[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3460 Reported in House (RH)]





                                                 Union Calendar No. 423

104th CONGRESS

  2d Session

                               H. R. 3460

                          [Report No. 104-784]

_______________________________________________________________________

                                 A BILL

     To establish the Patent and Trademark Office as a Government 
                  corporation, and for other purposes.

_______________________________________________________________________

                           September 12, 1996

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed





                                                 Union Calendar No. 423
104th CONGRESS
  2d Session
                                H. R. 3460

                          [Report No. 104-784]

     To establish the Patent and Trademark Office as a Government 
                  corporation, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 15, 1996

      Mr. Moorhead (for himself, Mrs. Schroeder, Mr. Conyers, Mr. 
 Sensenbrenner, Mr. Coble, Mr. Goodlatte, Mr. Berman, Mr. Boucher, Mr. 
    Gallegly, Mr. Hoke, Mr. Nadler, and Ms. Lofgren) introduced the 
  following bill; which was referred to the Committee on the Judiciary

                           September 12, 1996

Additional sponsors: Ms. Slaughter, Mr. Heineman, Mr. Gekas, Mr. Frost, 
Mr. Dreier, Mr. Hyde, Mr. Johnston of Florida, Mr. McHale, Mr. LaHood, 
                            and Mr. Pickett

                           September 12, 1996

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on May 15, 
                                 1996]

_______________________________________________________________________

                                 A BILL


 
     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 ``Moorhead-Schroeder Patent Reform 
Act''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.

      TITLE I--PATENT AND TRADEMARK OFFICE GOVERNMENT CORPORATION

Sec. 101. Short title.

         Subtitle A--United States Patent and Trademark Office

Sec. 111. Establishment of Patent and Trademark Office as a Government 
                            corporation.
Sec. 112. Powers and duties.
Sec. 113. Organization and management.
Sec. 114. Management Advisory Board.
Sec. 115. Conforming amendments.
Sec. 116. Trademark Trial and Appeal Board.
Sec. 117. Board of Patent Appeals and Interferences.
Sec. 118. Suits by and against the Office.
Sec. 119. Annual report of Commissioner.
Sec. 120. Suspension or exclusion from practice.
Sec. 121. Funding.
Sec. 122. Audits.
Sec. 123. Transfers.

            Subtitle B--Effective Date; Technical Amendments

Sec. 131. Effective date.
Sec. 132. Technical and conforming amendments.

                  Subtitle C--Miscellaneous Provisions

Sec. 141. References.
Sec. 142. Exercise of authorities.
Sec. 143. Savings provisions.
Sec. 144. Transfer of assets.
Sec. 145. Delegation and assignment.
Sec. 146. Authority of Director of the Office of Management and Budget 
                            with respect to functions transferred.
Sec. 147. Certain vesting of functions considered transfers.
Sec. 148. Availability of existing funds.
Sec. 149. Definitions.

           TITLE II--EARLY PUBLICATION OF PATENT APPLICATIONS

Sec. 201. Short title.
Sec. 202. Early publication.
Sec. 203. Time for claiming benefit of earlier filing date.
Sec. 204. Provisional rights.
Sec. 205. Prior art effect of published applications.
Sec. 206. Cost recovery for publication.
Sec. 207. Conforming changes.
Sec. 208. Patent term extension authority.
Sec. 209. Examining procedure improvements; further limited 
                            reexamination of patent applications.
Sec. 210. Last day of pendency of provisional application.
Sec. 211. Reporting requirement.
Sec. 212. Effective date.

                TITLE III--PRIOR DOMESTIC COMMERCIAL USE

Sec. 301. Short title.
Sec. 302. Defense to patent infringement based on prior domestic 
                            commercial use.
Sec. 303. Effective date and applicability.

                     TITLE IV--INVENTOR PROTECTION

Sec. 401. Short title.
Sec. 402. Invention development services.
Sec. 403. Technical and conforming amendment.
Sec. 404. Effective date.

                  TITLE V--PATENT REEXAMINATION REFORM

Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Reexamination procedures.
Sec. 504. Conforming amendments.
Sec. 505. Effective date.

               TITLE VI--MISCELLANEOUS PATENT PROVISIONS

Sec. 601. Provisional applications.
Sec. 602. International applications.
Sec. 603. Plant patents.
Sec. 604. Just compensation for United States Government use of 
                            patents.
Sec. 605. Electronic filing.

      TITLE I--PATENT AND TRADEMARK OFFICE GOVERNMENT CORPORATION

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Patent and Trademark Office 
Government Corporation Act of 1996''.

         Subtitle A--United States Patent and Trademark Office

SEC. 111. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE AS A GOVERNMENT 
              CORPORATION.

    Section 1 of title 35, United States Code, is amended to read as 
follows:
``Sec. 1. Establishment
    ``(a) Establishment.--The United States Patent and Trademark Office 
is established as a wholly owned Government corporation subject to 
chapter 91 of title 31, and shall be an agency of the United States 
under the policy direction of the Secretary of Commerce, except as 
otherwise provided in this title. For purposes of internal management, 
the United States Patent and Trademark Office shall be a corporate body 
not subject to supervision by any department, except as otherwise 
provided in this title.
    ``(b) Offices.--The United States 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 in which its principal office is located. The United States 
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 United States 
Patent and Trademark Office shall also be referred to as the `Office' 
and the `Patent and Trademark Office'.''.

