[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1332 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 1332
To amend title 35, United States Code, to provide for improvements in
the quality of patents on certain inventions.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 3, 2001
Mr. Berman (for himself and Mr. Boucher) introduced the following bill;
which was referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To amend title 35, United States Code, to provide for improvements in
the quality of patents on certain inventions.
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 ``Business Method Patent Improvement
Act of 2001''.
SEC. 2. DEFINITIONS.
Section 100 of title 35, United States Code, is amended by adding
at the end the following:
``(f) The term `business method' means--
``(1) a method--
``(A) of--
``(i) processing data; or
``(ii) performing calculation operations;
and
``(B) which is uniquely designed for or utilized in
the practice, administration, or management of an
enterprise;
``(2) any technique used in athletics, instruction, or
personal skills; and
``(3) any computer-assisted implementation of a method
described in paragraph (1) or a technique described in
paragraph (2).
``(g) The term `business method invention' means--
``(1) any invention which is a business method (including
any software or other apparatus); and
``(2) any invention which is comprised of any claim that is
a business method.''.
SEC. 3. PATENTS ON BUSINESS METHOD INVENTIONS.
(a) In General.--Title 35, United States Code, is amended by
inserting after chapter 31 the following new chapter:
``CHAPTER 32--PATENTS ON BUSINESS METHOD INVENTIONS
``Sec.
``321. Business method invention determinations.
``322. Opposition procedures.
``323. Effect on other proceedings.
``324. Burden of proof.
``Sec. 321. Business method invention determinations
``(a) Confidentiality.--Except as provided in subsection (b), an
application for a patent on a business method invention shall be kept
in confidence by the Patent and Trademark Office and no information
concerning the application may be 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 Director.
``(b) Publication.--
``(1) In general.--(A) Subject to subparagraph (E) and
paragraph (2), each application for a patent on a business
method invention shall be published, in accordance with
procedures determined by the Director, promptly after the
expiration of a period of 18 months after 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 that 18-month period.
``(B) Within 12 months after the first filing date of an
application in the United States for a patent under this title,
the Director shall make a determination of whether any
invention claimed in the application is a business method
invention.
``(C) After making a determination under subparagraph (B)
that an invention is a business method invention, the Director
shall notify the applicant of the determination and shall
provide the applicant with a period of 60 days within which to
respond to the determination by amending the application,
withdrawing the application, or otherwise.
``(D) No information concerning patent applications
published under this subsection shall be made available to the
public, except as the Director determines.
``(E)(i) The Director shall establish procedures for making
determinations under subparagraph (B), and for addressing
amendments to any application that may affect the Director's
determination of whether the invention claimed in the
application is a business method invention.
``(ii) In no case shall an application that would be
subject to section 122 but for this section be published later
than the date that would otherwise apply to the application
under section 122.
``(2) Exceptions.--(A) An application shall not be
published under paragraph (1) if that application is--
``(i) no longer pending;
``(ii) subject to a secrecy order under section 181
of this title;
``(iii) a provisional application filed under
section 111(b) of this title; or
``(iv) an application for a design patent filed
under chapter 16 of this title.
``(B) No application for a patent shall be published under
paragraph (1) if the publication or disclosure of such
invention would be detrimental to the national security. The
Director shall establish appropriate procedures to ensure that
such applications are promptly identified and the secrecy of
such inventions is maintained in accordance with chapter 17 of
this title.
``(3) Public participation.--Any party shall have the
opportunity to submit to the Director for the record prior art
(including, but not limited to, evidence of knowledge or use,
or public use or sale, under section 102), file a protest, or
petition the Director to conduct a proceeding to determine
whether the invention was known or used, or was in public use,
or on sale, under section 102 or is obvious under section 103.
The Director shall conduct such a proceeding if the petition--
``(i) is in writing;
``(ii) is accompanied by payment of the fee set
forth in section 41(a) of this title; and
``(iii) sets forth in detail the basis on which the
proceeding is requested.
``(4) Availability of information.--Information submitted
pursuant to paragraph (3) shall be considered during the
examination of the patent application.
``(5) Provisional rights.--During the period of pendency of
an application after publication, an applicant shall have
provisional rights pursuant to section 154 of this title.
