[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2533 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 2533

 To amend title 35, United States Code, to establish the United States 
      Intellectual Property Organization, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 25, 1995

    Mr. Moorhead (both by request) (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 United States 
      Intellectual Property Organization, 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 ``United States Intellectual Property 
Organization Act of 1995''.

SEC. 2. FINDINGS.

    The Congress of the United States finds that--
            (a) the granting of patents and the registration of 
        trademarks by the United States have promoted the useful arts, 
        strengthened the United States economy, improved interstate and 
        international commerce, and benefited consumers by increasing 
        the types of products and services available to the public and 
        by providing the public with the ability to distinguish between 
        competing products and services;
            (b) the Patent and Trademark Office has performed the 
        duties respecting the examination of patent and trademark 
        applications, the granting of patents, and the registration of 
        trademarks;
            (c) the Patent and Trademark Office currently has numerous 
        services and products that the users of those services or 
        products generally pay to receive;
            (d) because there are a large number of transactions, the 
        revenues from fees associated with the services and products 
        defray the cost of delivering those services and products;
            (e) because of the increasing demand for services and the 
        changing nature of those services, the Patent and Trademark 
        Office needs to be able to respond quickly to changes in demand 
        or workload;
            (f) for the above reasons, the Patent and Trademark Office 
        needs flexibility in budgetary, fiscal, and other management 
        matters;
            (g) a restructured organization would provide the necessary 
        flexibility for the entity to meet its obligations and ensure 
        that the patent and trademark laws are promptly and efficiently 
        administered; and
            (h) the United States Intellectual Property Organization 
        should succeed to the duties of the Patent and Trademark Office 
        respecting the examination of patent and trademark 
        applications.

       TITLE I--UNITED STATES INTELLECTUAL PROPERTY ORGANIZATION

    Subtitle A--Establishment; Powers and Duties; Organization and 
                               Management

SEC. 101. ESTABLISHMENT OF THE ORGANIZATION.

    Section 1 of title 35, United States Code, is amended to read as 
follows:
``Sec. 1. Establishment
    ``(a) Establishment.--There is hereby established a body corporate 
to be known as the ``United States Intellectual Property Organization'' 
which shall be a unique agency of the Department of Commerce and report 
to the Secretary of Commerce, subject to the policy direction of the 
Under Secretary of Commerce for Intellectual Property with respect to 
patents and trademarks, and which is to--
            ``(1) perform all duties respecting the examination of 
        patent applications;
            ``(2) perform all duties respecting the examination of 
        trademark applications;
            ``(3) disseminate patent and trademark information to the 
        public; and
            ``(4) perform all other duties the responsibility for which 
        is established by the Congress or that are necessary for the 
        administration of the Organization.
    ``(b) Offices.--The United States Intellectual Property 
Organization shall maintain an office for the service of process in the 
District of Columbia or the metropolitan area thereof, and shall be 
deemed, for purposes of venue in civil actions, to be a resident of the 
District of Columbia. The Organization may establish offices in such 
other place or places as it may deem necessary or appropriate in the 
conduct of its business.
    ``(c) Reference.--For purposes of this title, the United States 
Intellectual Property organization shall also be referred to as the 
`Organization'.''.

SEC. 102. POWERS AND DUTIES.