SEC. 112. 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 United States 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, the administration of the Office, or any other 
        function vested in the Office by law, including programs to 
        recognize, identify, assess, and forecast the technology of 
        patented inventions and their utility to industry;
            ``(3)(A) 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
            ``(B) with the concurrence of the Secretary of State, 
        authorizing the transfer of not to exceed $100,000 in any year 
        to the Department of State for the purpose of making special 
        payments to international intergovernmental organizations for 
        studies and programs for advancing international cooperation 
        concerning patents, trademarks, and related matters; and
            ``(4) disseminating to the public information with respect 
        to patents and trademarks.
The special payments under paragraph (3)(B) shall be in addition to any 
other payments or contributions to international organizations 
described in paragraph (3)(B) and shall not be subject to any 
limitations imposed by law on the amounts of such other payments or 
contributions by the United States Government.
    ``(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, subject to the provisions of 
        section 7;
            ``(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, 
        regulations, and determinations, which--
                    ``(A) shall govern the manner in which its business 
                will be conducted and the powers granted to it by law 
                will be exercised;
                    ``(B) shall be made after notice and opportunity 
                for full participation by interested public and private 
                parties;
                    ``(C) shall facilitate and expedite the processing 
                of patent applications, particularly those which can be 
                filed, stored, processed, searched, and retrieved 
                electronically, subject to the provisions of section 
                122 relating to the confidential status of 
                applications; and
                    ``(D) may govern the recognition and conduct of 
                agents, attorneys, or other persons representing 
                applicants or other parties before the Office, and may 
require them, before being recognized as representatives of applicants 
or other persons, to show that they are of good moral character and 
reputation and are possessed of the necessary qualifications to render 
to applicants or other persons valuable service, advice, and assistance 
in the presentation or prosecution of their applications or other 
business before the Office;
            ``(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;
            ``(7)(A) may make such purchases, contracts for the 
        construction, maintenance, or management and operation of 
        facilities, and contracts for supplies or services, without 
        regard to the provisions of the Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 471 and 
        following), the Public Buildings Act (40 U.S.C. 601 and 
        following), and the Stewart B. McKinney Homeless Assistance Act 
        (42 U.S.C. 11301 and following); and
            ``(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;
            ``(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 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 United States and 
        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, including for research and development and capital 
        investment, subject to the provisions of section 10101 of the 
        Omnibus Budget Reconciliation Act of 1990 (35 U.S.C. 41 note);
            ``(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. 113. 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 United States 
        Patent and Trademark Office shall be vested in a 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 or 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, and shall perform these duties in a fair, impartial, and 
equitable manner.
                    ``(B) Advising the president.--The Commissioner 
                shall advise the President, through the Secretary of 
                Commerce, of all activities of the 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, through the Secretary of 
                Commerce, changes in law or policy which may improve 
                the ability of United States 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 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.
                    ``(D) Security clearances.--The Commissioner, in 
                consultation with the Director of the Office of 
                Personnel Management, shall maintain a program for 
                identifying national security positions and providing 
                for appropriate security clearances.
            ``(3) Term.--The Commissioner shall serve a term of 5 
        years, and may continue to serve after the expiration of the 
        Commissioner's term 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 and management 
        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, except as otherwise provided in this 
                section; 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.
    ``(c) Limits on Compensation.--Except as otherwise provided by law, 
the annual rate of basic pay of an officer or employee of the Office 
may not be fixed at a rate that exceeds, and total compensation payable 
to any such officer or employee for any year may not exceed, the annual 
rate of basic pay in effect for the Commissioner for the year involved. 
The Commissioner shall prescribe such regulations as may be necessary 
to carry out this subsection.
    ``(d) Inapplicability of Title 5 Generally.--Except as otherwise 
provided in this section, officers and employees of the Office shall 
not be subject to the provisions of title 5 relating to Federal 
employees.
    ``(e) Continued Applicability of Certain Provision of Title 5.--
            ``(1) In general.--The following provisions of title 5 
        shall apply to the Office and its officers and employees:
                    ``(A) Section 3110 (relating to employment of 
                relatives; restrictions).
                    ``(B) Subchapter II of chapter 55 (relating to 
                withholding pay).
                    ``(C) Subchapters II and III of chapter 73 
                (relating to employment limitations and political 
                activities, respectively).
                    ``(D) Chapter 71 (relating to labor-management 
                relations), subject to paragraph (2) and subsection 
                (g).
                    ``(E) Section 3303 (relating to political 
                recommendations).
                    ``(F) Subchapter II of chapter 61 (relating to 
                flexible and compressed work schedules).
            ``(2) Compensation subject to collective bargaining.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, for purposes of applying chapter 71 
of title 5 pursuant to paragraph (1)(D), basic pay and other forms of 
compensation shall be considered to be among the matters as to which 
the duty to bargain in good faith extends under such chapter.
                    ``(B) Exceptions.--The duty to bargain in good 
                faith shall not, by reason of subparagraph (A), be 
                considered to extend to any benefit under title 5 which 
                is afforded by paragraph (1), (2), (3), or (4) of 
                subsection (f).
                    ``(C) Limitations apply.--Nothing in this 
                subsection shall be considered to allow any limitation 
                under subsection (c) to be exceeded.
    ``(f) Provisions of Title 5 That Continue To Apply, Subject to 
Certain Requirements.--
            ``(1) Retirement.--(A) The provisions of subchapter III of 
        chapter 83 and chapter 84 of title 5 shall apply to the Office 
        and its officers and employees, subject to subparagraph (B).
            ``(B)(i) The amount required of the Office under the second 
        sentence of section 8334(a)(1) of title 5 with respect to any 
        particular individual shall, instead of the amount which would 
        otherwise apply, be equal to the normal-cost percentage 
        (determined with respect to officers and employees of the 
        Office using dynamic assumptions, as defined by section 8401(9) 
        of such title) of the individual's basic pay, minus the amount 
        required to be withheld from such pay under such section 
        8334(a)(1).
            ``(ii) The amount required of the Office under section 
        8334(k)(1)(B) of title 5 with respect to any particular 
        individual shall be equal to an amount computed in a manner 
        similar to that specified in clause (i), as determined in 
        accordance with clause (iii).
            ``(iii) Any regulations necessary to carry out this 
        subparagraph shall be prescribed by the Office of Personnel 
        Management.
            ``(C) The United States Patent and Trademark Office may 
        supplement the benefits provided under the preceding provisions 
        of this paragraph.
            ``(2) Health benefits.--(A) The provisions of chapter 89 of 
        title 5 shall apply to the Office and its officers and 
        employees, subject to subparagraph (B).
            ``(B)(i) With respect to any individual who becomes an 
        officer or employee of the Office pursuant to subsection (h), 
        the eligibility of such individual to participate in such 
        program as an annuitant (or of any other person to participate 
        in such program as an annuitant based on the death of such 
        individual) shall be determined by disregarding the 
        requirements of section 8905(b) of title 5. The preceding 
        sentence shall not apply if the individual ceases to be an 
        officer or employee of the Office for any period of time after 
        becoming an officer or employee of the Office pursuant to 
        subsection (h) and before separation.
            ``(ii) The Government contributions authorized by section 
        8906 for health benefits for anyone participating in the health 
        benefits program pursuant to this subparagraph shall be made by 
        the Office in the same manner as provided under section 
        8906(g)(2) of title 5 with respect to the United States Postal 
        Service for individuals associated therewith.
            ``(iii) For purposes of this subparagraph, the term 
        `annuitant' has the meaning given such term by section 8901(3) 
        of title 5.
            ``(C) The Office may supplement the benefits provided under 
        the preceding provisions of this paragraph.
            ``(3) Life insurance.--(A) The provisions of chapter 87 of 
        title 5 shall apply to the Office and its officers and 
        employees, subject to subparagraph (B).
            ``(B)(i) Eligibility for life insurance coverage after 
        retirement or while in receipt of compensation under subchapter 
        I of chapter 81 of title 5 shall be determined, in the case of 
        any individual who becomes an officer or employee of the Office 
        pursuant to subsection (h), without regard to the requirements 
        of section 8706(b) (1) or (2), but subject to the condition 
        specified in the last sentence of paragraph (2)(B)(i) of this 
        subsection.
            ``(ii) Government contributions under section 8708(d) on 
        behalf of any such individual shall be made by the Office in 
        the same manner as provided under paragraph (3) thereof with 
        respect to the United States Postal Service for individuals 
        associated therewith.
            ``(C) The Office may supplement the benefits provided under 
        the preceding provisions of this paragraph.
            ``(4) Employees' compensation fund.--(A) Officers and 
        employees of the Office shall not become ineligible to 
        participate in the program under chapter 81 of title 5, 
        relating to compensation for work injuries, by reason of 
        subsection (d).
            ``(B) The Office shall remain responsible for reimbursing 
        the Employees' Compensation Fund, pursuant to section 8147 of 
        title 5, for compensation paid or payable after the effective 
        date of the Patent and Trademark Office Government Corporation 
        Act of 1996 in accordance with chapter 81 of title 5 with 
        regard to any injury, disability, or death due to events 
        arising before such date, whether or not a claim has been filed 
        or is final on such date.
    ``(g) Labor-Management Relations.--
            ``(1) Labor relations and employee relations programs.--The 
        Office shall develop labor relations and employee relations 
        programs with the objective of improving productivity and 
        efficiency, incorporating the following principles:
                    ``(A) Such programs shall be consistent with the 
                merit principles in section 2301(b) of title 5.
                    ``(B) Such programs shall provide veterans 
                preference protections equivalent to those established 
                by sections 2108, 3308-3318, and 3320 of title 5.
                    ``(C)(i) The right to work shall not be subject to 
                undue restraint or coercion. The right to work shall 
                not be infringed or restricted in any way based on 
                membership in, affiliation with, or financial support 
                of a labor organization.
                    ``(ii) No person shall be required, as a condition 
                of employment or continuation of employment--
                            ``(I) to resign or refrain from voluntary 
                        membership in, voluntary affiliation with, or 
                        voluntary financial support of a labor 
                        organization;
                            ``(II) to become or remain a member of a 
                        labor organization;
                            ``(III) to pay any dues, fees, assessments, 
                        or other charges of any kind or amount to a 
                        labor organization;
                            ``(IV) to pay to any charity or other third 
                        party, in lieu of such payments, any amount 
                        equivalent to or a pro-rata portion of dues, 
                        fees, assessments, or other charges regularly 
                        required of members of a labor organization; or
                            ``(V) to be recommended, approved, 
                        referred, or cleared by or through a labor 
                        organization.
                    ``(iii) This subparagraph shall not apply to a 
                person described in section 7103(a)(2)(v) of title 5 or 
                a `supervisor', `management official', or `confidential 
                employee' as those terms are defined in 7103(a) (10), 
                (11), and (13) of such title.
                    ``(iv) Any labor organization recognized by the 
                Office as the exclusive representative of a unit of 
                employees of the Office shall represent the interests 
of all employees in that unit without discrimination and without regard 
to labor organization membership.
            ``(2) Adoption of existing labor agreements.--The Office 
        shall adopt all labor agreements which are in effect, as of the 
        day before the effective date of the Patent and Trademark 
        Office Government Corporation Act of 1996, with respect to such 
        Office (as then in effect).
    ``(h) Carryover of Personnel.--
            ``(1) From pto.--Effective as of the effective date of the 
        Patent and Trademark Office Government Corporation Act of 1996, 
        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) Other personnel.--Any individual who, on the day 
        before the effective date of the Patent and Trademark Office 
        Government Corporation Act of 1996, is an officer or employee 
        of the Department of Commerce (other than an officer or 
        employee under paragraph (1)) shall be transferred to the 
        Office if--
                    ``(A) such individual serves in a position for 
                which a major function is the performance of work 
                reimbursed by the Patent and Trademark Office, as 
                determined by the Secretary of Commerce;
                    ``(B) such individual serves in a position that 
                performed work in support of the Patent and Trademark 
                Office during at least half of the incumbent's work 
                time, as determined by the Secretary of Commerce; or
                    ``(C) such transfer would be in the interest of the 
                Office, as determined by the Secretary of Commerce in 
                consultation with the Commissioner of Patents and 
                Trademarks.
        Any transfer under this paragraph shall be effective as of the 
        same effective date as referred to in paragraph (1), and shall 
        be made without a break in service.
            ``(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 those 
        becoming officers or employees of the Office pursuant to this 
        subsection, are obligations of the Office.
            ``(4) Termination rights.--Any employee referred to in 
        paragraph (1) or (2) of this subsection whose employment with 
        the Office is terminated during the 2-year period beginning on 
        the effective date of the Patent and Trademark Office 
        Government Corporation Act of 1996 shall be entitled to rights 
        and benefits, to be afforded by the Office, similar to those 
        such employee would have had under Federal law if termination 
        had occurred immediately before such date. An employee who 
        would have been entitled to appeal any such termination to the 
        Merit Systems Protection Board, if such termination had 
        occurred immediately before such effective date, may appeal any 
        such termination occurring within this 2-year period to the 
        Board under such procedures as it may prescribe.
            ``(5) 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 Government Corporation Act of 1996 may 
        serve as the Commissioner until the date on which a 
        Commissioner is 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 Government Corporation Act of 1996 may 
        serve as the Deputy Commissioner for Patents until the date on 
        which a Deputy Commissioner for Patents is 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 Government Corporation Act of 1996 
        may serve as the Deputy Commissioner for Trademarks until the 
        date on which a Deputy Commissioner for Trademarks is 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 not forfeit any 
competitive status, acquired by such officer or employee before the 
effective date of the Patent and Trademark Office Government 
Corporation Act of 1996, by reason of becoming an officer or employee 
of the Office pursuant to subsection (h).
    ``(j) Savings Provisions.--
            ``(1) In general.--Compensation, benefits, and other terms 
        and conditions of employment in effect immediately before the 
        effective date of the Patent and Trademark Office Government 
        Corporation Act of 1996, whether provided by statute or by 
        rules and regulations of the former Patent and Trademark Office 
        or the executive branch of the Government of the United States, 
        shall continue to apply to officers and employees of the 
        Office, until changed in accordance with this section (whether 
        by action of the Commissioner or otherwise).
            ``(2) Provisions specific to basic pay.--With respect to 
        any individual who becomes an officer or employee of the Office 
        pursuant to subsection (h), the rate of basic pay for such 
        officer or employee may not, on or after the effective date of 
        the Patent and Trademark Office Government Corporation Act of 
        1996, be less than the rate in effect immediately before such 
        effective date, except--
                    ``(A) pursuant to a collective-bargaining agreement 
                entered into under this section; or
                    ``(B) for inefficiency, neglect of duty, or 
                misconduct, on the part of such individual.
        For purposes of this subparagraph, the term `basic pay' 
        includes any amount considered to be part of basic pay for 
        purposes of subchapter III of chapter 83 or chapter 84 of title 
        5.
    ``(k) Removal of Quasi-Judicial Examiners.--The Office may remove a 
patent examiner or examiner-in-chief, or a trademark examiner or member 
of a Trademark Trial and Appeal Board, only for such cause as will 
promote the efficiency of the Office.''.

 SEC. 114. 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) Establishment of Management Advisory Board.--
            ``(1) Appointment.--The United States Patent and Trademark 
        Office shall have a Management Advisory Board (hereafter in 
        this title referred to as the `Board') of 12 members, 4 of whom 
        shall be appointed by the President, 4 of whom shall be 
        appointed by the Speaker of the House of Representatives, and 4 
        of whom shall be appointed by the President pro tempore of the 
        Senate. Not more than 3 of the 4 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 4 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, and 1 shall be for 
        a term of 3 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 Government Corporation Act of 
        1996, 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.
            ``(6) Committees.--The Chair shall designate members of the 
        Board to serve on a committee on patent operations and on a 
        committee on trademark operations to perform the duties set 
        forth in subsection (e) as they relate specifically to the 
        Office's patent operations, and the Office's trademark 
        operations, respectively.
    ``(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 United States 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 United States 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) Compensation.--Members of the Board shall be compensated for 
each day (including travel time) during which they are attending 
meetings or conferences of the Board or otherwise engaged in the 
business of the Board, at the rate which is the daily equivalent of the 
annual rate of basic pay in effect for level III of the Executive 
Schedule under section 5314 of title 5, and while away from their homes 
or regular places of business they may be allowed travel expenses, 
including per diem in lieu of subsistence, as authorized by section 
5703 of title 5.
    ``(g) Access to Information.--Members of the Board shall be 
provided access to records and information in the United States 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.''.

