[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1249 Enrolled Bill (ENR)]
H.R.1249
One Hundred Twelfth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the fifth day of January, two thousand and eleven
An Act
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 ``Leahy-Smith
America Invents Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. First inventor to file.
Sec. 4. Inventor's oath or declaration.
Sec. 5. Defense to infringement based on prior commercial use.
Sec. 6. Post-grant review proceedings.
Sec. 7. Patent Trial and Appeal Board.
Sec. 8. Preissuance submissions by third parties.
Sec. 9. Venue.
Sec. 10. Fee setting authority.
Sec. 11. Fees for patent services.
Sec. 12. Supplemental examination.
Sec. 13. Funding agreements.
Sec. 14. Tax strategies deemed within the prior art.
Sec. 15. Best mode requirement.
Sec. 16. Marking.
Sec. 17. Advice of counsel.
Sec. 18. Transitional program for covered business method patents.
Sec. 19. Jurisdiction and procedural matters.
Sec. 20. Technical amendments.
Sec. 21. Travel expenses and payment of administrative judges.
Sec. 22. Patent and Trademark Office funding.
Sec. 23. Satellite offices.
Sec. 24. Designation of Detroit satellite office.
Sec. 25. Priority examination for important technologies.
Sec. 26. Study on implementation.
Sec. 27. Study on genetic testing.
Sec. 28. Patent Ombudsman Program for small business concerns.
Sec. 29. Establishment of methods for studying the diversity of
applicants.
Sec. 30. Sense of Congress.
Sec. 31. USPTO study on international patent protections for small
businesses.
Sec. 32. Pro bono program.
Sec. 33. Limitation on issuance of patents.
Sec. 34. Study of patent litigation.
Sec. 35. Effective date.
Sec. 36. Budgetary effects.
Sec. 37. Calculation of 60-day period for application of patent term
extension.
SEC. 2. DEFINITIONS.
In this Act:
(1) Director.--The term ``Director'' means the Under Secretary
of Commerce for Intellectual Property and Director of the United
States Patent and Trademark Office.
(2) Office.--The term ``Office'' means the United States Patent
and Trademark Office.
(3) Patent public advisory committee.--The term ``Patent Public
Advisory Committee'' means the Patent Public Advisory Committee
established under section 5(a) of title 35, United States Code.
(4) Trademark act of 1946.--The term ``Trademark Act of 1946''
means the Act entitled ``An Act to provide for the registration and
protection of trademarks used in commerce, to carry out the
provisions of certain international conventions, and for other
purposes'', approved July 5, 1946 (15 U.S.C. 1051 et seq.)
(commonly referred to as the ``Trademark Act of 1946'' or the
``Lanham Act'').
(5) Trademark public advisory committee.--The term ``Trademark
Public Advisory Committee'' means the Trademark Public Advisory
Committee established under section 5(a) of title 35, United States
Code.
SEC. 3. FIRST INVENTOR TO FILE.
(a) Definitions.--Section 100 of title 35, United States Code, is
amended--
(1) in subsection (e), by striking ``or inter partes
reexamination under section 311''; and
(2) 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 term `joint research agreement' means a written contract,
grant, or cooperative agreement entered into by 2 or more persons or
entities for the performance of experimental, developmental, or
research work in the field of the claimed invention.
``(i)(1) The term `effective filing date' for a claimed invention
in a patent or application for patent means--
``(A) if subparagraph (B) does not apply, the actual filing
date of the patent or the application for the patent containing a
claim to the invention; or
``(B) the filing date of the earliest application for which the
patent or application is entitled, as to such invention, to a right
of priority under section 119, 365(a), or 365(b) or to the benefit
of an earlier filing date under section 120, 121, or 365(c).
``(2) The effective filing date for a claimed invention in an
application for reissue or reissued patent shall be determined by
deeming the claim to the invention to have been contained in the patent
for which reissue was sought.
``(j) The term `claimed invention' means the subject matter defined
by a claim in a patent or an application for a patent.''.
(b) Conditions for Patentability.--
(1) In general.--Section 102 of title 35, United States Code,
is amended to read as follows:
``Sec. 102. Conditions for patentability; novelty
``(a) Novelty; Prior Art.--A person shall be entitled to a patent
unless--
``(1) the claimed invention was patented, described in a
printed publication, or in public use, on sale, or otherwise
available to the public before the effective filing date of the
claimed invention; 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) Disclosures made 1 year or less before the effective
filing date of the claimed invention.--A disclosure made 1 year or
less before the effective filing date of a claimed invention shall
not be prior art to the claimed invention under subsection (a)(1)
if--
``(A) the disclosure was made by the inventor or joint
inventor or by another who obtained the subject matter
disclosed directly or indirectly from the inventor or a joint
inventor; or
``(B) the subject matter disclosed had, before such
disclosure, been publicly disclosed by the inventor or a joint
inventor or another who obtained the subject matter disclosed
directly or indirectly from the inventor or a joint inventor.
``(2) Disclosures appearing in applications and patents.--A
disclosure shall not be prior art to a claimed invention under
subsection (a)(2) if--
``(A) the subject matter disclosed was obtained directly or
indirectly from the inventor or a joint inventor;
``(B) the subject matter disclosed had, before such subject
matter was effectively filed under subsection (a)(2), been
publicly disclosed by the inventor or a joint inventor or
another who obtained the subject matter disclosed directly or
indirectly from the inventor or a joint inventor; or
``(C) the subject matter disclosed 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.
``(c) Common Ownership Under Joint Research Agreements.--Subject
matter disclosed 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 subsection (b)(2)(C) if--
``(1) the subject matter disclosed was developed and the
claimed invention was made by, or on behalf of, 1 or more parties
to a joint research agreement that was in effect on or before the
effective filing date of the claimed invention;
``(2) the claimed invention was made as a result of activities
undertaken within the scope of the joint research agreement; and
``(3) the application for patent for the claimed invention
discloses or is amended to disclose the names of the parties to the
joint research agreement.
``(d) Patents and Published Applications Effective as Prior Art.--
For purposes of determining whether a patent or application for patent
is prior art to a claimed invention under subsection (a)(2), such
patent or application shall be considered to have been effectively
filed, with respect to any subject matter described in the patent or
application--
``(1) if paragraph (2) does not apply, as of the actual filing
date of the patent or the application for patent; or
``(2) 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 1 or more prior filed applications for
patent, as of the filing date of the earliest such application that
describes the subject matter.''.
(2) Continuity of intent under the create act.--The enactment
of section 102(c) of title 35, United States Code, under paragraph
(1) of this subsection 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
subsection (c) of this section. The United States Patent and
Trademark Office shall administer section 102(c) 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 United States Patent and Trademark Office.
(3) Conforming amendment.--The item relating to section 102 in
the table of sections for chapter 10 of title 35, United States
Code, is amended to read as follows:
``102. Conditions for patentability; novelty.''.
(c) Conditions for Patentability; Nonobvious Subject Matter.--
Section 103 of title 35, United States Code, is amended to read as
follows:
``Sec. 103. Conditions for patentability; non-obvious subject matter
``A patent for a claimed invention may not be obtained,
notwithstanding that 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
of title 35, United States Code, and the item relating to that section
in the table of sections for chapter 10 of title 35, United States
Code, are repealed.
(e) Repeal of Statutory Invention Registration.--
(1) In general.--Section 157 of title 35, United States Code,
and the item relating to that section in the table of sections for
chapter 14 of title 35, United States Code, are repealed.
(2) Removal of cross references.--Section 111(b)(8) of title
35, United States Code, is amended by striking ``sections 115, 131,
135, and 157'' and inserting ``sections 131 and 135''.
(3) Effective date.--The amendments made by this subsection
shall take effect upon the expiration of the 18-month period
beginning on the date of the enactment of this Act, and shall apply
to any request for a statutory invention registration filed on or
after that effective date.
(f) Earlier Filing Date for Inventor and Joint Inventor.--Section
120 of title 35, United States Code, 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 of title 35, United States
Code, is amended by striking ``and the time specified in section
102(d)''.
(2) Limitation on remedies.--Section 287(c)(4) of title 35,
United States Code, 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 of title 35, United States Code, is amended by
striking ``except as otherwise provided in section 102(e) of this
title''.
(4) Publication of international application: effect.--Section
374 of title 35, United States Code, 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) of title 35, United States Code,
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) of title 35,
United States Code, 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) of
title 35, United States Code, 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(b) would end before the end of that 2-
year period''; and
(ii) by striking ``prior to the end of the statutory''
and inserting ``before the end of 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(b)''.
(h) Derived Patents.--
(1) In general.--Section 291 of title 35, United States Code,
is amended to read as follows:
``Sec. 291. Derived Patents
``(a) In General.--The owner of a patent may have relief by civil
action against the owner of another patent that claims the same
invention and has an earlier effective filing date, if the invention
claimed in such other patent was derived from the inventor of the
invention claimed in the patent owned by the person seeking relief
under this section.
``(b) Filing Limitation.--An action under this section may be filed
only before the end of the 1-year period beginning on the date of the
issuance of the first patent containing a claim to the allegedly
derived invention and naming an individual alleged to have derived such
invention as the inventor or joint inventor.''.
(2) Conforming amendment.--The item relating to section 291 in
the table of sections for chapter 29 of title 35, United States
Code, is amended to read as follows:
``291. Derived patents.''.
(i) Derivation Proceedings.--Section 135 of title 35, United States
Code, is amended to read as follows:
``Sec. 135. Derivation proceedings
``(a) Institution of Proceeding.--An applicant for patent may file
a petition to institute a derivation proceeding in the Office. The
petition shall set forth with particularity the basis for finding that
an inventor named in an earlier application derived the claimed
invention from an inventor named in the petitioner's application and,
without authorization, the earlier application claiming such invention
was filed. Any such petition may be filed only within the 1-year period
beginning on the date of the first publication of a claim to an
invention that is the same or substantially the same as the earlier
application's claim to the invention, shall be made under oath, and
shall be supported by substantial evidence. Whenever the Director
determines that a petition filed under this subsection demonstrates
that the standards for instituting a derivation proceeding are met, the
Director may institute a derivation proceeding. The determination by
the Director whether to institute a derivation proceeding shall be
final and nonappealable.
``(b) Determination by Patent Trial and Appeal Board.--In a
derivation proceeding instituted under subsection (a), the Patent Trial
and Appeal Board shall determine whether an inventor named in the
earlier application derived the claimed invention from an inventor
named in the petitioner's application and, without authorization, the
earlier application claiming such invention was filed. In appropriate
circumstances, the Patent Trial and Appeal Board may correct the naming
of the inventor in any application or patent at issue. The Director
shall prescribe regulations setting forth standards for the conduct of
derivation proceedings, including requiring parties to provide
sufficient evidence to prove and rebut a claim of derivation.
``(c) Deferral of Decision.--The Patent Trial and Appeal Board may
defer action on a petition for a derivation proceeding until the
expiration of the 3-month period beginning on the date on which the
Director issues a patent that includes the claimed invention that is
the subject of the petition. The Patent Trial and Appeal Board also may
defer action on a petition for a derivation proceeding, or stay the
proceeding after it has been instituted, until the termination of a
proceeding under chapter 30, 31, or 32 involving the patent of the
earlier applicant.
``(d) Effect of Final Decision.--The final decision of the Patent
Trial and Appeal Board, if adverse to claims in an application for
patent, shall constitute the final refusal by the Office on those
claims. The final decision of the Patent Trial and Appeal Board, if
adverse to claims in a patent, shall, if no appeal or other review of
the decision has been or can be taken or had, constitute cancellation
of those claims, and notice of such cancellation shall be endorsed on
copies of the patent distributed after such cancellation.
``(e) Settlement.--Parties to a proceeding instituted under
subsection (a) may terminate the proceeding by filing a written
statement reflecting the agreement of the parties as to the correct
inventors of the claimed invention in dispute. Unless the Patent Trial
and Appeal Board finds the agreement to be inconsistent with the
evidence of record, if any, it shall take action consistent with the
agreement. Any written settlement or understanding of the parties shall
be filed with the Director. At the request of a party to the
proceeding, the agreement or understanding shall be treated as business
confidential information, shall be kept separate from the file of the
involved patents or applications, and shall be made available only to
Government agencies on written request, or to any person on a showing
of good cause.
``(f) Arbitration.--Parties to a proceeding instituted under
subsection (a) may, within such time as may be specified by the
Director by regulation, determine such contest or any aspect thereof by
arbitration. Such arbitration shall be governed by the provisions of
title 9, to the extent such title is not inconsistent with this
section. The parties shall give notice of any arbitration award to the
Director, and such award shall, as between the parties to the
arbitration, be dispositive of the issues to which it relates. The
arbitration award shall be unenforceable until such notice is given.
Nothing in this subsection shall preclude the Director from determining
the patentability of the claimed inventions involved in the
proceeding.''.
(j) Elimination of References to Interferences.--(1) Sections 134,
145, 146, 154, and 305 of title 35, United States Code, are each
amended by striking ``Board of Patent Appeals and Interferences'' each
place it appears and inserting ``Patent Trial and Appeal Board''.
(2)(A) Section 146 of title 35, United States Code, is amended--
(i) by striking ``an interference'' and inserting ``a
derivation proceeding''; and
(ii) by striking ``the interference'' and inserting ``the
derivation proceeding''.
(B) The subparagraph heading for section 154(b)(1)(C) of title
35, United States Code, is amended to read as follows:
``(C) Guarantee of adjustments for delays due to
derivation proceedings, secrecy orders, and appeals.--''.
(3) The section heading for section 134 of title 35, United States
Code, is amended to read as follows:
``Sec. 134. Appeal to the Patent Trial and Appeal Board''.
(4) The section heading for section 146 of title 35, United States
Code, is amended to read as follows:
``Sec. 146. Civil action in case of derivation proceeding''.
(5) The items relating to sections 134 and 135 in the table of
sections for chapter 12 of title 35, United States Code, are amended to
read as follows:
``134. Appeal to the Patent Trial and Appeal Board.
``135. Derivation proceedings.''.
(6) The item relating to section 146 in the table of sections for
chapter 13 of title 35, United States Code, is amended to read as
follows:
``146. Civil action in case of derivation proceeding.''.
(k) Statute of Limitations.--
(1) In general.--Section 32 of title 35, United States Code, is
amended by inserting between the third and fourth sentences the
following: ``A proceeding under this section shall be commenced not
later than the earlier of either the date that is 10 years after
the date on which the misconduct forming the basis for the
proceeding occurred, or 1 year after the date on which the
misconduct forming the basis for the proceeding is made known to an
officer or employee of the Office as prescribed in the regulations
established under section 2(b)(2)(D).''.
(2) Report to congress.--The Director shall provide on a
biennial basis to the Judiciary Committees of the Senate and House
of Representatives a report providing a short description of
incidents made known to an officer or employee of the Office as
prescribed in the regulations established under section 2(b)(2)(D)
of title 35, United States Code, that reflect substantial evidence
of misconduct before the Office but for which the Office was barred
from commencing a proceeding under section 32 of title 35, United
States Code, by the time limitation established by the fourth
sentence of that section.
(3) Effective date.--The amendment made by paragraph (1) shall
apply in any case in which the time period for instituting a
proceeding under section 32 of title 35, United States Code, had
not lapsed before the date of the enactment of this Act.
