[Congressional Record Volume 140, Number 146 (Saturday, October 8, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                    RELATING TO PATENT INFRINGEMENT

  Mr. BUMPERS. Mr. President, I ask unanimous consent that the Senate 
now proceed to the immediate consideration of Calendar Order No. 681, 
S. 2272, a bill relating to patent infringement.
  The PRESIDENT pro tempore. The clerk will report.
  The legislative clerk read as follows:

       A bill (S. 2272) to amend Chapter 28 of title 35, United 
     States Code, to provide a defense to patent infringement 
     based on prior use by certain persons, and for other 
     purposes.

  The PRESIDENT pro tempore. Is there objection to the request of the 
Senator from Arkansas?
  There being no objection, the Senate proceeded to consider the 
bill, which had been reported from the Committee on the Judiciary, with 
an aamendment to strike all after the enacting clause and inserting in 
lieu the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Patent Prior User Rights Act 
     of 1994''.

     SEC. 2. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR USE.

       (a) In General.--Chapter 28 of title 35, United States 
     Code, is amended by adding at the end thereof the following 
     new section:

     ``Sec. 273. Rights based on prior use; defense to 
       infringement

       ``(a) Definitions.--For purposes of this section, the 
     term--
       ``(1) `commercially used' means the use in interstate or 
     intrastate commerce, including the use of processes, 
     equipment, tooling, and intermediate materials in the design, 
     testing, or production of commercial products whether or not 
     such processes, equipment, tooling, and intermediate 
     materials are normally accessible, available, or otherwise 
     known to the public;
       ``(2) `effective and serious preparation' means that a 
     person has, in the United States--
       ``(A) actually reduced to practice the subject matter for 
     which rights based on prior use are claimed; and
       ``(B) made serious plans, and a substantial investment or a 
     substantial portion of the total investment necessary for the 
     subject matter to be commercially used; and
       ``(3) `effective filing date' means the earlier of the 
     actual filing date of the application for patent or the 
     filing date of any earlier United States, foreign, or 
     international application to which the subject matter at 
     issue is entitled under sections 119, 120, or 365 of this 
     title.
       ``(b) In General.--A person shall not be liable as an 
     infringer under section 271 of this title with respect to any 
     subject matter claimed in the patent being asserted that such 
     person had, acting in good faith, commercially used in the 
     United States or made effective and serious preparation 
     therefore in the United States, before the effective filing 
     date.
       ``(c) Limitation of Defense.--Rights based on prior use 
     under this section are not a general license under all claims 
     of the patent, but subject to subsection (d), extend only to 
     the claimed invention that the person claiming rights based 
     on prior use was in possession of prior to the effective 
     filing date.
       ``(d) Certain Variations and Improvements Not an 
     Infringement.--The rights based on prior use under this 
     section shall include the right to vary the quantity or 
     volume of commercial use or to make improvements that do not 
     infringe additional claims of the patent.
       ``(e) Qualifications.--(1) The rights based on prior use 
     under this section are personal and shall not be licensed or 
     assigned or transferred to another except in connection with 
     the good faith assignment or transfer of the entire business 
     or enterprise or the entire line of business or enterprise to 
     which the rights relate.
       ``(2) A person may not claim rights based on prior use 
     under this section if the activity under which such person 
     claims the rights was--
       ``(A) based on information obtained or derived from the 
     patentee or those in privity with the patentee; or
       ``(B) abandoned on or after the effective filing date, 
     except that for abandonment which occurs after the effective 
     filing date, rights based on prior use may be used as a 
     defense to infringement for that period of activity which 
     occurred prior to abandonment if such activity would 
     otherwise, in the absence of abandonment, have been allowed 
     under this section.
       ``(f) Burden of Proof.--In any action in which a person 
     claims a defense to infringement under this section the 
     burden of proof for establishing the defense shall be on the 
     person claiming rights based on prior use.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 28 of title 35, United States Code, is 
     amended by adding at the end thereof the following:

``273. Rights based on prior use; defense to infringement.''.

     SEC. 3. EFFECTIVE DATE.

       The provisions of this Act and the amendments made by this 
     Act shall take effect on the date of the enactment of this 
     Act.


                           amendment no. 2655

   (Purpose: To amend Chapter 28 of title 35, United States Code, to 
proivde a defense to patent infringement based on prior use by certain 
                    persons, and for other purposes)

  Mr. BUMPERS. Mr. President, on behalf of Senator DeConcini, I send a 
substitute amendment to the desk and ask for its immediate 
consideration.
  The PRESIDENT pro tempore. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Arkansas [Mr. Bumpers], for Mr. DeConcini, 
     proposes an amendment numbered 2655.

  Mr. BUMPERS. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDENT pro tempore. Without objection it is so ordered.
  The amendment is as follows:
       Strike out all after the enacting clause and insert in lieu 
     thereof the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Patent Prior User Rights Act 
     of 1994''.

     SEC. 2. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR USE.