SEC. 115. CONFORMING AMENDMENTS.

    (a) Duties of Commissioner.--Chapter 1 of title 35, United States 
Code, is amended by striking section 6.
    (b) Regulations for Agents and Attorneys.--Section 31 of title 35, 
United States Code, and the item relating to such section in the table 
of sections for chapter 3 of title 35, United States Code, are 
repealed.

SEC. 116. 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. 117. BOARD OF PATENT APPEALS AND INTERFERENCES.

    Chapter 1 of title 35, United States Code, is amended by striking 
section 7 and inserting after section 5 the following:
``Sec. 6. Board of Patent Appeals and Interferences
    ``(a) Establishment and Composition.--There shall be in the United 
States Patent and Trademark Office a Board of Patent Appeals and 
Interferences. The Commissioner, the Deputy Commissioner for Patents, 
the Deputy Commissioner for 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). 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. 118. SUITS BY AND AGAINST THE OFFICE.

    Chapter 1 of part I of title 35, United States Code, is amended by 
inserting after section 6 the following new section:
``Sec. 7. Suits by and against the Office
    ``(a) In General.--
            ``(1) Actions under united states law.--Any civil action or 
        proceeding to which the United States Patent and Trademark 
        Office is a party is deemed to arise under the laws of the 
        United States. The Federal courts shall have exclusive 
        jurisdiction over all civil actions by or against the Office.
            ``(2) Contract claims.--Any action or proceeding against 
        the Office in which any claim is cognizable under the Contract 
        Disputes Act of 1978 (41 U.S.C. 601 and following) shall be 
        subject to that Act. For purposes of that Act, the Commissioner 
        shall be deemed to be the agency head with respect to contract 
        claims arising with respect to the Office. Any other action or 
        proceeding against the Office founded upon contract may be 
brought in an appropriate district court, notwithstanding any provision 
of title 28.
            ``(3) Tort claims.--(A) Any action or proceeding against 
        the Office in which any claim is cognizable under the 
        provisions of section 1346(b) and chapter 171 of title 28, 
        shall be governed by those provisions.
            ``(B) Any other action or proceeding against the Office 
        founded upon tort may be brought in an appropriate district 
        court without regard to the provisions of section 1346(b) and 
        chapter 171 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 or proceeding 
        against an officer or employee of the Office, if the Office 
        determines that the officer or employee was acting within the 
        scope of his or her 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 his or her 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. In any 
        such civil action or proceeding to which paragraph (3)(A) 
        applies, the provisions of section 1346(b) and chapter 171 of 
        title 28 shall apply in lieu of this paragraph.
    ``(b) Relationship With Justice Department.--
            ``(1) Exercise by office of attorney general's 
        authorities.--Except as provided in this section, with respect 
        to any action or proceeding in which the Office is a party or 
an officer or employee thereof is a party in his or her official 
capacity, the Office, officer, or employee 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 Office, officer, or employee under title 28 or other laws.
            ``(2) Appearances by attorney general.--Notwithstanding 
        paragraph (1), at any time the Attorney General may, in any 
        action or proceeding described in paragraph (1), file an 
        appearance on behalf of the Office or the officer or employee 
        involved, without the consent of the Office or the officer or 
        employee. Upon such filing, the Attorney General shall 
        represent the Office or such officer or employee with exclusive 
        authority in the conduct, settlement, or compromise of that 
        action or proceeding.
            ``(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 employed 
        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 before 
        which the proceeding is conducted.''.

 SEC. 119. ANNUAL REPORT OF COMMISSIONER.

    Section 14 of title 35, United States Code, is amended to read as 
follows:
``Sec. 14. Annual report to Congress
    ``The Commissioner shall report to the Congress, not later than 180 
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. The report under this section shall 
also meet the requirements of section 9106 of title 31, to the extent 
that such requirements are not inconsistent with the preceding 
sentence. The report required under this section shall be deemed to be 
the report of the United States Patent and Trademark Office under 
section 9106 of title 31, and the Commissioner shall not file a 
separate report under such section.''.

SEC. 120. 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 attorney who is an officer or employee 
of the United States Patent and Trademark Office to conduct the hearing 
required by this section.''.

SEC. 121. 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 United States Patent and Trademark 
Office shall be payable to the Office.
    ``(b) Use of Moneys.--Moneys from fees shall be available to the 
United States Patent and Trademark Office to carry out, to the extent 
provided in appropriations Acts, the functions of the Office. Moneys of 
the 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 Office under 
this title shall be used for the processing of patent applications and 
for other services and materials relating to patents. Fees available to 
the Office 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 for the processing of trademark registrations and for other 
services and materials relating to trademarks.
    ``(c) Borrowing Authority.--The United States 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') to assist in financing its activities. Borrowing under 
this subsection shall be subject to prior approval in appropriations 
Acts. Such borrowing shall not exceed amounts approved in 
appropriations Acts. Any borrowing under this subsection shall be 
repaid only from fees paid to the Office and surcharges appropriated by 
the Congress. 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 United States Patent and Trademark 
Office shall be treated as public debt transactions of the United 
States.''.

SEC. 122. 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
    ``(a) In General.--Financial statements of the United States 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 
Commissioner. 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. The Commissioner shall transmit to the 
Committees on the Judiciary of the House of Representatives and the 
Senate the results of each audit under this subsection.
    ``(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. 123. TRANSFERS.

    (a) Transfer of Functions.--Except as otherwise provided in this 
title, there are transferred to, and vested in, the United States 
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 title, and in the officers and components of 
such Office.
    (b) Transfer of Funds and Property.--The Secretary of Commerce 
shall transfer to the United States Patent and Trademark Office, on the 
effective date of this title, 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 title.

            Subtitle B--Effective Date; Technical Amendments

 SEC. 131. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
4 months after the date of the enactment of this Act.

SEC. 132. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Amendments to Title 35.--
            (1) The item relating to part I in the table of parts for 
        chapter 35, United States Code, is amended to read as follows:

        ``I. United States Patent and Trademark Office.........    1''.
            (2) The heading for part I of title 35, United States Code, 
        is amended to read as follows:

         ``PART I--UNITED STATES PATENT AND TRADEMARK OFFICE''.

            (3) The table of chapters for part I of title 35, United 
        States Code, is amended by amending the item relating to 
        chapter 1 to read as follows:

``1. Establishment, Officers and Employees, Functions.......       1''.
            (4) The table of sections for chapter 1 of title 35, United 
        States Code, is amended to read as follows:

     ``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.  Board of Patent Appeals and Interferences.
``7.  Suits by and against the Office.
``8.  Library.
``9.  Classification of patents.
``10. Certified copies of records.
``11. Publications.
``12. Exchange of copies of patents with foreign countries.
``13. Copies of patents for public libraries.
``14. Annual report to Congress.''.
            (5) The table of sections 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:
                    ``(R) the United States Patent and Trademark 
                Office.''.
            (2) Section 500(e) of title 5, United States Code, is 
        amended by striking ``Patent Office'' and inserting ``United 
        States Patent and Trademark Office''.
            (3) Section 5102(c)(23) of title 5, United States Code, is 
        amended by striking ``Patent and Trademark Office, Department 
        of Commerce'' and inserting ``United States Patent and 
        Trademark Office''.
            (4) 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.''.
            (5) Section 12 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.
            (6) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) 
        is amended by striking ``Patent Office'' and inserting ``United 
        States Patent and Trademark Office''.
            (7) 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 ``Patent and Trademark Office of the 
        Department of Commerce'' and inserting ``United States Patent 
        and Trademark Office''.
            (8) Section 105(e) of the Federal Alcohol Administration 
        Act (27 U.S.C. 205(e)) is amended by striking ``United States 
        Patent Office'' and inserting ``United States Patent and 
        Trademark Office''.
            (9) Section 1744 of title 28, United States Code is 
        amended--
                    (A) by striking ``Patent Office'' each place it 
                appears in the text and section heading and inserting 
                ``United States Patent and Trademark Office''; and
                    (B) by striking ``Commissioner of Patents'' and 
                inserting ``Commissioner of Patents and Trademarks''.
            (10) Section 1745 of title 28, United States Code, is 
        amended by striking ``United States Patent Office'' and 
        inserting ``United States Patent and Trademark Office''.
            (11) Section 1928 of title 28, United States Code, is 
        amended by striking ``Patent Office'' and inserting ``United 
        States Patent and Trademark Office''.
            (12) Section 160 of the Atomic Energy Act of 1954 (42 
        U.S.C. 2190) is amended--
                    (A) by striking ``United States Patent Office'' and 
                inserting ``United States Patent and Trademark 
                Office''; and
                    (B) by striking ``Commissioner of Patents'' and 
                inserting ``Commissioner of Patents and Trademarks''.
            (13) 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''.
            (14) 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''.
            (15) Section 1111 of title 44, United States Code, is 
        amended by striking ``the Commissioner of Patents,''.
            (16) Section 1114 of title 44, United States Code, is 
        amended by striking ``the Commissioner of Patents,''.
            (17) Section 1123 of title 44, United States Code, is 
        amended by striking ``the Patent Office,''.
            (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 United States 
        Patent and Trademark Office,'' after ``the United States 
        International Trade Commission,''.

                  Subtitle C--Miscellaneous Provisions

SEC. 141. REFERENCES.

    Any reference in any other Federal law, Executive order, rule, 
regulation, or delegation of authority, or any document of or 
pertaining to a department or office from which a function is 
transferred by this title--
            (1) to the head of such department or office is deemed to 
        refer to the head of the department or office to which such 
        function is transferred; or
            (2) to such department or office is deemed to refer to the 
        department or office to which such function is transferred.

SEC. 142. EXERCISE OF AUTHORITIES.

    Except as otherwise provided by law, a Federal official to whom a 
function is transferred by this title may, for purposes of performing 
the function, exercise all authorities under any other provision of law 
that were available with respect to the performance of that function to 
the official responsible for the performance of the function 
immediately before the effective date of the transfer of the function 
under this title.

