[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1249 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 1249
To amend title 35, United States Code, to provide for patent reform.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 30, 2011
Mr. Smith of Texas (for himself, Mr. Goodlatte, and Mr. Issa)
introduced the following bill; which was referred to the Committee on
the Judiciary, and in addition to the Committee on the Budget, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend title 35, United States Code, to provide for patent reform.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``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. First inventor to file.
Sec. 3. Inventor's oath or declaration.
Sec. 4. Defense to infringement based on earlier inventor.
Sec. 5. Post-grant review proceedings.
Sec. 6. Patent Trial and Appeal Board.
Sec. 7. Preissuance submissions by third parties.
Sec. 8. Venue.
Sec. 9. Fee setting authority.
Sec. 10. Fees for patent services.
Sec. 11. Supplemental examination.
Sec. 12. Funding agreements.
Sec. 13. Tax strategies deemed within the prior art.
Sec. 14. Best mode requirement.
Sec. 15. Marking.
Sec. 16. Advice of counsel.
Sec. 17. Ownership; assignment.
Sec. 18. Transitional program for covered business method patents.
Sec. 19. Clarification of jurisdiction.
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. Patent Ombudsman Program for small business concerns.
Sec. 25. Priority examination for technologies important to American
competitiveness.
Sec. 26. Designation of Detroit satellite office.
Sec. 27. Effective date.
Sec. 28. Budgetary effects.
SEC. 2. FIRST INVENTOR TO FILE.
(a) Definitions.--Section 100 of title 35, United States Code, is
amended by adding at the end the following:
``(f) The term `inventor' means the individual or, if a joint
invention, the individuals collectively who invented or discovered the
subject matter of the invention.
``(g) The terms `joint inventor' and `coinventor' mean any 1 of the
individuals who invented or discovered the subject matter of a joint
invention.
``(h) The 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; nonobvious 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 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. The Director
shall prescribe regulations setting forth standards for the conduct of
derivation proceedings.
``(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, 305, and 314 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) Sections 146 and 157(a) of title 35, United States Code, are
each amended--
(i) by striking ``an interference'' each place it
appears and inserting ``a derivation proceeding''; and
(ii) by striking ``interference'' each additional
place it appears and inserting ``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
State 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 regarding 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 date of the enactment of this Act,
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.
SEC. 3. 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 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 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) is amended by striking ``the
first paragraph of section 112 of this title'' and inserting
``section 112(a)''.
(2) Section 111(b)(2) 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. 4. DEFENSE TO INFRINGEMENT BASED ON EARLIER INVENTOR.
Section 273 of title 35, United States Code, is amended as follows:
(1) Subsection (a) is amended--
(A) in paragraph (1), by striking ``use of a method
in'' and inserting ``use of the subject matter of a
patent in or outside'' ;
(B) by striking paragraph (3); and
(C) by redesignating paragraph (4) as paragraph
(3).
(2) Subsection (b) is amended--
(A) in paragraph (1), by striking ``for a method'';
(B) in paragraph (2), by striking ``patented
method'' and inserting ``patented process'';
(C) in paragraph (3)--
(i) by striking subparagraph (A);
(ii) by redesignating subparagraphs (B) and
(C) as subparagraph (A) and (C), respectively;
and
(iii) by adding at the end the following:
``(D) Funding.--
``(i) Defense not available in certain
cases.--A person may not assert the defense
under this section if the subject matter of the
patent on which the defense is based was
developed pursuant to a funding agreement under
chapter 18 of this title or by a nonprofit
institution of higher education, or a
technology transfer organization affiliated
with such an institution, that did not receive
funding from a private business enterprise in
support of that development.
``(ii) Definitions.--In this subparagraph--
``(I) the term `institution of
higher education' has the meaning given
that term in section 101(a) of the
Higher Education Act of 1965 (20 U.S.C.