    Section 2 of title 35, United States Code is amended to read as 
follows:
Sec. 2. Power and duties
    ``(a) The Organization, under the policy direction of the Under 
Secretary of Commerce for Intellectual Property with respect to patents 
and trademarks, shall have the powers to carry out the functions and 
duties that are authorized by law with respect to--
            ``(1) the examination of patent and trademark applications;
            ``(2) carrying on studies, programs, or exchanges of items 
        or services regarding domestic and international patent and 
        trademark law or the administration of the Organization, or any 
        other matter included in the organic acts for which the 
        Organization is responsible; and
            ``(3) carrying on programs and studies cooperatively with 
        foreign patent and trademark offices and international 
        intergovernmental organizations or authorizing such programs 
        and studies to be carried on, in connection with the 
        examination of patent and trademark applications.
    ``(b) In order to accomplish the purposes of this Act, the 
Organization--
            ``(1) shall have perpetual succession unless dissolved by 
        Act of Congress;
            ``(2) shall adopt and use a corporate seal, which shall be 
        judicially noticed;
            ``(3) may sue and be sued in its corporate name;
            ``(4) may indemnify the Chief Executive Officer, officers, 
        attorneys, agents and employees of the Organization 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 power granted to it by law will be exercised;
            ``(6) if it is determined by the Administrator of General 
        Services and the Secretary of Commerce that the Organization 
        can acquire real property more cost effectively for the 
        Organization than the General Services Administration, may 
        acquire, construct, purchase, lease, hold, manage, operate, and 
        alter any property real, personal, or mixed, or any interest 
        therein, as it deems necessary in the transaction of its 
        business, and sell, lease, grant, and dispose of such property, 
        as it deems necessary to effectuate the purposes of this title, 
        for periods of time or for terms that the Organization deems 
        necessary, without regard to the provisions of the Federal 
        Property and Administrative Services Act of 1949 (40 U.S.C. 471 
        et seq.), as amended, the Public Buildings Act of 1959, as 
        amended (40 U.S.C. 601 et seq.), the McKinney Act (42 U.S.C. 
        11411-12), and section 759 of title 40 (the ``Brooks Act'') (40 
        U.S.C. 759, as amended: Provided, That if the Administrator 
        undertakes such activities on behalf of the Organization, the 
        Administrator shall have the authority to charge the 
        Organization for the actual cost of undertaking these 
        activities, but the Administrator shall exempt the Organization 
        from paying the approximate commercial charges provided for in 
        subsection 490(j) of title 40: Provided further, That the Chief 
        Executive Officer shall develop a results-oriented acquisition 
        and property disposal process that must include quantitative 
        and qualitative measures and standards for evaluating (1) the 
        cost effectiveness of the acquisition process and (2) the 
        extent to which the acquisition of goods and services cost 
        effectively satisfy the needs for which the items were 
        acquired. The process shall be consistent with the principles 
        of impartiality and competitiveness;
            ``(7)(A) may make purchases, contracts for the 
        construction, alteration, maintenance, or management and 
        operation of facilities and contracts for the supplies or 
        services, except personal services, after advertising, in such 
        manner and at such times sufficiently in advance of opening 
        bids, as the Organization shall determine to be adequate to 
        insure notice and an opportunity for competition: Provided, 
        That advertising shall not be required when the Organization 
        determines that the making of any such purchase or contract 
        without advertising is necessary in the interest of furthering 
        the purposes of this title, or that advertising is not 
        reasonably practicable;
            ``(B) may enter into and perform such purchases and 
        contracts for printing services, to include the process of 
        composition, platemaking, presswork, silk screen processes, 
        binding, microform, and the end items of such processes, as it 
        deems necessary to effectuate the functions of the 
        Organization, without regard to sections 501 through 517 and 
        1101 through 1123 of title 44;
            ``(C) Notwithstanding subparagraphs (A) and (B) above, 
        procurement procedures, including those related to advertising, 
        shall be applied consistent with all obligations under 
        international agreements on government procurement to which the 
        United States is a signatory. The Organization shall issue 
        internal guidelines, as appropriate, to ensure consistency with 
        such obligations;
            ``(8) may use, with their consent, services, equipment, 
        personnel, and facilities of other civilian or military 
        agencies and instrumentalities of the Federal Government, on a 
        reimbursable basis, and, on a similar basis, to cooperate with 
        such other agencies and instrumentalities in the establishment 
        and use of services, equipment, and facilities of the 
        Organization;
            ``(9) may obtain from the Administrator of the General 
        Services Administration such services as he or she is 
        authorized to provide to 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 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 necessary functions on the 
        Organization's behalf;
            ``(11) may enter into and perform such contracts, leases, 
        cooperative agreements, or other transactions with 
        international, foreign and domestic public agencies and private 
        organizations and persons as needed in the conduct of its 
        business and on such terms as it deems appropriate, subject 
        only to applicable laws;
            ``(12) except as otherwise provided in section 10101 of the 
        Omnibus Budget Reconciliation Act of 1990, as amended (35 
        U.S.C. 41 note) may, as a financially self-sustaining Federal 
        organization without reliance upon general taxpayer revenues, 
        retain and utilize all of its revenues and receipts, including 
        revenues from the sale, lease, or disposal of any property, 
        real, personal or mixed, or any interest therein, of the 
        Organization, including research and development and capital 
        investment;
            ``(13) shall have the priority of the United States with 
        respect to the payment of debts out of bankrupt, insolvent, and 
        decedents' estates;
            ``(14) may accept monetary gifts or donations of services, 
        or of property, real, personal, mixed, tangible or intangible, 
        in aid of any purposes herein authorized. The Chief Executive 
        Officer shall establish written rules setting forth the 
        criteria to be used in determining whether or not the 
        acceptance of contributions of monetary gifts or donations or 
        services, or of property, real, personal, mixed, tangible or 
        intangible under this subsection would reflect unfavorably upon 
        the ability of the Organization, or any employee of the 
        Organization, to carry out its responsibilities of official 
        duties in a fair and objective manner, or would compromise the 
        integrity or the appearance of the integrity of its programs or 
        any official involved in those programs;
            ``(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 or arising from the act or omission of any officer or 
        employee of the Organization from the funds of the Organization 
        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, employees, and Inspector General
    ``(a) Officers.--
            ``(1) Chief executive officer.--The management of the 
        Organization shall be vested in a Chief Executive Officer who 
        shall be a citizen of the United States and who shall be 
        appointed by the Secretary of Commerce. The Chief Executive 
        Officer shall be a person who, by reason of professional 
        experience regarding patents or trademarks and of management 
        experience, is especially qualified to manage the Organization: 
        Provided, however, That the office of Chief Executive Officer 
        becomes vacant or the Chief Executive Officer becomes 
        incapacitated, the Secretary may appoint an existing officer of 
        the Organization to act in such office until the office is 
        filled.
            ``(2) Other officers.--The Secretary shall appoint an 
        officer principally responsible for the examination of patent 
        applications, who shall be the principal adviser to the Chief 
        Executive Officer on all issues affecting the Organization's 
        patent examining operations, and an officer principally 
        responsible for the examination of trademark applications, who 
        shall be the principal advisor to the Chief Executive Officer 
        on all issues affecting the Organization's trademark examining 
        operations.
    ``(b) Duties.--The Chief Executive Officer--
            ``(1) shall be responsible for the management and direction 
        of the Organization, including the examination of patent and 
        trademark applications, and may delegate these responsibilities 
        to the officers and employees of the Organization whose 
        performance of these duties shall be subject to the Chief 
        Executive Officer's review;
            ``(2) shall be subject to the direction of the Under 
        Secretary of Commerce for Intellectual Property on patent and 
        trademark policy matters;
            ``(3) shall receive as basic compensation for a calendar 
        year an amount not to exceed the equivalent of the annual rate 
        of basic pay for level I of the Executive Schedule under 
        section 5312 of title 5 and, in addition, may receive as a 
