[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1659 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 1659

  To amend title 35, United States Code, to establish the Patent and 
 Trademark Office as a Government corporation, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 17, 1995

Mr. Moorhead (for himself and Mrs. Schroeder) introduced the following 
       bill; which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
  To amend title 35, United States Code, to establish the Patent and 
 Trademark Office as a Government corporation, and for other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Patent and Trademark Office 
Corporation Act of 1995''.

                  TITLE I--PATENT AND TRADEMARK OFFICE

SEC. 101. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE AS A 
              CORPORATION.

    Section 1 of title 35, United States Code, is amended to read as 
follows:
``Sec. 1. Establishment
    ``(a) Establishment.--The Patent and Trademark Office is 
established as a wholly owned Government corporation subject to chapter 
91 of title 31, except as otherwise provided in this title.
    ``(b) Offices.--The Patent and Trademark Office shall maintain an 
office in the District of Columbia, or the metropolitan area thereof, 
for the service of process and papers and shall be deemed, for purposes 
of venue in civil actions, to be a resident of the District of 
Columbia. The Patent and Trademark Office may establish offices in such 
other places as it considers necessary or appropriate in the conduct of 
its business.
    ``(c) Reference.--For purposes of this title, the Patent and 
Trademark Office shall also be referred to as the `Office'.''.

SEC. 102. POWERS AND DUTIES.

    Section 2 of title 35, United States Code, is amended to read as 
follows:
``Sec. 2. Powers and Duties
    ``(a) In General.--The Patent and Trademark Office shall be 
responsible for--
            ``(1) the granting and issuing of patents and the 
        registration of trademarks;
            ``(2) conducting studies, programs, or exchanges of items 
        or services regarding domestic and international patent and 
        trademark law or the administration of the Office, including 
        programs to recognize, identify, assess, and forecast the 
        technology of patented inventions and their utility to 
        industry;
            ``(3) authorizing or conducting studies and programs 
        cooperatively with foreign patent and trademark offices and 
        international organizations, in connection with the granting 
        and issuing of patents and the registration of trademarks; and
            ``(4) disseminating to the public information with respect 
        to patents and trademarks.
    ``(b) Specific Powers.--The Office--
            ``(1) shall have perpetual succession;
            ``(2) shall adopt and use a corporate seal, which shall be 
        judicially noticed and with which letters patent, certificates 
        of trademark registrations, and papers issued by the Office 
        shall be authenticated;
            ``(3) may sue and be sued in its corporate name and be 
        represented by its own attorneys in all judicial and 
        administrative proceedings;
            ``(4) may indemnify the Commissioner of Patents and 
        Trademarks, and other officers, attorneys, agents, and 
        employees (including members of the Management Advisory Board 
        established in section 5), of the Office for liabilities and 
        expenses incurred within the scope of their employment;
            ``(5) may adopt, amend, and repeal bylaws, rules, and 
        regulations, governing the manner in which its business will be 
        conducted and the powers granted to it by law will be 
        exercised, without regard to chapter 35 of title 44;
            ``(6) may acquire, construct, purchase, lease, hold, 
        manage, operate, improve, alter, and renovate any real, 
        personal, or mixed property, or any interest therein, as it 
        considers necessary to carry out its functions, without regard 
        to the provisions of the Federal Property and Administrative 
        Services Act of 1949;
            ``(7)(A) may make such purchases, contracts for the 
        construction, maintenance, or management and operation of 
        facilities, and contracts for supplies or services, after 
        advertising, in such manner and at such times sufficiently in 
        advance of opening bids, as the Office determines is adequate 
        to ensure notice and an opportunity for competition, except 
        that advertising shall not be required when the Office 
        determines that the making of any such purchase or contract 
        without advertising is necessary, or that advertising is not 
        reasonably practicable;
            ``(B) may enter into and perform such purchases and 
        contracts for printing services, including the process of 
        composition, platemaking, presswork, silk screen processes, 
        binding, microform, and the products of such processes, as it 
        considers necessary to carry out the functions of the Office, 
        without regard to sections 501 through 517 and 1101 through 
        1123 of title 44; and
            ``(C) may enter into and perform such other contracts, 
        leases, cooperative agreements, or other transactions with 
        international, foreign, and domestic public agencies and 
        private organizations, and persons as is necessary in the 
        conduct of its business and on such terms as it considers 
        appropriate;
            ``(8) may use, with their consent, services, equipment, 
        personnel, and facilities of other departments, agencies, and 
        instrumentalities of the Federal Government, on a reimbursable 
        basis, and to cooperate with such other departments, agencies, 
        and instrumentalities in the establishment and use of services, 
        equipment, and facilities of the Office;
            ``(9) may obtain from the Administrator of General Services 
        such services as the Administrator is authorized to provide to 
        other agencies of the United States, on the same basis as those 
        services are provided to other agencies of the United States;
            ``(10) may use, with the consent of the agency, government, 
        or international organization concerned, the services, records, 
        facilities, or personnel of any State or local government 
        agency or instrumentality or foreign government or 
        international organization to perform functions on its behalf;
            ``(11) may determine the character of and the necessity for 
        its obligations and expenditures and the manner in which they 
        shall be incurred, allowed, and paid, subject to the provisions 
        of this title and the Act of July 5, 1946 (commonly referred to 
        as the `Trademark Act of 1946');
            ``(12) may retain and use all of its revenues and receipts, 
        including revenues from the sale, lease, or disposal of any 
        real, personal, or mixed property, or any interest therein, of 
        the Office, in carrying out the functions of the Office, 
        including for research and development and capital investment, 
        without apportionment under the provisions of subchapter II of 
        chapter 15 of title 31;
            ``(13) shall have the priority of the United States with 
        respect to the payment of debts from bankrupt, insolvent, and 
        decedents' estates;
            ``(14) may accept monetary gifts or donations of services, 
        or of real, personal, or mixed property, in order to carry out 
        the functions of the Office;
            ``(15) may execute, in accordance with its bylaws, rules, 
        and regulations, all instruments necessary and appropriate in 
        the exercise of any of its powers;
            ``(16) may provide for liability insurance and insurance 
        against any loss in connection with its property, other assets, 
        or operations either by contract or by self-insurance; and
            ``(17) shall pay any settlement or judgment entered against 
        it from the funds of the Office and not from amounts available 
        under section 1304 of title 31.''.
SEC. 103. ORGANIZATION AND MANAGEMENT.