SEC. 143. SAVINGS PROVISIONS.

    (a) Legal Documents.--All orders, determinations, rules, 
regulations, permits, grants, loans, contracts, agreements, 
certificates, licenses, and privileges--
            (1) that have been issued, made, granted, or allowed to 
        become effective by the President, the Secretary of Commerce, 
        any officer or employee of any office transferred by this 
        title, or any other Government official, or by a court of 
        competent jurisdiction, in the performance of any function that 
        is transferred by this title, and
            (2) that are in effect on the effective date of such 
        transfer (or become effective after such date pursuant to their 
        terms as in effect on such effective date),
shall continue in effect according to their terms until modified, 
terminated, superseded, set aside, or revoked in accordance with law by 
the President, any other authorized official, a court of competent 
jurisdiction, or operation of law.
    (b) Proceedings.--This title shall not affect any proceedings or 
any application for any benefits, service, license, permit, 
certificate, or financial assistance pending on the effective date of 
this title before an office transferred by this title, but such 
proceedings and applications shall be continued. Orders shall be issued 
in such proceedings, appeals shall be taken therefrom, and payments 
shall be made pursuant to such orders, as if this title had not been 
enacted, and orders issued in any such proceeding shall continue in 
effect until modified, terminated, superseded, or revoked by a duly 
authorized official, by a court of competent jurisdiction, or by 
operation of law. Nothing in this subsection shall be considered to 
prohibit the discontinuance or modification of any such proceeding 
under the same terms and conditions and to the same extent that such 
proceeding could have been discontinued or modified if this title had 
not been enacted.
    (c) Suits.--This title shall not affect suits commenced before the 
effective date of this title, and in all such suits, proceedings shall 
be had, appeals taken, and judgments rendered in the same manner and 
with the same effect as if this title had not been enacted.
    (d) Nonabatement of Actions.--No suit, action, or other proceeding 
commenced by or against the Department of Commerce or the Secretary of 
Commerce, or by or against any individual in the official capacity of 
such individual as an officer or employee of an office transferred by 
this title, shall abate by reason of the enactment of this title.
    (e) Continuance of Suits.--If any Government officer in the 
official capacity of such officer is party to a suit with respect to a 
function of the officer, and under this title such function is 
transferred to any other officer or office, then such suit shall be 
continued with the other officer or the head of such other office, as 
applicable, substituted or added as a party.
    (f) Administrative Procedure and Judicial Review.--Except as 
otherwise provided by this title, any statutory requirements relating 
to notice, hearings, action upon the record, or administrative or 
judicial review that apply to any function transferred by this title 
shall apply to the exercise of such function by the head of the 
Federal agency, and other officers of the agency, to which such 
function is transferred by this title.

SEC. 144. TRANSFER OF ASSETS.

    Except as otherwise provided in this title, so much of the 
personnel, property, records, and unexpended balances of 
appropriations, allocations, and other funds employed, used, held, 
available, or to be made available in connection with a function 
transferred to an official or agency by this title shall be available 
to the official or the head of that agency, respectively, at such time 
or times as the Director of the Office of Management and Budget directs 
for use in connection with the functions transferred.

SEC. 145. DELEGATION AND ASSIGNMENT.

    Except as otherwise expressly prohibited by law or otherwise 
provided in this title, an official to whom functions are transferred 
under this title (including the head of any office to which functions 
are transferred under this title) may delegate any of the functions so 
transferred to such officers and employees of the office of the 
official as the official may designate, and may authorize successive 
redelegations of such functions as may be necessary or appropriate. No 
delegation of functions under this section or under any other provision 
of this title shall relieve the official to whom a function is 
transferred under this title of responsibility for the administration 
of the function.

SEC. 146. AUTHORITY OF DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET 
              WITH RESPECT TO FUNCTIONS TRANSFERRED.

    (a) Determinations.--If necessary, the Director of the Office of 
Management and Budget shall make any determination of the functions 
that are transferred under this title.
    (b) Incidental Transfers.--The Director of the Office of Management 
and Budget, at such time or times as the Director shall provide, may 
make such determinations as may be necessary with regard to the 
functions transferred by this title, and to make such additional 
incidental dispositions of personnel, assets, liabilities, grants, 
contracts, property, records, and unexpended balances of 
appropriations, authorizations, allocations, and other funds held, 
used, arising from, available to, or to be made available in connection 
with such functions, as may be necessary to carry out the provisions of 
this title. The Director shall provide for the termination of the 
affairs of all entities terminated by this title and for such further 
measures and dispositions as may be necessary to effectuate the 
purposes of this title.

SEC. 147. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.

    For purposes of this title, the vesting of a function in a 
department or office pursuant to reestablishment of an office shall be 
considered to be the transfer of the function.

SEC. 148. AVAILABILITY OF EXISTING FUNDS.

    Existing appropriations and funds available for the performance of 
functions, programs, and activities terminated pursuant to this title 
shall remain available, for the duration of their period of 
availability, for necessary expenses in connection with the termination 
and resolution of such functions, programs, and activities.

SEC. 149. DEFINITIONS.

    For purposes of this title--
            (1) the term ``function'' includes any duty, obligation, 
        power, authority, responsibility, right, privilege, activity, 
        or program; and
            (2) the term ``office'' includes any office, 
        administration, agency, bureau, institute, council, unit, 
        organizational entity, or component thereof.

           TITLE II--EARLY PUBLICATION OF PATENT APPLICATIONS

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Patent Application Publication Act 
of 1996''.

SEC. 202. EARLY PUBLICATION.

    Section 122 of title 35, United States Code, is amended to read as 
follows:
``Sec. 122. Confidential status of applications; publication of patent 
              applications
    ``(a) Confidentiality.--Except as provided in subsection (b), 
applications for patents shall be kept in confidence by the Patent and 
Trademark Office and no information concerning the same given without 
authority of the applicant or owner unless necessary to carry out the 
provisions of an Act of Congress or in such special circumstances as 
may be determined by the Commissioner.
    ``(b) Publication.--
            ``(1) In general.--(A) Subject to paragraph (2), each 
        application for patent, except applications for design patents 
        filed under chapter 16 of this title and provisional 
        applications filed under section 111(b) of this title, shall be 
        published, in accordance with procedures determined by the 
        Commissioner, as soon as possible after the expiration of a 
        period of 18 months from the earliest filing date for which a 
        benefit is sought under this title. At the request of the 
        applicant, an application may be published earlier than the end 
        of such 18-month period.
            ``(B) No information concerning published patent 
        applications shall be made available to the public except as 
        the Commissioner determines.
            ``(C) Notwithstanding any other provision of law, a 
        determination by the Commissioner to release or not to release 
        information concerning a published patent application shall be 
        final and nonreviewable.
            ``(2) Exceptions.--(A) An application that is no longer 
        pending shall not be published.
            ``(B) An application that is subject to a secrecy order 
        pursuant to section 181 of this title shall not be published.
            ``(C)(i) Upon the request of the applicant at the time of 
        filing, the application shall not be published in accordance 
        with paragraph (1) until 3 months after the Commissioner makes 
        a notification to the applicant under section 132 of this 
        title.
            ``(ii) Applications filed pursuant to section 363 of this 
        title, applications asserting priority under section 119 or 
        365(a) of this title, and applications asserting the benefit of 
        an earlier application under section 120, 121, or 365(c) of 
        this title shall not be eligible for a request pursuant to this 
        subparagraph.
            ``(iii) In a request under this subparagraph, the applicant 
        shall certify that the invention disclosed in the application 
        was not and will not be the subject of an application filed in 
        a foreign country.
            ``(iv) A request under this subparagraph shall only be 
        available to an applicant who has been accorded the status of 
        independent inventor under section 41(h) of this title.
            ``(v) The Commissioner may establish appropriate procedures 
        and fees for making a request under this subparagraph.
    ``(c) Pre-Issuance Opposition.--The provisions of this section 
shall not operate to create any new opportunity for pre-issuance 
opposition. The Commissioner may establish appropriate procedures to 
ensure that this section does not create any new opportunity for pre-
issuance opposition.''.

SEC. 203. TIME FOR CLAIMING BENEFIT OF EARLIER FILING DATE.

    (a) In a Foreign Country.--Section 119(b) of title 35, United 
States Code, is amended to read as follows:
    ``(b)(1) No application for patent shall be entitled to this right 
of priority unless a claim, identifying the foreign application by 
specifying its application number, country, and the day, month, and 
year of its filing, is filed in the Patent and Trademark Office at such 
time during the pendency of the application as required by the 
Commissioner.
    ``(2) The Commissioner may consider the failure of the applicant to 
file a timely claim for priority as a waiver of any such claim, and may 
require the payment of a surcharge as a condition of accepting an 
untimely claim during the pendency of the application.
    ``(3) The Commissioner may require a certified copy of the original 
foreign application, specification, and drawings upon which it is 
based, a translation if not in the English language, and such other 
information as the Commissioner considers necessary. Any such 
certification shall be made by the patent office of the foreign country 
in which the foreign application was filed and show the date of the 
application and of the filing of the specification and other papers.''.
    (b) In the United States.--Section 120 of title 35, United States 
Code, is amended by adding at the end the following: ``The Commissioner 
may determine the time period during the pendency of the application 
within which an amendment containing the specific reference to the 
earlier filed application is submitted. The Commissioner may consider 
the failure to submit such an amendment within that time period as a 
waiver of any benefit under this section. The Commissioner may 
establish procedures, including the payment of a surcharge, to accept 
unavoidably late submissions of amendments under this section.''.

SEC. 204. PROVISIONAL RIGHTS.

