[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1145 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1145

  To amend title 35, United States Code, to provide for patent reform.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 18, 2007

  Mr. Leahy (for himself, Mr. Hatch, Mr. Schumer, Mr. Cornyn, and Mr. 
  Whitehouse) introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
  To amend title 35, United States Code, to provide for patent reform.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Patent Reform Act 
of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Reference to title 35, United States Code.
Sec. 3. Right of the first inventor to file.
Sec. 4. Inventor's oath or declaration.
Sec. 5. Right of the inventor to obtain damages.
Sec. 6. Post-grant procedures and other quality enhancements.
Sec. 7. Definitions; patent trial and appeal board.
Sec. 8. Study and report on reexamination proceedings.
Sec. 9. Submissions by third parties and other quality enhancements.
Sec. 10. Venue and jurisdiction.
Sec. 11. Regulatory authority.
Sec. 12. Technical amendments.
Sec. 13. Effective date; rule of construction.

SEC. 2. REFERENCE TO TITLE 35, UNITED STATES CODE.

    Whenever in this Act a section or other provision is amended or 
repealed, that amendment or repeal shall be considered to be made to 
that section or other provision of title 35, United States Code.

SEC. 3. RIGHT OF THE FIRST INVENTOR TO FILE.

    (a) Definitions.--Section 100 is amended by adding at the end the 
following:
    ``(f) The term `inventor' means the individual or, if a joint 
invention, the individuals collectively who invented or discovered the 
subject matter of the invention.
    ``(g) The terms `joint inventor' and `coinventor' mean any 1 of the 
individuals who invented or discovered the subject matter of a joint 
invention.
    ``(h) The `effective filing date of a claimed invention' is--
            ``(1) the filing date of the patent or the application for 
        patent containing the claim to the invention; or
            ``(2) if the patent or application for patent is entitled 
        to a right of priority of any other application under section 
        119, 365(a), or 365(b) or to the benefit of an earlier filing 
        date in the United States under section 120, 121, or 365(c), 
        the filing date of the earliest such application in which the 
        claimed invention is disclosed in the manner provided by the 
        first paragraph of section 112.
    ``(i) The term `claimed invention' means the subject matter defined 
by a claim in a patent or an application for a patent.
    ``(j) The term `joint invention' means an invention resulting from 
the collaboration of inventive endeavors of 2 or more persons working 
toward the same end and producing an invention by their collective 
efforts.''.
    (b) Conditions for Patentability.--
            (1) In general.--Section 102 is amended to read as follows:
``Sec. 102. Conditions for patentability; novelty
    ``(a) Novelty; Prior Art.--A patent for a claimed invention may not 
be obtained if--
            ``(1) the claimed invention was patented, described in a 
        printed publication, or in public use or on sale--
                    ``(A) more than one year before the effective 
                filing date of the claimed invention; or
                    ``(B) one year or less before the effective filing 
                date of the claimed invention, other than through 
                disclosures made by the inventor or a joint inventor or 
                by others who obtained the subject matter disclosed 
                directly or indirectly from the inventor or a joint 
                inventor; or
            ``(2) the claimed invention was described in a patent 
        issued under section 151, or in an application for patent 
        published or deemed published under section 122(b), in which 
        the patent or application, as the case may be, names another 
        inventor and was effectively filed before the effective filing 
        date of the claimed invention.
    ``(b) Exceptions.--
            ``(1) Prior inventor disclosure exception.--Subject matter 
        that would otherwise qualify as prior art under subparagraph 
        (B) of subsection (a)(1) shall not be prior art to a claimed 
        invention under that subparagraph if the subject matter had, 
        before the applicable date under such subparagraph (B), been 
        publicly disclosed by the inventor or a joint inventor or 
        others who obtained the subject matter disclosed directly or 
        indirectly from the inventor, joint inventor, or applicant.
            ``(2) Derivation and common assignment exceptions.--Subject 
        matter that would otherwise qualify as prior art only under 
        subsection (a)(2), after taking into account the exception 
        under paragraph (1), shall not be prior art to a claimed 
        invention if--
                    ``(A) the subject matter was obtained directly or 
                indirectly from the inventor or a joint inventor; or
                    ``(B) the subject matter and the claimed invention, 
                not later than the effective filing date of the claimed 
                invention, were owned by the same person or subject to 
                an obligation of assignment to the same person.
            ``(3) Joint research agreement exception.--
                    ``(A) In general.--Subject matter and a claimed 
                invention shall be deemed to have been owned by the 
                same person or subject to an obligation of assignment 
                to the same person in applying the provisions of 
                paragraph (2) if--
                            ``(i) the claimed invention was made by or 
                        on behalf of parties to a joint research 
                        agreement that was in effect on or before the 
                        effective filing date of the claimed invention;
                            ``(ii) the claimed invention was made as a 
                        result of activities undertaken within the 
                        scope of the joint research agreement; and
                            ``(iii) the application for patent for the 
                        claimed invention discloses or is amended to 
                        disclose the names of the parties to the joint 
                        research agreement.
                    ``(B) For purposes of subparagraph (A), the term 
                `joint research agreement' means a written contract, 
                grant, or cooperative agreement entered into by two or 
                more persons or entities for the performance of 
                experimental, developmental, or research work in the 
                field of the claimed invention.
            ``(4) Patents and published applications effectively 
        filed.--A patent or application for patent is effectively filed 
        under subsection (a)(2) with respect to any subject matter 
        described in the patent or application--
                    ``(A) as of the filing date of the patent or the 
                application for patent; or
                    ``(B) if the patent or application for patent is 
                entitled to claim a right of priority under section 
                119, 365(a), or 365(b) or to claim the benefit of an 
                earlier filing date under section 120, 121, or 365(c), 
                based upon one or more prior filed applications for 
                patent, as of the filing date of the earliest such 
                application that describes the subject matter.''.
            (2) Conforming amendment.--The item relating to section 102 
        in the table of sections for chapter 10 is amended to read as 
        follows:

``102. Conditions for patentability; novelty.''.
    (c) Conditions for Patentability; Non-Obvious Subject Matter.--
Section 103 is amended to read as follows:
``Sec. 103. Conditions for patentability; nonobvious subject matter
    ``A patent for a claimed invention may not be obtained though the 
claimed invention is not identically disclosed as set forth in section 
102, if the differences between the claimed invention and the prior art 
are such that the claimed invention as a whole would have been obvious 
before the effective filing date of the claimed invention to a person 
having ordinary skill in the art to which the claimed invention 
pertains. Patentability shall not be negated by the manner in which the 
invention was made.''.
    (d) Repeal of Requirements for Inventions Made Abroad.--Section 
104, and the item relating to that section in the table of sections for 
chapter 10, are repealed.
    (e) Repeal of Statutory Invention Registration.--
            (1) In general.--Section 157, and the item relating to that 
        section in the table of sections for chapter 14, are repealed.
            (2) Removal of cross references.--Section 111(b)(8) is 
        amended by striking ``sections 115, 131, 135, and 157'' and 
        inserting ``sections 131 and 135''.
    (f) Earlier Filing Date for Inventor and Joint Inventor.--Section 
120 is amended by striking ``which is filed by an inventor or inventors 
named'' and inserting ``which names an inventor or joint inventor''.
    (g) Conforming Amendments.--
            (1) Right of priority.--Section 172 is amended by striking 
        ``and the time specified in section 102(d)''.
            (2) Limitation on remedies.--Section 287(c)(4) is amended 
        by striking ``the earliest effective filing date of which is 
        prior to'' and inserting ``which has an effective filing date 
        before''.
            (3) International application designating the united 
        states: effect.--Section 363 is amended by striking ``except as 
        otherwise provided in section 102(e) of this title''.
            (4) Publication of international application: effect.--
        Section 374 is amended by striking ``sections 102(e) and 
        154(d)'' and inserting ``section 154(d)''.
            (5) Patent issued on international application: effect.--
        The second sentence of section 375(a) is amended by striking 
        ``Subject to section 102(e) of this title, such'' and inserting 
        ``Such''.
            (6) Limit on right of priority.--Section 119(a) is amended 
        by striking ``; but no patent shall be granted'' and all that 
        follows through ``one year prior to such filing''.
            (7) Inventions made with federal assistance.--Section 
        202(c) is amended--
                    (A) in paragraph (2)--
                            (i) by striking ``publication, on sale, or 
                        public use,'' and all that follows through 
                        ``obtained in the United States'' and inserting 
                        ``the 1-year period referred to in section 
                        102(a) would end before the end of that 2-year 
                        period''; and
                            (ii) by striking ``the statutory'' and 
                        inserting ``that 1-year''; and
                    (B) in paragraph (3), by striking ``any statutory 
                bar date that may occur under this title due to 
                publication, on sale, or public use'' and inserting 
                ``the expiration of the 1-year period referred to in 
                section 102(a)''.
    (h) Repeal of Interfering Patent Remedies.--Section 291, and the 
item relating to that section in the table of sections for chapter 29, 
are repealed.
    (i) Action for Claim to Patent on Derived Invention.--Section 
135(a) is amended to read as follows:
    ``(a) Dispute Over Right to Patent.--
            ``(1) Institution of derivation proceeding.--An applicant 
        may request initiation of a derivation proceeding to determine 
        the right of the applicant to a patent by filing a request 
        which sets forth with particularity the basis for finding that 
        an earlier applicant derived the claimed invention from the 
        applicant requesting the proceeding and, without authorization, 
        filed an application claiming such invention. Any such request 
        may only be made within 12 months after the date of first 
        publication of an application containing a claim that is the 
        same or is substantially the same as the claimed invention, 
        must be made under oath, and must be supported by substantial 
        evidence. Whenever the Director determines that patents or 
        applications for patent naming different individuals as the 
        inventor interfere with one another because of a dispute over 
        the right to patent under section 101, the Director shall 
        institute a derivation proceeding for the purpose of 
        determining which applicant is entitled to a patent.
            ``(2) Requirements.--A proceeding under this subsection may 
        not be commenced unless the party requesting the proceeding has 
        filed an application that was filed not later than 18 months 
        after the effective filing date of the application or patent 
        deemed to interfere with the subsequent application or patent.
            ``(3) Determination by patent trial and appeal board.--In 
        any proceeding under this subsection, the Patent Trial and 
        Appeal Board--
                    ``(A) shall determine the question of the right to 
                patent;
                    ``(B) in appropriate circumstances, may correct the 
                naming of the inventor in any application or patent at 
                issue; and
                    ``(C) shall issue a final decision on the right to 
                patent.
            ``(4) Derivation proceeding.--The Board may defer action on 
        a request to initiate a derivation proceeding until 3 months 
        after the date on which the Director issues a patent to the 
        applicant that filed the earlier application.
            ``(5) Effect of final decision.--The final decision of the 
        Patent Trial and Appeal Board, if adverse to the claim of an 
        applicant, shall constitute the final refusal by the Patent and 
        Trademark Office on the claims involved. The Director may issue 
        a patent to an applicant who is determined by the Patent Trial 
        and Appeal Board to have the right to patent. The final 
        decision of the Board, if adverse to a patentee, shall, if no 
        appeal or other review of the decision has been or can be taken 
        or had, constitute cancellation of the claims involved in the 
        patent, and notice of such cancellation shall be endorsed on 
        copies of the patent distributed after such cancellation by the 
        Patent and Trademark Office.''.
    (j) Elimination of References to Interferences.--(1) Sections 6, 
41, 134, 141, 145, 146, 154, 305, and 314 are each amended by striking 
``Board of Patent Appeals and Interferences'' each place it appears and 
inserting ``Patent Trial and Appeal Board''.
    (2) Sections 141, 146, and 154 are each amended--
            (A) by striking ``an interference'' each place it appears 
        and inserting ``a derivation proceeding''; and
            (B) by striking ``interference'' each additional place it 
        appears and inserting ``derivation proceeding''.
    (3) The section heading for section 134 is amended to read as 
follows:
``Sec. 134. Appeal to the Patent Trial and Appeal Board''.
    (4) The section heading for section 135 is amended to read as 
follows:
``Sec. 135. Derivation proceedings''.
    (5) The section heading for section 146 is amended to read as 
follows:
``Sec. 146. Civil action in case of derivation proceeding''.
    (6) Section 154(b)(1)(C) is amended by striking ``interferences'' 
and inserting ``derivation proceedings''.
    (7) The item relating to section 6 in the table of sections for 
chapter 1 is amended to read as follows:

``6. Patent Trial and Appeal Board.''.
    (8) The items relating to sections 134 and 135 in the table of 
sections for chapter 12 are amended to read as follows:

``134. Appeal to the Patent Trial and Appeal Board.
``135. Derivation proceedings.''.
    (9) The item relating to section 146 in the table of sections for 
chapter 13 is amended to read as follows:

``146. Civil action in case of derivation proceeding.''.
    (10) Certain Appeals.--Subsection 1295(a)(4)(A) of title 28, United 
States Code, is amended to read as follows:
                    ``(A) the Patent Trial and Appeal Board of the 
                United States Patent and Trademark Office with respect 
                to patent applications, derivation proceedings, and 
                post-grant review proceedings, at the instance of an 
                applicant for a patent or any party to a patent 
                interference (commenced before the effective date of 
                the Patent Reform Act of 2007), derivation proceeding, 
                or post-grant review proceeding, and any such appeal 
                shall waive any right of such applicant or party to 
                proceed under section 145 or 146 of title 35;''.

SEC. 4. INVENTOR'S OATH OR DECLARATION.

    (a) Inventor's Oath or Declaration.--
            (1) In general.--Section 115 is amended to read as follows:
``Sec. 115. Inventor's oath or declaration
    ``(a) Naming the Inventor; Inventor's Oath or Declaration.--An 
application for patent that is filed under section 111(a), that 
commences the national stage under section 363, or that is filed by an 
inventor for an invention for which an application has previously been 
filed under this title by that inventor shall include, or be amended to 
include, the name of the inventor of any claimed invention in the 
application. Except as otherwise provided in this section, an 
individual who is the inventor or a joint inventor of a claimed 
invention in an application for patent shall execute an oath or 
declaration in connection with the application.
    ``(b) Required Statements.--An oath or declaration under subsection 
(a) shall contain statements that--
            ``(1) the application was made or was authorized to be made 
        by the affiant or declarant; and
            ``(2) such individual believes himself or herself to be the 
        original inventor or an original joint inventor of a claimed 
        invention in the application.
    ``(c) Additional Requirements.--The Director may specify additional 
information relating to the inventor and the invention that is required 
to be included in an oath or declaration under subsection (a).
    ``(d) Substitute Statement.--
            ``(1) In general.--In lieu of executing an oath or 
        declaration under subsection (a), the applicant for patent may 
        provide a substitute statement under the circumstances 
        described in paragraph (2) and such additional circumstances 
        that the Director may specify by regulation.
            ``(2) Permitted circumstances.--A substitute statement 
        under paragraph (1) is permitted with respect to any individual 
        who--
                    ``(A) is unable to file the oath or declaration 
                under subsection (a) because the individual--
                            ``(i) is deceased;
                            ``(ii) is under legal incapacity; or
                            ``(iii) cannot be found or reached after 
                        diligent effort; or
                    ``(B) is under an obligation to assign the 
                invention but has refused to make the oath or 
                declaration required under subsection (a).
            ``(3) Contents.--A substitute statement under this 
        subsection shall--
                    ``(A) identify the individual with respect to whom 
                the statement applies;
                    ``(B) set forth the circumstances representing the 
                permitted basis for the filing of the substitute 
                statement in lieu of the oath or declaration under 
                subsection (a); and
                    ``(C) contain any additional information, including 
                any showing, required by the Director.
    ``(e) Making Required Statements in Assignment of Record.--An 
individual who is under an obligation of assignment of an application 
for patent may include the required statements under subsections (b) 
and (c) in the assignment executed by the individual, in lieu of filing 
such statements separately.
    ``(f) Time for Filing.--A notice of allowance under section 151 may 
be provided to an applicant for patent only if the applicant for patent 
has filed each required oath or declaration under subsection (a) or has 
filed a substitute statement under subsection (d) or recorded an 
assignment meeting the requirements of subsection (e).
    ``(g) Earlier-Filed Application Containing Required Statements or 
Substitute Statement.--The requirements under this section shall not 
apply to an individual with respect to an application for patent in 
which the individual is named as the inventor or a joint inventor and 
that claims the benefit under section 120 or 365(c) of the filing of an 
earlier-filed application, if--
            ``(1) an oath or declaration meeting the requirements of 
        subsection (a) was executed by the individual and was filed in 
        connection with the earlier-filed application;
            ``(2) a substitute statement meeting the requirements of 
        subsection (d) was filed in the earlier filed application with 
        respect to the individual; or
            ``(3) an assignment meeting the requirements of subsection 
        (e) was executed with respect to the earlier-filed application 
        by the individual and was recorded in connection with the 
        earlier-filed application.
    ``(h) Supplemental and Corrected Statements; Filing Additional 
Statements.--
            ``(1) In general.--Any person making a statement required 
        under this section may withdraw, replace, or otherwise correct 
        the statement at any time. If a change is made in the naming of 
        the inventor requiring the filing of 1 or more additional 
        statements under this section, the Director shall establish 
        regulations under which such additional statements may be 
        filed.
            ``(2) Supplemental statements not required.--If an 
        individual has executed an oath or declaration under subsection 
        (a) or an assignment meeting the requirements of subsection (e) 
        with respect to an application for patent, the Director may not 
        thereafter require that individual to make any additional oath, 
        declaration, or other statement equivalent to those required by 
        this section in connection with the application for patent or 
        any patent issuing thereon.
            ``(3) Savings clause.--No patent shall be invalid or 
        unenforceable based upon the failure to comply with a 
        requirement under this section if the failure is remedied as 
        provided under paragraph (1).''.
            (2) Relationship to divisional applications.--Section 121 
        is amended by striking ``If a divisional application'' and all 
        that follows through ``inventor.''.
            (3) Requirements for nonprovisional applications.--Section 
        111(a) is amended--
                    (A) in paragraph (2)(C), by striking ``by the 
                applicant'' and inserting ``or declaration'';
                    (B) in the heading for paragraph (3), by striking 
                ``and oath''; and
                    (C) by striking ``and oath'' each place it appears.
            (4) Conforming amendment.--The item relating to section 115 
        in the table of sections for chapter 10 is amended to read as 
        follows:

``115. Inventor's oath or declaration.''.
    (b) Filing by Other Than Inventor.--Section 118 is amended to read 
as follows:
``Sec. 118. Filing by other than inventor
    ``A person to whom the inventor has assigned or is under an 
obligation to assign the invention may make an application for patent. 
A person who otherwise shows sufficient proprietary interest in the 
matter may make an application for patent on behalf of and as agent for 
the inventor on proof of the pertinent facts and a showing that such 
action is appropriate to preserve the rights of the parties. If the 
Director grants a patent on an application filed under this section by 
a person other than the inventor, the patent shall be granted to the 
real party in interest and upon such notice to the inventor as the 
Director considers to be sufficient.''.
    (c) Specification.--Section 112 is amended--
            (1) in the first paragraph----
                    (A) by striking ``The specification'' and inserting 
                ``(a) In General.--The specification''; and
                    (B) by striking ``of carrying out his invention'' 
                and inserting ``or joint inventor of carrying out the 
                invention''; and
            (2) in the second paragraph--
                    (A) by striking ``The specifications'' and 
                inserting ``(b) Conclusion.--The specifications''; and
                    (B) by striking ``applicant regards as his 
                invention'' and inserting ``inventor or a joint 
                inventor regards as the invention'';
            (3) in the third paragraph, by striking ``A claim'' and 
        inserting ``(c) Form.--A claim'';
            (4) in the fourth paragraph, by striking ``Subject to the 
        following paragraph,'' and inserting ``(d) Reference in 
        Dependent Forms.--Subject to subsection (e),'';
            (5) in the fifth paragraph, by striking ``A claim'' and 
        inserting ``(e) Reference in Multiple Dependent Form.--A 
        claim''; and
            (6) in the last paragraph, by striking ``An element'' and 
        inserting ``(f) Element in Claim for a Combination.--An 
        element''.

SEC. 5. RIGHT OF THE INVENTOR TO OBTAIN DAMAGES.

    (a) Damages.--Section 284 is amended--
            (1) in the first paragraph--
                    (A) by striking ``Upon'' and inserting ``(a) Award 
                of Damages.--
            ``(1) In general.--Upon'';
                    (B) by aligning the remaining text accordingly; and
                    (C) by adding at the end the following:
            ``(2) Relationship of damages to contributions over prior 
        art.--The court shall conduct an analysis to ensure that a 
        reasonable royalty under paragraph (1) is applied only to that 
        economic value properly attributable to the patent's specific 
        contribution over the prior art. In a reasonable royalty 
        analysis, the court shall identify all factors relevant to the 
        determination of a reasonable royalty under this subsection, 
        and the court or the jury, as the case may be, shall consider 
        only those factors in making the determination. The court shall 
        exclude from the analysis the economic value properly 
        attributable to the prior art, and other features or 
        improvements, whether or not themselves patented, that 
        contribute economic value to the infringing product or process.
            ``(3) Entire market value.--Unless the claimant shows that 
        the patent's specific contribution over the prior art is the 
        predominant basis for market demand for an infringing product 
        or process, damages may not be based upon the entire market 
        value of that infringing product or process.
            ``(4) Other factors.--In determining damages, the court may 
        also consider, or direct the jury to consider, the terms of any 
        nonexclusive marketplace licensing of the invention, where 
        appropriate, as well as any other relevant factors under 
        applicable law.'';
            (2) by amending the second undesignated paragraph to read 
        as follows:
    ``(b) Willful Infringement .--
            ``(1) Increased damages.--A court that has determined that 
        the infringer has willfully infringed a patent or patents may 
        increase the damages up to three times the amount of damages 
        found or assessed under subsection (a), except that increased 
        damages under this paragraph shall not apply to provisional 
        rights under section 154(d).
            ``(2) Permitted grounds for willfulness.--A court may find 
        that an infringer has willfully infringed a patent only if the 
        patent owner presents clear and convincing evidence that--
                    ``(A) after receiving written notice from the 
                patentee--
                            ``(i) alleging acts of infringement in a 
                        manner sufficient to give the infringer an 
                        objectively reasonable apprehension of suit on 
                        such patent, and
                            ``(ii) identifying with particularity each 
                        claim of the patent, each product or process 
                        that the patent owner alleges infringes the 
                        patent, and the relationship of such product or 
                        process to such claim,
                the infringer, after a reasonable opportunity to 
                investigate, thereafter performed one or more of the 
                alleged acts of infringement;
                    ``(B) the infringer intentionally copied the 
                patented invention with knowledge that it was patented; 
                or
                    ``(C) after having been found by a court to have 
                infringed that patent, the infringer engaged in conduct 
                that was not colorably different from the conduct 
                previously found to have infringed the patent, and 
                which resulted in a separate finding of infringement of 
                the same patent.
            ``(3) Limitations on willfulness.--(A) A court may not find 
        that an infringer has willfully infringed a patent under 
        paragraph (2) for any period of time during which the infringer 
        had an informed good faith belief that the patent was invalid 
        or unenforceable, or would not be infringed by the conduct 
        later shown to constitute infringement of the patent.
            ``(B) An informed good faith belief within the meaning of 
        subparagraph (A) may be established by--
                    ``(i) reasonable reliance on advice of counsel;
                    ``(ii) evidence that the infringer sought to modify 
                its conduct to avoid infringement once it had 
                discovered the patent; or
                    ``(iii) other evidence a court may find sufficient 
                to establish such good faith belief.
            ``(C) The decision of the infringer not to present evidence 
        of advice of counsel is not relevant to a determination of 
        willful infringement under paragraph (2).
            ``(4) Limitation on pleading.--Before the date on which a 
        court determines that the patent in suit is not invalid, is 
        enforceable, and has been infringed by the infringer, a 
        patentee may not plead and a court may not determine that an 
        infringer has willfully infringed a patent. The court's 
        determination of an infringer's willfulness shall be made 
        without a jury.''; and
            (3) in the third undesignated paragraph, by striking ``The 
        court'' and inserting ``(c) Expert Testimony.--The court''.
    (b) Defense to Infringement Based on Earlier Inventor.--Section 273 
of title 35, United States Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by striking ``of a method''; and
                            (ii) by striking ``review period;'' and 
                        inserting ``review period; and'';
                    (B) in paragraph (2)(B), by striking the semicolon 
                at the end and inserting a period; and
                    (C) by striking paragraphs (3) and (4);
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) by striking ``for a method''; and
                            (ii) by striking ``at least 1 year before 
                        the effective filing date of such patent, and'' 
                        and all that follows through the period and 
                        inserting ``and commercially used, or made 
                        substantial preparations for commercial use of, 
                        the subject matter before the effective filing 
                        date of the claimed invention.'';
                    (B) in paragraph (2)--
                            (i) by striking ``The sale or other 
                        disposition of a useful end result produced by 
                        a patented method'' and inserting ``The sale or 
                        other disposition of subject matter that 
                        qualifies for the defense set forth in this 
                        section''; and
                            (ii) by striking ``a defense under this 
                        section with respect to that useful end 
                        result'' and inserting ``such defense''; and
                    (C) in paragraph (3)--
                            (i) by striking subparagraph (A); and
                            (ii) by redesignating subparagraphs (B) and 
                        (C) as subparagraphs (A) and (B), respectively;
            (3) in paragraph (7), by striking ``of the patent'' and 
        inserting ``of the claimed invention''; and
            (4) by amending the heading to read as follows:
``Sec. 273. Special defenses to and exemptions from infringement''.
    (c) Table of Sections.--The item relating to section 273 in the 
table of sections for chapter 28 is amended to read as follows:

``273. Special defenses to and exemptions from infringement.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to any civil action commenced on or after the date of enactment 
of this Act.

SEC. 6. POST-GRANT PROCEDURES AND OTHER QUALITY ENHANCEMENTS.

    (a) Reexamination.--Section 303(a) is amended to read as follows:
    ``(a) Within 3 months after the owner of a patent files a request 
for reexamination under section 302, the Director shall determine 
whether a substantial new question of patentability affecting any claim 
of the patent concerned is raised by the request, with or without 
consideration of other patents or printed publications. On the 
Director's own initiative, and at any time, the Director may determine 
whether a substantial new question of patentability is raised by 
patents and publications discovered by the Director, is cited under 
section 301, or is cited by any person other than the owner of the 
patent under section 302 or section 311. The existence of a substantial 
new question of patentability is not precluded by the fact that a 
patent or printed publication was previously cited by or to the Office 
or considered by the Office.''.
    (b) Reexamination.--Section 315(c) is amended by striking ``or 
could have raised''.
    (c) Reexamination Prohibited After District Court Decision.--
Section 317(b) is amended--
            (1) in the subsection heading, by striking ``Final 
        Decision'' and inserting ``District Court Decision''; and
            (2) by striking ``Once a final decision has been entered'' 
        and inserting ``Once the judgment of the district court has 
        been entered''.
    (d) Effective Dates.--Notwithstanding any other provision of law, 
sections 311 through 318 of title 35, United States Code, as amended by 
this Act, shall apply to any patent that issues before, on, or after 
the date of enactment of this Act from an original application filed on 
any date.
    (e) Post-Grant Opposition Procedures.--
            (1) In general.--Part III is amended by adding at the end 
        the following new chapter:

               ``CHAPTER 32--POST-GRANT REVIEW PROCEDURES

``Sec.
``321. Petition for post-grant review.
``322. Timing and bases of petition.
``323. Requirements of petition.
``324. Prohibited filings.
``325. Submission of additional information; showing of sufficient 
                            grounds.
``326. Conduct of post-grant review proceedings.
``327. Patent owner response.
``328. Proof and evidentiary standards.
``329. Amendment of the patent.
``330. Decision of the Board.
``331. Effect of decision.
``332. Relationship to other pending proceedings.
``333. Effect of decisions rendered in civil action on future post-
                            grant review proceedings.
``334. Effect of final decision on future proceedings.
``335. Appeal.
``Sec. 321. Petition for post-grant review
    ``Subject to sections 322, 324, 332, and 333, a person who is not 
the patent owner may file with the Office a petition for cancellation 
seeking to institute a post-grant review proceeding to cancel as 
unpatentable any claim of a patent on any ground that could be raised 
under paragraph (2) or (3) of section 282(b) (relating to invalidity of 
the patent or any claim). The Director shall establish, by regulation, 
fees to be paid by the person requesting the proceeding, in such 
amounts as the Director determines to be reasonable.
``Sec. 322. Timing and bases of petition
    ``A post-grant proceeding may be instituted under this chapter 
pursuant to a cancellation petition filed under section 321 only if--
            ``(1) the petition is filed not later than 12 months after 
        the grant of the patent or issuance of a reissue patent, as the 
        case may be;
            ``(2)(A) the petitioner establishes a substantial reason to 
        believe that the continued existence of the challenged claim in 
        the petition causes or is likely to cause the petitioner 
        significant economic harm; or
            ``(B) the petitioner has received notice from the patent 
        holder alleging infringement by the petitioner of the patent; 
        or
            ``(3) the patent owner consents in writing to the 
        proceeding.
``Sec. 323. Requirements of petition
    ``A cancellation petition filed under section 321 may be considered 
only if--
            ``(1) the petition is accompanied by payment of the fee 
        established by the Director under section 321;
            ``(2) the petition identifies the cancellation petitioner; 
        and
            ``(3) the petition sets forth in writing the basis for the 
        cancellation, identifying each claim challenged and providing 
        such information as the Director may require by regulation, and 
        includes copies of patents and printed publications that the 
        cancellation petitioner relies upon in support of the petition; 
        and
            ``(4) the petitioner provides copies of those documents to 
        the patent owner or, if applicable, the designated 
        representative of the patent owner.
``Sec. 324. Prohibited filings
    ``A post-grant review proceeding may not be instituted under 
paragraph (1), (2), or (3) of section 322 if the petition for 
cancellation requesting the proceeding identifies the same cancellation 
petitioner and the same patent as a previous petition for cancellation 
filed under the same paragraph of section 322.
``Sec. 325. Submission of additional information; showing of sufficient 
              grounds
    ``The cancellation petitioner shall file such additional 
information with respect to the petition as the Director may require. 
The Director may not authorize a post-grant review proceeding to 
commence unless the Director determines that the information presented 
provides sufficient grounds to proceed.
``Sec. 326. Conduct of post-grant review proceedings
    ``(a) In General.--The Director shall--
            ``(1) prescribe regulations, in accordance with section 
        2(b)(2), establishing and governing post-grant review 
        proceedings under this chapter and their relationship to other 
        proceedings under this title;
            ``(2) prescribe regulations setting forth the standards for 
        showings of substantial reason to believe and significant 
        economic harm under section 322(2) and sufficient grounds under 
        section 325;
            ``(3) prescribe regulations establishing procedures for the 
        submission of supplemental information after the petition for 
        cancellation is filed; and
            ``(4) prescribe regulations setting forth procedures for 
        discovery of relevant evidence, including that such discovery 
        shall be limited to evidence directly related to factual 
        assertions advanced by either party in the proceeding, and the 
        procedures for obtaining such evidence shall be consistent with 
        the purpose and nature of the proceeding.
    ``(b) Post-Grant Regulations.--Regulations under subsection 
(a)(1)--
            ``(1) shall require that the final determination in a post-
        grant proceeding issue not later than one year after the date 
        on which the post-grant review proceeding is instituted under 
        this chapter, except that, for good cause shown, the Director 
        may extend the 1-year period by not more than six months;
            ``(2) shall provide for discovery upon order of the 
        Director;
            ``(3) shall prescribe sanctions for abuse of discovery, 
        abuse of process, or any other improper use of the proceeding, 
        such as to harass or to cause unnecessary delay or unnecessary 
        increase in the cost of the proceeding;
            ``(4) may provide for protective orders governing the 
        exchange and submission of confidential information; and
            ``(5) shall ensure that any information submitted by the 
        patent owner in support of any amendment entered under section 
        328 is made available to the public as part of the prosecution 
        history of the patent.
    ``(c) Considerations.--In prescribing regulations under this 
section, the Director shall consider the effect on the economy, the 
integrity of the patent system, and the efficient administration of the 
Office.
    ``(d) Conduct of Proceeding.--The Patent Trial and Appeal Board 
shall, in accordance with section 6(b), conduct each post-grant review 
proceeding authorized by the Director.
``Sec. 327. Patent owner response
    ``After a post-grant proceeding under this chapter has been 
instituted with respect to a patent, the patent owner shall have the 
right to file, within a time period set by the Director, a response to 
the cancellation petition. The patent owner shall file with the 
response, through affidavits or declarations, any additional factual 
evidence and expert opinions on which the patent owner relies in 
support of the response.
``Sec. 328. Proof and evidentiary standards
    ``(a) In General.--The presumption of validity set forth in section 
282 shall not apply in a challenge to any patent claim under this 
chapter.
    ``(b) Burden of Proof.--The party advancing a proposition under 
this chapter shall have the burden of proving that proposition by a 
preponderance of the evidence.
``Sec. 329. Amendment of the patent
    ``(a) In General.--In response to a challenge in a petition for 
cancellation, the patent owner may file 1 motion to amend the patent in 
1 or more of the following ways:
            ``(1) Cancel any challenged patent claim.
            ``(2) For each challenged claim, propose a substitute 
        claim.
            ``(3) Amend the patent drawings or otherwise amend the 
        patent other than the claims.
    ``(b) Additional Motions.--Additional motions to amend may be 
permitted only for good cause shown.
    ``(c) Scope of Claims.--An amendment under this section may not 
enlarge the scope of the claims of the patent or introduce new matter.
``Sec. 330. Decision of the Board
    ``If the post-grant review proceeding is instituted and not 
dismissed under this chapter, the Patent Trial and Appeal Board shall 
issue a final written decision with respect to the patentability of any 
patent claim challenged and any new claim added under section 329.
``Sec. 331. Effect of decision
    ``(a) In General.--If the Patent Trial and Appeal Board issues a 
final decision under section 330 and 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 and incorporating in the patent by 
operation of the certificate any new claim determined to be patentable.
    ``(b) New Claims.--Any new claim held to be patentable and 
incorporated into a patent in a post-grant review proceeding shall have 
the same effect as that specified in section 252 for reissued patents 
on the right of any person who made, purchased, offered to sell, or 
used within the United States, or imported into the United States, 
anything patented by such new claim, or who made substantial 
preparations therefore, prior to issuance of a certificate under 
subsection (a) of this section.
``Sec. 332. Relationship to other pending proceedings
    ``Notwithstanding subsection 135(a), sections 251 and 252, and 
chapter 30, the Director may determine the manner in which any 
reexamination proceeding, reissue proceeding, interference proceeding 
(commenced before the effective date of the Patent Reform Act of 2007), 
derivation proceeding, or post-grant review proceeding, that is pending 
during a post-grant review proceeding, may proceed, including providing 
for stay, transfer, consolidation, or termination of any such 
proceeding.
``Sec. 333. Effect of decisions rendered in civil action on future 
              post-grant review 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--
            ``(1) that party to the civil action and the privies of 
        that party may not thereafter request a post-grant review 
        proceeding on that patent claim on the basis of any grounds, 
        under the provisions of section 311, which that party or the 
        privies of that party raised or had actual knowledge of; and
            ``(2) the Director may not thereafter maintain a post-grant 
        review proceeding previously requested by that party or the 
        privies of that party on the basis of such grounds.
``Sec. 334. Effect of final decision on future proceedings
    ``(a) In General.--If a final decision under section 330 is 
favorable to the patentability of any original or new claim of the 
patent challenged by the cancellation petitioner, the cancellation 
petitioner may not thereafter, based on any ground which the 
cancellation petitioner raised during the post-grant review 
proceeding--
            ``(1) request or pursue a reexamination of such claim under 
        chapter 31;
            ``(2) request or pursue a derivation proceeding with 
        respect to such claim;
            ``(3) request or pursue a post-grant review proceeding 
        under this chapter with respect to such claim; or
            ``(4) assert the invalidity of any such claim, in any civil 
        action arising in whole or in part under section 1338 of title 
        28.
    ``(b) Extension of Prohibition.--If the final decision is the 
result of a petition for cancellation filed on the basis of paragraph 
(2) of section 322, the prohibition under this section shall extend to 
any ground which the cancellation petitioner raised during the post-
grant review proceeding.
``Sec. 335. Appeal
    ``A party dissatisfied with the final determination of the Patent 
Trial and Appeal Board in a post-grant proceeding under this chapter 
may appeal the determination under sections 141 through 144. Any party 
to the post-grant proceeding shall have the right to be a party to the 
appeal.''.
    (f) Conforming Amendment.--The table of chapters for part III is 
amended by adding at the end the following:

``32. Post-Grant Review Proceedings.........................     321''.
    (g) Regulations and Effective Date.--
            (1) Regulations.--The Under Secretary of Commerce for 
        Intellectual Property and Director of the United States Patent 
        and Trademark Office (in this subsection referred to as the 
        ``Director'') shall, not later than the date that is 1 year 
        after the date of the enactment of this Act, issue regulations 
        to carry out chapter 32 of title 35, United States Code, as 
        added by subsection (e) of this section
            (2) Applicability.--The amendments made by subsection (e) 
        shall take effect on the date that is 1 year after the date of 
        the enactment of this Act and shall apply to patents issued 
        before, on, or after that date, except that, in the case of a 
        patent issued before that date, a petition for cancellation 
        under section 321 of title 35, United States Code, may be filed 
        only if a circumstance described in paragraph (2), (3), or (4) 
        of section 322 of title 35, United States Code, applies to the 
        petition.
            (3) Pending interferences.--The Director shall determine 
        the procedures under which interferences commenced before the 
        effective date under paragraph (2) are to proceed, including 
        whether any such interference is to be dismissed without 
        prejudice to the filing of a cancellation petition for a post-
        grant opposition proceeding under chapter 32 of title 35, 
        United States Code, or is to proceed as if this Act had not 
        been enacted. The Director shall include such procedures in 
        regulations issued under paragraph (1).

SEC. 7. DEFINITIONS; PATENT TRIAL AND APPEAL BOARD.

    (a) Definitions.--Section 100 (as amended by this Act) is further 
amended--
            (1) in subsection (e), by striking ``or inter partes 
        reexamination under section 311''; and
            (2) by adding at the end the following:
    ``(k) The term `cancellation petitioner' means the real party in 
interest requesting cancellation of any claim of a patent under chapter 
31 of this title and the privies of the real party in interest.''.
    (b) Patent Trial and Appeal Board.--Section 6 is amended to read as 
follows:
``Sec. 6. Patent Trial and Appeal Board
    ``(a) Establishment and Composition.--There shall be in the Office 
a Patent Trial and Appeal Board. The Director, the Deputy Director, the 
Commissioner for Patents, the Commissioner for Trademarks, and the 
administrative patent judges shall constitute the Patent Trial and 
Appeal Board. The administrative patent judges shall be persons of 
competent legal knowledge and scientific ability who are appointed by 
the Director. Any reference in any Federal law, Executive order, rule, 
regulation, or delegation of authority, or any document of or 
pertaining to the Board of Patent Appeals and Interferences is deemed 
to refer to the Patent Trial and Appeal Board.
    ``(b) Duties.--The Patent Trial and Appeal Board shall--
            ``(1) on written appeal of an applicant, review adverse 
        decisions of examiners upon application for patents;
            ``(2) on written appeal of a patent owner, review adverse 
        decisions of examiners upon patents in reexamination 
        proceedings under chapter 30; and
            ``(3) determine priority and patentability of invention in 
        derivation proceedings under subsection 135(a); and
            ``(4) conduct post-grant opposition proceedings under 
        chapter 32.
Each appeal and derivation proceeding shall be heard by at least 3 
members of the Patent Trial and Appeal Board, who shall be designated 
by the Director. Only the Patent Trial and Appeal Board may grant 
rehearings. The Director shall assign each post-grant review proceeding 
to a panel of 3 administrative patent judges. Once assigned, each such 
panel of administrative patent judges shall have the responsibilities 
under chapter 32 in connection with post-grant review proceedings.''.

SEC. 8. STUDY AND REPORT ON REEXAMINATION PROCEEDINGS.

    The Under Secretary of Commerce for Intellectual Property and 
Director of the Patent and Trademark Office shall, not later than 3 
years after the date of the enactment of this Act--
            (1) conduct a study of the effectiveness and efficiency of 
        the different forms of proceedings available under title 35, 
        United States Code, for the reexamination of patents; and
            (2) submit to the Committees on the Judiciary of the House 
        of Representatives and the Senate a report on the results of 
        the study, including any of the Director's suggestions for 
        amending the law, and any other recommendations the Director 
        has with respect to patent reexamination proceedings.

SEC. 9. SUBMISSIONS BY THIRD PARTIES AND OTHER QUALITY ENHANCEMENTS.

    (a) Publication.--Section 122(b)(2) is amended--
            (1) by striking subparagraph (B); and
            (2) in subparagraph (A)--
                    (A) by striking ``(A) An application'' and 
                inserting ``An application''; and
                    (B) by redesignating clauses (i) through (iv) as 
                subparagraphs (A) through (D), respectively.
    (b) Preissuance Submissions by Third Parties.--Section 122 is 
amended by adding at the end the following:
    ``(e) Preissuance Submissions by Third Parties.--
            ``(1) In general.--Any person may submit for consideration 
        and inclusion in the record of a patent application, any 
        patent, published patent application or other publication of 
        potential relevance to the examination of the application, if 
        such submission is made in writing before the earlier of--
                    ``(A) the date a notice of allowance under section 
                151 is mailed in the application for patent; or
                    ``(B) either--
                            ``(i) 6 months after the date on which the 
                        application for patent is published under 
                        section 122, or
                            ``(ii) the date of the first rejection 
                        under section 132 of any claim by the examiner 
                        during the examination of the application for 
                        patent,
                whichever occurs later.
            ``(2) Other requirements.--Any submission under paragraph 
        (1) shall--
                    ``(A) set forth a concise description of the 
                asserted relevance of each submitted document;
                    ``(B) be accompanied by such fee as the Director 
                may prescribe; and
                    ``(C) include a statement by the submitter 
                affirming that the submission was made in compliance 
                with this section.''.