    Section 3 of title 35, United States Code, is amended to read as 
follows:
``Sec. 3. Officers and employees
    ``(a) Commissioner.--
            ``(1) In general.--The management of the Patent and 
        Trademark Office shall be vested in Commissioner of Patents and 
        Trademarks (hereafter in this title referred to as the 
        `Commissioner'), who shall be a citizen of the United States 
        and who shall be appointed by the President, by and with the 
        advice and consent of the Senate. The Commissioner shall be a 
        person who, by reason of professional background and experience 
        in patent and trademark law, is especially qualified to manage 
        the Office.
            ``(2) Duties.--
                    ``(A) In general.--The Commissioner shall be 
                responsible for the management and direction of the 
                Office, including the issuance of patents and the 
                registration of trademarks.
                    ``(B) Advising the president.--The Commissioner 
                shall advise the President of all activities of the 
                Patent and Trademark Office undertaken in response to 
                obligations of the United States under treaties and 
                executive agreements, or which relate to cooperative 
                programs with those authorities of foreign governments 
                that are responsible for granting patents or 
                registering trademarks. The Commissioner shall also 
                recommend to the President changes in law or policy 
                which may improve the ability of U.S. citizens to 
                secure and enforce patent rights or trademark rights in 
                the United States or in foreign countries.
                    ``(C) Consulting with the management advisory 
                board.--The Commissioner shall consult with the 
                Management Advisory Board established in section 5 on a 
                regular basis on matters relating to the operation of 
                the Patent and Trademark Office, and shall consult with 
                the Board before submitting budgetary proposals to the 
                Office of Management and Budget or changing or 
                proposing to change patent or trademark user fees or 
                patent or trademark regulations.
            ``(3) Term.--The Commissioner shall serve a term of six 
        years, and may continue to serve until a successor is appointed 
        and assumes office. The Commissioner may be reappointed to 
        subsequent terms.
            ``(4) Oath.--The Commissioner shall, before taking office, 
        take an oath to discharge faithfully the duties of the Office.
            ``(5) Compensation.--The Commissioner shall receive 
        compensation at the rate of pay in effect for Level II of the 
        Executive Schedule under section 5313 of title 5.
            ``(6) Removal.--The Commissioner may be removed from office 
        by the President only for cause.
            ``(7) Designee of commissioner.--The Commissioner shall 
        designate an officer of the Office who shall be vested with the 
        authority to act in the capacity of the Commissioner in the 
        event of the absence or incapacity of the Commissioner.
    ``(b) Officers and Employees of the Office.--
            ``(1) Deputy commissioners.--The Commissioner shall appoint 
        a Deputy Commissioner for Patents and a Deputy Commissioner for 
        Trademarks for terms that shall expire on the date on which the 
        Commissioner's term expires. The Deputy Commissioner for 
        Patents shall be a person with demonstrated experience in 
        patent law and the Deputy Commissioner for Trademarks shall be 
        a person with demonstrated experience in trademark law. The 
        Deputy Commissioner for Patents and the Deputy Commissioner for 
        Trademarks shall be the principal policy advisors to the 
        Commissioner on all aspects of the activities of the Office 
        that affect the administration of patent and trademark 
        operations, respectively.
            ``(2) Other officers and employees.--The Commissioner 
        shall--
                    ``(A) appoint an Inspector General and such other 
                officers, employees (including attorneys), and agents 
                of the Office as the Commissioner considers necessary 
                to carry out its functions;
                    ``(B) fix the compensation of such officers and 
                employees in accordance with the policy set forth in 
                section 5301 of title 5, including compensation based 
                on performance; and
                    ``(C) define the authority and duties of such 
                officers and employees and delegate to them such of the 
                powers vested in the Office as the Commissioner may 
                determine.
The Office shall not be subject to any administratively or statutorily 
imposed limitation on positions or personnel, and no positions or 
personnel of the Office shall be taken into account for purposes of 
applying any such limitation, except to the extent otherwise 
specifically provided by statute with respect to the Office.
    ``(c) Limits on Compensation.--Except as otherwise provided in this 
title or any other provision of law, the basic pay of an officer or 
employee of the Office for any calendar year may not exceed the annual 
rate of basic pay in effect for level III of the Executive Schedule 
under section 5314 of title 5. The Commissioner shall by regulation 
establish a limitation on the total compensation payable to officers or 
employees of the Office, consistent with the limitation under section 
5307 of title 5.
    ``(d) Applicability of Title 5 Generally.--Except as otherwise 
provided in this section, officers and employees of the Office shall be 
subject to the provisions of title 5 relating to Federal employees.
    ``(e) Title 5 Exclusions.--The following provisions of title 5 
shall not apply to the Office or its officers and employees:
            ``(1) Chapter 31 (relating to authority for employment).
            ``(2) Chapter 33 (relating to examination, selection, and 
        placement), except that the provisions relating to a preference 