        bonus awarded by the Secretary, an amount up to the equivalent 
        of the annual rate of basic pay for level I, based upon the 
        Secretary's evaluation of the Chief Executive Officer's 
        performance--
                    ``(A) as defined in an annual performance agreement 
                between the Chief Executive Officer and the Secretary 
                incorporating measurable goals in such specific areas 
                as productivity, cycle times, efficiency, cost-
                reduction, innovative ways of delivering patent and 
                trademark services, and customer satisfaction, as 
                delineated in an annual performance plan, and
                    ``(B) as reflected in an annual report on the 
                results of the Organization's performance, a copy of 
                which shall be provided to the Office of Management and 
                Budget and the Congress:
        Provided, however, That the Secretary shall provide the 
        Director of the Office of Management and Budget the opportunity 
        to review, before any bonus is awarded, the annual performance 
        standards, the level of the proposed bonus, and any information 
        that the Secretary forwards regarding the bonus;
            ``(4) shall serve on the basis of a six-year contract with 
        the Secretary, so long as performance, as set forth in the 
        annual performance agreement, is satisfactory, and
            ``(5) shall, before taking office, take an oath to 
        discharge faithfully the duties thereof.
    ``(c) Status of Officers and Employees.--Officers and employees of 
the Organization shall be officers and employees of the United States 
as defined by sections 2104 and 2105, title 5. Except as otherwise 
provided in this section, officers and employees of the Organization 
shall be subject to the provisions of title 5 relating to Federal 
employees.
    ``(d) The Chief Executive Officer shall affix the compensation and 
number of, appoint, and direct all employees of the Organization that 
he deems necessary to effect the provisions of this title, consistent 
with chapter 23, title 5, United States Code; such determination of 
number, appointment, and compensation (including any awards) to be made 
without regard to any other of the provisions of title 5, United States 
Code, except that the principle of veteran's preference shall apply 
with regard to appointment.
    ``(e) Limit on Compensation.--Except as otherwise provided by law, 
no officer or employee of the Organization other than the Chief 
Executive Officer shall receive basic compensation for a calendar year 
that exceeds the equivalent of the basic rate of pay for the Senior 
Executive Service ES-6 (5 U.S.C. 5382). Total compensation, including 
compensation based on performance (but not including benefits or 
contribution to retirement systems), may not exceed the equivalent of 
the basic rate of pay for level I of the Executive Schedule under 
section 5312 of title 5.
    ``(f) Establishment of Classification, Appointment, and 
Compensation Systems.--Notwithstanding the provisions of title 5, 
United States Code, the Chief Executive Officer shall have sole and 
exclusive discretion:
            ``(1) over the establishment, amendment, or repeal of any 
        position classification system, any system to determine the 
        qualifications and procedures for appointment; any compensation 
        and award system except gainsharing, including wages and 
        compensation based on performance, and over any supplement to 
        contributions of the Organization to the retirement and 
        benefits programs; and
            ``(2) to fix and adjust rates of pay without regard to the 
        provisions of chapter 53 of title 5, United States Code and 
        abolish positions and layoff employees without regard to the 
        provisions of chapter 35 of title 5, except that the principle 
        of veteran's preference shall apply in any layoff system.
    ``(g) Specific Exemptions From Title 5.--To accomplish the above, 
the following provisions of title 5, United States Code, shall not 
apply to the Organization and its employees:
            ``(1) Chapter 31 (employment authorities) except for the 
        provision governing nepotism (5 U.S.C. 3110).
            ``(2) Chapter 33 (examination, selection, and placement); 
        except that the provisions governing recommendations of 
        Senators or Representatives (5 U.S.C. 3303), selective service 
        registration (5 U.S.C. 3328), the oath of office (5 U.S.C. 
        3331), and employee affidavits (5 U.S.C. 3333) and the 
        principle of veteran's preference, shall apply to the 
        Organization and its employees.
            ``(3) Chapter 35 (retention preference, restoration, and 
        reemployment), except the principle of veteran's preference 
        shall apply to any layoff system.
            ``(4) Chapter 43 (performance appraisal).
            ``(5) Chapter 45 (incentive awards).
            ``(6) Chapter 51 (classification).
            ``(7) Chapter 53, subchapter 3 (general pay rates).
    ``(h) Application of Title 5.--The provisions of chapters 83 (Civil 
Service Retirement System), 84 (Federal Employees Retirement System), 
87 (life insurance), and 89 (health insurance) of title 5 shall apply 
to the officers and employees of the Organization. The Organization may 
supplement the benefits provided under chapters 83 and 84 from time to 
time. The Organization also may supplement the benefits provided under 
chapters 87 and 89 to its officers and employees.
    ``(i) Payments for Benefits.--
            ``(1) The Organization shall make such payments to the 
        Employees' Compensation Fund as are required by section 8147 of 
        title 5.
            ``(2) The Organization shall pay to the Civil Service 
        Retirement and Disability Fund--
                    ``(A) such employee deductions and agency 
                contributions as are required by sections 8334, 8422, 
                and 8423 of title 5;
                    ``(B) such additional agency contributions as are 
                determined necessary by the Office of Personnel 
                Management to pay, in combination with the sums under 
                paragraph (1), the normal cost (determined using 
                dynamic assumptions) of retirement benefits for the 
                employees of the Organization who are subject to 
                subchapter III of chapter 83 of title 5; and
                    ``(C) such additional amounts, not to exceed two 
                percent of the amounts under paragraphs (1) and (2), as 
                are determined necessary by the Office of Personnel 
                Management to pay the cost of administering 
retirement benefits for the Organization's employees and retirees and 
their survivors (which amounts shall be available to the Office as 
provided in section 8348(a)(1)(B) of title 5).
            ``(3)(A) The Organization shall pay to the Employees' Life 
        Insurance Fund--
                    ``(i) such employee deductions and agency 
                contributions as are required by sections 8707 and 
                8708(a) of title 5; and
                    ``(ii) such amounts as are determined necessary by 
                the Office of Personnel Management under subparagraph 
                (2)(C) of this subsection to reimburse the Office for 
                contributions under section 8708(d) of title 5.
            ``(B) The Organization shall pay to the Employees Health 
        Benefits Fund--
                    ``(i) such employee payments and agency 
                contributions as are required by section 8906 (a) 
                through (f) of title 5, and
                    ``(ii) such amounts as are determined necessary by 
                the Office of Personnel Management under subparagraph 
                (2)(C) of this subsection to reimburse the Office for 
                contributions under section 8905(g)(1) of title 5.
            ``(C) The amounts required under subparagraphs (A)(ii) and 
        (B)(ii) of this paragraph shall pay the Government 
        contributions for retired employees who retire from the 
        Organization after the date of transfer, the survivors of such 
        retired employees, and survivors of employees of the 
        Organization who die after the date of transfer, prorated to 
        reflect the portion of the total civilian service of such 
        employees and retired employees that was performed for the 
        Organization after the date of transfer.
            ``(4) The Organization shall pay to the Thrift Savings Fund 
        such employee and agency contributions as are required by 
        section 8432 of title 5.
    ``(j) Joint Labor-Management Committee.--The Organization shall 
establish a joint committee, which will include an equal number of 
members appointed by the Organization and employees who are designated 
by its labor organizations accorded exclusive recognition under chapter 
71 of title 5 to assist the Chief Executive Officer by making 
recommendations concerning the design and implementation of any 
position classification system, and any system to determine 
qualifications and procedures for employment, any compensation and 
awards system, and contributions of the Organization to retirement and 
benefits programs.
    ``(k) Restrictions on FTE Not Applicable.--The Organization shall 
not be subject to any restriction or limitation on the number of full-
time equivalent Federal employees it may employ unless such restriction 
or limitation is made applicable to the Organization through an 
amendment to this subsection. Beginning with the first full fiscal 
period following enactment of this bill, the number of full-time 
equivalent Federal employees available to the Organization shall be 
adjusted annually by a percentage equivalent to the projected change as 
determined by the Secretary of Commerce in patent and trademark 
application filings, respectively, for each fiscal year. The projection 
shall be based upon a linear regression model taking into account 
productivity changes.
    ``(l) Inspector General.--The Inspector General of the Department 
of Commerce shall carry out all responsibilities and duties required of 
him or her, and shall have all powers and authorities vested in him or 
her, by the Inspector General Act of 1978 (5 U.S.C. App. 3) as amended, 
with respect to the programs, operations, and activities of the 
Organization.''.