(l) Small Business Study.--
(1) Definitions.--In this subsection--
(A) the term ``Chief Counsel'' means the Chief Counsel for
Advocacy of the Small Business Administration;
(B) the term ``General Counsel'' means the General Counsel
of the United States Patent and Trademark Office; and
(C) the term ``small business concern'' has the meaning
given that term under section 3 of the Small Business Act (15
U.S.C. 632).
(2) Study.--
(A) In general.--The Chief Counsel, in consultation with
the General Counsel, shall conduct a study of the effects of
eliminating the use of dates of invention in determining
whether an applicant is entitled to a patent under title 35,
United States Code.
(B) Areas of study.--The study conducted under subparagraph
(A) shall include examination of the effects of eliminating the
use of invention dates, including examining--
(i) how the change would affect the ability of small
business concerns to obtain patents and their costs of
obtaining patents;
(ii) whether the change would create, mitigate, or
exacerbate any disadvantages for applicants for patents
that are small business concerns relative to applicants for
patents that are not small business concerns, and whether
the change would create any advantages for applicants for
patents that are small business concerns relative to
applicants for patents that are not small business
concerns;
(iii) the cost savings and other potential benefits to
small business concerns of the change; and
(iv) the feasibility and costs and benefits to small
business concerns of alternative means of determining
whether an applicant is entitled to a patent under title
35, United States Code.
(3) Report.--Not later than the date that is 1 year after the
date of the enactment of this Act, the Chief Counsel shall submit
to the Committee on Small Business and Entrepreneurship and the
Committee on the Judiciary of the Senate and the Committee on Small
Business and the Committee on the Judiciary of the House of
Representatives a report on the results of the study under
paragraph (2).
(m) Report on Prior User Rights.--
(1) In general.--Not later than the end of the 4-month period
beginning on the date of the enactment of this Act, the Director
shall report, to the Committee on the Judiciary of the Senate and
the Committee on the Judiciary of the House of Representatives, the
findings and recommendations of the Director on the operation of
prior user rights in selected countries in the industrialized
world. The report shall include the following:
(A) A comparison between patent laws of the United States
and the laws of other industrialized countries, including
members of the European Union and Japan, Canada, and Australia.
(B) An analysis of the effect of prior user rights on
innovation rates in the selected countries.
(C) An analysis of the correlation, if any, between prior
user rights and start-up enterprises and the ability to attract
venture capital to start new companies.
(D) An analysis of the effect of prior user rights, if any,
on small businesses, universities, and individual inventors.
(E) An analysis of legal and constitutional issues, if any,
that arise from placing trade secret law in patent law.
(F) An analysis of whether the change to a first-to-file
patent system creates a particular need for prior user rights.
(2) Consultation with other agencies.--In preparing the report
required under paragraph (1), the Director shall consult with the
United States Trade Representative, the Secretary of State, and the
Attorney General.
(n) Effective Date.--
(1) In general.--Except as otherwise provided in this section,
the amendments made by this section shall take effect upon the
expiration of the 18-month period beginning on the date of the
enactment of this Act, and shall apply to any application for
patent, and to any patent issuing thereon, that contains or
contained at any time--
(A) a claim to a claimed invention that has an effective
filing date as defined in section 100(i) of title 35, United
States Code, that is on or after the effective date described
in this paragraph; or
(B) a specific reference under section 120, 121, or 365(c)
of title 35, United States Code, to any patent or application
that contains or contained at any time such a claim.
(2) Interfering patents.--The provisions of sections 102(g),
135, and 291 of title 35, United States Code, as in effect on the
day before the effective date set forth in paragraph (1) of this
subsection, shall apply to each claim of an application for patent,
and any patent issued thereon, for which the amendments made by
this section also apply, if such application or patent contains or
contained at any time--
(A) a claim to an invention having an effective filing date
as defined in section 100(i) of title 35, United States Code,
that occurs before the effective date set forth in paragraph
(1) of this subsection; or
(B) a specific reference under section 120, 121, or 365(c)
of title 35, United States Code, to any patent or application
that contains or contained at any time such a claim.
(o) Sense of Congress.--It is the sense of the Congress that
converting the United States patent system from ``first to invent'' to
a system of ``first inventor to file'' will promote the progress of
science and the useful arts by securing for limited times to inventors
the exclusive rights to their discoveries and provide inventors with
greater certainty regarding the scope of protection provided by the
grant of exclusive rights to their discoveries.
(p) Sense of Congress.--It is the sense of the Congress that
converting the United States patent system from ``first to invent'' to
a system of ``first inventor to file'' will improve the United States
patent system and promote harmonization of the United States patent
system with the patent systems commonly used in nearly all other
countries throughout the world with whom the United States conducts
trade and thereby promote greater international uniformity and
certainty in the procedures used for securing the exclusive rights of
inventors to their discoveries.
SEC. 4. INVENTOR'S OATH OR DECLARATION.
(a) Inventor's Oath or Declaration.--
(1) In general.--Section 115 of title 35, United States Code,
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) or commences
the national stage under section 371 shall include, or be amended to
include, the name of the inventor for any invention claimed in the
application. Except as otherwise provided in this section, each
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.--
``(1) Exception.--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 who claims the benefit under section 120, 121, or 365(c) of the
filing of an earlier-filed application, if--
``(A) 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;
``(B) a substitute statement meeting the requirements of
subsection (d) was filed in connection with the earlier filed
application with respect to the individual; or
``(C) 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.
``(2) Copies of oaths, declarations, statements, or
assignments.--Notwithstanding paragraph (1), the Director may
require that a copy of the executed oath or declaration, the
substitute statement, or the assignment filed in connection with
the earlier-filed application be included in the later-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 meeting the requirements of
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.--A patent shall not 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).
``(i) Acknowledgment of Penalties.--Any declaration or statement
filed pursuant to this section shall contain an acknowledgment that any
willful false statement made in such declaration or statement is
punishable under section 1001 of title 18 by fine or imprisonment of
not more than 5 years, or both.''.
(2) Relationship to divisional applications.--Section 121 of
title 35, United States Code, is amended by striking ``If a
divisional application'' and all that follows through
``inventor.''.
(3) Requirements for nonprovisional applications.--Section
111(a) of title 35, United States Code, is amended--
(A) in paragraph (2)(C), by striking ``by the applicant''
and inserting ``or declaration'';
(B) in the heading for paragraph (3), by inserting ``or
declaration'' after ``and oath''; and
(C) by inserting ``or declaration'' after ``and oath'' each
place it appears.
(4) Conforming amendment.--The item relating to section 115 in
the table of sections for chapter 11 of title 35, United States
Code, is amended to read as follows:
``115. Inventor's oath or declaration.''.
(b) Filing by Other Than Inventor.--
(1) In general.--Section 118 of title 35, United States Code,
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.''.
(2) Conforming amendment.--Section 251 of title 35, United
States Code, is amended in the third undesignated paragraph by
inserting ``or the application for the original patent was filed by
the assignee of the entire interest'' after ``claims of the
original patent''.
(c) Specification.--Section 112 of title 35, United States Code, is
amended--
(1) in the first undesignated 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'';
(2) in the second undesignated paragraph--
(A) by striking ``The specification'' and inserting ``(b)
Conclusion.--The specification''; and
(B) by striking ``applicant regards as his invention'' and
inserting ``inventor or a joint inventor regards as the
invention'';
(3) in the third undesignated paragraph, by striking ``A
claim'' and inserting ``(c) Form.--A claim'';
(4) in the fourth undesignated paragraph, by striking ``Subject
to the following paragraph,'' and inserting ``(d) Reference in
Dependent Forms.--Subject to subsection (e),'';
(5) in the fifth undesignated paragraph, by striking ``A
claim'' and inserting ``(e) Reference in Multiple Dependent Form.--
A claim''; and
(6) in the last undesignated paragraph, by striking ``An
element'' and inserting ``(f) Element in Claim for a Combination.--
An element''.
(d) Conforming Amendments.--
(1) Sections 111(b)(1)(A) of title 35, United States Code, is
amended by striking ``the first paragraph of section 112 of this
title'' and inserting ``section 112(a)''.
(2) Section 111(b)(2) of title 35, United States Code, is
amended by striking ``the second through fifth paragraphs of
section 112,'' and inserting ``subsections (b) through (e) of
section 112,''.
(e) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to any patent application
that is filed on or after that effective date.
SEC. 5. DEFENSE TO INFRINGEMENT BASED ON PRIOR COMMERCIAL USE.
(a) In General.--Section 273 of title 35, United States Code, is
amended to read as follows:
``Sec. 273. Defense to infringement based on prior commercial use
``(a) In General.--A person shall be entitled to a defense under
section 282(b) with respect to subject matter consisting of a process,
or consisting of a machine, manufacture, or composition of matter used
in a manufacturing or other commercial process, that would otherwise
infringe a claimed invention being asserted against the person if--
``(1) such person, acting in good faith, commercially used the
subject matter in the United States, either in connection with an
internal commercial use or an actual arm's length sale or other
arm's length commercial transfer of a useful end result of such
commercial use; and
``(2) such commercial use occurred at least 1 year before the
earlier of either--
``(A) the effective filing date of the claimed invention;
or
``(B) the date on which the claimed invention was disclosed
to the public in a manner that qualified for the exception from
prior art under section 102(b).
``(b) Burden of Proof.--A person asserting a defense under this
section shall have the burden of establishing the defense by clear and
convincing evidence.
``(c) Additional Commercial Uses.--
``(1) Premarketing regulatory review.--Subject matter for which
commercial marketing or use is subject to a premarketing regulatory
review period during which the safety or efficacy of the subject
matter is established, including any period specified in section
156(g), shall be deemed to be commercially used for purposes of
subsection (a)(1) during such regulatory review period.
``(2) Nonprofit laboratory use.--A use of subject matter by a
nonprofit research laboratory or other nonprofit entity, such as a
university or hospital, for which the public is the intended
beneficiary, shall be deemed to be a commercial use for purposes of
subsection (a)(1), except that a defense under this section may be
asserted pursuant to this paragraph only for continued and
noncommercial use by and in the laboratory or other nonprofit
entity.
``(d) Exhaustion of Rights.--Notwithstanding subsection (e)(1), the
sale or other disposition of a useful end result by a person entitled
to assert a defense under this section in connection with a patent with
respect to that useful end result shall exhaust the patent owner's
rights under the patent to the extent that such rights would have been
exhausted had such sale or other disposition been made by the patent
owner.
``(e) Limitations and Exceptions.--
``(1) Personal defense.--
``(A) In general.--A defense under this section may be
asserted only by the person who performed or directed the
performance of the commercial use described in subsection (a),
or by an entity that controls, is controlled by, or is under
common control with such person.
``(B) Transfer of right.--Except for any transfer to the
patent owner, the right to assert a defense under this section
shall not be licensed or assigned or transferred to another
person except as an ancillary and subordinate part of a good-
faith assignment or transfer for other reasons of the entire
enterprise or line of business to which the defense relates.
``(C) Restriction on sites.--A defense under this section,
when acquired by a person as part of an assignment or transfer
described in subparagraph (B), may only be asserted for uses at
sites where the subject matter that would otherwise infringe a
claimed invention is in use before the later of the effective
filing date of the claimed invention or the date of the
assignment or transfer of such enterprise or line of business.
``(2) Derivation.--A person may not assert a 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.
``(3) 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 specific subject matter
for which it has been established that a commercial use that
qualifies under this section occurred, 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.
``(4) Abandonment of use.--A person who has abandoned
commercial use (that qualifies under this section) of subject
matter may not rely on activities performed before the date of such
abandonment in establishing a defense under this section with
respect to actions taken on or after the date of such abandonment.
``(5) University exception.--
``(A) In general.--A person commercially using subject
matter to which subsection (a) applies may not assert a defense
under this section if the claimed invention with respect to
which the defense is asserted was, at the time the invention
was made, owned or subject to an obligation of assignment to
either an institution of higher education (as defined in
section 101(a) of the Higher Education Act of 1965 (20 U.S.C.
1001(a)), or a technology transfer organization whose primary
purpose is to facilitate the commercialization of technologies
developed by one or more such institutions of higher education.
``(B) Exception.--Subparagraph (A) shall not apply if any
of the activities required to reduce to practice the subject
matter of the claimed invention could not have been undertaken
using funds provided by the Federal Government.
``(f) Unreasonable 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 fees under section 285.
``(g) Invalidity.--A patent shall not be deemed to be invalid under
section 102 or 103 solely because a defense is raised or established
under this section.''.
(b) Conforming Amendment.--The item relating to section 273 in the
table of sections for chapter 28 of title 35, United States Code, is
amended to read as follows:
``273. Defense to infringement based on prior commercial use.''.
(c) Effective Date.--The amendments made by this section shall
apply to any patent issued on or after the date of the enactment of
this Act.
SEC. 6. POST-GRANT REVIEW PROCEEDINGS.
(a) Inter Partes Review.--Chapter 31 of title 35, United States
Code, is amended to read as follows:
``CHAPTER 31--INTER PARTES REVIEW
``Sec.
``311. Inter partes review.
``312. Petitions.
``313. Preliminary response to petition.
``314. Institution of inter partes review.
``315. Relation to other proceedings or actions.
``316. Conduct of inter partes review.
``317. Settlement.
``318. Decision of the Board.
``319. Appeal.
``Sec. 311. Inter partes review
``(a) In General.--Subject to the provisions of this chapter, a
person who is not the owner of a patent may file with the Office a
petition to institute an inter partes review of the patent. The
Director shall establish, by regulation, fees to be paid by the person
requesting the review, in such amounts as the Director determines to be
reasonable, considering the aggregate costs of the review.
``(b) Scope.--A petitioner in an inter partes review may request to
cancel as unpatentable 1 or more claims of a patent only on a ground
that could be raised under section 102 or 103 and only on the basis of
prior art consisting of patents or printed publications.
``(c) Filing Deadline.--A petition for inter partes review shall be
filed after the later of either--
``(1) the date that is 9 months after the grant of a patent or
issuance of a reissue of a patent; or
``(2) if a post-grant review is instituted under chapter 32,
the date of the termination of such post-grant review.
``Sec. 312. Petitions
``(a) Requirements of Petition.--A petition filed under section 311
may be considered only if--
``(1) the petition is accompanied by payment of the fee
established by the Director under section 311;
``(2) the petition identifies all real parties in interest;
``(3) the petition identifies, in writing and with
particularity, each claim challenged, the grounds on which the
challenge to each claim is based, and the evidence that supports
the grounds for the challenge to each claim, including--
``(A) copies of patents and printed publications that the
petitioner relies upon in support of the petition; and
``(B) affidavits or declarations of supporting evidence and
opinions, if the petitioner relies on expert opinions;
``(4) the petition provides such other information as the
Director may require by regulation; and
``(5) the petitioner provides copies of any of the documents
required under paragraphs (2), (3), and (4) to the patent owner or,
if applicable, the designated representative of the patent owner.
``(b) Public Availability.--As soon as practicable after the
receipt of a petition under section 311, the Director shall make the
petition available to the public.
``Sec. 313. Preliminary response to petition
``If an inter partes review petition is filed under section 311,
the patent owner shall have the right to file a preliminary response to
the petition, within a time period set by the Director, that sets forth
reasons why no inter partes review should be instituted based upon the
failure of the petition to meet any requirement of this chapter.