    Section 154 of title 35, United States Code, is amended--
            (1) in the section caption by inserting ``; provisional 
        rights'' after ``patent''; and
            (2) by adding at the end the following new subsection:
    ``(d) Provisional Rights.--
            ``(1) In general.--In addition to other rights provided by 
        this section, a patent shall include the right to obtain a 
        reasonable royalty from any person who, during the period 
        beginning on the date of publication of the application for 
        such patent pursuant to section 122(b) of this title, or in the 
        case of an international application designating the United 
        States, the date of international publication of the 
        application, and ending on the date the patent is issued--
                    ``(A)(i) makes, uses, offers for sale, or sells in 
                the United States the invention as claimed in the 
                published patent application or imports such an 
                invention into the United States; or
                    ``(ii) if the invention as claimed in the published 
                patent application is a process, uses, offers for sale, 
                or sells in the United States or imports into the 
                United States products made by that process as claimed 
                in the published patent application; and
                    ``(B) had actual notice of the published patent 
                application and where the right arising under this 
                paragraph is based upon an international application 
                designating the United States that is published in a 
                language other than English, a translation of the 
                international application into the English language.
            ``(2) Right based on substantially identical inventions.--
        The right under paragraph (1) to obtain a reasonable royalty 
        shall not be available under this subsection unless the 
        invention as claimed in the patent is substantially identical 
        to the invention as claimed in the published patent 
        application.
            ``(3) Time limitation on obtaining a reasonable royalty.--
        The right under paragraph (1) to obtain a reasonable royalty 
        shall be available only in an action brought not later than 6 
        years after the patent is issued. The right under paragraph (1) 
        to obtain a reasonable royalty shall not be affected by the 
        duration of the period described in paragraph (1).
            ``(4) Requirements for international applications.--The 
        right under paragraph (1) to obtain a reasonable royalty based 
        upon the publication under the treaty of an international 
        application designating the United States shall commence from 
        the date that the Patent and Trademark Office receives a copy 
        of the publication under the treaty of the international 
        application, or, if the publication under the treaty of the 
        international application is in a language other than English, 
        from the date that the Patent and Trademark Office receives a 
        translation of the international application in the English 
        language. The Commissioner may require the applicant to provide 
        a copy of the international publication of the international 
        application and a translation thereof.''.

SEC. 205. PRIOR ART EFFECT OF PUBLISHED APPLICATIONS.

    Section 102(e) of title 35, United States Code, is amended to read 
as follows:
    ``(e) the invention was described in--
            ``(1) an application for patent, published pursuant to 
        section 122(b) of this title, by another filed in the United 
        States before the invention by the applicant for patent, except 
        that an international application filed under the treaty 
        defined in section 351(a) of this title shall have the effect 
        under this subsection of a national application published under 
        section 122(b) of this title only if the international 
        application designating the United States was published under 
        Article 21(2)(a) of such treaty in the English language, or
            ``(2) a patent granted on an application for patent by 
        another filed in the United States before the invention by the 
        applicant for patent, except that a patent granted on an 
        international application filed under the treaty defined in 
        section 351(a) of this title shall have the effect under this 
        subsection of a patent granted on a national application only 
        if the international application was published under Article 
        21(2)(a) of such treaty in the English language, or''.

SEC. 206. COST RECOVERY FOR PUBLICATION.

    The Commissioner shall recover the cost of early publication 
required by the amendment made by section 202 by adjusting the filing, 
issue, and maintenance fees under title 35, United States Code, by 
charging a separate publication fee, or by any combination of these 
methods.

SEC. 207. CONFORMING CHANGES.

    The following provisions of title 35, United States Code, are 
amended:
            (1) Section 11 is amended in paragraph 1 of subsection (a) 
        by inserting ``and published applications for patents'' after 
        ``Patents''.
            (2) Section 12 is amended--
                    (A) in the section caption by inserting ``and 
                applications'' after ``patents''; and
                    (B) by inserting ``and published applications for 
                patents'' after ``patents''.
            (3) Section 13 is amended--
                    (A) in the section caption by inserting ``and 
                applications'' after ``patents''; and
                    (B) by inserting ``and published applications for 
                patents'' after ``patents''.
            (4) The items relating to sections 12 and 13 in the table 
        of sections for chapter 1 are each amended by inserting ``and 
        applications'' after ``patents''.
            (5) The item relating to section 122 in the table of 
        sections for chapter 11 is amended by inserting ``; publication 
        of patent applications'' after ``applications''.
            (6) The item relating to section 154 in the table of 
        sections for chapter 14 is amended by inserting ``; provisional 
        rights'' after ``patent''.
            (7) Section 181 is amended--
                    (A) in the first paragraph--
                            (i) by inserting ``by the publication of an 
                        application or'' after ``disclosure''; and
                            (ii) by inserting ``the publication of the 
                        application or'' after ``withhold'';
                    (B) in the second paragraph by inserting ``by the 
                publication of an application or'' after ``disclosure 
                of an invention'';
                    (C) in the third paragraph--
                            (i) by inserting ``by the publication of 
                        the application or'' after ``disclosure of the 
                        invention''; and
                            (ii) by inserting ``the publication of the 
                        application or'' after ``withhold''; and
                    (D) in the fourth paragraph by inserting ``the 
                publication of an application or'' after ``and'' in the 
                first sentence.
            (8) Section 252 is amended in the first paragraph by 
        inserting ``substantially'' before ``identical'' each place it 
        appears.
            (9) Section 284 is amended by adding at the end of the 
        second paragraph the following: ``Increased damages under this 
        paragraph shall not apply to provisional rights under section 
        154(d) of this title.''.
            (10) Section 374 is amended to read as follows:
``Sec. 374. Publication of international application: Effect
    ``The publication under the treaty, defined in section 351(a) of 
this title, of an international application designating the United 
States shall confer the same rights and shall have the same effect 
under this title as an application for patent published under section 
122(b), except as provided in sections 102(e) and 154(d) of this 
title.''.

SEC. 208. PATENT TERM EXTENSION AUTHORITY.

    Section 154(b) of title 35, United States Code, is amended to read 
as follows:
    ``(b) Term Extension.--
            ``(1) Basis for patent term extension.--
                    ``(A) Delay.--Subject to the limitations set forth 
                in paragraph (2), if the issue of an original patent is 
                delayed due to--
                            ``(i) a proceeding under section 135(a) of 
                        this title,
                            ``(ii) the imposition of an order pursuant 
                        to section 181 of this title,
                            ``(iii) appellate review by the Board of 
                        Patent Appeals and Interferences or by a 
                        Federal court where the patent was issued 
                        pursuant to a decision in the review reversing 
                        an adverse determination of patentability, or
                            ``(iv) an unusual administrative delay by 
                        the Patent and Trademark Office in issuing the 
                        patent,
                the term of the patent shall be extended for the period 
                of delay.
                    ``(B) Administrative delay.--For purposes of 
                subparagraph (A)(iv), an unusual administrative delay 
                by the Patent and Trademark office is the failure to--
                            ``(i) make a notification of the rejection 
                        of any claim for a patent or any objection or 
                        argument under section 132 of this title or 
                        give or mail a written notice of allowance 
                        under section 151 of this title not later than 
                        14 months after the date on which the 
                        application was filed;
                            ``(ii) respond to a reply under section 132 
                        of this title or to an appeal taken under 
                        section 134 of this title not later than 4 
                        months after the date on which the reply was 
                        filed or the appeal was taken;
                            ``(iii) act on an application not later 
                        than 4 months after the date of a decision by 
                        the Board of Patent Appeals and Interferences 
                        under section 134 or 135 of this title or a 
                        decision by a Federal court under section 141, 
                        145, or 146 of this title where allowable 
                        claims remain in an application; or
                            ``(iv) issue a patent not later than 4 
                        months after the date on which the issue fee 
                        was paid under section 151 of this title and 
                        all outstanding requirements were satisfied.
            ``(2) Limitations.--(A) The total duration of any 
        extensions granted pursuant to either clause (iii) or (iv) of 
        paragraph (1)(A) or both such clauses shall not exceed 10 
        years. To the extent that periods of delay attributable to 
        grounds specified in paragraph (1) overlap, the period of any 
        extension granted under this subsection shall not exceed the 
        actual number of days the issuance of the patent was delayed.
            ``(B) The period of extension of the term of a patent under 
        this subsection shall be reduced by a period equal to the time 
        in which the applicant failed to engage in reasonable efforts 
        to conclude prosecution of the application. The Commissioner 
        shall prescribe regulations establishing the circumstances that 
        constitute a failure of an applicant to engage in reasonable 
        efforts to conclude processing or examination of an 
        application.
            ``(C) No patent the term of which has been disclaimed 
        beyond a specified date may be extended under this section 
        beyond the expiration date specified in the disclaimer.
            ``(3) Procedures.--The Commissioner shall prescribe 
        regulations establishing procedures for the notification of 
        patent term extensions under this subsection and procedures for 
        contesting patent term extensions under this subsection.''.

SEC. 209. EXAMINING PROCEDURE IMPROVEMENTS; FURTHER LIMITED 
              REEXAMINATION OF PATENT APPLICATIONS.

    The Commissioner of Patents and Trademarks shall prescribe 
regulations to provide for the further limited reexamination of 
applications for patent. The Commissioner may establish appropriate 
fees for such further limited reexamination and shall be authorized to 
provide a 50 percent reduction on such fees for small entities that 
qualify for reduced fees under section 41(h)(1) of title 35, United 
States Code.

SEC. 210. LAST DAY OF PENDENCY OF PROVISIONAL APPLICATION.

    Section 119(e) of title 35, United States Code, is amended by 
adding at the end the following:
    ``(3) If the day that is 12 months after the filing date of a 
provisional application falls on a Saturday, Sunday, or legal holiday 
as defined in rule 6(a) of the Federal Rules of Civil Procedure, the 
period of pendency of the provisional application shall be extended to 
the next succeeding business day.''.

SEC. 211. REPORTING REQUIREMENT.

    The Commissioner of Patents and Trademarks shall report to the 
Congress not later than April 1, 2000, and not later than April 1 of 
each year thereafter, regarding the impact of publication on the patent 
applications filed by an applicant who has been accorded the status of 
independent inventor under section 41(h) of title 35, United States 
Code. The report shall include information concerning the frequency and 
number of initial and continuing patent applications, pendency, 
interferences, reexaminations, rejection, abandonment rates, fees, 
other expenses, and other relevant information related to the 
prosecution of patent applications.

SEC. 212. EFFECTIVE DATE.

    (a) Sections 202 Through 207.--Sections 202 through 207, and the 
amendments made by such sections, shall take effect on April 1, 1997, 
and shall apply to all applications filed under section 111 of title 
35, United States Code, on or after that date, and all international 
applications designating the United States that are filed on or after 
that date.
    (b) Sections 208 Through 210.--The amendments made by sections 208 
through 210 shall take effect on the date of the enactment of this Act 
and, except for a design patent application filed under chapter 16 of 
title 35, United States Code, shall apply to any application filed on 
or after June 8, 1995.

                TITLE III--PRIOR DOMESTIC COMMERCIAL USE

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Prior Domestic Commercial Use Act 
of 1996''.

SEC. 302. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR DOMESTIC 
              COMMERCIAL USE.