SEC. 104. DEFINITIONS.

    Section 6 of title 35 of the United States Code is amended to read 
as follows:
``Sec. 6. Definitions
    ``As used in this title, the following terms have the meanings 
indicated:
            ``(a) The term `Chief Executive Officer' means the chief 
        executive officer of the United States Intellectual Property 
        Organization.
            ``(b) The term `Commissioner' means the Commissioner of 
        Patent and Trademarks.
            ``(c) The term `Department' means the Department of 
        Commerce.
            ``(d) The term `intellectual property' shall include rights 
        in inventions; in trademarks, service marks, and commercial 
        names and designations; in literary, artistic and scientific 
        works; in performances of performing artists, phonograms and 
        broadcasts; in industrial designs; in trade secrets and 
        scientific discoveries; in semiconductor chip layout designs; 
        in geographical indications; and all other rights resulting 
        from intellectual activity in the industrial, scientific, 
        literary, or artistic fields.
            ``(e) The term `organic statues' includes this Act and the 
        Federal statutes that confer authority upon and refer 
        specifically to the Office, the United States Intellectual 
        Property Organization, the Commissioner, or the Chief Executive 
        Officer, including the Patent Act (35 U.S.C. 1, et seq.) and 
        the Trademark Act (15 U.S.C. 1051 et seq.).
            ``(f) The term `Organization' means the United States 
        Intellectual Property Organization.
            ``(g) The terms `Patent and Trademark Office' and 
        ``Office'' mean the Patent and Trademark Office of the 
        Department of Commerce.
            ``(h) The term `Secretary' means the Secretary of 
        Commerce.''.

 Subtitle B--Trademark Trial and Appeal Board; Board of Patent Appeals 
        and Interferences; Suits By and Against the Organization

SEC. 105. TRADEMARK TRIAL AND APPEAL BOARD.

    Section 17 of the Act of July 5, 1946 (commonly called the 
Trademark Act of 1946), as amended, is amended to read as follows:
    ``(a) Function.--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 Chief Executive 
Officer of the United States Intellectual Property Organization 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) Composition.--The Trademark Trial and Appeal Board shall 
include the Chief Executive Officer, the officer of the Organization 
principally responsible for the examination of trademarks, the officer 
of the Organization principally responsible for the examination of 
patents, and members competent in trademark law who are appointed by 
the Secretary of Commerce. Each case shall be heard by at least three 
members of the Board.''.

SEC. 106. 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) Composition.--There shall be in the United States 
Intellectual Property Organization a Board of Patent Appeals and 
Interferences. The Chief Executive Officer, the officer of the 
Organization principally responsible for the examination of patents, 
the officer of the Organization principally responsible for the 
examination of trademarks, and the examiners-in-chief shall constitute 
the Board. The examiners-in-chief shall be appointed by the Secretary 
of Commerce and shall be persons of competent legal knowledge and 
scientific ability.
    ``(b) Function.--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 three members of the Board. Only the Board of Patent Appeals and 
Interferences may grant rehearings.''.

SEC. 107. SUITS BY AND AGAINST THE ORGANIZATION.

    (a) Sections 8 through 14 of this title (35 U.S.C. 8, 9, 10, 11, 
12, 13, and 14) are renumbered 9, 10, 11, 12, 13, 14, and 15, 
respectively.
    (b) The following new section is added to this title:
``Sec. 8. Suits by and against the Organization
    ``(a) Actions Under United States Law.--Any civil action, suit, or 
proceeding to which the Organization is a party is deemed to arise 
under the laws of the United States. Exclusive jurisdiction over all 
civil actions by or against the Organization is in the Federal courts 
as provided by law. For purposes of filing suits, the Chief Executive 
Officer shall be the head of the agency.
    ``(b) Contract Claims.--Any action, suit, or proceeding against the 
Organization founded upon contract shall be subject to the limitations 
and exclusive remedy provided in sections 1346(a)(2) and 1491 through 
1509 of title 28, whether or not such contract claims are cognizable 
under sections 507, 1346, 1402, 1491, 1496, 1497, 1501, 1503, 2071, 
2072, 2411, 2501, and 2512 of title 28. For purposes of the Contract 
Disputes Act of 1978 (41 U.S.C. 601), the Chief Executive Officer shall 
be deemed to be the agency head with respect to contract claims arising 
with respect to the Organization.
    ``(c) Tort Claims.--Any action, suit, or proceeding against the 
Organization founded upon tort shall be subject to the limitations and 
exclusive remedies provided in subsection 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.
    ``(d) Federal Remedies Apply.--Any action, suit, or proceeding 
against the Organization based upon civil rights laws shall be subject 
to the limitations and exclusive remedies provided for other Federal 
Government executive agencies under 42 U.S.C. 2000e-16, 29 U.S.C. 633a, 
29 U.S.C. 791 et seq., and 29 U.S.C. 206(d).
    ``(e) Prohibition on Attachments, Liens, Etc.--No attachment, 
garnishment, lien, or similar process, intermediate or final, in law or 
equity, may be issued against property of the Organization.''.

SEC. 108. ANNUAL MANAGEMENT REPORT.

    Section 15 of title 35, United States Code, as redesignated by 
section 107 of this Act, is amended to read as follows:
``Sec. 15. Reports to Congress
    ``(a) Annual Report on Monies and Statistics.--The Chief Executive 
Officer shall report to the President and the Congress annually the 
monies received and expended, statistics concerning the work of the 
Organization, and other information relating to the Organization as may 
be useful to the Congress or the public.
    ``(b) Management Report.--The Chief Executive Officer shall prepare 
and submit to the President and the Congress an annual management 
report as required by section 9106 of title 31.''.

        Subtitle C--Fees; Organization Moneys; Borrowing; Audits

SEC. 109. FEES.