        eligible shall apply to the Office and its employees.
            ``(3) Chapter 35 (relating to retention preference, 
        restoration, and reemployment).
            ``(4) Chapter 43 (relating to performance appraisal).
            ``(5) Chapter 45 (relating to incentive awards).
            ``(6) Chapter 51 (relating to classification).
            ``(7) Subchapter III of chapter 53 (relating to General 
        Schedule pay rates).
    ``(f) Provisions of Title 5 Relating to Certain Benefits.--Officers 
and employees of the Office shall remain subject to chapters 83 
(relating to the Civil Service Retirement System), 84 (relating to the 
Federal Employees' Retirement System), 87 (relating to life insurance), 
and 89 (relating to health insurance) of title 5, except that the 
Office may, with respect to officers and employees of the Office, by 
regulation--
            ``(1) provide for benefits to supplement the benefits 
        otherwise provided under such chapter 83 or 84, as the case may 
        be; or
            ``(2) change the benefits provided under such chapter 87 or 
        89, so long as the changes do not result in benefits under 
        either chapter becoming, on the whole, less favorable than the 
        benefits which would then otherwise be available under such 
        chapter had such changes not been made.
    ``(g) Labor-Management Relations.--Chapter 71 of title 5 (relating 
to labor-management relations) shall apply with respect to the Office 
and its employees, except that--
            ``(1) the Office shall not bargain over the establishment, 
        implementation, amendment, or repeal of--
                    ``(A) any system of classification of employees;
                    ``(B) any compensation system, including wages and 
                compensation based on performance, and contributions of 
                the Office to the retirement and benefits programs; or
                    ``(C) any system to determine qualifications and 
                procedures for employment; and
            ``(2) in any other matter, the Office may negotiate only 
        with respect to--
                    ``(A) procedures which management officials of the 
                Office observe in exercising any authority under 
                section 7106 of title 5; and
                    ``(B) appropriate arrangements for employees 
                adversely affected by the exercise of any authority 
                under section 7106 of title 5.
    ``(h) Carryover of Personnel.--
            ``(1) To the office.--Effective as of the effective date of 
        the Patent and Trademark Office Corporation Act of 1995, all 
        officers and employees of the Patent and Trademark Office on 
        the day before such effective date shall become officers and 
        employees of the Office, without a break in service.
            ``(2) 1-year protections.--No individual who so becomes an 
        officer or employee of the Office shall, for a period of 1 year 
        after the effective date described in paragraph (1), be subject 
        to separation or to any reduction in compensation as a 
        consequence of the establishment of the Office as a Government 
        corporation.
            ``(3) Accumulated leave.--The amount of sick and annual 
        leave and compensatory time accumulated under title 5 before 
        the effective date described in paragraph (1), by officers or 
        employees of the Patent and Trademark Office who so become 
        officers or employees of the Office, are obligations of the 
        Office.
            ``(4) Continuation in office of certain officers.--(A) The 
        individual serving as the Commissioner of Patents and 
        Trademarks on the day before the effective date of the Patent 
        and Trademark Office Corporation Act of 1995 may serve as the 
        Commissioner for a period of 1 year beginning on such effective 
        date or, if earlier, until a Commissioner has been appointed 
        under subsection (a).
            ``(B) The individual serving as the Assistant Commissioner 
        for Patents on the day before the effective date of the Patent 
        and Trademark Office Corporation Act of 1995 may serve as the 
        Deputy Commissioner for Patents for a period of 1 year 
        beginning on such effective date or, if earlier, until a Deputy 
        Commissioner for Patents has been appointed under subsection 
        (b).
            ``(C) The individual serving as the Assistant Commissioner 
        for Trademarks on the day before the effective date of the 
        Patent and Trademark Office Corporation Act of 1995 may serve 
        as the Deputy Commissioner for Trademarks for a period of 1 
        year beginning on such effective date or, if earlier, until a 
        Deputy Commissioner for Trademarks has been appointed under 
        subsection (b).
    ``(i) Competitive Status.--For purposes of appointment to a 
position in the competitive service for which an officer or employee of 
the Office is qualified, such officer or employee shall--
            ``(1) not forfeit any competitive status, acquired by such 
        officer or employee before the effective date of the Patent and 
        Trademark Office Corporation Act of 1995, by reason of becoming 
        an officer or employee of the Office pursuant to subsection 
        (h)(1); or
            ``(2) if not covered by paragraph (1), acquire competitive 
        status after completing at least 1 year of continuous service 
        under a nontemporary appointment to a position within the 
        Office (taking into account such service, performed before the 
        effective date described in paragraph (1), as may be 
        appropriate).
    ``(j) Savings Provisions.--All orders, determinations, rules, and 
regulations regarding compensation and benefits and other terms and 
conditions of employment, in effect for the Office and its officers and 
employees immediately before the effective date of the Patent and 
Trademark Office Corporation Act of 1995, shall continue in effect with 
respect to the Office and its officers and employees until modified, 
superseded, or set aside by the Office or a court of appropriate 
jurisdiction or by operation of law.''.
 SEC. 104. MANAGEMENT ADVISORY BOARD.