``Sec. 314. Institution of inter partes review
``(a) Threshold.--The Director may not authorize an inter partes
review to be instituted unless the Director determines that the
information presented in the petition filed under section 311 and any
response filed under section 313 shows that there is a reasonable
likelihood that the petitioner would prevail with respect to at least 1
of the claims challenged in the petition.
``(b) Timing.--The Director shall determine whether to institute an
inter partes review under this chapter pursuant to a petition filed
under section 311 within 3 months after--
``(1) receiving a preliminary response to the petition under
section 313; or
``(2) if no such preliminary response is filed, the last date
on which such response may be filed.
``(c) Notice.--The Director shall notify the petitioner and patent
owner, in writing, of the Director's determination under subsection
(a), and shall make such notice available to the public as soon as is
practicable. Such notice shall include the date on which the review
shall commence.
``(d) No Appeal.--The determination by the Director whether to
institute an inter partes review under this section shall be final and
nonappealable.
``Sec. 315. Relation to other proceedings or actions
``(a) Infringer's Civil Action.--
``(1) Inter partes review barred by civil action.--An inter
partes review may not be instituted if, before the date on which
the petition for such a review is filed, the petitioner or real
party in interest filed a civil action challenging the validity of
a claim of the patent.
``(2) Stay of civil action.--If the petitioner or real party in
interest files a civil action challenging the validity of a claim
of the patent on or after the date on which the petitioner files a
petition for inter partes review of the patent, that civil action
shall be automatically stayed until either--
``(A) the patent owner moves the court to lift the stay;
``(B) the patent owner files a civil action or counterclaim
alleging that the petitioner or real party in interest has
infringed the patent; or
``(C) the petitioner or real party in interest moves the
court to dismiss the civil action.
``(3) Treatment of counterclaim.--A counterclaim challenging
the validity of a claim of a patent does not constitute a civil
action challenging the validity of a claim of a patent for purposes
of this subsection.
``(b) Patent Owner's Action.--An inter partes review may not be
instituted if the petition requesting the proceeding is filed more than
1 year after the date on which the petitioner, real party in interest,
or privy of the petitioner is served with a complaint alleging
infringement of the patent. The time limitation set forth in the
preceding sentence shall not apply to a request for joinder under
subsection (c).
``(c) Joinder.--If the Director institutes an inter partes review,
the Director, in his or her discretion, may join as a party to that
inter partes review any person who properly files a petition under
section 311 that the Director, after receiving a preliminary response
under section 313 or the expiration of the time for filing such a
response, determines warrants the institution of an inter partes review
under section 314.
``(d) Multiple Proceedings.--Notwithstanding sections 135(a), 251,
and 252, and chapter 30, during the pendency of an inter partes review,
if another proceeding or matter involving the patent is before the
Office, the Director may determine the manner in which the inter partes
review or other proceeding or matter may proceed, including providing
for stay, transfer, consolidation, or termination of any such matter or
proceeding.
``(e) Estoppel.--
``(1) Proceedings before the office.--The petitioner in an
inter partes review of a claim in a patent under this chapter that
results in a final written decision under section 318(a), or the
real party in interest or privy of the petitioner, may not request
or maintain a proceeding before the Office with respect to that
claim on any ground that the petitioner raised or reasonably could
have raised during that inter partes review.
``(2) Civil actions and other proceedings.--The petitioner in
an inter partes review of a claim in a patent under this chapter
that results in a final written decision under section 318(a), or
the real party in interest or privy of the petitioner, may not
assert either in a civil action arising in whole or in part under
section 1338 of title 28 or in a proceeding before the
International Trade Commission under section 337 of the Tariff Act
of 1930 that the claim is invalid on any ground that the petitioner
raised or reasonably could have raised during that inter partes
review.
``Sec. 316. Conduct of inter partes review
``(a) Regulations.--The Director shall prescribe regulations--
``(1) providing that the file of any proceeding under this
chapter shall be made available to the public, except that any
petition or document filed with the intent that it be sealed shall,
if accompanied by a motion to seal, be treated as sealed pending
the outcome of the ruling on the motion;
``(2) setting forth the standards for the showing of sufficient
grounds to institute a review under section 314(a);
``(3) establishing procedures for the submission of
supplemental information after the petition is filed;
``(4) establishing and governing inter partes review under this
chapter and the relationship of such review to other proceedings
under this title;
``(5) setting forth standards and procedures for discovery of
relevant evidence, including that such discovery shall be limited
to--
``(A) the deposition of witnesses submitting affidavits or
declarations; and
``(B) what is otherwise necessary in the interest of
justice;
``(6) prescribing 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 an unnecessary increase in
the cost of the proceeding;
``(7) providing for protective orders governing the exchange
and submission of confidential information;
``(8) providing for the filing by the patent owner of a
response to the petition under section 313 after an inter partes
review has been instituted, and requiring that the patent owner
file with such response, through affidavits or declarations, any
additional factual evidence and expert opinions on which the patent
owner relies in support of the response;
``(9) setting forth standards and procedures for allowing the
patent owner to move to amend the patent under subsection (d) to
cancel a challenged claim or propose a reasonable number of
substitute claims, and ensuring that any information submitted by
the patent owner in support of any amendment entered under
subsection (d) is made available to the public as part of the
prosecution history of the patent;
``(10) providing either party with the right to an oral hearing
as part of the proceeding;
``(11) requiring that the final determination in an inter
partes review be issued not later than 1 year after the date on
which the Director notices the institution of a review under this
chapter, except that the Director may, for good cause shown, extend
the 1-year period by not more than 6 months, and may adjust the
time periods in this paragraph in the case of joinder under section
315(c);
``(12) setting a time period for requesting joinder under
section 315(c); and
``(13) providing the petitioner with at least 1 opportunity to
file written comments within a time period established by the
Director.
``(b) Considerations.--In prescribing regulations under this
section, the Director shall consider the effect of any such regulation
on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to timely
complete proceedings instituted under this chapter.
``(c) Patent Trial and Appeal Board.--The Patent Trial and Appeal
Board shall, in accordance with section 6, conduct each inter partes
review instituted under this chapter.
``(d) Amendment of the Patent.--
``(1) In general.--During an inter partes review instituted
under this chapter, the patent owner may file 1 motion to amend the
patent in 1 or more of the following ways:
``(A) Cancel any challenged patent claim.
``(B) For each challenged claim, propose a reasonable
number of substitute claims.
``(2) Additional motions.--Additional motions to amend may be
permitted upon the joint request of the petitioner and the patent
owner to materially advance the settlement of a proceeding under
section 317, or as permitted by regulations prescribed by the
Director.
``(3) Scope of claims.--An amendment under this subsection may
not enlarge the scope of the claims of the patent or introduce new
matter.
``(e) Evidentiary Standards.--In an inter partes review instituted
under this chapter, the petitioner shall have the burden of proving a
proposition of unpatentability by a preponderance of the evidence.
``Sec. 317. Settlement
``(a) In General.--An inter partes review instituted under this
chapter shall be terminated with respect to any petitioner upon the
joint request of the petitioner and the patent owner, unless the Office
has decided the merits of the proceeding before the request for
termination is filed. If the inter partes review is terminated with
respect to a petitioner under this section, no estoppel under section
315(e) shall attach to the petitioner, or to the real party in interest
or privy of the petitioner, on the basis of that petitioner's
institution of that inter partes review. If no petitioner remains in
the inter partes review, the Office may terminate the review or proceed
to a final written decision under section 318(a).
``(b) Agreements in Writing.--Any agreement or understanding
between the patent owner and a petitioner, including any collateral
agreements referred to in such agreement or understanding, made in
connection with, or in contemplation of, the termination of an inter
partes review under this section shall be in writing and a true copy of
such agreement or understanding shall be filed in the Office before the
termination of the inter partes review as between the parties. At the
request of a party to the proceeding, the agreement or understanding
shall be treated as business confidential information, shall be kept
separate from the file of the involved patents, and shall be made
available only to Federal Government agencies on written request, or to
any person on a showing of good cause.
``Sec. 318. Decision of the Board
``(a) Final Written Decision.--If an inter partes review 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 by the petitioner and any
new claim added under section 316(d).
``(b) Certificate.--If the Patent Trial and Appeal Board issues a
final written decision under subsection (a) and the time for appeal has
expired or any appeal 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 by
operation of the certificate any new or amended claim determined to be
patentable.
``(c) Intervening Rights.--Any proposed amended or new claim
determined to be patentable and incorporated into a patent following an
inter partes review under this chapter shall have the same effect as
that specified in section 252 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 preparation therefor,
before the issuance of a certificate under subsection (b).
``(d) Data on Length of Review.--The Office shall make available to
the public data describing the length of time between the institution
of, and the issuance of a final written decision under subsection (a)
for, each inter partes review.
``Sec. 319. Appeal
``A party dissatisfied with the final written decision of the
Patent Trial and Appeal Board under section 318(a) may appeal the
decision pursuant to sections 141 through 144. Any party to the inter
partes review shall have the right to be a party to the appeal.''.
(b) Conforming Amendment.--The table of chapters for part III of
title 35, United States Code, is amended by striking the item relating
to chapter 31 and inserting the following:
``31. Inter Partes Review.........................................311''.
(c) Regulations and Effective Date.--
(1) Regulations.--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 31 of title 35, United States
Code, as amended by subsection (a) of this section.
(2) Applicability.--
(A) In general.--The amendments made by subsection (a)
shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall
apply to any patent issued before, on, or after that effective
date.
(B) Graduated implementation.--The Director may impose a
limit on the number of inter partes reviews that may be
instituted under chapter 31 of title 35, United States Code,
during each of the first 4 1-year periods in which the
amendments made by subsection (a) are in effect, if such number
in each year equals or exceeds the number of inter partes
reexaminations that are ordered under chapter 31 of title 35,
United States Code, in the last fiscal year ending before the
effective date of the amendments made by subsection (a).
(3) Transition.--
(A) In general.--Chapter 31 of title 35, United States
Code, is amended--
(i) in section 312--
(I) in subsection (a)--
(aa) in the first sentence, by striking ``a
substantial new question of patentability affecting
any claim of the patent concerned is raised by the
request,'' and inserting ``the information
presented in the request shows that there is a
reasonable likelihood that the requester would
prevail with respect to at least 1 of the claims
challenged in the request,''; and
(bb) in the second sentence, by striking ``The
existence of a substantial new question of
patentability'' and inserting ``A showing that
there is a reasonable likelihood that the requester
would prevail with respect to at least 1 of the
claims challenged in the request''; and
(II) in subsection (c), in the second sentence, by
striking ``no substantial new question of patentability
has been raised,'' and inserting ``the showing required
by subsection (a) has not been made,''; and
(ii) in section 313, by striking ``a substantial new
question of patentability affecting a claim of the patent
is raised'' and inserting ``it has been shown that there is
a reasonable likelihood that the requester would prevail
with respect to at least 1 of the claims challenged in the
request''.
(B) Application.--The amendments made by this paragraph--
(i) shall take effect on the date of the enactment of
this Act; and
(ii) shall apply to requests for inter partes
reexamination that are filed on or after such date of
enactment, but before the effective date set forth in
paragraph (2)(A) of this subsection.
(C) Continued applicability of prior provisions.--The
provisions of chapter 31 of title 35, United States Code, as
amended by this paragraph, shall continue to apply to requests
for inter partes reexamination that are filed before the
effective date set forth in paragraph (2)(A) as if subsection
(a) had not been enacted.
(d) Post-Grant Review.--Part III of title 35, United States Code,
is amended by adding at the end the following:
``CHAPTER 32--POST-GRANT REVIEW
``Sec.
``321. Post-grant review.
``322. Petitions.
``323. Preliminary response to petition.
``324. Institution of post-grant review.
``325. Relation to other proceedings or actions.
``326. Conduct of post-grant review.
``327. Settlement.
``328. Decision of the Board.
``329. Appeal.
``Sec. 321. Post-grant review
``(a) In General.--Subject to the provisions of this chapter, a
person who is not the owner of a patent may file with the Office a
petition to institute a post-grant review of the patent. The Director
shall establish, by regulation, fees to be paid by the person
requesting the review, in such amounts as the Director determines to be
reasonable, considering the aggregate costs of the post-grant review.
``(b) Scope.--A petitioner in a post-grant review may request to
cancel as unpatentable 1 or more claims 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).
``(c) Filing Deadline.--A petition for a post-grant review may only
be filed not later than the date that is 9 months after the date of the
grant of the patent or of the issuance of a reissue patent (as the case
may be).
``Sec. 322. Petitions
``(a) Requirements of Petition.--A 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 all real parties in interest;
``(3) the petition identifies, in writing and with
particularity, each claim challenged, the grounds on which the
challenge to each claim is based, and the evidence that supports
the grounds for the challenge to each claim, including--
``(A) copies of patents and printed publications that the
petitioner relies upon in support of the petition; and
``(B) affidavits or declarations of supporting evidence and
opinions, if the petitioner relies on other factual evidence or
on expert opinions;
``(4) the petition provides such other information as the
Director may require by regulation; and
``(5) the petitioner provides copies of any of the documents
required under paragraphs (2), (3), and (4) to the patent owner or,
if applicable, the designated representative of the patent owner.
``(b) Public Availability.--As soon as practicable after the
receipt of a petition under section 321, the Director shall make the
petition available to the public.
``Sec. 323. Preliminary response to petition
``If a post-grant review petition is filed under section 321, the
patent owner shall have the right to file a preliminary response to the
petition, within a time period set by the Director, that sets forth
reasons why no post-grant review should be instituted based upon the
failure of the petition to meet any requirement of this chapter.
``Sec. 324. Institution of post-grant review
``(a) Threshold.--The Director may not authorize a post-grant
review to be instituted unless the Director determines that the
information presented in the petition filed under section 321, if such
information is not rebutted, would demonstrate that it is more likely
than not that at least 1 of the claims challenged in the petition is
unpatentable.
``(b) Additional Grounds.--The determination required under
subsection (a) may also be satisfied by a showing that the petition
raises a novel or unsettled legal question that is important to other
patents or patent applications.
``(c) Timing.--The Director shall determine whether to institute a
post-grant review under this chapter pursuant to a petition filed under
section 321 within 3 months after--
``(1) receiving a preliminary response to the petition under
section 323; or
``(2) if no such preliminary response is filed, the last date
on which such response may be filed.
``(d) Notice.--The Director shall notify the petitioner and patent
owner, in writing, of the Director's determination under subsection (a)
or (b), and shall make such notice available to the public as soon as
is practicable. Such notice shall include the date on which the review
shall commence.
``(e) No Appeal.--The determination by the Director whether to
institute a post-grant review under this section shall be final and
nonappealable.
``Sec. 325. Relation to other proceedings or actions
``(a) Infringer's Civil Action.--
``(1) Post-grant review barred by civil action.--A post-grant
review may not be instituted under this chapter if, before the date
on which the petition for such a review is filed, the petitioner or
real party in interest filed a civil action challenging the
validity of a claim of the patent.
``(2) Stay of civil action.--If the petitioner or real party in
interest files a civil action challenging the validity of a claim
of the patent on or after the date on which the petitioner files a
petition for post-grant review of the patent, that civil action
shall be automatically stayed until either--
``(A) the patent owner moves the court to lift the stay;
``(B) the patent owner files a civil action or counterclaim
alleging that the petitioner or real party in interest has
infringed the patent; or
``(C) the petitioner or real party in interest moves the
court to dismiss the civil action.