    ``(a) Establishment of Fee Schedule.--Section 41 of title 35 of the 
United States Code is amended to read as follows:
``Sec. 41. Fees
    ``Consistent with section 553 of title 5, the Organization shall 
recommend a schedule to the Secretary of fees to be levied for the 
services rendered and products provided in carrying out its activities. 
Any schedule of fees, or revision thereof, before it is promulgated, 
must be approved by the Secretary.''.
    (b) Principles for Developing Fee Schedules.--In the course of the 
deliberations to propose modifications to the fee schedule, the 
Organization shall be guided by the following principles:
            (1) The fees shall be fair and equitable and shall give due 
        consideration to the objectives of the patent and trademark 
        systems.
            (2) Financial relief, in the form of a 50 percent reduction 
        of the major fees for filing a patent application, and issuing 
        and maintaining a patent, shall be provided to individual 
        inventors and non-profit organizations. Such financial relief 
        shall be provided to small business concerns as defined in 
        section 3 of the Small Business Act (15 U.S.C. 632) and by 
        regulations established by the Small Business Administration.
            (3) Fees shall be established, in the aggregate, in such a 
        manner that all costs of operating and maintaining the 
        Organization shall be recovered, including depreciation, 
capital expenditures, and payments in lieu of taxes, if any, and to 
provide the reimbursement under section 1503c(d) of title 15, United 
States Code (15 U.S.C. 1503c(d)).
            (4) Fees for the processing of trademark registrations and 
        for other services and materials related to trademarks shall be 
        calculated based solely upon the full cost of, and capital 
        expenditures for, such trademark operations. Furthermore, 
        trademark revenues shall be used exclusively for the processing 
        of trademark registrations and for other services and materials 
        related to trademarks, including a fair share of allocated 
        general and administrative support costs and the reimbursement 
        provided under section 1503c(d) of title 15, United States Code 
        (15 U.S.C. 1503c(d)).
            (5) Fees for the processing of patent grants and for other 
        services and materials related to patents shall be calculated 
        based solely upon the full cost of, and capital expenditures 
        for, such patent operations. Furthermore, patent revenues shall 
        be used exclusively for the processing of patent grants and for 
        other services and materials related to patents, including a 
        fair share of allocated general and administrative support 
        costs and the reimbursement provided under section 1503c(d) of 
        title 15, United States Code (15 U.S.C. 1503c(d)).
    (c) Transition Provision for Fees.--The fee schedule promulgated by 
the Patent and Trademark Office, which is in effect immediately prior 
to the enactment of this legislation, shall remain in full force and 
effect until such time as the Secretary of Commerce has established and 
promulgated a schedule of fees.
    (d) Exemption From Sequestration Orders.--Section 255(g)(1)(A) of 
the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
905(g)(a)(A)) is amended by inserting after the ``Tennessee Valley 
Authority fund . . .'' the following, ``United States Intellectual 
Property Fund''.
    (e) Conforming Amendments to OBRA.--Section 10101 of the Omnibus 
Reconciliation Act of 1990 (35 U.S.C. 41 note), as amended, is amended 
as follows:
            (1) In subsection (a), by striking the phrase ``by 
        subsections (a) and (b)''.
            (2) In subsections (b)(1)(A) and (b)(2)(A), by striking 
        ``Patent and Trademark activities in the Department of 
        Commerce'' and inserting in lieu thereof ``United States 
        Intellectual Property Organization''.
            (3) In subsections (b) and (c), by striking all other 
        references to ``Patent and Trademark Office'' and substituting 
        therefor ``United States Intellectual Property Organization''.
            (4) In subsection (c), by striking ``Commissioner of 
        Patents and Trademarks'' and inserting in lieu thereof ``Chief 
        Executive Officer of the United States Intellectual Property 
        Organization''.
            (5) Notwithstanding the provisions of any other law, except 
        insofar as such law amends this sentence, on October 1, 1998, 
        the provisions of section 10101, as they apply to the 
        Organization, shall cease to apply to the revenues of the 
        Organization.
    (f) Recommend Trademark Fee Schedule.--Subsection 31(a) of the Act 
of July 5, 1946 (commonly referred to as the Trademark Act of 1946), as 
amended, is amended to read as follows:
    ``(a) Consistent with section 553 of title 5, the Organization 
shall recommend to the Secretary a schedule of fees to be levied for 
the services rendered and products provided in carrying out its 
activities. Any schedule of fees, or revision therefore, before it is 
promulgated, must be approved by the Secretary.''.
    (g) PCT Fees.--Section 371 of title 35, United States Code, is 
amended to read as follows:
``Sec.  376. Fees required
    ``The required payment of the international fee and the handling 
fee, which amounts are specified in the Regulations, shall be paid in 
United States currency. The Organization shall charge national fees as 
provided in section 41 of this title and may also charge the following 
fees:
            ``(a) A transmittal fee (see section 361(d)).
            ``(b) A search fee (see section 361(d)).
            ``(c) A supplemental search fee (to be paid when required).
            ``(d) A preliminary examination fee and any additional fees 
        (see section 362(b)).
            ``(e) Such other fees as established by the Secretary.''.

SEC. 110. ORGANIZATION MONIES.

    Section 42 of title 35, United States Code, is amended to read as 
follows:
``Sec. 42. United States Intellectual Property Organization Funding
    ``(a) Establishment of a Revolving Fund.--There is established with 
the Secretary of the Treasury a revolving fund, which shall be known as 
the Patent and Trademark Organization Fund (the ``Fund''). All fees for 
services performed or furnished by the Organization, will be payable to 
the Organization, and, except as otherwise provided in section 10101 of 
the Omnibus Budget Reconciliation Act of 1990, as amended (35 U.S.C. 41 
note), fees authorized under section 31 of the Act of July 5, 1946 
(commonly called Trademark Act of 1946), as amended, and sections 41 
and 376 of title 35, and all other revenues and monies accruing to the 
Organization shall be deposited in the Fund. Amounts deposited in the 
Fund shall be available to the Organization for obligation without 
further appropriation and shall remain available for obligation without 
time limitation. All monies in the Fund shall remain available to the 
Organization for obligation until expended.
    ``(b) Authority To Invest.--Upon the request of the Organization, 
the Secretary of the Treasury shall invest such portion of the Fund as 
is not, in the judgment of the Organization, required to meet current 
withdrawals. Such investments shall be in public debt securities with 
maturities suitable to the needs of the Fund, as determined by the 
Organization, and bearing interest at rates determined by the Secretary 
of the Treasury, taking into consideration current market yields on 
outstanding marketable obligations of the United States of comparable 
maturities. The income on such investments shall be credited to and 
form a part of the Fund.
    ``(c) Authority To Issue Obligations.--To assist in financing its 
activities, the Organization is authorized after October 1, 1998 to 
issue obligations, to the Secretary of the Treasury and the Secretary 
of the Treasury may, at his or her discretion, purchase such 
obligations, provided that the amount of such obligations outstanding 
at any one time does not exceed $2,000,000,000 and provided further 
that expenditures (including capital investment and interest on 
borrowing) are fully offset by the Organization's revenues in each 
fiscal year. For such purpose, the Secretary of the Treasury is 
authorized to use as a public debt transaction the proceeds of the sale 
of any securities hereafter issued under chapter 31 of title 31 of the 
United States Code and the purposes for which securities may be issued 
under that chapter are extended to include such purchases. Each 
purchase of obligations by the Secretary of the Treasury shall be upon 
such terms and conditions as to yield a return at a rate not less than 
a rate determined by the Secretary of the Treasury, taking into 
consideration the current yields on outstanding marketable obligations 
of the United States of comparable maturity. The Secretary of the 
Treasury may sell, upon such terms and conditions and at such price or 
prices as determined by the Secretary of the Treasury, any of the 
obligations acquired under this subsection. All purchases and sales by 
the Secretary of the Treasury of such obligations under this subsection 
shall be treated as public debt transactions of the United States. 
Funds obtained by the Organization from the issuance of such 
obligations shall be credited to and form part of the Fund.
    ``(d) Form of Payment.--All fees for services performed by or 
materials furnished by the United States Intellectual Property 
Organization will be payable to the Organization.''.

SEC. 111. AUDITS.

    Chapter 4 of part I of title 35, United States Code, is amended by 
adding at the end the following new section:
``Sec. 43. Audits
    ``The Organization shall reimburse the Inspector General for the 
full cost of any audit conducted by the Inspector General or an 
external auditor under section 9105 of title 31 as determined by the 
Inspector General.''.