    Chapter 1 of part I of title 35, United States Code, is amended by 
inserting after section 4 the following:
``Sec. 5. Patent and Trademark Office Management Advisory Board
    ``(a) Compensation.--
            ``(1) Appointment.--The Patent and Trademark Office shall 
        have a Management Advisory Board (hereafter in this title 
        referred to as the `Board') of 18 members, 6 of whom shall be 
        appointed by the President, 6 of whom shall be appointed by the 
        Speaker of the House of Representatives, and 6 of whom shall be 
        appointed by the President pro tempore of the Senate. Not more 
        than 4 of the 6 members appointed by each appointing authority 
        shall be members of the same political party.
            ``(2) Terms.--Members of the Board shall be appointed for a 
        term of 6 years each, except that of the members first 
        appointed by each appointing authority, 1 shall be for a term 
        of 1 year, 1 shall be for a term of 2 years, 1 shall be for a 
        term of 3 years, 1 shall be for a term of 4 years, and 1 shall 
        be for a term of 5 years. No member may serve more than 1 term.
            ``(3) Chair.--The President shall designate the chair of 
        the Board, whose term as chair shall be for 3 years.
            ``(4) Timing of appointments.--Initial appointments to the 
        Board shall be made within 3 months after the effective date of 
        the Patent and Trademark Office Corporation Act of 1995, and 
        vacancies shall be filled within 3 months after they occur.
            ``(5) Vacancies.--Vacancies shall be filled in the manner 
        in which the original appointment was made under this 
        subsection. Members appointed to fill a vacancy occurring 
        before the expiration of the term for which the member's 
        predecessor was appointed shall be appointed only for the 
        remainder of that term. A member may serve after the expiration 
        of that member's term until a successor is appointed.
    ``(b) Basis for Appointments.--Members of the Board shall be 
citizens of the United States who shall be chosen so as to represent 
the interests of diverse users of the Patent and Trademark Office, and 
shall include individuals with substantial background and achievement 
in corporate finance and management.
    ``(c) Applicability of Certain Ethics Laws.--Members of the Board 
shall be special Government employees within the meaning of section 202 
of title 18.
    ``(d) Meetings.--The Board shall meet at the call of the chair to 
consider an agenda set by the chair.
    ``(e) Duties.--The Board shall--
            ``(1) review the policies, goals, performance, budget, and 
        user fees of the Patent and Trademark Office, and advise the 
        Commissioner on these matters; and
            ``(2) within 60 days after the end of each fiscal year, 
        prepare an annual report on the matters referred to in 
        paragraph (1), transmit the report to the President and the 
        Committees on the Judiciary of the Senate and the House of 
        Representatives, and publish the report in the Patent and 
        Trademark Office Official Gazette.
    ``(f) Staff.--The Board shall employ a staff and procure support 
services for the staff adequate to enable the Board to carry out its 
functions, using funds available to the Commissioner under section 42 
of this title. Persons employed by the Board shall receive compensation 
as determined by the Board, serve in accordance with terms and 
conditions of employment established by the Board, and be subject 
solely to the direction of the Board, notwithstanding any other 
provision of law.
    ``(g) Compensation.--Members of the Board may accept reimbursement 
for expenses incurred in attending meetings of the Board and 
compensation not to exceed $1000 per day for each day in attendance at 
meetings of the Board.
    ``(h) Access to Information.--Members of the Board shall be 
provided access to records and information
 in the Patent and Trademark Office, except for personnel or other 
privileged information and information concerning patent applications 
required to be kept in confidence by section 122 of this title.
    ``(i) Applicability of Federal Advisory Committee Act.--The 
provisions of the Federal Advisory Committee Act (5 U.S.C. App.) shall 
not apply to meetings of the Board, but all meetings of the Board shall 
be announced in the Federal Register at least 30 days in advance and 
all meetings shall be open to the public unless closed by the Board for 
good cause.''.

