising under any Act of Congress relating
to patents, plant variety protection, or copyrights may be
removed to the district court of the United States for the
district and division embracing the place where the action is
pending.
(b) Special Rules.--The removal of an action under this
section shall be made in accordance with section 1446, except
that if the removal is based solely on this section--
(1) the action may be removed by any party; and
(2) the time limitations contained in section
1446(b) may be extended at any time for cause shown.
(c) Clarification of Jurisdiction in Certain Cases.--The
court to which a civil action is removed under this section is
not precluded from hearing and determining any claim in the
civil action because the State court from which the civil
action is removed did not have jurisdiction over that claim.
(d) Remand.--If a civil action is removed solely under this
section, the district court--
(1) shall remand all claims that are neither a
basis for removal under subsection (a) nor within the
original or supplemental jurisdiction of the district
court under any Act of Congress; and
(2) may, under the circumstances specified in
section 1367(c), remand any claims within the
supplemental jurisdiction of the district court under
section 1367.
* * * * * * *
CHAPTER 99--GENERAL PROVISIONS
Sec.
1631. Transfer to cure want of jurisdiction.
1632. Transfer by the Court of Appeals for the Federal Circuit.
* * * * * * *
Sec. 1632. Transfer by the Court of Appeals for the Federal Circuit
When a case is appealed to the Court of Appeals for the
Federal Circuit under section 1295(a)(1), and no claim for
relief arising under any Act of Congress relating to patents or
plant variety protection is the subject of the appeal by any
party, the Court of Appeals for the Federal Circuit shall
transfer the appeal to the court of appeals for the regional
circuit embracing the district from which the appeal has been
taken.
* * * * * * *
----------
TRADEMARK ACT OF 1946
TITLE I--THE PRINCIPAL REGISTER
* * * * * * *
Sec. 21. (a) * * *
(b)(1) * * *
* * * * * * *
(4) Where there is an adverse party, such suit may be
instituted against the party in interest as shown by the
records of the United States Patent and Trademark Office at the
time of the decision complained of, but any party in interest
may become a party to the action. If there are adverse parties
residing in a plurality of districts not embraced within the
same State, or an adverse party residing in a foreign country,
the [United States District Court for the District of Columbia]
United States District Court for the Eastern District of
Virginia shall have jurisdiction and may issue summons against
the adverse parties directed to the marshal of any district in
which any adverse party resides. Summons against adverse
parties residing in foreign countries may be served by
publication or otherwise as the court directs.
* * * * * * *
----------
CONSOLIDATED APPROPRIATIONS ACT, 2005
* * * * * * *
DIVISION B--DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY,
AND RELATED AGENCIES APPROPRIATIONS ACT, 2005
* * * * * * *
TITLE VIII--PATENT AND TRADEMARK FEES
* * * * * * *
SEC. 802. ADJUSTMENT OF TRADEMARK FEES.
(a) Fee For Filing Application.--[During fiscal years 2005,
2006, and 2007,] Until such time as the Director sets or
adjusts the fees otherwise, under such conditions as may be
prescribed by the Director, the fee under section 31(a) of the
Trademark Act of 1946 (15 U.S.C. 1113(a)) for: (1) the filing
of a paper application for the registration of a trademark
shall be $375; (2) the filing of an electronic application
shall be $325; and (3) the filing of an electronic application
meeting certain additional requirements prescribed by the
Director shall be $275. [During fiscal years 2005, 2006, and
2007, the] The provisions of the second and third sentences of
section 31(a) of the Trademark Act of 1946 shall apply to the
fees established under this section.
* * * * * * *
SEC. 803. EFFECTIVE DATE, APPLICABILITY, AND TRANSITIONAL PROVISION.
(a) Effective Date.--Except as otherwise provided in this
title (including this section), the provisions of this title
shall take effect on the date of the enactment of this Act [and
shall apply only with respect to the remaining portion of
fiscal year 2005 and fiscal year 2006].
* * * * * * *
Dissenting Views
Patent reform is one of the most important issues facing
Congress and the Nation. Increasingly our nation has an
information based economy, and the key to such an economy is
intellectual property such as patents, copyrights and
trademarks. Studies establish that intellectual property drives
this economy to the tune of $5 trillion dollars, accounting for
half of all U.S. exports and employing nearly 18 million
workers. This is why the House Judiciary Committee has been
working on patent reform for over 6 years, under both parties.
Unfortunately, the legislation does not represent an
overall improvement over the status quo and, as presently
drafted is not one that I can support. Among other things, I
object to provisions in the bill that apply retroactively with
regard to business method patents\1\ and false markings
cases.\2\ Most of the proposed reforms in both the House and
Senate patent reform bills such as the other post-grant
provisions are applicable going forward, not retroactively. If
we are seeking to craft a bipartisan bill with consensus,
stripping the legal rights of private parties involved in
pending litigation is a non-starter.