Subtitle D--Transfers; Use of Organization Name; Transition Provisions; 
                  Technical and Conforming Amendments

SEC. 112. TRANSFERS.

    (a) Transfer of Functions, Powers, and Duties.--Except as otherwise 
provided in this Act, on the effective date of this Act, there are 
hereby transferred to, and vested in, the United States Intellectual 
Property Organization all functions, powers and duties vested by law in 
the Secretary of Commerce or the Department of Commence or in officers 
or components in the Department with respect to the authority to 
examine patent and trademark applications, and in the Patent and 
Trademark Office, and in the officers and components of such Office.
    (b) Transfer of Assets, Liabilities, Etc.--The Secretary of 
Commerce is authorized and directed, without need of further 
appropriation, to transfer to the United States Intellectual Property 
Organization, on the effective date of this Act, those assets, 
liabilities, contracts, property, records, and unexpended and 
unobligated balances of appropriations, authorizations, allocations and 
other funds employed, held, used, arising from, available or to be made 
available to the Department of Commerce (inclusive of funds set aside 
for accounts receivable which are related to functions, powers and 
duties which are vested in the Organization by this Act).
    (c) Transfer of Invested Capital.--From time to time, and at least 
at the close of each fiscal year, the United States Intellectual 
Property Organization shall pay into the Treasury as miscellaneous 
receipts interest on the invested capital transferred to the 
Organization under subsection (b) less the cumulative total of invested 
capital repaid to the general fund. The rate of interest shall be 
determined by the Secretary of the Treasury taking into consideration 
the average market yield on outstanding marketable obligations of the 
United States with remaining periods to maturity of approximately one 
year during the month preceding each fiscal year. Interest payments may 
be deferred, but any interest payments so deferred shall themselves 
bear interest.

SEC. 113. USE OF ORGANIZATION NAME.

    Chapter 1 of part I of title 35, United States Code, is amended by 
adding at the end the following new section:
``Sec. 16. Use of Organization name
    ``No individual, association, partnership, or corporation, except 
the Organization, shall hereafter use words `United States Intellectual 
Property Organization,' `Patent and Trademark Office,' or any 
combination of such words, as the name or part thereof under which such 
individual or entity shall do business. Violations of the foregoing may 
be enjoined by any Federal court at the suit of the Organization. In 
any such suit, the Organization shall be entitled to statutory damages 
of $1,000 for each day during which such violation continues or is 
repeated and, in addition, may recover actual damages flowing from such 
violation.''.

SEC. 114. TRANSITION PROVISIONS.

    (a) Continuation of Contracts, Etc.--Except as provided elsewhere 
in this Act, all contracts, agreements, leases and other business 
instruments, and licenses, permits and privileges that have been 
afforded to the Patent and Trademark Office prior to the effective date 
of this Act, shall continue in effect as if the United States 
Intellectual Property Organization had executed such contracts, 
agreements, leases or other business instruments which have been made 
in the exercise of functions which are transferred to the Organization 
by this Act.
    (b) Continuation of Rules.--Until changed by the United States 
Intellectual Property Organization, any procedural and administrative 
rules applicable to particular functions over which the Organization 
acquires jurisdiction on the effective date of this Act shall continue 
in effect with respect to such particular functions.
    (c) Cessation of Certain Orders, Etc.--Unless otherwise provided by 
this Act, as related to the functions vested in the United States 
Intellectual Property Organization by this Act, all orders, 
determinations, rules, regulations, and privileges of the Department of 
Commerce shall cease to apply to the Organization on the effective date 
of this Act, except for those which the Organization determines shall 
continue to be applicable.
    (d) Transfer Not Affecting Other Proceedings.--Except as provided 
elsewhere in this Act, the transfer of functions related to and vested 
in the United States Intellectual Property Organization by this Act 
shall not affect judicial, administrative, or other proceedings which 
are pending at the time this Act takes effect, and such proceedings 
shall be continued by the Organization.
    (e) Transition Provisions for Employees.--
            (1) Reassignment.--On the effective date of this Act and 
        without a break in service, all officers and employees of the 
        Office on the day before the effective date of this Act will 
        become officers and employees of the Organization or will be 
        reassigned to the Office of the Under Secretary for 
        Intellectual Property within the Department.
            (2) No separations or reductions in compensation.--No 
        officer or employee of the Office who becomes an officer or 
        employee of the Organization shall, for a period of one year 
        after the effective date of this Act, be subject to separation 
        or to any reduction in compensation as a consequence of the 
        establishment of the Organization.
    (f) Transition Provisions for Labor Agreements.--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 on the day before the effective 
date of this Act shall continue in effect with respect to the 
Organization and its officers and employees until modified, superseded, 
or set aside by the Organization. The collective bargaining agreements 
between the Patent and Trademark Office and National Treasury Employees 
Union 243, dated March 13, 1993, the Patent and Trademark Office and 
the National Treasury Employees Union 245, dated July 20, 1993, and the 
Patent and Trademark Office and the Patent Office Professional 
Association, dated October 6, 1986, as well as the recognition of the 
three units, shall remain in effect until modified, superseded, or set 
aside by the parties.