``(3) Treatment of counterclaim.--A counterclaim challenging
the validity of a claim of a patent does not constitute a civil
action challenging the validity of a claim of a patent for purposes
of this subsection.
``(b) Preliminary Injunctions.--If a civil action alleging
infringement of a patent is filed within 3 months after the date on
which the patent is granted, the court may not stay its consideration
of the patent owner's motion for a preliminary injunction against
infringement of the patent on the basis that a petition for post-grant
review has been filed under this chapter or that such a post-grant
review has been instituted under this chapter.
``(c) Joinder.--If more than 1 petition for a post-grant review
under this chapter is properly filed against the same patent and the
Director determines that more than 1 of these petitions warrants the
institution of a post-grant review under section 324, the Director may
consolidate such reviews into a single post-grant review.
``(d) Multiple Proceedings.--Notwithstanding sections 135(a), 251,
and 252, and chapter 30, during the pendency of any post-grant review
under this chapter, if another proceeding or matter involving the
patent is before the Office, the Director may determine the manner in
which the post-grant review or other proceeding or matter may proceed,
including providing for the stay, transfer, consolidation, or
termination of any such matter or proceeding. In determining whether to
institute or order a proceeding under this chapter, chapter 30, or
chapter 31, the Director may take into account whether, and reject the
petition or request because, the same or substantially the same prior
art or arguments previously were presented to the Office.
``(e) Estoppel.--
``(1) Proceedings before the office.--The petitioner in a post-
grant review of a claim in a patent under this chapter that results
in a final written decision under section 328(a), or the real party
in interest or privy of the petitioner, may not request or maintain
a proceeding before the Office with respect to that claim on any
ground that the petitioner raised or reasonably could have raised
during that post-grant review.
``(2) Civil actions and other proceedings.--The petitioner in a
post-grant review of a claim in a patent under this chapter that
results in a final written decision under section 328(a), or the
real party in interest or privy of the petitioner, may not assert
either in a civil action arising in whole or in part under section
1338 of title 28 or in a proceeding before the International Trade
Commission under section 337 of the Tariff Act of 1930 that the
claim is invalid on any ground that the petitioner raised or
reasonably could have raised during that post-grant review.
``(f) Reissue Patents.--A post-grant review may not be instituted
under this chapter if the petition requests cancellation of a claim in
a reissue patent that is identical to or narrower than a claim in the
original patent from which the reissue patent was issued, and the time
limitations in section 321(c) would bar filing a petition for a post-
grant review for such original patent.
``Sec. 326. Conduct of post-grant review
``(a) Regulations.--The Director shall prescribe regulations--
``(1) providing that the file of any proceeding under this
chapter shall be made available to the public, except that any
petition or document filed with the intent that it be sealed shall,
if accompanied by a motion to seal, be treated as sealed pending
the outcome of the ruling on the motion;
``(2) setting forth the standards for the showing of sufficient
grounds to institute a review under subsections (a) and (b) of
section 324;
``(3) establishing procedures for the submission of
supplemental information after the petition is filed;
``(4) establishing and governing a post-grant review under this
chapter and the relationship of such review to other proceedings
under this title;
``(5) setting forth standards and 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;
``(6) prescribing 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 an unnecessary increase in
the cost of the proceeding;
``(7) providing for protective orders governing the exchange
and submission of confidential information;
``(8) providing for the filing by the patent owner of a
response to the petition under section 323 after a post-grant
review has been instituted, and requiring that the patent owner
file with such response, through affidavits or declarations, any
additional factual evidence and expert opinions on which the patent
owner relies in support of the response;
``(9) setting forth standards and procedures for allowing the
patent owner to move to amend the patent under subsection (d) to
cancel a challenged claim or propose a reasonable number of
substitute claims, and ensuring that any information submitted by
the patent owner in support of any amendment entered under
subsection (d) is made available to the public as part of the
prosecution history of the patent;
``(10) providing either party with the right to an oral hearing
as part of the proceeding;
``(11) requiring that the final determination in any post-grant
review be issued not later than 1 year after the date on which the
Director notices the institution of a proceeding under this
chapter, except that the Director may, for good cause shown, extend
the 1-year period by not more than 6 months, and may adjust the
time periods in this paragraph in the case of joinder under section
325(c); and
``(12) providing the petitioner with at least 1 opportunity to
file written comments within a time period established by the
Director.
``(b) Considerations.--In prescribing regulations under this
section, the Director shall consider the effect of any such regulation
on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to timely
complete proceedings instituted under this chapter.
``(c) Patent Trial and Appeal Board.--The Patent Trial and Appeal
Board shall, in accordance with section 6, conduct each post-grant
review instituted under this chapter.
``(d) Amendment of the Patent.--
``(1) In general.--During a post-grant review instituted under
this chapter, the patent owner may file 1 motion to amend the
patent in 1 or more of the following ways:
``(A) Cancel any challenged patent claim.
``(B) For each challenged claim, propose a reasonable
number of substitute claims.
``(2) Additional motions.--Additional motions to amend may be
permitted upon the joint request of the petitioner and the patent
owner to materially advance the settlement of a proceeding under
section 327, or upon the request of the patent owner for good cause
shown.
``(3) Scope of claims.--An amendment under this subsection may
not enlarge the scope of the claims of the patent or introduce new
matter.
``(e) Evidentiary Standards.--In a post-grant review instituted
under this chapter, the petitioner shall have the burden of proving a
proposition of unpatentability by a preponderance of the evidence.
``Sec. 327. Settlement
``(a) In General.--A post-grant review instituted under this
chapter shall be terminated with respect to any petitioner upon the
joint request of the petitioner and the patent owner, unless the Office
has decided the merits of the proceeding before the request for
termination is filed. If the post-grant review is terminated with
respect to a petitioner under this section, no estoppel under section
325(e) shall attach to the petitioner, or to the real party in interest
or privy of the petitioner, on the basis of that petitioner's
institution of that post-grant review. If no petitioner remains in the
post-grant review, the Office may terminate the post-grant review or
proceed to a final written decision under section 328(a).
``(b) Agreements in Writing.--Any agreement or understanding
between the patent owner and a petitioner, including any collateral
agreements referred to in such agreement or understanding, made in
connection with, or in contemplation of, the termination of a post-
grant review under this section shall be in writing, and a true copy of
such agreement or understanding shall be filed in the Office before the
termination of the post-grant review as between the parties. At the
request of a party to the proceeding, the agreement or understanding
shall be treated as business confidential information, shall be kept
separate from the file of the involved patents, and shall be made
available only to Federal Government agencies on written request, or to
any person on a showing of good cause.
``Sec. 328. Decision of the Board
``(a) Final Written Decision.--If a post-grant review 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 by the petitioner and any new claim
added under section 326(d).
``(b) Certificate.--If the Patent Trial and Appeal Board issues a
final written decision under subsection (a) and the time for appeal has
expired or any appeal 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 by
operation of the certificate any new or amended claim determined to be
patentable.
``(c) Intervening Rights.--Any proposed amended or new claim
determined to be patentable and incorporated into a patent following a
post-grant review under this chapter 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 preparation
therefor, before the issuance of a certificate under subsection (b).
``(d) Data on Length of Review.--The Office shall make available to
the public data describing the length of time between the institution
of, and the issuance of a final written decision under subsection (a)
for, each post-grant review.
``Sec. 329. Appeal
``A party dissatisfied with the final written decision of the
Patent Trial and Appeal Board under section 328(a) may appeal the
decision pursuant to sections 141 through 144. Any party to the post-
grant review shall have the right to be a party to the appeal.''.
(e) Conforming Amendment.--The table of chapters for part III of
title 35, United States Code, is amended by adding at the end the
following:
``32. Post-Grant Review...........................................321''.
(f) Regulations and Effective Date.--
(1) Regulations.--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 (d) of this section.
(2) Applicability.--
(A) In general.--The amendments made by subsection (d)
shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and, except
as provided in section 18 and in paragraph (3), shall apply
only to patents described in section 3(n)(1).
(B) Limitation.--The Director may impose a limit on the
number of post-grant reviews that may be instituted under
chapter 32 of title 35, United States Code, during each of the
first 4 1-year periods in which the amendments made by
subsection (d) are in effect.
(3) Pending interferences.--
(A) Procedures in general.--The Director shall determine,
and include in the regulations issued under paragraph (1), the
procedures under which an interference commenced before the
effective date set forth in paragraph (2)(A) is to proceed,
including whether such interference--
(i) is to be dismissed without prejudice to the filing
of a petition for a post-grant review under chapter 32 of
title 35, United States Code; or
(ii) is to proceed as if this Act had not been enacted.
(B) Proceedings by patent trial and appeal board.--For
purposes of an interference that is commenced before the
effective date set forth in paragraph (2)(A), the Director may
deem the Patent Trial and Appeal Board to be the Board of
Patent Appeals and Interferences, and may allow the Patent
Trial and Appeal Board to conduct any further proceedings in
that interference.
(C) Appeals.--The authorization to appeal or have remedy
from derivation proceedings in sections 141(d) and 146 of title
35, United States Code, as amended by this Act, and the
jurisdiction to entertain appeals from derivation proceedings
in section 1295(a)(4)(A) of title 28, United States Code, as
amended by this Act, shall be deemed to extend to any final
decision in an interference that is commenced before the
effective date set forth in paragraph (2)(A) of this subsection
and that is not dismissed pursuant to this paragraph.
(g) Citation of Prior Art and Written Statements.--
(1) In general.--Section 301 of title 35, United States Code,
is amended to read as follows:
``Sec. 301. Citation of prior art and written statements
``(a) In General.--Any person at any time may cite to the Office in
writing--
``(1) prior art consisting of patents or printed publications
which that person believes to have a bearing on the patentability
of any claim of a particular patent; or
``(2) statements of the patent owner filed in a proceeding
before a Federal court or the Office in which the patent owner took
a position on the scope of any claim of a particular patent.
``(b) Official File.--If the person citing prior art or written
statements pursuant to subsection (a) explains in writing the
pertinence and manner of applying the prior art or written statements
to at least 1 claim of the patent, the citation of the prior art or
written statements and the explanation thereof shall become a part of
the official file of the patent.
``(c) Additional Information.--A party that submits a written
statement pursuant to subsection (a)(2) shall include any other
documents, pleadings, or evidence from the proceeding in which the
statement was filed that addresses the written statement.
``(d) Limitations.--A written statement submitted pursuant to
subsection (a)(2), and additional information submitted pursuant to
subsection (c), shall not be considered by the Office for any purpose
other than to determine the proper meaning of a patent claim in a
proceeding that is ordered or instituted pursuant to section 304, 314,
or 324. If any such written statement or additional information is
subject to an applicable protective order, such statement or
information shall be redacted to exclude information that is subject to
that order.
``(e) Confidentiality.--Upon the written request of the person
citing prior art or written statements pursuant to subsection (a), that
person's identity shall be excluded from the patent file and kept
confidential.''.
(2) Conforming amendment.--The item relating to section 301 in
the table of sections for chapter 30 of title 35, United States
Code, is amended to read as follows:
``301. Citation of prior art and written statements.''.
(3) Effective date.--The amendments made by this subsection
shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall apply
to any patent issued before, on, or after that effective date.
(h) Reexamination.--
(1) Determination by director.--
(A) In general.--Section 303(a) of title 35, United States
Code, is amended by striking ``section 301 of this title'' and
inserting ``section 301 or 302''.
(B) Effective date.--The amendment made by this paragraph
shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall
apply to any patent issued before, on, or after that effective
date.
(2) Appeal.--
(A) In general.--Section 306 of title 35, United States
Code, is amended by striking ``145'' and inserting ``144''.
(B) Effective date.--The amendment made by this paragraph
shall take effect on the date of the enactment of this Act and
shall apply to any appeal of a reexamination before the Board
of Patent Appeals and Interferences or the Patent Trial and
Appeal Board that is pending on, or brought on or after, the
date of the enactment of this Act.
SEC. 7. PATENT TRIAL AND APPEAL BOARD.
(a) Composition and Duties.--
(1) In general.--Section 6 of title 35, United States Code, is
amended to read as follows:
``Sec. 6. Patent Trial and Appeal Board
``(a) In General.--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 Secretary, in
consultation with 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 applications for patents pursuant to
section 134(a);
``(2) review appeals of reexaminations pursuant to section
134(b);
``(3) conduct derivation proceedings pursuant to section 135;
and
``(4) conduct inter partes reviews and post-grant reviews
pursuant to chapters 31 and 32.
``(c) 3-Member Panels.--Each appeal, derivation proceeding, post-
grant review, and inter partes review 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.
``(d) Treatment of Prior Appointments.--The Secretary of Commerce
may, in the Secretary's discretion, deem the appointment of an
administrative patent judge who, before the date of the enactment of
this subsection, held office pursuant to an appointment by the Director
to take effect on the date on which the Director initially appointed
the administrative patent judge. It shall be a defense to a challenge
to the appointment of an administrative patent judge on the basis of
the judge's having been originally appointed by the Director that the
administrative patent judge so appointed was acting as a de facto
officer.''.
(2) Conforming amendment.--The item relating to section 6 in
the table of sections for chapter 1 of title 35, United States
Code, is amended to read as follows:
``6. Patent Trial and Appeal Board.''.
(b) Administrative Appeals.--Section 134 of title 35, United States
Code, is amended--
(1) in subsection (b), by striking ``any reexamination
proceeding'' and inserting ``a reexamination''; and
(2) by striking subsection (c).
(c) Circuit Appeals.--
(1) In general.--Section 141 of title 35, United States Code,
is amended to read as follows:
``Sec. 141. Appeal to Court of Appeals for the Federal Circuit
``(a) Examinations.--An applicant who is dissatisfied with the
final decision in an appeal to the Patent Trial and Appeal Board under
section 134(a) may appeal the Board's decision to the United States
Court of Appeals for the Federal Circuit. By filing such an appeal, the
applicant waives his or her right to proceed under section 145.
``(b) Reexaminations.--A patent owner who is dissatisfied with the
final decision in an appeal of a reexamination to the Patent Trial and
Appeal Board under section 134(b) may appeal the Board's decision only
to the United States Court of Appeals for the Federal Circuit.
``(c) Post-Grant and Inter Partes Reviews.--A party to an inter
partes review or a post-grant review who is dissatisfied with the final
written decision of the Patent Trial and Appeal Board under section
318(a) or 328(a) (as the case may be) may appeal the Board's decision
only to the United States Court of Appeals for the Federal Circuit.
``(d) Derivation Proceedings.--A party to a derivation proceeding
who is dissatisfied with the final decision of the Patent Trial and
Appeal Board in the proceeding may appeal the decision to the United
States Court of Appeals for the Federal Circuit, but such appeal shall
be dismissed if any adverse party to such derivation proceeding, within
20 days after the appellant has filed notice of appeal in accordance
with section 142, files notice with the Director that the party elects
to have all further proceedings conducted as provided in section 146.
If the appellant does not, within 30 days after the filing of such
notice by the adverse party, file a civil action under section 146, the
Board's decision shall govern the further proceedings in the case.''.
(2) Jurisdiction.--Section 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 a patent
application, derivation proceeding, reexamination, post-grant
review, or inter partes review under title 35, at the instance
of a party who exercised that party's right to participate in
the applicable proceeding before or appeal to the Board, except
that an applicant or a party to a derivation proceeding may
also have remedy by civil action pursuant to section 145 or 146
of title 35; an appeal under this subparagraph of a decision of
the Board with respect to an application or derivation
proceeding shall waive the right of such applicant or party to
proceed under section 145 or 146 of title 35;''.