 SEC. 105. INDEPENDENCE FROM DEPARTMENT OF COMMERCE.

    Section 6 of title 35, United States Code, is amended--
            (1) by striking ``, under the direction of the Secretary of 
        Commerce,'' each place it appears; and
            (2) by striking ``, subject to the approval of the 
        Secretary of Commerce,''.
SEC. 106. TRADEMARK TRIAL AND APPEAL BOARD.

    Section 17 of the Act of July 5, 1946 (commonly referred to as the 
``Trademark Act of 1946'') (15 U.S.C. 1067) is amended to read as 
follows:
    ``Sec. 17. (a) In every case of interference, opposition to 
registration, application to register as a lawful concurrent user, or 
application to cancel the registration of a mark, the Commissioner 
shall give notice to all parties and shall direct a Trademark Trial and 
Appeal Board to determine and decide the respective rights of 
registration.
    ``(b) The Trademark Trial and Appeal Board shall include the 
Commissioner, the Deputy Commissioner for Patents, the Deputy 
Commissioner for Trademarks, and members competent in trademark law who 
are appointed by the Commissioner.''.

SEC. 107. BOARD OF PATENT APPEALS AND INTERFERENCES.

    Section 7 of title 35, United States Code, is amended to read as 
follows:
``Sec. 7. Board of Patent Appeals and Interferences
    ``(a) Establishment and Composition.--There shall be in the Patent 
and Trademark Corporation a Board of Patent Appeals and Interferences. 
The Commissioner, the Deputy Commissioner for Patents, the Deputy 
Commissioner for Trademarks, the officer principally responsible for 
the examination of patents, the officer principally responsible for the 
examination of trademarks, and the examiners-in-chief shall constitute 
the Board. The examiners-in-chief shall be persons of competent legal 
knowledge and scientific ability.
    ``(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) of this title. Each appeal and interference shall be heard by at 
least 3 members of the Board, who shall be designated by the 
Commissioner. Only the Board of Patent Appeals and Interferences may 
grant rehearings.''.

SEC. 108. SUITS BY AND AGAINST THE CORPORATION.