SEC. 115. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Section 5314 of title 5, United States Code is amended by 
adding at the end ``Under Secretary of Commerce for Intellectual 
Property.''.
    (b) Section 9101(3) of title 31, United States Code, is amended by 
adding at the end the following:
                    ``(O) the United States Intellectual Property 
                Organization.''.
    (c) Section 602(d) of the Federal Property and Administrative 
Services Act of 1949 (40 U.S.C. 474), is amended--
            (1) in paragraph (20) by striking ``or'' after the 
        semicolon;
            (2) in paragraph (21) by striking the period and inserting 
        ``; or''; and
            (3) by adding at the end the following:
            ``(22) the United States Intellectual Property 
        Organization.''.
    (d) Title 35, United States Code is amended--
            (1) in section 13 by striking ``at the rate for each year's 
        issue established for this purpose in section 41(d) of this 
        title'';
            (2) in section 111 by striking ``required by law'' and 
        inserting ``established by the Chief Executive Officer'';
            (3) in section 131 by striking the second occurrence of 
        ``Commissioner'' and inserting ``Under Secretary for 
        Intellectual Property'';
            (4) in the third sentence of subsection 135(2) by striking 
        ``Commissioner'' and inserting ``Under Secretary for 
        Intellectual Property'';
            (5) in subsection 153--
                    (A) by striking ``Commissioner'' and inserting 
                ``Under Secretary for Intellectual Property''; and
                    (B) by striking ``under the seal of the Patent and 
                Trademark Office,''
            (6) in section 251 by striking ``Commissioner'' in all 
        occurrences and insert ``Under Secretary for Intellectual 
        Property'';
            (7) in section 254 by striking the second occurrence of 
        ``Commissioner'' and inserting ``Under Secretary for 
        Intellectual Property'';
            (8) in section 302 by inserting ``established'' before the 
        word ``pursuant'';
            (9) in subsection 307(a) by striking ``Commissioner'' and 
        inserting ``Under Secretary for Intellectual Property'';
            (10) in section 371(c)(1) by striking ``provided in section 
        41(a)'' and inserting ``established under section 41'';
            (11) in all other occurrences by striking the words 
        ``Commissioner of Patents and Trademarks'' and ``Commissioner'' 
        (insofar as the word refers to the Commissioner of Patents and 
        Trademarks) and inserting ``Chief Executive Officer''; and
            (12) by striking the words ``Patent and Trademark Office'' 
        whenever they appear and inserting ``United States Intellectual 
        Property Organization''.
    (e) The Act of July 5, 1946 (commonly known as the Trademark Act of 
1946), as amended (chapter 22 of title 15), is amended--
            (1) in paragraph 1(d)(1), second sentence, by striking ``in 
        the Patent and Trademark Office'' and inserting ``by the Under 
        Secretary for Intellectual Property'';
            (2) in subsection 2(d)--
                    (A) by striking ``Patent and Trademark Office'' and 
                inserting ``United States''; and
                    (B) in the second and third sentences by striking 
                ``Commissioner'' and inserting ``Under Secretary for 
                Intellectual Property'';
            (3) in section 7--
                    (A) in subsection (a) by striking ``under the seal 
                of the Patent and Trademark Office and shall be signed 
                by the Commissioner'' and inserting ``and shall be 
                signed by the Under Secretary for Intellectual 
                Property'';
                    (B) in subsection (d) by striking ``Commissioner'' 
                and inserting ``Under Secretary for Intellectual 
                Property'';
                    (C) in subsection (e) by striking ``Commissioner'' 
                in all occurrences and inserting ``Under Secretary for 
                Intellectual Property'';
                    (D) in subsection (g) by striking ``Commissioner'' 
                and inserting ``Under Secretary for Intellectual 
                Property''; and
                    (E) in subsection (h) by striking ``Commissioner'' 
                and inserting ``Under Secretary for Intellectual 
                Property'';
            (4) in subsection 12(a) by striking ``shall refer the 
        application to the examiner in charge of the registration of 
        marks'';
            (5) in section 45 by striking ``The term Commissioner means 
        the Commissioner of Patents and Trademarks.'' and inserting 
        ``The term Chief Executive Officer'' means the Chief Executive 
        Officer of the United States Intellectual Property Organization 
        and the term ``Under Secretary for Intellectual Property'' 
        shall mean the Under Secretary for Intellectual Property within 
        the Department of Commerce.'';
            (6) in all other occurrences by striking the words 
        ``Commissioner of Patents and Trademarks'' and ``Commissioner'' 
        (insofar as the word refers to the Commissioner of Patents and 
        Trademarks) and inserting ``Chief Executive Officer''; and
            (7) by striking the words ``Patent and Trademark Office'' 
        whenever they appear and inserting ``United States Intellectual 
        Property Organization''.
    (f) Section 500(e) of title 5, United States Code, is amended by 
striking ``the Patent Office'' and ``the United States Intellectual 
Property Organization''.
    (g) Subsection 5102(c) of title 5, United States Code, by striking 
paragraph (23) and redesignating paragraphs (24) through (30) as 
paragraphs (23) through (29).
    (h) Section 5316 of title 5, United States Code, is amended--
            (1) by striking ``Commissioner of Patents, Department of 
        Commerce'';
            (2) by striking ``Deputy Commissioner for Patents'';
            (3) by striking ``Assistant Commissioner for Patents''; and
            (4) by striking ``Assistant Commissioner for Trademarks''.
    (i) Subparagraph 9(p)(1)(B) of the Small Business Act (15 U.S.C. 
638(p)(1)(B)) is amended by striking ``Commissioner of Patents and 
Trademarks'' and inserting ``Under Secretary for Intellectual 
Property''.
    (j) 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.
    (k) Section 19 of the Tennessee Valley Authority Act of 1933 (16 
U.S.C. 831r) is amended--
            (1) by striking ``Patent and Trademark Office'' and 
        inserting ``United States Patent and Trademark Organization''; 
        and
            (2) by striking ``Commissioner of Patents and Trademarks'' 
        and inserting ``Chief Executive Officer of the United States 
        Intellectual Property Organization''.
    (l) Subparagraph 2320(d)(1)(A)(ii) of title 18, United States Code, 
is amended by striking ``Patent Office'' and inserting ``United States 
Patent and Trademark Organization''.
    (m) Section 1526(a) of title 19, United States Code (19 U.S.C. 
1526(a)) is amended by striking ``Patent and Trademark Office'' and 
inserting in lieu thereof ``United States Intellectual Property 
Organization''.
    (n) Sections 2242(b)(2)(A) and 2412(b)(2)(D) of title 19, United 
States Code (19 U.S.C. 2242(b)(2)(A) and 2412(b)(2)(D)) are amended by 
striking ``Commissioner of Patents and Trademarks'' and inserting in 
lieu thereof ``Under Secretary of Commerce for Intellectual Property''.
    (o) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 20) is 
amended by striking ``Patent Office'' and inserting ``United States 
Intellectual Property Organization''.
    (p) Subsections 505(m) and 512(o) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are amended by striking 
``Patent and Trademark Office'' and inserting ``United States 
Intellectual Property Organization''.
    (q) Subsection 702(d) of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 372) is amended by striking ``Commissioner of Patents'' and 
inserting ``Chief Executive Officer of the United States Intellectual 
Property Organization''.
    (r) Section 2151t-1 of title 22, United States Code (22 U.S.C. 
2151t-1) is amended by striking ``Patent and Trademark Office'' and 
inserting in lieu thereof ``Under Secretary of Commerce for 
Intellectual Property''.
    (s) Section 305a of title 25, United States Code (25 U.S.C. 305a) 
is amended by striking ``Patent and Trademark Office'' and inserting in 
lieu thereof ``United States Intellectual Property Organization''.
    (t) Subsection 105(e) of the Federal Alcohol Administration Act (27 
U.S.C. 205(e)) is amended by striking ``Patent Office'' and inserting 
``United States Intellectual Property Organization''.
    (u) Paragraph 1295(a)(4) of title 28, United States Code, is 
amended--
            (1) by striking ``Patent and Trademark Office'' and 
        inserting ``United States Intellectual Property Organization''; 
        and
            (2) striking ``Commissioner of Patents and Trademarks'' and 
        inserting ``Chief Executive Officer of the United States 
        Intellectual Property Organization''.
    (v) Section 1744 of title 28, United States Code, is amended--
            (1) by striking ``Patent Office'' each place it appears and 
        inserting ``United States Intellectual Property Organization'';
            (2) by striking ``Commissioner of Patents'' and inserting 
        ``Chief Executive Officer of the United States Intellectual 
        Property Organization''; and
            (3) by striking ``Commissioner'' and inserting ``Chief 
        Executive Officer''.
    (w) Section 1745 of title 28, United States Code, is amended by 
striking ``Patent Office'' and inserting ``United States Intellectual 
Property Organization''.
    (x) Section 1928 of title 28, United States Code, is amended by 
striking ``Patent Office'' and inserting ``United States Intellectual 
Property Organization''.
    (y) Section 2181 (c) and (d) of title 42, United States Code (42 
U.S.C. 2181 (c) and (d)) are amended by striking ``Commissioner of 
Patents'' and inserting in lieu thereof ``Chief Executive Officer of 
the United States Intellectual Property Organization''.
    (z) Section 160 of the Atomic Energy Act of 1954 (42 U.S.C. 2190) 
is amended--
            (1) by striking ``Patent Office'' and inserting ``United 
        States Intellectual Property Organization''; and
            (2) by striking ``Commissioner of Patents'' and inserting 
        ``Chief Executive Officer''.
    (aa) Subsection 305(c) of the National Aeronautics and Space Act of 
1958 (42 U.S.C. 2457(c)) is amended--
            (1) by striking ``Commissioner of Patents'' and inserting 
        ``Chief Executive Officer of the United States Intellectual 
        Property Organization''; and
            (2) by striking ``Commissioner'' and inserting ``Chief 
        Executive Officer''.
    (bb) Subsection 12(a) of the Solar Heating and Cooling 
Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by striking 
``Commissioner of Patent Office'' and inserting ``Chief Executive 
Officer of the United States Intellectual Property Organization''.
    (cc) Section 1111 of title 44, United States Code, is amended by 
striking ``Commissioner of Patents'' and inserting ``Chief Executive 
Officer of the United States Intellectual Property Organization''.
    (dd) Sections 1114 and 1123 of title 44, United States Code, are 
amended by striking ``Commissioner of Patents''.
    (ee) 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.
    (ff) Subsection 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 ``Chief Executive Officer of the United States Intellectual 
Property Organization''.
    (gg) Section 5 of Public Law 103-226 is amended as follows:
            (1) In paragraph (a) by adding ``and the United States 
        Intellectual Property Organization'' following ``General 
        Accounting Office,''.
            (2) In subsection (b), by striking paragraphs (3) through 
        (6) and inserting the following:
            ``(3) 1,998,200 during fiscal year 1996;
            ``(4) 1,958,200 during fiscal year 1997;
            ``(5) 1,917,300 during fiscal year 1998; and
            ``(6) 1,877,400 during fiscal year 1999.''.