(3) Proceedings on appeal.--Section 143 of title 35, United
States Code, is amended--
(A) by striking the third sentence and inserting the
following: ``In an ex parte case, the Director shall submit to
the court in writing the grounds for the decision of the Patent
and Trademark Office, addressing all of the issues raised in
the appeal. The Director shall have the right to intervene in
an appeal from a decision entered by the Patent Trial and
Appeal Board in a derivation proceeding under section 135 or in
an inter partes or post-grant review under chapter 31 or 32.'';
and
(B) by striking the last sentence.
(d) Conforming Amendments.--
(1) Atomic energy act of 1954.--Section 152 of the Atomic
Energy Act of 1954 (42 U.S.C. 2182) is amended in the third
undesignated paragraph--
(A) by striking ``Board of Patent Appeals and
Interferences'' each place it appears and inserting ``Patent
Trial and Appeal Board''; and
(B) by inserting ``and derivation'' after ``established for
interference''.
(2) Title 51.--Section 20135 of title 51, United States Code,
is amended--
(A) in subsections (e) and (f), by striking ``Board of
Patent Appeals and Interferences'' each place it appears and
inserting ``Patent Trial and Appeal Board''; and
(B) in subsection (e), by inserting ``and derivation''
after ``established for interference''.
(e) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to proceedings commenced
on or after that effective date, except that--
(1) the extension of jurisdiction to the United States Court of
Appeals for the Federal Circuit to entertain appeals of decisions
of the Patent Trial and Appeal Board in reexaminations under the
amendment made by subsection (c)(2) shall be deemed to take effect
on the date of the enactment of this Act and shall extend to any
decision of the Board of Patent Appeals and Interferences with
respect to a reexamination that is entered before, on, or after the
date of the enactment of this Act;
(2) the provisions of sections 6, 134, and 141 of title 35,
United States Code, as in effect on the day before the effective
date of the amendments made by this section shall continue to apply
to inter partes reexaminations that are requested under section 311
of such title before such effective date;
(3) the Patent Trial and Appeal Board may be deemed to be the
Board of Patent Appeals and Interferences for purposes of appeals
of inter partes reexaminations that are requested under section 311
of title 35, United States Code, before the effective date of the
amendments made by this section; and
(4) the Director's right under the fourth sentence of section
143 of title 35, United States Code, as amended by subsection
(c)(3) of this section, to intervene in an appeal from a decision
entered by the Patent Trial and Appeal Board shall be deemed to
extend to inter partes reexaminations that are requested under
section 311 of such title before the effective date of the
amendments made by this section.
SEC. 8. PREISSUANCE SUBMISSIONS BY THIRD PARTIES.
(a) In General.--Section 122 of title 35, United States Code, is
amended by adding at the end the following:
``(e) Preissuance Submissions by Third Parties.--
``(1) In general.--Any third party may submit for consideration
and inclusion in the record of a patent application, any patent,
published patent application, or other printed 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
given or mailed in the application for patent; or
``(B) the later of--
``(i) 6 months after the date on which the application
for patent is first published under section 122 by the
Office, 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.
``(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 person making such
submission affirming that the submission was made in compliance
with this section.''.
(b) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to any patent application
filed before, on, or after that effective date.
SEC. 9. VENUE.
(a) Technical Amendments Relating to Venue.--Sections 32, 145, 146,
154(b)(4)(A), and 293 of title 35, United States Code, and section
21(b)(4) of the Trademark Act of 1946 (15 U.S.C. 1071(b)(4)), are each
amended by striking ``United States District Court for the District of
Columbia'' each place that term appears and inserting ``United States
District Court for the Eastern District of Virginia''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act and shall apply to any
civil action commenced on or after that date.
SEC. 10. FEE SETTING AUTHORITY.
(a) Fee Setting.--
(1) In general.--The Director may set or adjust by rule any fee
established, authorized, or charged under title 35, United States
Code, or the Trademark Act of 1946 (15 U.S.C. 1051 et seq.), for
any services performed by or materials furnished by, the Office,
subject to paragraph (2).
(2) Fees to recover costs.--Fees may be set or adjusted under
paragraph (1) only to recover the aggregate estimated costs to the
Office for processing, activities, services, and materials relating
to patents (in the case of patent fees) and trademarks (in the case
of trademark fees), including administrative costs of the Office
with respect to such patent or trademark fees (as the case may be).
(b) Small and Micro Entities.--The fees set or adjusted under
subsection (a) for filing, searching, examining, issuing, appealing,
and maintaining patent applications and patents shall be reduced by 50
percent with respect to the application of such fees to any small
entity that qualifies for reduced fees under section 41(h)(1) of title
35, United States Code, and shall be reduced by 75 percent with respect
to the application of such fees to any micro entity as defined in
section 123 of that title (as added by subsection (g) of this section).
(c) Reduction of Fees in Certain Fiscal Years.--In each fiscal
year, the Director--
(1) shall consult with the Patent Public Advisory Committee and
the Trademark Public Advisory Committee on the advisability of
reducing any fees described in subsection (a); and
(2) after the consultation required under paragraph (1), may
reduce such fees.
(d) Role of the Public Advisory Committee.--The Director shall--
(1) not less than 45 days before publishing any proposed fee
under subsection (a) in the Federal Register, submit the proposed
fee to the Patent Public Advisory Committee or the Trademark Public
Advisory Committee, or both, as appropriate;
(2)(A) provide the relevant advisory committee described in
paragraph (1) a 30-day period following the submission of any
proposed fee, in which to deliberate, consider, and comment on such
proposal;
(B) require that, during that 30-day period, the relevant
advisory committee hold a public hearing relating to such proposal;
and
(C) assist the relevant advisory committee in carrying out that
public hearing, including by offering the use of the resources of
the Office to notify and promote the hearing to the public and
interested stakeholders;
(3) require the relevant advisory committee to make available
to the public a written report setting forth in detail the
comments, advice, and recommendations of the committee regarding
the proposed fee; and
(4) consider and analyze any comments, advice, or
recommendations received from the relevant advisory committee
before setting or adjusting (as the case may be) the fee.
(e) Publication in the Federal Register.--
(1) Publication and rationale.--The Director shall--
(A) publish any proposed fee change under this section in
the Federal Register;
(B) include, in such publication, the specific rationale
and purpose for the proposal, including the possible
expectations or benefits resulting from the proposed change;
and
(C) notify, through the Chair and Ranking Member of the
Committees on the Judiciary of the Senate and the House of
Representatives, the Congress of the proposed change not later
than the date on which the proposed change is published under
subparagraph (A).
(2) Public comment period.--The Director shall, in the
publication under paragraph (1), provide the public a period of not
less than 45 days in which to submit comments on the proposed
change in fees.
(3) Publication of final rule.--The final rule setting or
adjusting a fee under this section shall be published in the
Federal Register and in the Official Gazette of the Patent and
Trademark Office.
(4) Congressional comment period.--A fee set or adjusted under
subsection (a) may not become effective--
(A) before the end of the 45-day period beginning on the
day after the date on which the Director publishes the final
rule adjusting or setting the fee under paragraph (3); or
(B) if a law is enacted disapproving such fee.
(5) Rule of construction.--Rules prescribed under this section
shall not diminish--
(A) the rights of an applicant for a patent under title 35,
United States Code, or for a mark under the Trademark Act of
1946; or
(B) any rights under a ratified treaty.
(f) Retention of Authority.--The Director retains the authority
under subsection (a) to set or adjust fees only during such period as
the Patent and Trademark Office remains an agency within the Department
of Commerce.
(g) Micro Entity Defined.--
(1) In general.--Chapter 11 of title 35, United States Code, is
amended by adding at the end the following new section:
``Sec. 123. Micro entity defined
``(a) In General.--For purposes of this title, the term `micro
entity' means an applicant who makes a certification that the
applicant--
``(1) qualifies as a small entity, as defined in regulations
issued by the Director;
``(2) has not been named as an inventor on more than 4
previously filed patent applications, other than applications filed
in another country, provisional applications under section 111(b),
or international applications filed under the treaty defined in
section 351(a) for which the basic national fee under section 41(a)
was not paid;
``(3) did not, in the calendar year preceding the calendar year
in which the applicable fee is being paid, have a gross income, as
defined in section 61(a) of the Internal Revenue Code of 1986,
exceeding 3 times the median household income for that preceding
calendar year, as most recently reported by the Bureau of the
Census; and
``(4) has not assigned, granted, or conveyed, and is not under
an obligation by contract or law to assign, grant, or convey, a
license or other ownership interest in the application concerned to
an entity that, in the calendar year preceding the calendar year in
which the applicable fee is being paid, had a gross income, as
defined in section 61(a) of the Internal Revenue Code of 1986,
exceeding 3 times the median household income for that preceding
calendar year, as most recently reported by the Bureau of the
Census.
``(b) Applications Resulting From Prior Employment.--An applicant
is not considered to be named on a previously filed application for
purposes of subsection (a)(2) if the applicant has assigned, or is
under an obligation by contract or law to assign, all ownership rights
in the application as the result of the applicant's previous
employment.
``(c) Foreign Currency Exchange Rate.--If an applicant's or
entity's gross income in the preceding calendar year is not in United
States dollars, the average currency exchange rate, as reported by the
Internal Revenue Service, during that calendar year shall be used to
determine whether the applicant's or entity's gross income exceeds the
threshold specified in paragraphs (3) or (4) of subsection (a).
``(d) Institutions of Higher Education.--For purposes of this
section, a micro entity shall include an applicant who certifies that--
``(1) the applicant's employer, from which the applicant
obtains the majority of the applicant's income, is an institution
of higher education as defined in section 101(a) of the Higher
Education Act of 1965 (20 U.S.C. 1001(a)); or
``(2) the applicant has assigned, granted, conveyed, or is
under an obligation by contract or law, to assign, grant, or
convey, a license or other ownership interest in the particular
applications to such an institution of higher education.
``(e) Director's Authority.--In addition to the limits imposed by
this section, the Director may, in the Director's discretion, impose
income limits, annual filing limits, or other limits on who may qualify
as a micro entity pursuant to this section if the Director determines
that such additional limits are reasonably necessary to avoid an undue
impact on other patent applicants or owners or are otherwise reasonably
necessary and appropriate. At least 3 months before any limits proposed
to be imposed pursuant to this subsection take effect, the Director
shall inform the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the Senate of any
such proposed limits.''.
(2) Conforming amendment.--Chapter 11 of title 35, United
States Code, is amended by adding at the end the following new
item:
``123. Micro entity defined.''.
(h) Electronic Filing Incentive.--
(1) In general.--Notwithstanding any other provision of this
section, an additional fee of $400 shall be established for each
application for an original patent, except for a design, plant, or
provisional application, that is not filed by electronic means as
prescribed by the Director. The fee established by this subsection
shall be reduced by 50 percent for small entities that qualify for
reduced fees under section 41(h)(1) of title 35, United States
Code. All fees paid under this subsection shall be deposited in the
Treasury as an offsetting receipt that shall not be available for
obligation or expenditure.
(2) Effective date.--This subsection shall take effect upon the
expiration of the 60-day period beginning on the date of the
enactment of this Act.
(i) Effective Date; Sunset.--
(1) Effective date.--Except as provided in subsection (h), this
section and the amendments made by this section shall take effect
on the date of the enactment of this Act.
(2) Sunset.--The authority of the Director to set or adjust any
fee under subsection (a) shall terminate upon the expiration of the
7-year period beginning on the date of the enactment of this Act.
(3) Prior regulations not affected.--The termination of
authority under this subsection shall not affect any regulations
issued under this section before the effective date of such
termination or any rulemaking proceeding for the issuance of
regulations under this section that is pending on such date.
SEC. 11. FEES FOR PATENT SERVICES.
(a) General Patent Services.--Subsections (a) and (b) of section 41
of title 35, United States Code, are amended to read as follows:
``(a) General Fees.--The Director shall charge the following fees:
``(1) Filing and basic national fees.--
``(A) On filing each application for an original patent,
except for design, plant, or provisional applications, $330.
``(B) On filing each application for an original design
patent, $220.
``(C) On filing each application for an original plant
patent, $220.
``(D) On filing each provisional application for an
original patent, $220.
``(E) On filing each application for the reissue of a
patent, $330.
``(F) The basic national fee for each international
application filed under the treaty defined in section 351(a)
entering the national stage under section 371, $330.
``(G) In addition, excluding any sequence listing or
computer program listing filed in an electronic medium as
prescribed by the Director, for any application the
specification and drawings of which exceed 100 sheets of paper
(or equivalent as prescribed by the Director if filed in an
electronic medium), $270 for each additional 50 sheets of paper
(or equivalent as prescribed by the Director if filed in an
electronic medium) or fraction thereof.
``(2) Excess claims fees.--
``(A) In general.--In addition to the fee specified in
paragraph (1)--
``(i) on filing or on presentation at any other time,
$220 for each claim in independent form in excess of 3;
``(ii) on filing or on presentation at any other time,
$52 for each claim (whether dependent or independent) in
excess of 20; and
``(iii) for each application containing a multiple
dependent claim, $390.
``(B) Multiple dependent claims.--For the purpose of
computing fees under subparagraph (A), a multiple dependent
claim referred to in section 112 or any claim depending
therefrom shall be considered as separate dependent claims in
accordance with the number of claims to which reference is
made.
``(C) Refunds; errors in payment.--The Director may by
regulation provide for a refund of any part of the fee
specified in subparagraph (A) for any claim that is canceled
before an examination on the merits, as prescribed by the
Director, has been made of the application under section 131.
Errors in payment of the additional fees under this paragraph
may be rectified in accordance with regulations prescribed by
the Director.
``(3) Examination fees.--
``(A) In general.--
``(i) For examination of each application for an
original patent, except for design, plant, provisional, or
international applications, $220.
``(ii) For examination of each application for an
original design patent, $140.
``(iii) For examination of each application for an
original plant patent, $170.
``(iv) For examination of the national stage of each
international application, $220.
``(v) For examination of each application for the
reissue of a patent, $650.
``(B) Applicability of other fee provisions.--The
provisions of paragraphs (3) and (4) of section 111(a) relating
to the payment of the fee for filing the application shall
apply to the payment of the fee specified in subparagraph (A)
with respect to an application filed under section 111(a). The
provisions of section 371(d) relating to the payment of the
national fee shall apply to the payment of the fee specified in
subparagraph (A) with respect to an international application.
``(4) Issue fees.--
``(A) For issuing each original patent, except for design
or plant patents, $1,510.
``(B) For issuing each original design patent, $860.
``(C) For issuing each original plant patent, $1,190.
``(D) For issuing each reissue patent, $1,510.
``(5) Disclaimer fee.--On filing each disclaimer, $140.
``(6) Appeal fees.--
``(A) On filing an appeal from the examiner to the Patent
Trial and Appeal Board, $540.
``(B) In addition, on filing a brief in support of the
appeal, $540, and on requesting an oral hearing in the appeal
before the Patent Trial and Appeal Board, $1,080.
``(7) Revival fees.--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
any reexamination proceeding, $1,620, unless the petition is filed
under section 133 or 151, in which case the fee shall be $540.