1001(a)); and
``(II) the term `technology
transfer organization' means an
organization the primary purpose of
which is to facilitate the
commercialization of technologies
developed by one or more institutions
of higher education.''; and
(D) by amending paragraph (6) to read as follows:
``(6) Personal defense.--
``(A) In general.--The defense under this section
may be asserted only by the person who performed or
caused the performance of the acts necessary to
establish the defense, as well as any other entity that
controls, is controlled by, or is under common control
with such person, and, except for any transfer to the
patent owner, the right to assert the defense shall not
be licensed or assigned or transferred to another
person except 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.
``(B) Exception.--Notwithstanding subparagraph (A),
any person may, on the person's own behalf, assert a
defense based on the exhaustion of rights provided
under paragraph (2), including any necessary elements
thereof.''.
SEC. 5. 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.
``320. Request for stay of certain proceedings.
``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 12 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
``(a) Preliminary Response.--If an inter partes review petition is
filed under section 311, the patent owner shall have the right to file
a preliminary response within a time period set by the Director.
``(b) Content of Response.--A preliminary response to a petition
for inter partes review shall set 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 commence unless the Director determines that the information
presented in the petition filed under section 311 and any response
filed under section 313 shows that a substantial new question of
patentability exists.
``(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,
real party in interest, or privy of the petitioner filed a
civil action challenging the validity of a claim of the patent.
``(2) Stay of civil action.--If the petitioner, real party
in interest, or privy of the petitioner 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 requests to lift the stay;
``(B) the patent owner files a civil action or
counterclaim alleging that the petitioner, real party
in interest, or privy of the petitioner has infringed
the patent; or
``(C) the petitioner, real party in interest, or
privy of the petitioner requests 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
9 months 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 under this chapter, or the real party in
interest or privy of the petitioner, may not request or
maintain a proceeding before the Office with respect to a claim
on any ground that the petitioner raised or reasonably could
have raised during an inter partes review of the claim that
resulted in a final written decision under section 318(a).
``(2) Civil actions and other proceedings.--The petitioner
in an inter partes review under this chapter, 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 a claim in a patent is invalid on any ground that the
petitioner raised or reasonably could have raised during an
inter partes review of the claim that resulted in a final
written decision under section 318(a).
``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) in accordance with section 2(b)(2), establishing and
governing inter partes review under this chapter and the
relationship of such review to other proceedings under this
title;
``(5) setting a time period for requesting joinder under
section 315(c);
``(6) 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;
``(7) 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;
``(8) providing for protective orders governing the
exchange and submission of confidential information;
``(9) 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;
``(10) 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;
``(11) providing either party with the right to an oral
hearing as part of the proceeding; and
``(12) 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).
``(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 proceeding
authorized by the Director.
``(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 apply to that petitioner. 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. If any
party filing such agreement or understanding so requests, the copy
shall be kept separate from the file of the inter partes review, and
shall be made available only to Federal Government agencies upon
written request, or to any other 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) 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.
``Sec. 320. Request for stay of certain proceedings
``If a party seeks a stay of a civil action alleging infringement
of a patent under section 281, or a proceeding before the International
Trade Commission under section 337 of the Tariff Act of 1930, relating
to an inter partes review under this chapter, the court shall decide
whether to enter a stay based on--
``(1) whether a stay, or the denial thereof, will simplify
the issues in question and streamline the trial;
``(2) whether discovery is complete and whether a trial
date has been set;
``(3) whether a stay, or the denial thereof, would unduly
prejudice the nonmoving party or present a clear tactical
advantage for the moving party; and
``(4) whether a stay, or the denial thereof, will reduce
the burden of litigation on the parties and on the court.''.
(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 such inter partes reexaminations
that are ordered in the last fiscal year ending before
the effective date of the amendments made by subsection
(a).
(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.
``330. Request for stay of certain proceedings.
``Sec. 321. Post-grant review
``(a) In General.--Subject to the provisions of this chapter, a
person who is not the patent owner may file with the Office a petition
to institute a post-grant review of a 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 12 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
``(a) Preliminary Response.--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 2 months after the date
on which the petition is filed.