``Sec. 322. Opposition procedures
``(a) Administrative Opposition Panel.--
``(1) Establishment.--The Director shall, not later than 1
year after the date of enactment of the Business Method Patent
Improvement Act of 2001, establish an Administrative Opposition
Panel. The Administrative Opposition Panel shall be comprised
of not less than 18 administrative opposition judges, each of
whom shall be an individual of competent legal knowledge and
scientific ability. Upon establishment of the Administrative
Opposition Panel, the Director shall publish notice of the
establishment of the Panel in the Federal Register.
``(2) Assignment of patent examiners to panel.--Patent
examiners may be assigned on detail to assist the
Administrative Opposition Panel in carrying out opposition
proceedings under this section, except that a patent examiner
may not be assigned to assist in review of a patent application
examined by that patent examiner. The Director shall establish
procedures by which an opposition is heard under subsection
(b).
``(b) Opposition Procedures.--
``(1) Request for opposition.--(A) Any person may file a
request for an opposition to a patent on a business method
invention on the basis of section 101, 102, 103, or 112 of this
title. Such a request is valid only if the request--
``(i) is made not later than 9 months after the
date of issuance of the patent;
``(ii) is in writing;
``(iii) is accompanied by payment of the opposition
fee set forth in section 41(a) of this title; and
``(iv) sets forth in detail the basis on which the
opposition is requested.
``(B) Not later than 60 days after receiving a valid
request under subparagraph (A), the Director shall issue an
order for an opposition proceeding to be held on the record
after opportunity for a hearing, and shall promptly send a copy
of the request to the owner of record of the patent. The patent
owner shall be provided a reasonable period, but in no case
less than 60 days after the date on which a copy of the request
is given or mailed to the patent owner, within which the owner
may file a statement in reply to the grounds for the request
for opposition, including any amendment to the patent and new
claim or claims, for consideration in the opposition
proceeding. If the patent owner files such a statement, the
patent owner shall promptly serve a copy of the statement on
the third-party requester. Not later than 2 months after the
date of such service, the third-party requester may file and
have considered in the opposition proceeding a reply to the
statement filed by the patent owner.
``(2) Conduct of opposition proceedings.--Each opposition
shall be heard by one administrative opposition judge, and no
party shall be permitted ex parte communication with the
administrative opposition judge. In addition to the statements
and replies set forth in paragraph (1), the administrative
opposition judge may consider evidence that the judge considers
relevant, including evidence that is presented in any oral
testimony (including exhibits and expert testimony) in direct
or cross examination, or in any deposition, affidavit, or other
documentary form, whether voluntary or compelled. In any
opposition proceeding, the Federal Rules of Evidence shall
apply.
``(3) Amendments to patent claims.--A patent applicant may
propose to amend a patent claim or propose a new claim at any
time during the opposition proceeding, except that no proposed
amended or new claim enlarging the scope of a claim of the
patent may be permitted at any time during an opposition
proceeding under this section.
``(4) Determination.--Not later than 18 months after the
filing of a request for an opposition under this section, the
administrative opposition judge in the opposition proceeding
shall determine the patentability of the subject matter of the
patent, a record of the administrative opposition judge's
determination under this section shall be placed in the
official file of the patent, and a copy shall promptly be given
or mailed to the owner of record of the patent and to the
third-party requester.
``(5) Appeals.--Any party to the opposition may appeal a
decision of the Administrative Opposition Panel under the
provisions of section 134 of this title, and may seek court
review under the provisions of sections 141 through 145 of this
title, with respect to any decision in regard to the
patentability of any original or proposed amended or new claim
of the patent. A patent owner may be a party to an appeal taken
by a third-party requester. Any third-party requester may be a
party to an appeal taken by a patent owner.
``(6) Certification of patentability.--In an opposition
proceeding under this chapter, when the time for appeal has
expired or any appeal proceeding has terminated, the Director
shall issue and publish a certificate canceling any claim of
the patent finally determined to be unpatentable, confirming
any claim of the patent determined to be patentable, and
incorporating in the patent any proposed amended or new claim
determined to be patentable.
``(7) Effect of determination.--Any proposed, amended, or
new claim determined to be patentable and incorporated into a
patent following an opposition proceeding shall have the same
effect as that specified in section 252 of this title for
reissued patents on the right of any person who made, purchased, or
used within the United States, or imported into the United States,
anything patented by such proposed amended or new claim, or who made
substantial preparations therefor, prior to issuance of a certificate
under paragraph (6) of this subsection.