``(8) Extension fees.--For petitions for 1-month extensions of
time to take actions required by the Director in an application--
``(A) on filing a first petition, $130;
``(B) on filing a second petition, $360; and
``(C) on filing a third or subsequent petition, $620.
``(b) Maintenance Fees.--
``(1) In general.--The Director shall charge the following fees
for maintaining in force all patents based on applications filed on
or after December 12, 1980:
``(A) Three years and 6 months after grant, $980.
``(B) Seven years and 6 months after grant, $2,480.
``(C) Eleven years and 6 months after grant, $4,110.
``(2) Grace period; surcharge.--Unless payment of the
applicable maintenance fee under paragraph (1) is received in the
Office on or before the date the fee is due or within a grace
period of 6 months thereafter, the patent shall expire as of the
end of such grace period. The Director may require the payment of a
surcharge as a condition of accepting within such 6-month grace
period the payment of an applicable maintenance fee.
``(3) No maintenance fee for design or plant patent.--No fee
may be established for maintaining a design or plant patent in
force.''.
(b) Delays in Payment.--Subsection (c) of section 41 of title 35,
United States Code, is amended--
(1) by striking ``(c)(1) The Director'' and inserting:
``(c) Delays in Payment of Maintenance Fees.--
``(1) Acceptance.--The Director''; and
(2) by striking ``(2) A patent'' and inserting:
``(2) Effect on rights of others.--A patent''.
(c) Patent Search Fees.--Subsection (d) of section 41 of title 35,
United States Code, is amended to read as follows:
``(d) Patent Search and Other Fees.--
``(1) Patent search fees.--
``(A) In general.--The Director shall charge the fees
specified under subparagraph (B) for the search of each
application for a patent, except for provisional applications.
The Director shall adjust the fees charged under this paragraph
to ensure that the fees recover an amount not to exceed the
estimated average cost to the Office of searching applications
for patent by Office personnel.
``(B) Specific fees.--The fees referred to in subparagraph
(A) are--
``(i) $540 for each application for an original patent,
except for design, plant, provisional, or international
applications;
``(ii) $100 for each application for an original design
patent;
``(iii) $330 for each application for an original plant
patent;
``(iv) $540 for the national stage of each
international application; and
``(v) $540 for each application for the reissue of a
patent.
``(C) Applicability of other provisions.--The provisions of
paragraphs (3) and (4) of section 111(a) relating to the
payment of the fee for filing the application shall apply to
the payment of the fee specified in this paragraph with respect
to an application filed under section 111(a). The provisions of
section 371(d) relating to the payment of the national fee
shall apply to the payment of the fee specified in this
paragraph with respect to an international application.
``(D) Refunds.--The Director may by regulation provide for
a refund of any part of the fee specified in this paragraph for
any applicant who files a written declaration of express
abandonment as prescribed by the Director before an examination
has been made of the application under section 131.
``(2) Other fees.--
``(A) In general.--The Director shall establish fees for
all other processing, services, or materials relating to
patents not specified in this section to recover the estimated
average cost to the Office of such processing, services, or
materials, except that the Director shall charge the following
fees for the following services:
``(i) For recording a document affecting title, $40 per
property.
``(ii) For each photocopy, $.25 per page.
``(iii) For each black and white copy of a patent, $3.
``(B) Copies for libraries.--The yearly fee for providing a
library specified in section 12 with uncertified printed copies
of the specifications and drawings for all patents in that year
shall be $50.''.
(d) Fees for Small Entities.--Subsection (h) of section 41 of title
35, United States Code, is amended to read as follows:
``(h) Fees for Small Entities.--
``(1) Reductions in fees.--Subject to paragraph (3), fees
charged under subsections (a), (b), and (d)(1) shall be reduced by
50 percent with respect to their application to any small business
concern as defined under section 3 of the Small Business Act, and
to any independent inventor or nonprofit organization as defined in
regulations issued by the Director.
``(2) Surcharges and other fees.--With respect to its
application to any entity described in paragraph (1), any surcharge
or fee charged under subsection (c) or (d) shall not be higher than
the surcharge or fee required of any other entity under the same or
substantially similar circumstances.
``(3) Reduction for electronic filing.--The fee charged under
subsection (a)(1)(A) shall be reduced by 75 percent with respect to
its application to any entity to which paragraph (1) applies, if
the application is filed by electronic means as prescribed by the
Director.''.
(e) Technical Amendments.--Section 41 of title 35, United States
Code, is amended--
(1) in subsection (e), in the first sentence, by striking ``The
Director'' and inserting ``Waiver of Fees; Copies Regarding
Notice.--The Director'';
(2) in subsection (f), by striking ``The fees'' and inserting
``Adjustment of Fees.--The fees'';
(3) by repealing subsection (g); and
(4) in subsection (i)--
(A) by striking ``(i)(1) The Director'' and inserting the
following:
``(i) Electronic Patent and Trademark Data.--
``(1) Maintenance of collections.--The Director'';
(B) by striking ``(2) The Director'' and inserting the
following:
``(2) Availability of automated search systems.--The
Director'';
(C) by striking ``(3) The Director'' and inserting the
following:
``(3) Access fees.--The Director''; and
(D) by striking ``(4) The Director'' and inserting the
following:
``(4) Annual report to congress.--The Director''.
(f) Adjustment of Trademark Fees.--Section 802(a) of division B of
the Consolidated Appropriations Act, 2005 (Public Law 108-447) is
amended--
(1) in the first sentence, by striking ``During fiscal years
2005, 2006, and 2007,'', and inserting ``Until such time as the
Director sets or adjusts the fees otherwise,''; and
(2) in the second sentence, by striking ``During fiscal years
2005, 2006, and 2007, the'' and inserting ``The''.
(g) Effective Date, Applicability, and Transition Provisions.--
Section 803(a) of division B of the Consolidated Appropriations Act,
2005 (Public Law 108-447) is amended by striking ``and shall apply only
with respect to the remaining portion of fiscal year 2005 and fiscal
year 2006''.
(h) Prioritized Examination Fee.--
(1) In general.--
(A) Fee.--
(i) Prioritized examination fee.--A fee of $4,800 shall
be established for filing a request, pursuant to section
2(b)(2)(G) of title 35, United States Code, for prioritized
examination of a nonprovisional application for an original
utility or plant patent.
(ii) Additional fees.--In addition to the prioritized
examination fee under clause (i), the fees due on an
application for which prioritized examination is being
sought are the filing, search, and examination fees
(including any applicable excess claims and application
size fees), processing fee, and publication fee for that
application.
(B) Regulations; limitations.--
(i) Regulations.--The Director may by regulation
prescribe conditions for acceptance of a request under
subparagraph (A) and a limit on the number of filings for
prioritized examination that may be accepted.
(ii) Limitation on claims.-- Until regulations are
prescribed under clause (i), no application for which
prioritized examination is requested may contain or be
amended to contain more than 4 independent claims or more
than 30 total claims.
(iii) Limitation on total number of requests.--The
Director may not accept in any fiscal year more than 10,000
requests for prioritization until regulations are
prescribed under this subparagraph setting another limit.
(2) Reduction in fees for small entities.--The Director shall
reduce fees for providing prioritized examination of nonprovisional
applications for original utility and plant patents by 50 percent
for small entities that qualify for reduced fees under section
41(h)(1) of title 35, United States Code.
(3) Deposit of fees.--All fees paid under this subsection shall
be credited to the United States Patent and Trademark Office
Appropriation Account, shall remain available until expended, and
may be used only for the purposes specified in section 42(c)(3)(A)
of title 35, United States Code.
(4) Effective date and termination.--
(A) Effective date.--This subsection shall take effect on
the date that is 10 days after the date of the enactment of
this Act.
(B) Termination.--The fee imposed under paragraph
(1)(A)(i), and the reduced fee under paragraph (2), shall
terminate on the effective date of the setting or adjustment of
the fee under paragraph (1)(A)(i) pursuant to the exercise of
the authority under section 10 for the first time with respect
to that fee.
(i) Appropriation Account Transition Fees.--
(1) Surcharge.--
(A) In general.--There shall be a surcharge of 15 percent,
rounded by standard arithmetic rules, on all fees charged or
authorized by subsections (a), (b), and (d)(1) of section 41,
and section 132(b), of title 35, United States Code. Any
surcharge imposed under this subsection is, and shall be
construed to be, separate from and in addition to any other
surcharge imposed under this Act or any other provision of law.
(B) Deposit of amounts.--Amounts collected pursuant to the
surcharge imposed under subparagraph (A) shall be credited to
the United States Patent and Trademark Appropriation Account,
shall remain available until expended, and may be used only for
the purposes specified in section 42(c)(3)(A) of title 35,
United States Code.
(2) Effective date and termination of surcharge.--The surcharge
provided for in paragraph (1)--
(A) shall take effect on the date that is 10 days after the
date of the enactment of this Act; and
(B) shall terminate, with respect to a fee to which
paragraph (1)(A) applies, on the effective date of the setting
or adjustment of that fee pursuant to the exercise of the
authority under section 10 for the first time with respect to
that fee.
(j) Effective Date.--Except as otherwise provided in this section,
this section and the amendments made by this section shall take effect
on the date of the enactment of this Act.
SEC. 12. SUPPLEMENTAL EXAMINATION.
(a) In General.--Chapter 25 of title 35, United States Code, is
amended by adding at the end the following:
``Sec. 257. Supplemental examinations to consider, reconsider, or
correct information
``(a) Request for Supplemental Examination.--A patent owner may
request supplemental examination of a patent in the Office to consider,
reconsider, or correct information believed to be relevant to the
patent, in accordance with such requirements as the Director may
establish. Within 3 months after the date a request for supplemental
examination meeting the requirements of this section is received, the
Director shall conduct the supplemental examination and shall conclude
such examination by issuing a certificate indicating whether the
information presented in the request raises a substantial new question
of patentability.
``(b) Reexamination Ordered.--If the certificate issued under
subsection (a) indicates that a substantial new question of
patentability is raised by 1 or more items of information in the
request, the Director shall order reexamination of the patent. The
reexamination shall be conducted according to procedures established by
chapter 30, except that the patent owner shall not have the right to
file a statement pursuant to section 304. During the reexamination, the
Director shall address each substantial new question of patentability
identified during the supplemental examination, notwithstanding the
limitations in chapter 30 relating to patents and printed publication
or any other provision of such chapter.
``(c) Effect.--
``(1) In general.--A patent shall not be held unenforceable on
the basis of conduct relating to information that had not been
considered, was inadequately considered, or was incorrect in a
prior examination of the patent if the information was considered,
reconsidered, or corrected during a supplemental examination of the
patent. The making of a request under subsection (a), or the
absence thereof, shall not be relevant to enforceability of the
patent under section 282.
``(2) Exceptions.--
``(A) Prior allegations.--Paragraph (1) shall not apply to
an allegation pled with particularity in a civil action, or set
forth with particularity in a notice received by the patent
owner under section 505(j)(2)(B)(iv)(II) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355(j)(2)(B)(iv)(II)), before
the date of a supplemental examination request under subsection
(a) to consider, reconsider, or correct information forming the
basis for the allegation.
``(B) Patent enforcement actions.--In an action brought
under section 337(a) of the Tariff Act of 1930 (19 U.S.C.
1337(a)), or section 281 of this title, paragraph (1) shall not
apply to any defense raised in the action that is based upon
information that was considered, reconsidered, or corrected
pursuant to a supplemental examination request under subsection
(a), unless the supplemental examination, and any reexamination
ordered pursuant to the request, are concluded before the date
on which the action is brought.
``(d) Fees and Regulations.--
``(1) Fees.--The Director shall, by regulation, establish fees
for the submission of a request for supplemental examination of a
patent, and to consider each item of information submitted in the
request. If reexamination is ordered under subsection (b), fees
established and applicable to ex parte reexamination proceedings
under chapter 30 shall be paid, in addition to fees applicable to
supplemental examination.
``(2) Regulations.--The Director shall issue regulations
governing the form, content, and other requirements of requests for
supplemental examination, and establishing procedures for reviewing
information submitted in such requests.
``(e) Fraud.--If the Director becomes aware, during the course of a
supplemental examination or reexamination proceeding ordered under this
section, that a material fraud on the Office may have been committed in
connection with the patent that is the subject of the supplemental
examination, then in addition to any other actions the Director is
authorized to take, including the cancellation of any claims found to
be invalid under section 307 as a result of a reexamination ordered
under this section, the Director shall also refer the matter to the
Attorney General for such further action as the Attorney General may
deem appropriate. Any such referral shall be treated as confidential,
shall not be included in the file of the patent, and shall not be
disclosed to the public unless the United States charges a person with
a criminal offense in connection with such referral.
``(f) Rule of Construction.--Nothing in this section shall be
construed--
``(1) to preclude the imposition of sanctions based upon
criminal or antitrust laws (including section 1001(a) of title 18,
the first section of the Clayton Act, and section 5 of the Federal
Trade Commission Act to the extent that section relates to unfair
methods of competition);
``(2) to limit the authority of the Director to investigate
issues of possible misconduct and impose sanctions for misconduct
in connection with matters or proceedings before the Office; or
``(3) to limit the authority of the Director to issue
regulations under chapter 3 relating to sanctions for misconduct by
representatives practicing before the Office.''.
(b) Conforming Amendment.--The table of sections for chapter 25 of
title 35, United States Code, is amended by adding at the end the
following new item:
``257. Supplemental examinations to consider, reconsider, or correct
information.''.
(c) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to any patent issued
before, on, or after that effective date.
SEC. 13. FUNDING AGREEMENTS.
(a) In General.--Section 202(c)(7)(E)(i) of title 35, United States
Code, is amended--
(1) by striking ``75 percent'' and inserting ``15 percent'';
(2) by striking ``25 percent'' and inserting ``85 percent'';
and
(3) by striking ``as described above in this clause (D);'' and
inserting ``described above in this clause;''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act and shall apply to any
patent issued before, on, or after that date.
SEC. 14. TAX STRATEGIES DEEMED WITHIN THE PRIOR ART.
(a) In General.--For purposes of evaluating an invention under
section 102 or 103 of title 35, United States Code, any strategy for
reducing, avoiding, or deferring tax liability, whether known or
unknown at the time of the invention or application for patent, shall
be deemed insufficient to differentiate a claimed invention from the
prior art.
(b) Definition.--For purposes of this section, the term ``tax
liability'' refers to any liability for a tax under any Federal, State,
or local law, or the law of any foreign jurisdiction, including any
statute, rule, regulation, or ordinance that levies, imposes, or
assesses such tax liability.
(c) Exclusions.--This section does not apply to that part of an
invention that--
(1) is a method, apparatus, technology, computer program
product, or system, that is used solely for preparing a tax or
information return or other tax filing, including one that records,
transmits, transfers, or organizes data related to such filing; or
(2) is a method, apparatus, technology, computer program
product, or system used solely for financial management, to the
extent that it is severable from any tax strategy or does not limit
the use of any tax strategy by any taxpayer or tax advisor.
(d) Rule of Construction.--Nothing in this section shall be
construed to imply that other business methods are patentable or that
other business method patents are valid.
(e) Effective Date; Applicability.--This section shall take effect
on the date of the enactment of this Act and shall apply to any patent
application that is pending on, or filed on or after, that date, and to
any patent that is issued on or after that date.
SEC. 15. BEST MODE REQUIREMENT.