    Chapter 1 of part I of title 35, United States Code, is amended--
            (1) by redesignating sections 8 through 14 as sections 9 
        through 15; and
            (2) by inserting after section 7 the following new section:
``Sec. 8. Suits by and against the Corporation
    ``(a) In General.--
            ``(1) Actions under united states law.--Any civil action, 
        suit, or proceeding to which the Patent and Trademark Office is 
        a party is deemed to arise under the laws of the United States. 
        Exclusive jurisdiction over all civil actions by or against the 
        Office is in the Federal courts as provided by law.
            ``(2) Contract claims.--Any action, suit, or proceeding 
        against the Office founded upon contract shall be subject to 
        the limitations and exclusive remedy provided in section 
        1346(a)(2) and sections 1491 through 1509 of title 28, whether 
        or not such contract claims are cognizable under the sections 
        507, 1346, 1402, 1491, 1496, 1497, 1501, 1503, 2071, 2072, 
        2411, 2501, 2512 of title 28). For purposes of the Contract 
        Disputes Act of 1978 (41 U.S.C. 601 and following), the 
        Commissioner shall be deemed to be the agency head with respect 
        to contract claims arising with respect to the Office.
            ``(3) Tort claims.--Any action, suit, or proceeding against 
        the Office founded upon tort shall be subject to the 
        limitations and exclusive remedies provided in section 1346(b) 
        and sections 2671 through 2680 of title 28, whether or not such 
        tort claims are cognizable under section 1346(b) of title 28.
            ``(4) Prohibition on attachment, liens, etc.--No 
        attachment, garnishment, lien, or similar process, intermediate 
        or final, in law or equity, may be issued against property of 
        the Office.
            ``(5) Substitution of office as party.--The Office shall be 
        substituted as defendant in any civil action, suit, or 
        proceeding against an officer or employee of the Office, if the 
        Office determines that the employee was acting within the scope 
        of the officer or employee's employment with the Office. If the 
        Office refuses to certify scope of employment, the officer or 
        employee may at any time before trial petition the court to 
        find and certify that the officer or employee was acting within 
        the scope of the officer or employee's employment. Upon 
        certification by the court, the Office shall be substituted as 
        the party defendant. A copy of the petition shall be served 
        upon the Office.
    ``(b) Relationship With Justice Department.--
            ``(1) Exercise by office of attorney general's 
        authorities.--Except as provided in this section, in relation 
        to all judicial proceedings in which the Office or an officer 
        or employee thereof is a party or in which the officer or 
        employee thereof is interested and which arise from or relate 
        to officers or employees thereof acting within the scope of 
        their employment, torts, contracts, property, registration of 
        patent and trademark practitioners, patents or trademarks, or 
        fees, the officer or employee thereof may exercise, without 
        prior authorization from the Attorney General, the authorities 
        and duties that otherwise would be exercised by the Attorney 
        General on behalf of the officer or employee thereof under 
        title 28, and other laws. In all other judicial or 
        administrative proceedings in which the Office or an officer or 
        employee of the Office is a party or is interested, the Office 
        may exercise these authorities and duties only after obtaining 
        authorization from the Attorney General.
            ``(2) Appearances by attorney general.--The Attorney 
        General may file an appearance on behalf of the Office or an 
        employee of the Office, without the consent of the Office, in 
        any suit in which the Office is a party and represent the 
        Office with exclusive authority in the conduct, settlement, or 
        compromise of that suit.
            ``(3) Consultations with and assistance by attorney 
        general.--The Office may consult with the Attorney General 
        concerning any legal matter, and the Attorney General shall 
        provide advice and assistance to the Office, including 
        representing the Office in litigation, if requested by the 
        Office.
            ``(4) Representation before supreme court.--The Attorney 
        General shall represent the Office in all cases before the 
        United States Supreme Court.
            ``(5) Qualifications of attorneys.--An attorney admitted to 
        practice to the bar of the highest court of at least one State 
        in the United States or the District of Columbia and appointed 
        by the Office may represent the Office in any legal proceeding 
        in which the Office or an officer or employee of the Office is 
        a party or interested, regardless of whether the attorney is a 
        resident of the jurisdiction in which the proceeding is held 
        and notwithstanding any other prerequisites of qualification or 
        appearance required by the court or administrative body.''.
 SEC. 109. ANNUAL REPORT OF COMMISSIONER.

    Section 15 of title 35, United States Code, as redesignated by 
section 108 of this Act, is amended to read as follows:
``Sec. 15. Annual report to Congress
    ``The Commissioner shall report to the Congress, not later than 90 
days after the end of each fiscal year, the moneys received and 
expended by the Office, the purposes for which the moneys were spent, 
the quality and quantity of the work of the Office, and other 
information relating to the Office.''.

SEC. 110. SUSPENSION OR EXCLUSION FROM PRACTICE.

    Section 32 of title 35, United States Code, is amended by inserting 
before the last sentence the following: ``The Commissioner shall have 
the discretion to designate any officer or employee of the Patent and 
Trademark Office to conduct the hearing required by this section.''.

SEC. 111. FUNDING.

    Section 42 of title 35, United States Code, is amended to read as 
follows:
``Sec. 42. Patent and Trademark Office funding
    ``(a) Fees Payable to the Office.--All fees for services performed 
by or materials furnished by the Patent and Trademark Office shall be 
payable to the Office.
    ``(b) Use of Moneys.--Moneys of the Patent and Trademark Office not 
otherwise used to carry out the functions of the Office shall be kept 
in cash on hand or on deposit, or invested in obligations of the United 
States or guaranteed by the United States, or in obligations or other 
instruments which are lawful investments for fiduciary, trust, or 
public funds. Fees available to the Commissioner under this title shall 
be used exclusively for the processing of patent applications and for 
other services and materials relating to patents. Fees available to the 
Commissioner under section 31 of the Act of July 5, 1946 (commonly 
referred to as the `Trademark Act of 1946') (15 U.S.C. 1113) shall be 
used exclusively for the processing of trademark registrations and for 
other services and materials relating to trademarks.
    ``(c) Borrowing Authority.--The Patent and Trademark Office is 
authorized to issue from time to time for purchase by the Secretary of 
the Treasury its debentures, bonds, notes, and other evidences of 
indebtedness (hereafter in this subsection referred to as 
`obligations') in an amount not exceeding $2,000,000 outstanding at any 
one time, to assist in financing its activities. Such obligations shall 
be redeemable at the option of the Office before maturity in the manner 
stipulated in such obligations and shall have such maturity as is 
determined by the Office with the approval of the Secretary of the 
Treasury. Each such obligation issued to the Treasury shall bear 
interest at a rate not less than the current yield on outstanding 
marketable obligations of the United States of comparable maturity 
during the month preceding the issuance of the obligation as determined 
by the Secretary of the Treasury. The Secretary of the Treasury shall 
purchase any obligations of the Office issued under this subsection and 
for such purpose the Secretary of the Treasury is authorized to use as 
a public-debt transaction the proceeds of any securities issued under 
chapter 31 of title 31, and the purposes for which securities may be 
issued under that chapter are extended to include such purpose. Payment 
under this subsection of the purchase price of such obligations of the 
Patent and Trademark Office shall be treated as public debt 
transactions of the United States.''.