``Sec. 323. Effect on other proceedings
``(a) Right to Litigation.--Subject to subsections (b) and (c),
proceedings under section 322 shall not alter or prejudice any party's
right to pursue remedies under provisions of law other than this
section. In the case of court proceedings, other than an appeal of a
decision in an opposition proceeding under this section, the court may
consider any matter independently of any opposition proceeding under
this section.
``(b) Effect of Final Decisions.--
``(1) In future opposition proceedings.--If 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,
establishing that the party has not sustained its burden of
proving the invalidity of any patent claim, or if a final
decision in an inter partes reexamination proceeding instituted
by a third-party requester is favorable to the patentability of
any original or proposed amended or new claim of the patent--
``(A) neither that party to the civil action, the
third-party requester, nor the privies of that party or
third-party requester may thereafter request an
opposition to such patent claim on the basis of issues
which that party, third-party requester, or the privies
of that party or third-party requester raised in such
civil action or inter partes reexamination proceeding
(as the case may be); and
``(B) an opposition requested by that party, third-
party requester, or the privies of that party or third-
party requester on the basis of such issues may not
thereafter be maintained by the Office.
``(2) Effect of final decision in opposition.--If a final
decision in an opposition proceeding instituted by a third-
party requester is favorable to the patentability of any
original or proposed amended or new claim of the patent--
``(A) neither the third-party requester, nor the
privies of that third-party requester, may thereafter
bring a civil action under section 1338 of title 28, or
request an inter partes reexamination of, or an
opposition to, such patent claim on the basis of issues
which that third-party requester, or the privies of
that third-party requester, raised in such opposition
proceeding; and
``(B) an inter partes reexamination or opposition
requested by that third-party requester, or the privies
of that third-party requester, on the basis of such
issues may not thereafter be maintained by the Office.
``(3) New evidence.--Paragraphs (1) and (2) do not prevent
the assertion by a party to a civil action or a third-party
requester of invalidity based on newly discovered prior art, or
other evidence, unavailable to that party or third-party
requester, as the case may be, and the Patent and Trademark
Office, at the time of the civil action, inter partes
reexamination, or opposition proceeding (as the case may be).
``(c) Stay of Litigation.--Once an order for an opposition
proceeding with respect to a patent has been issued under section
322(b)(1)(B), any party to the proceeding may obtain a stay of any
pending court proceeding (other than an appeal to the Court of Appeals
for the Federal Circuit) which involves an issue of patentability of
any claims of the patent which are the subject of the opposition
proceeding, unless the court before which such litigation is pending
determines that a stay would not serve the interests of justice.
``Sec. 324. Burden of proof
``(a) Burden of Proof.--In the case of reexamination, interference,
opposition, or other legal challenge (including a civil action brought
in whole or in part under section 1338 of title 28) to a patent (or an
application for a patent) on a business method invention, the party
producing evidence of invalidity or ineligibility shall have the burden
of showing by a preponderance of the evidence the invalidity of the
patent or ineligibility of the subject matter of the application.''.
(b) Fees.--Section 41(a) of title 35, United States Code, is
amended--
(1) by redesignating paragraphs (7) through (15) as
paragraphs (9) through (17), respectively; and
(2) by inserting after paragraph (6) the following:
``(7)(A) On filing an opposition under chapter 32 to a
patent on a business method invention based on prior art
citations or obviousness, a fee of $200.
``(B) On filing an opposition under chapter 32 to a patent
on a business method invention on any other basis, a fee of
$5,000.
``(C) The Director may waive the payment by an individual
of fees under this paragraph if such waiver is in the public
interest.
``(8) On filing a request for a proceeding to determine
whether an invention claimed in an application was known or
used, or has been in public use or on sale, under section 102,
a fee of $35.''.
(c) Clerical Amendment.--The table of chapters for part III of
title 35, United States Code, is amended by adding at the end the
following:
``32. Patents on Business Method Inventions................. 321.''.
SEC. 4. NONOBVIOUSNESS.
Section 103 of title 35, United States Code, is amended by adding
at the end the following:
``(d)(1) A business method invention shall be presumed obvious
under this section if the only significant difference between the
combined teachings of the prior art and the claimed invention is that
the claimed invention is appropriate for use with a computer
technology, unless--
``(A) the application of the computer technology is novel;
or
``(B) the computer technology is novel and not the subject
of another patent or patent application.
``(2)(A) An applicant or patentee may rebut the presumption under
paragraph (1) upon a showing by a preponderance of the evidence that
the invention is not obvious to persons of ordinary skill in all
relevant arts.