---------------------------------------------------------------------------
\1\America Invents Act, H.R. 1249, 112th Cong. Sec. 18.
\2\Id. Sec. 15(b).
---------------------------------------------------------------------------
Section 18 in the bill is purportedly designed to create an
administrative mechanism to review so-called business method
patents whose validity has been questioned. However, Section 18
is both too broad and too narrow to serve its purported goal,
and works an injustice on legitimate patent holders as a
result. Section 18 is overly broad because it is retroactive,
applying to patents granted more than a decade ago. It is also
overly broad because it could affect patents that have been
upheld as valid through additional review at the USPTO, such as
ex parte re-examination, or that have been held valid by a
federal court. It applies not only to business methods but also
to apparatus inventions. On the other hand, Section 18 is too
narrow because instead of applying to all kinds of business
methods, it only applies to financially-related business
methods. Further, it is unfair and inappropriate to force
specific patent holders that have been through reexamination,
or that have survived years of legal challenge, to defend their
patents under an entirely new set of rules at the USPTO. It is
also contrary to patent law norms and establishes a bad
precedent for our trade partners to force a small subset of
patent holders--those who have invented financially-related
business methods and associated apparatus--to defend themselves
in a new, retroactive procedure that does not apply to any
other patent holders.
I am also opposed to the section dealing with false
markings cases. I say this as a member who has expressed
concerns in the past with the Federal Circuit decision in
Forest Group Inc. v. Bon Tool Co.\3\ The legislation, in
essence, would change the rules of the game for cases that are
currently being litigated. To the extent legislation is needed,
I support applying the new rules going forward because these
rules would be implemented and cases would be adjudicated in
conjunction with the new broader reforms of the entire patent
system the bill proposes, creating balance and fairness for all
parties. Moreover, based on recent court decisions that have
already imposed more restrictive standards concerning present
claims, there is absolutely no reason for Congress to interfere
in these claims which are before the courts.\4\
---------------------------------------------------------------------------
\3\Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir.
2009).
\4\Unique Product Solutions, Ltd. v. Hy-Grade Valve, Inc., No. 10-
1912, 2011 U.S. Dist. LEXIS (N.D. Ohio Feb. 23, 2011); In re BP
Lubricants USA Inc., Misc. Docket No. 960, 2011 U.S. App. LEXIS 5015
(Fed. Cir. March 15, 2011).
---------------------------------------------------------------------------
I am also concerned about the creation of a 3-year safe
harbor for companies accused of false marking their products.
Providing a safe harbor for expiring patents only compounds the
retroactivity problem by ensuring that almost all ongoing
litigation will be eliminated.
I would also like to express my support for the Additional
Views being filed by other Democratic Members noting
improvements that should be made in the bill regarding inter
partes reexamination.
It is my hope that these and other problems can be
alleviated and the bill modified so that it can become a true
bipartisan consensus product.
John Conyers, Jr.
Additional Views
Congressional efforts to enact comprehensive patent reform
began in the 107th Congress. Since that time, various
iterations of patent reform bills have fallen short of the
elusive finish-line. Today, however, we are closer than we have
ever been to crafting legislation that will strengthen the
patent system and afford the U.S. Patent and Trademark Office
(PTO) the resources it requires to clear the still sizeable
backlog of patent applications and move forward to deliver to
all American inventors the first rate service they deserve. We
are not there yet and the process has not been perfect. But
Committee Democrats are encouraged that some of the core
provisions we sought, for example, the expansion of prior user
rights and the end to fee diversion, are in H.R. 1249. We write
separately to highlight our concerns with modifications to the
post-grant review procedures designed to provide controls on
the quality of issued patents.
A longstanding goal of patent reform has been to improve
the PTO's administrative procedures for challenging dubious
patents through reexamination. H.R. 1249 creates a new post-
grant review procedure to provide an additional check on poor-
quality patents than currently available under current law.
However, this new procedure is limited to challenges filed
within 12 months of the date that a patent is granted. This 12-
month deadline will limit the utility of the post-grant review
as an efficient, low-cost alternative to litigation. The lack
of clear notice of the precise scope of a given patents is well
documented.\1\ In several industries, patents are often
multitudinous, vague, and highly abstract. This prevents
practitioners from being able to identify and assess relevant
patents before they receive some specific warning of liability,
which often comes many years after a patent has been issued.
For this reason, the National Research Council of the National
Academies recommended, at a minimum, the creation of a ``second
window'' for post-grant review challenges triggered by
litigation or a threat of enforcement by a patent owner.\2\
---------------------------------------------------------------------------
\1\See Federal Trade Commission, The Evolving IP Marketplace:
Aligning Patent Notice and Remedies with Competition (Mar. 2011),
available at http://www.ftc.gov/os/2011/03/110307
patentreport.pdf.