SEC. 10. VENUE AND JURISDICTION.

    (a) Venue for Patent Cases.--Section 1400 of title 28, United 
States Code, is amended by striking subsection (b) and inserting the 
following:
    ``(b) Any civil action arising under any Act of Congress relating 
to patents, other than an action for declaratory judgment or an action 
seeking review of a decision of the Patent Trial and Appeal Board under 
chapter 13 of title 35, may be brought only--
            ``(1) in the judicial district where either party resides; 
        or
            ``(2) in the judicial district where the defendant has 
        committed acts of infringement and has a regular and 
        established place of business.
    ``(c) Notwithstanding section 1391(c) of this title, for purposes 
of venue under subsection (b), a corporation shall be deemed to reside 
in the judicial district in which the corporation has its principal 
place of business or in the State in which the corporation is 
incorporated.''.
    (b) Interlocutory Appeals.--Subsection (c)(2) of section 1292 of 
title 28, United States Code, is amended by adding at the end the 
following:
            ``(3) of an appeal from an interlocutory order or decree 
        determining construction of claims in a civil action for patent 
        infringement under section 271 of title 35.
Application for an appeal under paragraph (3) shall be made to the 
court within 10 days after entry of the order or decree, and 
proceedings in the district court under such paragraph shall be stayed 
during pendency of the appeal.''.

SEC. 11. REGULATORY AUTHORITY.

    Section 3(a) is amended by adding at the end the following:
            ``(5) Regulatory authority.--In addition to the authority 
        conferred by other provisions of this title, the Director may 
        promulgate such rules, regulations, and orders that the 
        Director determines appropriate to carry out the provisions of 
        this title or any other law applicable to the United States 
        Patent and Trademark Office or that the Director determines 
        necessary to govern the operation and organization of the 
        Office.''.

SEC. 12. TECHNICAL AMENDMENTS.

    (a) Joint Inventions.--Section 116 is amended--
                    (1) in the first paragraph, by striking ``When'' 
                and inserting ``(a) Joint Inventions.--When'';
                    (2) in the second paragraph, by striking ``If a 
                joint inventor'' and inserting ``(b) Omitted 
                Inventor.--If a joint inventor''; and
                    (3) in the third paragraph, by striking 
                ``Whenever'' and inserting ``(c) Correction of Errors 
                in Application.--Whenever''.
    (b) Filing of Application in Foreign Country.--Section 184 is 
amended--
            (1) in the first paragraph, by striking ``Except when'' and 
        inserting ``(a) Filing in Foreign Country.--Except when'';
            (2) in the second paragraph, by striking ``The term'' and 
        inserting ``(b) Application.--The term''; and
            (3) in the third paragraph, by striking ``The scope'' and 
        inserting ``(c) Subsequent Modifications, Amendments, and 
        Supplements.--The scope''.
    (c) Reissue of Defective Patents.--Section 251 is amended--
            (1) in the first paragraph, by striking ``Whenever'' and 
        inserting ``(a) In General.--Whenever'';
            (2) in the second paragraph, by striking ``The Director'' 
        and inserting ``(b) Multiple Reissued Patents.--The Director'';
            (3) in the third paragraph, by striking ``The provision'' 
        and inserting ``(c) Applicability of This Title.--The 
        provisions''; and
            (4) in the last paragraph, by striking ``No reissued 
        patent'' and inserting ``(d) Reissue Patent Enlarging Scope of 
        Claims.--No reissued patent''.
    (d) Effect of Reissue.--Section 253 is amended--
            (1) in the first paragraph, by striking ``Whenever'' and 
        inserting ``(a) In General.--Whenever''; and
            (2) in the second paragraph, by striking ``in like manner'' 
        and inserting ``(b) Additional Disclaimer or Dedication.--In 
        the manner set forth in subsection (a),''.
    (e) Correction of Named Inventor.--Section 256 is amended--
            (1) in the first paragraph, by striking ``Whenever'' and 
        inserting ``(a) Correction.--Whenever''; and
            (2) in the second paragraph, by striking ``The error'' and 
        inserting ``(b) Patent Valid if Error Corrected.--The error''.
    (f) Presumption of Validity.--Section 282 is amended--
            (1) in the first undesignated paragraph, by striking ``A 
        patent'' and inserting ``(a) In General.--A patent'';
            (2) in the second undesignated paragraph, by striking ``The 
        following'' and inserting ``(b) Defenses.--The following''; and
            (3) in the third undesignated paragraph, by striking ``In 
        actions'' and inserting ``(c) Notice of Actions; Actions During 
        Extension of Patent Term.--In actions''.

SEC. 13. EFFECTIVE DATE; RULE OF CONSTRUCTION.

    (a) Effective Date.--Except as otherwise provided in this Act, the 
provisions of this Act shall take effect 12 months after the date of 
the enactment of this Act and shall apply to any patent issued on or 
after that effective date.
    (b) Continuity of Intent Under the Create Act.--The enactment of 
section 102(b)(3) of title 35, United States Code, under section (3)(b) 
of this Act is done with the same intent to promote joint research 
activities that was expressed, including in the legislative history, 
through the enactment of the Cooperative Research and Technology 
Enhancement Act of 2004 (Public Law 108-453; the ``CREATE Act''), the 
amendments of which are stricken by section 3(c) of this Act. The 
United States Patent and Trademark Office shall administer section 
102(b)(3) of title 35, United States Code, in a manner consistent with 
the legislative history of the CREATE Act that was relevant to its 
administration by the Patent and Trademark Office.
                                 <all>