``(b) Content of Response.--A preliminary response to a petition
for post-grant review shall set 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 commence 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. The Director shall make each notice of the institution
of a post-grant review available to the public. 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, real party in interest, or privy of the
petitioner filed a civil action challenging the validity of a
claim of the patent.
``(2) Stay of civil action.--If the petitioner, real party
in interest, or privy of the petitioner 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 requests to lift the stay;
``(B) the patent owner files a civil action or
counterclaim alleging that the petitioner, real party
in interest, or privy of the petitioner has infringed
the patent; or
``(C) the petitioner, real party in interest, or
privy of the petitioner requests to dismiss his 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 under this chapter, or the real party in
interest or privy of the petitioner, may not request or
maintain a proceeding before the Office with respect to a claim
on any ground that the petitioner raised or reasonably could
have raised during a post-grant review of the claim that
resulted in a final written decision under section 328(a).
``(2) Civil actions and other proceedings.--The petitioner
in a post-grant review under this chapter, 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 a
claim in a patent is invalid on any ground that the petitioner
raised during a post-grant review of the claim that resulted in
a final written decision under section 328(a).
``(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) in accordance with section 2(b)(2), 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) allowing the patent owner to file a response to the
petition 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; and
``(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).
``(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 proceeding
authorized by the Director.
``(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 apply to that petitioner. 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. If any
party filing such agreement or understanding so requests, the copy
shall be kept separate from the file of the post-grant review, and
shall be made available only to Federal Government agencies upon
written request, or to any other 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) 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.
``Sec. 330. Request for stay of certain proceedings
``If a party seeks a stay of a civil action alleging infringement
of a patent under section 281, or a proceeding before the International
Trade Commission under section 337 of the Tariff Act of 1930, relating
to a post-grant review under this chapter, the court shall decide
whether to enter a stay based on--
``(1) whether a stay, or the denial thereof, will simplify
the issues in question and streamline the trial;
``(2) whether discovery is complete and whether a trial
date has been set;
``(3) whether a stay, or the denial thereof, would unduly
prejudice the nonmoving party or present a clear tactical
advantage for the moving party; and
``(4) whether a stay, or the denial thereof, will reduce
the burden of litigation on the parties and on the court.''.
(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 to any patent that is
described in section 2(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 4 years following the effective date
set forth in subparagraph (A).
(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) 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),
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, and the
jurisdiction to entertain appeals from derivation
proceedings in section 1295(a)(4)(A) of title 28,
United States Code, shall be deemed to extend to any
final decision in an interference that is commenced
before the effective date set forth in paragraph (2) 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, it 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 that is pending before the Board of
Patent Appeals and Interferences or the Patent Trial
and Appeal Board on or after the date of the enactment
of this Act.
SEC. 6. 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 the 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 a post-grant
or inter partes review who is dissatisfied with the final written
decision of the Patent Trial and Appeal Board under section 318(a) or
328(a) 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 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) 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 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 date of
the enactment of this Act shall continue to apply to inter
partes reexaminations that are requested under section 311 of
such title before the effective date of the amendments made by
this section;
(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. 7. 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. 8. 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. 9. 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 (f) 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 trademark 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 examination fee for the application 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 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 examination fee for
the application 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 year is not in United States
dollars, the average currency exchange rate, as reported by the
Internal Revenue Service, during the preceding 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) Public Institutions of Higher Education.--
``(1) In general.--For purposes of this section, a micro
entity shall include an applicant who certifies that--
``(A) 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 of the Higher Education Act of
1965 (20 U.S.C. 1001), that is a public institution; or
``(B) 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 application to
such State public institution.
``(2) Director's authority.--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 subsection 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 paragraph shall 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, a 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.--This section and the amendments made by this
section shall take effect on the date of the enactment of this Act.
SEC. 10. 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
either by acquiring a search report from a qualified
search authority, or by causing a search by Office
personnel to be made, of each application for patent.
``(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.