       (a) In General.--Chapter 28 of title 35, United States 
     Code, is amended by adding at the end thereof the following 
     new section:

     ``Sec. 273. Rights based on prior use; defense to 
       infringement

       ``(a) Definitions.--For purposes of this section--
       ``(1) the term `commercially used' means used in the 
     production of commercial products, whether or not the 
     processes, equipment, tooling, or other materials so used are 
     normally accessible, available, or otherwise known to the 
     public;
       ``(2) the term `effective and serious preparation' means 
     that a person has--
       ``(A) actually reduced to practice the subject matter for 
     which rights based on prior use are claimed; and
       ``(B) made a substantial portion of the total investment 
     necessary, for the subject matter to be commercially used; 
     and
       ``(3) the `effective filing date' of an application for 
     patent is the earlier of the actual filing date of the 
     application or the filing date of any earlier United States, 
     foreign, or international application to which the subject 
     matter at issue is entitled under sections 119, 120, or 365 
     of this title.
       ``(b) In General.--
       ``(1) Defense.--A person shall not be liable as an 
     infringer of a patent under section 271 of this title with 
     respect to any subject matter claimed in the patent that such 
     person had commercially used in the United States, or made 
     effective and serious preparation therefor in the United 
     States, before the effective filing date of the application 
     for the patent.
       ``(2) Good faith purchasers.--A person who purchases in 
     good faith a product that results directly from a use or 
     preparation therefor described in paragraph (1) shall not be 
     liable as an infringer for continuing the use of the product 
     purchased, or for selling to another person the product 
     purchased.
       ``(c) Limitation of Defense.--Rights based on prior use 
     under this section are not a general license under all claims 
     of the patent, but, subject to subsection (d), extend only to 
     the claimed subject matter that the person asserting the 
     defense based on prior use had commercially used or made 
     effective and serious preparation therefor before the 
     effective filing date of the application for the patent.
       ``(d) Certain Variations and Improvements Not an 
     Infringement.--The rights under this section based on prior 
     use shall include the right to vary quantities or volumes, or 
     to make improvements, that do not infringe claims other than 
     those claims that, but for subsection (b), would have been 
     infringed as of the effective date of the application for 
     patent.
       ``(e) Qualifications.--
       ``(1) Rights are personal.--The rights under this section 
     based on prior use are personal and may not be licensed or 
     assigned or transferred to any other person except in 
     connection with the good faith assignment or transfer of the 
     entire business or enterprise or the entire line of business 
     or enterprise to which the rights relate.
       ``(2) Exclusions.--(A) A person may not claim rights under 
     this section based on prior use if the activity under which 
     such person claims the rights was based on information 
     obtained or derived from the patentee or those in privity 
     with the patentee.
       ``(B) If the activity under which a person claims rights 
     under this section based on prior use is abandoned on or 
     after the effective filing date of the application for the 
     patent, such person may claim such rights only for that 
     period of activity which occurred before abandonment.
       ``(f) Burden of Proof.--In any action in which a person 
     claims a defense to infringement under this section, the 
     burden of proof for establishing the defense shall be on the 
     person claiming rights based on prior use.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 28 of title 35, United States Code, is 
     amended by adding at the end thereof the following:

``273. Rights based on prior use; defense to infringement.''.

     SEC. 3. EFFECTIVE DATE.

       (a) In General.--Subject to subsections (b) and (c), this 
     Act and the amendments made by this Act shall take effect on 
     the date of the enactment of this Act.
       (b) Existing Patent Claims.--This Act and the amendments 
     made by this Act shall apply to any action for infringement 
     that is brought, on or after the date of the enactment of 
     this Act, by a patentee in a case in which the effective 
     filing date (as defined in section 273(a)(2) of title 35, 
     United States Code) of the application for patent is before 
     such date of enactment, only if--
       (1) no other action for the same act or acts of 
     infringement was brought before such date of enactment, and
       (2) there has been no notice of infringement under section 
     287 of title 35, United States Code, as of October 1, 1994, 
     with respect to the same act or acts of infringement.
       (c) Equitable Compensation.--In any action for infringement 
     to which subsection (b) applies and in which the defense of 
     prior user rights under section 273 of title 35, United 
     States Code (as added by this Act), is asserted and 
     determined to be valid by the court, the court may grant 
     equitable compensation to the patentee, notwithstanding 
     subsection (b) of such section 273. Such equitable 
     compensation may be based on all actions of the person 
     asserting the defense that were carried out after notice of 
     infringement under section 287 of title 35, United States 
     Code, which would constitute infringement of the patent but 
     for section 273 of such title (as added by this Act).
  The PRESIDENT pro tempore. The question is on the adoption of the 
amendment.
  The amendment (No. 2655) was agreed to.
  Mr. BUMPERS. Mr. President, I move to reconsider the vote by which 
the amendment was agreed to.
  Mr. LOTT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDENT pro tempore. The question is on agreeing to the 
committee substitute, as amended.
  The committee substitute, as amended, was agreed to.
  Mr. BUMPERS. Mr. President, I move to reconsider the vote by which 
the committee substitute was agreed to and I move to lay that motion on 
the table.
  The motion to lay on the table was agreed to.
  The PRESIDENT pro tempore. The question is on the engrossment and 
third reading of the bill.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.
  The PRESIDENT pro tempore. The bill having been read the third time, 
the question is, Shall the bill pass?
  So the bill (S. 2272), as amended, was passed.
  (The text of the bill will be printed in a future edition of the 
Record.)
  Mr. BUMPERS. Mr. President, I move to reconsider the vote by which 
the bill was passed.
  Mr. LOTT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

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