    (a) Defense.--Chapter 28 of title 35, United States Code, is 
amended by adding at the end the following new section:
``Sec. 273. Prior domestic commercial use; defense to infringement
    ``(a) Definitions.--For purposes of this section--
            ``(1) the terms `commercially used', `commercially use', 
        and `commercial use' mean the use in the United States in 
        commerce or the use in the design, testing, or production in 
        the United States of a product or service which is used in 
        commerce, whether or not the subject matter at issue is 
        accessible to or otherwise known to the public;
            ``(2) the terms `used in commerce', and `use in commerce' 
        mean that there has been an actual sale or other commercial 
        transfer of the subject matter at issue or that there has been 
        an actual sale or other commercial transfer of a product or 
        service resulting from the use of the subject matter at issue; 
        and
            ``(3) the `effective filing date' of a patent is the 
        earlier of the actual filing date of the application for the 
        patent or the filing date of any earlier United States, 
        foreign, or international application to which the subject 
        matter at issue is entitled under section 119, 120, or 365 of 
        this title.
    ``(b) Defense to Infringement.--(1) A person shall not be liable as 
an infringer under section 271 of this title with respect to any 
subject matter that would otherwise infringe one or more claims in the 
patent being asserted against such person, if such person had, acting 
in good faith, commercially used the subject matter before the 
effective filing date of such patent.
    ``(2) The sale or other disposition of the subject matter of a 
patent by a person entitled to assert a defense under this section with 
respect to that subject matter shall exhaust the patent owner's rights 
under the patent to the extent such rights would have been exhausted 
had such sale or other disposition been made by the patent owner.
    ``(c) Limitations and Qualifications of Defense.--The defense to 
infringement under this section is subject to the following:
            ``(1) Derivation.--A person may not assert the defense 
        under this section if the subject matter on which the defense 
        is based was derived from the patentee or persons in privity 
        with the patentee.
            ``(2) Not a general license.--The defense asserted by a 
        person under this section is not a general license under all 
        claims of the patent at issue, but extends only to the subject 
        matter claimed in the patent with respect to which the person 
        can assert a defense under this chapter, except that the 
        defense shall also extend to variations in the quantity or 
        volume of use of the claimed subject matter, and to 
        improvements in the claimed subject matter that do not infringe 
        additional specifically claimed subject matter of the patent.
            ``(3) Effective and serious preparation.--With respect to 
        subject matter that cannot be commercialized without a 
        significant investment of time, money, and effort, a person 
        shall be deemed to have commercially used the subject matter 
        if--
                    ``(A) before the effective filing date of the 
                patent, the person reduced the subject matter to 
                practice in the United States, completed a significant 
                portion of the total investment necessary to 
                commercially use the subject matter, and made a 
                commercial transaction in the United States in 
                connection with the preparation to use the subject 
                matter; and
                    ``(B) thereafter the person diligently completed 
                the remainder of the activities and investments 
                necessary to commercially use the subject matter, and 
                promptly began commercial use of the subject matter, 
                even if such activities were conducted after the 
                effective filing date of the patent.
            ``(4) Burden of proof.--A person asserting the defense 
        under this section shall have the burden of establishing the 
        defense.
            ``(5) Abandonment of use.--A person who has abandoned 
        commercial use of subject matter may not rely on activities 
        performed before the date of such abandonment in establishing a 
        defense under subsection (b) with respect to actions taken 
        after the date of such abandonment.
            ``(6) Personal defense.--The defense under this section may 
        only be asserted by the person who performed the acts necessary 
        to establish the defense and, except for any transfer to the 
        patent owner, the right to assert the defense shall not be 
        licensed or assigned or transferred to another person except in 
        connection with the good faith assignment or transfer of the 
        entire enterprise or line of business to which the defense 
        relates.
            ``(7) One-year limitation.--A person may not assert a 
        defense under this section unless the subject matter on which 
        the defense is based had been commercially used or reduced to 
        practice more than one year prior to the effective filing date 
        of the patent by the person asserting the defense or someone in 
        privity with that person.
    ``(d) Unsuccessful Assertion of Defense.--If the defense under this 
section is pleaded by a person who is found to infringe the patent and 
who subsequently fails to demonstrate a reasonable basis for asserting 
the defense, the court shall find the case exceptional for the purpose 
of awarding attorney's fees under section 285 of this title.
    ``(e) Invalidity.--A patent shall not be deemed to be invalid under 
section 102 or 103 of this title solely because a defense is 
established under this section.''.
    (b) Conforming Amendment.--The table of sections at the beginning 
of chapter 28 of title 35, United States Code, is amended by adding at 
the end the following new item:

``273. Prior domestic commercial use; defense to infringement.''.

SEC. 303. EFFECTIVE DATE AND APPLICABILITY.

    This title and the amendments made by this title shall take effect 
on the date of the enactment of this Act, but shall not apply to any 
action for infringement that is pending on such date of enactment or 
with respect to any subject matter for which an adjudication of 
infringement, including a consent judgment, has been made before such 
date of enactment.

                     TITLE IV--INVENTOR PROTECTION

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Inventor Protection Act of 1996''.

SEC. 402. INVENTION DEVELOPMENT SERVICES.

    Part I of title 35, United States Code, is amended by adding after 
chapter 4 the following new chapter:

              ``CHAPTER 5--INVENTION DEVELOPMENT SERVICES

``Sec.
``51. Definitions.
``52. Contracting requirements.
``53. Standard provisions for cover notice.
``54. Reports to customer required.
``55. Mandatory contract terms.
``56. Remedies.
``57. Records of complaints.
``58. Fraudulent representation by an invention developer.
``59. Rule of construction.
``Sec. 51. Definitions
    ``For purposes of this chapter--
            ``(1) the term `contract for invention development 
        services' means a contract by which an invention developer 
        undertakes invention development services for a customer;
            ``(2) the term `customer' means any person, firm, 
        partnership, corporation, or other entity who is solicited by, 
        seeks the services of, or enters into a contract with an 
        invention promoter for invention promotion services;
            ``(3) the term `invention promoter' means any person, firm, 
        partnership, corporation, or other entity who offers to perform 
        or performs for, or on behalf of, a customer any act described 
        under paragraph (4), but does not include--
                    ``(A) any department or agency of the Federal 
                Government or of a State or local government;
                    ``(B) any nonprofit, charitable, scientific, or 
                educational organization, qualified under applicable 
                State law or described under section 170(b)(1)(A) of 
                the Internal Revenue Code of 1986; or
                    ``(C) any person duly registered and in good 
                standing before the Patent and Trademark Office acting 
                within the scope of that person's registration to 
                practice before the Patent and Trademark Office; and
            ``(4) the term `invention development services' means, with 
        respect to an invention by a customer, any act involved in--
                    ``(A) evaluating the invention to determine its 
                protectability as some form of intellectual property, 
                other than evaluation by a person licensed by a State 
                to practice law who is acting solely within the scope 
                of that person's professional license;
                    ``(B) evaluating the invention to determine its 
                commercial potential by any person for purposes other 
                than providing venture capital; or
                    ``(C) marketing, brokering, licensing, selling, or 
                promoting the invention or a product or service in 
                which the invention is incorporated or used, except 
                that the display only of an invention at a trade show 
                or exhibit shall not be considered to be invention 
                development services.
``Sec. 52. Contracting requirements
    ``(a) In General.--(1) Every contract for invention development 
services shall be in writing and shall be subject to the provisions of 
this chapter. A copy of the signed written contract shall be given to 
the customer at the time the customer enters into the contract.
    ``(2) If a contract is entered into for the benefit of a third 
party, such party shall be considered a customer for purposes of this 
chapter.
    ``(b) Requirements of Invention Developer.--The invention developer 
shall--
            ``(1) state in a written document, at the time a customer 
        enters into a contract for invention development services, 
        whether the usual business practice of the invention developer 
        is to--
                    ``(A) seek more than 1 contract in connection with 
                an invention; or
                    ``(B) seek to perform services in connection with 
                an invention in 1 or more phases, with the performance 
                of each phase covered in 1 or more subsequent 
                contracts; and
            ``(2) supply to the customer a copy of the written document 
        together with a written summary of the usual business practices 
        of the invention developer, including--
                    ``(A) the usual business terms of contracts; and
                    ``(B) the approximate amount of the usual fees or 
                other consideration that may be required from the 
                customer for each of the services provided by the 
                developer.
    ``(c) Right of Customer To Cancel Contract.--(1) Notwithstanding 
any contractual provision to the contrary, a customer shall have the 
right to terminate a contract for invention development services by 
sending a written letter to the invention developer stating the 
customer's intent to cancel the contract. The letter of termination 
must be deposited with the United States Postal Service on or before 5 
business days after the date upon which the customer or the invention 
developer executes the contract, whichever is later.
    ``(2) Delivery of a promissory note, check, bill of exchange, or 
negotiable instrument of any kind to the invention developer or to a 
third party for the benefit of the invention developer, without regard 
to the date or dates appearing in such instrument, shall be deemed 
payment received by the invention developer on the date received for 
purposes of this section.
``Sec. 53. Standard provisions for cover notice
    ``(a) Contents.--Every contract for invention development services 
shall have a conspicuous and legible cover sheet attached with the 
following notice imprinted in boldface type of not less than 12-point 
size:
            ```YOU HAVE THE RIGHT TO TERMINATE THIS CONTRACT. TO 
        TERMINATE THIS CONTRACT, YOU MUST SEND A WRITTEN LETTER TO THE 
        COMPANY STATING YOUR INTENT TO CANCEL THIS CONTRACT. THE LETTER 
        OF TERMINATION MUST BE DEPOSITED WITH THE UNITED STATES POSTAL 
        SERVICE ON OR BEFORE FIVE (5) BUSINESS DAYS AFTER THE DATE ON 
        WHICH YOU OR THE COMPANY EXECUTE THE CONTRACT, WHICHEVER IS 
        LATER.
            ```THE TOTAL NUMBER OF INVENTIONS EVALUATED BY THE 
        INVENTION DEVELOPER FOR COMMERCIAL POTENTIAL IN THE PAST FIVE 
        (5) YEARS IS __________. OF THAT NUMBER, __________ RECEIVED 
        POSITIVE EVALUATIONS AND __________ RECEIVED NEGATIVE 
        EVALUATIONS.
            ```IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION 
        TO THE INVENTION DEVELOPER, THE INVENTION DEVELOPER MAY HAVE 
        THE RIGHT TO SELL OR DISPOSE OF THE INVENTION WITHOUT YOUR 
        CONSENT AND MAY NOT HAVE TO SHARE THE PROFITS WITH YOU.
            ```THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH 
        THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS IS 
        __________. THE TOTAL NUMBER OF CUSTOMERS KNOWN BY THIS 
        INVENTION DEVELOPER TO HAVE RECEIVED, BY VIRTUE OF THIS 
        INVENTION DEVELOPER'S PERFORMANCE, AN AMOUNT OF MONEY IN EXCESS 
        OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION DEVELOPER 
        IS ______________.
            ```THE OFFICERS OF THIS INVENTION DEVELOPER HAVE 
        COLLECTIVELY OR INDIVIDUALLY BEEN AFFILIATED IN THE LAST TEN 
        (10) YEARS WITH THE FOLLOWING INVENTION DEVELOPMENT COMPANIES: 
        (LIST THE NAMES AND ADDRESSES OF ALL PREVIOUS INVENTION 
        DEVELOPMENT COMPANIES WITH WHICH THE PRINCIPAL OFFICERS HAVE 
        BEEN AFFILIATED AS OWNERS, AGENTS, OR EMPLOYEES). YOU ARE 
        ENCOURAGED TO CHECK WITH THE UNITED STATES PATENT AND TRADEMARK 
        OFFICE, THE FEDERAL TRADE COMMISSION, YOUR STATE ATTORNEY 
        GENERAL'S OFFICE, AND THE BETTER BUSINESS BUREAU FOR ANY 
        COMPLAINTS FILED AGAINST ANY OF THESE COMPANIES.
            ```YOU ARE ENCOURAGED TO CONSULT WITH AN ATTORNEY OF YOUR 
        OWN CHOOSING BEFORE SIGNING THIS CONTRACT. BY PROCEEDING 
        WITHOUT THE ADVICE OF AN ATTORNEY REGISTERED TO PRACTICE BEFORE 
        THE PATENT AND TRADEMARK OFFICE, YOU COULD LOSE ANY RIGHTS YOU 
        MIGHT HAVE IN YOUR IDEA OR INVENTION.'.
    ``(b) Other Requirements for Cover Notice.--The cover notice shall 
contain the items required under subsection (a) and the name, primary 
office address, and local office address of the invention developer, 
and may contain no other matter.
    ``(c) Disclosure of Certain Customers Not Required.--The 
requirement in the notice set forth in subsection (a) to include the 
`TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH THE INVENTION 
DEVELOPER IN THE PAST FIVE (5) YEARS' need not include information with 
respect to customers who have purchased trade show services, research, 
advertising, or other nonmarketing services from the invention 
developer, nor with respect to customers who have defaulted in their 
payments to the invention developer.
``Sec. 54. Reports to customer required
    ``With respect to every contract for invention development 
services, the invention developer shall deliver to the customer at the 
address specified in the contract, at least once every 3 months 
throughout the term of the contract, a written report that identifies 
the contract and includes--
            ``(1) a full, clear, and concise description of the 
        services performed to the date of the report and of the 
        services yet to be performed and names of all persons who it is 
        known will perform the services; and
            ``(2) the name and address of each person, firm, 
        corporation, or other entity to whom the subject matter of the 
        contract has been disclosed, the reason for each such 
        disclosure, the nature of the disclosure, and complete and 
        accurate summaries of all responses received as a result of 
        those disclosures.
``Sec. 55. Mandatory contract terms
    ``(a) Mandatory terms.--Each contract for invention development 
services shall include in boldface type of not less than 12-point 
size--
            ``(1) the terms and conditions of payment and contract 
        termination rights required under section 52;
            ``(2) a statement that the customer may avoid entering into 
        the contract by not making a payment to the invention 
        developer;
            ``(3) a full, clear, and concise description of the 
        specific acts or services that the invention developer 
        undertakes to perform for the customer;
            ``(4) a statement as to whether the invention developer 
        undertakes to construct, sell, or distribute one or more 
        prototypes, models, or devices embodying the invention of the 
        customer;
            ``(5) the full name and principal place of business of the 
        invention developer and the name and principal place of 
        business of any parent, subsidiary, agent, independent 
        contractor, and any affiliated company or person who it is 
        known will perform any of the services or acts that the 
        invention developer undertakes to perform for the customer;
            ``(6) if any oral or written representation of estimated or 
        projected customer earnings is given by the invention developer 
        (or any agent, employee, officer, director, partner, or 
        independent contractor of such invention developer), a 
        statement of that estimation or projection and a description of 
        the data upon which such representation is based;
            ``(7) the name and address of the custodian of all records 
        and correspondence relating to the contracted for invention 
        development services, and a statement that the invention 
        developer is required to maintain all records and 
        correspondence relating to performance of the invention 
        development services for such customer for a period of not less 
        than 2 years after expiration of the term of such contract; and
            ``(8) a statement setting forth a time schedule for 
        performance of the invention development services, including an 
        estimated date in which such performance is expected to be 
        completed.
    ``(b) Invention Developer as Fiduciary.--To the extent that the 
description of the specific acts or services affords discretion to the 
invention developer with respect to what specific acts or services 
shall be performed, the invention developer shall be deemed a 
fiduciary.
    ``(c) Availability of Information.--Records and correspondence 
described under subsection (a)(7) shall be made available after 7 days 
written notice to the customer or the representative of the customer to 
review and copy at a reasonable cost on the invention developer's 
premises during normal business hours.
``Sec. 56. Remedies
    ``(a) In General.--(1) Any contract for invention development 
services that does not comply with the applicable provisions of this 
chapter shall be voidable at the option of the customer.
    ``(2) Any contract for invention development services entered into 
in reliance upon any material false, fraudulent, or misleading 
information, representation, notice, or advertisement of the invention 
developer (or any agent, employee, officer, director, partner, or 
independent contractor of such invention developer) shall be voidable 
at the option of the customer.
    ``(3) Any waiver by the customer of any provision of this chapter 
shall be deemed contrary to public policy and shall be void and 
unenforceable.
    ``(4) Any contract for invention development services which 
provides for filing for and obtaining utility, design, or plant patent 
protection shall be voidable at the option of the customer unless the 
invention developer offers to perform or performs such act through a 
registered patent attorney or agent.
    ``(b) Civil Action.--(1) Any customer who is injured by a violation 
of this chapter by an invention developer or by any material false or 
fraudulent statement or representation, or any omission of material 
fact, by an invention developer (or any agent, employee, director, 
officer, partner, or independent contractor of such invention 
developer) or by failure of an invention developer to make all the 
disclosures required under this chapter, may recover in a civil action 
against the invention developer (or the officers, directors, or 
partners of such invention developer) in addition to reasonable costs 
and attorneys' fees, the greater of--
            ``(A) $5,000; or
            ``(B) the amount of actual damages sustained by the 
        customer.
    ``(2) Notwithstanding paragraph (1), the court may increase damages 
to not more than 3 times the amount awarded.
    ``(c) Rebuttable Presumption of Injury.--For purposes of this 
section, substantial violation of any provision of this chapter by an 
invention developer or execution by the customer of a contract for 
invention development services in reliance on any material false or 
fraudulent statements or representations or omissions of material fact 
shall establish a rebuttable presumption of injury.
``Sec. 57. Records of complaints
    ``(a) Release of Complaints.--The Commissioner shall make all 
complaints received by the Patent and Trademark Office involving 
invention developers publicly available, together with any response of 
the invention developers.
    ``(b) Request for Complaints.--The Commissioner may request 
complaints relating to invention development services from any Federal 
or State agency and include such complaints in the records maintained 
under subsection (a), together with any response of the invention 
developers.
``Sec. 58. Fraudulent representation by an invention developer
    ``Whoever, in providing invention development services, knowingly 
provides any false or misleading statement, representation, or omission 
of material fact to a customer or fails to make all the disclosures 
required under this chapter, shall be guilty of a misdemeanor and fined 
not more than $10,000 for each offense.
``Sec. 59. Rule of construction
    ``Except as expressly provided in this chapter, no provision of 
this chapter shall be construed to affect any obligation, right, or 
remedy provided under any other Federal or State law.''.

SEC. 403. TECHNICAL AND CONFORMING AMENDMENT.

    The table of chapters for part I of title 35, United States Code, 
is amended by adding after the item relating to chapter 4 the 
following:

``5. Invention Development Services.........................      51''.

SEC. 404. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
60 days after the date of the enactment of this Act.

                  TITLE V--PATENT REEXAMINATION REFORM

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Patent Reexamination Reform Act of 
1996''.

SEC. 502. DEFINITIONS.

    Section 100 of title 35, United States Code, is amended by adding 
at the end the following new subsection:
    ``(e) The term `third-party requester' means a person requesting 
reexamination under section 302 of this title who is not the patent 
owner.''.

SEC. 503. REEXAMINATION PROCEDURES.