``(E) Applications subject to secrecy order.--A
search of an application that is the subject of a
secrecy order under section 181 or otherwise involves
classified information may be conducted only by Office
personnel.
``(F) Conflicts of interest.--A qualified search
authority that is a commercial entity may not conduct a
search of a patent application if the entity has any
direct or indirect financial interest in any patent or
in any pending or imminent application for patent filed
or to be filed in the Office.
``(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) Division B of 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) Electronic Filing Incentive.--
(1) In general.--Notwithstanding any other provision of
this section, a 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) Reduction in Fees for Small Entity Patents.--The Director shall
reduce fees for providing prioritized examination of utility and plant
patent applications by 50 percent for small entities that qualify for
reduced fees under section 41(h)(1) of title 35, United States Code, so
long as the fees of the prioritized examination program are set to
recover the estimated cost of the program.
(j) 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.
SEC. 11. 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, 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) 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. 12. 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''; and
(2) by striking ``25 percent'' and inserting ``85
percent''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of enactment of this Act and shall apply to any
patent issued before, on, or after that date.
SEC. 13. 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 enactment of this Act and shall apply to any patent
application pending, and any patent issued, on or after that date.
SEC. 14. BEST MODE REQUIREMENT.
(a) In General.--Section 282 of title 35, United State Code, is
amended in its 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. 15. 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.
(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) Effective date.--The amendments 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.
SEC. 16. 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. 17. OWNERSHIP; ASSIGNMENT.
The fourth undesignated paragraph of section 261 of title 35,
United States Code, is amended by inserting before the period the
following: ``and identifies all real parties in interest and those
entities that control, directly or indirectly, such real parties in
interest''.
SEC. 18. TRANSITIONAL PROGRAM FOR COVERED BUSINESS METHOD PATENTS.
(a) References.--Except as otherwise expressly provided, wherever
in this section language is expressed in terms of a section or chapter,
the reference shall be considered to be made to that section or chapter
in title 35, United States Code.
(b) 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, subject to the following:
(A) Section 321(c) and subsections (b), (e)(2), and
(f) of section 325 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 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, as in effect on the day before the
date of the enactment of this Act, may support such
ground only on the basis of--
(i) prior art that is described by section
102(a) (as in effect on the day before the date
of the enactment of this Act); 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) (as in effect on the day before
the date of the enactment of this Act)
if the disclosure had been made by
another before the invention thereof by
the applicant for patent.
(D) The petitioner in a transitional proceeding, 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, that a claim in a patent is invalid on any
ground that the petitioner raised during a transitional
proceeding that resulted in a final written decision.
(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 such effective date, except that the regulations shall
not apply to a patent described in the first sentence of
section 5(f)(2) of this Act during the period that a petition
for post-grant review of that patent would satisfy the
requirements of section 321(c).
(3) Sunset.--
(A) In general.--This subsection, and the
regulations issued under this subsection, are repealed
effective upon the expiration of the 4-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.
(c) Request for Stay.--
(1) In general.--If a party seeks a stay of a civil action
alleging infringement of a patent under section 281 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 de novo the district court's decision to ensure
consistent application of established precedent.
(d) Venue of Infringement Actions.--Notwithstanding section 1400(b)
of title 28, United States Code, an action for infringement under
section 281 of title 35, United States Code, of a covered business
method patent may be brought only in a judicial district--
(1) where the defendant has its principal place of business
or is incorporated;
(2) where the defendant has committed acts of infringement
and has a regular and established place of business;
(3) where the defendant has agreed or consented to be sued;
or
(4) for foreign defendants that do not meet the
requirements of paragraphs (1) or (2), in accordance with
section 1391(d) of title 28, United States Code.
(e) Attorney's Fees and Costs.--In an action for infringement under
section 281 of title 35, United States Code, of a covered business
method patent, the prevailing party shall be entitled to reasonable
attorney's fees and costs.
(f) 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 physical facility for purposes of section 1400(b)(2)
of title 28, United States Code.
(g) 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.
(h) 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.
SEC. 19. CLARIFICATION OF JURISDICTION.