``(B) Those areas of art which are relevant for purposes of
subparagraph (A) include the field of the business method and the field
of the computer implementation.''.
SEC. 5. REQUIREMENT TO DISCLOSE SEARCH.
The Director of the Patent and Trademark Office shall, within 30
days after the date of enactment of this Act, publish notice of
rulemaking proceedings to amend the rules of the Patent and Trademark
Office to require an applicant for a patent for a business method
invention to disclose in the application the extent to which the
applicant searched for prior art to meet the requirements of title 35,
United States Code. Such amendment shall include appropriate penalties
for failure to comply with such requirement. The Director shall ensure
that the amendment is implemented as promptly as possible.
SEC. 6. CONFORMING AMENDMENTS.
(a) Definitions.--Section 100(e) of title 35, United States Code,
is amended by striking ``or inter partes reexamination under section
311'' and inserting ``, inter partes reexamination under section 311,
or an opposition under section 322,''.
(b) Board of Patent Appeals and Interferences.--Section 134 of
title 35, United States Code, is amended--
(1) in subsection (b)--
(A) by inserting ``or opposition'' after
``reexamination''; and
(B) by inserting ``or the Administrative Opposition
Panel (as the case may be)'' after ``administrative
patent judge''; and
(2) in subsection (c)--
(A) by striking ``proceeding'' and inserting
``reexamination proceeding or an opposition
proceeding'';
(B) by inserting ``or the Administrative Opposition
Panel (as the case may be)'' after ``administrative
patent judge''; and
(C) in the last sentence, by inserting ``in an
inter partes reexamination proceeding'' after
``requester''.
(c) Appeal to Court of Appeals.--(1) Section 141 of title 35,
United States Code, is amended in the second sentence by inserting
after ``reexamination proceeding'' the following: ``, and any party in
an opposition proceeding, who is''.
(2) Section 143 of title 35, United States Code, is amended by
inserting after the third sentence the following: ``In any opposition
proceeding, the Administrative Opposition Panel shall submit to the
court in writing the grounds for the decision of the Panel, addressing
all the issues involved in the appeal.''.
(d) Defense to Infringement.--Section 273 of title 35, United
States Code, is amended--
(1) in subsection (a)--
(A) by striking paragraph (3) and redesignating
paragraph (4) as paragraph (3); and
(B) in paragraphs (1) and (2) by striking
``method'' and inserting ``business method''; and
(2) in subsection (b), by striking ``method'' each place it
appears and inserting ``business method''.
(e) Other Publication of Patent Applications.--Section 122 of title
35, United States Code, is amended by adding at the end the following:
``(e) Business Method Inventions.--In the case of applications for
business method inventions, section 321 of this title applies in lieu
of this section.''.
SEC. 7. EFFECTIVE DATE.
(a) In General.--Subject to subsections (b), (c), and (d), this Act
and the amendments made by this Act apply to--
(1) any application for patent that is pending on, or that
is filed on or after, the date of enactment of this Act; and
(2) any patent issued on or after the date of enactment of
this Act.
(b) Pending Applications.--In applying section 321 of title 35,
United States Code, as added by section 3 of this Act, to an
application for patent that is pending on the date of enactment of this
Act--
(1) the Director of the Patent and Trademark Office shall
make the determination required by subsection (b)(1)(B) of such
section 321 within 12 months after the date of enactment of
this Act, or on the date specified in such section 321,
whichever occurs later;
(2) subject to paragraph (3), such an application shall be
published--
(A) on the date specified in section 321 of title
35, United States Code, or
(B) the date on which the determination is made
pursuant to paragraph (1),
whichever occurs later; and
(3) in no case shall an application that would be published
under section 122 of title 35, United States Code, but for the
enactment of this Act, be published later than the date
specified in such section 122, regardless of when the Director
makes the determination under paragraph (1).
(c) Patents Issued Before Establishment of Administrative
Opposition Panel.--In the case of a patent issued after the enactment
of this Act but before the date on which notice of the establishment of
the Administrative Opposition Panel is published under section
322(a)(1) of title 35, United States Code (as added by this Act), a
request for an opposition to the patent may be filed under section
322(b)(1)(A) of title 35, United States Code (as added by this Act),
notwithstanding the 9-month requirement set forth in clause (i) of that
section, if the request is filed not later than 9 months after the date
on which such notice is so published.
<all>