SEC. 112. AUDITS.

    Chapter 4 of part I title 35, United States Code, is amended by 
adding at the end the following new section:
``Sec. 43. Audits
    ``(a) In General.--Financial statements of the Patent and Trademark 
Office shall be prepared on an annual basis in accordance with 
generally accepted accounting principles. Such statements shall be 
audited by an independent certified public accountant chosen by the 
Secretary. The audit shall be conducted in accordance with standards 
that are consistent with generally accepted Government auditing 
standards and other standards established by the Comptroller General, 
and with the generally accepted auditing standards of the private 
sector, to the extent feasible.
    ``(b) Review by Comptroller General.--The Comptroller General may 
review any audit of the financial statement of the Patent and Trademark 
Office that is conducted under subsection (a). The Comptroller General 
shall report to the Congress and the Office the results of any such 
review and shall include in such report appropriate recommendations.
    ``(c) Audit by Comptroller General.--The Comptroller General may 
audit the financial statements of the Office and such audit shall be in 
lieu of the audit required by subsection (a). The Office shall 
reimburse the Comptroller General for the cost of any audit conducted 
under this subsection.
    ``(d) Access to Office Records.--All books, financial records, 
report files, memoranda, and other property that the Comptroller 
General deems necessary for the performance of any audit shall be made 
available to the Comptroller General.
    ``(e) Applicability in Lieu of Title 31 Provisions.--This section 
applies to the Office in lieu of the provisions of section 9105 of 
title 31.''.

SEC. 113. TRANSFER.

    (a) Transfer of Functions.--Except as otherwise provided in this 
Act, there are transferred to, and vested in, the Patent and Trademark 
Office all functions, powers, and duties vested by law in the Secretary 
of Commerce or the Department of Commerce or in the officers or 
components in the Department of Commerce with respect to the authority 
to grant patents and register trademarks, and in the Patent and 
Trademark Office, as in effect on the day before the effective date of 
this Act, and in the officers and components of such Office.
    (b) Transfer of Funds and Property.--The Secretary of Commerce 
shall transfer to the Patent and Trademark Office, on the effective 
date of this Act, so much of the assets, liabilities, contracts, 
property, records, and unexpended and unobligated balances of 
appropriations, authorizations, allocations, and other funds employed, 
held, used, arising from, available to, or to be made available to the 
Department of Commerce, including funds set aside for accounts 
receivable which are related to functions, powers, and duties which are 
vested in the Patent and Trademark Office by this Act.
    (c) Transfer of Surcharge Fund.--On the effective date of this Act, 
there are transferred to the Patent and Trademark Office those residual 
and unappropriated balances remaining as of the effective date within 
the Patent and Trademark Office Surcharge Fund established by section 
10101(b) of the Omnibus Budget Reconciliation Act of 1990 (35 U.S.C. 41 
note).

             TITLE II--EFFECTIVE DATE; TECHNICAL AMENDMENTS

 SEC. 201. EFFECTIVE DATE.

    This Act shall take effect 6 months after the date of the enactment 
of this Act.
SEC. 202. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Amendments to Title 35.--
            (1) The table of contents for part I of title 35, United 
        States Code, is amended by amending the item relating to 
        chapter 1 to read as follows:
            (2) The table of sections for chapter 1 of title 35, United 
        States Code, is amended to read as follows:

``1. Establishment, Officers and Employees, Functions.......       1.''