(a) In General.--Section 282 of title 35, United States Code, is
amended in the second undesignated paragraph by striking paragraph (3)
and inserting the following:
``(3) Invalidity of the patent or any claim in suit for failure
to comply with--
``(A) any requirement of section 112, except that the
failure to disclose the best mode shall not be a basis on which
any claim of a patent may be canceled or held invalid or
otherwise unenforceable; or
``(B) any requirement of section 251.''.
(b) Conforming Amendment.--Sections 119(e)(1) and 120 of title 35,
United States Code, are each amended by striking ``the first paragraph
of section 112 of this title'' and inserting ``section 112(a) (other
than the requirement to disclose the best mode)''.
(c) Effective Date.--The amendments made by this section shall take
effect upon the date of the enactment of this Act and shall apply to
proceedings commenced on or after that date.
SEC. 16. MARKING.
(a) Virtual Marking.--
(1) In general.--Section 287(a) of title 35, United States
Code, is amended by striking ``or when,'' and inserting ``or by
fixing thereon the word `patent' or the abbreviation `pat.'
together with an address of a posting on the Internet, accessible
to the public without charge for accessing the address, that
associates the patented article with the number of the patent, or
when,''.
(2) Effective date.--The amendment made by this subsection
shall apply to any case that is pending on, or commenced on or
after, the date of the enactment of this Act.
(3) Report.--Not later than the date that is 3 years after the
date of the enactment of this Act, the Director shall submit a
report to Congress that provides--
(A) an analysis of the effectiveness of ``virtual
marking'', as provided in the amendment made by paragraph (1)
of this subsection, as an alternative to the physical marking
of articles;
(B) an analysis of whether such virtual marking has limited
or improved the ability of the general public to access
information about patents;
(C) an analysis of the legal issues, if any, that arise
from such virtual marking; and
(D) an analysis of the deficiencies, if any, of such
virtual marking.
(b) False Marking.--
(1) Civil penalty.--Section 292(a) of title 35, United States,
Code, is amended by adding at the end the following: ``Only the
United States may sue for the penalty authorized by this
subsection.''.
(2) Civil action for damages.--Subsection (b) of section 292 of
title 35, United States Code, is amended to read as follows:
``(b) A person who has suffered a competitive injury as a result of
a violation of this section may file a civil action in a district court
of the United States for recovery of damages adequate to compensate for
the injury.''.
(3) Expired patents.--Section 292 of title 35, United States
Code, is amended by adding at the end the following:
``(c) The marking of a product, in a manner described in subsection
(a), with matter relating to a patent that covered that product but has
expired is not a violation of this section.''.
(4) Effective date.--The amendments made by this subsection
shall apply to all cases, without exception, that are pending on,
or commenced on or after, the date of the enactment of this Act.
SEC. 17. ADVICE OF COUNSEL.
(a) In General.--Chapter 29 of title 35, United States Code, is
amended by adding at the end the following:
``Sec. 298. Advice of counsel
``The failure of an infringer to obtain the advice of counsel with
respect to any allegedly infringed patent, or the failure of the
infringer to present such advice to the court or jury, may not be used
to prove that the accused infringer willfully infringed the patent or
that the infringer intended to induce infringement of the patent.''.
(b) Conforming Amendment.--The table of sections for chapter 29 of
title 35, United States Code, is amended by adding at the end the
following:
``298. Advice of counsel.''.
SEC. 18. TRANSITIONAL PROGRAM FOR COVERED BUSINESS METHOD PATENTS.
(a) Transitional Program.--
(1) Establishment.--Not later than the date that is 1 year
after the date of the enactment of this Act, the Director shall
issue regulations establishing and implementing a transitional
post-grant review proceeding for review of the validity of covered
business method patents. The transitional proceeding implemented
pursuant to this subsection shall be regarded as, and shall employ
the standards and procedures of, a post-grant review under chapter
32 of title 35, United States Code, subject to the following:
(A) Section 321(c) of title 35, United States Code, and
subsections (b), (e)(2), and (f) of section 325 of such title
shall not apply to a transitional proceeding.
(B) A person may not file a petition for a transitional
proceeding with respect to a covered business method patent
unless the person or the person's real party in interest or
privy has been sued for infringement of the patent or has been
charged with infringement under that patent.
(C) A petitioner in a transitional proceeding who
challenges the validity of 1 or more claims in a covered
business method patent on a ground raised under section 102 or
103 of title 35, United States Code, as in effect on the day
before the effective date set forth in section 3(n)(1), may
support such ground only on the basis of--
(i) prior art that is described by section 102(a) of
such title of such title (as in effect on the day before
such effective date); or
(ii) prior art that--
(I) discloses the invention more than 1 year before
the date of the application for patent in the United
States; and
(II) would be described by section 102(a) of such
title (as in effect on the day before the effective
date set forth in section 3(n)(1)) if the disclosure
had been made by another before the invention thereof
by the applicant for patent.
(D) The petitioner in a transitional proceeding that
results in a final written decision under section 328(a) of
title 35, United States Code, with respect to a claim in a
covered business method patent, or the petitioner's real party
in interest, may not assert, either in a civil action arising
in whole or in part under section 1338 of title 28, United
States Code, or in a proceeding before the International Trade
Commission under section 337 of the Tariff Act of 1930 (19
U.S.C. 1337), that the claim is invalid on any ground that the
petitioner raised during that transitional proceeding.
(E) The Director may institute a transitional proceeding
only for a patent that is a covered business method patent.
(2) Effective date.--The regulations issued under paragraph (1)
shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall apply
to any covered business method patent issued before, on, or after
that effective date, except that the regulations shall not apply to
a patent described in section 6(f)(2)(A) of this Act during the
period in which a petition for post-grant review of that patent
would satisfy the requirements of section 321(c) of title 35,
United States Code.
(3) Sunset.--
(A) In general.--This subsection, and the regulations
issued under this subsection, are repealed effective upon the
expiration of the 8-year period beginning on the date that the
regulations issued under to paragraph (1) take effect.
(B) Applicability.--Notwithstanding subparagraph (A), this
subsection and the regulations issued under this subsection
shall continue to apply, after the date of the repeal under
subparagraph (A), to any petition for a transitional proceeding
that is filed before the date of such repeal.
(b) Request for Stay.--
(1) In general.--If a party seeks a stay of a civil action
alleging infringement of a patent under section 281 of title 35,
United States Code, relating to a transitional proceeding for that
patent, the court shall decide whether to enter a stay based on--
(A) whether a stay, or the denial thereof, will simplify
the issues in question and streamline the trial;
(B) whether discovery is complete and whether a trial date
has been set;
(C) whether a stay, or the denial thereof, would unduly
prejudice the nonmoving party or present a clear tactical
advantage for the moving party; and
(D) whether a stay, or the denial thereof, will reduce the
burden of litigation on the parties and on the court.
(2) Review.--A party may take an immediate interlocutory appeal
from a district court's decision under paragraph (1). The United
States Court of Appeals for the Federal Circuit shall review the
district court's decision to ensure consistent application of
established precedent, and such review may be de novo.
(c) ATM Exemption for Venue Purposes.--In an action for
infringement under section 281 of title 35, United States Code, of a
covered business method patent, an automated teller machine shall not
be deemed to be a regular and established place of business for
purposes of section 1400(b) of title 28, United States Code.
(d) Definition.--
(1) In general.--For purposes of this section, the term
``covered business method patent'' means a patent that claims a
method or corresponding apparatus for performing data processing or
other operations used in the practice, administration, or
management of a financial product or service, except that the term
does not include patents for technological inventions.
(2) Regulations.--To assist in implementing the transitional
proceeding authorized by this subsection, the Director shall issue
regulations for determining whether a patent is for a technological
invention.
(e) Rule of Construction.--Nothing in this section shall be
construed as amending or interpreting categories of patent-eligible
subject matter set forth under section 101 of title 35, United States
Code.
SEC. 19. JURISDICTION AND PROCEDURAL MATTERS.
(a) State Court Jurisdiction.--Section 1338(a) of title 28, United
States Code, is amended by striking the second sentence and inserting
the following: ``No State court shall have jurisdiction over any claim
for relief arising under any Act of Congress relating to patents, plant
variety protection, or copyrights. For purposes of this subsection, the
term `State' includes any State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the United States Virgin
Islands, American Samoa, Guam, and the Northern Mariana Islands.''.
(b) Court of Appeals for the Federal Circuit.--Section 1295(a)(1)
of title 28, United States Code, is amended to read as follows:
``(1) of an appeal from a final decision of a district court of
the United States, the District Court of Guam, the District Court
of the Virgin Islands, or the District Court of the Northern
Mariana Islands, in any civil action arising under, or in any civil
action in which a party has asserted a compulsory counterclaim
arising under, any Act of Congress relating to patents or plant
variety protection;''.
(c) Removal.--
(1) In general.--Chapter 89 of title 28, United States Code, is
amended by adding at the end the following new section:
``Sec. 1454. Patent, plant variety protection, and copyright cases
``(a) In General.--A civil action in which any party asserts a
claim for relief arising under any Act of Congress relating to patents,
plant variety protection, or copyrights may be removed to the district
court of the United States for the district and division embracing the
place where the action is pending.
``(b) Special Rules.--The removal of an action under this section
shall be made in accordance with section 1446, except that if the
removal is based solely on this section--
``(1) the action may be removed by any party; and
``(2) the time limitations contained in section 1446(b) may be
extended at any time for cause shown.
``(c) Clarification of Jurisdiction in Certain Cases.--The court to
which a civil action is removed under this section is not precluded
from hearing and determining any claim in the civil action because the
State court from which the civil action is removed did not have
jurisdiction over that claim.
``(d) Remand.--If a civil action is removed solely under this
section, the district court--
``(1) shall remand all claims that are neither a basis for
removal under subsection (a) nor within the original or
supplemental jurisdiction of the district court under any Act of
Congress; and
``(2) may, under the circumstances specified in section
1367(c), remand any claims within the supplemental jurisdiction of
the district court under section 1367.''.
(2) Conforming amendment.--The table of sections for chapter 89
of title 28, United States Code, is amended by adding at the end
the following new item:
``1454. Patent, plant variety protection, and copyright cases.''.
(d) Procedural Matters in Patent Cases.--
(1) Joinder of parties and stay of actions.--Chapter 29 of
title 35, United States Code, as amended by this Act, is further
amended by adding at the end the following new section:
``Sec. 299. Joinder of parties
``(a) Joinder of Accused Infringers.--With respect to any civil
action arising under any Act of Congress relating to patents, other
than an action or trial in which an act of infringement under section
271(e)(2) has been pled, parties that are accused infringers may be
joined in one action as defendants or counterclaim defendants, or have
their actions consolidated for trial, or counterclaim defendants only
if--
``(1) any right to relief is asserted against the parties
jointly, severally, or in the alternative with respect to or
arising out of the same transaction, occurrence, or series of
transactions or occurrences relating to the making, using,
importing into the United States, offering for sale, or selling of
the same accused product or process; and
``(2) questions of fact common to all defendants or
counterclaim defendants will arise in the action.
``(b) Allegations Insufficient for Joinder.--For purposes of this
subsection, accused infringers may not be joined in one action as
defendants or counterclaim defendants, or have their actions
consolidated for trial, based solely on allegations that they each have
infringed the patent or patents in suit.
``(c) Waiver.--A party that is an accused infringer may waive the
limitations set forth in this section with respect to that party.''.
(2) Conforming amendment.--The table of sections for chapter 29
of title 35, United States Code, as amended by this Act, is further
amended by adding at the end the following new item:
``299. Joinder of parties.''.
(e) Effective Date.--The amendments made by this section shall
apply to any civil action commenced on or after the date of the
enactment of this Act.
SEC. 20. TECHNICAL AMENDMENTS.
(a) Joint Inventions.--Section 116 of title 35, United States Code,
is amended--
(1) in the first undesignated paragraph, by striking
``When'' and inserting ``(a) Joint Inventions.--When'';
(2) in the second undesignated paragraph, by striking ``If
a joint inventor'' and inserting ``(b) Omitted Inventor.--If a
joint inventor''; and
(3) in the third undesignated paragraph--
(A) by striking ``Whenever'' and inserting ``(c)
Correction of Errors in Application.--Whenever''; and
(B) by striking ``and such error arose without any
deceptive intention on his part,''.
(b) Filing of Application in Foreign Country.--Section 184 of title
35, United States Code, is amended--
(1) in the first undesignated paragraph--
(A) by striking ``Except when'' and inserting ``(a) Filing
in Foreign Country.--Except when''; and
(B) by striking ``and without deceptive intent'';
(2) in the second undesignated paragraph, by striking ``The
term'' and inserting ``(b) Application.--The term''; and
(3) in the third undesignated paragraph, by striking ``The
scope'' and inserting ``(c) Subsequent Modifications, Amendments,
and Supplements.--The scope''.
(c) Filing Without a License.--Section 185 of title 35, United
States Code, is amended by striking ``and without deceptive intent''.
(d) Reissue of Defective Patents.--Section 251 of title 35, United
States Code, is amended--
(1) in the first undesignated paragraph--
(A) by striking ``Whenever'' and inserting ``(a) In
General.--Whenever''; and
(B) by striking ``without any deceptive intention'';
(2) in the second undesignated paragraph, by striking ``The
Director'' and inserting ``(b) Multiple Reissued Patents.--The
Director'';
(3) in the third undesignated paragraph, by striking ``The
provisions'' and inserting ``(c) Applicability of This Title.--The
provisions''; and
(4) in the last undesignated paragraph, by striking ``No
reissued patent'' and inserting ``(d) Reissue Patent Enlarging
Scope of Claims.--No reissued patent''.
(e) Effect of Reissue.--Section 253 of title 35, United States
Code, is amended--
(1) in the first undesignated paragraph, by striking
``Whenever, without any deceptive intention,'' and inserting ``(a)
In General.--Whenever''; and
(2) in the second undesignated paragraph, by striking ``In like
manner'' and inserting ``(b) Additional Disclaimer or Dedication.--
In the manner set forth in subsection (a),''.
(f) Correction of Named Inventor.--Section 256 of title 35, United
States Code, is amended--
(1) in the first undesignated paragraph--
(A) by striking ``Whenever'' and inserting ``(a)
Correction.--Whenever''; and
(B) by striking ``and such error arose without any
deceptive intention on his part''; and
(2) in the second undesignated paragraph, by striking ``The
error'' and inserting ``(b) Patent Valid if Error Corrected.--The
error''.
(g) Presumption of Validity.--Section 282 of title 35, United
States Code, is amended--
(1) in the first undesignated paragraph--
(A) by striking ``A patent'' and inserting ``(a) In
General.--A patent''; and
(B) by striking the third sentence;
(2) in the second undesignated paragraph--
(A) by striking ``The following'' and inserting ``(b)
Defenses.--The following'';
(B) in paragraph (1), by striking ``uneforceability,'' and
inserting ``unenforceability.''; and
(C) in paragraph (2), by striking ``patentability,'' and
inserting ``patentability.'' ; and
(3) in the third undesignated paragraph--
(A) by striking ``In actions involving the validity or
infringement of a patent'' and inserting ``(c) Notice of
Actions; Actions During Extension of Patent Term.--In an action
involving the validity or infringement of a patent''; and
(B) by striking ``Claims Court'' and inserting ``Court of
Federal Claims''.
(h) Action for Infringement.--Section 288 of title 35, United
States Code, is amended by striking ``, without deceptive intention,''.
