[Congressional Record Volume 140, Number 148 (Wednesday, November 30, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: November 30, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                      PATENT PRIOR USER RIGHTS ACT

  The text of the 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, as passed by 
the Senate on October 8, 1994, is as follows:

                                S. 2272

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``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).

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