(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.''.
(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 of this chapter, 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) Transfer by Court of Appeals for the Federal Circuit.--
(1) In general.--Chapter 99 of title 28, United States
Code, is amended by adding at the end the following new
section:
``Sec. 1632. Transfer by the Court of Appeals for the Federal Circuit
``When a case is appealed to the Court of Appeals for the Federal
Circuit under section 1295(a)(1), and no claim for relief arising under
any Act of Congress relating to patents or plant variety protection is
the subject of the appeal by any party, the Court of Appeals for the
Federal Circuit shall transfer the appeal to the court of appeals for
the regional circuit embracing the district from which the appeal has
been taken.''.
(2) Conforming amendment.--The table of sections for
chapter 99 of title 28, United States Code, is amended by
adding at the end the following new item:
``1632. Transfer by the Court of Appeals for the Federal Circuit.''.
(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 intent 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) Ownership; Assignment.--The fourth undesignated paragraph of
section 261 of title 35, United States Code, is amended by inserting
before the period the following: ``and identifies all real parties in
interest''.
(h) 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, by striking ``The
following'' and inserting ``(b) Defenses.--The following''; 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 patent, the party asserting
infringement shall identify, in the pleadings or
otherwise in writing to the adverse party, all of its
real parties in interest, and''; and
(B) by striking ``Claims Court'' and inserting
``Court of Federal Claims''.
(i) Action for Infringement.--Section 288 of title 35, United
States Code, is amended by striking ``, without deceptive intention,''.
(j) 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)--
(i) in subparagraph (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''; and
(ii) in subparagraph (E)(i), by striking
``as described above in this clause (D);'' and
inserting ``described above in this clause;''.
(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.''.
(k) 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 100.
(C) Section 101.
(D) Subsections (a) and (b) of section 105.
(E) The first instance of the use of such term in
section 111(b)(8).
(F) Section 157(a), in the matter preceding
paragraph (1).
(G) Section 161.
(H) Section 164.
(I) Section 171.
(J) Section 251(c), as so designated by this
section.
(K) Section 261.
(L) Subsections (a), (g), and (h) of section 271.
(M) Section 287(b)(1).
(N) Section 289.
(O) The first instance of the use of such term in
section 375(a).
(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 non-federal employees attending
such programs'' 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 has the authority to fix the
rate of basic pay for the administrative patent judges
appointed pursuant to section 6 of this title 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. The payment of a rate of basic pay under
this paragraph shall not be subject to the pay limitation of
section 5306(e) or 5373 of title 5.''.
SEC. 22. PATENT AND TRADEMARK OFFICE FUNDING.
(a) Definition.--In this section, the term ``Fund'' means the
United States Patent and Trademark Office Public Enterprise Fund
established under subsection (c).
(b) Funding.--
(1) In general.--Section 42 of title 35, United States
Code, is amended--
(A) in subsection (b), by striking ``Patent and
Trademark Office Appropriation Account'' and inserting
``United States Patent and Trademark Office Public
Enterprise Fund''; and
(B) in subsection (c), in the first sentence--
(i) by striking ``To the extent'' and all
that follows through ``fees'' and inserting
``Fees''; and
(ii) by striking ``shall be collected by
and shall be available to the Director'' and
inserting ``shall be collected by the Director
and shall be available until expended''.
(2) Effective date.--The amendments made by paragraph (1)
shall take effect on the later of--
(A) October 1, 2011; or
(B) the first day of the first fiscal year that
begins after the date of the enactment of this Act.
(c) USPTO Revolving Fund.--
(1) Establishment.--There is established in the Treasury of
the United States a revolving fund to be known as the ``United
States Patent and Trademark Office Public Enterprise Fund''.
Amounts shall be deposited in the Fund as an offsetting receipt
and shall be available for use by the Director without fiscal
year limitation.