(i) Reviser's Notes.--
(1) Section 3(e)(2) of title 35, United States Code, is amended
by striking ``this Act,'' and inserting ``that Act,''.
(2) Section 202 of title 35, United States Code, is amended--
(A) in subsection (b)(3), by striking ``the section
203(b)'' and inserting ``section 203(b)''; and
(B) in subsection (c)(7)(D), by striking ``except where it
proves'' and all that follows through ``small business firms;
and'' and inserting: ``except where it is determined to be
infeasible following a reasonable inquiry, a preference in the
licensing of subject inventions shall be given to small
business firms; and''.
(3) Section 209(d)(1) of title 35, United States Code, is
amended by striking ``nontransferrable'' and inserting
``nontransferable''.
(4) Section 287(c)(2)(G) of title 35, United States Code, is
amended by striking ``any state'' and inserting ``any State''.
(5) Section 371(b) of title 35, United States Code, is amended
by striking ``of the treaty'' and inserting ``of the treaty.''.
(j) Unnecessary References.--
(1) In general.--Title 35, United States Code, is amended by
striking ``of this title'' each place that term appears.
(2) Exception.--The amendment made by paragraph (1) shall not
apply to the use of such term in the following sections of title
35, United States Code:
(A) Section 1(c).
(B) Section 101.
(C) Subsections (a) and (b) of section 105.
(D) The first instance of the use of such term in section
111(b)(8).
(E) Section 161.
(F) Section 164.
(G) Section 171.
(H) Section 251(c), as so designated by this section.
(I) Section 261.
(J) Subsections (g) and (h) of section 271.
(K) Section 287(b)(1).
(L) Section 289.
(M) The first instance of the use of such term in section
375(a).
(k) Additional Technical Amendments.--Sections 155 and 155A of
title 35, United States Code, and the items relating to those sections
in the table of sections for chapter 14 of such title, are repealed.
(l) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to proceedings commenced
on or after that effective date.
SEC. 21. TRAVEL EXPENSES AND PAYMENT OF ADMINISTRATIVE JUDGES.
(a) Authority To Cover Certain Travel Related Expenses.--Section
2(b)(11) of title 35, United States Code, is amended by inserting ``,
and the Office is authorized to expend funds to cover the subsistence
expenses and travel-related expenses, including per diem, lodging
costs, and transportation costs, of persons attending such programs who
are not Federal employees'' after ``world''.
(b) Payment of Administrative Judges.--Section 3(b) of title 35,
United States Code, is amended by adding at the end the following:
``(6) Administrative patent judges and administrative trademark
judges.--The Director may fix the rate of basic pay for the
administrative patent judges appointed pursuant to section 6 and
the administrative trademark judges appointed pursuant to section
17 of the Trademark Act of 1946 (15 U.S.C. 1067) at not greater
than the rate of basic pay payable for level III of the Executive
Schedule under section 5314 of title 5. The payment of a rate of
basic pay under this paragraph shall not be subject to the pay
limitation under section 5306(e) or 5373 of title 5.''.
SEC. 22. PATENT AND TRADEMARK OFFICE FUNDING.
(a) In General.--Section 42(c) of title 35, United States Code, is
amended--
(1) by striking ``(c)'' and inserting ``(c)(1)'';
(2) in the first sentence, by striking ``shall be available''
and inserting ``shall, subject to paragraph (3), be available'';
(3) by striking the second sentence; and
(4) by adding at the end the following:
``(2) There is established in the Treasury a Patent and Trademark
Fee Reserve Fund. If fee collections by the Patent and Trademark Office
for a fiscal year exceed the amount appropriated to the Office for that
fiscal year, fees collected in excess of the appropriated amount shall
be deposited in the Patent and Trademark Fee Reserve Fund. To the
extent and in the amounts provided in appropriations Acts, amounts in
the Fund shall be made available until expended only for obligation and
expenditure by the Office in accordance with paragraph (3).
``(3)(A) Any fees that are collected under sections 41, 42, and
376, and any surcharges on such fees, may only be used for expenses of
the Office relating to the processing of patent applications and for
other activities, services, and materials relating to patents and to
cover a share of the administrative costs of the Office relating to
patents.
``(B) Any fees that are collected under section 31 of the Trademark
Act of 1946, and any surcharges on such fees, may only be used for
expenses of the Office relating to the processing of trademark
registrations and for other activities, services, and materials
relating to trademarks and to cover a share of the administrative costs
of the Office relating to trademarks.''.
(b) Effective Date.--The amendments made by this section shall take
effect on October 1, 2011.
SEC. 23. SATELLITE OFFICES.
(a) Establishment.--Subject to available resources, the Director
shall, by not later than the date that is 3 years after the date of the
enactment of this Act, establish 3 or more satellite offices in the
United States to carry out the responsibilities of the Office.
(b) Purposes.--The purposes of the satellite offices established
under subsection (a) are to--
(1) increase outreach activities to better connect patent
filers and innovators with the Office;
(2) enhance patent examiner retention;
(3) improve recruitment of patent examiners;
(4) decrease the number of patent applications waiting for
examination; and
(5) improve the quality of patent examination.
(c) Required Considerations.--
(1) In general.--In selecting the location of each satellite
office to be established under subsection (a), the Director--
(A) shall ensure geographic diversity among the offices,
including by ensuring that such offices are established in
different States and regions throughout the Nation;
(B) may rely upon any previous evaluations by the Office of
potential locales for satellite offices, including any
evaluations prepared as part of the Office's Nationwide
Workforce Program that resulted in the 2010 selection of
Detroit, Michigan, as the first satellite office of the Office;
(C) shall evaluate and consider the extent to which the
purposes of satellite offices listed under subsection (b) will
be achieved;
(D) shall consider the availability of scientific and
technically knowledgeable personnel in the region from which to
draw new patent examiners at minimal recruitment cost; and
(E) shall consider the economic impact to the region.
(2) Open selection process.--Nothing in paragraph (1) shall
constrain the Office to only consider its evaluations in selecting
the Detroit, Michigan, satellite office.
(d) Report to Congress.--Not later than the end of the third fiscal
year that begins after the date of the enactment of this Act, the
Director shall submit a report to Congress on--
(1) the rationale of the Director in selecting the location of
any satellite office required under subsection (a), including an
explanation of how the selected location will achieve the purposes
of satellite offices listed under subsection (b) and how the
required considerations listed under subsection (c) were met;
(2) the progress of the Director in establishing all such
satellite offices; and
(3) whether the operation of existing satellite offices is
achieving the purposes under subsection (b).
SEC. 24. DESIGNATION OF DETROIT SATELLITE OFFICE.
(a) Designation.--The satellite office of the United States Patent
and Trademark Office to be located in Detroit, Michigan, shall be known
and designated as the ``Elijah J. McCoy United States Patent and
Trademark Office''.
(b) References.--Any reference in a law, map, regulation, document,
paper, or other record of the United States to the satellite office of
the United States Patent and Trademark Office to be located in Detroit,
Michigan, referred to in subsection (a) shall be deemed to be a
reference to the ``Elijah J. McCoy United States Patent and Trademark
Office''.
SEC. 25. PRIORITY EXAMINATION FOR IMPORTANT TECHNOLOGIES.
Section 2(b)(2) of title 35, United States Code, is amended--
(1) in subparagraph (E), by striking ``and'' after the
semicolon;
(2) in subparagraph (F), by inserting ``and'' after the
semicolon; and
(3) by adding at the end the following:
``(G) may, subject to any conditions prescribed by the
Director and at the request of the patent applicant, provide
for prioritization of examination of applications for products,
processes, or technologies that are important to the national
economy or national competitiveness without recovering the
aggregate extra cost of providing such prioritization,
notwithstanding section 41 or any other provision of law;''.
SEC. 26. STUDY ON IMPLEMENTATION.
(a) PTO Study.--The Director shall conduct a study on the manner in
which this Act and the amendments made by this Act are being
implemented by the Office, and on such other aspects of the patent
policies and practices of the Federal Government with respect to patent
rights, innovation in the United States, competitiveness of United
States markets, access by small businesses to capital for investment,
and such other issues, as the Director considers appropriate.
(b) Report to Congress.--The Director shall, not later than the
date that is 4 years after the date of the enactment of this Act,
submit to the Committees on the Judiciary of the House of
Representatives and the Senate a report on the results of the study
conducted under subsection (a), including recommendations for any
changes to laws and regulations that the Director considers
appropriate.
SEC. 27. STUDY ON GENETIC TESTING.
(a) In General.--The Director shall conduct a study on effective
ways to provide independent, confirming genetic diagnostic test
activity where gene patents and exclusive licensing for primary genetic
diagnostic tests exist.
(b) Items Included in Study.--The study shall include an
examination of at least the following:
(1) The impact that the current lack of independent second
opinion testing has had on the ability to provide the highest level
of medical care to patients and recipients of genetic diagnostic
testing, and on inhibiting innovation to existing testing and
diagnoses.
(2) The effect that providing independent second opinion
genetic diagnostic testing would have on the existing patent and
license holders of an exclusive genetic test.
(3) The impact that current exclusive licensing and patents on
genetic testing activity has on the practice of medicine, including
but not limited to: the interpretation of testing results and
performance of testing procedures.
(4) The role that cost and insurance coverage have on access to
and provision of genetic diagnostic tests.
(c) Confirming Genetic Diagnostic Test Activity Defined.--For
purposes of this section, the term ``confirming genetic diagnostic test
activity'' means the performance of a genetic diagnostic test, by a
genetic diagnostic test provider, on an individual solely for the
purpose of providing the individual with an independent confirmation of
results obtained from another test provider's prior performance of the
test on the individual.
(d) Report.--Not later than 9 months after the date of enactment of
this Act, the Director shall report to the Committee on the Judiciary
of the Senate and the Committee on the Judiciary of the House of
Representatives on the findings of the study and provide
recommendations for establishing the availability of such independent
confirming genetic diagnostic test activity.
SEC. 28. PATENT OMBUDSMAN PROGRAM FOR SMALL BUSINESS CONCERNS.
Using available resources, the Director shall establish and
maintain in the Office a Patent Ombudsman Program. The duties of the
Program's staff shall include providing support and services relating
to patent filings to small business concerns and independent inventors.
SEC. 29. ESTABLISHMENT OF METHODS FOR STUDYING THE DIVERSITY OF
APPLICANTS.
The Director shall, not later than the end of the 6-month period
beginning on the date of the enactment of this Act, establish methods
for studying the diversity of patent applicants, including those
applicants who are minorities, women, or veterans. The Director shall
not use the results of such study to provide any preferential treatment
to patent applicants.
SEC. 30. SENSE OF CONGRESS.
It is the sense of Congress that the patent system should promote
industries to continue to develop new technologies that spur growth and
create jobs across the country which includes protecting the rights of
small businesses and inventors from predatory behavior that could
result in the cutting off of innovation.
SEC. 31. USPTO STUDY ON INTERNATIONAL PATENT PROTECTIONS FOR SMALL
BUSINESSES.
(a) Study Required.--The Director, in consultation with the
Secretary of Commerce and the Administrator of the Small Business
Administration, shall, using the existing resources of the Office,
carry out a study--
(1) to determine how the Office, in coordination with other
Federal departments and agencies, can best help small businesses
with international patent protection; and
(2) whether, in order to help small businesses pay for the
costs of filing, maintaining, and enforcing international patent
applications, there should be established either--
(A) a revolving fund loan program to make loans to small
businesses to defray the costs of such applications,
maintenance, and enforcement and related technical assistance;
or
(B) a grant program to defray the costs of such
applications, maintenance, and enforcement and related
technical assistance.
(b) Report.--Not later than 120 days after the date of the
enactment of this Act, the Director shall issue a report to the
Congress containing--
(1) all findings and determinations made in carrying out the
study required under subsection (a);
(2) a statement of whether the determination was made that--
(A) a revolving fund loan program described under
subsection (a)(2)(A) should be established;
(B) a grant program described under subsection (a)(2)(B)
should be established; or
(C) neither such program should be established; and
(3) any legislative recommendations the Director may have
developed in carrying out such study.
SEC. 32. PRO BONO PROGRAM.
(a) In General.--The Director shall work with and support
intellectual property law associations across the country in the
establishment of pro bono programs designed to assist financially
under-resourced independent inventors and small businesses.
(b) Effective Date.--This section shall take effect on the date of
the enactment of this Act.
SEC. 33. LIMITATION ON ISSUANCE OF PATENTS.
(a) Limitation.--Notwithstanding any other provision of law, no
patent may issue on a claim directed to or encompassing a human
organism.
(b) Effective Date.--
(1) In general.--Subsection (a) shall apply to any application
for patent that is pending on, or filed on or after, the date of
the enactment of this Act.
(2) Prior applications.--Subsection (a) shall not affect the
validity of any patent issued on an application to which paragraph
(1) does not apply.
SEC. 34. STUDY OF PATENT LITIGATION.
(a) GAO Study.--The Comptroller General of the United States shall
conduct a study of the consequences of litigation by non-practicing
entities, or by patent assertion entities, related to patent claims
made under title 35, United States Code, and regulations authorized by
that title.
(b) Contents of Study.--The study conducted under this section
shall include the following:
(1) The annual volume of litigation described in subsection (a)
over the 20-year period ending on the date of the enactment of this
Act.
(2) The volume of cases comprising such litigation that are
found to be without merit after judicial review.
(3) The impacts of such litigation on the time required to
resolve patent claims.
(4) The estimated costs, including the estimated cost of
defense, associated with such litigation for patent holders, patent
licensors, patent licensees, and inventors, and for users of
alternate or competing innovations.
(5) The economic impact of such litigation on the economy of
the United States, including the impact on inventors, job creation,
employers, employees, and consumers.
(6) The benefit to commerce, if any, supplied by non-practicing
entities or patent assertion entities that prosecute such
litigation.
(c) Report to Congress.--The Comptroller General shall, not later
than the date that is 1 year after the date of the enactment of this
Act, submit to the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the Senate a
report on the results of the study required under this section,
including recommendations for any changes to laws and regulations that
will minimize any negative impact of patent litigation that was the
subject of such study.
SEC. 35. EFFECTIVE DATE.
Except as otherwise provided in this Act, the provisions of this
Act shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall apply to
any patent issued on or after that effective date.
SEC. 36. BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by
reference to the latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, submitted for printing in the Congressional
Record by the Chairman of the House Budget Committee, provided that
such statement has been submitted prior to the vote on passage.
SEC. 37. CALCULATION OF 60-DAY PERIOD FOR APPLICATION OF PATENT TERM
EXTENSION.
(a) In General.--Section 156(d)(1) of title 35, United States Code,
is amended by adding at the end the following flush sentence:
``For purposes of determining the date on which a product receives
permission under the second sentence of this paragraph, if such
permission is transmitted after 4:30 P.M., Eastern Time, on a business
day, or is transmitted on a day that is not a business day, the product
shall be deemed to receive such permission on the next business day.
For purposes of the preceding sentence, the term `business day' means
any Monday, Tuesday, Wednesday, Thursday, or Friday, excluding any
legal holiday under section 6103 of title 5.''.
(b) Applicability.--The amendment made by subsection (a) shall
apply to any application for extension of a patent term under section
156 of title 35, United States Code, that is pending on, that is filed
after, or as to which a decision regarding the application is subject
to judicial review on, the date of the enactment of this Act.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.