    (a) Request for Reexamination.--Section 302 of title 35, United 
States Code, is amended to read as follows:
``Sec. 302. Request for reexamination
    ``Any person at any time may file a request for reexamination by 
the Office of a patent on the basis of any prior art cited under the 
provisions of section 301 of this title or on the basis of the 
requirements of section 112 of this title except for the requirement to 
set forth the best mode of carrying out the invention. The request must 
be in writing, must include the identity of the real party in interest, 
and must be accompanied by payment of a reexamination fee established 
by the Commissioner pursuant to the provisions of section 41 of this 
title. The request must set forth the pertinency and manner of applying 
cited prior art to every claim for which reexamination is requested or 
the manner in which the patent specification or claims fail to comply 
with the requirements of section 112 of this title. Unless the 
requesting person is the owner of the patent, the Commissioner promptly 
shall send a copy of the request to the owner of record of the 
patent.''.
    (b) Determination of Issue by Commissioner.--Section 303 of title 
35, United States Code, is amended to read as follows:
``Sec. 303. Determination of issue by Commissioner
    ``(a) Reexamination.--Not later than 3 months after the filing of a 
request for reexamination under the provisions of section 302 of this 
title, the Commissioner shall determine whether a substantial new 
question of patentability affecting any claim of the patent concerned 
is raised by the request, with or without consideration of other 
patents or printed publications. On the Commissioner's initiative, at 
any time, the Commissioner may determine whether a substantial new 
question of patentability is raised by patents and publications or by 
the failure of the patent specification or claims to comply with the 
requirements of section 112 of this title except for the best mode 
requirement described in section 302.
    ``(b) Record.--A record of the Commissioner's determination under 
subsection (a) shall be placed in the official file of the patent, and 
a copy shall be promptly given or mailed to the owner of record of the 
patent and to the third-party requester, if any.
    ``(c) Final Decision.--A determination by the Commissioner pursuant 
to subsection (a) shall be final and nonappealable. Upon a 
determination that no substantial new question of patentability has 
been raised, the Commissioner may refund a portion of the reexamination 
fee required under section 302 of this title.''.
    (c) Reexamination Order by Commissioner.--Section 304 of title 35, 
United States Code, is amended to read as follows:
``Sec. 304. Reexamination order by Commissioner
    ``If, in a determination made under the provisions of section 
303(a) of this title, the Commissioner finds that a substantial new 
question of patentability affecting a claim of a patent is raised, the 
determination shall include an order for reexamination of the patent 
for resolution of the question. The order may be accompanied by the 
initial action of the Patent and Trademark Office on the merits of the 
reexamination conducted in accordance with section 305 of this 
title.''.
    (d) Conduct of Reexamination Proceedings.--Section 305 of title 35, 
United States Code, is amended to read as follows:
``Sec. 305. Conduct of reexamination proceedings
    ``(a) In General.--Subject to subsection (b), reexamination shall 
be conducted according to the procedures established for initial 
examination under the provisions of sections 132 and 133 of this title. 
In any reexamination proceeding under this chapter, the patent owner 
shall be permitted to propose any amendment to the patent and a new 
claim or claims, except that no proposed amended or new claim enlarging 
the scope of the claims of the patent shall be permitted.
    ``(b) Response.--(1) This subsection shall apply to any 
reexamination proceeding in which the order for reexamination is based 
upon a request by a third-party requester.
    ``(2) With the exception of the reexamination request, any document 
filed by either the patent owner or the third-party requester shall be 
served on the other party.
    ``(3) If the patent owner files a response to any Patent and 
Trademark Office action on the merits, the third-party requester shall 
have 1 opportunity to file written comments within a reasonable period 
not less than 1 month after the date of service of the patent owner's 
response. Written comments provided under this paragraph shall be 
limited to issues covered by the Patent and Trademark Office action or 
the patent owner's response.
    ``(c) Special Dispatch.--Unless otherwise provided by the 
Commissioner for good cause, all reexamination proceedings under this 
section, including any appeal to the Board of Patent Appeals and 
Interferences, shall be conducted with special dispatch within the 
Office.''.
    (e) Appeal.--Section 306 of title 35, United States Code, is 
amended to read as follows:
``Sec. 306. Appeal
    ``(a) Patent Owner.--The patent owner involved in a reexamination 
proceeding under this chapter--
            ``(1) may appeal under the provisions of section 134 of 
        this title, and may appeal under the provisions of sections 141 
        through 144 of this title, with respect to any decision adverse 
        to the patentability of any original or proposed amended or new 
        claim of the patent; and
            ``(2) may be a party to any appeal taken by a third-party 
        requester pursuant to subsection (b) of this section.
    ``(b) Third-Party Requester.--A third-party requester--
            ``(1) may appeal under the provisions of section 134 of 
        this title, and may appeal under the provisions of sections 141 
        through 144 of this title, with respect to any final decision 
        favorable to the patentability of any original or proposed 
        amended or new claim of the patent; and
            ``(2) may be a party to any appeal taken by the patent 
        owner, subject to subsection (c) of this section.
    ``(c) Participation as Party.--(1) A third-party requester who, 
under the provisions of sections 141 through 144 of this title, files a 
notice of appeal or who participates as a party to an appeal by the 
patent owner is estopped from asserting at a later time, in any forum, 
the invalidity of any claim determined to be patentable on appeal on 
any ground which the third-party requester raised or could have raised 
during the reexamination proceedings.
    ``(2) A third-party requester is deemed not to have participated as 
a party to an appeal by the patent owner unless, not later than 20 days 
after the patent owner has filed notice of appeal, the third-party 
requester files notice with the Commissioner electing to 
participate.''.
    (f) Reexamination Prohibited.--(1) Chapter 30 of title 35, United 
States Code, is amended by adding at the end the following new section:
``Sec. 308. Reexamination prohibited
    ``(a) Order for Reexamination.--Notwithstanding any provision of 
this chapter, once an order for reexamination of a patent has been 
issued under section 304 of this title, neither the patent owner nor 
the third-party requester, if any, nor privies of either, may file a 
subsequent request for reexamination of the patent until a 
reexamination certificate is issued and published under section 307 of 
this title, unless authorized by the Commissioner.
    ``(b) Final Decision.--Once a final decision has been entered 
against a party in a civil action arising in whole or in part under 
section 1338 of title 28 that the party has not sustained its burden of 
proving the invalidity of any patent claim in suit, then neither that 
party nor its privies may thereafter request reexamination of any such 
patent claim on the basis of issues which that party or its privies 
raised or could have raised in such civil action, and a reexamination 
requested by that party or its privies on the basis of such issues may 
not thereafter be maintained by the Office, notwithstanding any other 
provision of this chapter.''.
    (2) The table of sections for chapter 30 of title 35, United States 
Code, is amended by adding at the end the following:

``308. Reexamination prohibited.''.

SEC. 504. CONFORMING AMENDMENTS.

    (a) Board of Patent Appeals and Interferences.--The first sentence 
of section 6(b) of title 35, United States Code, as amended by section 
117 of this Act, is amended to read as follows: ``The Board of Patent 
Appeals and Interferences shall, on written appeal of an applicant, or 
a patent owner or a third-party requester in a reexamination 
proceeding, review adverse decisions of examiners upon applications for 
patents and decisions of examiners in reexamination proceedings, and 
shall determine priority and patentability of invention in 
interferences declared under section 135(a) of this title.''.
    (b) Patent Fees; Patent and Trademark Search Systems.--Section 
41(a)(7) of title 35, United States Code, is amended to read as 
follows:
            ``(7) On filing each petition for the revival of an 
        unintentionally abandoned application for a patent, for the 
        unintentionally delayed payment of the fee for issuing each 
        patent, or for an unintentionally delayed response by the 
        patent owner in a reexamination proceeding, $1,250, unless the 
        petition is filed under sections 133 or 151 of this title, in 
        which case the fee shall be $110.''.
    (c) Appeal to the Board of Patent Appeals and Interferences.--
Section 134 of title 35, United States Code, is amended to read as 
follows:
``Sec. 134. Appeal to the Board of Patent Appeals and Interferences
    ``(a) Patent Applicant.--An applicant for a patent, any of whose 
claims has been twice rejected, may appeal from the decision of the 
primary examiner to the Board of Patent Appeals and Interferences, 
having once paid the fee for such appeal.
    ``(b) Patent Owner.--A patent owner in a reexamination proceeding 
may appeal from the final rejection of any claim by the primary 
examiner to the Board of Patent Appeals and Interferences, having once 
paid the fee for such appeal.
    ``(c) Third-Party.--A third-party requester may appeal to the Board 
of Patent Appeals and Interferences from the final decision of the 
primary examiner favorable to the patentability of any original or 
proposed amended or new claim of a patent, having once paid the fee for 
such appeal.''.
    (d) Appeal to Court of Appeals for the Federal Circuit.--Section 
141 of title 35, United States Code, is amended by amending the first 
sentence to read as follows: ``An applicant, a patent owner, or a 
third-party requester, dissatisfied with the final decision in an 
appeal to the Board of Patent Appeals and Interferences under section 
134 of this title, may appeal the decision to the United States Court 
of Appeals for the Federal Circuit.''.
    (e) Proceedings on Appeal.--Section 143 of title 35, United States 
Code, is amended by amending the third sentence to read as follows: 
``In ex parte and reexamination cases, the Commissioner shall submit to 
the court in writing the grounds for the decision of the Patent and 
Trademark Office, addressing all the issues involved in the appeal.''.
    (f) Civil Action To Obtain Patent.--Section 145 of title 35, United 
States Code, is amended in the first sentence by inserting ``(a)'' 
after ``section 134''.

SEC. 505. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
on the date that is 6 months after the date of the enactment of this 
Act and shall apply to all reexamination requests filed on or after 
such date.

               TITLE VI--MISCELLANEOUS PATENT PROVISIONS

SEC. 601. PROVISIONAL APPLICATIONS.

    (a) Abandonment.--Section 111(b)(5) of title 35, United States 
Code, is amended to read as follows:
            ``(5) Abandonment.--Notwithstanding the absence of a claim, 
        upon timely request and as prescribed by the Commissioner, a 
        provisional application may be treated as an application filed 
        under subsection (a). If no such request is made, the 
        provisional application shall be regarded as abandoned 12 
        months after the filing date of such application and shall not 
        be subject to revival thereafter.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to any provisional application filed on or after June 8, 1995.

SEC. 602. INTERNATIONAL APPLICATIONS.

    Section 119 of title 35, United States Code, is amended--
            (1) in subsection (a), by inserting ``or in a WTO member 
        country'' after ``or to citizens of the United States,'';
            (2) in subsection (b), as amended by section 203 of this 
        Act, by striking ``patent office of the foreign country'' and 
        inserting ``foreign intellectual property authority''; and
            (3) by adding at the end the following new subsections:
    ``(f) Applications For Plant Breeder's Rights.--Applications for 
plant breeder's rights filed in a WTO member country (or in a UPOV 
Contracting Party) shall have the same effect for the purpose of the 
right of priority under subsections (a) through (c) of this section as 
applications for patents, subject to the same conditions and 
requirements of this section as apply to applications for patents.
    ``(g) Definitions.--As used in this section--
            ``(1) the term `WTO member country' has the same meaning as 
        the term is defined in section 104(b)(2) of this title; and
            ``(2) the term `UPOV Contracting Party' means a member of 
        the International Convention for the Protection of New 
        Varieties of Plants.''.

SEC. 603. PLANT PATENTS.

    (a) Tuber Propagated Plants.--Section 161 of title 35, United 
States Code, is amended by striking ``a tuber propagated plant or''.
    (b) Rights in Plant Patents.--The text of section 163 of title 35, 
United States Code, is amended to read as follows: ``In the case of a 
plant patent, the grant shall include the right to exclude others from 
asexually reproducing the plant, and from using, offering for sale, or 
selling the plant so reproduced, or any of its parts, throughout the 
United States, or from importing the plant so reproduced, or any parts 
thereof, into the United States.''.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply on the date of the enactment of this Act. The amendment made by 
subsection (b) shall apply to any plant patent issued on or after the 
date of the enactment of this Act.

SEC. 604. JUST COMPENSATION FOR U.S. GOVERNMENT USE OF PATENTS.

    (a) Compensation.--Section 1498(a) of title 28, United States Code, 
is amended by adding at the end of the first paragraph the following: 
``Reasonable and entire compensation shall include the owner's 
reasonable costs, including reasonable fees for expert witnesses and 
attorneys, in pursuing the action if the owner is an independent 
inventor, a nonprofit organization, or an entity that had no more than 
500 employees at any time during the 5-year period preceding the use or 
manufacture of the patented invention by or for the United States.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to actions under section 1498(a) of title 28, United States Code, 
that are pending on, or brought on or after, the date of the enactment 
of this Act.

SEC. 605. ELECTRONIC FILING.

    Section 22 of title 35, United States Code, is amended by striking 
``printed or typewritten'' and inserting ``printed, typwritten, or on 
an electronic medium''.