\2\National Research Council of the National Academies, A Patent
System for the 21st Century (2004) at 101.
---------------------------------------------------------------------------
In the absence of a second window, patent reform
legislation should maintain the existing system for
reexaminations by the PTO, through ex parte and inter partes
procedures. Inter partes reexamination in particular provides
important ongoing opportunities for expert review of patent
validity in some cases. H.R. 1249 maintains this procedure with
some changes. We support the continued existence of inter
partes reexamination\3\ as well as the creation of the new
post-grant review procedure. However, we have significant
concerns about the limitations that H.R. 1249 imposes on inter
partes review.
---------------------------------------------------------------------------
\3\Under Sec. 5 of H.R. 1249, inter partes reexamination is renamed
as ``inter partes review.''
---------------------------------------------------------------------------
Use of inter partes reexamination is already exceedingly
rare in the status quo. In Fiscal Year 2010, 281 reexamination
petitions were filed,\4\ while 219,614 utility patents were
granted.\5\ The limitations imposed by H.R. 1249 and the
managers amendment are motivated by assertions that the inter
partes procedure may be abused to harass patent owners and
interfere with the enforcement of valid patents. However, no
empirical evidence, even anecdotally, was proffered to the
Committee to demonstrate such abuses occur in the current
reexamination system. On the contrary, of the 253 inter partes
reexaminations decided since the procedure was created in
1999,\6\ 224 (89%) resulted in the modification or
nullification of at least one patent claim, which means that
the challenges were ultimately found meritorious.\7\ This
suggests that further limitations and deterrents against inter
partes petitions, beyond those already in place in current law,
are unnecessary and counterproductive.
---------------------------------------------------------------------------
\4\United States Patent and Trademark Office (USPTO), Inter Partes
Reexamination Filing Data (Mar. 31, 2011), available at http://
www.uspto.gov/patents/IP_quarterly_
report_March_2011.pdf.
\5\United States Patent and Trademark Office, U.S. Patent Activity,
Calendar Years 1790 to the Present, available at http://www.uspto.gov/
web/offices/ac/ido/oeip/taf/h_counts.htm.
\6\The Optional Inter Partes Reexamination Act, Pub. L. No. 106-
113.
\7\See Inter Partes Reexamination Filing Data, supra note 4.
---------------------------------------------------------------------------
Patent reform legislation should seek to expand
opportunities for low-cost, efficient alternatives to
litigation as a way of resolving disputes about the validity of
issued patents. In the context of inter partes reexamination,
H.R. 1249 does the opposite, by placing unnecessary constraints
on a procedure that is already under-utilized. We are
particularly concerned about two specific provisions.
First, H.R. 1249 as amended sets a 12-month deadline for a
defendant in litigation to file a petition for inter partes
review, starting from the date on which the party is served
with a complaint for infringement. The length of this deadline
is completely arbitrary, and does not account for the
complexity of many patent cases that can encompass dozens of
patents and defendants and hundreds of separate patent claims.
In such complex cases, the 12-month period imposes an extremely
compressed schedule that will not provide enough time for the
defendants to prepare and file an inter partes petition.
Instead, the deadline should be tied to substantive progress in
patent litigation, such as the entry of an order by the
district court construing the relevant patent claims. This
would ensure that defendants have an opportunity to prepare
legitimate petitions for inter partes review based upon the
core issues in a patent case.
Second, H.R. 1249 as amended raises the threshold for
initiating an inter partes review procedure. In order to
initiate a review, the Director must find ``a reasonable
likelihood that the petitioner would prevail with respect to at
least one of the claims challenged in the petition.'' The
existing threshold--whether a petition raises a ``substantial
new question of patentability''--should be maintained instead.
As noted above, the overwhelming majority of inter partes
reexaminations that have been initiated under the current
standard have been ultimately deemed meritorious. A stricter
threshold is therefore unjustified. Moreover, the practical
meaning of the new standard in H.R. 1249 is not clear and
creates a risk that the PTO will reject legitimate petitions at
the outset of the procedure, without further inquiry.
Because of these provisions, we do not support Sec. 5(a) of
H.R. 1249. Several Democratic amendments designed to address
these provisions were offered but defeated during the markup of
the bill. We believe that, at minimum, in order to preserve the
existing utility of inter partes reexaminations, current law
should be maintained. Ensuring the high caliber of patents
circulating in the marketplace inures to the benefit of all
Americans by stimulating innovation, encouraging investment and
creating jobs. We hope that as H.R. 1249 moves closer to the
floor, needed revisions will be made to ensure that inter
partes reexamination remains a viable, efficient alternative to
litigation for weeding out bad patents.
Howard L. Berman.
Melvin L. Watt.
Zoe Lofgren.