      ``CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES FUNCTIONS
``Sec.
 ``1. Establishment.
 ``2. Powers and duties.
 ``3. Officers and employees.
 ``4. Restrictions on officers and employees as to interest in patents.
 ``5. Patent and Trademark Office Management Advisory Board.
 ``6. Duties of Commissioner.
 ``7. Board of Patent Appeals and Interferences.
 ``8. Suits by and against the Corporation.
 ``9. Library.
``10. Classification of patents.
``11. Certified copies of records.
``12. Publications.
``13. Exchange of copies of patents with foreign countries.
``14. Copies of patents for public libraries.
``15. Annual report to Congress.''.
    (3) The table of contents for chapter 4 of part I of title 35, 
United States Code, is amended by adding at the end the following new 
item:

``43. Audits.''.
    (b) Other Provisions of Law.--
            (1) Section 9101(3) of title 31, United States Code, is 
        amended by adding at the end the following:
                    ``(O) the Patent and Trademark Office.''.
            (2) Section 602(d) of the Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 474) is 
        amended--
                    (A) in paragraph (20) by striking ``or'' after the 
                semicolon;
                    (B) in paragraph (21) by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(22) the Patent and Trademark Office.''.
            (3) Section 500(e) of title 5, United States Code (5 U.S.C. 
        500(e)) is amended by striking ``Patent Office'' and inserting 
        ``Patent and Trademark Office''.
            (4) Section 5102(c)(23) of title 5, United States Code, is 
        amended by striking ``Department of Commerce''.
            (5) Section 5316 of title 5, United States Code (5 U.S.C. 
        5316) is amended by striking ``Commissioner of Patents, 
        Department of Commerce.'', ``Deputy Commissioner of Patents and 
        Trademarks.'', ``Assistant Commissioner for Patents.'', and 
        ``Assistant Commissioner for Trademarks.''.
            (6) Section 4 of the Act of February 14, 1903 (15 U.S.C. 
        1511) is amended by striking ``(d) Patent and Trademark 
        Office;'' and redesignating subsections (a) through (g) as 
        paragraphs (1) through (6), respectively.
            (7) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) 
        is amended by striking ``Patent Office'' and inserting ``Patent 
        and Trademark Office''.
            (8) Sections 505(m) and 512(o) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each 
        amended by striking ``of the Department of Commerce''.
            (9) Section 105(e) of the Federal Alcohol Administration 
        Act (27 U.S.C. 205(e)) is amended by striking ``Patent Office'' 
        and inserting ``Patent and Trademark Office''.
            (10) Section 1744 of title 28, United States Code is 
        amended--
                    (A) by striking ``Patent Office'' each place it 
                appears and inserting ``Patent and Trademark Office''; 
                and
                    (B) by striking ``Commissioner of Patents'' and 
                inserting ``Commissioner of Patents and Trademarks''.
            (11) Section 1745 of title 28, United States Code, is 
        amended by striking ``United States Patent Office'' and 
        inserting ``Patent and Trademark Office''.
            (12) Section 1928 of title 28, United States Code, is 
        amended by striking ``Patent Office'' and inserting ``Patent 
        and Trademark Office''.
            (13) Section 160 of the Atomic Energy Act of 1954 (42 
        U.S.C. 2190) is amended--
                    (A) by striking ``Patent Office'' and inserting 
                ``Patent and Trademark Office''; and
                    (B) by striking ``Commissioner of Patents'' and 
                inserting ``Commissioner of Patents and Trademarks''.
            (14) Section 305(c) of the National Aeronautics and Space 
        Act of 1958 (42 U.S.C. 2457(c)) is amended by striking 
        ``Commissioner of Patents'' and inserting ``Commissioner of 
        Patents and Trademarks''.
            (15) Section 12(a) of the Solar Heating and Cooling 
        Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by 
        striking ``Commissioner of the Patent Office'' and inserting 
        ``Commissioner of Patents and Trademarks''.
            (16) Section 1111 of title 44, United States Code, is 
        amended by striking ``Commissioner of Patents'' and inserting 
        ``Commissioner of Patents and Trademarks''.
            (17) Sections 1114 and 1123 of title 44, United States 
        Code, are each amended by striking ``Commissioner of Patents''.
            (18) Sections 1337 and 1338 of title 44, United States 
        Code, and the items relating to those sections in the table of 
        contents for chapter 13 of such title, are repealed.
            (19) Section 10(i) of the Trading With the Enemy Act (50 
        U.S.C. App. 10(i)) is amended by striking ``Commissioner of 
        Patents'' and inserting ``Commissioner of Patents and 
        Trademarks''.
            (20) Section 8G(a)(2) of the Inspector General Act of 1978 
        (5 U.S.C. App.) is amended by inserting ``the Patent and 
        Trademark Office,'', after ``the Panama Canal Commission,''.
            (21) Section 255(g)(1)(A) of the Balanced Budget and 
        Emergency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) 
        is amended by inserting after the item relating to the United 
        States Enrichment Corporation the following new item:
            ``Patent and Trademark Office;''.
            (22) Section 10101(b)(2)(B) of the Omnibus Budget 
        Reconciliation Act of 1990 (35 U.S.C. 41 note) is amended by 
        striking ``, to the extent provided in appropriation Acts,'' 
        and inserting ``without appropriation''.
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