(2) Derivation of resources.--There shall be deposited into
the Fund, on and after the effective date set forth in
subsection (b)(2)--
(A) any fees collected under sections 41, 42, and
376 of title 35, United States Code, except that--
(i) notwithstanding any other provision of
law, if such fees are collected by, and payable
to, the Director, the Director shall transfer
such amounts to the Fund; and
(ii) no funds collected pursuant to section
9(h) of this Act or section 1(a)(2) of Public
Law 111-45 shall be deposited in the Fund; and
(B) any fees collected under section 31 of the
Trademark Act of 1946 (15 U.S.C. 1113).
(3) Expenses.--Amounts deposited into the Fund under
paragraph (2) shall be available, without fiscal year
limitation, to cover--
(A) all expenses to the extent consistent with the
limitation on the use of fees set forth in section
42(c) of title 35, United States Code, including all
administrative and operating expenses, determined in
the discretion of the Director to be ordinary and
reasonable, incurred by the Director for the continued
operation of all services, programs, activities, and
duties of the Office relating to patents and
trademarks, as such services, programs, activities, and
duties are described under--
(i) title 35, United States Code; and
(ii) the Trademark Act of 1946; and
(B) all expenses incurred pursuant to any
obligation, representation, or other commitment of the
Office.
(d) Annual Report.--Not later than 60 days after the end of each
fiscal year, the Director shall submit a report to Congress which
shall--
(1) summarize the operations of the Office for the
preceding fiscal year, including financial details and staff
levels broken down by each major activity of the Office;
(2) detail the operating plan of the Office, including
specific expense and staff needs for the upcoming fiscal year;
(3) describe the long-term modernization plans of the
Office;
(4) set forth details of any progress towards such
modernization plans made in the previous fiscal year; and
(5) include the results of the most recent audit carried
out under subsection (f).
(e) Annual Spending Plan.--
(1) In general.--Not later than 30 days after the beginning
of each fiscal year, the Director shall notify the Committees
on Appropriations of both Houses of Congress of the plan for
the obligation and expenditure of the total amount of the funds
for that fiscal year in accordance with section 605 of the
Science, State, Justice, Commerce, and Related Agencies
Appropriations Act, 2006 (Public Law 109-108; 119 Stat. 2334).
(2) Contents.--Each plan under paragraph (1) shall--
(A) summarize the operations of the Office for the
current fiscal year, including financial details and
staff levels with respect to major activities; and
(B) detail the operating plan of the Office,
including specific expense and staff needs, for the
current fiscal year.
(f) Audit.--The Director shall, on an annual basis, provide for an
independent audit of the financial statements of the Office. Such audit
shall be conducted in accordance with generally acceptable accounting
procedures.
(g) Budget.--The Fund shall prepare and submit each year to the
President a business-type budget in a manner, and before a date, as the
President prescribes by regulation for the budget program.
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 Patent and
Trademark Office.
(b) Purpose.--The purpose of the satellite offices established
under subsection (a) are to--
(1) increase outreach activities to better connect patent
filers and innovators with the Patent and Trademark Office;
(2) enhance patent examiner retention;
(3) improve recruitment of patent examiners; and
(4) decrease the number of patent applications waiting for
examination and 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
Patent and Trademark 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 ever satellite office of the
Office.
(2) Open selection process.--Nothing in paragraph (1) shall
constrain the Patent and Trademark Office to only consider its
evaluations in selecting the Detroit, Michigan, satellite
office.
(d) Report to Congress.--Not later than the end of the first 3
fiscal years that begin 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);
(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 required under subsection (b).
SEC. 24. PATENT OMBUDSMAN PROGRAM FOR SMALL BUSINESS CONCERNS.
Subject to available resources, the Director may establish 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.
SEC. 25. PRIORITY EXAMINATION FOR TECHNOLOGIES IMPORTANT TO AMERICAN
COMPETITIVENESS.
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. 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. 27. EFFECTIVE DATE.
Except as otherwise provided in this Act, the provisions of this
Act shall take effect 1 year after the date of the enactment of this
Act and shall apply to any patent issued on or after that effective
date.
SEC. 28. 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.
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