   Subtitle E--Separability; Effective Date; Report of the Secretary

SEC. 116. SEPARABILITY.

    If any provision of this Act or the application thereof to any 
person or circumstance is held invalid, the remainder of this Act, and 
the application of such provision to other persons or circumstances 
shall not be affected thereby.

SEC. 117. EFFECTIVE DATE.

    This Act shall take effect 6 months after the date of the enactment 
of this Act.

SEC. 118. REPORT OF THE SECRETARY.

    Not later than five years from the effective date of this Act, the 
Secretary of Commerce shall provide to the President and the Congress a 
report on the operation and effectiveness of the provisions of this Act 
and the costs associated therewith. As part of the report, the 
Secretary shall include (a) the Secretary's recommendation as to 
whether the Organization should continue to exist and (b) any 
recommendations for legislation the Secretary deems necessary or 
appropriate as a result of his or her analysis of the operation and 
effectiveness of the Act and the costs associated therewith. The 
Secretary shall provide to the President and the Congress additional 
reports that comply with the requirements of this section every six 
years after the submission of the first report. The preceding sentence 
shall cease to be effective upon the enactment of legislation to 
terminate the Organization or to amend this Act.

          TITLE II--UNDER SECRETARY FOR INTELLECTUAL PROPERTY

SEC. 201. UNDER SECRETARY FOR INTELLECTUAL PROPERTY.

    (A) Appointment.--There shall be within the Department of Commerce, 
an Under Secretary of Commerce for Intellectual property, who shall be 
appointed by the President by and with the advice and consent of the 
Senate.
    (b) Duties.--The Under Secretary for Intellectual Property, under 
the direction of the Secretary of Commerce, shall perform the following 
functions with respect to intellectual property policy:
            (1) Grant patents and register trademarks.
            (2) Advise the Secretary on all aspects of intellectual 
        property policy, legislation, and issues, including 
        international trade issues concerning intellectual property.
            (3) Advise the Chief Executive Officer of the United States 
        Intellectual Property Organization on patent and trademark 
        policy as provided in section 2(a) of title 35, United States 
        Code, as amended.
            (4) Promote in international trade the United States 
        industries that rely on intellectual property.
            (5) Advise the Secretary of State, the United States Trade 
        Representative, and other appropriate department and agency 
        heads, subject to the authority of the Secretary, on 
        international intellectual property issues.
            (6) Advise Federal agencies on ways to improve intellectual 
        property protection in other countries through economic 
        assistance and international trade.
            (7) Review and coordinate all proposals by agencies to 
        assist foreign governments and international intergovernmental 
        agencies in improving intellectual property protection.
            (8) Carry on studies related to the effectiveness of 
        intellectual property protection throughout the world.
            (9) Advise the Secretary on programs and studies which the 
        Organization is carrying on cooperatively, or is authorizing to 
        be carried on, with foreign patent and trademark offices and 
        international intergovernmental organizations in connection 
        with the examination of patent and trademark applications.
            (10) In coordination with the Department of State, carry on 
        studies cooperatively with foreign intellectual property 
        offices and international intergovernmental organizations.
    (c) Deputy Under Secretaries.--The Under Secretary for Intellectual 
Property shall be assisted by two Deputy Under Secretaries of Commerce 
for Intellectual Property. The Deputy Under Secretaries shall be 
appointed by the Secretary of Commerce to non-career positions within 
the Senior Executive Service and shall be compensated in accordance 
with the provisions of title V, United States Code. The Deputy Under 
Secretaries shall perform such duties and functions as the Under 
Secretary for Intellectual Property shall prescribe.
    (d) Funding.--The offices of the Under Secretary for Intellectual 
Property shall be financially supported through reimbursement from the 
United States Intellectual Property Organization, in lieu of all other 
payments by the Organization, upon determination of requirements by the 
Secretary and in an amount not to exceed two (2) percent of the 
Organization's projected annual revenues from fees for services and 
goods.
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